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Presentation

Operator: Greetings, and welcome to the INmune Bio Fourth Quarter and Full Year 2022 Earnings Call. This conference will be recorded. A brief question-and-answer session will follow the formal presentation. It is now my pleasure to introduce Mr. David Moss, CFO of INmune Bio. David, the floor is yours.

David Moss: Thank you, Paul, and good afternoon, everybody. We thank you for joining us for the call for INmune Bio’s full year 2022 financial results. With me on the call is Dr. RJ Tesi, CEO of INmune Bio; and Dr. CJ Barnum, VP of Neuroscience, who together will provide a business update on our dominant negative TNF platform, or XPro. Also on the call is Dr. Mark Lowdell, Chief Scientific Officer of INmune Bio, who will provide an update on INKmune, 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 of the date they are made as of the facts and circumstances underlying these forward-looking statements may change. Except as required by law, INmune 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 Tesi, CEO of INmune Bio. RJ?

RJ Tesi: 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 XPro, CJ Barnum, the VP of CNS Development, will help me with those comments. I will then hand it over to Professor Mark Lowdell, our CSO, who will focus on what’s going on with the INmune 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 timelines. 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 2 study. As you recall, we had separated them previously into separate trials.

The combined trial should improve our ability to demonstrate a clinical benefit in patients receiving XPro 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 2 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 3 registration trials. 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 Phase 2 that we hadn’t originally intended to, we should improve the efficiency as we enter the pivotal Phase 3 study, that is the efficiency of getting that Phase 3 up and running. To be clear, the consolidation of the two trials does not increase regulatory or clinical risks. In fact, we believe it reduces clinical risk while also conserving resources and positively benefiting enrollment. CJ Barnum, VP of CNS Development will comment on this further when he speaks. We describe the XPro asset as an iceberg with multiple CNS in the applications (ph) and a hint of applications outside the CNS therapeutic silo. Given the broad swathe of diseases that can benefit from dominant negative CNS therapy, I often call XPro, 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 INmune Bio take its scarce resources to be serious about business development. How can we leverage XPro into that business development program? In January, we unveiled how we plan to solve these two problems. We formed a wholly-owned subsidiary DN02, 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 the DMD inaugural partnering effort? Well, TNF has long been soluble TNF, that is has long been known to be part of the pathology of the Duchenne Muscular Dystrophy attempts to use non-selective TNF inhibitors to treat DMD, never reached the clinic because — sorry, because of cardiac toxicity. We believe that the DN-TNF solves this problem because of its selectivity by protecting transmembrane TNF function, while neutralizing the devastating effects of soluble TNF on skeletal muscles. 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 DN-TNF 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 XPro 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 XPro, but that are considered new chemical entities that is new drugs. We call these the pSar. Curapath, the 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 a half-life extender. The pSar’s, we call them the sons of XPro, are 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 XPro 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 U.S. in 2023.

It will happen after the FDA hold is resolved. We anticipate top line data from the early AD Phase 2 program in the second half of 2024. The exact timing of that data release in the second half of 2024 is, 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?

CJ Barnum: Thanks, RJ. As RJ mentioned, the AD02 Phase 2 trial, a 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 XPro 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 XPro 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 AD02 and AD03 is the EMACC, 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 in mild AD patients. Patients that complete the six month Phase 2 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 XPro 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 XPro 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.

RJ Tesi: Thank you, CJ. I will now move to INKmune, our memory-like natural killer cell priming program. The high risk MDS/AML INKmune Phase 1 program continues to make progress in the UK with the second site now open at the Royal Hallamshire Hospital at Sheffield University Medical School. A patient was consented this week and will — treatment is planned on for March 7, a week from today, excuse me, March 9, a week from today. In addition, we will also be expanding the MDS/AML program into Europe with a third site Attikon University Hospital in Athens, Greece is expected to open later this month. We’ve previously stated that INKmune may be an ideal therapy to treat solid tumors because of its performance in the hostile environment of the TME.

Mark Lowdell will discuss this more in a moment. In October, we announced positive solid tumor pre-clinical data and prostate renal cell, ovarian in nasopharyngeal cancer cell tumor lines that tumor lines that are all resistant to NK killing that when the NK cells are treated with INKmune, they now can kill these NK resistant tumors. We implied we were pivoting to solid tumors because we thought the effects of INKmune were somewhat unique. And today we are pleased to announce that the company will be filing for an IND to use INKmune to treat patients with metastatic castration-resistant prostate cancer in the US. Prostate cancer is the most common cause of cancer in men, if you excludes non-melanoma skin cancers. The trial is expected to take place in four or more medical centers in the U.S. It will enroll approximately 30 patients in a flexible bayesian design that will allow us to determine safety, proof of biology and confidently picked the dose of INKmune 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 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 Jonsson Comprehensive Cancer Center at the UCLA School of Medicine, €œthere is no — there are no good options for metastatic castration-resistant prostate cancer, especially given the recent failures of checkpoint inhibitors.€ We are excited about the potential of INKmune in treating solid tumors and hope to make a difference in men with prostate cancer. With that, I’ll pass it to Professor Mark Lowdell, CSO.

Mark?

Mark Lowdell: Thank you, RJ, and thank you once again to everyone that’s joining us to hear. What I think are some really exciting progress that we’ve been able to make. So you will know that we recently shared with the investment community positive solid tumor efficacy data with INKmune 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 will know that, but cell therapies currently focused on the 10% hematologic (ph) or liquid cancers. The recent data that we’ve shown and shared with people provide insights into why the company believes that in INKmune killer cells to override the immersive hypoxia and regulatory cells in the tumor environment or the TME for short.

The interaction of the TME with cancer cells enables 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 increasing over the last few years. These complex interactions have to be considered when designing cell therapies to treat solid tumors. 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 tumor. So a cell therapy to be effective must operate in that tumor environment. And what we’ve shown over the last 12 months and more recently, INKmune 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 INKmune primes NK cells from patients and indeed from healthy donors to lies as NK resistant solid tumor cell lines and we’ve worked with ovarian cancer, 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 INKmune. INKmune 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 that on behalf of the company at the Innate Killer Summit in Europe, in London or October 19, 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 therapies tab. It’s also on INKmune 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 the attaining the BLA. And in INKmune Bio, we’ve been lucky we 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 connectivity. 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. 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’s been hospitalized six months and she received INKmune within a month and stabilized her blood counts adequately with an adequate neutral recovery to allow her to be discharged from hospital and go home. Clinically, she’d had reduced bone pain, and scheduled for a fourth transplant. But eight months post in treatment, she sadly will and rapidly died.

But the third patient treated had chemotherapy reactive — refractory AML and much as the first patient had received had failed to bone marrow transplants. Post INKmune his disease stabilized for four months before relapse again with a new clone of acute myeloid leukemia and he’s 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 within €“ in July last year. But interestingly, the majority of our 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 INKmune stimulation.

Her disease progressed and she received further chemotherapy to 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 INKmune. So whilst we are very early in the development INKmune being restricted to using the lowest dose of this, 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. Now the clinical experience of these four patients was presented at the American’s 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 opened in the UK, we have enrolled the first patient from that site and soon a third site will be opening in Europe, in Athens and yet another regulatory environment. So in preparation for the increased recruitment into the trial in myelodysplastic syndrome, and opening of new trials in metastatic castration resistant prostate cancer, as you’ve heard, the company has invested in upscaling the manufacturing process and the validation of that new process to CGMP is now complete. So this forms the basis of the IND application to the FDA.

And we’re delighted that our tight budget control of the INKmune 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 INKmune trial in the U.S. This embeds the way for our ambitious plans for trials in other solid tumors going back to the original plan for ovarian trial and also in renal and shortly we hope nasopharyngeal cancer as we have relevant supporting data to submit to regulatory agencies. So I think the combination of basic research into mechanisms of action, the manufacturing improvement in the clinical trial operations in the U.K., broader Europe and the U.S., plus the continued preclinical research in new diseases such as renal and nasopharyngeal put the company in excellent position to support the INKmune trials in solid tumors in the U.S. and elsewhere.

And I’ll now pass the call back to RJ. Thank you.

RJ Tesi: 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. Dave 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 AD/PD conference, the largest AD/PD medical event in Europe the last week of March. April, we are presenting two abstracts at the AACR on our MUC4, the role of DN-TNF targeting, MUC4 expressing tumors as part of combination therapy. INB03 is the product that is part of the DNT oncology branch of the XPro 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 infection diseases 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 2 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 2 program will not compromise the potential of XPro long-term in Alzheimer’s disease. We expect the U.S. will open in time to include Phase 2 patients in the current trial.

And we fully expect the U.S. will be a very big part of any successful global Phase 3 registration program for XPro in early AD. We are planning for success in early AD and beyond in diseases like TRD and the many other CNS diseases where XPro will have value. At this point, I will turn it over to David Moss, our CFO to review financial items. David?

David Moss: 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 ended 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 31, 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 2, 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 outlay for the two combined trials by approximately $8 million. Further, 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 budget 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 and 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 2 trial.

All of the aforementioned items better position us to manage our cash 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 2 early AD trial in patients with inflammation Alzheimer’s disease is expected in the second half of 2024. We will initiate a Phase 2 trial of XPro1595 in patients with treatment resistant depression upon resolution of the FDA manufacturing review. Additional open label Phase 1 trial data of INKmune and high risk MDS/AML in 2023 along with the initiation of more sites in the UK and Europe as Mark mentioned earlier. Initiation of a Phase 1/2 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 that 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 pull for questions. Paul?

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Operator: Thank you. We will now be conducting a question-and-answer session. Thank you. Our first question is from Jason McCarthy with Maxim Group. Please proceed with your question.

Jason McCarthy: Hey, guys. Thanks for taking the questions. First question on INKmune, 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 is 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 pluvicto is out there now and Merck just the other day pulled the plug on KEYTRUDA and Xtandi combination?

RJ Tesi: Yes. Thanks, Jason. So in our minds, a choice — and we didn’t make this alone. We worked closely with the experts in oncology on this decision. The choice is pretty clear. And it’s really based on what you just said there are no effective immunotherapies for patients with metastatic castration-resistant prostate cancer that have failed an androgen therapy of some sort and the enzyme, the various inhibitors. So these patients kind of go into a status of dealers choice at many institutions. And 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 immunotherapy, there’s been difference in survive.

Prostate cancer doesn’t have one, is INKmune it? Well, the preclinical data suggests it. But we will have to do this randomized trial or this trial, this multi-step trial to actually determine they think INKmune 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, PSA in the blood, the CT scan and bone scans. But there are some developing biomarkers that are much more interesting for understanding tumor driven burden, including circulating tumor DNA and the PSMA PET scan, which helps you quantify residual disease. This gives you really quantitative evidence of disease status in which way it’s been.

So we like castration-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 most — almost every region of the country treats the disease there.

Mark Lowdell: Can I just add — sorry, I didn’t — I interrupted?

RJ Tesi: Absolutely. No, I’m done. Go ahead, Mark.

Mark Lowdell: No. 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 sort of 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 beaten you so far don’t target any NK cell function. So what we’re effectively giving, if you like, and I wouldn’t use this sort of lightly, but we’re giving NK checkpoint inhibitor immune takes the resting NK cells that are in the tumor and hopefully we’ll 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.

Jason McCarthy: 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 with the company and the FDA?

RJ Tesi: Good question. The answer is absolutely not. I think, I’ve been clear that we will — we’re going to have to do a Phase 3 trial. The Phase 3 trial will look — we assume is going to look very similar because of what this Phase 2 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 enroll every patient as outside the U.S. that will compromise our ability to move forward.

Jason McCarthy: Okay. Are you selecting countries or more international countries for this trials? So it does set the stage then for

RJ Tesi: Yeah. 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 3.

Jason McCarthy: And just like — I just brief your last question if you combine or when — as you are combining the MCI and mild AD trials and so one, €œearly AD trial€ how does it not increase the trial size or what will the total trial size end up being now?

RJ Tesi: Yes. CJ, why don’t you go ahead there?

CJ Barnum: Can you hear me?

Jason McCarthy: Yes.

CJ Barnum: So it’s a good question. Really, I mean, it comes down to when you’re powering the study and what your assumptions are. So the assumptions that MCI patients will perform better than even mild AD patients. So when we do that power calculation, we actually increased our likelihood of seeing a positive result on the EMACC. Now it’s going to treat — we believe it’s going to increase the trial size a little bit. But we’re talking 10, 20 patients, not talking 100 patients.

Jason McCarthy: So the total size would be range.

RJ Tesi: So it’s 20-ish (ph), I mean, about that. Don’t hold us 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?

Jason McCarthy: Got it. Okay. Great. Thank you, guys.

RJ Tesi: Yes, just to reinforce what 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 that — and only good things happen when you do that.

Jason McCarthy: Got it. Thank you guys.

Operator: Thank you. Our next question is from Tom Shrader with BTIG. Please proceed with your question.

Tom Shrader: 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. And 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, the XPro might get around some of those issues. I think you mentioned cardiac-tox. I would ask, how derisked is that idea or the XPro 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?

RJ Tesi: Yeah. So I think that’s an excellent question. Let me give you the derisk, and then I will give you an educated guess on the — on whether a partner’s going to have to this specific issues. So what happened when they used the original non-selected TNF inhibitors in mouse models, in mouse models to treat DMD. There — long term, there was a decrease in cardiac output in the mice. Now remember, patients and animals with DMD actually see a 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 if 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 because of selective nature of soluble TNF. We have one published paper that shows in a model of exercise induced atrial hypertrophy in mice that actually XPro decreases hypertrophy and decreases the fibrosis. Fibrosis as part of the pathology of DMD. And we have unpublished data in another cardiac model that shows that XPro, you should see that data probably midyear, that XPro has benefit on cardiac disease. So in fact, we have pretty good evidence in animal studies that XPro 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 derisk it. Now does this mean that when someone takes this and drops it into kids, are they going to have to somehow derisk it beyond the standard clinical trial perspective. I don’t think so, but because of the benefits of the drugs that are beyond just anti-inflammatory, but I would rather wait until we ask someone, hopefully a partner actually talks to the FDA. But the bottom line is, our data in cardiac with XPro is quite positive. We will have 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 XPro actually improves cardiac function in most disease models.

Tom Shrader: Got it. Thank you. And maybe probably a CJ question. I understand you want to get XPro approved as a standalone therapeutic in Alzheimer’s disease. But it’s increasingly clear that ARIA is 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?

CJ Barnum: 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 XPro is going to be an excellent drug for combination therapy in general. So I guess the answer to your question is yes, we thought about it quite a bit, we thought about a lot of things and hopefully in the near future as we get going in our programs here we can start entertaining them a little more.

RJ Tesi: Yeah. Tom, RJ here. I mean, that’s that is obviously a question we talked about a lot. We have done a bit of a deep dive. There is no — to our knowledge, and if someone has one, please contact us. To our knowledge, there’s no rodents, rat or mirroring 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 a 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 bunch of monkeys, 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 aside , 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.

Tom Shrader: Great. Thank you.

Operator: Thank you. Our next question is from Daniel Carlson with Tailwind Research. Please proceed with your question.

Daniel Carlson: 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 just what you have going on?

RJ Tesi: So thanks, we’ve — 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 include patients. But the more successful we are in getting sites 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, dictates whether it’s going to be midyear or later in the year. So 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, and there will be U.S. patients in that — in the Phase II trial. It’s just — I don’t want to give you what the percentage will be at this point.

Daniel Carlson: Okay. Fair enough. Thanks. And then CJ had mentioned that you’re going to get some data from the open-label extension, you 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.

RJ Tesi: CJ?

CJ Barnum: Hey, Dan. So yeah, so we will be measuring all the clinical rating scales that we have in the AD02 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.

RJ Tesi: And an interesting problem, Dan is since the Phase II 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 1 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 — 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, one. Two, it gives us the long-term efficacy data that we know the regulatory authorities were going to want.

And the third thing is its trade date, what I mean trial date 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 XPro 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 un-enrollable, 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 we — the investigators have been very supportive of this strategy because at the end of the day, 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 they’re always trying to look out for the best wishes of their patients, and we think this puts us high on the list.

Daniel Carlson: Yeah. And then one last question, just — I’ve just looked briefly since your press release, but your PI and the INKmune prostate trial seems to be a pretty big deal. I’m just wondering what his motivation was to work with you guys on this?

RJ Tesi: Well, I’ll let you ask — I’ll let you — I don’t want to put words in his mouth, but this is, as you said, he’s a very experienced guy, clinical trialist. He has particular insight and expertise in immunotherapy. 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, ADCs, etcetera. 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 that the only way he’s going to progress is with an 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 breast cancer and in lung cancer with immunotherapy in prostate cancer. And so far, it’s been a disappointment.

Daniel Carlson: Thank you. Thanks for your answers guys and looking forward to a big year from you.

David Moss: Thanks, Dan.

Operator: There are no further questions at this time. I’d like to turn the floor back over to Dr. RJ Tesi for closing comments.

David Moss: I think you’re on mute RJ?

RJ Tesi: 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. INmune 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.

Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.