Greetings, and welcome to the INmune Bio First Quarter 2024 Earnings Call. 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 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 six 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 six 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. In that press release a week ago, we described two patients who participated in the Australian Phase I trial, one with Mild Cognitive Impairment and the other with moderate Alzheimer's disease. Both have been taking XPro for roughly three years. Due to the rules of clinical development in Australia, we cannot communicate directly with the patients. But the anecdotes that we receive from their treating physicians highlighted the positive impact of XPro on the patient's cognitive health and overall quality of life. If you haven't viewed the video link associated with that press release, I strongly encourage you to do so as they exemplify what we are trying to achieve with XPro in patients suffering from early Alzheimer's disease. Obviously, this is a small sample, but the results speak for themselves. Long-term treatment with XPro in patients with Alzheimer's disease has been shown to be safe, well-tolerated, and made a difference in the lives of these patients and their caregivers. The ongoing blinded randomized placebo-controlled trials are a necessary step in the development process, and we believe we are helping these patients, their families, and their caregivers who live with this dreadful disease every day. We want to help you better understand three important elements of our ongoing Phase II trial. The elements are duration, size, and primary endpoint. I'll start with the primary endpoints. The clinical trial is powered on the cognitive scale called CDR. CDR is a validated endpoint that has been used in the recent Phase III anti-amyloid trials that will all result in approval of those drugs. The endpoint is acceptable to regulatory authorities, certainly in the U.S., and as we suspect globally. In our Phase I trial, eight of the nine evaluable patients had stable or better cognition at three months. Three of those patients had improved cognition, two of those were highlighted in the recent press release. And this is where we differ a little bit from what the other companies do. We believe some of the patients in AD02 on XPro will respond like those in the Phase I trial. We need to be able to measure clinical improvement. To do that, we need a better, more sensitive cognitive scale than CDR, and that is why we're using EMACC. EMACC will allow us to accurately determine if patients have improved cognitive function, and we believe that will be an important finding of the Phase II trial. To be clear, the primary endpoint that will be used in the Phase III pivotal trial will come after discussion and agreement with the regulatory agencies that we work with, including the FDA, EMA, and MHRA. It may be CDR or it may be EMACC. That decision will be driven by data and the regulatory authorities, not by INmune Bio. The size and duration of AD02, the Alzheimer's trial, are both smaller and shorter, respectively, compared to the other trials in Alzheimer's disease. This trial design was based on a careful analysis of our preclinical data, clinical data, and publicly available databases. First, I want to make a personal statement as a clinician. This is me talking; this is not the company. But when you put a patient into a clinical trial and they get randomized to placebo, we are asking that patient to allow their disease to progress under our care. In my opinion, we need to do everything possible to limit the number of patients who receive placebo and how long they're on the placebo because we're really not benefiting that patient. The AD02 trial exposed patients to six months of placebo. This is just one-third of the time in the anti-amyloid trials. They were 18 months long. Shorter trials are good for patients. But is it bad for drug development in Alzheimer's disease? And the answer is clear; it is not bad for drug development in Alzheimer's disease. AD02 is fully powered to demonstrate a benefit of six months with XPro. And in fact, you realize that both the lecanemab and the donanemab trials were statistically positive at six months; they could have stopped those trials at six months and have the same results that we have today. That is, the drug therapy is better than placebo. There's nothing magical about an 18-month trial or a 12-month trial. The issue is statistical power. And this is where our unique trial is relevant. To our knowledge, AD02 is the only Alzheimer's trial that uses enrichment criteria to enroll patients; AD02 enrolled early Alzheimer's patients with biomarkers of inflammation. There is a biological and statistical advantage to this simple enrollment strategy. The biological advantage is that the mechanism of action of XPro targeting neuroinflammation is matched with the patient disease that is the pathology that's driving their cognitive decline. Trials that don't use enrichment gamble that a large number of patients treated for a long time will overcome statistical noise. That's a risky and expensive strategy. The benefits of enrichment are best seen in oncology drug development. Oncology clinical trials routinely use enrichment to de-risk clinical trials. This is called precision medicine. Precision medicine is the standard in clinical oncology drug development; it should be the standard in CNS drug development too. We are using a precision management approach. The second advantage is statistical, and it's more subtle than this enrichment strategy. Patients with neuroinflammation with Alzheimer's disease progress more quickly and more reliably than patients without neuroinflammation. This is kind of a terrible thing to say, but it's a biological reality. In the language of a statistician who are critical in the design of the trial, the increase in delta difference between placebo and active arm, and the lower variance provide important statistical advantages. Overall, the trial is well designed, de-risked, and relevant to today's patients with Alzheimer's. To be smart with drug supply and capital resources, we have closed enrollment of the Phase II open-label extension. Remember, the open-label extension was for patients who were going to be offered 12 months of therapy in an open-label trial as a reward for being in the randomized blinded trial, and also to give us additional safety and efficacy data. This was a practical consideration by the company. Having a large patient population on drug for 12 months consumes both drug and budget. The first question many asked is, what will the FDA say? I remind you the Phase II trial is not a registration trial. The purpose of the Phase II is to demonstrate safety and efficacy of XPro in the target population, patients with early Alzheimer's and biomarkers of neuroinflammation. At the end of the Phase II trial, we will have an end of Phase II meeting with the regulatory authorities where we will negotiate the design of the Phase III clinical trial. The FDA worries about both safety and efficacy. There's no question that FDA will want more patients treated with XPro who have Alzheimer's disease. The question is, will they want patients treated for a longer period of time? In my mind, the FDA is very focused on doing no harm. That is part of their charter. And to ask a patient to be on placebo for 12 or 18 months when we already have data to show that you get an effective clinical readout after six months may prove to be an ethical dilemma. At this time, we cannot predict what the FDA will want from the Phase III trial. I predict, and once again, this is RJ Tesi talking not INmune Bio, that the FDA will want a larger trial but not necessarily a longer trial. The FDA does provide mechanisms to speed drugs through the development process. The accelerated approval pathways are in place for this purpose. We believe XPro for Alzheimer's disease will qualify for accelerated approval pathway. We will apply for a fast-track approval based on our preclinical and Phase I data. We may be eligible for breakthrough status after we complete the Phase II clinical trial. We cannot predict how the FDA will respond to our applications but we believe XPro's unique mechanism of action, the importance of neuroinflammation and real activation, and the pathophysiology of Alzheimer's disease combined with our clinical data will be a compelling story. Finally, you've heard us talk about the many CNS diseases that XPro can be applied to, all of which have neuroinflammation as part of their underlying pathophysiology. We have 87 publications on our website covering 12 different diseases. This is the future of XPro. It is a CNS franchise in a drug. For now, treatment-resistant depression will be the first disease beyond Alzheimer's disease that we develop. We will have further announcements on the treatment-resistant depression Phase II program using XPro in the near future. Our goal is to enroll that first patient in this NIH-supported Phase II trial in the second half of this year. I will now pass the mic to Mark Lowdell, Co-Founder and CFO of INmune Bio, to update progress on the INKmune program. Mark?

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. 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 sit in a chair as outpatients, receiving intravenous infusion over about 20 minutes, and after receiving their dose, they're able to leave. We've given over 20 doses of INKmune in outpatient settings so far. Each infusion has been remarkably uneventful 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 anti-tumor effects by following blood prostate-specific antigen levels, tumor volume with 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/II trial is expected to enroll 30 patients. The men enrolled in CaRePC have all received previous high-dose therapy but now have metastatic castrate-resistant disease. In the trial, they received three infusions of INKmune, as I said, on an outpatient basis with a 6-month follow-up. We have three centers enrolling patients at the moment, a fourth opening this month, and four more are planned to open over the next few months. The Phase I portion of the trial will be completed by September this year, and we expect patient enrollment in the Phase II portion to be completed by the second quarter of next year, with data available for all of the patients by the end of 2025 at the latest. It is an open-label trial, which means that we're looking forward to some snapshots of the data in 2024 or early 2025. Equally important is the trial; the INKmune team has been working very hard on perfecting the manufacturing and logistics elements of INKmune for future clinical and commercial development. So I still have a part-time university post, and wearing my academic hat over the last 35 years, I've seen a lot of promising therapeutic strategies in the cell and gene therapy space fail due to manufacturing and logistical problems. And I'm sure you're all aware of some of those associated with adoptive immunotherapies like CAR T cells. We're scaling up the manufacturing process for INKmune in preparation for the pivotal trial, and we perfected the quality and release assays, which will be required by the regulatory authorities as we move forward. Because the product ships on dry ice, logistics and storage at treatment centers are easy, and they fit with many other commercial drugs. So in summary, we can make the drug, we can quality control, release the drug, we can ship it, and hospitals can store the drug. The clinical trials will determine the drug's therapeutic value as we move forward. Our pivot from hematological malignancies to solid tumors was not a one-tumor project, and it's been well planned as an initial transition into the solid tumor space. The unique attributes of INKmune empower NK cells, making them ideal to treat a wide variety of solid tumors and we've published papers on some of those. Prostate cancer is a test case, but we've sound preclinical work in ovarian cancer, and we're developing the same data in renal cell carcinoma at the moment. As we obtain resources, these will be the next targets for INKmune therapy. That is my update on the INKmune platform, and I'd like to turn the call over to David Moss now, CFO; and another co-founder to discuss the financials. Thank you, David.

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 aggregate 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 the 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 aligned the entire INmune team is to 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. The 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 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. General and administrative expenses were approximately $2.3 million for the quarter ended March 31, 2024, compared with approximately $2.3 million for the comparable period of 2023. As of March 31, 2024, the company had cash and cash equivalents of approximately $26 million. This figure does not include the recent raises. Based on our current operating plan, we believe our cash is sufficient to fund our operations into 2025. As of May 9, 2024, the company had approximately 19.8 million shares of common stock outstanding. Now I'd like to focus on some key upcoming milestones. Full enrollment in the Phase II XPro trial for the treatment of neuroinflammation as a cause of Alzheimer's disease is expected by mid-2024, followed by top-line data approximately six months from the last patient enrolled. We will initiate a Phase II trial of XPro in patients with treatment-resistant depression in the second half of this year. Last week, we announced completion of cohort 1 for the first of our three patients taking part in the metastatic castration-resistant prostate program. We expect cohort 2 to start shortly. We expect complete enrollment in the Phase I portion of the metastatic castration-resistant prostate trial by the end of Q3 '24, and the Phase II portion is expected to complete enrollment in Q2 of '25. Although we've secured additional funding, as always, we continue to focus on achieving our primary clinical objectives while remaining prudent with costs and the potential to recover a portion of R&D expenses in Australia and the U.K. Further, the recent changes RJ mentioned with regards to the open-label extension will save the company a couple of million dollars in drug and trial-related expenses. In summary, we secured meaningful equity funding recently that puts us in a good position heading into the data, and our focus remains solely on execution. At this point, I'd like to thank you for your time and attention. I'd like to turn it back to James to poll for questions. James?

So RJ, you must be thinking about the role of A-beta antibodies in your Phase III. Is there any guidance or thoughts on whether you're 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. Thank you, Tom, for that interesting question about the anti-amyloid. We have indicated clearly that we need to address the question of combination therapy. We expect to share some preclinical data on this by midyear. What is crucial, though, is how this will impact the Phase III clinical trial. In the United States, where these drugs are currently approved, the adoption has been slow. Therefore, there will be a significant number of patients who are not on anti-amyloid drugs available as potential clinical trial participants in the U.S. and other regions like Europe, the U.K., Canada, and beyond. While we can't predict when these drugs will gain approval, they will likely be approved by the time we initiate our Phase III trial for sure. However, the slow adoption rate is something we are aware of, so we are not worried at this time. We believe that a combination trial represents a different development pathway which may address a different question than whether XPro is effective on its own for Alzheimer's patients with neuroinflammation.

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

The question was about the absence of fever and inflammatory reactions with INKmune. INKmune activates NK cells but does not activate T cells. We have thoroughly examined this. The inflammatory response seen in cytokine release syndrome is solely mediated by T cells, which release inflammatory cytokines from CD4 T cells. In contrast, NK cells activated by INKmune or even by cytokines do not secrete inflammatory cytokines. Therefore, no NK therapy has been linked to inflammatory reactions.

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

The first one is for the ongoing Phase II trial in early Alzheimer’s disease. Can you remind us of the mix of patients you're targeting and enrollment between the ones that have mild cognitive impairment versus mild Alzheimer's, 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, for every two active patients, 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, although you don't specify whether there are twice as many mild Alzheimer's patients as MCI or vice versa, it will really be an early Alzheimer's 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 the way it looks right now, it’s going to be about a 50-50 next.

I have a question regarding the open-label extension study. Can you clarify whether only enrollments are closed while some patients are still being dosed, or is dosing completed for all patients? Additionally, are there any plans to share the open-label extension data you have collected?

That's a good question. The open-label extension data has always been complex because we don’t know the treatment patients were receiving at the start since they enter the trial after a blinded randomized trial. Therefore, we haven't determined the best way to analyze that data. Currently, due to both drug supply and financial considerations, we are collaborating with the sites to find the best approach. Some patients may transition to compassionate use if it's an option, while others may be discontinued. The company isn't pleased with this situation, but it is a practical reality. Our commitment to investors is to complete the Phase II trial and achieve the results we are aiming for, which is where we are concentrating our resources.

I guess this is RJ's thought type of question. RJ, can you kind of opine a little bit on what you think regulators might want in terms of timing for this trial? You said that the two approved amyloid drugs saw effectiveness at 6 months; but given what you know now about markers of inflammation and the FDA's willingness to accept correlation between biomarkers and outcomes in Alzheimer's disease, with any current standard of care in mild or early Alzheimer's, what is the expected rate of decline? Can you really get away with a trial that's just 3 to 6 months given all the inflammatory biomarkers 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. Three 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 characteristics needed 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 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 a 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 receive XPro. So my bet is that we’ll focus on patients who have no neuroinflammation because that’s how the drug works. But we don't think that the FDA will have 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. I don’t think they’ll be interested in 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 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 three times 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?

Yes, so two points. The acetylcholinesterase inhibitors generally do not show any benefit after 3 months, certainly after 6 months. Patients have to be on stable therapy before they can be enrolled for three months, so any patient that would be enrolled with an acetylcholinesterase inhibitor, for instance, would have been on the drug long enough that they are no longer benefiting from it. 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 in my clinical view. I think the earlier question asked regarding anti-amyloid is interesting. I don’t think the monotherapy trial will lead to patients not being on maintenance anti-amyloid. That would be a separate trial and a different 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 a question for the future. 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.

Absolutely. So there's a long history. I mean, last week, I was examining a PhD student who spent four years looking at the same issue. 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 a negative prognostic effect of having a high CD8 T cell infiltrate. Of course, the drugs that have been approved for renal cell cancer have NK targeting. 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 for action.

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 of conditional approval post the Phase II?

I believe that despite the challenges we've faced with the FDA, they generally have good intentions. If the results are exceptional, not only will investors and the company be enthusiastic, but the FDA may also show their support. It's uncertain what that would entail, but they tend to react positively to groundbreaking data. Is there a possibility? Yes. Would I place significant bets on it at this stage? No. However, if we achieve remarkable results, anything could happen, and we'll just have to wait and see their response. Patient advocacy groups greatly influence the FDA, and while there are many Alzheimer's patients, their advocacy is not as vocal compared to smaller indications like ALS and DMD. It's an interesting question, and while I'd like to be hopeful, I won’t get my hopes up too high.

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 answer that question because each regulatory body is a bit different. The MHRA tends to have an independent approach, while the EMA generally aligns closely with the FDA. We have not seen much regulatory innovation in Alzheimer's disease, mainly because there haven't been many opportunities. So far, the only drugs that have progressed are the anti-amyloids, which are quite similar. We'll have to wait and see. Right now, our priority is to enroll participants in this Phase II study. Once we have that analyzed and receive the top line data, we will have the resources and insights needed to move forward quickly. We will make every effort possible to expedite the process.

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