Greetings, and welcome to the INmune Bio First Quarter 2024 Earnings Call. [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?

Thank you, James, and good afternoon, everybody. We thank you for joining us for the call for INmune Bio's First Quarter 2024 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 who'll 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 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 release as well as risk factors in the company's SEC filings, including our most recent quarterly filings 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 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. With that behind us, now I'd like to turn the call over to Dr. RJ Tesi, CEO of INmune Bio. RJ?

Thank you, David, and I thank you everyone for joining the call. As usual, I will arrange my remarks to highlight the key takeaways from the first quarter and the subsequent period and provide updates on our platform programs. I will start by reviewing developments in the XPro platform and then pass it over to Mark Lowdell, who will update the incoming program. David will conclude with a discussion of our financial results, including some commentary around the recent equity capital infusions and provide an update on upcoming milestones. At a high level, steady progress on all fronts has continued over the last 6 weeks since we held our fourth quarter conference call in March. We continue to enroll patients globally in our early Phase II trial in Alzheimer's disease called AD02, and we expect to meet our target enrollment by mid-2024. The clinical trial sites continue to enroll patients at a good clip, and we reiterate our commitment to complete the enrollment midyear. I know you want to know the exact date of our last patient enrollment, but we will not predict this because of the vagaries of predicting exact enrollment rates and pace. I promise you that as soon as we enroll that last patient, we will let everyone know. Like you, we eagerly await the conclusion of the Phase II and the corresponding data readout that will occur about 6 months or so after that last patient is enrolled. Recently, we provided an update on the long-term use of XPro in patients with Alzheimer's disease. And in that press release a week ago, we described two patients who participated in the Australian Phase I trial, one with MCI and the other with mild, actually moderate Alzheimer's disease. Both have been taking XPro for roughly three years. Due…

Thanks, RJ, and thanks, everyone, for dialing in. Yes, I'm going to tell you where we've got to with our prostate cancer trial called CaRePC. And it's unique in many ways as appears to be typical for our company. First, the concept, this is an NK targeting therapy that doesn't actually administer NK cells or use cytokines, which are the typical historical use of NK targeting therapies. INKmune converts the patient's own NK cells in their circulation and probably actually within their tumor 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. Unlike more conventional adoptive immunotherapies with NK cells from donors, patients don't require any type of preconditioning chemotherapy nor do they require NK stimulating cytokines as is common to other NK activating therapies. The immune patients sitting in a chair as an outpatient, getting intravenous infusion over about 20 minutes and then having received their dosing, they're able to leave. We've given over 20 doses of INKmune in outpatient setting so far. Each infusion has been remarkably boring for the patient, and as importantly, boring for the clinical team because it's been so well tolerated. Each patient in the trial is monitored for immunological endpoints, as you would expect, and these include NK cell number phenotype of those NK cells, their ability to kill NK-resistant tumor cells. We also measure tumor-related variables. In this metastatic castrate-resistant prostate cancer trial, we measure antitumor effects by following blood prostate-specific antigen levels, tumor volume with PMSA (sic) [ PSMA ] scans and we measure circulating tumor DNA. So this rich data set will allow us to determine whether the drug is ready for a pivotal trial at the end of Phase II. The Phase I, Phase II trial…

Thank you, Mark. As usual, I'll provide a brief overview of our financial results and upcoming milestones before we head to our Q&A session. However, I'd like to begin with some comments on our recent capital equity raises as we get closer to our Phase II Alzheimer's readout and INKmune data. We are pleased to have raised $14.5 million in gross proceeds from two separate equity offerings over the past weeks at an average price of $8.35 and $9.84 per share. In the two transactions, the company issued an aggregate of approximately 1.5 million shares of common stock and warrants to purchase an accurate of approximately 1.5 million shares of common stock. The exercise price of the warrants is $9.15 and $9.84, respectively. The warrants are exercisable on the earlier of 2-year anniversary of the initial exercise date or 30 days following the reporting of top line data in the Phase II Alzheimer's program for XPro. In the first $4.8 million raise, management, employees and members of the Board of Directors purchased over $1 million worth of stock. I cannot underscore how financially committed and align the entire INmune team is the success of the company. We greatly appreciate the support from our existing shareholders and the support we saw in both offerings for mostly existing investors, our team here at INmune, but also we welcome a few new holders to the registry. Now moving on to the financials. Net loss attributable to common stockholders for the quarter ended March 31, 2024, was approximately $11 million compared with approximately $6.5 million for the comparable period as we've reached at scale with both of our clinical programs. Research and development expenses totaled approximately $8.7 million for the quarter ended March 31, 2024, compared with approximately $4.1 million for the comparable period.…

[Operator Instructions] And we'll take our first question today from Tom Shrader with BTIG.

So RJ, you must be thinking about the role of A-beta antibodies in your Phase III. Is there any guidance or thoughts are you going to be able to stratify or could you still do a monotherapy trial? I'm just curious if there's any sort of thought yet. And then a quick one for Mark. I understand, Mark, boring is good. But would you expect some fever if you're turning on NK cells? Just your historical thoughts on why things are so safe?

Yes. So let me -- thank you, Tom for those. A very interesting question about the anti-amyloid. We have signaled very strongly. We are aware that we're going to have to be able to answer the question about combination therapy. And I think we've said that you should expect some preclinical data to that regard from us midyear. What's more important, though, is how will it affect the Phase III clinical trial. And at least in the United States, the only place these drugs are currently approved, adoption has been slow. So I believe that there will be plenty of patients who are not on the anti-amyloid drugs who will be potential clinical trial participants in the United States and other regulatory jurisdictions like the Europe, U.K., Canada, and beyond. We don't know when those drugs are going to be approved. They will be approved by the time we start our Phase III, no doubt. But once again, those drugs have had slow adoption. So I'm -- we are not concerned at this point. We believe a combination trial is actually a different development pathway that may be answering a different question than whether XPro works alone for patients in Alzheimer's with neuroinflammation. David, do you want to made a comment on -- is Mark on the phone? I think his call may have dropped. Mark, you there? Mark is not here.

I'll tell you what, Mark got dropped. He's got a -- they'll try and add him back in. He's over in Europe having problems. But in relation to your question, Tom, why you don't see a fever or some sort of inflammatory response, why the drug is so safe.

Mark is here.

So the answer -- the question was about no fever, why no inflammatory reactions with INKmune. Well, INKmune activated NK cells and it doesn't activate T cells. And we spent a lot of time looking at that. So the inflammatory response you see in cytokine release syndrome, is entirely T cell mediated. So that's released an inflammatory cytokines from CD4 T cells. And NK cells, which are activated by INKmune or even by cytokines don't secrete inflammatory cytokine. So no NK therapy itself, it has been associated with inflammatory type reactions.

Got it. Okay. Thanks for the thoughts on both.

No, no, not at all. It's a very smart question actually because it's normally the cytokines that are administered to sustain NK cells that cause side effects. And of course, INKmune doesn't require the administration of cytokines. So it's specifically NK cell targeting.

Our next question will come from Joel Beatty with Baird.

The first one is for the ongoing Phase II trial in early AD. Can you remind us of the mix of patients you're targeting and enrollment between the ones that have mild cognitive impairment versus mild AD, and how enrollment is tracking with that?

Yes, good question. So two things, proof points in there, it's relevant considering my promise on placebo. We have a 2 to 1 enrollment of active to placebo. In other words, so average group of [indiscernible] and one patient gets placebo. So that's number one. Number two, the way the protocol is written, there will not be more than a 2 to 1 balance. In other words, there's -- although you don't specify whether there's twice as many mild AD as MCI or twice as many MCI as mild AD, it will not be a -- it will really be an early AD trial, like all the other ones do. Statistically, I would expect -- you would expect more MCI patients. But as you recall, we started the trial with only enrolling mild AD patients. So I suspect it will be very close to a 50-50 mix. Don't hold me to that, that's a prediction. But it's -- the way it's looking right now is going to be about a 50-50 next.

And then a question on the open-label extension study that -- I guess a clarification. Has it just been enrollments that's closed, but some patients in the study are continuing to be dosed or is dosing complete in all patients? And in any case, are there plans to share the open-label extension data that you have collected?

Yes. So that's a good question. The open-label extension data that we have has always been complicated by the fact that we don't know what the patients were on at entry. Remember, they come into the trial after a blinded randomized trial so we don't know. So we haven't figured out the best way to analyze those. Right now, because of really, as I said, both drug supply and financial considerations to -- by the way drug supply is a financial consideration because making the stuff is not a small task. We are basically working with the sites to decide the best path. Some patients will go on to kind of a theme where they get compassionate use if that's available to them, and some will not be -- will be discontinued. It's not -- the company is not happy with this turn of events, but it is a practical consideration. Our goal and our commitment to investors is to make sure we finish the Phase II trial, get the results we're looking for, and that's where we're focusing on [ resources ].

Our next question will come from Jason McCarthy with Maxim Group.

I guess this is RJ's thought type of question. RJ, can you kind of opine a little bit on what do you think regulators might want in terms of timing for this trial. You said that the 2 approved amyloid drugs, 6 months they already saw that they're effective. But given what you know now about markers of inflammation, seemingly FDA willingness to accepts correlation between biomarkers and outcomes in Alzheimer's disease. And with any current standard of care in mild or early Alzheimer's, what is the expected rate of decline? Like can you really get away with the trial that's just 3 to 6 months because of all the inflammatory biomarkers that are available that the FDA seems to be more accepting of?

So good question, and I'm going to answer it in a series of statements. First of all, I'm not predicting 3 months, our trial is 6 months. 3 months is pretty quick, we expect robust results after 6 months. Now let's talk a little bit about the biomarkers. Our biomarkers of neuroinflammation in the Phase II trial are enrichment criteria. In other words, there are things you need for enrollment. The FDA, I'm not convinced that the FDA will accept biomarkers of neuroinflammation as a biomarker of Alzheimer but they will accept are biomarkers of what they consider Alzheimer's, which are amyloid, tau, maybe GFAP, which is glial fibrillary acidic protein, a biomarker of [ acetylcholine ]. Now the good news is there's very good blood test for all of those, and I predict that we will actually show a decrease in those biomarkers in the Phase II trial in patients who get XPro. So my bet is that what we've got is we're going to be focused on patients who have no neuroinflammation because that's how the drug works. But we don't think that the FDA -- we make a surprise mind you, but we don't think the FDA will actually focus on neuroinflammation as a response, they're going to stick to the biomarkers they know and they know amyloid and tau and they might be interested in GFAP. And I don't think there'll be interest in NfL, neurofilament light chain in Alzheimer's. So those are my predictions. But I really think if we do as well as we think we are, where you've got a placebo group that's racing to really quite significant cognitive impairment. And the XPro group, which is relatively stable. I don't think they're going to force us to treat patients on placebo for a very long time. But they're going to want to see more patients. 200 patients will not be the size of the next trial. It will be at least double that, probably 3x that in my predictions.

So in the placebo group, even with the acetylcholinesterase inhibitors or something like that, how far out can they go even with a true placebo effect and then start to decline kind of like not fake it to you make it, but you know what I mean, where they will eventually...

Yes, so two points. Acetylcholinesterase inhibitors. In general, after 3 months, certainly after 6 months, you don't see any benefit for those drugs. Patients have to be on a stable therapy before they can be enrolled, and that's for 3 months. So any patient that would be enrolled with an acetylcholinesterase, [indiscernible], for instance, would have been on the drug long enough that they are no longer benefiting from the drug. But as you know, many patients are on the drug and it's really the doctors who are treating themselves as much as they're treating the patients at least in my clinical view. I think that the earlier question asked by Shrader's group was regarding anti-amyloid is interesting. I don't think the monotherapy trial will not -- patients won't be on maintenance anti-amyloid. That will be a separate trial and a separate question that we'll ask hopefully with a partner that has an anti-amyloid drug because they're the ones who I think will be the most curious if the addition of combination therapy may improve both the safety profile of those drugs and the efficacy profile. But that's the question of the future. And the first thing we need to do is prove that the combination is safe in animal models. And as I mentioned, those studies are underway.

Just one quick question on INKmune, I think I heard earlier that the potential to move towards renal cancer next, depending on resources, of course. But is the selection of renal cancer have similarities to prostate cancer choice in terms of there seems to be a higher proportion of NK cells versus T cells in those tumor types.

Absolutely. So there's a long history. I mean, last week, I was examining a PhD student at the [indiscernible] who's spent 4 years looking at the same issue. And yes, renal cell cancers are typically heavily infiltrated with NK cells, and there's a prognostic benefit to those patients who have a high NK cell infiltrate and intact as a negative prognostic effect of having a high CD8 T cell infiltrate. And of course, the drugs that have been approved for renal cell cancer have NK targeting for [indiscernible] IL-2. So yes, that's really the rationale behind that, and we've got some very nice data to demonstrate that NK cells do target renal cell carcinoma cell lines better after they've been primed to [indiscernible]

Our last question will come from Daniel Carlson with Tailwinds Research.

RJ, just you talk about hopefully showing flat on cognition as opposed to a deep decline in the placebo group. I'm wondering if you do put up those type of numbers, is there any chance that conditional approval post the Phase II?

[indiscernible] I do -- as much as the FDA has tortured us. I do believe, in general, the FDA has their heart in the right place. And if the results are extraordinary, and I would consider that an extraordinary result, not only will investors be excited, not only will the company be excited. But the FDA gets excited. And who knows what will happen, Dan, they will pull out all the stops to help push us along. I don't know what that looks like but they get excited about groundbreaking data just like you and I do. So is there a chance? Yes. Would I bet more than a state dinner on it? At this point, no. But man, if we knock it out of the park, I think all bets are off. We'll just have to see what they say. As you know, patient advocacy groups make a big difference with the FDA. The Alzheimer's field or the Alzheimer's adversary groups, although there are a lot of patients are not particularly vocal compared to some of the other indications, which are smaller, such as ALS and DMD. I don't know. It's a great question. I'd like to dream about it, but I'm not going to hold my breath, Dan.

And just sort of a follow-up on that. What about other jurisdictions? Are they all going to fall in line behind the FDA? Or might it get approved on those results elsewhere?

I hesitate to ask that question because each of them is a little bit different. And I think the MHRA tends to be one that I think is a little more independent thinking. The EMA tends to think very much like the FDA. And we certainly haven't seen a lot of innovation of regulatory innovation in Alzheimer's disease but I have to say some of that is just because they haven't had many swings at the ball, right? For all practical purposes, the only drugs that have come through are the anti-amyloids and that's kind of a -- they all look pretty much the same. I don't know. We'll see. And I think that let's -- we need right now to get this Phase II enrolled, number one, we need to get it analyzed and then when we see that top line data, then we'll both have the resources and the insight to move as quickly as we can. And believe me, we'll be making every attempt we can to move quickly.

Yes. So that's great. I look forward to seeing what happens when you ring the bell there. So just one question about TRD. Now that you've got some more capital in, can you just sort of refresh the time line and maybe get more research to put there and tell us about this trial and when we can expect something out of it?

Well, something out of it. Once again, it's a blinded, randomized placebo-controlled trials. So actually getting data, the first thing you're going to hear is that this is the way it will go. The FDA will announce that the FDA has accepted the IND, and the trial is open. First patient enrolled and then we'll be moving it forward. The amount of -- the speed of the trial will directly be related to how much resources we can put behind it. Right now, the NIH grant only funds about 1/3 of the trial. So we have to be careful because our primary mission, as we've said, is number one, Alzheimer's, and then number two, the INKmune CaRePC. But we think we'll be able to move that ahead. And as our resources expand, we'll be able to put the pedal to the metal on treatment resistant depression. But this year, the two milestones you should hear from, as David said, is that the FDA has allowed us to open the IND because it is a U.S. trial. And the second thing will be the first patient enrolled. That's our goals.

And that will conclude today's question-and-answer session. I will now turn the conference over to RJ for any additional closing remarks.

So thank you. Yes. With the success of the fundraising, we now have the capital to comfortably complete AD02, the early Alzheimer's trial, and support CaRePC into some of the open-label data in metastatic castration-resistant prostate cancer. Our goal is to provide positive readout in these problems with positive readouts. We expect we'll be able to access capital markets in a way to allow the company to become more aggressive in pursuing its goals. Both of these products have uses beyond their primary indications. And we believe that with THE resources, we meet with -- given the resources we hope to get, we have the expertise and the teams who tend to capitalize on those other activities either alone or with [ partners ]. For now, we appreciate your support. Thank you very much.

This does conclude today's conference call. Thank you for your participation. You may now disconnect.