INmune Bio Inc.

Greetings and welcome to the ImmuneBio fourth quarter and full year 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. Thank you, David. The floor is yours.

Thank you, John, and good afternoon, everybody. We thank you for joining us for the call for ImmuneBio's fourth quarter and full year 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 clinical programs. 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 harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statements disclaimer on the company's earning press release, as well as the risk factors in the company's SEC filings, including our most recent quarterly filing with the SEC. There is 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, as the facts and circumstances underlying these forward-looking statements may change. Except as required by law, Immune Bio disclaims any obligation to update these forward-looking statements to reflect future information, events, or circumstances. With that out of the way, now I'd like to turn the call over to Dr. RJ Tessie, co-founder and CEO of Immune Bio. RJ.

Thank you, David, and thank you, everyone, for joining the call. As is our practice, I will arrange my remarks to highlight key takeaways for the first quarter. and subsequent period. We will then move to Q&A, starting with EXPRO. During 2021, we provided extensive detail of our clinical programs in Alzheimer's disease, including the results of the Phase 1 trial and the design of our Phase 2 programs in mild AD and MCI, or mild cognitive impairment, a prodromal form of Alzheimer's disease. The Phase 1 trial exceeded expectations. Studies showed that Expro, one milligram per kilogram once a week as a sub-Q injection, decreases neuroinflammation in patients with ADI. That's capital A, capital D, small i. ADI is the term we have coined for patients with Alzheimer's disease who have biomarkers of inflammation and neuroinflammation. The phase one trial demonstrated downstream benefits of decreasing neuroinflammation, including decreased neuroinflammation. or nerve cell death, improved synaptic function, arguably the most important target in Alzheimer's disease, and remyelination. We provided anecdotes of improved cognition in the phase one trial, but definitive evidence of the effects of XPRO on cognition in patients with ADI awaits the results of the blinded randomized phase two trials. The company understands it must deliver clinically relevant data in these trials. We have presented detailed descriptions of the ADI phase two trials previously. Here I will highlight the two unique aspects of those trials. Both use enrichment strategies to enroll patients and both use EMAC, that's capitalized E-M-A-C-C, to test cognition. EMAC stands for Early Alzheimer's Disease Cognition Composite. EMAC is ideally suited to measure cognitive changes in patients with MCI. and mild AD. EMAC is a highly sensitive index of cognitive change composed of validated neuropsychological test measures. EMAC is psychometrically better suited to the early and mild range of illness than measures such as ADES-COGS. ADES-COGS suffers from a floor effect, which means that nine of the 13 elements are at a ceiling effect, which means that 80% of the MCI patients basically perform them flawlessly. This renders ADES-COGS insensitive to measuring changes in performance in these early AD populations. Finally, EMAC is being used by other companies in AD trials, and we believe it will become the standard endpoint for cognition in clinical trials in this group of patients. Put simply, EMAC is the best tool for the task. I believe that many of the failures of AD drug development in the past have been partly caused by the use of the historically crude measures of cognition. Enrichment strategy is a term coined by the FDA and is commonly used in oncology trials. Enrichment means the use of biomarkers to select patients for a clinical trial to match their disease with the drug therapy. Basically, you're slanting the trial to success. Our CNS trials are enriched for patients who have neuroinflammations. This distinct ADI subset equals about half of the Alzheimer's disease patient population. The ADI enrichment strategy provides trial design advantages that improve efficiency and decrease risk. Because dementia in patients with ADI progresses both rapidly and reliably, I'll repeat, rapidly and reliably, that clinical trials are shorter and smaller than trials that do not use enrichment strategies. Combining findings from publicly available databases, such as the ADNI database of the USC, with data from our phase one trial that showed that the response to EXPRO happens quickly in patients with mild disease, we designed the MCI and mild AD trials to last three or six months, respectively. Please refer to previous press releases, webinars, and the website for more details. The MILD Alzheimer's Phase 2 trial is actively screening patients. We will announce when we have treated our first patient. The MCI trial will start in a few months, and we remain confident that the top-line data we reported in the first half of 23 for the MCI trial the second half of 23 for the MILD-AD trial. In 2021, we contributed eight presentations at the two of the most important medical meetings for Alzheimer's disease, the AAIC and CTAD. We expect 2022 to be equally productive. In three weeks' time, Immune Bio is part of at least four presentations at the upcoming ADPD meeting, the largest Alzheimer's meeting in Europe. We expect to maintain our high profile at the AAIC and CTAD in 2022. One of the bigger advantages of EXPRO to target neuroinflammation is that EXPRO can be used to treat a wide variety of neurodegenerative and neuroinflammatory diseases. We have announced a phase two trial on treatment-resistant depression funded by the NIH, partially funded by the NIH. This third phase two study with EXPRO will be initiated in 2022. Other diseases remain on the horizon, but more of that in the future. Before getting on to IncMUNE, I want to highlight the exciting research using MbO3. MbO3 is a DN-TNF program focused on oncology, and I'll remind you that was our first Phase I clinical trial several years ago. Mucin-4, or MUC4, is a proteoglycan expressed on the surface of many solid tumors. Roxana Solaci has discovered that MUC4 is a biomarker for resistance to immunotherapy. Data using MbO3 in breast tumors expressing MUC4 have been presented at the San Antonio Breast Cancer Symposium in 2020-2021, and the publication list is long and growing. Those posters and publications are available on our website. Why is this program important? We believe two of the biggest trends in cancer immunotherapy is resistance to immune checkpoint inhibitors and innovations in trastuzumab-based therapies. Resistance to checkpoint inhibitors is about the immunobiology of the tumor microenvironment. MbO3 appears to make cold tumors hot and may convert a tumor resistant to checkpoint inhibitors to one that is sensitive to checkpoint inhibitors. The expanding role of trastuzumab-based therapies is following two parallel tracks, and I have to say this is one of the more exciting innovations in the last six months. The first track is that trastuzumab-based drug conjugates, or TRAS-ADCs, the most prominent being NHER2, are being used a lot. The second is the expanding use of TRAS-ADCs in low-expressing HER2-neu tumors. The breast cancer expansion in low-expressing tumors more than doubles the number of patients who may benefit from TRAV-ADC tumors. In breast cancer tumors, in animal models, MUC4 expression prevents binding of TRAV-Tuzumab to HER2-neu, making them resistant to therapy. MUC4 expression is driven by soluble TNF, so when you give NbO3, MUC4 expression decreases, and the tumor becomes sensitive to therapy. Resistance to TRAS-ADC is now being reported in patients, and we expect this conversation to continue and expand over the next year or so. Additional data will be presented at this year's AHCR, and our presence at San Antonio Breast Cancer Symposium will continue. The third, in our opinion, the third big trend in oncology is the increased importance of NK cells. And this is a great segue into our InCommune program. One clear difference of our InCommune program compared to other NK programs is that we do not give NK cells. I repeat, we do not give NK cells, but aim to improve the function of the abundant NK cells in patients with cancer. InCommune is a universal, off-the-shelf therapy with cost-effective manufacturing that activates the patient's own NK cells. I say that again. We believe the patient's NK cells have all the tools they need to kill the cancer, but they lack the signals necessarily to initiate that process. Most patients have plenty of NK cells that just don't work. Inquimune changes the patient's inert resting NK cells into memory-like NK cells. Memory-like NK cells are the cells that matter because they're the NK cells that kill cancer. It's possible to make memory-like NK cells from cytokines, but this requires a triple cytokine cocktail of IL-12, 15, and 18. Because this combination is too toxic to give to patients, This conversion must be done ex vivo in a test tube, a process that is costly and logistically complex. In 2021, we transplanted IncMune from bench to man. Three patients with hematologic malignancies have been treated with IncMune. What have we learned? First, IncMune is safe and well-tolerated. Each of the patients received a single course of IncMune, that is three simple intravenous infusions over a two-week period. Incomune is given as an outpatient and does not require premedication, conditioning therapy, or extra cytokine therapy. Incomune is simple and can be used in any center that treats cancer patients. Incomune performs better than expected in patients. A high percentage of the patient's resting NK cells are converted to the cancer-killing memory-like phenotype, the only NK cells that matter in patients with cancer. The patient's memory-like NK cells kill NK-resistant cancer cells in a laboratory assay. That's to say it's one thing to change the phenotype. It's another thing to make sure that those cells now kill cancer. Before treatment, the patient's NK cells did not kill cancer. After income, they do. Finally, both the increase in memory-like NK cells and the cancer killing lasted for many weeks. We call this therapeutic persistence. In the MDS patient, therapeutic persistence lasted at least 12 weeks. That's at least 10 weeks longer beyond the last infusion of vincmium. This is promising. The science is great, but how are the patients doing? Of the three patients treated, two significantly improved with vincmium. The patient from the high-risk MDS trial shows decreased blasts. decreased transfusion requirements, and improved performance status. Before treatment, he was in bed for half the day as an ECOG-2. Now he's ECOG-0, living a normal life, and for him, a normal life means playing badly. The young woman with a failed bone marrow transplant with relapsed AML remains home with stable disease after a course of incoming. She may still need a second transplant, but the urgency surrounding that decision has been mitigated. The third patient, a young man who has failed two bone marrow transplants due to AML, remains in the hospital. This week, the high-risk MDS program has been peer-reviewed by the UK National Cancer Research Institute Myelodysplastic Syndrome Expert Group. This group has accepted the trial for listing on the UK National MDS trial site. The NCRI scheme is unique to the UK. No equivalent system exists in the US. The NCRI classification allows centers to refer patients to existing UK trial sites for treatment under the existing program. Without this national listing, the patients must be treated in their local healthcare facilities. There's no ability to refer patients elsewhere. This, we hope, will improve enrollment. We also hope that this added validation and exposure to the expert centers that the process entails will provide more patients for the clinical trial now and in the future. Professor Liddell's team continues to dig deeper into how does this work and why is this better than cytokine questions. In 2022, his team will release data at meetings on these questions. Now to the elephant in the room. Why have clinical trial enrollment been slowed and delayed? I promise the company recognizes the problem. The main delay in the Alzheimer's disease phase two trials has been due to expo drug supply. Because of COVID related supply chain issues, new expo was not available until January 2022. This was a four-month delay. Every element of the Alzheimer's disease phase two program was affected by this four-month delay. Now we have 25,000 doses of Expro on hand with another 40,000 doses of drug in the process, in process, so to speak, that will support for future and further development in Alzheimer's treatment resistance, depression, and beyond. The expo drug supply problem is behind us, but the consequences of that delay is the delayed start dates. To make up lost time, we have engaged in international CRO with deep experience in managing Alzheimer's disease trials. We plan to open 45 sites in the mild AD trial and 25 sites for MCI. 85% of the sites will be enrolling both trials. We have hired two additional employees to supplement our existing team to speed site initiations. Finally, we have made an important change in the MCI trial. Bear with me for this on a moment. Last year, we committed to positioning ExPro for accelerated approval in Alzheimer's disease if Lilly followed a phase two accelerated approval regulatory path with Donamimab, their promising anti-amyloid therapy. The CMS decision on January 11th made it clear that phase two programs will most likely be required. This decision impacted our development plans. We have altered the design of the phase two trial in MCI. It will now be a two-arm trial. Previously, it was a three-arm trial. Comparing 12 weeks of one milligram of Expro to placebo. 60 patients enrolled in a two-to-one ratio. There will be no patients enrolled at two milligram per kilogram. The elimination of the two milligram per kilogram arm allows us to eliminate invasive diagnostic and biomarker assays that were going to be a barrier, so to speak, to enrollment. The trial endpoints, the statistical power, none of the other elements have changed, and none of the elements of the mild AD phase two trial have changed. The time from first patient enrolled to the last patient enrolled in the MCI trial should be improved with the elimination of these invasive tests. In summary, we expect, as we have in the past, that the Phase II trials in MCI and mild AD will report top-line data in the first half of 23 and the second half of 23, respectively. That is, The MCI trial will report in the first half of 23, and the mild AD trial will report in the second half of 23. IncMUNE is equally frustrating. I mentioned one benefit of the NCRI classification is that centers can refer patients to clinical sites outside of their catchment area. The second benefit is it allows other expert centers in the UK to join the program as a clinical site. We hope the NCRI classification enlarges the pool of eligible patients for this high-risk MDS trial. We are also looking to expand into sites outside of the UK. Our goal is simple. Get eight additional patients enrolled by the end of 2022. With that, I will turn it over to David Moss, our CFO, to review certain financial items.