IN8BIO, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 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 results and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development | $3.786 million | $4.255 million | $12.305 million | $10.140 million |
| General and administrative | $3.383 million | $3.144 million | $10.434 million | $10.583 million |
| Total operating expenses | $7.169 million | $7.399 million | $22.739 million | $20.723 million |
| Net loss | $7.169 million | $7.399 million | $22.409 million | $20.723 million |
| Net loss per share | $(0.23) | $(0.34) | $(0.79) | $(1.05) |
The nine-month 2023 net loss includes $330,000 of non-recurring other income from transferring two lots of clinical-scale gamma-delta T cells for a third party’s research. The company reported no operating margin because it had no product revenue.
- Cash and liquidity: Cash was $12.854 million at September 30, 2023, down from $18.182 million at December 31, 2022. Current assets were $16.549 million and current liabilities were $4.686 million; working capital was approximately $11.863 million.
- Cash flow: Operating activities used $18.490 million in the first nine months, investing activities used $528,000, and financing activities provided $13.692 million. Cash and restricted cash declined by $5.326 million to $13.108 million.
- Debt and commitments: The filing reports no long-term debt. Lease liabilities totaled $5.262 million, comprising $1.410 million of finance leases and $3.852 million of operating leases. Fixed lease payments were $6.5 million, including $2.0 million due within 12 months.
- Equity financing: The company sold 7,430,772 shares through its at-the-market program during the nine months, generating $14.3 million net. Shares outstanding rose from 24.5 million at December 31, 2022 to 32.0 million at September 30, 2023.
Changes versus the prior comparable period
- Q3 operating expenses fell $230,000 year over year, mainly because INB-400 costs declined after the prior-year IND filing activity; increased personnel costs partly offset the reduction. Q3 net loss narrowed by $230,000.
- For the nine months, operating expenses increased $2.016 million and net loss increased $1.686 million. R&D rose $2.165 million, primarily from higher personnel costs, while G&A declined $149,000.
- Operating cash use increased from $16.172 million to $18.490 million. Financing proceeds increased to $13.692 million from $9.241 million, principally reflecting ATM share sales.
Outlook, risks and notable items
- Going concern: Management says September 30 cash will not fund projected operating expenses and capital requirements beyond May 2024 and identifies substantial doubt about the company’s ability to continue as a going concern. Plans include additional equity or debt financing and collaborations, licensing or other arrangements; none is assured. Without funding, the company may further reduce or delay programs or explore other strategic options.
- Financing constraints: Public float was below $75 million, subjecting primary offerings under Form S-3 to the baby-shelf limit of one-third of public float in any 12-month period. The company also warns of potential dilution and the possibility that financing could require restrictive terms or surrender of product rights.
- Clinical pipeline: INB-400’s company-sponsored Phase 2 trial in newly diagnosed glioblastoma began enrollment, with approximately 40 patients planned for Arm A and 12-month overall survival as the primary endpoint. INB-200 remains in Phase 1; management expected enrollment of Cohort 3 and clinical updates through 2023 and the first half of 2024. INB-100 completed Phase 1 dose escalation, with further data expected at the December 2023 ASH meeting.
- Safety and development risks: INB-100 patients treated to date had grade 1 or 2 graft-versus-host disease, which the company says responded to steroids. The filing emphasizes that early and interim clinical data may change and that cell-therapy manufacturing, enrollment, safety, efficacy and regulatory outcomes are uncertain.
- Other risks: The company depends on third parties for manufacturing and key supplies, including lentiviral vectors, and identifies manufacturing disruptions, competition, intellectual-property and licensing risks, and volatile capital markets as material concerns. It reported no material legal proceedings. Management concluded disclosure controls were effective as of September 30, 2023.
Important facts for investors to verify
- Whether new financing or a collaboration is secured, and whether cash runway extends beyond management’s May 2024 estimate.
- The effect of the baby-shelf limit on the company’s ability to raise capital, and the amount of future share issuance and dilution.
- INB-400 Phase 2 enrollment and trial progress, and updated INB-200 and INB-100 efficacy, durability and safety data.
- Whether the observed INB-100 graft-versus-host disease or other adverse events affect development plans or the potential for allogeneic treatment.
- Whether manufacturing capacity and single-source supply dependencies can support ongoing trials without delays or additional costs.