INmune Bio Inc.

Greetings and welcome to the ImmuneBio third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. A transcript will follow within 24 hours of this conference call. At this time, it is my pleasure to introduce Mr. David Moss, co-founder and CFO of ImmuneBio. David, the floor is yours.

Thank you, Hector, and good afternoon, everybody. We thank you for joining us for the call for the ImmuneBio's third quarter 2021 financial results. With me on the call is Dr. RJ Tessie, CEO and co-founder of ImmuneBio, who will provide a business update on our DN-TNF platform, and Dr. Mark Liddell, CSO and co-founder of who will provide an update on our NK cell priming platform. We are also lucky to have Dr. C.J. Barnum, head of neuroscience, who will speak about our newly announced Phase II program in mild cognitive impairment, or MCI. Before we begin, I remind everyone that except for statements of historical facts, the statements made by management and responses to questions on this conference call are forward-looking statements under the Safe Harbors Provision of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause action results to differ materially from those but forward-looking statements. Please see the forward-looking statement disclaimer in the company's earning press release as well as the risk factors in the company's SEC filings, including our most recently quarterly filing with the SEC. There's no assurance of any specific outcome. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made and as of the fact and circumstances underlying forward-looking statements may change. Except as required by law, ImmuneBio disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances. Now, I'd like to turn the call over to Dr. Arjay Sethi, co-founder and CEO of ImmuneBio. Arjay.

Thank you, David, and thank everyone for joining the call. As is our practice, I will arrange my remarks to highlight the key takeaways from the third quarter and subsequent period and provide updates on our platform programs. I will start by reviewing our DN TNF programs, then hand the call to CJ Barnum, head of neuroscience for immune bio, who will speak about our new phase two program and patients with MCI. which is a prodromal form of Alzheimer's disease. Professor Mark Liddell, our CSO, will speak about recent developments with the Incommune platform before I pass it back to David Moss, our CFO, to discuss the financial results and upcoming milestones. Then we will move to Q&A. EXPRO is our CNS platform. We have clinical programs in Alzheimer's disease and treatment-resistant depression. with IND enabling studies underway in ALS. Each of these programs is supported by extramural non-dilutive funding from the Alzheimer's Association, the NIH, and the ALS Foundation, respectively. The common denominator of these CNS indications is that neuroinflammation plays an important role in the disease. Neuroinflammation, however, is one step removed from the true pathology underlying Alzheimer's disease. Those changes are loss of connections between neurons and nerve cell death. In the brain, neurons have two parts. The cell body is in the gray matter and the myelinated axons are in the white matter. The first is where the memories are stored. The latter allows neurons to communicate. Both are required for normal cognitive function. Inflammation causes synaptic dysfunction. strips axons of their myelin, and drives neurodegeneration of both axons and nerve cells. Put simply, neuroinflammation dramatically alters brain biology, precluding normal function. ImmuneBio believes that synaptic connections can be restored and myelinated axons can be repaired with exprotherapy. ImmuneBio is using novel technology to demonstrate the importance of white matter pathology in in Alzheimer's disease. The MRI biomarkers of white matter-free water, apparent fiber density, and radial density measures of neuroinflammation, axonal integrity, and myelination, respectively, help locate and quantify white matter pathology, then measure the effect of ex-pro therapy. These powerful technologies provide new opportunities for staging and treatment of CNS diseases and highlight the many effects of ex-pro therapy. The opportunities to use ex-pro beyond Alzheimer's disease are real. More than 60 publications covering more than a dozen diseases gives a hint of the opportunities before us. These publications can be found on our website. We've given three webinars discussing the results from the phase one study of ex-pro in Alzheimer's disease patients. To summarize, treatment with Expro for three months decreases neuroinflammation, decreases neurodegeneration, and improves synaptic function in patients with Alzheimer's disease. The last two benefits of Expro target therapy, that is the core pathology of cognitive decline, which is Expro, which is nerve cell death and synaptic dysfunction. In our opinion, if a drug for AD does not improve one or both of these variables, there's little hope that the drug will make a difference in cognition. Our data show that EXPRO improves both and does much more. During the third quarter, we released additional biomarker data that further supports our belief that EXPRO will make a difference in patients with Alzheimer's disease. Much of the new biomarker data is focused on white matter pathology. ExPRO improves multiple measures of white matter pathology. Unlike traditional volumetric analysis of the brain, advances in MRI imaging allows us to measure the microstructural changes of specific white matter tracts as well as axons and myelin within the white matter tract using techniques called apparent fiber density and radial diffusivity, respectively. The concept of white matter tracts may be new to you. White matter tracts are axonal superhighways that connects parts of the brain that must work together. There are many white matter tracts, and not all are important in Alzheimer's disease. Our analysis is focused on the so-called 7AD white matter bundles. Those are the white matter tracts most affected by Alzheimer's disease, and they include names like, you know, the anterior fasciculus, the frontal occipital corpus callosum and the cingulum, just to name a few. The phase one trial had two steps. All patients were treated for three months, and six patients retrieved Expro for up to a year in the so-called extension trial. In the patients treated for 12 months with Expro in the extension trial, there was continuous improvement in white matter volumetric changes in the temporal lobe, and increases in apparent fiber density and radial diffusivity within the AD bundles of 17% and 16% respectively. You may be thinking, that doesn't sound like much, but it is. To give perspective, over a 12-month period, apparent fiber density and radial diffusivity get worse in patients with Alzheimer's disease. To our knowledge, improvement in these metrics has never been seen in patients. These observations or these improvements are supported by data from the CSF proteome that will be presented next week at CTAD, which is the big clinical trials Alzheimer's disease meeting occurring in Boston. We also observed an effect on EXPRO on more traditional biomarkers of disease, specifically tau. Tau is a structural protein necessary for axon integrity. When phosphorylated, the axon degenerates. Phosphorylated tau proteins are liberated from dying axons and can be detected in the CSF. The more phosphorylated tau present, the more white matter loss is occurring. Of the many tau species, phospho tau 217 has the highest discriminative accuracy for Alzheimer's disease. and a strong correlation with amyloidosis and cognitive decline. When assessed in our patients treated with EXPRO for three months, CSF levels of phospho tau 217 decreased 46%. In summary, EXPRO improves the biology of brains in patients with Alzheimer's disease. It decreases biomarkers of neuroinflammation and neurodegeneration while improving biomarkers of synaptic dysfunction, myelination, and white matter brain volume. Because our phase one trial, like nearly all phase one trials, is without a placebo arm, what is missing is the effect on cognition. We have told the story of the patient who quit work because of his dementia and then after six months of expert therapy, returned to his position as an educator. We love that story, but understand it is an anecdote. The Phase II trial is a blinded, randomized, placebo-controlled trial designed to allow us to determine if six months of ex pro therapy in patients with mild AD will have an impact on cognition. We believe it will, and like you, we look forward to the results of the trial. We have previously announced the design of the Phase II trial of ex pro in patients with mild AD and biomarkers of inflammation. We call this ADI, that's a capital A, capital D, small i, Alzheimer's disease with inflammation. Mild ADI is defined as a clinical dementia rating or CDR of 0.5 and 1, or 1, and they have biomarkers of inflammation that are required for enrollment. The six-month trial will enroll 201 patients. The primary cognitive endpoint will be EMAC. early AD slash MCI Alzheimer's cognitive composite. There will be multiple secondary endpoints in both cognition, function, and biology with MRI. Although we are the first to use EMAC as a primary endpoint in an Alzheimer's disease trial, we will not be the only ones to do so. Dr. Judy Yeager of Albert Einstein College of Medicine, a recognized expert in the measurement of cognition, will deliver a talk at the upcoming CTAD meeting next week detailing the advantages of EMAC over the currently used primary endpoints in clinical trials. To encourage participation in the trial, you know, to help recruit patients, quite frankly, we have set up a randomization of two to one. So of those 201 patients, two-thirds will get drugged. Those that complete a six-month treatment will be eligible for a 12-month extension trial and we will continue to collect data on those patients during the extension trial. Placebo patients will be allowed to switch over to the ex-pro therapy. Many have asked how we can conduct a phase two Alzheimer's trial that is small, 201 patients, and short, six months. The answer lies in our biomarker-driven development strategy, which aims to choose patients that progress quickly and have a low variability in their rate of progression. These are elements that provide a statistical advantage in trial design. The details of how these calculations were made will be presented at CTAD next week. We anticipate 40 trial sites to be open in the U.S., Canada, and Australia. Because of our biomarker-based inclusion criteria, we predict there will be a 50% screen failure rate. This combined with the renewed enthusiasm towards AD drug development following the Atacanamab approval means increased competition for patients. We expect enrollment, which will start this quarter, will be achieved at a measured pace. We do not anticipate reporting top line data until the second half of 2023. We will try to beat that, but that is our current prediction. Today, we announce a phase two trial using Expro to treat patients with MCI and a biomarker of inflammation. We believe the earlier the disease is treated, the more likely progression can be stopped with the hope of reversing the disease and keeping it away. In a moment, CJ Barnum, the head of neurosciences for Immune Bio, will give more details on the trial. Why start an MCI trial now? The answer is simple. We watch with interest the rush of companies seeking approval for anti-amyloid therapies based on Phase II trials using the FDA accelerated approval mechanisms commonly used to gain conditional approval in oncology. It is too early to know exactly how this will play out for EXPRO, but we are preparing for accelerated approval after successful completion of our Phase II programs. Two elements are necessary for success, clinically relevant efficacy data and an ample safety database. We believe the potential weakness of a single trial strategy is not enough safety data. Adding a second phase to it has the potential to expand both the efficacy and the safety databases. CJ?