THE TEN BILLION DOLLAR UNICORN IN INMUNE BIO, PART II

Introduction

INmune Bio is more than 5,000% away from a ten billion dollar valuation at the time of writing, having shed almost two thirds of this year’s peak without a reasonably justifiable reason in my eyes, and is currently priced at a ridiculous 30% above the price it IPO’d on the Nasdaq at in 2019. This unicorn has obviously been hiding in a misty winter forest, and so I took the liberty to change the title to reflect my true intentions here.

The summary of part I of this series was:

- As in AD, in neurodegenerative diseases as a whole, all multibillion-dollar markets, neuroinflammation is an overarching hallmark;

- That neuroinflammation is due to (micro)glial cells changing phenotype – from a beneficial to a detrimental one – as well established in literature;

- XPro has been proven to reduce an entire set of biomarkers of neuroinflammation – not just selected ones - by not less than 15% over the course of three months, and with sustained effects over a longer period;

- On XPro, a patient with severe AD’s MRI scan showed visual improvement in brain quality, both in gray as well as in white matter;

o in white matter, a 13% improvement in 31 of the 33 investigated white matter bundled;

o in grey matter, a 6% improvement;

- Results were sustained over the course of the investigated period – 9 months at the time.

Apart from a more general framework on neuroinflammation in neurodegenerative diseases that had been set out in the previous blog post, that post also focused on the story of one patient, the one with the best treatment response. I would dare to think that this patient was probably also the one who, after he had had to stop work as a teacher due to the progression of his Alzheimer’s, was able to return to his job when he was on XPro. That’s anecdotal, but it’s a far better anecdote than I have ever heard in Alzheimer’s disease, and would beat the one of a patient remembering having taken a shower in my opinion. The visual results on improvement of white matter tracts, even if they were only taken from one patient, were so telling that they could not be left out.

XPro brings down an entire set of neuroinflammation biomarkers as identified by a third party, Olink, and that relates to the entire cohort on XPro in the Phase 1 trial.

The summary of this part of the series is:

- The ample publications of XPro’s effects in animals are consistent with the results in humans, and hence make these results credible and trustworthy; which is why I took a position prior to the September readout in all patients;

- The August/September 2021 readout not only confirms what had been seen, it basically blew the lid off, yet for lack of proper PR and/or for lack of knowledge on how to interpret these data, I believe the market has missed this entirely;

- Companies commercializing traditional TNF inhibitors, take note, there’s a new kid on the block.

Before being able to compare other companies I have looked at both in the neurodegenerative and immune-oncology space – and that research is obviously ever-expanding – the full picture of what INmune Bio entails needs to be brought to mind. Other chapters to appear in this series will therefore be on:

- the upcoming MCI, AD and TRD trials, how INMB has been thinking ahead about future trial design since its IPO in 2019;

- INKmune, as a seemingly commercially viable, cost-efficient, in all likelihood effective drug candidate in the NK immuno-oncology space that appears to combine the advantages of NK cell therapy without suffering from the limitations thereof.

Let’s get right to it.

The publications of XPro’s effects in animals

The website of INMB stands out from that of other biotech companies because it features an extreme amount of literature on the effects of XPro as a selective TNF inhibitor, as science progressed as to the beneficial versus detrimental action of respectively transmembrane TNF versus soluble TNF, and both the beneficial and detrimental phenotypes of microglia.

Many investors may not have the time to read through all of these, and so I present my own small digest below for everyone’s benefit. The publications feature, among others:

- 22 publications co-authored by David E. Szymkowski, VP cell biology at Xencor;

- 15 co-authored by Malù Tansey, Director of the Center for Translational Research in Neurodegenerative Disease at the University of Florida, a consultant to INmune Bio;

- 4 by Kate Lykke Lambertsen, a Danish professor of neurobiology who has just this year been awarded the Danish Alzheimer’s Association Research award, and has entitled her inaugural presentation ‘The potential of targeting TNF in neuroinflammatory conditions’.

As prior knowledge:

- Chronic inflammation is a latent inflammatory state that is seen to be present as of the age of 30 on average, and increases with age;

- TNF inhibitors have as their goal to reduce inflammation; they have been approved since 1998 for rheumatoid arthritis, juvenile arthritis, psoriatic arthritis, plaque psoriasis, ankylosing spondylitis, ulcerative colitis, and Crohn's disease;

- Traditional TNF inhibitors come with a massive downside: they lead to suppression of immunity and neurological issues, and are therefore not allowed for use in diseases of the central nervous system (CNS);

- Since about 15 years, i.e. later than the date of initial approval of TNF inhibitors, science has abundantly shown that transmembrane TNF is beneficial and soluble TNF is detrimental, and that therein lies the answer to why traditional TNF inhibitors are immunosuppressant and may lead to diseases of the CNS;

- XPro1595 is a second-generation TNF inhibitor that is selective in that it only targets soluble TNF, but not transmembrane TNF;

- Neuroinflammation has over the past ten years or so been discovered as the overarching hallmark in a wide range of severe neurodegenerative diseases – it even stretches to types of depression, bipolar disorder and migraine.

TNF, as a major pro-inflammatory cytokine, gets activated first when an immune response is triggered, and may trigger the entire inflammatory response.

INmune Bio refers to TNF on its website as the master cytokine, but of course does not stand alone in that. TNF is elevated in Alzheimer’s patients, and was one of the first inflammatory markers tied to Alzheimer’s disease.

The following were my insights reading these publications. Understand that these animal models try to mimic (aspects of) disease states in humans, so a one-on-one comparison is never possible.

With reference to my earlier blog post, INmune Bio stands apart from many other biotech companies in my eyes here, as it does base its drug development on an all-in-all small discovery that may be underdeveloped in literature. XPro has been tested in tons of animal disease models, and I list the literature that I considered most worthwhile mentioning, which I find de-risking and should also comfort any bigger player looking at INmune Bio.

Selective versus non-selective TNF inhibitors

- Long-term inhibition of TNF with the nonselective TNF inhibitor etanercept, but not the soluble TNF inhibitor XPro, decreased neurogenesis in the adult mouse hippocampus and impairs learning and memory after two months of treatment;

- Central administration of XPro resulted in improved locomotor function, decreased anxiety-related behavior, and reduced damage to the lesioned spinal cord, whereas central administration of etanercept (the first TNF inhibitor to have been approved) had no therapeutic effects, in mice with moderate spinal cord injury;

- Administration of Xpro decreases infarct volumes after ischemic stroke, modifies microglial activation and the inflammatory response post-stroke, suggesting that it holds great promise for future neuroprotective treatment in ischemic stroke;

- XPro had more protective effects on neuronal survival and motility compared with etanercept ;

- XPro protected mice from acute liver inflammation induced by endotoxin challenge in Mycobacterium bovis bacillus Calmette-Guérin (BCG)-infected mice, but, in contrast to etanercept, it did not compromise host immunity.

Disease-related publications

- Elevated systemic TNF-α is associated with more rapid cognitive decline over 6 months in Alzheimer's disease patients;

- Peripheral administration of XPro modifies brain immune cell profiles, decreases beta-amyloid plaque load, and rescues impaired long-term potentiation in 5xFAD mice;

- Targeted inhibition of solTNF with XPro may slow the appearance of amyloid-associated pathology, cognitive deficits, and potentially the progressive loss of neurons in AD;

- Treating of the amyloid transgenic mouse model TgCRND8 before amyloidosis with Xpro prevented synaptic deficits otherwise apparent at the age of 6 months;

- Treatment with XPro in a cuprizone mouse model of MS permitted profound early remyelination due to improved phagocytosis of myelin debris by CNS macrophages and prevented disease-associated decline in motor performance; transmembrane TNF is sufficient for the maintenance of myelin and neuroprotection, whereas soluble TNF inhibits remyelination and repair;

- Administration of XPro to mice subjected to chronic adolescent stress leads to increased social interaction and ameliorated the effects of said stress, suggesting that targeting solTNF with Xpro may improve quality of life for individuals with a history of adolescent stress;

- Administration of Xpro attenuates nigral cell loss and glial activation in 6-OHDA Hemiparkinsonian Rats;

- Treatment with XPro in mice with experimental autoimmune encephalomyelitis improves recovery; signalling mediated by TNF is essential for axon and myelin preservation as well as remyelination, opening a possible treatment for multiple sclerosis;

- Elevated levels of TNF have been seen in postmortem brains and CSF fluid of Parkinson’s patients and in animal models of nigrostriatal degeneration implicating its role in PD pathophysiology;

- Inhibition of soluble tumor necrosis factor is therapeutic in Huntington's disease;

- Aged rats treated with XPro1595 showed improved Morris Water Maze performance, reduced microglial activation, reduced susceptibility to hippocampal long-term depression;

- XPro may serve as a treatment for orofacial pain disorders;

- Soluble TNF is a potential target for therapeutic intervention in inflammatory states and insulin disturbances in obesogenic environments to lower risk for AD;

- XPro decreased tumor incidence and growth and prolonged survival in chemically induced carcinogenesis in mice, dramatically decreased IL1α and increased the essential immunoregulatory cytokines IL1β, IL12p70, and IL17.

Science has also established a link between use of TNF inhibitors and reduced risk for Alzheimer’s disease. That was first established in 2016 (link), after which it had been reported that Etanercept (Enbrel / Amgen-Pfizer) appeared to reduce the risk for AD by 65%. Still in that vein, Tetra Therapeutics had in 2019 found, reviewing data of 56 million patients on existing TNF inhibitors, that anti-TNF use shows a reduced risk of Alzheimer’s disease.

Similarly, in Parkinson’s disease, big data analysis had shown that patients with inflammatory bowel disease in the U.S. were at a 28% higher risk of developing Parkinson’s disease, yet in case of early treatment with anti-TNF therapy, their risk of developing Parkinson’s disease went down significantly, and became even lower than that in the general population. The incidence of Parkinson’s disease was 78% lower in IBD patients who received anti-TNF therapy versus those who did not.

That is evidence enough of the unique character, efficacy of and need for XPro in (neurodegenerative) diseases, to me.

XPro’s twelve month effects in humans

The results that have been reported by INmune Bio in August and September 2021 were in line with the above publications. They in fact confirmed safety over twelve months, and showed proof of efficacy to a degree never seen before. As in previous reporting, the control group was ADNI, the Alzheimer’s neuroimaging database.

Source

INmune Bio’s CEO commented:

As you can see over time in the grey line, patients with Alzheimer's disease, their neuroinflammation gets worse. So that difference is dramatic. Look at 12 months. It's a 55% difference in the patients who have Alzheimer's versus [those that] don't.

This is a big deal. This is our primary endpoint. But now it's only beginning to get interesting.

On the next slide, if you can look at the elements, the other two parts of what we call the virtual biopsy, you see dramatic improvements. On the left you see apparent fiber density, which is a measure of those axons, those wires in the white matter tracks connecting parts of the brain that work together.

In a normal patient in the grey line, though the number of wires declines over 12 months, in our patients they went up dramatically by 15%.

People have never seen this before. They've never seen it for two reasons. First of all [because] not a lot of people are using the MRI to look at the white matter pathology. The second thing: they've never had a drug that's done this.

Right, XPro improves apparent fiber density and it also improves myelin, that insulating fat that goes around the wire in the white matter bundle. Just think of a bunch of copper wires. If you've got a bunch of copper wires that don't have insulation, they're going to short out. They're not going to work very well. So you need that insulation and the problem is, patients with Alzheimer's disease do demyelinate.

As you can see on the right-hand figure, that grey line, that increasing line means demyelination. If you treat them with XPro, you get a rapid remyelination when you get rid of neuroinflammation. So now we have the holy grail, excuse me, the holy trinity of white matter analytics, where we can see inflammation, we can see axonal fiber function and remyelination.

Source

Biomarkers don’t lie, and they all move in the right direction. No other biotech company has reported anything similar. Just like with the neuroinflammation that had dropped by 15%, these results were also consistent across all patients. If I were a clinician treating an Alzheimer's patient, I'd be happy to show him this MRI.

If I were to pick one graph here that I like, I would choose the one on apparent fiber density. That measure decreases at about 5% in patients with AD, but increases with about 17% in patients on XPro. The relevant cohort in Phase 1 on XPro was a cohort with severe, which means fast-decaying, Alzheimer’s disease. Apparent fiber density is a measure for how the neural network in the brain is connecting. The difference is more than 20% over a year’s time when on XPro (-5% vs. +17%). In one year, the connections in the brains of those patients basically returned to a state these patients had been in in three to four years back in their disease progression, with seemingly continuous improvement. I can only wonder what that would do if XPro were given to patients who presented with a light or mild-to-moderate disease state.

Biomarkers do not lie. Cognition results might, but biomarkers don’t lie.

And because biomarkers don’t lie, what has been reported by INmune Bio in September 2021 is - to me - plainly and simply more and better than cognition. Mr. Market may not have perceived it as such, because he’s never seen reporting like this and may not know what to do with it yet, and probably because he missed the PR. But that reporting, which is moreover in line with so many earlier animal trials and statistics in humans on the use of traditional TNF inhibitors, brings certainty and is of an opportunity to the intelligent investor rather than a downside. I would assume these results will not reverse in patients with an earlier state of disease, rather they will present in such patients as well.

Looking at these biomarkers, I could believe that one would see a reduction in cognition in any of the patients treated, let alone the entire cohort. The question is rather: how much improvement in cognition will we see? And I’m assuming that it will blow the lid off, seeing these charts.

Conclusion

And so I conclude: AbbVie, Amgen, Johnson & Johnson, UCB, Novartis, Pfizer, Merck, Ablynx and Momenta Pharmaceuticals, watch out, there’s a new kid on the block and it’s got a better toy.

Biogen, Lilly, and also Roche that has failed so many AD trials yet has always kept a keen interest in pursuing a drug here: keep your eyes open. If this drug comes to market, and it’s already got its safety profile, publications and scientific backers, patients won’t want just an anti-amyloid drug, if they would already want that now for the yearly price of a quarter of an average house (in Belgium), and I don’t see doctors refusing to prescribe it.

Lest I forget, INmune Bio has a second platform, INKmune. INKmune is, in my eyes, the only immuno-oncology drug in the natural killer (NK) space that could be commercialized. It is safe, seemingly very effective, cost-efficient and therefore commercially viable as one of the very few drug candidates in that space out there. It is worth billions, in my eyes, and the market is missing that too. Somebody call Cathie Wood, she's in the wrong company (or companies, for that matter).