INmune Bio Inc.

Greetings and welcome to the ImmuneBio fourth quarter and full year 2022 earnings call. This conference will be recorded.

A brief 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. It is now my pleasure to introduce Mr. David Moss, CFO of ImmuneBio. David, the floor is yours.

Thank you, Paul, and good afternoon, everybody. We thank you for joining us for the call for ImmuneBio's full year 2022 financial results. With me on the call is Dr. RJ Tessie, CEO of ImmuneBio, and Dr. CJ Barnum, VP of Neuroscience, who together will provide a business update on our dominant negative TNF platform, or EXPRO. Also on the call is Dr. Mark Lodell, Chief Scientific Officer of Immune Bio, who will provide an important update on IncMune, our memory-like natural killer cell oncology platform. 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 earnings press release, as well as risk factors in the company's SEC filings, including our most recent 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 the date they are made as of the facts and circumstances underlying these forward-looking statements may change. Except as required by law, Immune Bio disclaims any obligations to update these forward-looking statements to reflect future information, events, or circumstances. Now, I'd like to turn the call over to Dr. RJ Tessie, CEO of Immune Bio. RJ.

Yeah, thank you, David, and I thank everyone for joining us today. As usual, I will arrange my remarks to highlight key takeaways from the fourth quarter and provide updates on our platform programs. I will start by reviewing our developments in EXPRO. C.J. Barnum, the VP of CNS Development, will help me with those comments. I will then hand it over to Professor Mark Waddell, our CSO, who will focus on what's going on with the IncBio program before I pass it back to David. to go over the financial results and provide an update on upcoming and new milestones. This will be followed by a Q&A. I will begin with our Phase 2 program in Alzheimer's disease. Actually, ADI is what we call it, Alzheimer's disease due to inflammation. We continue to enroll patients in the U.S. and Canada. The FDA's full clinical hold has affected our timeline. This has encouraged us, the company, to develop alternative strategies to meet our primary goal of completing the Phase 2 Alzheimer's program in a timely fashion. We have implemented several important changes in the last few months to help us reach that goal. We will modify the enrollment criteria in the larger, longer Phase 2 mild AD trial to include both mild AD and MCI patients, mild cognitive improvement patients. As you know, they're kind of a prodrome for Alzheimer's. So adding the MCI patients is a new change. This consolidates the MCI and the mild Alzheimer's disease trials into an early Alzheimer's disease phase two study. As you recall, we had separated them previously into separate trials. The combined trial should improve our ability to demonstrate a clinical benefit, and patients receiving EXPRO should accelerate enrollment and reduce costs. The consolidation should help us achieve our goal of reporting top-line data from the blinded randomized placebo-controlled Phase II program in early Alzheimer's disease in the second half of 2024. Consolidating the trials allows an estimated $8 million savings from the budgeted costs of the MCI trial. We will use these savings to open additional clinical sites and other regulatory venues to help speed enrollment. The new early ADI trial design conforms to industry standards and mimics what we would plan to do in the Phase III registration trial. During the FDA clinical hold, we have expanded our clinical development horizons beyond the U.S. We are aggressively looking for ways to enroll patients globally while working our way through the FDA hold. By operating in foreign jurisdictions now during the Phase II that we hadn't originally intended to, we should improve the efficiency as we enter the pivotal Phase III study, that is the efficiency of getting that phase three up and running. To be clear, the consolidation of the two trials does not increase regulatory or clinical risk. In fact, we believe it reduces clinical risk while also conserving resources and positively benefiting enrollment. C.J. Barnum, VP of CNS Development, will comment on this further when he speaks. We described the ex pro asset as an iceberg with multiple CNS applications and a hint of applications outside the CNS therapeutic silo. Given the broad swath of diseases that can benefit from dominant negative TNS therapy, I often call Expro a pharmaceutical company in a bottle. A review of the more than 75 publications on our website provides a window into the many clinical opportunities. Each of these clinical applications outside of the CNS therapeutic silo are business development opportunities. How can ImmuneBio take its scarce resources to be serious about business development? How can we leverage Expro into that business development program? In January, we unveiled how we plan to solve these two problems. We formed a wholly-owned subsidiary, DNO2, Inc. that will hold the intellectual property to facilitate partnering and business development in the Duchenne muscular dystrophy. I'll call that DMD as I go forward. This structure allows us to pursue a partnership in DMD without compromising the company's CNS franchise. Why is DMD the inaugural partnering effort? Well, TNF has long been, soluble TNF that is, has long been known to be part of the pathology of Duchenne muscular dystrophy.

Attempts to use non-selective TNF inhibitors to treat DMD never reached the clinic because of cardiac toxicity.

We believe that the DNTNF solves this problem because of its selectivity by protecting transmembrane TNF function while neutralizing the devastating effects of soluble TNF on skeletal muscle. The DMD therapeutic landscape has been focused on controlling inflammation, primarily with corticosteroids, and by replacing dystrophin, primarily using gene therapy strategies. In animal models of DMD, DN-TNF therapy decreases fibrosis and promotes muscle regeneration. Muscle regeneration is the holy grail of DMD therapeutics. The apparent ability of DNTNF to promote muscle regeneration is unique. Hence, we are seeking a partner to drive this clinical program forward because we think it will benefit patients and investors. In addition to the right business structure for partnering, you need a drug to place into the partnership. Partnering our Crown Jewel Expro is not an option at this time. We have work to do to add value to that prized asset. Over the past 18 months, we've been working to develop new compounds with the biologic capabilities of Expro, but that are considered new chemical entities, that is, new drugs. We call these the PSARs. CuraPath, a company in Spain, has developed these polysarcosine polymers that are half-life extenders that replace the PEG on XPRO. You remember, XPRO has a 10 kilodalton linear PEG that is its half-life extender. The PSARs, we call them the sons of XPRO, function as selective inhibitors of soluble TNF, but they have novel IP and have slightly different biologic characteristics that can be leveraged into the new indications. in some ways tuned to fit the indication that they are earmarked for. We have earmarked one of these novel PSAR compounds for DMD. Put simply, the PSAR program converts EXTRO, the drug, into DN-TNF, dominant negative TNF inhibitors, the drug platform, with applications across many areas of medicine. You will learn more about this important program in the near future. We do plan to launch the treatment resistant depression program in the US in 2023. It will happen after the FDA hold is resolved. We anticipate top line data from the early AD phase two program in the second half of 2024. The exact timing of that data release in the second half of 2024, it's a little early to predict exactly where that end because we are moving in a lot of different regulatory jurisdictions at the same time. But now I will pass it over to CJ Barnum, the Vice President of CNS Development, who can speak more about the early ADI program.

CJ? Are you on mute? Thanks, RJ.

As RJ mentioned, the ADO2 Phase 2 trial in mild Alzheimer's patients with inflammation is open in Australia and Canada. As a reminder, ADO2 is a blinded, randomized, placebo-controlled study evaluating cognition in mild AD patients and biomarkers of inflammation. We have started the process to include MCI patients also with biomarkers of inflammation into that trial. This complex regulatory process is underway. Once complete, this trial will enroll early AD patients, a group that includes both MCI and mild AD patients. These patients will be treated with Expro for six months. Including MCI patients has two important benefits. First, it improves our ability to observe a clinical response as our expectation is that EXPRO will have a greater benefit in MCI patients than in even mild AD patients. This is further driven by extending the treatment of MCI patients from three months as we were in AD03 to six months of treatment. With longer therapy, both the number of MCI patients responding and the magnitude of that response should be greater. Second, our clinical sites have told us that including MCI patients increases the number of eligible patients for the trial and should positively impact enrollment. Importantly, consolidating trials allows us to save costs by treating fewer patients in a single trial. The primary reason we had to separate studies, we had two separate studies for MCI and mild AD were based on the MRI biomarkers of primary interest, not clinical outcome. As you may recall, the primary endpoint for both ADO2 and ADO3 is the EMAC, a cognitive composite that was empirically derived to measure clinical cognitive changes during early AD. As it relates to the differences in imaging biomarkers, we will address these differences by pre-specifying the expected change in MCI and mild AD patients. Patients that complete the six-month Phase II early ADI study are eligible to enroll into a 12-month open-label extension trial, or OLE. The OLE study is a 12-month study where safety and efficacy of EXPRO will continue to be evaluated. Efficacy will be assessed every three months by MRI and clinical rating scales. All patients that enroll in the OLE study receive EXPRO regardless of previous treatment assignment. The OLE serves multiple purposes. First, it provides long-term safety data. We believe regulatory authorities will expect 18 months of safety data for marketing authorization. The OLE strategy will provide this critical safety data. Second, the OLE provides long-term efficacy data. Third, the OLE is a recruitment tool. Guaranteed access to 12 months of treatment following a six-month study provides significant advantages over other trials. Patients and clinical teams like this trial design, and so far, patient participation in the OLE is high. We expect to share some of this data in due time. Now, I'd like to pass the call back to RJ.

Thank you, CJ.

I will now move to Incune, our memory-like natural killer cell priming program. The high-risk MDS-AML Incune phase one program continues to make progress in the UK with a second site now open at the Royal Hampshire Hospital and at Sheffield University Medical School. A patient was consented this week and treatment is planned for March 7th, a week from today. Excuse me, March 9th, a week from today. In addition, we will also be expanding the MD-SAML program into Europe with a third site. Atacon University Hospital in Athens, Greece is expected to open later this month. We've previously stated that ink immune may be an ideal therapy to treat solid tumors because of its performance in the hospital environment of the TMA. Mark Liddell will discuss this more in a moment. In October, we announced positive solid tumor preclinical data in prostate, renal cell, ovarian, and nasopharyngeal cancer cell tumor lines, that tumor lines that are all resistant to NK killing, that when the NK cells are treated with INCMUNE, they now can kill these NK resistant tumors. We implied we were pivoting to solid tumors because we thought the effects of INCMUNE were somewhat unique. And today, we are pleased to announce that the company will be filing for an IND to use ink immune to treat patients with metastatic castrate-resistant prostate cancer in the US. Prostate cancer is the most common cause of cancer in men, if you exclude non-melanoma skin cancers. The trial is expected to take place in four or more medical centers in the US. It will enroll approximately 30 patients in a flexible Bayesian design that will allow us to determine safety, proof of biology, and confidently pick the dose of Incommune to move into a blinded, randomized, potentially pivotal trial. As you have come to expect, we are using a mix of standard and novel biomarkers to measure tumor response. When finished, we should have a a good understanding of how the drug works in the disease, and have a credible biomarker package to move into the blinded randomized trial. If I can paraphrase the quote from Professor Matt Rettig, the principal investigator from the Johnson Comprehensive Cancer Center at the UCLA School of Medicine, quote, there are no good options for metastatic castrate-resistant prostate cancer especially given the recent failures of checkpoint inhibitors, end quote. We are excited about the potential of Incommune in treating solid tumors and hope to make a difference in men with prostate cancer.

With that, I'll pass it to Professor Mark Liddell, CSO. Mark.

Thank you, RJ. And thank you once again to everyone that's joining us to hear what I think is some really exciting progress that we've been able to make. So some of you will know that we recently shared with the investment community positive solid tumor efficacy data with IncMune in multiple cancer cell lines, as RJ alluded to. And as we highlighted in our recent press on the topic, solid tumors are the majority of human cancers. I'm sure you all know that. but cell therapies currently focus on the 10% hematoma or liquid cancers. The recent data that we've shown and shared with people provides insights into why the company believes that immune harms natriurecular cells to override the oppressive hypoxia and regulatory cells in the tumor environment, or the TME for short. The interaction of the TME with cancer cells and immune cells can drive tumor progression, and that's well known. And it's thought to prevent many cell therapies from being effective. And we've seen that increasingly over the last few years. These complex interactions have to be considered when designing cell therapies to treat solid tumours. And the TME is hostile to cell therapies because of these two things, the presence of the immunosuppressive immunoregulatory cells and the extreme hypoxia or lack of oxygen within the tumour. So a cell therapy to be effective must operate in that style environment. And what we've shown over the last 12 months and more recently, that INCMUNE converts resting normal NK cells in patients into what are now known in the field as memory-like NK cells. And these can target solid tumors directly, even in the presence of immunosuppressive regulatory cells, as we've shown, and particularly in hypoxic environments. The company's preclinical data with human NK cells and cancer cells show that INCMUNE primes NK cells from patients and indeed from healthy donors, to Ly's NK-resistant solid tumor cell lines. And we've worked with ovarian cancer and published those data, breast cancer, prostate cancer, more recently, renal cell carcinoma, and now, straight out of the box, nasopharyngeal cancer cells. And when compared to resting NK cells, which are normal NK cells from healthy donors or patients before treatment with IncMune, the IncMune primed NK cells demonstrate this enhanced ability to kill these resistant tumor cell lines. And you'll see some of those images on the website if you have time. I was fortunate enough to present the data on behalf of the company at the Innate Killer Summit in Europe, in London, on October the 19th, and the data were very well received and have led to a lot of discussion. And a video of that presentation is currently available on the company's website under the Therapist tab. It's also on Immune Videos on the company's YouTube channel, if you get a chance. So in the field of cell and gene therapies, it's becoming increasingly apparent that regulatory agencies such as the FDA require extensive understanding of the mechanism of action of these novel therapies before they'll consider licensing as a commercial drug for attaining the BLA. And at ImmuneBio, we've been lucky. We've been focused on the MOA of InkMune since we really conceived this drug back in 2006 before the company was formed. Latest proteomic data, genomic and metabolomic data, the so-called omics, clearly explain how InkMune works and delineate the differences between InkMune stimulation and cytokine stimulation used by our competitors. And the recent video presentation explains some of these data and I'm very happy to take questions. In parallel with increasing our knowledge about InkMune mechanism of action, we've continued to treat patients and expand our clinical activity. Four patients have received the complete three-dose regimen with complete safety. In fact, the most recent patient was treated on an outpatient basis, which is our planned treatment scenario with a licensed medicine, and it's a world away from the sort of days of hospitalization associated with current adoptive cell therapies. Three of the four patients treated so far have shown evidence of sustained NK cell activation in their blood, and we're analyzing the biomarker data from those patients to identify those which best predict outcome. I'm pleased to say that the first MDS patient we treated in the clinical trial remains alive 20 months post-treatment, so he's now had his 80th birthday, and he's enjoyed a much improved quality of life with fewer hospital visits. The second patient, a young lady with acute myeloid leukemia, which transformed from myelodysplastic syndrome, and with bone marrow failure after a third failed allogeneic stem cell transplant, She'd been hospitalised for six months and she received IncMune within a month, had stabilised her blood counts adequately with an adequate neutrophil recovery to allow her to be discharged from hospital and go home. Clinically, she'd had reduced bone pain, was scheduled for a fourth transplant, but eight months post-IncMune treatment, she sadly relapsed unexpectedly and rapidly died. But the third patient treated had chemotherapy refractory AML, and much as the first patient had failed two bone marrow transplants. Post-inc immune, his disease stabilized for four months before relapse again with a new clone of acute myeloid leukemia, and he has recently received a third unrelated donor transplant. So this emphasizes how sick these patients are that we've been treating. The most recent patient is a 17-year-old young lady with MDS. who relapsed with acute myeloid leukemia post-unrelated transplant in 2020 and again after a second cord blood transplant in 2022. After further chemotherapy, she achieved remission and was treated compassionately in July last year. But interestingly, the majority of her cells were immature NK cells, which may reflect the fact that she's had a cord blood transplant, and they showed little evidence of improved function after in stimulation. Her disease progressed and she received further chemotherapy. prepare her for a third unrelated donor transplant, and she remains the one patient we've treated who doesn't appear to have responded significantly to inguine. So whilst very early in the development of inguine and being restricted to using the lowest dose at this time, the chief trial investigator has treated all four patients, said, and I all enjoyed an improvement in general fitness and resolution of fevers, stabilized or improved counts, and we were able to give breaks from low-dose chemotherapy that they had been receiving. there was definite improvement in subjective parameters of well-being, mood, appetite, and clinical performance status. So the clinical experience of these four patients was presented at the American Society of Hematology annual conference in December. Also in Q4 last year, we received approval to widen the trial inclusion criteria to allow patients like the three compassionate cases to be enrolled in the future. And moreover, as RJ said, the second clinical trial opened in the U.K., We have enrolled the first patient from that site, and soon a third site will be opening in Europe, in Athens, in yet another regulatory environment. So in preparation for the increased recruitment into the Laurel trial in myelostatic syndrome and opening of new trials in metastatic castration-resistant prostate cancer, as you've heard, the company's invested in upscaling the manufacturing process and the validation of that new process to CGMP is now complete. This forms the basis of the IND application to the FDA, and we're delighted that our tight budget control of inkimmune development so far has allowed us to invest now in the additional manufacturing capacity and clinical trial staff to support our expansion into solid tumors and to open our first inkimmune trial in the US. This invest is the way for our ambitious plans for trials in other solid tumors, going back to the original plan for ovarian trials but also in renal and shortly, we hope, nasopharyngeal cancer, as we have relevant supporting data to submit to regulatory agencies. I think the combination of basic research into mechanisms of action, the manufacturing improvement of clinical trial operations in the UK, the broader Europe, and the US, plus the continued preclinical research in new diseases such as renal and nasopharyngeal, put the company in an excellent position to support the immune trials in solid tumours in the US and elsewhere. And I'll now pass the call back to Audrey. Thank you.

Thank you, Mark.

So we kicked off 2023 with our heads down, focused on continuing to expand and advance our existing and contemplated trials in the ways that we can manage our resources, including our costs and our goals to get drugs approved that make a difference at the bedside. David will touch on the financial issues later in his remarks. As we enter the second quarter, the conference and events calendar comes back to life. We will be attending the annual ADPD conference, the largest ADPD medical event in Europe the last week of March. April, we are presenting two abstracts at the AACR on the role of DNT-NF targeting MUC4-expressing tumors as part of combination therapy. MBO3 is the product that is part of the DNT oncology branch of the EXPRO platform that we have designated for our oncology activities. In July, AAIC, the Alzheimer's Association International Conference in Amsterdam, will be the center of the AD world. We will be there providing insights into that vaccine disease that do not include amyloid or tau. As you might expect, we are frequently asked about the FDA hold. We continue to work closely as the FDA works to resolve issues that are unique to the FDA. We continue to enroll patients in Australia and Canada and are focused on how we can accelerate our core Phase II program in early AD in venues outside of the U.S. that will be beyond Australia and Canada. To be clear, the problems we are facing with the Phase II program will not compromise the potential of extra long-term in Alzheimer's disease. We expect the U.S. will open in time to include Phase II patients. in the current trial, and we fully expect the U.S. will be a very big part of any successful global phase three registration program for ex pro and early AD. We are planning for success in early AD and beyond in diseases like TRD and the many other CNS diseases where ex pro will have value. At this point, I will turn it over to David Moss, our CFO, to review financial items. David?

Thank you, RJ. I'll provide a brief overview of our financial results and upcoming milestones before we head to our Q&A session. Net loss attributable to common stockholders for the year end of December 31, 2022, was approximately $27.3 million, compared with approximately $30.3 million for 2021. Research and Development Expense totaled approximately $17.1 million for the year ended December 31, 2022, compared with approximately $20.5 million for 2021. General and Administrative Expense was approximately $9.3 million for the year ended December 31, 2022, compared to $8.8 million for 2021. As of December 31st, 2022, the company had cash and cash equivalents of approximately $52.2 million. I'll remind everyone this does not include the recent $6.4 million we received in early Q1. Based on our current operating plan, we believe our cash is sufficient to fund our operations into the second half of 2024. As of March 2nd, 2023, the company had approximately 17.9 million shares of common stock outstanding. I'd like to highlight that for 2022, we sold only 82,900 shares that went only to insiders. As RJ previously mentioned, we are focused on achieving our research and trial programs objectives while remaining prudent on costs. To that end, we estimate that the consolidation of the AD and MCI trials will reduce the forecasted budget outlie for the two combined trials by approximately $8 million. As we continue to dialogue with the FDA, our budgeted spend in the U.S. is not occurring as forecasted, thus resulting in less capital outlays. As previously pointed out, our cash burn has been less than budgeted because both the delay in starting the trials in the U.S. in tandem with the broad-based strength of the U.S. dollar reducing foreign costs, particularly in Australia. Further, we were pleased to report last month the receipt of the combined $6.4 million in total research related to rebates from Australia and the United Kingdom. As highlighted in the release, we expect to continue to receive further cash rebates as we spend on international-based trials, in particular in Australia. We plan to reinvest the cash rebate in increasing recruitment and enrollment in the early AD trial in Australia and Canada that will now include MCI patients as well along with potentially other foreign jurisdictions to facilitate the enrollment of early AD patients into the ongoing phase two trial. All of the aforementioned items better position us to manage our CAS runway more efficiently to reach our targeted goals of recruitment. Now I'd like to move on and list our upcoming milestones. Top line results for our Phase II early AD trial in patients with inflammation and Alzheimer's disease is expected in the second half of 2024. We will initiate a Phase II trial of EXPRO-1595 in patients with treatment-resistant depression upon resolution of the FDA manufacturing review. Additional open-label Phase I trial data of INCBUNE in high-risk MDS and AML in 2023 along with the initiation of more sites in the UK and Europe, as Mark mentioned earlier. Initiation of a phase one slash two program in metastatic castration-resistant prostate cancer upon the acceptance of the IND by the FDA, which should occur in the first half of 2023. Finally, we are pursuing business development opportunities, and there could be no assurance the company can complete any such transaction as they are complex and difficult. We have two great platforms, and as a small company, we will try to expand the application of these platforms in areas that we do not have the resources or expertise to pursue ourselves in order to benefit shareholders. Naturally, we will update investors should material business development events occur. In summary, we are pleased with our progress during the quarter and full year of 2022 during a turbulent time in the market and unexpected regulatory hindrances. As we continue to navigate our way through this challenging time, we are grateful to our shareholders' trust and support in our company as we continue to work hard to bring value from our platform technologies by carefully managing our shareholder resources. At this point, I'd like to thank you for your time and attention. I'd like to turn it back to the operator, Paul, to poll for questions. Paul?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

One moment, please, while we poll for questions. Thank you.

Our first question is from Jason McCarthy with Maxim Group. Please proceed with your question.

Hey, guys. Thanks for taking the questions. First question on IncMUNE, as it relates to your mention of several solid tumor types where it seems to be effective, but you've chosen to go to metastatic castration-resistant prostate cancer. I'd like to know what prompted that decision. And as a second part to that question, this space has a very defined treatment paradigm. and kind of where does this fit in or where are you targeting when you think about things like Xtandi and then kind of salvage chemotherapy. We've just seen, you know, Pluvicto is out there now, and Merck just the other day pulled the plug on Keytruda and Xtandi combination.

Yeah, thanks, Jason. You know, in our minds, the choice, and we didn't make this alone. We worked closely with experts in oncology on this decision. The choice was pretty clear, and it's really based on what you just said. There are no effective immunotherapies for patients with metastatic catheter-resistant prostate cancer that have failed an androgen therapy of some sort, and the the enzyme, the various inhibitors. So these patients kind of go into a status of dealer's choice at many institutions. And, you know, although chemotherapy is often used, the patients can often be elderly. It's not a great choice for them. And quite frankly, they don't work. So what excites the people we're talking about is the fact that you may have an immunotherapy, which, as you know, every other tumor that has had an effect of the immunotherapy, there's been a difference in survival. Prostate cancer doesn't have one. Is Incommune it? Well, the preclinical data suggests it's it, but we will have to do this randomized trial or this trial, this multi-step trial to actually determine if Incommune is an adequate therapy. The second reason we like prostate cancer is, as you know, we're kind of the king of the biomarkers and Prostate cancers, particularly metastatic castrate-resistant prostate cancer, has a lot of very informative biomarkers. There's the traditional biomarkers of, you know, PSA in the blood, CT scan, and bone scans. But there are some developing biomarkers that are much more interesting for understanding tumor burden, including circulating tumor DNA and the PMSA PET scans. which helps you quantify residual disease. This gives you really quantitative evidence of disease status and which way it's been. So we like aesthetic castrate-resistant prostate cancer. We think it's quite a large opportunity that's growing in size. And quite frankly, the competitive landscape out there is not well-defined because almost every region of the country treats the disease difference.

Can I just add? Sorry, I interrupted.

Absolutely. No, I'm done. Go ahead, Mark.

Now, I was just going to say, one of the things that frustrates me as someone who trained as an immunopathologist is a lot of the attempts at immunotherapy are based upon a natural assumption that T cells are the king of cancer immunotherapy. And yet, as my old boss said to me over 40 years ago, you should go and look at the patient. If you look at publications of the cells that are infiltrating prostate cancer and the infiltrates that are associated with outcome, It's NK cell infiltrates, not T cell infiltrates. And checkpoint inhibitors that have been used so far don't target NK cell function. So what we're effectively giving, if you like, and I wouldn't use this lightly, but we're giving NK checkpoint inhibitor. It takes the resting NK cells that are in the tumor and hopefully will pump the way that they do in the lab. So yeah, I think what we're looking at here is going for a tumor where there is good evidence from public literature that the number of NK cells that are there and the type of NK cell is potentially prognostically valuable. So that's another good reason for prostate cancer.

Got it. And just shifting gears to the Alzheimer's side, if you enroll all the patients in the AD trial before you get off clinical hold, does it hurt any standing patients? with the company and the FDA?

Good question. The answer is absolutely not. You know, I think I've been clear that we will definitely, we're going to have to do a phase three trial. The phase three trial will look, we assume is going to look very similar to what this phase two trial looks like. So it will be a global trial that will include obviously North America, Europe, and parts of Asia. So the U.S. will be a very big part of that. So there will be – there's absolutely zero risk that even if we, you know, enroll every patient outside the U.S., that that will compromise our ability to move forward.

Okay. Are you selecting countries or more international countries for this trial so it does set the stage then for – Oh, yeah. Absolutely.

Absolutely. Absolutely. I mean, all of the countries we're selecting would be countries that you would have on your list for a global regulatory phase three.

And just like, just briefly, last question, if you combine or when, as you are combining the MCI and mild AD trials into one quote unquote early AD trial, how does it not increase the trial size or what will the total trial size end up being now?

Yeah, CJ, why don't you go ahead there? Can you hear me? Yes. So it's a good question.

It really, I mean, it comes down to when you're powering the study and what your assumptions are. So the assumption is that MCI patients will perform better than even mild AD patients. So when we do that power calculation, we actually increase our likelihood of seeing a positive result on the EMAC. Now, we believe it's going to increase the trial size a little bit, but we're talking 10, 20 patients, not talking 100 patients.

So the total size would be 20-ish?

So it's 220-ish. 220-ish, yeah. I mean, about that. Don't hold it to that number, but that's the kind of magnitude we're looking at. It's not adding the two trials together. It's not 204 plus 60. it's 220, okay?

Got it. Okay, great. Thank you, guys, for taking the question.

Yeah, just to reinforce what CJ said, remember, the trial power comes from the difference between the treatment arm and the placebo arm. And the kind of the unsung hero here is that by taking Doubling the length of the MCI trial, as CJ said in his comments, means you get – we anticipate more response in the MCI group. So you will increase that delta between the MCI treatment group and the placebo group, and only good things happen when you do that.

Got it. Thank you, guys. Thank you.

Our next question is from Tom Schrader with BPIG. Please proceed with your question.

Good afternoon, and thank you, Mark, for asking or answering my big question about why castrate-resistant prostate cancer because that's a tough one. On another one, I wanted to ask about the new program in DMD. You commented that there's a little bit of a historical issue with conventional TNF scavengers that ex pro might get around some of those issues. I think you mentioned cardiac tox. I would ask how de-risked is that idea or the ex pro gets around it, or would a partner need to do some work to show that this is no longer an issue? And then I have an AD question later on.

Yeah. So I think that's an excellent question. Let me give you, let me give you the de-risk and then I will, I will give you a, uh, an educated guess on whether a partner is going to have to do specific issues. So what happened when they used the original non-selective TNF inhibitors in mouse models, in mouse models, to treat DMD, long-term there was a decrease in cardiac output in the mice. Now remember, patients and animals with DMD actually see a decrease decrease in cardiac function over time. It's part of the muscular effects of the dystrophin abnormalities. But actually, the TNF inhibitors made it worse. So that basically, they just stopped. And what I found pretty interesting from the literature is they stopped, and this literature is kind of old, let's call it early 2000s. They stopped because they became contented with the results they were getting with corticosteroids, right? So the reason we're quite confident that this is not going to be an issue is because of the selective nature of soluble TNF. We have one published paper that shows in a model of exercise-induced atrial hypertrophy in mice that actually ExPRO decreases the hypertrophy and decreases the fibrosis. Fibrosis is part of the pathology of DMD. And we have unpublished data in another cardiac model that shows that expro, and you should see that data probably mid-year, that expro has benefit on cardiac disease. So, in fact, we have pretty good evidence in animal studies that expro is actually beneficial to the heart. And we are soon completing a six-month DMD study in the mice where the primary endpoint is cardiac output. So at that point, I'm pretty confident we'll completely de-risk it. Now, does this mean that when someone takes this and drops it into kids, are they going to have to somehow de-risk it beyond the standard clinical trial perspective? I don't think so. But, you know, because of the benefits of the drugs that are beyond just anti-inflammatory. But I would rather wait until someone, you know, hopefully a partner actually talks to the FDA. But the bottom line is our data in cardiac with Expro is quite positive. We will have, you know, really unequivocal data based on the animal models quite soon. But everything is pointing to that should not be a problem, and the fact that Expro actually improves cardiac function in most disease models.

Got it. Thank you. It may be probably a CJ question. I understand you want to get Expro approved as a standalone therapeutic in Alzheimer's disease, but it's increasingly clear that ARIA is a neuroinflammatory process associated with the A-beta antibodies. Have you thought about trying to get a signal to reduce ARIA in an A-beta model or in a small trial? Is that a reasonable way to think about getting a quick signal that I think a lot of people would be interested in?

I think we've said previously that's something we think we agree with you. And we think about all sorts of things, not just ARIA, but across the board. And we think Expro is going to be an excellent drug for combination therapy in general. So I guess the answer to your question is yes, we've thought about it quite a bit. We thought about a lot of things, and hopefully in the near future, you know, as we get going in our programs here, we can start entertaining them a little more.

Yeah, Tom, RJ here. I mean, that is obviously a question we talk about a lot. We have done a bit of a deep dive. There is no, to our knowledge, and if someone... Hezman, please contact us. To our knowledge, there's no rodent, rat, or murine model of area. In other words, if you give an anti-amyloid drug to a rat or a mouse, nothing happens. To our knowledge, the only area model is a spontaneous area model in some strain of monkey, which is not one of the standard strains. And these animals are extremely rare. So it's not like we could just buy a give them an anti-amyloid drug and see who develops area and then treat it because that would be the fastest way forward. We have some ideas. We're talking to people, but we believe, we agree with you that the Achilles heel of the anti-amyloid strategies, if I can be snarky, besides the fact that they only work somewhat versus well, they only work somewhat, is their safety signals. associated with ARIA. And I think that moving forward, people will be a lot more comfortable using a drug with its efficacy profile if the safety profile can be solved. So it's on our radar screen, and stay tuned.

Good. Thank you. Thank you. Our next question is from Daniel Carlson with Tailwind Research.

Please proceed with your question.

Hi, guys. Thanks for taking my questions. Just a quick one on the timeline for the AD MCI trial. Does the second half of 2024, do you need U.S. approval at some point to reach that timeline, or is that based on, you know, just what you have going on?

So, thanks. We, you know, we are...

I hate to say this, but we're quite confident we're going to be off. We'll solve the FDA problems this year. And so we'll, we'll include patients, but you know, the more successful we are in getting psyched up and running outside of the U S and how fast they enroll. Some of these areas we're looking at are historically quite rapid enrollers, you know, dictates whether it's going to be mid year or later in the year. So again, you know at the end of the day it's going to be 2024 it's going to be the second half don't let us get a little farther on um and there will be u.s patients in that in the phase two trial it's just you know i i don't want to give you what the percentage will be at this point okay fair enough thanks um and then dj had mentioned that you're going to get some data from the open label extension

He said in due time. So, I was wondering if you could just sort of tell us what to expect from that. And I was curious, in particular, if you're measuring cognition in the open label extension, if we'll get a chance to see that at some point. CJ?

Hey, Dan. So, yes. So, we will be measuring all the clinical rating scales that we have in the AD. O2 study will be continued in the open label extension study. So, we'll get those every three months along with MRI data. Like I said, our intention is to share that data, but I don't have a timeline as to when we'll see that at this point.

Okay. Yeah, and an interesting problem, Dan, an interesting problem, Dan, is you know, since the phase two is blinded, we actually won't know if a patient has been a placebo patient or an active patient. So suddenly they show up day one on the OLE, right? They could be a de novo patient or they could be someone who's already had six months of therapy. So it's not like we're going to know in the first month or two, what's going on. We're going to need some time to figure this out, but it, You know, remember the three values or the three important elements of the trial of the OLE that CJ mentioned. One, it gives us that long-term safety data that we know the regulatory authorities are going to want. Two, it gives us the long-term efficacy data that we know the regulatory authorities are going to want. And the third thing is it's trade bait. What I mean, trial bait, rather. In other words, we're trying to encourage clinical teams to enroll their patients. We know it's competitive out there. One of the great advantages of the expo trials being only six months is that even if you end up on the placebo trial, your progression rate is not going to be so catastrophic that you potentially can't benefit from some other clinical trial. You don't become unenrollable, so to speak. And if you do participate in the trial, you're guaranteed to get what we think is going to be a beneficial drug after the period of that trial, whether you're on placebo or not. So the investigators have been very supportive of this strategy because at the end of the day, you know, when you walk into a memory clinic now, they've got three or four or five trials that they can choose between to enroll their patients. And, you know, they're always trying to look out for the best wishes of their patients. And we think this puts us high on the list.

Yep. And then one last question, just, yeah, I've just looked briefly since your press release, but your PI and the ink immune prostate trial seems to be a pretty big deal. I'm just wondering what his motivation was to work with you guys on this.

Well, I'll let you ask.

I'll let you, I don't want to put words in his mouth, but this is a, this is, as you said, he's a very experienced guy. clinical trial is he has particular insight and expertise in immunotherapies. And I think he's just, my sense is he's been frustrated that all of his other buddies in the cancer world, whether you're lung cancer or melanoma docs, have all these interesting immunotherapy tools to use, checkpoint inhibitors, you know, ADCs, et cetera. And he doesn't have anything, right? And he states that we've reached the limit. I think this is in his quote in the press release. We've reached the limit with what we can do with the effective therapies we have. And those are inhibitors, anti-androgen strategies, and chemotherapy. So he believes the only way he's going to progress is with a immunotherapy. And Mark, you heard Mark's comments. Mark convinced him that What they really need is a therapy that targets NK cells, and he's on board. So we're pretty excited. He's a very good guy, but he's been there, done that, and he's been involved in every immunotherapy failure in prostate cancer going forward because that's what the field has been focused on. They're trying to replicate the success they've had

in you know in breast cancer and in lung cancer with immunotherapy and prostate cancer and so far it's been a it's been a disappointment well thank you and thanks for your answers guys and i'm looking forward to a big year from you thanks tom thank you there are no further questions at this time i'd like to turn the floor back over to dr rj tessie for closing comments I think you're on mute, RJ. Well, okay. Thank you.

So thank you, everyone, for participating in the call. We continue to make progress despite the regulatory challenges and the dislocations in the capital markets. We believe we have novel products that will be valuable to clinical teams and have a broad variety of clinical applications, and you're beginning to see that. And we aren't afraid to innovate in our clinical, regulatory, and financial activities. Immune Bio has this can-do attitude that we think will benefit patients and investors alike. And I personally will put Alzheimer's disease and prostate cancer on notice. We're coming after you.

So with that, we will close. And thank you very much. This concludes today's conference.

You may disconnect your lines at this time. Thank you for your participation.