IN8BIO, Inc. — Form 10-Q Summary
Reporting period: Quarter and nine months ended September 30, 2021. IN8BIO is a clinical-stage biopharmaceutical company developing gamma-delta T-cell therapies; it has no approved products and generated no revenue.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $1.350m | $1.057m | $4.660m | $3.893m |
| General and administrative expense | $2.041m | $0.624m | $4.144m | $2.353m |
| Total operating expenses and net loss | $3.391m | $1.681m | $8.804m | $6.246m |
| Basic and diluted loss per share | $(0.25) | $(0.60) | $(1.26) | $(2.14) |
Cash flow: For the nine months, operating cash use was $11.333m and investing cash use was $0.153m; financing provided $34.167m. Cash increased $22.681m to $40.675m.
Balance sheet at September 30: Cash was $40.675m, total assets $47.134m, total liabilities $4.096m, and stockholders’ equity $43.038m. The company reported an accumulated deficit of $26.842m. No material conventional debt remained; the $0.174m PPP loan was repaid in August 2021. Lease liabilities totaled $2.564m, including financing and operating leases.
Margins are not meaningful because the company has no revenue. Management expects recurring losses and negative operating cash flows as it advances its pipeline.
Material changes versus comparable periods
- Q3 operating expenses increased $1.710m year over year. R&D rose $0.293m, primarily from clinical-trial, contract-manufacturing, personnel and stock-compensation costs; G&A rose $1.417m, mainly from higher personnel and public-company-related costs.
- Nine-month operating expenses increased $2.558m year over year: R&D increased $0.767m and G&A increased $1.791m, including higher legal and public-company costs.
- Operating cash use increased from $5.408m to $11.333m for the nine-month period, while the IPO substantially increased financing cash flows.
- The August 2021 IPO sold 4.0m shares at $10.00 per share, generating $32.3m net proceeds. Preferred stock converted into 10.99m common shares. The filing says IPO proceeds had not been used as of September 30; planned use was unchanged from the prospectus.
Outlook, developments and risks
- Management said September 30 cash of $40.7m was expected to fund operating expenses and capital expenditures for at least 12 months from issuance of the financial statements. The company expects to need additional capital; financing may dilute shareholders, impose debt obligations, or require granting rights to programs.
- INB-200 and INB-100 are in Phase 1 trials. The company expected initial INB-200 results from the second and third cohorts in 2022, and initial INB-100 first-cohort results in 2022, with topline results across INB-100 cohorts in 2023. It also expected to potentially file up to three INDs through 2023, with four planned over three years.
- Management reported completion of first-cohort INB-100 dosing. No severe infusion reactions, cytokine release syndrome, neurotoxicity or dose-limiting toxicities were observed in the reported patients; mild-to-moderate acute skin graft-versus-host disease responsive to standard therapy was observed. All three treated patients were reported in remission. These are early, limited-patient observations, not evidence of established efficacy.
- Key risks include clinical and regulatory failure, patient-enrollment delays, complex cell-therapy manufacturing and reliance on single suppliers for the automated manufacturing device and lentiviral vectors. The filing stated the current vector supply would cover approximately 29 patients. COVID-19 could disrupt trials, sites, supply chains and access to capital.
- The filing reported no material legal proceedings. Management concluded disclosure controls were effective at a reasonable-assurance level; internal-control effectiveness was not evaluated in this quarterly report under the transition applicable to newly public companies.
Important facts for investors to verify
- Whether cash use and clinical-development spending remain consistent with management’s stated minimum 12-month runway and anticipated financing needs.
- Trial enrollment, follow-up duration, safety events and final, verified results for INB-100 and INB-200, including the context for reported remission and graft-versus-host-disease observations.
- Availability, timing and cost of lentiviral vectors, manufacturing capacity and clinical-trial supplies.
- Actual timing and feasibility of planned IND filings and clinical milestones; these are forward-looking expectations and may change.
- Potential dilution from equity compensation and future financing, and the financial and operational impact of new leases and the Birmingham laboratory build-out.