Inmune Bio, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Unaudited financial statements; dollar amounts below are in millions except per-share data. Inmune Bio is a clinical-stage biotechnology company developing DN-TNF and natural-killer-cell therapies; its candidates are not approved for sale.
Financial performance and position
| Metric | Q2 2022 | Six months 2022 | Comparable 2021 period |
|---|---|---|---|
| Revenue | $0.016 | $0.179 | $0; $0.004, respectively |
| Research and development expense | $4.189 | $8.498 | $4.464; $6.955, respectively |
| General and administrative expense | $2.215 | $4.547 | $2.090; $4.151, respectively |
| Net loss | $6.838 | $13.741 | $6.655; $11.211, respectively |
| Basic and diluted loss per share | $(0.38) | $(0.77) | $(0.44); $(0.77), respectively |
| Operating cash used | Not separately presented | $13.624 | $10.801 |
At June 30, cash and cash equivalents were $61.213 million, down from $74.810 million at year-end 2021. Working capital was $68.3 million and accumulated deficit was $77.456 million. Total liabilities were $17.876 million, including $14.571 million of long-term debt net of discount and $0.758 million of lease liabilities. The term loan has a 9.25% interest rate at period-end; interest-only payments run through July 1, 2023, with principal and interest thereafter and maturity on January 1, 2025. The company reported covenant compliance.
Changes versus prior period
- Six-month net loss increased $2.530 million year over year as operating expenses rose $1.939 million and other expense increased $0.766 million, partly offset by higher revenue.
- Six-month R&D expense rose $1.543 million, principally due to increased Alzheimer’s and mild cognitive impairment trial costs and compensation, partly offset by lower costs for the terminated COVID-19 trial and drug manufacturing.
- Six-month G&A expense increased $0.396 million, reflecting higher compensation, including stock-based compensation, partly offset by lower consulting expense.
- Operating cash use increased $2.823 million. The company raised $0.729 million from share and warrant issuances in the first half of 2022, versus $43.415 million of financing cash flow in the first half of 2021, which included a $15 million loan and ATM equity proceeds.
Outlook, risks and notable items
- Management believes cash on hand will fund operations for at least 12 months following the filing date, but expects continuing losses and cash use, with spending expected to increase as development advances. The company says additional financing will be needed; availability and terms are uncertain.
- Management reported the first patient had enrolled in the Phase II mild Alzheimer’s trial in April 2022 and expected topline data in late 2023. The treatment-resistant depression Phase II design was still being finalized, with trial authorization anticipated in the second half of 2022. The company planned continued enrollment in the INKmune Phase I study and a separate solid-tumor Phase I trial in late 2022 or early 2023. These are forward-looking expectations, not guaranteed milestones.
- Clinical development faces trial-enrollment, regulatory, manufacturing, funding and execution risks. The filing says COVID-19 may disrupt trial sites and enrollment. The company also cites foreign-exchange exposure and expects not to qualify for UK R&D tax incentives on expenditures incurred during 2022.
- Six-month foreign-currency translation loss was $0.702 million. Stock-based compensation was $3.422 million, versus $1.668 million a year earlier. No material pending legal proceeding was reported; management stated disclosure controls were effective.
Key facts for investors to verify
- Cash runway assumptions, quarterly cash burn, and the timing and terms of any future financing.
- Clinical-trial enrollment, regulatory status, and data timelines for Alzheimer’s, depression, cancer, and INKmune programs.
- Whether UK and Australian R&D tax-credit receivables are collected as expected and how UK incentive changes affect future costs.
- Debt service requirements, variable interest rate exposure, and compliance with loan covenants.
- Potential dilution from outstanding options and warrants, and the impact of stock-based compensation.