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INAB: Initiating Coverage – Enhancing the Insurgents of the Immune System


By John Vandermosten, CFA



We are initiating coverage of IN8bio, Inc. (NASDAQ:INAB) with a valuation of $5.00 per share. This value is based on our estimates for a successful development and commercialization of INB-100 in patients with leukemia, specifically acute myeloid leukemia (AML) following haploidentical hematopoietic stem cell transplant (HSCT) and INB-400 in recurrent and newly diagnosed glioblastoma multiforme (GBM) patients. INB-100 is the subject of a Phase I study and is enrolling patients in an expansion cohort. It is slated to report long-term follow-up results at scientific meetings in 2024. INB-200 has completed Phase I enrollment and will report GBM data at scientific conferences in 2024 including the American Society of Clinical Oncology (ASCO) meeting in June. This program has passed the baton to INB-400, which may add an allogeneic arm to the GBM program in 2025. The Phase II INB-400 study initiated enrollment in 1Q:24.

The leukemia program uses haploidentical allogeneic cells while the GBM program employs autologous ones. Subsequent programs may explore the use of fully off-the-shelf (OTS) allogeneic cells in order to benefit from the quality, quantity, cost and immediate availability of such a product. Orphan designation has been granted to the GBM program and we expect AML will also be allowed this expedited pathway. IN8bio expects to pursue the Regenerative Medicine Advanced Therapy (RMAT) designation which allows a gene and cell therapy certain regulatory advantages such as priority review, if it can show evidence that it can benefit a serious or life-threatening disease.

We anticipate that both the INB-100 and INB-400 programs will evolve into adaptive studies in 2025 that will eventually support FDA approval. Based on our estimates of enrollment duration, time to achieve desired endpoints and regulatory submission, we could see a BLA submitted in 2028 for INB-400 and in 2029 for INB-100. We anticipate that pivotal studies and commercialization will benefit from a partner in the United States and around the world.

IN8bio has demonstrated clinical activity and initial safety for both its leukemia and GBM programs. As of the latest update in December 2023, 100% of patients enrolled in the INB-100 leukemia study have achieved and maintained a complete response (CR). 70% of the patients produced a CR lasting more than six months and 60% enjoy a CR greater than one year. As of the latest update in November 2023, the INB-200 GBM study has enrolled 22 patients with the majority of treated patients exceeding expected progression free survival (PFS) based on their profile. No dose limiting toxicities, cytokine release syndrome or immune effector cell-associated neurotoxicity syndrome (ICAN) have been observed. INB-400 is in the early stages of enrollment and has not yet produced public data.

γδ T cells are a type of immune cell that present characteristics of both the innate and adaptive immune system. They comprise a subset of T cells that differ from the more common αβ T cells in that they can recognize a tumor directly without reliance on antigen presentation. γδ T cells are relatively uncommon in the immune system repertoire, comprising roughly 5% of the total T lymphocyte population and residing in many of the peripheral tissues that interface with the outside world. Since the γδ T cells are not antigen specific, they may be effective in allogeneic therapies which could potentially lead to an off the shelf (OTS) γδ T cell product.

IN8bio’s program is differentiated from other immunotherapies by its DeltEx platform, genetically modified Drug Resistant Immunotherapy (DRI) and manufacturing prowess which is applied to its γδ T cells. The platform is able to collect, activate, genetically modify and expand γδ T cells for use in cell therapy. The DRI feature in particular is key in combination therapy with chemotherapy which allows γδ T cells to overexpress DNA damage repair proteins which shield them from chemotherapy damage. Additionally, the chemotherapy upregulates stress antigens on cancer cells, which act as a beacon to attract the γδ T cells. These features have shown success in early-stage trials and support advancement into later stage studies.

IN8bio is pursuing initial indications in leukemia and GBM. In the broader leukemia setting there are over 60,000 cases per year in the US and just under 500,000 worldwide. We expect IN8bio to first pursue AML, which comprises about a third of the total cases of leukemia. It is considered a rare disease as it falls under the 200,000 cases per year threshold for orphan indications. GBM is also a rare disease with about 14,000 new cases per year in the US and 300,000 around the globe. If the therapies are successful in these initial indications, we expect to see further expansion into a broader leukemia setting and in other solid tumors.

Both leukemia and GBM present substantial unmet needs. Most leukemia patients relapse after HSCT while their immune system reconstitutes and patients require supportive therapy to eradicate any remaining leukemic cells. GBM patients have a very short expected survival of 12 to 18 months and ~5% five-year survival rate. These difficult cancers are particularly amenable to γδ T cell therapy which can leverage this flexible and durable immune cell to improve survival. Based on the strong data generated, IN8bio recently raised over $14 million in a securities purchase agreement bringing its end of year 2023 cash pile to over $21 million. In addition to the cash on hand, IN8bio has access to an at-the-market (ATM) facility that has historically contributed to the company’s coffers. Company management has stated that it has sufficient capital to fund operations into the first quarter of 2025.

We expect further updates on the leukemia and GBM programs throughout 2024 and expect that if data continues to be favorable, additional financial support will follow. Assuming sufficient capital is raised, the company plans to accelerate clinical trials in 2025 that may be adaptive into pivotal trials that can support a biologic license application (BLA) filing. Based on these assumptions, we anticipate a regulatory filing for the GBM program in 2028 and the leukemia program in 2029 followed by approval in the following year for each.

Key reasons to own IN8bio shares:

➢ The γδ T cell therapy platform has produced remarkable overall survival (OS)

o 100% of INB-100 leukemia patients achieved median CR >6 months and 60% >1 year

▪ Allogeneic γδ T cells persist and expand beyond 1 year after administration

o INB-200 GBM patients exceed standard of care median PFS and median OS

▪ Four of 12 subjects have achieved OS of > than 1 year

➢ DeltEx Platform

o Ability to produce expanded and modified γδ T cells ex vivo at high rates

o Can apply gene therapy to shield γδ T cells from chemotherapy

o Cell therapy employs small batch production using cell processing systems

➢ Offers preclinical programs that address shortcomings in other cell therapies

o Non-signaling chimeric antigen receptor (nsCAR) γδ T cell (INB-300)

o Induced pluripotent stem cell (iPSC) derived γδ T cells (INB-500)

➢ Presence of γδ T cells highly correlated with improved cancer prognosis

o Supported by multiple studies (Gentles, Godder, Meraviglia)

➢ γδ T cells offer features from both the innate and adaptive immune system

o Detect cellular stress

o Can kill cancer cells without priming

o Can differentiate between stressed and healthy cells

➢ Robust intellectual property

o Patent portfolio addressing multiple disease states

o Internally developed know-how and trade secrets

In the following sections we describe immuno-oncology (I-O), elaborate on cell therapy and introduce γδ T cells. We look at how γδ T cells differ from other types of immune cells and describe how they present features of both the innate and adaptive immune responses. We follow with a description of IN8bio’s DeltEx platform and DRI modifications. The next section examines the company’s clinical programs including INB-100, INB-200 and INB-400. We also include a brief description of IN8bio’s preclinical assets. A discussion of IN8bio’s leukemia and GBM is given along with why we expect to see a refinement in focus to AML as well as newly diagnosed and recurrent GBM. This section is followed by a short review of IN8bio’s intellectual property (IP) and anticipated regulatory pathway. The epidemiology, etiology and other details of IN8bio’s primary indications in leukemia and GBM are included. We then discuss other competitors in the immuno-oncology space, including several peers advancing γδ T cell programs. The subsequent segment reviews recent financial and operational history for the company followed by an introduction to the management team and a summary of company-specific risks. Our valuation discussion details the assumptions behind our target price. Our work generates a valuation of $5.00 per share for IN8bio, Inc.

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