Inmune Bio, Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; filed March 28, 2024. This is an annual report, not a standalone fourth-quarter results filing. Inmune Bio is a clinical-stage biotechnology company with no approved products and minimal revenue.
Business context and development programs
The company is developing therapies targeting innate immune dysfunction. Its main programs are INKmune, an NK-cell therapy being studied in cancer, and the DN-TNF platform: XPro for Alzheimer’s disease (AD) and treatment-resistant depression (TRD), and INB03 for cancer. The company is also pursuing preclinical work and potential partnering for DN-TNF in Duchenne muscular dystrophy and for INB03 in cancer. CORDstrom stem-cell activity supports academic trials and possible third-party services.
- INKmune: An open-label Phase I/II trial in metastatic castration-resistant prostate cancer began enrolling in December 2023. The first low-dose cohort was completed in March 2024, after year-end. The company also reported it would stop further enrollment in its high-risk MDS/AML trial in March 2024.
- XPro for AD: A global, randomized, placebo-controlled Phase II trial is enrolling up to 201 early-AD patients with inflammation biomarkers. Phase I findings were preliminary and from a small, open-label study; cognitive benefit was not established.
- XPro for TRD: A proposed Phase II trial has a $2.9 million NIMH award. The filing anticipated initiation in the second half of 2024, subject to trial design and regulatory discussions.
- INB03 for cancer: The Phase I study is complete, but the company said it had no current plan for additional oncology clinical trials and was seeking a partner or licensee.
Financial results and liquidity
| Metric | 2023 | 2022 | Change / context |
|---|---|---|---|
| Revenue | $0.155 million | $0.374 million | Revenue came from MSC sales to one customer; down $0.219 million. |
| Research and development expense | $20.273 million | $17.067 million | Up $3.206 million, principally from higher INKmune and AD trial costs. |
| General and administrative expense | $9.623 million | $9.258 million | Up $0.365 million. |
| Operating loss | $29.741 million | $25.951 million | Loss widened $3.790 million. |
| Net loss | $30.008 million | $27.299 million | Loss widened $2.709 million; basic and diluted loss per share was $1.67 versus $1.52. |
| Net cash used in operations | $11.980 million | $22.686 million | Lower year over year, with working-capital movements—including tax-credit receipts—affecting cash use. |
| Cash and cash equivalents at year-end | $35.848 million | $52.153 million | Down $16.305 million. |
Profitability and operating margins are not meaningful given the company’s very small revenue base and continuing losses. Interest income helped reduce net other expense to $0.267 million from $1.348 million, partly offset by higher interest expense. The company reported no income tax expense or benefit.
At December 31, 2023, the balance sheet showed total current assets of $39.942 million, current liabilities of $18.465 million, total assets of $57.001 million, and total liabilities of $18.862 million. The filing’s MD&A separately states that total current assets were $21.5 million, which conflicts with the audited balance sheet; the filing text does not explain the discrepancy.
The company had a $15 million secured term loan; $10 million principal was classified as current at year-end and the loan was payable in 2024. Its stated interest rate was 13.0% at December 31, 2023; terms also include a final payment fee of 6.5% of original principal and possible prepayment and default fees. The company repaid $5 million of debt during 2023. Cash plus current assets do not remove the company’s stated financing risk: management projected available liquidity would be insufficient to fund operations for one year after issuance of the financial statements.
Material changes, outlook, and risks
- R&D spending increased about 19% year over year, while reported revenue declined. The net loss increased despite lower operating cash use.
- Management expects substantial additional losses and cash needs as clinical development advances. It plans to seek funding through equity or debt offerings, grants, partnerships, licensing, or asset sales, but gives no assurance financing will be available on acceptable terms.
- The auditor issued an unmodified opinion on the financial statements with an explanatory paragraph about substantial doubt regarding the company’s ability to continue as a going concern. Management concluded its funding plans did not alleviate that doubt.
- Key risks include clinical-trial failure or delay, regulatory uncertainty, dependence on third-party manufacturers and research organizations, competition, intellectual-property and licensing risks, and dilution or restrictive terms from future financing. No product candidate has regulatory approval.
- The company disclosed that 75,697 shares sold through its ATM in July 2023 were sold after the relevant registration statement expired. Purchasers may have rescission rights, and regulatory penalties are possible; no claims or demands had been received by year-end. The related $799,000 was classified as redeemable common stock.
- Immune Ventures, the INKmune licensor, is owned by the CEO, CFO, and Chief Scientific Officer, creating a disclosed related-party conflict. The company also reported no material litigation, while noting ordinary-course claims may arise.
- The filing describes preliminary Phase I AD biomarker changes, but the study was not randomized or blinded and did not establish cognitive efficacy. Management’s anticipated trial milestones and expedited regulatory pathways are prospective, not assured.
Important facts for investors to verify
- Current cash runway, near-term financing requirements, and the outcome and terms of any subsequent financing or debt repayment.
- The audited balance-sheet current-assets figure of $39.942 million versus the $21.5 million figure in MD&A, and the exact status of the debt due in 2024.
- Enrollment, timing, safety, and clinical results for the AD Phase II and INKmune prostate-cancer trials; distinguish post-year-end developments from 2023 results.
- Status of the TRD grant, trial authorization and design; and whether partnerships or licensing arrangements for INB03 or DMD are secured.
- Any rescission claims, enforcement actions, or penalties related to the expired-registration ATM sales, and the resolution of the related-party and licensing arrangements.
- Potential dilution from future financing and outstanding equity awards; the filing reported 5,496,000 options outstanding at year-end and 18,026,473 common shares outstanding as of March 27, 2024.