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Greetings, and welcome to the INmune Bio First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [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, Paul, and good afternoon, everybody. We thank you for joining us for the call for INmune Bio's first quarter 2022 financial results. With me on the call is Dr. RJ Tesi, CEO and Co-Founder of INmune Bio, who will provide a business update on our DN-TNF platform; and Dr. CJ Barnum, Head of Neuroscience, who will speak about both of our Phase 2 programs in Alzheimer's disease and our Phase 2 program in treatment-resistant depression. 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 provision of the Private Securities Litigation Act Reform of 1995. These statements involve risks and uncertainties that can 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 risk factors in the company's SEC filings, including our most recent quarterly filing 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 of 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. Now, to start, I'd like to state that we are very optimistic about the developments on our two platforms, INKmune from NK cells and XPro for CNS indications. Both platforms have significant potential and we like to say that what we're pursuing today is just the tip of the iceberg. To update you on our progress, I'd like to turn the call over to Dr. RJ Tesi, Co-Founder and 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 for the first quarter and subsequent period, and provide updates on our platform programs. I will start by reviewing our developments in the XPro programs, and I will then hand it over to Dr. CJ Barnum, the VP of CNS Development, to speak about those programs in detail. And obviously, David will finish with the financial results and upcoming new milestones before we move to Q&A. We recently announced the dosing of the first patient in the Phase 2 XPro trial for the treatment of neuroinflammation as a cause of cognitive decline in Alzheimer's disease. INmune Bio believes that restoration of synaptic connections and prevention of nerve cell death with XPro therapy will have a procognitive effect on patients with ADi. ADi, that's A-D-i, is the term we use to define the AD patient with neuroinflammation that are the target of our clinical programs in Alzheimer's disease. The design of the Phase 2 ADi trials are based on what we learned from the successful Phase 1 trial. The use of biomarkers help select dose, duration and endpoints of the trials to derisk the programs. These biomarkers are relevant beyond ADi and provides new opportunities for the staging and treatment of CNS diseases. The opportunities to XPro beyond ADi are real. Alzheimer's disease is the first of the neurodegenerative diseases we will be treating with XPro. We have announced a program – Phase 2 program in treatment resistant depression, or TRD, in depressed patients with neuroinflammation, something we call TRDi, and are performing IND-enabling preclinical studies in ALS. Each of these programs began with extramural non-dilutive funding from the Alzheimer's Association, the NIH and the ALS Foundation, respectively. Neuroinflammation is the common denominator of these CNS indications. More than 70 publications covering more than a dozen diseases gives a hint of the opportunities before us. These publications can be found on our website. We will be enrolling additional patients in the coming months in the Phase 2 mild ADi trial. We will be initiating our Phase 2 MCI trial soon. But first, during the first quarter, we presented additional data from what the successful Phase 1 trial at the AD/PD 2022 Conference in Barcelona. Our imaging partner, Imeka, demonstrated that measures of white matter pathology are different in MCI versus Alzheimer's disease patients and may provide a means of predicting progression from MCI to Alzheimer's disease. These data have implications for our clinical development programs and drove our decision to separate trials in MCI and mild ADi. In the future, the ability to identify patients at risk of conversion from MCI to AD, to Alzheimer's disease, may prove to be a key step in preventing the development of dementia related to Alzheimer's disease. Why start an MCI trial now? The answer is quite simple. There are two elements necessary for drug approval, clinically relevant efficacy data and an ample safety database. By adding the MCI trial, not only do we get insight into a clinically and commercially relevant market beyond mild ADi, but we also expand the safety day-to-day. Both of these trials will help us achieve our goal of moving XPro closer toward registration trials. CJ Barnum, the VP of CNS Development at INmune Bio and the architect of our AD trials will provide more detailed information on our Alzheimer's disease clinical program. CJ?

Thank you, RJ. INmune Bio will be conducting two Phase 2 trials in patients with ADI: one in mild AD, that is currently enrolling; and a second in MCI that will begin enrolling later this summer. The three most common questions we get asked are: why are we doing separate trials in MCI and mild AD? Why are our trials small and short? And why do we use nontraditional primary cognitive endpoints? First, I want to reiterate why we are bullish on the use of XPro to treat ADi. Simply speaking, neuroinflammation causes dementia. The evidence for this is overwhelmingly supported by preclinical genetic and epidemiological studies. Soluble TNF, the target of XPro, is the master regulator of neuroinflammation and modulates the activity of nearly every inflammatory target in development for AD. In short, we believe TNF is the most important inflammatory factor driving AD. More importantly, we have a drug that neutralizes the species of TNF that drives dementia, soluble TNF, and preserves the part of TNF that is necessary for CNS repair, trans-membrane TNF. We believe that the drug may be procognitive precisely because it preserves transmembrane mediated neuronal repair. So far, this hypothesis has been supported by our nonclinical and early clinical studies. But back to the questions I mentioned earlier. What – we are doing separate trials for MCI and mild AD because the biomarkers are different for each disease. By separating them into individual studies, we will get a clearer picture of how our biomarkers are changing. Second, patients with ADi progress rapidly and reliably. I wanted to emphasize this because it is not widely known that patients with increased inflammation progress faster and with more consistent progression between patients. This clinical reality allows for trial design advantages, the most prominent being adequately powered smaller and shorter trials. Finally, we have chosen scales that measure cognitive changes that occurred during mild AD and MCI. Our primary endpoints, EMACC, was empirically derived to measure cognitive changes in these early AD patients, whereas ADAS-cog was developed to capture cognitive changes that occur in moderate and severe AD patients. The cognitive changes that occur in early AD are different from those that change in moderate and severe disease, and therefore, require a different scale. The EMACC is that scale. The MCI study is a blinded, randomized, placebo-controlled study of XPro in patients with MCI due to AD. This proof of biology study will enroll 60 patients in Australia and North America. Patients will be randomized two-to-one, drug to placebo, where they will receive XPro for three months. The primary goal of the study is to determine the effect of XPro on cognition and biomarkers that will inform the design of a registration trial. Why is this important? MCI studies are plagued by a slow rate of cognitive decline and low rate of conversion to AD. The extensive biomarker package we are using in the MCI trial will help us derisk the registration trial and dictate if MCI and mild AD can be studied together or must be studied separately. To reach this goal, we use frequent and diverse clinical and biological measurements of cognition, inflammation, neurodegeneration and function. This strategy decreases risk and increases the probability of success. Specific information about this study can be found on clinicaltrials.gov. Our Phase 2 proof-of-concept study in mild AD patients will enroll 201 patients with ADi. This six months randomized, blinded placebo-controlled study is powered to show a significant effect on the primary and key secondary endpoints of cognition. As described above for the MCI trial, we are using endpoints that measure the cognitive and clinical changes that occur in patients with mild Alzheimer's disease. We are confident we have designed a study that will succeed and provide a clear path for a registration study. As RJ mentioned above, we have started treating patients and are on pace to meet our timelines. A feature of both the mild AD and MCI trial is that once patients complete the six and three-month trials, respectively, all patients will be offered XPro for up to an additional 12 months. During that time, we will obtain additional data on safety and efficacy that will add to our clinical and safety database. We believe the short timeline of the trials and the fact all patients will be able to go on XPro will be an attractive recruiting feature for patients. Now, I will turn to treatment resistant depression. There are approximately 7 million patients per year in the U.S. with treatment resistant depression. Approximately a third of those patients will have biomarkers of neuroinflammation that we believe is a cause of their treatment resistance. Proof-of-concept studies with nonselective TNF inhibitors have demonstrated a therapeutic benefit for patients with treatment resistant depression and biomarkers of inflammation. We have announced a Phase 2 trial of XPro in treatment resistant patients supported in part by a $2.9 million grant from the National Institute of Health. The study is a six-week blinded placebo-controlled study of XPro in 90 patients with treatment resistant depression and biomarkers of inflammation. Consistent with our AD development strategy, we will select patients with biomarkers of inflammation. The primary endpoint will assess the impact of XPro on the functional activity of the reward pathway in the brain. This functional MRI metric is a well-documented change associated with inflammation and key depressive symptoms, including anhedonia and motivation, which alongside with traditional depression scales will be assessed as key secondary endpoints. As with ADi, the enrichment strategy and target engagement for TRD patients with neuroinflammation aligns the pathology of the disease with a mechanism of XPro. More information about this study will be available as we get closer to the start date. Now, let me pass the call back to RJ to discuss our second platform, INKmune. RJ?

Thank you, CJ. INKmune is our proprietary natural killer cell priming platform that we classify as a cytokine. Why do we call INKmune a cytokine? All other NK companies that use NK cells as their primary therapy requires cytokines to support, prime and expand their NK product into an effective therapy. Cytokines are a problem. They have toxicities when given directly to the patient either alone or as part of a multi-cytokine cocktail. These toxicities can complicate the management of a sick patient population. Cytokines are expensive and cumbersome when added to a complex manufacturing process. INKmune solves these problems in an elegant manner by converting the patient's own NK cells while they're in their body, in their own circulation, into the cancer killing memory-like phenotype without the need for cytokines, genetic engineering or ex vivo culturing or processing. INKmune is safe and simple. We have seen the effectiveness of INKmune therapy in two of three patients with MDS/AML. And we expect this approach will differentiate INKmune therapy from other NK cell strategies. Like you, we are frustrated in our inability to recruit patients into the INKmune trial. To solve this problem, we have expanded our clinical trial in the MDS program to include AML patients, in addition to the MDS patients. Even in the era of COVID, AML patients must come to the hospital for their treatment. This eliminates one barrier to enrollment. We are working to open a second site in the EU. And we believe these two changes will allow us to obtain additional INKmune patient data this year. Why is it that that most NK-targeted therapies focus on hematologic malignancies? It makes little commercial sense since more than 90% of cancers are solid tumors. That focus is based on biology. NK-directed therapies do not work well in solid tumors. Mark Lowdell has discovered why NK cell therapies don't work in solid tumors, and it's actually quite simple. The tumor microenvironment where NK cells must perform their magic is very inhospitable to NK cell function. The TME is hypoxic and immunosuppressive. What is a hypoxic tumor microenvironment? Hypoxia is abnormally low oxygen level that prevents a cell from working normally. Think about when you go skiing in Colorado. When you first arrive, you can't walk up a flight of stairs without getting short of breath. The oxygen level at 9,000 feet is 30% lower than at sea level. You feel it. Like you, when the NK cell is hypoxic, it cannot survive and thrive, and it certainly cannot kill cancer cells. INKmune appears to solve this problem by upregulating mitochondrial survival proteins and nutrient receptors compared to cytokine-primed NK cells. This is probably why INKmune-primed NK cells survive, thrive and kill cancer cells in the hypoxic TME. NK cells that are produced in normal oxygen levels just don't work. To our knowledge, every NK company produces their NK cells in normoxia. The immunosuppressive environment of TME is a second problem that is overcome by INKmune compared to cytokine-primed NK cells. INKmune-primed NK cells kill cancer when surrounded by immunosuppressive tumor-activated microphages, MDSC cells and T regulatory cells that are all trying to protect the cancer. NK priming with INKmune produces a memory-like NK cells that kill and kill and kill again. In the patients that responded to INKmune, memory-like NGKD2+ NK cells, that's the memory-like NK cell that is cancer killing, were present in the blood and bone marrow for at least 100 days after the last dose of INKmune. To our knowledge, this prolonged therapeutic persistence is unmatched by cytokines. Avidity is a measure of how effective the NK cell is at killing a cancer cell. More avidity is good for controlling cancer. INKmune causes the higher – much higher avidity than any single cytokine in assays of cancer killing. Professor Lowdell presented this in more at the Innate Killer Conference last month in San Diego, where he chaired a session on the use of NK cells in the treatment of solid tumors. INKmune is ideally suited for treating solid tumors. Because of these advantages, we are pivoting INKmune toward solid tumors, a market that is many times larger than a liquid tumor market. We are not abandoning the MDS/AML program. It is an important source of information and insight for clinical teams, the company and the regulatory authorities. We will take what we are learning from MDS/AML to move forward in solid tumors. You already know about ovarian, renal cell and nasopharyngeal cancers, both in preclinical and preclinical stages but this is just the beginning. Solid tumors are the future of INKmune. At this point, I'd like to turn it over to David Moss, our CFO, to review certain financial items.

Thank you, RJ. I'll provide a brief overview of our financial results and upcoming milestones before we head to Q&A. Net loss attributable to common stockholders for the quarter ended March 31, 2022, was approximately $6.9 million compared with approximately $4.6 million for the comparable period in 2021. Revenues totaled approximately $0.2 million for the quarter ended March 31, 2022, compared to $0 million for the comparable period in 2021. Research and development expense totaled approximately $4.3 million for the quarter ended March 31, 2022, compared with approximately $2.5 million for the comparable period in 2021. General and administrative expenses was approximately $2.3 million for the quarter ended March 31, 2021, compared to $2.1 million for the comparable period in 2021. Other expenses was approximately $0.4 million for the quarter ended March 31, 2022, compared with 0 for the comparable period in 2021. At March 31, 2022, the company had cash and cash equivalents or mainly just cash, of approximately $66.7 million. I'd like to point out that during the quarter, as previously reported in an 8-K filed with the SEC, we sold 82,900 shares to officers and directors for approximately $700,000 in cash. That includes RJ, Mark Lowdell, myself and one director. Based on the current – on our current operating plan, we believe our cash is sufficient to fund our operations into late 2023. As of May 5, 2022, the company had approximately 17.9 million shares of common stock outstanding. Now, I would like to move on and list our upcoming milestones and catalysts before Q&A. As previously highlighted by both CJ and RJ, we dosed our first patient in our Phase 2 XPro1595 trial for treatment of neuroinflammation as a cause of Alzheimer's disease. We expect to continue enrolling patients over the coming months in order to reach our enrollment target of 201 patients. Top line results for the six-month program is expected in late 2023. In the first half of 2022, we plan to initiate a three-month 60-patient Phase 2 program for mild cognitive impairment. Barring any unexpected delays, we anticipate having top line results sometime first half to mid-2023. In the coming months, we plan to initiate a Phase 2 trial of XPro in patients with treatment resistant depression. This partially funded by a $2.9 million grant – NIH grant. We expect further open-label high-risk MDS/AML data in INKmune patient as the program continues to enroll. Finally, we plan to launch a second INKmune study in ovarian cancer or another solid tumor in this year in 2022. So summary, we're pleased with our progress for the quarter as we continue to advance our pipeline toward potentially evaluate and creating milestones. At this point, I'd like to thank you for your time and attention, and I'd like to turn it back to Paul to poll for questions. Paul?

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question is from Mayank Mamtani with B. Riley Securities. Please proceed with your question.

Hi. This is William Wood on for Mayank Mamtani today. I really appreciate the update that you provided and really congratulations on all the progress that you've been making. I've got a couple of questions. The first, kind of focused on your MCI and mild AD trials. So the MCI is an earlier population and it's going for three months, and the mild is a slightly more severe population and the trial is running for six months. I guess, could you – just curious thinking about the limits of the EMACC, and how you see these two trials with the readouts and the difference in populations and the difference in timeline? Maybe in my eyes, the less severe trial should be potentially longer and/or bigger. Just curious about your thoughts on that.

Yes. Thanks, William, I'm going to let CJ answer that.

So I mean, it's a really long answer. It's a good question, but there's a lot of elements to it. I think referring back to what we said in the call, we view these, in some ways, as two different diseases. And if MCI is viewed as a different disease, we need to make sure we understand that our biomarkers work that we're looking in the right spot before we put a lot of time and resources into it. The other factor that is involved in the length of these studies has to do with what you expect. So if your expectation, for example is to slow decline of the disease by 50%, that dictates how long the trials need to be. If you expect the drug not to – the patients will stop progressing, that's obviously a different timeframe. And we actually had different expectations between MCI and mild patients. But really, the truth is the reason we do a three-month study is because we need to understand if our biomarkers are working in that MCI population before we move into a more proof-of-concept. And we need to understand the conversion rate as well and how our biomarkers reflect that.

Yes. Let me jump in here, William, also. I mean, we just spent a couple of days with the team and that included Judy Jaeger, who we've mentioned before, our cognitive guru and really one of the architects of the EMACC. And one of the important points she made reinforces what CJ just said, it depends on your expectations. If you're expecting to differentiate between two declining populations, you need more time, you need more patients. As we've said many times, we are expecting our patients to be – we euphemistically say flat-line or stable. So we aren't expecting our patients to get worse. And in fact, in the MCI patients, there's even a chance that we'll have a better outcome than that. That really changes the – shall we say, the opportunity for demonstrating in a meaningful way the effects of the drug. So once again, it goes back to the lack of sensitivity of the traditional ADAS-cogs, which is just completely inappropriate for MCI for sure, mild AD for sure. And using a more sensitive tool suddenly allows us to be more confident of our development. One more comment by CJ.

Yes. So let me address the cognition piece because I think that's important. And we've been saying this all along, that you sort of – you have to measure what's – you have to be able to measure what's changing, and we believe the ADAS-cog just doesn't do that. So this is why the EMACC was empirically derived. It was really determined to do that. Now, the field understands this is a problem, knows that the ADAS-cog isn't very good. But convention is a problem in this business. So you have to remember that our secondary endpoints used the CDR. The CDR is an endpoint that can – that we know can be used in registration studies, and we powered the studies based on the CDR as well. So even though we believe the EMACC will be superior and we think the EMACC will be – we're developing the EMACC in a way that we will potentially be able to use it as a primary endpoint in a registration trial, we have the CDR in our back pocket to make sure that we are covering all our bases.

You had a second question?

Yes. Actually, a quick one and then – well, two quick ones. One is it looks like, at least in general, your timelines have been slightly pushed back at least from your fourth quarter. Just trying to get a feeling on how we should interpret this?

No. We said we'd have the MCI the first half of the year and the mild ADi, second half of the year. That's exactly what we plan.

Okay. I'll take that. And then, I guess, lastly, just on your INKmune trial, you obviously started incorporating the AML patients. Just trying to get a feeling on how we should be viewing that trial going forward? Obviously, you said you'd be still treating the MLS, but are you going to be trying to enroll both, treat both? Any extra color would be appreciated.

So yes, fair question. So we've expanded the inclusion criteria now to include a number of AML categories, patients with incomplete response to chemotherapy with circulating blast that aren't candidates for bone marrow transplant. Patients who have failed a bone marrow transplant for AML and there's one other criteria that I'm blocking out. So these are all being lumped into the same trial now. So there's not two trials. It's one trial with high-risk MDS, which is a pre-AML, and bad actors on the AML side. And as you know, this is a biomarker-driven trial that we actually had some pretty good responses in. I mean, remember, both of these patients are more than six months out after their last dose of INKmune with complete control of their disease on no other therapy. So now we haven't cured them because they still have disease, but these patients are living normal lives. So I think the way to look at it is really, as I described it in the last paragraph, we like what's happening in MDS/AML. We are frustrated as heck that we can't enroll the trials. And I can tell you that anybody who's enrolling AML/MDS trials is having trouble enrolling patients because there's way too many companies chasing way too few patients. The reason I went in such detail on the ability of INKmune to positively affect NK cell function in the TMA is because we believe solid tumors is a huge opportunity for INKmune that will dramatically differentiate us from other companies. No other company, to my knowledge, has presented every evidence of why they are not approaching solid tumors. We now know why we should attack solid tumors, and we think that's the future for the product. Now, the proof is in the pudding and that means we need to open the ovarian trial, we need to open other trials, and we have some interesting plans afoot that you'll hear about. We will finish the MDS/AML trial, but I do believe, and I'm saying it publicly here, that the future opportunity of INKmune is solid tumors, and there's only nine times the number of solid tumor patients than there are hematologic malignancy patients.

Excellent. I appreciate the extra color there. Congratulations again.

Thank you. Our next question comes from Matthew Cross with Alliance Global Partners. Please proceed with your question.

Hey, guys. Good afternoon and thanks for taking a couple of questions from me. I'll jump on to the kind of line of discussion here regarding NK cells and INKmune within solid tumors, which I think accurately is probably the direction to be going. The question that I had was, I guess, how do you envision actually moving into the solid tumor space? I guess exactly as RJ, you pointed out that there isn't really much in the way of data or certainly nothing all too promising yet from any of the other allogeneic NK cell therapies where we're delivering actual cells or NK cells, in this case, into patients in the solid tumor setting. So I guess with another experimental agent like INKmune, do you need to wait for the Encarta or whichever allogeneic NK cell developer of the world to kind of pave the way, get an approval in solid tumors, etc., etc., in order to prove that you can use INKmune to really, in these aggressive solid tumor types, enhance avidity and other cell functioning metrics? Or the way you've described it, do you need to kind of look at improving residual disease in those solid tumors and that patient's normal, and maybe in the cancer patients, more suppressed NK cells can be rejuvenated, to some extent, to sufficiently fight disease? I guess do you need to wait for the rest of the field to catch up? Or can you really go into even these very aggressive solid tumors right away right now is maybe this succinct way to put it?

So all I can say is, hell no. I mean, there is not a reason that I can think of why we would wait for everybody to catch up. They are clueless quite frankly, about how to attack solid tumors because they really don't understand what's going on in the tumor in microenvironment. And if they are set well, they may understand, but they've never, to our knowledge, studied the function of their cells in the environment that they're going to be meeting in the TME. Our top-secret program or secret – our top-secret, shall we say, sauce here is Mark Lowdell. Mark Lowdell has been studying NK cells, maybe not 30 years, but certainly 25, and he has really studied this and basically now, as I presented, understands it well. I think you bring up a point that's important, though. You're talking about these patients with aggressive bulky disease. What will differentiate us, I think, in our programs is we're going to be careful about picking the cancers. Mark has criteria based on NK infiltrates of biopsies and kits, etc., about cancers he wants to attack, I'll let him comment when he's able to join us on the call more specifically. But – so there's only certain cancers, and we are sensitive to the fact that we don't believe INKmune is a magic bullet for people with bulky diseases. We will ideally go after patients with a low burden of disease that we can – that won't be – that we won't necessarily treat concurrently with chemotherapy maybe with other immunotherapies. But the fact is we will pick and choose our battles in a way that allows us to attack certain types of patients within the cancers that I've talked about. So stay tuned. We have something to learn. But the most important thing that I presented today, I think, and what Mark really talked about when he was at the Innate Killer Conference was that we now know why everybody has failed in NK cells and solid tumors is because they keep making NK cells that are supposed to be working in 21% oxygen with no immunosuppressive environment, throw them into the patient and they get blindsided by hypoxia in immunosuppression. INKmune NK cells work in that environment, and to our knowledge, others don't. And if I'm wrong, I'll be the first to admit it. But so far, nobody has any data other than us, and that gives us confidence.

Understood. No, super helpful. And I think on – switching to the AD, MCI side quickly for one question. I think what I particularly wanted to focus on was the upcoming study in TRD as you guys have covered quite a bit around AD and MCI. But contrasting TRD with AD and MCI in those latter two, you're looking at patients that have neuroinflammation, also the case in TRD. But in both of those cases for AD and MCI, you're looking at patients that will have amyloid in the equation – maybe in the equation. For MCI, I think they need to actually be amyloid positive to enroll. So since amyloid, I guess, is a pretty well-documented trigger of microglial activation and that inflammation that XPro should normalize in patients, I guess in the case of something like TRD or Parkinson's or other places you may one day go on that iceberg of potential neuroinflammatory diseases, could you kind of comment on how you enrich a study in those other indications where glial cell activity isn't really as central to the kind of mechanistic rationale and you can't filter patients by amyloid?

CJ?

Yes. So the simple answer to that question is we don't. I view amyloid differently. I don't think amyloid is necessary. If you have inflammation, that's the patient we're looking for. And that biomarker is going to – we believe we'll be able to identify the biomarker that will tell us which patients have inflammation within the brain and those are the patients we're going to select. So in the case of treatment resistant depression, we already know that patients with high CRP – blood levels of CRP respond to anti-TNF therapy. That data has been published previously. If you look at the TNF inhibitors and all the diseases that are currently on the market, CRP is used as a predictor of treatment response. So I think we don't need a next level for these diseases. I think we need to make sure that CRP is the best biomarker. There may be better biomarkers. We'll unravel that over time. But I think it's – I think we just need to focus on the patients that have inflammation.

And if I could make one more comment here. One of the key elements for CJ and INmune Bio to win this large funding tranche from the NIMH, which is National Institute of Mental Health, was the fact that: one, it's a placebo-controlled trial – blinded placebo-controlled trial. And there's enough biology in the biomarkers that one, we will know when it works, how it works, and we will know why it didn't work in the placebo patients. In other words, they will – their key criteria was a thoughtful trial that was going to provide information that was actionable for future patients with resistant depression. And this trial is designed to do that. And we think that it's actually a pretty well-designed trial, and there are going to be other applications of those biomarkers in patients with psychiatric diseases.

Absolutely. Okay. Great, guys. Understood. Thanks for the answers from both you.

Thank you. Our next question comes from Tom Shrader with BTIG. Please proceed with your question.

Good afternoon. This is Sung calling in for Tom. So I have two questions. First question is kind of like a follow-up for the AD and MCI. So you've mentioned earlier in your call that patients with elevated inflammation exhibit faster and more consistent disease progression. So I was just wondering, at what clinical disease stage is that just like a faster write of disease progression, like separable those with the non-elevated inflammation? And I have a follow-up for the second question actually.

CJ?

It's a good question. The answer is it doesn't really matter where they are in the stage of disease, what matters is whether or not they've got the biomarkers of inflammation. If they have the biomarker of inflammation and you look over the course of the next six months, 12 months or however you want to look at it, their disease progresses faster and the most important part is that the variance in disease progression between patients is low, and that gives you enormous power advantages to do smaller and shorter trials.

Okay. Very helpful. OK. And then, a second question is, so regarding the depression. So you mentioned earlier that baseline inflammation influences the different immune response. But are there any data to suggest that the combination therapy between antidepressants and anti-inflammatory may have like a synergistic effect? And how established the role of inflammation in other indications such as schizophrenia or bipolar disorder?

So great question. I think the jury is still out on that. We don't have a lot of – we don't – this point. The jury is still out on whether a combination with, for example, XPro and an SSRI will be any more advantageous. I think most of the studies that have really looked at inflamed, depressed patients have looked at cohorts with trauma-related onset, which is a uniquely different disease that where the combination of the two may not be as effective, but we don't know the answer to that. And what was the second question? So schizophrenia, bipolar, these are patients that have documented inflammation. In fact, schizophrenic patients have some of the most the highest levels of inflammation I've ever seen in the brain. Those are really unique circumstances. Part of the issue there is these are developed mental diseases where the brain gets rewired a certain way. And it is not clear whether you can make a difference once the disease has onset. So it's not a program that I will be tackling anytime soon.

Right. Very helpful. Thank you.

Thank you. Our next question is from Daniel Carlson with TW Research Group. Please proceed with your question.

Hi, guys. Thanks for taking my questions. There's a couple here. Regarding INKmune, a lot of people have suggested you're not getting much market for this. And one of the better days we've had recently was when Encarta came out with results. So I'm just wondering if you could talk about what, in their results, bodes well for INKmune – the INKmune program? And also, what is the difference between you guys and Encarta?

So thanks, Dan. I'm going to let David start with that answer, and then maybe I'll jump in.

So a number of different things. I think that I'll point out that it's very early in an NK cell land. They only talked about six patients. Obviously, we only have a few as well, but we're intent on enrolling more. A big part of it is the phenotype of the NK cells that they're using, which is this NKG2D+ cell. Obviously, I think I was a little bit surprised at the market response. I think another part of it is that they're seeing – they have a CAR that they're using to help get the activities they need with their NK cell. And obviously, we get the same type of activity without the use of a CAR, the complications related to cytokines which they use. And then, I think the jury is out about the persistence of therapy and the number of doses that are needed. Obviously, we're monitoring our patients over a long period of time with persistence. We need to get – we need to show more of that in more patients. And hopefully, if we're able to do that, the market gives us credit similar to what they've done with other NK cell companies. I would say to date, we feel as a company that we do not get the credit of our NK cell program, but we believe that will come with additional data, which is what we're very focused on delivering.

Yes. Let me jump in here and make a very important point. The reason CAR T-cells work, and the only reason they work is when they actually engraft. That is – those CAR T-cells can be found many, many months, probably years after the patient has been treated, in the patients that remain, shall we say, free of disease. Patients – as soon as that engraftment is lost, those patients tend to relapse. NK cells don't engraft. That's not the case. So putting a CAR on an NK cell may do something for – it's not going to alter your therapeutic persistence, which, as I've already told you, is a key element to how well you can control the tumor. So one major advantage is, right now, we have a best-in-class therapeutic persistence. Maybe it isn't, but I haven't seen any data that suggests anybody is even close to us. That's number one. Number two, the fact, this is – remember, we're not giving NK cells. We don't have any – we don't have to give cytokines for the patient or cytokines for the manufacturing. By the way, the reason many NK cell companies give cytokines is to promote proliferation, promote avidity and promote persistence. And what they do is promote toxicity and they don't get much of the other three elements. So finally, INKmune is easy to make. I mean, we've got buckets of the stuff. And so, it's logistically simple, it's cost effective, it's safe and well tolerated. We get the right kind of NK cell, these memory-like NK killers. They have last a long time in the patient, that's a more complicated discussion. And back to what I talked about earlier, the cell we make will work in solid tumors because it can tolerate and thrive in that hypoxic immunosuppressive tumor microenvironment.

I got it. Just switching gears, maybe this is for CJ, but the big talk in Alzheimer's is recently looking at big pictures, obviously, what's going on with Biogen. So I'm just wondering, it seems like it should be positive for you guys in terms of your recruitment. But if you can sort of talk about what's going on with them and how that's going to impact you?

Let me start on the business question because obviously, I get up every morning and I anxiously look at my news feeds and see what's new with the Biogen saga, right? And obviously, now they've – the CEO stepped down and they're really stopping their investment in aducanumab. But people forget that they have an antibody that's coming behind called blucanumab, which is once again with Eisai, which looks to be more like – to function more like the Lilly antibody than not. So it's not that Biogen is abandoning anti-amyloid strategy. It's just they are – the amyloid, the ADUHELM is just a severely wounded duck. Now, my interpretation of ADUHELM data is that it is not great, but it works. And I can tell you, people forget that it – all three drugs, whether you're looking at Biogen drugs, whether you're looking at Lilly drug or the Genotek drug, the target amyloid have about the same efficacy, which, quite honestly, we think is subpar. And I'll also tell you that there are to date, to my knowledge, no anti-tau therapy that's had any evidence of efficacy. So I think we know where the old fashion approaches are, where they're going to sit, where the anti-tau and the anti-amyloid strategies are going to be, and it's time to be – and I think the community is turning to other approaches. We are getting more mentions, I guess, you might say. Neuroinflammation is viewed as important. We have great preclinical data. We have great Phase 1 data. It's now up to us to produce great Phase 2 data. So you will all understand that when you become 75, you want to be on XPro.

That's it for me. Guys, thank you very much. Appreciate that color.

There are no further questions at this time. I'd like to turn the floor back over to RJ for any closing comments.

So thank you all for joining. I think we presented a little bit of new information here with INKmune and our increased interest in solid tumors. I think you can hear the confidence we have in the XPro program for Alzheimer's disease. And we understand that it's up to us, at management and the company, to drive our clinical trial enrollments so we can give you the answers and have you get us enthusiastic about these programs as we are. With that, we will sign off.