Inmune Bio, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Inmune Bio is a clinical-stage biotechnology company developing therapies through its DN-TNF and natural killer cell platforms. The unaudited financial statements are presented in U.S. dollars; amounts below are in millions unless noted.
Financial performance and position
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Revenue | $0.004 | $0 |
| Research and development expense | $2.491 | $0.793 |
| General and administrative expense | $2.061 | $1.299 |
| Total operating expenses | $4.552 | $2.092 |
| Net loss | $4.556 | $2.070 |
| Basic and diluted loss per share | $0.32 | $0.19 |
| Net cash used in operating activities | $5.092 | $1.035 |
- Revenue was from MSC sales to one third party. Given minimal revenue and continued losses, operating margins are not meaningful.
- Cash and cash equivalents were $45.340 at March 31, 2021, up from $21.967 at December 31, 2020. Working capital was $47.017; accumulated deficit was $37.931.
- Financing activities provided $28.464, mainly from net proceeds of $28.446 under the 2020 at-the-market (ATM) program. The company sold 1,439,480 shares at an average $20.17 per share.
- Total liabilities were $2.312, including $0.139 of related-party operating lease liabilities. The filing reports no borrowings or interest paid; debt is not identified as a material funding source.
Changes versus the prior-year quarter
- Net loss increased $2.486, while operating expenses rose $2.460. R&D expense increased $1.698, primarily due to additional drug manufacturing and costs associated with the COVID-19 clinical trial. G&A increased $0.762, largely from higher professional fees and stock-based compensation.
- Operating cash use increased $4.057. Cash at quarter-end was $45.340 versus $5.931 a year earlier, reflecting the substantial equity financing.
- Shares issued and outstanding increased from 13,481,283 at December 31, 2020 to 14,932,638 at March 31, 2021, chiefly due to ATM sales.
Outlook, risks and notable items
- Management expected available cash to fund operations for at least 12 months following the filing date, based on March 31 cash. It expects continuing losses and higher operating costs as development advances; no revenue or earnings guidance was provided.
- Planned or ongoing programs include clinical development of XPro1595 for Alzheimer’s disease and treatment-resistant depression, and planned Phase II studies involving INB03, LIVNate and Quellor. INKmune Phase I trials were planned for high-risk MDS and relapsed/refractory ovarian cancer. Timelines and trial plans remain subject to regulatory, development and funding uncertainty.
- Management said COVID-19 may delay trial site initiation, enrollment and patient participation, and may affect suppliers, CROs and other service providers. The extent of its impact was uncertain.
- The company had a $45 million 2021 ATM program established in March, with no sales under it through March 31. The prior 2020 ATM had been completed; the Lincoln Park purchase agreement was terminated in April 2021.
- License commitments include potential milestone and royalty payments. INKmune milestones include Phase I initiation by October 29, 2021; failure to meet milestones may require remediation discussions and could lead to termination or conversion to a non-exclusive license. No INKmune milestones had been met as of March 31.
- The company disclosed related-party relationships involving office space leased from CTI, which is majority-owned by a director, and Immune Ventures, whose owners include company officers and a director. It reported no pending legal proceedings believed likely to have a material adverse effect.
- Disclosure controls were assessed as effective; no material change in internal control over financial reporting was reported.
Investor verification priorities
- Confirm cash runway against quarterly operating cash use and planned trial, manufacturing and public-company costs.
- Review ATM capacity, future share issuance and potential dilution, including outstanding options and warrants.
- Track clinical-trial authorization, enrollment and milestone timing, particularly for INKmune and the planned XPro1595 study in treatment-resistant depression.
- Assess the collectability and timing of the $2.190 million R&D tax-credit receivable and the conditions attached to grants and license agreements.
- Monitor COVID-19-related trial disruption and related-party transactions and arrangements.