IN8BIO, Inc. — Q2 2023 Form 10-Q
Reporting period: Three and six months ended June 30, 2023; filed August 10, 2023. IN8BIO is a clinical-stage biopharmaceutical company developing gamma-delta T-cell therapies. It has no approved products and has generated no product revenue.
Financial performance and liquidity
| Metric | Q2 2023 | Q2 2022 | Six months 2023 | Six months 2022 |
|---|---|---|---|---|
| Revenue | No product revenue | No product revenue | No product revenue | No product revenue |
| Research and development expense | $4.134 million | $3.504 million | $8.519 million | $5.885 million |
| General and administrative expense | $3.581 million | $3.675 million | $7.051 million | $7.439 million |
| Total operating expenses | $7.715 million | $7.179 million | $15.570 million | $13.324 million |
| Other income | None reported | None reported | $0.330 million | None reported |
| Net loss | $7.715 million | $7.179 million | $15.240 million | $13.324 million |
| Net loss per share, basic and diluted | $0.27 | $0.38 | $0.57 | $0.71 |
No operating margin is meaningful because the company has no product revenue. Q2 net loss widened by $0.536 million year over year, while six-month net loss increased by $1.916 million; the six-month 2023 result includes $0.330 million of other income from transferring two lots of clinical-scale cells for a third party’s research.
- Cash and liquidity: Cash was $16.993 million at June 30, 2023, down from $18.182 million at December 31, 2022. Cash plus restricted cash was $17.246 million.
- Cash flows, six months: Operating activities used $12.777 million, investing activities used $0.451 million, and financing activities provided $12.040 million. Cash and restricted cash declined by $1.188 million.
- Funding: ATM common-stock sales generated $12.429 million net during the first half of 2023. From July 1 through August 7, the company sold 995,026 additional shares for $1.5 million net.
- Debt and obligations: The filing reports no long-term debt. At June 30, finance-lease liabilities totaled $1.626 million and operating-lease liabilities totaled $4.034 million. Fixed lease payments were $7.0 million, including $2.1 million due within 12 months.
- Balance sheet: Total assets were $29.718 million, total liabilities $7.919 million, stockholders’ equity $21.799 million, and accumulated deficit $76.452 million. Common shares outstanding were 30,606,119 at June 30 and 31,601,145 as of August 7, 2023.
Material changes versus prior periods
- Q2 R&D expense rose $0.630 million, primarily because of higher personnel costs and increased INB-100 clinical costs. Six-month R&D expense rose $2.634 million, reflecting higher personnel costs, INB-400 clinical and vector-manufacturing costs, and facility-related expenses; INB-200 direct costs declined.
- Q2 G&A expense fell $0.094 million and six-month G&A fell $0.388 million, primarily due to lower D&O insurance premiums and professional-services costs.
- Operating cash use increased by $2.346 million versus the first half of 2022. The company’s 2023 ATM financing partly offset operating and investing outflows.
- Common shares issued and outstanding increased from 24,545,157 at December 31, 2022 to 30,606,119 at June 30, 2023, reflecting equity issuance and potential dilution.
Outlook, risks, and unusual items
- Going concern: Management states that cash at June 30 plus subsequent ATM proceeds will not fund projected operating expenses and capital needs beyond April 2024. The filing says substantial doubt exists about the company’s ability to continue as a going concern. Management plans to seek additional equity or debt financing and strategic collaborations, licensing, or other arrangements; success is not assured. If funding is unavailable, programs may be delayed, reduced, discontinued, or otherwise altered.
- Clinical plans: INB-200 and INB-100 are in Phase 1 trials. Management expected to complete INB-200 Cohort 3 enrollment in 2023 and provide an update in the second half of 2023. INB-100 primary enrollment was complete; updated results were expected in late 2023 and long-term follow-up in 2024. The company planned to begin enrollment in a company-sponsored Phase 2 autologous INB-400 trial in the second half of 2023. An allogeneic INB-400 Phase 1b program depends on additional funding. INB-400 received FDA orphan drug designation in April 2023.
- Clinical evidence: The company reported that all eight INB-200 patients treated to date had exceeded the reported median progression-free survival at the time of its ASCO 2023 update. These are early, limited-patient results; the filing cautions that interim or preliminary results may change with further data and verification. INB-100 patients treated to date had experienced grade 1 or 2 graft-versus-host disease, reported as responsive to steroids.
- Operating and financing risks: Development is costly and uncertain; the company has no product sales and expects continued losses. Additional equity could dilute shareholders, while debt or collaboration terms could restrict operations or require relinquishing rights. Public float below $75 million subjects Form S-3 primary offerings to the baby-shelf limit. Cash-preservation measures may affect development timing and regulatory filings.
- Other risks and contingencies: The filing highlights clinical, manufacturing, patient-enrollment, single-source supplier, intellectual-property, regulatory, and data-security risks. Cash deposits exceed FDIC-insured limits. The company reported no material legal proceedings and no material changes to significant accounting policies.
- Controls: Management concluded disclosure controls and procedures were effective at the reasonable-assurance level as of June 30, 2023; no material change in internal control over financial reporting was reported during the six months.
Important facts for investors to verify
- Whether the company can raise sufficient capital or secure collaborations to fund operations beyond the stated April 2024 runway, and the resulting dilution or program changes.
- Progress and complete, verified clinical data for INB-200, INB-100, and the planned INB-400 Phase 2 trial, including safety findings and enrollment status.
- Actual cash burn, subsequent ATM share sales, remaining financing capacity under applicable shelf-registration limits, and cash balances after the filing date.
- Manufacturing capacity and reliability, including access to lentiviral vectors and third-party manufacturing facilities.
- Lease and other contractual cash requirements, and any changes in legal, licensing, or intellectual-property obligations.