IN8BIO, Inc. — Q2 2021 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2021. The unaudited filing covers a clinical-stage biopharmaceutical company developing gamma-delta T-cell cancer therapies. INB-200 (newly diagnosed glioblastoma) and INB-100 (leukemia patients undergoing stem-cell transplantation) were in Phase 1 trials; other programs were preclinical. The company had no approved products and generated no revenue.
Financial performance and position
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $2.064 million | $1.784 million | $3.310 million | $2.836 million |
| General and administrative expense | $0.986 million | $1.090 million | $2.103 million | $1.729 million |
| Total operating expenses | $3.050 million | $2.874 million | $5.413 million | $4.565 million |
| Net loss | $3.050 million | $2.874 million | $5.413 million | $4.565 million |
| Net loss attributable to common stockholders | $3.765 million | $3.178 million | $6.834 million | $5.129 million |
| Basic and diluted loss per share | $1.00 | $0.92 | $1.82 | $1.52 |
There are no revenue-based margins to report. The larger loss attributable to common stockholders includes cumulative preferred dividends: $0.715 million for Q2 and $1.421 million for the six-month period.
- Cash and liquidity: Cash was $12.0 million at June 30, 2021, down from $18.0 million at December 31, 2020. Operating cash use was $4.968 million for the first half, compared with $3.284 million a year earlier; net cash decreased $5.995 million.
- Balance sheet: Total assets were $17.564 million; total liabilities were $3.903 million. Current assets were $12.167 million and current liabilities $2.773 million. Accumulated deficit was $23.451 million.
- Debt and leases: The $174,000 PPP loan was outstanding at June 30 and repaid in August 2021. At June 30, finance lease liabilities were $949,000 and operating lease liabilities were $833,000.
- Financing after quarter-end: The August 3 IPO sold 4.0 million shares at $10.00 per share, generating $40.0 million gross and approximately $32.6 million net proceeds. Preferred stock converted into 10,990,065 common shares. The company reported that it had not yet used IPO proceeds.
Material changes versus prior comparable periods
- Q2 operating expenses increased $176,000 (about 6%) year over year. R&D increased $280,000, primarily from INB-200 clinical-trial and personnel costs; G&A decreased $104,000, mainly due to lower legal and professional fees.
- First-half operating expenses increased $848,000 (about 19%). R&D rose $474,000 and G&A rose $374,000, the latter primarily reflecting personnel and public-company preparation costs.
- First-half operating cash use increased $1.684 million year over year. The company cited operating losses, working-capital changes, and higher non-cash stock compensation and lease amortization.
- Stock-based compensation was $753,000 for the first half of 2021 versus $38,000 in 2020. The company adopted lease accounting guidance effective January 1, 2021, recognizing lease assets and liabilities.
Outlook, commentary, risks, and unusual items
- Management expected cash at June 30 plus IPO net proceeds to fund operating and capital needs for at least 12 months from issuance of the financial statements; it cautioned that assumptions may prove wrong. It expects continued losses and substantially higher spending as clinical programs, pipeline development, and public-company costs advance.
- Management expected INB-200 cohort 2 and 3 initial results in 2022 and INB-100 initial cohort results in 2022, with further INB-100 results in 2023. Elsewhere, the filing says additional INB-200 data were expected by the end of 2021; investors should note this differing timeline language.
- The company reported that INB-200’s first cohort was generally well tolerated, with no observed infusion reactions, cytokine release syndrome, neurotoxicity, or dose-limiting toxicities; the three treated patients exceeded expected median progression-free survival based on age and MGMT status. These are early, limited-patient observations, not evidence of established efficacy. INB-100’s first cohort was fully dosed in August; no severe adverse infusion reactions or dose-limiting toxicities were reported, and the first two patients remained in complete remission more than a year after treatment.
- COVID-19 could delay enrollment, clinical-site activity, supply availability, and regulatory work; the company described hospital capacity and PPE constraints at trial sites. It also cited dependence on third-party manufacturing, a single supplier for automated manufacturing devices and lentiviral vectors, and complex cell-production processes.
- Other material risks include early-stage clinical and regulatory uncertainty, patient enrollment, manufacturing consistency and scale-up, licensed intellectual property, competition, and the need for additional capital. The company has not achieved profitability and may need future financing, potentially dilutive or on unfavorable terms.
- Subsequent events included a September 2021 New York office lease with approximately $0.3 million annual commitment and a Birmingham laboratory build-to-suit lease with a $4.0 million cost threshold. The filing disclosed no material legal proceedings.
Most important facts for investors to verify
- Whether the IPO’s approximately $32.6 million net proceeds and management’s stated 12-month-plus runway are consistent with actual cash burn and subsequent spending.
- Updated INB-200 and INB-100 trial enrollment, safety, follow-up, and data timelines, particularly the filing’s differing INB-200 timing statements.
- Whether the company can secure adequate lentiviral vectors and manufacturing capacity, and maintain reliable cell-product quality as trials expand.
- Future R&D and public-company expense growth, cash use, and any need for additional capital or resulting dilution.
- Potential obligations under university license agreements, including milestones and royalties, and the impact of the preferred-stock conversion and equity plans on dilution.