INMB - INmune Bio: Alzheimer's Disease Treatment Lottery Ticket

2023-04-24 05:00:05 ET

Summary

• Final results from the phase 2 study using XPro for the treatment of patients with mild AD and mild cognitive impairment are expected in the 2nd half of 2024.
• It is estimated that the global market opportunity for Alzheimer's Disease could reach $17.7 billion by 2025.
• Initiation of an additional phase 1 study using INKmune for the treatment of patients with the high-risk myelodysplastic syndrome is expected in 2023.
• Initiation of a phase 1/2 stud using INKmune for the treatment of patients with metastatic castration-resistant prostate cancer is expected in 2023 pending IND acceptance from the FDA.

INmune Bio, Inc. ( INMB ) is a great speculative biotech play to look into. That's because it is using a drug by the name of XPro, which is being explored in a phase 2 open-label study treating patients with Mild Alzheimer's Disease [AD]. However, to speed up enrollment and to cut costs, it chose to combine this study together with another separate study being done. That is, to add patients with Mild Cognitive Impairment from another phase 2 study. With that said, the company expects to have topline results from this phase 2 AD study in the 2nd half of 2024. Recruitment is taking place in Australia and Canada for the time being for the AD study, because recruitment in the United States is on hold. INmune is working to remove the clinical hold of XPro in the U.S. and should it do so would be ready to create trial sites in the United States. Regardless, the biotech states that it will not be adversely affected if recruits most or all patients outside of the United States. In addition, it has two other large market indications it is going after in the pipeline. These would be the initiation of an open-label phase 1 study using INKmune for the treatment of patients with high-risk MDS/AML and the initiation of a phase 1/2 study using INKmune for the treatment of patients with metastatic castration-resistant prostate cancer [mCRPC] expected in 2023. With the targeting of the large multi-billion dollar AD market, plus the ability to advanced several other large target market indications, these are the reasons why I believe that INmune Bio is a good speculative biotech play to look into.

XPro For The Treatment Of Patients With Alzheimer's Disease

The main clinical program in the pipeline is the use of XPro, which is being developed for the treatment of patients with Alzheimer's Disease. Alzheimer's Disease occurs when a person's memory and other mental functions start to deteriorate. Brain cells start to die and that's when the memory loss starts to occur. There are no cures at all and many biotechs have tried and failed to succeed in studies. There are roughly 3 million cases of Alzheimer's in the U.S. each year. It is a large population to treat and any biotech that is able to come up with a solid treatment will be greatly rewarded. It is estimated that the global market opportunity for Alzheimer's Disease could reach $17.7 billion by 2025 . This is a huge market opportunity for INmune Bio and the hope is that it will ultimately be successful with this large multi billion-dollar indication. As mentioned above, in order to accelerate patient enrollment and reduce costs of the ongoing phase 2 Alzheimer's Disease study, it has chosen to consolidate it with the phase 2 Mild Cognitive Impairment [MCI] phase 2 study. Having said that, the phase 2 AD study is expected to complete in a 6-month period. However, once the 6-month period is completed, patients will then have the option of being eligible to be enrolled into the 12-month open-label extension trial [OLE]. As far as a catalyst goes for traders/investors to look forward to with respect to this program, it is expected that topline results from the phase 2 AD trial will be released by the 2nd half of 2024. One downside, which I wouldn't consider a risk, is that the biotech is unable to open trial sites in the U.S. for this phase 2 AD study at the moment until the clinical hold is lifted. INmune hopes to get the hold lifted in the U.S. for XPro, but states that it will not hamper this phase 2 study even if all or most patients are recruited outside of United States. Having said that, the AD market is a huge market opportunity and success in this would greatly boost shareholder value.

Financials

According to the 10-K SEC Filing , INmune Bio had cash and cash equivalents of approximately $52.2 million as of December 31, 2022. It did receive some research and development rebates from Australia and the United Kingdom in early 2023 that totaled approximately $6.4 million. It believes that it has enough cash to fund its operations for at least the next 12 months following the date of this 10-K SEC Filing. This leads me to believe that in the coming months in 2023 it will need to raise additional cash. It may have to sell shares or enact another financial transaction to keep its operations going. The raising of cash is going to dilute shareholders. Although, it won't be that bad considering that as of March 2, 2023 it only has approximately 17.9 million common shares outstanding.

Risks To Business

Despite so much potential, there are some risks that traders/investors should be aware of before investing in this biotech. The biggest risk of all would be with respect to the phase 2 AD study. There is no guarantee that this study will be successful and in that case, it will have to rely on its other programs in its pipeline. The second risk would be with respect to the other ongoing indications it has in its pipeline. The targeting of prostate cancer and myelodysplastic syndrome are large market opportunities, but there is no guarantee that INKmune will be successful in helping these patients. In addition, the FDA has not yet accepted the IND of INKmune for prostate cancer. Only if the biotech receives clearance from the FDA can it begin a phase 1/2 study for this program. The final risk would be with respect to the financial position it is in. That's because it only has $52.2 million in cash as of December 31, 2022. That means, it will likely have to raise additional cash in the coming months.

Conclusion

The final conclusion is that INmune Bio is a good speculative biotech play to look into. That's because it is advancing XPro for the treatment of patients with mild Alzheimer's Disease. It is expected that topline results from this phase 2 AD study are going to be released in the 2nd half of 2024. This means that investors will have to wait roughly about 1 year to see if this drug is going to be successful in being able to treat mild AD patients. Even then, this biotech does have other impressive programs it is wanting to advance. It is hoping to initiate an additional open-label phase 1 study using INKmune for the treatment of patients with high-risk MDS/AML in 2023. Then, it intends to initiate a phase 1/2 program using INKmune to treat patients with prostate cancer. With the potential to capture the large AD market, plus several other billion dollar market indications in its pipeline, I believe that INmune Bio is a great speculative biotech play to look into.

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