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spk04: all sites on hold we appreciate your patience and ask that you please continue to stand by your program will begin momentarily © transcript Emily Beynon Please stand by, your program is about to begin. Greetings and welcome to the Immune Bio second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question and answer sessions. You may register to ask a question over the phone at any time by pressing the star and 1 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's my pleasure to introduce Mr. David Moss, CFO of ImmuneBio. David?
spk03: Thank you, Operator, and good afternoon, everyone. We thank you for joining us for the call for ImmuneBio's second quarter 2024 financial results. With me on the call today are Dr. RJ Tessie, CEO and co-founder of ImmuneBio, and Dr. Mark Liddell, Chief Scientific Officer and co-founder of ImmuneBio, who will provide an update on IncMune, our memory-like natural killer cell oncology platform. Also on the call is Dr. CJ Barnum, Head of Neuroscience, who will provide some details on our ongoing Phase II Alzheimer's study. 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 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 such as forward-looking statements. Please see the forward-looking statements disclaimers 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 is no assurance of any specific outcome. Undue reliance should not be placed on forward-looking statements which speak only as to the date they are made as the facts and circumstances underlying these 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. With that behind us, now it's my pleasure to turn the call over to Dr. RJ Tessie. RJ.
spk09: Thank you, David. Good afternoon to everyone. We will keep our prepared remarks brief. I will review the key takeaways from the second quarter, relevant news from recent weeks, and provide updates on our platform programs. I will then pass it to CJ Barnum, VP of CNS Drug Development, for more details on the ongoing Phase II trial in Alzheimer's disease. Dr. Mark Lodell will follow. with an update on our increment program in prostate cancer, and David Moss will conclude with a review of our financial results for the second quarter before we take your questions. Since our first quarter conference call in May, we continue to make steady progress in both clinical programs. Before I comment on our AD, on our ex-pro program in AD, or in Alzheimer's disease, I want to make a couple comments about the rapidly changing landscape of Alzheimer's disease diagnosis and treatment. Just in the last month, the second drug, Donanumab, was approved for the treatment of Alzheimer's disease. It is an anti-amyloid drug. And it does have a black box warning for highlighting the increased risk of AREA, which is edema in the brain, in patients with two copies of APOE4 gene. Last week, the EU regulatory authorities did not approve the aside Biogen's drug lucanumab for the treatment of Alzheimer's disease. We don't know if the EU's decision is going to be unique to lucanumab or affect other drugs in the anti-amyloid class. Today, the last day of AIC in Philadelphia, AIC is the Alzheimer's Disease International Congress, which is the largest meeting in AD that occurs every year. But at this meeting, there is cautious hope for the future of therapeutic options for patients with Alzheimer's disease and a lot of discussion about alternatives to amyloid therapy. People understand the risk and efficacy profile of this class of drugs, and they look forward to other options in the future. Much excitement was focused on the anti-inflammatory treatment strategies, and obviously we like to think we are leaders in this particular area. All in all, it was a very bullish meeting for EXPRO and Alzheimer's disease. In June, we completed a planned blinded interim analysis of ADO2, our phase two trial of EXPRO, in patients with early Alzheimer's disease with biomarkers of inflammation. The purpose of the analysis was to evaluate the power and performance characteristics of the primary endpoint. The primary endpoint is EMAC, which is Early Mild Alzheimer's Cognitive Composite Score. Independent third-party statisticians and neuropsychologists determined the ADO2 trial is appropriately powered and concluded the trial design, operational execution, data collection, and management are of the highest quality. As of today, we have many patients in the screening process and pipeline and are on track to reach full enrollment of this trial by the end of September. We eagerly await top line data readout on the primary endpoint approximately six months later, or excuse me, approximately six months after the last patient is enrolled. At AAIC this week, we presented additional data on the effects of EXPRO on the brain of patients with Alzheimer's disease. The data demonstrate EXPRO's direct impact on synaptic proteins and provide biologic support for the improvement in synaptic function that we recently demonstrated with EEG. I remind you that synapses are the things that allow nerve cells to talk to each other, and they are a critical part of neurologic disease in general and Alzheimer's disease specifically. These data are another example of how EXPRO normalizes the brain's immune system to improve the biology of the aging brain. That includes less neurodegeneration, that's nerve cell death, increased remyelination, and improved synaptic function. We predict the ongoing phase two trial will demonstrate these biologic benefits correlate with cognitive benefits. The importance of controlling neuroinflammation extends well beyond Alzheimer's disease, and we continue to move forward with our plans to initiate a treatment-resistant depression phase two study. The trial is sponsored by the NIH, and we expect to enroll patients later this year. InCommune, our novel NK-focused cancer program, also continues to make progress. We announced the publication of a paper in the prestigious high-impact Journal of Immunotherapy of Cancer. The data showed the unique ability of InCommune to create cancer-killing memory like NK cells in situ in situ, meaning within the patient's blood system, using NK cells of their own. Dr. Liddell will provide more detail on this in a moment. We're excited by these data and their implications for treating multiple types of solid tumors with INCMUME in the future. We plan to provide patient-level data from the ongoing Phase I-II trial and cache-resistant metastatic prostate cancer later this year. For now, I'll turn it over to C.J. Barnum, VP of CNH Drug Development, to provide a more in-depth discussion of our ongoing Phase II trial in patients with Alzheimer's disease. C.J.?
spk07: Thank you, RJ. As you said, I'd like to take some time to discuss the ongoing Phase II trial in Alzheimer's and the recent unblinded analysis we performed. The clinical trial is powered on the Clinical Dementia Rating Scale, or CDR, and is using both EMAC and CDR as our primary and key secondary endpoints, respectively. These clinically valid endpoints were chosen based on their ability to accurately assess cognition in our target population of early Alzheimer's patients with biomarkers of inflammation. It's our belief that patients on expo for the treatment of early AD will have stable or possibly improved cognition and our endpoints were selected to give us the best chance of a successful outcome. As RJ said, we are close to completing enrollment. This has admittedly taken slightly longer than originally forecast, and I think it's important to address why that is the case as it plays right into why we believe we'll get a positive result. At Immune, we are running the first clinical trial in Alzheimer's using biomarkers as selection criteria. Our trial is designed to have a small enrollment and a very short duration. Smaller studies require higher quality data to minimize the impact of variance. As such, patient selection is key to success. We need to enroll patients who are not only likely to benefit from our therapy, but are also highly likely to complete the duration of the trial. This selectivity leads to a slower enrollment process. We could easily relax our criteria to speed enrollment, however, There is a trade-off between speed and quality. We are very biased towards the latter. This focus on execution is demonstrated through the recently completed blinded interim analysis of our data. As that independent evaluation revealed, and I quote, the assumptions made during the planning are being met within the conduct of the trial. In other words, the EMAC is performing exactly as expected. This is a testament to our operational and clinical teams who continue to exceed my expectations in executing a trial of the highest quality. While the final results from the trial have yet to be determined, I can say with great confidence that the trial is being conducted in such a way that, at completion, we will know without a doubt if we have a successful therapy. With that, I'll turn the microphone over to Mark to discuss the INCBEAM program, and I look forward to answering questions investigators might have.
spk08: about the Alzheimer's program. Mark?
spk00: Thanks, CJ, and good afternoon, everybody. Thank you for joining us. As Immune announced recently, together with several of my colleagues, I was pleased to lead the publication of a landmark paper entitled Proteomic and Phenotypic Characteristics of Memory-like Natural Killer Cells for Cancer Immunotherapy, which, as RJ said, was published in the Journal for the Immunotherapy of Cancer. So in this study, we demonstrated that memory-like natural killer cells, or MLNK cells, generated by INCMUNE are the same as the more traditional cytokine-driven MLNK cells. And both type of NK cells show increased cytotoxicity against multiple tumor types. However, while most studies are conducted on NK cells from healthy volunteers, this study demonstrated that NK cells from cancer patients can be primed with IncMune and are equally as potent as those generated from healthy volunteers, providing further support for our in vitro treatment strategy. This research also provides new insights into the metabolic and proteomic mechanisms underlying NK cell memory. paving the way for innovative treatments in both haematological malignancies and, more importantly for us, multiple solid tumors. But this is an area of NK cell biology research that is evolving very rapidly, and our study is the first to identify the unique characteristics of mRNA NK cells. Most significantly, The study is the first to report in vivo generation of MLNK cells, as RJ said. And that's something which cannot be done with the cytokine cocktail used in vitro by other groups because of the toxicity of the cytokines. So our research successfully showed that these MLNK cells primed by InkMune can be found in patient's blood after they've been treated with the drug, which is a critical step in proving our claimed mechanism of action. We also believe this points ways to enhance the potential of MLNK cells in further advances in cancer immunotherapy. Our paper highlighted the improved metabolic function of MLNK cells, which predicts better performance in the tumor microenvironment, or TMA. We believe these findings are particularly noteworthy, as NK cell dysfunction in the TMA has been reported by many others to be due to impaired metabolic function. So showing that inkimmune priming can overcome these metabolic barriers encourages our belief that inkimmune will target solid tumors. And this is further supported by our observation in the same paper that inkimmune priming increases survival proteins and nutrient receptors expressed on NK cells. And this combination of changes following inkimmune priming is exciting for our ongoing clinical trial in metastatic castration-resistant prostate cancer. This research study was a commercial and academic collaboration led by Immune over many years, and we were delighted to see the results of the work published in a high-impact peer-reviewed scientific journal. Elsewhere in our IncMune development program, we're pleased to announce a new formulation of IncMune that supports the highest trial dose with a single-bag administration, which makes it much more easily delivered in the clinic, and the expansion of our bioreactor capacity in preparation for more scalable manufacturing. So an IND amendment to the FDA with the improved formulation has been submitted. It also includes additional validation data supporting alternative critical reagent used in the manufacture of INCMUNE to improve our supply chain redundancy. And all of these seem minor, but they're essential steps in preparation for commercial development and supply of the drug. Since our last call, we've completed the first cohort in our Phase 1, Phase 2 open-label trial of Incommune in metastatic castrate-resistant prostate cancer called CARE-PC. Following review by the Safety Review Committee, approval was granted to proceed with the second dose level, Cohort 2, and we're nearly halfway through that cohort, with patients in line waiting to be recruited. Data from this open-label trial are expected to be released intermittently as they become available from us. But most importantly at the moment, the safety record of INCMUNE remains excellent. There have been 12 administrations of INCMUNE in the CarePC study given as an outpatient with no significant adverse events and zero cases of cytokine release syndrome. And combining those data with the experience from INCMUNE from the MDS-AML trial, over 25 infusions of INCMUNE have now been given safely without the need for conditioning therapy, pre-medication, or cytokine support. So that ends my update on the Incmune platform, and I'd like to turn the call over to David Moss, our CFO, to discuss financials. David.
spk03: Thank you, Mark. As usual, I'll provide a brief overview of our financial results and upcoming milestones before we head to our Q&A session. During our second quarter, we were pleased to have raised approximately $14.5 million in gross proceeds from two separate equity offerings over the past weeks at an average price of $8.35 and $9.85 four cents per share. In the two transactions, the company issued an aggregate of approximately 1.558 million shares of common stock and warrants to purchase an aggregate of approximately 1.558 million shares of common stock. The warrants have a two-year term with acceleration on positive phase two data from our AD program, which if exercised would raise additional cash for the company. In the first approximate 4.8 million, raise management employees and members of the board of directors purchased over a million dollars of stock i cannot underscore how financially committed and aligned the entire immune team is to the success of the company we greatly appreciate the support we saw in both offerings from mostly existing investors and our team here at immu bio but we also welcome a few notable holders to the registry including a sole investor in the approximately 9.7 million offering a person that i've had a relationship with for more than a decade In addition, we received approximately 2.5 million in R&D rebates in July as we continue to manage our shareholder resources carefully while completing our clinical programs. Now moving on to financials. Net loss attributable to common stockholders for the quarter to enter June 30th, 2024 was approximately 9.7 million compared with approximately 6.5 million for the comparable period in 2023. Research and development expense totaled $7.1 million for the quarter ended June 30, 2024, compared with approximately $4.1 million for the comparable period in 2023. General and administrative expenses were approximately $2.8 million for the quarter ended June 30, 2024, compared with approximately $2.3 million for the comparable period in 2023. As of June 30th, 2024, the company had cash and cash equivalents of approximately 31.1 million. Based on our current operating plan, we believe our cash is sufficient to fund our operations into 2025. As of August 1st, the company had approximately 19.8 million shares of common stock outstanding. Effective as of July 1st, the company joined the Russell 3000 Index as part of its 2024 reconstitution. positive development for our company and our shareholders that we believe will increase our visibility within the investment community and help broaden our shareholder base. This is the first significant index the company has joined since going public in 2019. We also believe our inclusion in the Russell 3000 is a testament to the hard work and dedication of our entire team and underscores our commitment to advancing our innovative immunology and inflammation platforms in early Alzheimer's treatment, in early Alzheimer's, treatment-resistant depression, and metastatic castration-resistant prostate cancer. Now I'd like to focus on some key upcoming milestones. As RJ and CJ have mentioned, we expect full enrollment in our Phase 2 EXPRO trial for the treatment of neuroinflammation as a cause of Alzheimer's disease before the end of Q3, and top-line data is expected to read out approximately six months from the last patient enrolled. We will initiate a Phase 2 trial of EXPRO in patients with treatment-resistant depression in the second half of 2024. We expect to complete enrollment in the second cohort in the metastatic castration-resistant prostate cancer by the end of Q3 2024 and complete the Phase 1 portion is expected to complete enrollment by Q2 of 2025. Results of the trial will be released as they become available starting later this year. Although we have secured additional funding, as always, we continue to focus on achieving our primary clinical objectives while remaining cost-proof with the potential to recover a portion of R&D expenses in Australia and the UK. In summary, we secured a meaningful equity infusion that puts us in a good position into 2025 with our focus remaining on execution. At this point, I'd like to turn the microphone back to RJ to conclude our prepared remarks and then go to Q&A. RJ?
spk09: Yes, thank you, David. This is an exciting time for the company. The therapeutic landscape of Alzheimer's disease is changing rapidly. And the changes are making the expo program in Alzheimer's disease more, I guess the right word is relevant, as people get frustrated with the anti-amyloid strategies they look towards neuroinflammation as a potential way to improve patients' lives. We expect to be reporting meaningful data from both the ex-pro and incoming programs and what now seems to be the near future. Each of our programs has a strong scientific foundation. Our clinical trials are designed to take advantage of the unique biology each drug brings to patients. The company has funding to see the development through important milestones, and we are grateful for the strong and committed shareholder base that continues to support Immune Bio. And in particular, we thank those who invested alongside us in management as we work to achieve our goals.
spk08: So now I'd like the operator to poll for questions.
spk04: At this time, if you'd like to ask a question, please press the star and 1 keys on your telephone keypad. Keep in mind, you may remove yourself from the question queue at any time by pressing star and 2. Again, it is star and 1 if you would like to ask a question today. And we'll take our first question from Tom Schrader with BTIG. Please go ahead. Your line is open.
spk06: Good afternoon. Thanks for taking the questions. Congratulations on all the progress. I wanted to ask kind of a remedial question first on the synaptic markers. And one of the most exciting things at AAIC is phosphotau as a temporal treatment marker. Where do synaptic markers fit in there? Are they early? Are they late? You know, you've done a lot of work to measure them. Are they useful treatment markers? I'm going to have an in-community follow-up.
spk08: Thank you. DJ, I'll let you handle this one. It's a fairly sophisticated question. Go ahead. Thanks, RJ. Hi, Tom.
spk07: So I'm not sure they're a long-term solution as it relates to biomarker measurement. It's something you can do if you collect CSF, which is where the analysis was performed. It hasn't really translated to blood yet. But what we know about synaptic proteins and synaptic dysfunction and synaptic loss in Alzheimer's, we've actually known for quite a while. There's been a little bit of a resurgence to this at this point. And I think that's something that we can take advantage of. The other thing is it aligns really nicely with EEG. So changes in EEG are likely to be subserved by changes at the level of the synapse as opposed to an improvement in, you know, cell building or even axons as well. It tends to be a little bit faster, but EEG is an asserted outcome for that. I would say that while they're great, they add to the story. They're probably not a long-term biomarker solution, but it does reinforce the biology of what we understand X-Pro can do. And I think that's really exciting to us. because it targeted really what we were able to show is that we saw broad changes in networks of proteins that are critical for synaptic function. So to us, it's another biomarker to help support our decision making in that where the biology is aligning as we expect. But I don't know, aside from maybe EEG in the future, that the biomarker proteins themselves are particularly useful in later stages.
spk06: Got it. And then, Mark, where are you or is it a priority to try to understand what is in ink muon that's driving the biology? It sounds like from the side effect profile, it's not a cytokine, which suggests it might be an additive with cytokines. But do you have a sense of what it is? Is it a lot of things? Is it something that you might purify? Where are you on understanding what exactly ink muon depends on? Thanks.
spk00: Yeah, that's a very good question. And I wish I knew all of the answers. But we've been looking at the immune since 2005. So we've done a lot of work. And we initially thought exactly as you've alluded to, that we could find the magic signals that it gives to the NK cell and make them artificially. What we did publish back in 2011 was that their immune is a cell and obviously it has millions of molecules on its surface. And those molecules, we found three that were absolutely critical to its function and that they're published. What we tried to do was to produce an artificial version of those, and we were able to do that, but we could never get the concentrations. So if you imagine you've got three variables, each of those can be at different intensities, and we could never get the intensities right to be as good as the natural cell. The other thing that inkmune has that you could not reproduce artificially is that when inkmune binds to the NK cell, Like any tumor cell, the NK cell rips a membrane out of INCMUNE. So INCMUNE is just a replication incompetent tumor cell. And it's the ripping out of that membrane, it's called trogocytosis, and it's incorporation into the NK cell, which allows the NK cell that's been primed by INCMUNE not only to function, but to go on and prime other resting NK cells. And we believe that's why we see such a long tail of effect after just three injections. So we haven't been able to find a way of producing an artificial version of ink immune. It's certainly a complex raft of proteins that come from the surface of the ink immune cell. and they are incorporated into the NK cell in a way that making them artificially just wouldn't be able to provide that function. Having said that, it's very cheap to manufacture and easy to ship.
spk09: Yeah, and just I want to reemphasize your point about cytokines, Tom, because we think one of the really big deals about InCommune is it doesn't require cytokines because, as you said, the safety profile is markedly improved. And as Mark just implied, the cost profile is markedly improved. So we really like it, even though, as Mark says, he's still studying it.
spk08: Got it. Okay, thank you.
spk04: And as a reminder, if you'd like to ask a question, please press the star and one keys on your telephone keypad. We'll take our next question from George Farmer with Scotiabank. Please go ahead. Your line is open.
spk05: Hi. Good afternoon. Thanks for taking my questions. You mentioned the way you're enriching for enrollment in the Phase II AD trial. Two things. One is selecting patients with specific biomarkers that would indicate a higher inflammatory state, and then also patients who will likely complete the study. The first one is understandable, but how are you enriching for the second?
spk08: CJ? Yeah, so this is a great question.
spk07: And there's really a couple answers to that. And what I gave you was a simplified, what you got was a simplified explanation. So the study itself, because we opted to go for a shorter study, six months, requires quite a bit of monitoring, probably much more so on a per day or per week basis, if you will, than you would see in other studies. There are some times where patients in other studies, they need to come in once a month. And in our study, you need to come in at least once a week. And we're doing multiple measurements as well. And so that can be quite challenging for some patients to come in and do that. And so a lot of times what will happen is you enroll a patient and you end up with patients that miss visits or they end up leaving the study early. And of course, that creates problems as it relates to data analysis. So what we try to do at the very beginning is really have the conversation with the patients, let them, you know, get them to understand that the commitment is pretty high. And, you know, we really need their participation to make sure that they can complete all of those different things. And I think to the testament of our investigators, they've done a really good job to make sure that the patients that get into the trial are really willing to make that commitment. And we're seeing that in our retention rate as well. But we have had a number of patients at the beginning that say, you know what, I'm not sure that I can do that. And from our perspective, it's easier for us to move on. The other thing, the other aspect of that is we're a little more rigid as it relates to the clinical diagnosis criteria of MCI and mild AD than we would normally be, again, because we have a small study. And believe it or not, there's quite a bit of variance and across investigators and what mild AD is and what MCI is in terms of diagnosis. And in order to compare apples to apples, we have to try to homogenize that. That's not a problem when you get to a phase three study where you have more patients, you can relax some of that criteria. But those two things really do force us to slow enrollment and be more selective for patients. and it takes a little bit longer. The biomarker enrichment as it relates to inflammation is about what we expected it to be. I don't have the exact numbers on hand right now, but it is somewhere around 40 to 55% of those patients that show up have those biomarkers.
spk05: And then regarding those biomarkers, how do those patients fare relative to the general populations with respect to say baseline characteristics?
spk08: In terms of their, for example, their cognitive?
spk05: Yeah, yeah.
spk07: So good question. Obviously, I don't have that exact data for the study here. But generally speaking, what I can tell you is patients that have biomarkers of inflammation, if you look at the registry databases, they have more severe disease. They have faster-progressing disease. And what's really unusual and really works in our favor is that the variance in progression between patients that have these biomarkers is smaller. So this allows us again to do these shorter trials with fewer patients.
spk08: Okay. Thanks very much.
spk04: And we have received a question from the web. It reads, CJ, you seem excited about the interim data. How does this update, even though it's blinded, give you insight into how the trial is progressing?
spk07: Yeah, so this is a great question. And I get this, I've gotten this question quite a bit is, you know, why is blinded data so exciting? I think, you know, the biggest challenge when you're in a new area is especially when you're using biomarkers and you're selecting patients that really hasn't been done before, is when you go to power the study, is the sample size that you use really representative of the patients out there? I mean, you only have the data that's available to go on to do that. And, of course, that's a sample. And so the biggest question to me is, A, do we have the right test? Can we capture those things? And is it performing as we expect? In other words, are we going to be able to, is it accurately powered? And to not only see that was the case, that the variance that we expected was there, but even numerically better, and the quality of the data that we were able to collect. And in some ways I'm maybe more excited about that because we review, we record every single assessment and we review it. And if there are errors, we fix them quickly. So the, the teams that are in charge of reviewing and, and reaching out to sites and training and working with investigators say, uh, you know, help us with, it really is incredible. And what I can tell you is the independent, consultants that we had, neuropsychologists that reviewed this, said this is the highest quality data that they've seen. And that's all you can ask for. It means we have done absolutely everything we can do within our control.
spk08: And that's what really excites me about that.
spk04: And there are no further questions on the line at this time. I'll return the call to Dr. Tessie for any additional or closing comments.
spk09: Thank you. As all of you know, the success in biotech depends on sound science, committed investors, and medical need. The Alzheimer's space is added by the intrigue of honest disagreements on the value of recently approved drugs. We see real opportunity for expo in Alzheimer's disease as these other drugs are better understood. And Incommune brings a unique perspective to the castrate-resistant prostate cancer arena because of its safety profile. There are drugs in development for metastatic castrate-resistant prostate cancer, but you're not talking about young patients, and these drug cocktails tend to be quite toxic. So safety matters in patients like that. Both of our platforms, also show promise beyond their current indications. You've talked about treatment-resistant depression and Alzheimer's with Expo and other solid tumors with Inkman. But no further than our website to see more than 80 publications that point to the many uses of these drugs. But at the end of the day, our aim is to provide data readouts on both of these programs as quickly as we can.
spk08: We are grateful for shareholder support We believe the future is bright. Thank you. This does conclude today's program. Thank you for your participation and you may now disconnect.
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