Ladies and gentlemen, greetings and welcome to the INmune Bio Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] 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 Mr. David Moss, CFO of INmune Bio. David, the floor is yours.

Thank you, Ryan, and good afternoon everybody. We thank you for joining us for the call for INmune Bio's yearend 2023 financial results. With me on the call is Dr. RJ Tesi, CEO and Co-Founder of INmune Bio and Dr. Mark Lowdell, Chief Scientific Officer and Co-Founder 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 fact, 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 such as 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 filings 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. 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?

Thank you, David, and thank you everyone for joining the call. As usual, I will arrange my remarks to highlight the key takeaways for the fourth quarter and the subsequent period and provide updates on our platform programs. I will start by reviewing developments on our XPro platform and then pass it over to Mark Lowdell, who will provide an update on INKmune. David will conclude with a discussion of our final results and providing an update on upcoming and new milestones. During the fourth quarter in early 2024, there were several positive developments in our Phase 2 trial in patients with early Alzheimer's disease. First, we received acceptance of our clinical trial application by several EU countries to allow us to initiate the Phase 2 trial in those countries. Clinical trial sites in Poland, Spain, France, Czech Republic and Slovakia will soon be enrolling patients. The UK continues to be very active in recruiting patients for the Phase 2 trial, and the UK is ideal, an ideal jurisdiction to expand or to develop our program because it possesses one of the highest rates of Alzheimer's disease in the rest of the world, coupled with a robust for-profit medical research infrastructure. Patient enrolment tends to be faster in the private for-profit sites compared to academic or government-run hospitals. The FDA listed the clinical hold for the AV program in January of this year. We have previously announced we will not be enrolling patients or adding trial locations in the US. This is a simple issue of timing. The time and cost to open US sites is such that we probably would not be successful getting any patients enrolled before the Phase 1 and Phase 2, excuse me, enrolment is completed. That cost just can't be justified. We expect no US…

Ladies and gentlemen, the line of Dr. Mark Lowdell has been disconnected. Please stay connected while I connect him. Thank you.

Okay. Mark, there's a storm in the UK where Mark is.

I'll tell you what, I'll go to my part and then we can come back to Mark if you don't mind. Okay, that's fine. So, I hope the audience doesn't mind that, but I think that's the way to go because Mark is really the one that needs to speak about it. So, David?

Yeah, I'll jump on here. And, yes, and RJ, maybe what you could do is just text Mark, so you can get him on the line. So, I'm going to provide a brief overview of our financial results and upcoming milestones and we'll go back to Mark and then Mark will move on to Q&A. Net loss attributable to common stockholders for the year ended December 31, 2023 was approximately $30 million compared to with approximately $27.3 million for 2022. Research and development expenses totalled approximately $20.3 million for the year ended December 31, 2023 compared with approximately $17.1 million for 2022. General and administrative expenses was approximately $9.6 million for the year ended December 31, 2023 compared with approximately $9.3 million for 2022. At December 31, 2023, the company had cash and cash equivalents of approximately $35.8 million. Based on our current operating plan, we believe our cash is sufficient to fund our operations into Q4. As of March 27, 2024, 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 objectives while remaining cost prudent with the potential to recover a portion of R&D expenses in Australia and the UK. Now I'd like to move on and list our upcoming important milestones. Full enrolment in the Phase 2 XPro trial for the treatment of neuroinflammation as a cause of Alzheimer's disease are expected mid-2024, followed by top-line data approximately six months from the last patient enrolled. We will initiate a Phase 2 trial of XPro in patients with treatment-resistant depression in the second half of 2024. Cohort 1 of the metastatic castration-resistant prostate cancer program is nearly complete with all three patients enrolled. We expect Cohort 2 to start in April with open label data to follow. We expect complete enrolment in the Phase 1 portion of the metastatic castration-resistant prostate cancer trial by the end of Q3, 2024, and the Phase 2 portion is expected to complete enrolment in Q2 of 2025. An upcoming webinar on using XPro to promote remyelination in neurodegenerative disease will be announced in Q2. We encourage you to look out for this event and do your best to try and join. It should be pretty exciting. And then at this point, I think, Mark, are you back on the line?

David, Mark is still not online.

Yeah, so he says he's going to try a web call, but let me go ahead and get started and even jump in. So, on to INKmune. So, we apologize for the technical problems. So, we achieved…

I've actually joined. RJ?

Okay, go ahead, Mark. Mark, I did give your accolades about your awards, so you can start from there.

That's very kind of you. Yeah. Sorry, everyone. I'm in the UK and we've got a thunderstorm going on and I got dropped out. Anyway, thank you very much, RJ. Of course, I'm very honored by the ISCT's recognition and obviously pass my thanks to all of my current and former colleagues that I've had the pleasure to work with over the years. It's a great reflection on the entire research effort and success of everyone I've been lucky to work and collaborate with over the course of my career, and I hope it continues. So, most notably for us, though, that we achieved the accompanying milestone at the end of 2023 in the last weeks before Christmas, with the launching of the Phase 1-2 open-label trial of INKmune in metastatic castration-resistant prostate cancer, or MCRPC for short, with the first patient dosing taking place in the final week at the end of last year. The trial is actually unique in many ways, as seems to be the trend of our company. First, the concept. This is an NK therapy trial that does not give NK cells or use cytokines. INKmune converts the patient's own residual NK cells in their circulation from resting, non-cancer-killing state, to what we now know are memory-like NK cells that are able to destroy NK-resistant cancer cells. So, unlike more conventional adoptive immunotherapies with NK cells from donors, patients don't require any type of conditioning chemotherapy, and nor do they require NK-stimulating cytokines, as is common to other NK-activating therapies. INmune patients sitting in a chair as an outpatient can get an IV, or intravenous infusion, over 20 minutes, and then having received their dose of INKmune, they're able to leave. We've given over 20 doses of INKmune in an outpatient setting so far. Each…

Well, I appreciate it, Mark, and thank you for the update. Since I've already gone through the financials and summary management fields, the company has two great platforms, and it's a small organization with limited resources, we'll try to expand the application of these platforms when resources allow. We greatly, greatly appreciate your continued belief in our small company and support of shareholders. At this point, I'd like to thank you for your time and attention. I'd like to turn it back to Brian to poll for questions. Brian?

[Operator instructions] Our first question is from Thomas Shrader with BTIG. Please go ahead.

Hi. Good morning. Good afternoon. This is [indiscernible] for Tom. Thanks for taking my question. So two for us. So first, for the plan study in TRD patients, is there an obvious criteria for patient stratification to enrich for patients who are likely to benefit from XPro? And then question number two is, so for the recent EEG data that was presented, how established is the correlation between EEG changes and improvements in cognition and memory? Any additional insights will be helpful. Thank you.

Yeah. So thanks. So the first question is on TRD and in fact, we will use CRP. So these patients have had to be confirmed to be treatment resistant, which means they failed two previous lines of antidepressant therapy, and they need to have an elevated CRP. So we're not adding the other three biomarkers we use in the AD trial, but it's the same principle that patients with neuroinflammation will benefit from XPro and it turns out that neuroinflammation makes patients resistant to traditional antidepressant drugs. So this is an ideal treatment group for us to treat. Now, I missed the first part of your second question. So ask it again, please.

Just how established is the correlation between EEG changes and improvements in cognition and memory in Alzheimer's disease?

Yeah, good question. In fact, it's not established. As far as we obviously did a very deep dive here and we could only, so we could only find published data on patients with head injury. In other words, if you have a head injury, TBI, your alpha wave declines and then four weeks later, when you get better, your alpha wave goes up. So there's an improvement in alpha wave in a patient who has cognitive dysfunction after TBI that improves. That is not a drug trial. We looked hard at the drug literature and could find no data that really supports that correlation and that's why I was saying we don't really have a roadmap. There's a couple, there's some debate with the [indiscernible], whether it in fact increases alpha wave power in patients that respond, but I would say that's a debate at this point. I would honestly, we believe, and the experts believe that it is consistent with improvement in synaptic function and brain function. We'll see after our Phase 2 trial. We hope it's the case.

And if you don't mind, RJ, I'd just like to add a little bit on the TRD and I wish we had CJ on the call because CJ is really a TRD expert, but one of the reasons why we're very interested in TRD is that Andy Miller and Jen Felger, two KOLs that are in the space, there was a trial that was previously run with TNF inhibitors. It's a published paper on it. I'd be happy to send it to you. I think it's listed on our slide on the TRD deck and it shows a failed trial that just took all comers, but it shows that patients that had elevated CRP, elevated measures of neuroinflammation had a very statistically different result, a positive result when treated. And so if you select your patient population and you use a better TNF inhibitor, i.e. XPro, we feel very confident that that is a trial that will be successful and really Andy Miller has really been chomping at the bit to do this trial for many, many years and that's the reason it's set up and one of the reasons why the NIMH, the National Institutes of Mental Health, gave the company a $2.9 million grant to do that trial.

Thank you. Our next question is from the line of Joel Beatty with Baird. Please go ahead.

Great. Thanks for taking the questions and for the update today. First question is, as you enrol the Phase 2 Alzheimer's trial, what about the profile of XPro or the previous data that resonates the most with investigators?

So, yeah, thank you, Joel. So remember that this trial is occurring in jurisdictions that do not have the anti-amyloid drugs approved. So, that's Canada, Australia, Europe and the UK. So in fact, number one, they're excited about the fact that they have something to offer their patients. Number two, they read the literature like everybody else and they, especially those that haven't had hands-on experience with the anti-amyloids, they're just not sure and here we are giving them a drug that is both safe and we think, and we've convinced them is effective. So they like the safety profile. They like the idea that it is not -- it is targeting something else besides the amyloid and they also like the idea that the trial is only six months because if in fact the patient doesn't respond, then the patient can move on to another clinical trial and still probably qualify where if it was an 18-month trial, that wouldn't be the case.

Yeah, that's helpful and then a question on INKmune, with the prostate cancer trial now underway, share anything about the potential of cadence of when you might be able to share data from the trial with investors?

Yeah. The best thing I can tell you is that today we treated the third patient. So the last patient in the first cohort with the final dose of drug, obviously that's the lowest dose and we will start analysing those data as they come through. We have got patients lined up now to start the second cohort. So we're right on schedule to deliver this trial on time. I believe we will be coming out with good news as it comes through and I think September is when we will be looking for that -- for those days to come out because we'll be able to maturely analyse them across the three dose levels, but if we get any remarkable data prior to that, then plainly, we'll go public with that.

Our next question is from the line of Daniel Carlson with Tailwinds Research. Please go ahead.

Hi guys. Thanks for taking my questions. RJ, you've talked about comparing XPro to the anti-amyloid trials at six months. We know those trials are much larger in size than your XPro trial. What gives you confidence that you'll be successful in comparing your trial to theirs at six months?

Great question, Dan, and pretty easy to answer. This is where the enrichment criteria come in. You know we've been touting the fact that we only enrol patients with neuroinflammation and we define that by one of three blood tests or being APOE for five years. By doing a trial that matches the patient's disease, neuroinflammation, with a mechanism of action, a drug that treats neuroinflammation, you actually make the trial work at six months better than the anti-amyloid trials. That is, to put it in heating terms, the statistical power increases because the variance decreases. So because there's less noise, the data we get is cleaner. So whereas they need, it turns out if you look at the results they got, they would have needed about 700 patients per total, so 350 per arm, to actually have a positive trial at six months, but we only need 200. So it's all related to the enrichment criteria. We've always called it a little bit of our secret sauce and this is a good example of why it's the secret sauce.

Got you. That makes perfect sense, thanks. Mark, question for you on INKmune. The prostate market has certainly heated up with, in these radioconjugate companies, some of them have been acquired and some financing with great valuations, etcetera. Can you compare or just tell us how INKmune competes with radioconjugates?

Yeah, thanks Dan, that's a very good question and plainly, they're much further down the line than we are in their trials and getting their drugs licensed, but the fact is that radiopharmaceuticals are tough to deliver, just getting the isotopes and if you think about Pluvicto, the Lutetium-177 that they use for Pluvicto, there's only one manufacturer of Lutetium-177 in the entirety of the United States and I think there's probably only three globally. So you do end up looking, as we've seen with the Strontium-89 in Metastron, a challenge in getting the availability of the radioligand. The other problem, of course, is, or one of the other problems, is of course the short shelf life. Lutetium's got a shelf life of, I think, 6.7 days or seven days. So your manufacturing issues are very considerable and I think as these drugs get more widely used, we're going to see bigger problems with that, but I guess that the real difference is the sort of recall effect that you get, which leads to off-target toxicity, even with these relatively well-tolerated drugs like Pluvicto. You've got bone marrow suppression in these patients become anemic and so that's fine in the metastatic castration-resistant prostate cancer setting where you've got patients who are very far down the therapeutic line, but it does make them more challenging to deliver earlier in the treatment process and the great thing about INKmune is its complete lack of toxicity in the patients we've treated so far and in the animal models that we used beforehand. So I think the great difference, if you wanted to look at one now, if we're successful with INKmune, I see it moving earlier in the treatment paradigm. So you end up treating patients with early stage disease, which is where we are with many of the other immunotherapies. So that's where I think the difference will be. We'll have a wider population of less severely sick patients.

Awesome. That's great. Thank you. That's good input. Thanks. And then one more question. RJ, just if you can comment, it seems like both INKmune and the Alzheimer's trial, the enrolment seems to be on track. Can you just talk about the trends you're seeing in enrolment right now?

Yeah, well, but I'll start with INKmune. INKmune is actually, enrolment has been constrained by the FDA's requests. In other words, they wanted, in the Phase 1 portion of the trial, 28 days between each patient in the cohort. So by definition, the first, getting all three cohorts done will take nine months. Now, there is some speed up because of the Bayesian design, because there is some overlap of the Phase 2 groups. But the bottom line is, we've had more patients actually contacting us who want to be enrolled in the trial than we have slots for right now. Now, knock on wood, let's hope that continues when we get to the Phase 2 portion, where we have a little more flexibility in enrolment rates. But the bottom line is, prostate disease is common. The patients are actually quite sophisticated in searching for clinical options and so they contact us as often as our clinical sites go looking for them, which is quite encouraging. Alzheimer's disease is more interesting, as I said earlier, because all of our studies are in jurisdictions where the anti-amyloids aren't approved. In fact, we're only competing with clinical trial, other clinical trials. Now, there's a lot of clinical trials in Alzheimer's disease, including, both companies are running, Phase 3s and other trials. So there's a lot of patients being consumed by the anti-amyloid trial. But as I said to Joel, XPro is just kind of an attractive drug. It's a different mechanism. So we get a good listen. It's safe. It's a good mechanism. I have to say, it's not the -- it's rarely the patient that chooses on which trial to be in. They really follow the advice of their clinicians, but the clinicians like, kind of like what we're doing and so far, so good is all I can say. I will say that we, every day we get up and we think of ways that we can speed enrolment and I think we've got some ideas and we're pushing hard and so far, fingers crossed, toes crossed, everything's going to work out as we've promised for the last two years, despite our frustrations with the FDA.

I just like to say that Dan, I've been doing early phase clinical trials all my career, and I have never known a trial, either the XPro ADO2 trial or our INKmune trial in prostate cancer that has enrolled to schedule in the way that these two trials have and so we can be really confident about the outcome, the delivery time point, given the sheer enthusiasm for patients on both trials, which is, I say is remarkable in my experience.

Well, thanks guys. After going through COVID with a number of companies, missing their timelines because of enrolment issues, it's great to see these trends. So thank you for that. Appreciate it.

Thank you. As there are no further questions, I would now hand the conference over to Dr. RJ Tesi for his closing comments.

Yeah. So thank you. So INmune Bio is making progress on two fronts and we're pretty proud of that. I will say the drug development landscape for the treatment in cognitive decline in Alzheimer's disease is really changing rapidly and we are impressed how quickly the conversation has pivoted from treatment of dementia to prevention of dementia and I can't help wonder that this rapid pivot is because of the satisfaction and frustration of the -- with the approved therapies. There's still a niggling concern that the risk profile is not ideal, but I have to say at INmune Bio, we have a little bit of a different view. We believe the anti-amyloid drugs are chasing the wrong target. We believe neuroinflammation is intimately involved in disrupting nerve cell function and survival and synaptic function and those are the two central elements needed for cognitive decline. With XPro, we are attacking this pathology and have strong evidence that we change the biology of the brain for the better. The ongoing Phase 2 trial will allow us to correlate these biologic benefits with cognitive change, and we hope cognitive benefits. Stay tuned because the positive result there opens the door to other indications where neuroinflammation meets cognitive dysfunction. Likewise, INKmune is an NK therapy of a different stripe. The biology is sound. It's a lifetime of work by Mark Lowdell, and he is getting finally recognized for what has been long due. We marvel at the safety profile of this immunotherapy. Could this be a cancer therapy that really has no side effects and only has benefits? Time will tell, and we believe the metastatic castrate resistant prostate cancer trial will give the product and INKmune, a good chance to shine. We remain optimistic about both our programs, and we thank you for your support and your attention.

Thank you. The conference of INmune Bio has now concluded. Thank you for your participation. You may now disconnect your lines.