Q2 2023 Nmune Bio Inc Earnings Call

Greetings and welcome to the immune by our second quarter 2023 earnings call. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded a transcript will follow within 24 hours of this conference call at this time it is my.

Pleasure to introduce to you Mr. David Moss CFO of immune bio David. Thank you the floor is yours.

Thank you John and good afternoon, everybody. We thank you for joining us for the call for immune <unk> second quarter 2023 financial results with me on the call actually sitting right next to me stocked our RJ tests, each CEO of IMMU bio who will provide an update on our two platforms X pro.

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.

These statements involve risks and uncertainties that can cause actual results to differ materially from those as such.

Such forward looking statements.

Please see the forward looking statements disclaimer on the Companys earnings press releases 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 of the date. They are made as the facts and circumstances underlying these forward looking statements may change.

As required by law immune bio disclaims any obligation to update these forward looking statements to reflect future information events or circumstances.

With that behind US now I'd like to turn the call over to Dr. RJ Testy CEO of <unk> bio RJ.

Thank you David and thank you everyone for joining the call as usual I'll arrange my remarks to highlight the key takeaways for the second quarter and subsequent period and provide updates on our platform programs.

I'll start by reviewing our developments with <unk> pro and <unk> before I pass it back to David to discuss financial results and provide an update on upcoming.

And new milestones, we will then move to Q&A.

During the second quarter, our primary focus remained enrollment of patients into the phase two blinded randomized trial in patients with early Alzheimer's disease with inflammation.

And increasing the geographic footprint of that trial, we're going global.

Spanning the geographic footprint has been slowed by staffing problems at regulatory authorities in some jurisdictions I believe this is a hangover from the Covid era for instance, one country has.

Is 120 days past the response time required by law, but Theres nothing you can do about the problem, we just deal with it.

<unk>.

Answer their requests as needed.

Enrollment continues to accelerate and we are encouraged to see patients finished the trial and ought to continue treatment under the phase two open label extension program I'll remind you the OLED or the open label extension provides two additional bites at the Apple if I may.

One third of the patients entering the open label extension had been on placebo that is they've not received EXPAREL. These patients now have an opportunity to respond to <unk> therapy, we should be able to capture that data.

Patients who received <unk> two thirds, who had been on active drug during the trial will continue on the drug for them and provide data for long term efficacy and safety follow up important issues for the company investors clinical teams potential partners and the.

<unk>.

Finally, we remain on track with the FDA to meet the conditions necessary to lift the clinical manufacturing called before the end of the year. This long and frustrating process is nearing its end we hope.

The just completed annual Ah Alzheimer's Association International Conference was filled with both promise and pragmatism. The promise was the release of data from the <unk> study in patients with early E D.

With the release of that data there are now three large phase III studies performed with different anti amyloid antibodies. The three studies showed consistent efficacy and safety.

Put another way.

Wearing my commercial hat, although the marketing staffs of perspective.

Companies will see differences in the three drug therapies and their clinical trial results.

<unk> and patients will see similarities there is a class effect.

That is reflected by the pragmatism.

<unk> seen by the clinical.

Alzheimer's disease professionals. It was palpable that they want more a multi derik de survey confirm there was no need in their opinion for additional drugs targeting amyloid.

But there was plenty room for employment for improvement in the drugs treating Alzheimer's disease.

The clinical teams and the clinical experts want three things first additional drugs that improve outcomes and that do not target.

What.

Drugs targeting Tau in neuro and claims information on top of that list.

Second there is a desire for better biomarkers to identify patients early in the disease process when they can be best treated.

And help select what drugs the patient should receive.

The preference is for easily obtained blood tests.

Finally combination therapy has become a serious topic of discussion now on a satisfied with the results of the monotherapy anti amyloid trials.

In Alzheimer's disease is a complex disease and modern medicine complex diseases, often require treatment with combination therapy.

We should expect no difference with Alzheimer's disease.

An interesting problem did rear its head at the meeting there was much head scratching about what to do with patients. After the amyloid is gone.

In fact, the Lilly trial was done I mean that they stopped the drug once the amyloid is gone, but the patients continue to show progressive cognitive decline.

Clearly there is a need for something to solve this problem.

With combination therapy, we believe <unk> is well positioned to fulfill this new cognitive decline without amyloid problem.

Some may be scratching their heads trying to understand the data the company presented at the meeting in Amsterdam.

The posters on the effects of extra on gray matter microstructure elements for complicated.

And a little bit data dense and I'll attempt to integrate these highly technical data into our overall program for you.

We have presented extensively on the benefits of ex broke treatment.

And white matter on white matter of pathology in patients with Alzheimer's.

Because the brain has both white and gray matter some basketball what about gray matter and these data we presented show that X pro does affect positively.

The microstructural elements of grey matter in the brain and the areas, where Alzheimer's pathology is most fear.

That is ex pro helps normalize the microstructural elements of both white and gray matter that is the whole brain.

So we have already shown that <unk> changes, the biology of neuro inflammation nerve degeneration synaptic function and Mylan.

These data suggest that remodeling and repair of the aging of brain occurs when you control destructive neuro inflammation with EXPAREL what remains to be shown as the impact of these changes on cognitive function.

The and the open label Phase one trial eight of nine patients treated with shall we say full dose X pro had stable or improved cognition.

On X pro therapy, we have been vocal in our belief that extra will flatline cognition in patients with Alzheimer's disease in neuro inflammation.

But we won't really be able to answer this question until we've completed the ongoing phase III trial.

We have signaled our interest in using the DN TNF or the dominant negative TNF platform for the treatment of Duchenne muscular dystrophy or DMD.

As highlighted in January we established DNO to a separate wholly owned subsidiary that will hold the intellectual property to facilitate partnering and business development activities for treating DMD with our dominant negative TNF.

This business structure allows us to focus on our core mission that is the treatment of Alzheimer's disease, without leaving and valuable asset on the shelf so to speak.

Our confidence in Dms.

DMD is based on the preclinical data the ticket and ticket for entry into DMD as clear a therapy must decrease inflammation and decrease muscle fiber destruction.

DN TNF does that and more the most interesting and novel attribute is that.

DN TNF treatment improves muscle fiber regeneration.

To our knowledge muscle fiber regeneration has not been seen in any small molecule biologic or gene therapies.

A therapy that promotes muscle fiber regeneration may change the course of disease in these boys.

As part of the preclinical effort, we are performing molecular studies to understand the advantage of DN TNF therapy compared to standard of care.

Article steroid therapy.

We are working hard to find a potential partner for this promising asset.

Moving from DN TNF to the Inkerman platform.

You'll recall in may that the FCA or we received from the FDA a safe to proceed.

Letter actually its an email these days for the phase one two clinical trial using east increments to treat men with metastatic castrate resistant prostate cancer or M. CRP C.

Is the more common phrase that is used.

This simple email formalized our decision to pivot from using <unk> to treat hematologic diseases to treating solid tumors.

The decision for this payment was based on the unique biology of ink being prime that NK cells.

<unk> prime to NK cells undergo changes that allow the NK cells.

Function in the immunologically hostile in hypoxic Tammy.

To our knowledge cytokine primed NK cells are genetically modified NK cells do not undergo these changes that are critical for successful treatment in solid tumors.

The choice of metastatic castrate resistant prostate cancer as our first tumor target was carefully considered.

Prostate cancer specimens have a robust NK cell infiltrate but the cells are resting NK cells that do not kill cancer.

Prostate cancer is well established biomarkers that will allow us to determine if.

And commune is decreasing tumor burden in the cancer patient.

And finally.

Metastatic castrate resistant prostate cancer is one of the few tumors that have not benefited from the immunotherapy revolution of the less.

Five or six years, we believe we can change that.

Finally, the health of men with.

Metastatic castrate resistant prostate cancer it ranges from very active.

Let's say normal to sedentary, Inc. Fin is given as an outpatient without the need for pre medication cytotoxic conditioning or difficult to use cytokine therapy. This therapeutic profile aligns well with the expectations of men with metastatic castrate resistant prostate cancer.

<unk>, who often live a long time with their disease and value a high quality of life.

The trial is a novel Bayesian design that is expected to enroll 30 met.

The trial will take place at a minimum almost six sites in the U S and we plan to enroll the first patient by the end of the year.

Patients will receive one of three doses of Lincoln unison outpatient during the six month trial, immunologic and therapeutic efficacy efficacy will be measured.

Immunologic efficacy will be measured by the increase in memory like NK cells in the blood and how long. These cells are present in the patient's circulation.

We expect this secure correlate with therapeutic effects therapeutic efficacy or tumor response to England.

Measured using traditional biomarkers for prostate cancer tumor burden, including blood Psa.

A C T scan and bone scans as well as novel Biomarkers of tumor burden, which include the Pms a pet scan.

And circulating tumor DNA.

We continue to treat patients in the Loral trial, that's the ongoing phase one trial in high risk Mds AML patients four patients have received the complete three dose regimen.

<unk> show that is so far is well tolerated three of the four patients showed evidence evidence of NK cell activation.

Of the four patients one remains alive 20 months post treatment with not having received no other therapy.

And has enjoyed an improved quality of life.

Two patients were bridged to transplant and one patient actually down died while waiting for a transplant.

We've opened a third clinical site in Athens, the first Greek patient has been identified and treatment is planned for the end of August .

There have been two major barriers to recruitment of patients in the world.

Trial first was COVID-19, the original sites for all in the U K and the U K as National Health service.

Really suffered under Covid and those dislocations in service persist.

Second problem is related to the enrollment conservative enrollment criteria, we use for the first cohort.

With experience that enrollment criteria can be made more Liberals. We believe this will solve.

Some of the enrollment problems.

The company remains committed to execute on its vision of moving <unk> towards commercialization both platforms offer unique therapeutic options.

More than one disease in their respective therapeutic silos. We are excited about the prospects of both platforms and are working hard to make a difference at the bedside.

Building shareholder value.

I return this to David Moss and review certain financial items.

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 quarter ended June 30th 23.

Was approximately $6 5 million compared with approximately $6 8 million for the comparable period in 'twenty two.

Research and development expenses totaled approximately $4 1 million for the quarter ended June 30th 23, compared with approximately $4 2 million for the comparable period in 'twenty two.

General and administrative expense was approximately $2 3 million for the quarter ended June 30 was 23 compared with approximately $2 2 million for the comparable period in 'twenty two.

At the end of June 32023, the company had cash and cash equivalents of approximately $47 8 million based on our current operating plan. We believe our cash is sufficient to fund our operations into late 'twenty four.

As of August 7th 2023, the company had approximately 18 million shares of common stock outstanding.

As highlighted in the prior quarter's investor call. We continue to focus on achieving our primary clinical trial objectives, why retain remaining cost prudent with the potential to recover a portion of R&D expenses in Australia.

And to a lesser extent the U K.

Now I'd like to move on enlist our upcoming important milestones.

Topline results for our phase two early <unk> trial in patients with inflammation Alzheimers disease expected in late 'twenty four.

We will initiate a phase II trial of EXPAREL in patients with treatment resistant depression upon resolution of the FDA manufacturing, maybe if we'd been working relatively hard on that.

Additional open label Phase one trial of <unk> in high risk Mds AML in 'twenty three in early 'twenty four.

Initiation of a phase one slash two program in metastatic castration resistant prostate cancer will begin in the second half of this year.

Finally, we continue to pursue business development partnership opportunities and there can be no assurances that the company will complete any transactions as they are complex and very difficult.

With two great platforms and as a small company, we will try to expand the applications for these platforms in areas. We do not have the resources or expertise to pursue ourselves in order to benefit shareholders naturally we'll update investors should material business development that's curve.

At this point I'd like to thank you for your time and attention.

And I'd like to turn it back to John our operator to poll for questions John .

Yeah.

Thank you Sir at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two to remove a question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

One moment, please what we pull for questions.

And the first question comes from the line of Joel Beatty with Baird. Please proceed with your question.

Okay.

Great. Thanks for the update and for taking the questions.

First one is on the ongoing FDA manufacturing review could you provide a little bit more detail there on what is needed to get that resolved.

Yes. So thanks, Joe So it's now 15 months since we received 14 months since we received the clinical hold and really I divide this into two halves it took us.

A long time to understand exactly what the FDA was asking for as you know.

Both Canada, and Australia, where are fine with.

The new <unk> pro that we've made is being used to treat patients in both of those are regulatory jurisdictions.

And we.

The way the communication happens with the FDA, which is not very efficient.

Seven months for us to reach an agreement with the FDA, what the problem was and what the solution was so I.

I can promise you that was extremely frustrating for us and as it was for investors. Since then we have been executing against their request.

Once again, our scratching our heads a little confused why they are preventing us from treating patients in the U S. Despite the fact the drug has been used in the U S. Before for our Covid trials and is being used in both in the.

In Canada, and Australia, but that is the nature of working under the regulatory authority of the FDA, we expect to.

So it gives them everything they need to get us off clinical hold.

In time for us to receive that.

For safe to proceed email before the end of the year.

I, if I sound, a little bit less than I feel confident that it's just because it's the FDA and you know you never know the score until the end of the whistle as well so.

It's been frustrating for you its frustrating for us, but the drug just fine.

We're using it in two venues in new patients are going on.

Frequently.

Yeah.

Okay.

Yeah.

And the next question comes from the line of Thomas Shrader with BTG. Please proceed with your question.

Hey, Good afternoon does the song calling in for Tom and Thanks for taking my question, but two questions first is regarding alzheimer or more of a big picture question.

About pricing for a new drug if a new drug does not require ARIA monitoring what do you do you believe that that will allow for premium pricing with cost savings from the MRI and.

And then the second question is.

Following the recent FDA decision on the competitor drug an M D D over the weekend and how does that help you think about enrichment strategies for TRT trial and kind of level of TNF can be you used here. Thank you.

Yeah. So thank you very two good questions.

So the current estimate for the cost of care.

The cost of receiving an anti amyloid drug for the first year is $82000.

More than $82000, that's only a third of that is the cost of the drug.

So two thirds of that is really all of the safety monitoring and what's needed for diagnosis of the disease.

We believe that X pro will not have that burden in other words right now our enrollment criteria.

Include basically a you know a set of blood test, which are all relatively cheap nothing fancy can be done virtually any lab in the country.

And then MRI scan that requires some special reading, but that's a that is not expensive there's no pet scans and there's no need for at least as we envision it today, there's no need for additional follow up MRI scans.

So.

Yeah, you know you know how pharmaceutical pricing works. The first drug company sets the price, which has been done and then you can adjust the pricing based on whether you are better we think if we do meet our clinical goal of stabilizing cognitive decline that allows us for premium pricing.

And I would expect that premium pricing would come well within that $82000 bracket, although don't hold me to that we're a little ways off from that decision.

But the bottom line is the current drugs are difficult to use they're complicated.

I think there are.

<unk> is going to be somewhat comp will be slow because.

Of that sophistication needed for managing those patients and the resources, such as MRI scans, which are going to be needed.

For those are managing those patients.

As far as the more recent.

That's with a major depressive disorder, I believe I found that very interesting and actually quite validating about how we do our <unk>.

CNS drug development.

Clearly.

You know, although I have not seen the data I'm not going to comment on it we are very sensitive to the fact that particularly in depression, but it's all central nervous system diseases placebo effects always are what catches you by surprise and the way to eliminate surprises on the placebo side is to better control.

Patient enrollment criteria using enrichment factors the oncologist learn this 20 years ago, the CNS drug developers have not yet learned it we.

Take this seriously and then our Alzheimer's trials. These patients all have neuro inflammation and actually in the trial that we plan in treatment resistant depression. They will all have neuro inflammation, we believe by using that kind of shall we say discipline and enrollment it will prevent some.

Arises on the on the placebo and <unk>.

Or the placebo response and allow you to really accurately assess the drugs effect on the disease.

Great. Thank you.

Yeah.

At this time there are no further questions and I would like to turn the floor back over to RJ for any closing comments.

Yeah. Thank you. So just in summary, you know ex frozen a unique asset in the Alzheimer's therapeutic space and.

This became particularly clear.

At AIC this year, where there are a lot of companies have jumped on the anti inflammatory bandwagon for Alzheimer's, but as many of you know C. J S C J likes to say.

C J as our VP of CNS drug development for those of you that don't know C. J. It's.

It's not treating neuro inflammation, that's important it's how you treat neuro inflammation many of the anti inflammatory shift strategies are what we called Leal suppressive another as they turn off glial cells that strictly on microbial cells.

And while that may prevent production of destructive side of inflammatory cytokines doesn't fix the problem because glial cells play a very very important and active role in the remodeling and repair needed to control in reverse.

CNS diseases, including Alzheimer's disease, so turning off a dysfunctional.

So it's not a winning strategy converting a dysfunctional destructive glial cell into functioning normally functioning with yourselves.

Phagocytize myelin debris promotes synaptic plasticity improved neurons function as needed for success.

So far we have evidenced that extra plays this role well and as far as we know we're the only drug that place this role.

And finally why is the NSA case based so confusing we believe it's pretty simple reason everybody is assumed NK cells or T cells. When in fact, the how and why of NK cells in oncology is a separate and distinct scientific discipline.

<unk> as a therapy that solves the three major problems facing todays NK therapies and commune therapy leverages, the patient's own NK cells to treat their disease, while I make new NK cells when the patient has plenty.

Incremented converts the own the patient's own NK cells into cancer, killing memory like NK cells that are present for present for months after inkerman therapy.

And it does this in the patient circulation without the need for complex manufacturing or concomitant cytokines supplementation.

Finally income and primed NK cells survive and thrive and kill cancer and the hospital tumor microenvironment of solid tumors.

Can't control cancer cells can play on cancers turf.

Increment primed NK cells thrive in that environment.

Yeah.

So these are the reasons why <unk> should succeed in solid tumors and why others are stuck treating hematologic malignancies.

Remind you that 90% of cancers or solid tumors.

When we have the data to support this bolt talk.

Because the <unk> trial, which is the open label Phase one phase II trial.

If it is open label, we should be able to see snippets of patient responses. During 2024, and you will hear about them.

Our corporate focus is in delivering phase two data with X pro in Alzheimer's disease and could be in prostate cancer.

We are positioning other valuable assets in our pipeline such as N V O three and DN TNF for DMD.

For partnering our goal is to partner these promising assets to allow them to be to benefit patients, while providing non dilutive capital for the development of our core assets.

On behalf of Mark and David C J Terra the entire.

Immune team we thank you for your support your continued support and we look forward to speaking to you in the near future and providing further updates.

Thank you.

With that we will conclude the call.

Ladies and gentlemen that does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.

[music].

Okay.