IN8BIO, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. IN8BIO is a clinical-stage biotechnology company developing gamma-delta T-cell therapies. It reported no product revenue and had no approved products.
Key financial metrics
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $4.385 million | $2.381 million |
| General and administrative expense | $3.470 million | $3.764 million |
| Total operating expenses | $7.855 million | $6.145 million |
| Other income | $0.330 million | None |
| Net loss | $7.525 million | $6.145 million |
| Net loss per share, basic and diluted | $0.30 | $0.33 |
| Net cash used in operating activities | $7.439 million | $4.559 million |
| Cash and restricted cash at quarter-end | $11.113 million, including $10.860 million cash | $32.358 million at March 31, 2022 |
Margins are not meaningful because the company had no product revenue. At March 31, 2023, current assets were $14.402 million and current liabilities were $3.748 million. Total liabilities were $7.890 million, including $1.318 million of finance lease liabilities and $4.210 million of operating lease liabilities. The company reported no long-term debt. Accumulated deficit was $68.737 million.
Material changes versus the prior-year quarter
- Net loss increased by $1.380 million, while loss per share narrowed from $0.33 to $0.30, with a higher weighted-average share count.
- R&D expense rose $2.004 million, primarily due to increased personnel costs and clinical activity, including INB-400. INB-200 direct clinical costs declined.
- G&A expense fell $0.294 million, mainly due to lower insurance, accounting and recruiting costs.
- Operating cash use increased by $2.880 million. Cash and restricted cash fell $7.321 million during the quarter.
- The company recognized $0.330 million of other income from transferring two lots of clinical-scale cells to a third party for research use.
Outlook, risks and notable items
- Going concern and funding: Management stated that quarter-end cash plus $9.9 million of net ATM proceeds raised after March 31 would not fund projected operating and capital needs beyond February 2024. The filing says substantial doubt exists about the company’s ability to continue as a going concern. Management plans to seek additional capital and strategic collaborations; neither is assured. Cost-preservation measures may delay or reduce development activities.
- Financing and dilution: The company sold 415,712 shares through its ATM in Q1 for approximately $0.7 million net. After quarter-end it reported approximately $9.9 million of additional net ATM proceeds. Further equity financing could dilute shareholders; the company also cited a public float below $75 million and related limits on primary offerings under Form S-3.
- Clinical plans: INB-200 and INB-100 were in Phase 1 trials. Management expected to complete INB-200 Cohort 3 enrollment and provide updates during 2023. It planned to begin a Phase 2 INB-400 trial for newly diagnosed glioblastoma in the second half of 2023, and, with additional funding, to submit an IND for INB-410 and initiate a Phase 1b trial in late 2023.
- Clinical commentary: The company reported positive INB-100 updates, including durable complete remissions in 100% of seven evaluable patients and all evaluable patients alive at last assessment. These are early, small-sample company-reported results, not evidence of established efficacy. The filing also says grade 1/2 graft-versus-host disease had been observed in all INB-100 patients treated to date.
- Key risks: Clinical and regulatory failure, patient enrollment, cell-manufacturing complexity, reliance on third-party suppliers and manufacturers, and the need for additional funding. The company noted reliance on a single supplier for its automated manufacturing device and lentiviral vectors. It also holds cash deposits above FDIC-insured limits.
- Other disclosures: INB-400 and INB-410 received FDA Orphan Drug Designation in April 2023. The company reported no material legal proceedings. Management concluded disclosure controls were effective as of March 31, 2023.
Important facts for investors to verify
- Whether additional funding or collaborations can be secured in time to address the stated runway beyond February 2024, and the resulting dilution or program impact.
- Clinical-trial enrollment, safety, durability and final results for INB-100 and INB-200, including the significance of the small patient samples and observed GvHD.
- Whether INB-400 and INB-410 timelines remain achievable, particularly given management’s stated dependence on additional funding for INB-410.
- The ATM share-count disclosures: the subsequent-events note reports 4,789,479 shares sold after March 31, while a risk-factor passage refers to 4,627,376 shares sold during April. Clarify the periods covered and reconcile the figures.
- Cash runway calculations, lease commitments of $7.0 million in fixed payments, and the company’s ability to maintain liquidity while advancing its pipeline.