Greetings and welcome to the INmune Bio Third Quarter 2021 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, Co-Founder and CFO of INmune Bio. David, the floor is yours.

Thank you, Hector and good afternoon everybody. We thank you for joining us for the call for the INmune Bio’s third quarter 2021 financial results. With me on the call is Dr. R. J. Tesi, CEO and Co-Founder of INmune Bio, who will provide a business update on our DN-TNF platform and Dr. Mark Lowdell, CSO and Co-Founder, who will provide an update on our NK cell priming platform. We are also lucky to have Dr. C. J. Barnum, Head of Neuroscience, who will speak about our newly announced Phase 2 program in mild cognitive impairment or MCI. 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’s provision of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Please see the forward-looking statements disclaimer on the company’s earnings press release as well as the risk factors in the company’s SEC filings, including our most recently quarterly filing with the SEC. There is no assurance of any specific outcome. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made and as of the fact and circumstances, underlying forward-looking statements may change. Except as required by law INmune Bio disclaims any obligation to update these forward-looking statements to reflect future information, events or circumstances. Now, I’d like to turn the call over to Dr. R. J. Tesi, Co-Founder and CEO of INmune Bio. R. J.?

Thank you, David and thank everyone for joining the call. As is our practice, I will arrange my remarks to highlight the key takeaways from the third quarter and subsequent period and provide updates on our platform programs. I will start by reviewing our DN-TNF programs then hand the call to C. J. Barnum, Head of Neuroscience for INmune Bio, who will speak about our new Phase 2 program and patients with MCI, which is a prodromal form of Alzheimer’s disease. Professor Mark Lowdell, our CSO, will speak about recent developments with the INKmune platform before I pass it back to David Moss, our CFO, to discuss the financial results and upcoming milestones. Then we’ll move to Q&A. XPro is our CNS platform. We have clinical programs in Alzheimer’s disease and treatment-resistant depression with IND-enabling studies underway in ALS. Each of these programs is supported by extramural non-dilutive funding from the Alzheimer’s Association, the NIH, and the ALS Foundation, respectively. The common denominator of these CNS indications is that neuroinflammation plays an important role in the disease. Neuroinflammation, however, is one step removed from the true pathology underlying Alzheimer’s disease. Those changes are loss of connections between neurons and nerve cell death. In the brain, neurons have two parts. The cell body is in the gray matter and the myelinated axons are in the white matter. The first is where the memories are stored, the latter allows neurons to communicate. Both are required for normal cognitive function. Inflammation causes synaptic dysfunction, strips axons of their myelin, and drives neurodegeneration of both axons and nerve cells. Put simply neuroinflammation dramatically alters brain biology precluding normal function. INmune Bio believes that synaptic connections can be restored and myelinated axons can be repaired with XPro therapy. INmune Bio is using novel technology to…

Thank you, R. J. Our second Phase 2 study will be in MCI patients with inflammation, which we refer to as AD-03. This will be a 3-month, 90 patient, randomized, placebo-controlled study with endpoints of biological and cognitive biomarkers. 30 patients will be assigned to one of three treatment groups: placebo, 1 mg per kg, or 2 mg per kg of XPro. As in the mild AD study, which we now refer to as AD-02, the primary endpoint will be the EMACC. Secondary clinical endpoints will include the Cogstate cognitive battery, the CDR, goal attainment scale, the NPI, and activities of daily living. Secondary biological endpoints include imaging, MRI neuroinflammation and white matter, blood and CSF to measure inflammatory and neurodegenerative biomarkers, and functional biomarkers, EEG, and speech and language analysis. We believe the latter two biomarkers will provide important functional data on the impact of the biological changes we see in the brain after treatment with XPro. EEG will be assessed using a portable EEG platform developed by Cumulus Neuroscience that will collect EEG data from the comfort of the patient’s home. We determine feasibility of this platform on a subset of patients in the Phase 1 study. Speech and language analysis has also been shown to be a sensitive biomarker for disease and holds promise as a biomarker for treatment response. The addition of EEG and speech analysis provides a functional biological readout that will further enrich our understanding of the biological response to XPro. At the end of the 3-month study, all patients, including those randomized to placebo will be eligible to enroll in a 12-month extension study where all patients will receive XPro. In both Phase 2 studies, the extension trials will increase the quality of the safety database needed for our approval strategy. Why did we choose 3 months? Despite MCI and early mild AD patients often being lumped together as early AD in clinical trials, biologically, they are not the same. As an example, white matter changes presents differently and in different brain regions. There is also evidence that inflammation is not the same in MCI and AD patients. In other words, the biomarkers that were so informative in mild AD patients in our Phase 1 study, might not be relevant for MCI patients. This study will identify the appropriate biomarkers for MCI patients while also assessing the potential clinical benefit for XPro. We are confident that this study will provide the information necessary to further our understanding of MCI. Thank you, everyone. Back to you, R. J.

Thank you, C. J. We like to emphasize that XPro has many uses in the treatment of CNS diseases. You’ve heard me say it’s not a one-trick pony. We have announced a Phase 2 trial of XPro in treatment-resistant depression. This trial is supported in part by a $2.9 million grant from the NIMH. Consistent with our AD development strategy, we will select patients with biomarkers of inflammation and measure functional activity of a pathway in the brain tied to both treatment-resistant depression and inflammation using MRI. As with Alzheimer’s disease, the enrichment strategy and target engagement for the treatment-resistant depression patients with neuroinflammation aligns with the pathology of the disease – excuse me, aligns the pathology of the disease with the mechanism of XPro. This is a 6-week double-blind, placebo-controlled study of TRD patients. The primary outcome measure is the functional connectivity measured by MRI, but we will also measure change in biomarkers of inflammation and improvement in more traditional clinical measures. We have dubbed INKmune, our natural killer cell platform a pseudokine. What is a pseudokine? Well, INKmune is not an NK cell, we don’t give NK cells. It is not a cytokine, we don’t give or use cytokines in any part of the INKmune therapy. INKmune binds to the patient’s NK cells in vivo and dulls the NK cells what it takes a cocktail of cytokines to do ex vivo, that is in a test tube. That cocktail of cytokines includes IL-12, IL-15, and IL-18. Importantly, NK cells produced by INKmune are memory-like NK cells, the NK cells that are better at killing cancer cells. The first patient was treated in our Phase 1 trial evaluating INKmune in MDS. That’s high-risk myelodysplastic syndrome. It is a serious hemopoietic to cell disorder that can transform to AML. Professor Mark Lowdell, Co-Founder and CSO of the company, and quite frankly, the inventor of the whole INKmune kind of hypothesis will provide information on the status of our INKmune program. Mark?

Thank you, R. J., and thank you, everyone, for listening. So as R. J. said, 2021 has seen the opening of our first clinical trial with INKmune after considerable delays we suffered because of the COVID pandemic. This is the first-in-human trial and issued a single center in the UK and is enrolling patients, as R. J. said, with the bone marrow disease called myelodysplastic syndrome. The trial is a dose-escalation trial, typical of most Phase 1s with three dose cohorts. The first patient was treated at the lowest dose and received three of those low doses over a 2-week period. We were delighted to see that he showed no adverse reactions to any of the infusions. But most importantly, he showed an almost immediate response to INKmune with systemic activation of his peripheral blood NK cells and the development of NK cells in his blood with a memory-like phenotype, which showed enhanced tumor-killing in the laboratory analysis right the way through to his most recent test on day 73 post-treatment. And so far, he’s completed over 100 days of follow-up and remains well. In fact, the day-119 samples were in the lab today and are being tested presently. And we hope to find that he retains activated NK cells in his peripheral blood with that ability to kill tumor cells better. We will continue to monitor him but at present, having spoken to his physician today, his disease appears to be controlled and he reports that his quality of life has improved. The long tail of COVID in the UK, however, still restricts enrollment of cancer patients into trials. They are reluctant to come into hospital since they fear infection. So to increase recruitment, we’ve applied to open a second trial in the UK to the UK medicines regulator…

Thank you, Mark. Everyone knows a lot more about COVID-19 today than we did 2 years ago. Mortality rate has fallen tenfold from 20% in March 2020 to 2% today. All hospitalized patients received corticosteroids, and respiratory therapies is much more sophisticated today than at the beginning of the pandemic. Vaccination and soon anti-viral pills and maybe even an inexpensive oral psychiatric treatment are changing the need for hospitalization. Drug development and hospitalized patients with COVID-19 has been like shooting at a moving target. Standard of care keeps changing, the patient profiles keep changing, patient therapies keep changing, and regulatory uncertainty is real. Tocilizumab received an emergency use authorization after a 4,000 patient clinical trial. Another company is yet to receive an EUA after completing a 500 patient trial. This clinical and regulatory uncertainty, combined with our prospects for early approval in Alzheimer’s disease has forced a difficult decision. We have decided to close the Quellor Phase 2 trial and reallocate those resources to our Alzheimer’s program. We believe the risks of failure and the cost of obtaining approval in the COVID-19 market is higher than the cost of completing our two Phase 2 programs in Alzheimer’s disease. Some may not agree with this approach. We are happy to speak with you. But as of today, our investment in COVID-19 has nearly wound down. We are proud of our successful biomarker strategy in Alzheimer’s disease. The virtual biopsy using MRI allows us to quantify white matter pathology, and we believe our Phase 2 trials will correlate improvements in those biomarkers with improvements in cognition. I believe we are entering the golden age of CNS drug development. INmune Bio is leading the effort to use powerful new tools to move CNS programs forward. Companies like ours are always thinking validation from the academic world. The form for this validation is peer-reviewed medical meetings. A few days ago, we announced five abstracts accepted at the upcoming 14 Clinical Trials – upcoming CTAD meeting, which is being held in Boston next week. Two are oral presentations, one on – including the one on EMACC, cognitive endpoint, I referenced earlier, and the three posters have a common theme that studying white matter pathology allows us to quantify disease burden in patients with Alzheimer’s disease and measure response to therapy. We believe our success at CTAD reflects an interest in the novel techniques we bring to the field. At this point, I’ll turn the call back over to David Moss, our CFO, to review certain financial terms.

Thank you, R. J. I’ll provide a brief overview of our financial results and upcoming milestones before we head to the Q&A session. Net loss attributable to common stockholders for the quarter ended September 30, 2021, was approximately $9.5 million compared with approximately $4.7 million for the comparable period in 2020. Research and development expenses totaled approximately $6.5 million for the quarter ended September 30, 2021, compared with approximately $2.4 million for the comparable period in 2020. The primary reason for the increase in expense was an increase in R&D activities related to our clinical programs and costs associated with manufacturing additional drug supply. General and administrative expenses, was approximately $2.5 million for the quarter ended September 30, 2021, compared to $2.5 million for the comparable period in 2020. As of September 30, 2021, the company had cash and cash equivalents of approximately $84.5 million. Based on our current operating plan, we believe our cash is sufficient to fund our operations into 2023. As of November 3, 2021, the company had approximately 17.8 million shares of common stock outstanding. Now I’d like to move on and list our upcoming milestones. In the fourth quarter, we plan to initiate our Phase 2 program for mild Alzheimer’s disease with XPro in patients with neuroinflammation. Barring any competitive or pandemic-related delays, we expect this trial to have top line results in the second half of 2023. In the first half of 2022, we plan to initiate a three-month 90-patient Phase 2 program for mild cognitive impairment. Similarly, barring any unexpected delays, we anticipate having top line results in the first half of 2023. Also, shortly after the start of this phase – AD program, we plan to initiate a Phase 2 trial of Xpro in patients with treatment-resistant depression that is partially funded by a $2.9 million NIMH grant. We expect further open-label high-risk INKmune patient data as the program continues to enroll. And finally, we plan to launch a second INKmune study in ovarian cancer in the first half of 2022. Some summary, we are pleased with our progress during the third quarter as we continue to advance our two platforms towards potentially value-creating milestones. At this point, Hector, I would like to – at this point, I would like to thank you for your time and attention, and I would like to turn it back to the operator to poll for questions. Hector?

[Operator Instructions] Our first question comes from the line of Tom Shrader with BTIG. Please proceed with your question.

Hi. Good afternoon. Congratulations on the progress. So, I wanted to ask a little bit about EMACC. How experimental that is? I understand it works earlier than ADAS-Cog. But if you get patients kind of on the borderline of mild AD and MCI, does it say the same thing, is it highly correlated?

C. J.?

So, great question, Tom. So, the answer is the EMACC was empirically derived in early MCI and early mild AD. So, it works extremely well for both groups. And the reason for that is because the EMACC is measuring cognitive symptoms that are relevant for our cognitive disease progression in that cohorts.

Yes, Tom. This is – Tom, this – if I can jump in here. I mean, I really encourage you to try to listen to Judy Jaeger’s talk at CTAD. If not, we can arrange for her to call you. But I mean, basically, she developed this with industry players because people have not been satisfied with ADAS-Cog in these mild AD and MCI patients. It’s just a very – ADAS-Cog and CDR are just very blunt instruments. So, this should give more sensitive evaluation of their cognition. And importantly, allows us to tell us they are remaining stable or even improving. And as you have heard me say, I think that actually that if the industry’s belief that decreasing in the rate of decline is a – I consider a low hurdle, and we have higher aspirations for the way XPro will work.

One more thing as it relates to the regulatory pathway. So, as you will hear from Judy, we are not the only ones that are using EMACC. There are other – if you go to ClinicalTrials.gov, other companies are using the metric. And we believe we have all the boxes checked off that the FDA requires to be able to use a novel metric for a primary endpoint. So, we think we are well-positioned in every angle.

Okay. I have a couple of questions on inclusion criteria, your inflammatory markers. So for instance, HbA1c, that’s barely pre-diabetes. Is that where inflammation is already full-blown? And then a second question is you are choosing not to use plaque as an inclusion criteria. I understand your view of the role in pathology, but it’s a pretty good way to make sure you have Alzheimer’s patients. If you remember some of the early solanezumab trial, they think a third of the patients didn’t have Alzheimer’s. So, just your thoughts, is diagnosis without plaque better now?

No.

First of all, to be clear – yes, go ahead, C. J.

Yes. Let me answer the second one first. So, we are requiring the patient to be amyloid positive.

Okay. I am sorry.

Yes. Now that’s an FDA request. I mean they are very clear that Alzheimer’s patients have plaque, full stop.

Okay. Got it. Okay.

Now, Hemoglobin A1C, I think is a very insightful biomarker by INmune Bio for two reasons. One, they have – these patients do have inflammation, peripheral inflammation. Now remember, you all heard me say for years that peripheral inflammation begets central inflammation. The other thing, as you know, there is an important element of insulin resistance and that can cause dementia, right. Now people forget that back when we were doing NASH that one of the findings was that XPro actually decreases insulin resistance.

Right.

So, in fact, I think we are going to – I think there is a potential for a double whammy year that not only do we have an impact on inflammation. And Hemoglobin A1C does select patients who have neuroinflammation. You will see more of that information at CTAD. But importantly, you may see getting a twofer, as we like to say. We may actually be having a secondary effect on those patients who have peripheral inflammation and dementia due to their amyloid, due to Alzheimer’s disease, so.

Alright. Great. Thanks.

[Operator Instructions] Our next question comes from the line of Mayank Mamtani with B. Riley. Please proceed with your question.

Hi. This is William on for Mayank Mamtani. I really appreciate you taking our Qs. A few quick ones from us. First off, could you provide some additional color on what investors should be focused on at the CTAD presentations and what we might be expecting that could be new?

Well, you saw in the press release, I think from last week and I think as far there is – I would say, we will – there will be more information on how, shall we say, reliable white matter free water MRI metrics are in the disease, in measuring the disease pathology and therapy. You will see data on – increased additional data on the CSF podium and how – what effects XPro has on it. And then I think the EMACC story, as we have mentioned a couple of times, will be clarified. I think it’s important. I think one of the things that management has been frustrated at – by, quite honestly, as we are I think we have been on the cutting-edge of using novel biomarkers, but I think that – and we don’t – this is not a criticism, rightfully so, investors are a little bit uncomfortable because these are biomarkers that a lot of other companies aren’t using. Now, we think they will be using them soon. But it is our responsibility to make sure the investment community and the academic community understand how important these biomarkers are into diagnosing and staging the disease and looking for a therapeutic response. So, I think there is going to be – the new stuff is going to be relatively incremental. There is no – there is not going to be any knock you off your socks kind of stuff. But it’s going to give you a lot more, I hope, we hope, it gives you more confidence that we aren’t playing in a sandbox that nobody else is playing in. That in fact, we have – what we are doing makes sense. And we believe that more and more patients will be using the kind of biomarkers that we are using for their future trials because they work pretty well.

Awesome. Really appreciate that. And then also, you had mentioned for your XPro and TRD that you are going to be using a similar enrichment biomarker strategy like you did in AD. I was curious if we could get some – any extra information on what those biomarkers or enrichment strategy might be?

C. J.?

Yes. So, the really incredible thing about the depression field is CRP as a biomarker for treatment response with anti-TNF drugs is well established. It’s been shown in multiple clinical trials. And we have evidence from that with – in patients with chronic neuroinflammatory diseases like rheumatoid arthritis as well. So CRP, we have got a really good biomarker with CRP that’s well established. But we have actually added to that a little bit. We have added a behavioral biomarker of anhedonia. So, it turns out that one of the most prominent symptoms associated with inflammation and is reflected within the region of the brain that we are looking with functional connectivity is anhedonia. So, when we combine those two things together, we have got both the behavioral and a biological biomarker that help us enrich further the patients that are most likely to respond.

Got it. And then real quickly, are you – or can we expect any type of interim analysis for either of your AD trials, safety check, or anything like that in between the initiation and the top line?

No. Unfortunately, it is a very pure, blinded, randomized trial. So, because it’s only six months, and we know six months of therapy is well tolerated in these patients, there is no safe – there is always safety now. But there is no potential to stop the trial unless something terribly untoward happens. So, we think that’s why we like a six-month trial. Remember, almost everybody else is 18-month trial. So, looking for something halfway through makes some sense, because you are looking for something at nine months. We will have our results before them.

Got it. Thank you. It makes me a lot of sense. I really appreciate you taking our questions. Congratulations on everything.

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to Dr. R. J. Tesi for closing remarks.

So, thank you. We continue to make progress on both our platform programs. We remain confident that our in-depth understanding of the science and the mechanism of action and the use of biomarkers will lead to efficient development strategies. We will aggressively pursue accelerated approval strategies for our Alzheimer’s disease program. We do not know if we will be eligible for or successful in those efforts, but to ignore them would not be fair to patients or our shareholders. Finally, I will remind you that you are only seeing the opportunities at the tip of the iceberg for each platform. There are many opportunities yet to be presented as resources grow. Our efforts will expand and you will see what those other opportunities look like. With that, we thank you for participating in the call and I am sure we will be speaking to some of you over the next couple of weeks.

Ladies and gentlemen, this concludes today’s conference. You may disconnect your lines at this time. Thank you, all for your participation.