10-Q: IN8BIO Reports Q1 2025 Results, Focuses on Pipeline Prioritization and Cost Management Amid Going Concern Uncertainty

Sentiment:

Quarterly Report 7 May 2025 4:03 PM

IN8BIO reports a net loss for Q1 2025 and expresses substantial doubt about its ability to continue as a going concern, while focusing on pipeline prioritization and cost management.

Capital raiseThe company plans to raise additional capital through equity and/or debt offerings, including through ATM offerings and private placements of securities.The company may receive up to $1.9 million from the exercise of Series A warrants and up to $8.1 million from the exercise of Series C warrants.If not otherwise redeemed by the company, the company may also receive aggregate proceeds of up to $4.1 million from the exercise of its outstanding Series B warrants.In April 2025, the company entered into agreements with certain holders of Series A and Series B warrants to exercise or exchange them for net proceeds of $1.9 million.

Worse than expectedThe company expresses substantial doubt about its ability to continue as a going concern.The company's existing cash is not anticipated to fund its projected operating expenses and capital expenditure requirements for a period of at least 12 months from the date of issuance of these condensed financial statements.

Summary

IN8BIO, a clinical-stage biopharmaceutical company, reported its financial results for the quarter ended March 31, 2025.
The company is focused on developing gamma-delta T cell product candidates for solid and liquid tumors.
IN8BIO's lead product candidate, INB-100, is in a Phase 1 clinical trial for acute myeloid leukemia (AML).
The company's DeltEx platform has preclinical programs including INB-300, INB-500, and INB-600.
In September 2024, IN8BIO announced a pipeline prioritization plan, suspending development of INB-400 and reducing its workforce by approximately 49%.
The company incurred one-time costs of $1.1 million related to the workforce reduction.
For the three months ended March 31, 2025, IN8BIO reported a net loss of $5.6 million, compared to a net loss of $8.6 million for the same period in 2024.
Research and development expenses were $3.0 million, down from $4.9 million in the prior year.
General and administrative expenses were $2.7 million, compared to $3.7 million in the prior year.
As of March 31, 2025, IN8BIO had cash of $11.9 million.
The company states that its existing cash is not anticipated to fund its projected operating expenses and capital expenditure requirements for a period of at least 12 months from the date of issuance of these condensed financial statements, and accordingly, there is substantial doubt about the company's ability to continue to operate as a going concern.
To continue funding operations, IN8BIO plans to raise additional capital through equity and/or debt offerings and strategic collaborations.
The company may receive up to $1.9 million from the exercise of Series A warrants and up to $8.1 million from the exercise of Series C warrants.
If not otherwise redeemed by the company, the company may also receive aggregate proceeds of up to $4.1 million from the exercise of its outstanding Series B warrants.
In April 2025, the company entered into agreements with certain holders of Series A and Series B warrants to exercise or exchange them for net proceeds of $1.9 million.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are positive aspects such as decreased net loss and promising clinical trial results for INB-100, the going concern warning and pipeline prioritization raise concerns about the company's financial stability and future prospects.

Positives

Net loss decreased from $8.6 million in Q1 2024 to $5.6 million in Q1 2025.
Research and development expenses decreased from $4.9 million to $3.0 million.
General and administrative expenses decreased from $3.7 million to $2.7 million.
100% of acute myeloid leukemia (AML) patients across both original and expansion cohorts remain in complete remission (CR), with a median follow-up of 20.1 months.

Negatives

The company reported a net loss of $5.6 million for Q1 2025.
IN8BIO expresses substantial doubt about its ability to continue as a going concern.
The company suspended enrollment in the Phase 2 Trial of INB-400.

Risks

The company's ability to continue as a going concern is dependent on obtaining additional funding.
Raising additional capital may cause dilution to existing stockholders.
Clinical trials may not be successful, and regulatory approvals may not be obtained.
The company faces significant competition in the biopharmaceutical industry.
The company is dependent on third parties for manufacturing and clinical trials.
The company's intellectual property may not be adequately protected.
Unstable market and economic conditions may have adverse consequences on the company's business and financial condition.

Future Outlook

The company expects to complete the enrollment of the INB-100 expansion cohort in 2025, with long-term follow-up results anticipated in late 2025 and in 2026. The company expects to present additional preliminary preclinical data at another medical meeting in the spring of 2025.

Management Comments

We continue to deploy cash preservation measures to defer or reduce costs in the near term in order to preserve capital and increase financial flexibility given the ongoing market environment for biotechnology stocks.
These cash preservation measures may impact our ability and the timing to execute our strategy.
To continue to fund our operations, management has developed plans, which primarily consist of the pipeline prioritization and workforce reduction, raising additional capital through some combination of equity and/or debt offerings, including through our ATM program, and identifying strategic collaborations, licensing or other arrangements to support development of our product candidates.

Industry Context

The company operates in the competitive biopharmaceutical industry, focusing on novel gamma-delta T cell therapies. The company's pipeline prioritization and cost-cutting measures reflect the challenging market environment for biotechnology stocks.

Comparison to Industry Standards

The company's approach to gamma-delta T cell immunotherapy is novel, but the field is still in early stages of development.
The company's clinical trial results for INB-100 are being compared to real-world control groups from CIBMTR and KUCC.
The company's INB-200 trial results are being compared to the standard-of-care Stupp regimen for glioblastoma.
Recent competitor data presented at ASCO 2024 demonstrated that persistence of donor derived cells are correlated with levels of HLA matching and they are now advancing their programs to be haploidentical matched as we have in our INB-100 program.

Stakeholder Impact

Shareholders face potential dilution from future equity offerings and the risk of losing their investment if the company is unable to continue as a going concern.
Employees have been impacted by the workforce reduction.
Patients may benefit from the development of new therapies, but clinical trial delays could limit access to these treatments.
Suppliers and creditors face increased risk due to the company's financial instability.

Next Steps

Complete enrollment of the INB-100 expansion cohort in 2025.
Report long-term follow-up results for INB-100 in late 2025 and in 2026.
Present additional preliminary preclinical data at a medical meeting in the spring of 2025.
Seek strategic collaborations for INB-400 and other assets.
Raise additional capital through equity and/or debt offerings.

Key Dates

Date	Description
2015-11-23	Incysus, Inc. was formed in the State of Delaware.
2016-02-08	Incysus, Ltd. was incorporated in Bermuda.
2016-03	The Company entered into an exclusive license agreement with UABRF.
2016-06	The Company entered into an exclusive license agreement with Emory University, Childrens Healthcare of Atlanta, Inc. and UAB Research Foundation.
2018-05-07	Incysus, Ltd. reincorporated in the United States in a domestication transaction.
2018	The Company entered into an agreement with an equipment leasing company in 2018, which provided up to $ 2.5 million for equipment purchases in the form of sale and leasebacks or direct leases.
2019-07-24	Incysus Therapeutics merged with Incysus.
2020-08	Incysus Therapeutics subsequently changed its name to IN8bio, Inc.
2021-07-29	The 2020 Equity Incentive Plan (the 2020 Plan) was approved by the Company's Board of Directors and the Company’s stockholders and became effective.
2021-09-15	The Company has an operating lease for office space in New York, New York, with a term that commenced on September 15, 2021, and continues through March 2027.
2022-08-04	The commencement date of the embedded lease within the University of Louisville Manufacturing Services Agreement was August 4, 2022 and it continues through August 2028.
2022-11-01	In November 2022, the Company filed a shelf registration statement on Form S-3 (File No. 333-268288) (the Shelf Registration Statement) with the SEC, which permits the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 200.0 million of its common stock and preferred stock, various series of debt securities and/or warrants to purchase any of such securities, of which $ 50.0 million of common stock may be issued and sold pursuant to an ATM.
2023-04	We received Orphan Drug Designation for the autologous and allogeneic INB-400 products from the FDA, covering a broad range of malignant glioma indications, including relapsed and newly diagnosed GBM.
2023-06-15	The Amended and Restated 2023 Equity Incentive Plan (the 2023 Plan) was approved by the Company's Board of Directors and the Company’s stockholders and became effective.
2023	The Company entered into an agreement with another equipment leasing company in the second quarter of 2023.
2023-12	In December 2023, the Company issued 574,241 pre-funded warrants (the 2023 Pre-Funded warrants), 11,823,829 Series A warrants and 11,823,829 Series B warrants (the 2023 Private Placement).
2024-03-08	On March 8, 2024, the Company delivered a termination notice to Truist, removing them as a sales agent under the ATM program.
2024-03	The Company has an operating lease for office space in Birmingham, Alabama, which was modified and expanded in March 2024 for a 60-month term ending in March 2029, with an option to extend five years, resulting in an increase to both the right of use assets and operating lease liabilities.
2024-06	In June 2024, the Company entered into a new finance lease agreement with another leasing company.
2024-09	In September 2024, the Company announced a plan to optimize its resource allocation through a pipeline prioritization, suspending further development on INB-400 while seeking partnership opportunities and focusing on development of INB-100 and a workforce reduction of approximately 49 %, across all functions.
2024-10	In October 2024, the Company issued 5,646,853 pre-funded warrants (the 2024 Pre-Funded warrants), and 31,343,158 Series C warrants (the 2024 Private Placement).
2024-11	We presented an oral plenary presentation at the Society of Neuro-Oncology (SNO) Annual Meeting in November 2024 where we provided longer-term patient follow-up.
2025-02	We presented updated data at the 2025 Transplantation & Cellular Therapy (TCT) Meeting in February 2025, demonstrating that 100% of acute myeloid leukemia (AML) patients across both original and expansion cohorts remain in complete remission (CR), with a median follow-up of 20.1 months.
2025-03-31	End of the quarterly period.
2025-04	In April 2025 the Company entered into privately negotiated letter agreements with certain holders of outstanding Series A warrants and Series B warrants (the Participating Holders) to (i) exercise, for cash, 7,178,934 Series A warrants and 2,142,147 Series B warrants for the purchase of an aggregate of 9,321,081 shares of common stock, in each case at a reduced exercise price of (a) $0.1844 per share for Participating Holders who are directors or executive officers of the Company and (b) $0.1784 per share for all other Participating Holders (the Warrant Exercises) and (ii) exchange certain Series A warrants and Series B warrants for 1,230,449 pre-funded warrants (the 2025 Pre-Funded Warrants), in each case at a reduced exercise price of (a) $0.1843 per share for Participating Holders who are directors or executive officers of the Company and (b) $0.1783 per share for all other Participating Holders (the Warrant Exchanges), for aggregate net proceeds of $1.9 million.
2025-04	In April 2025, the Company entered into an Amendment No. 1 (the SPA Amendment) to Securities Purchase Agreement, dated September 30, 2024 (the 2023 Purchase Agreement), to amend the restrictions on certain equity sales by the Company set forth in the 2023 Purchase Agreement.
2025-04	In April 2025, the Company amended certain of the Companys outstanding Series B warrants to reduce the exercise price from $1.50 to $0.45 per share.
2025-04	In April 2025, the Company terminated its operating lease for additional unutilized office space in Birmingham, Alabama.
2025-04	In April 2025, at the American Association for Cancer Research (AACR) Annual Meeting 2025, we presented in vitro studies that demonstrated INB-619 (Targeting CD19) and INB-633 (targeting CD33) induced strong, antigen-specific cytotoxicity against CD19+ acute lymphoblastic leukemia (ALL) and CD33+ AML cell lines, respectively.
2025-05-02	Number of shares of Registrants Common Stock outstanding as of May 2, 2025 was 90,771,944.
2025-05-07	Date of report.

Keywords

IN8BIO, gamma-delta T cells, clinical trials, financial results, going concern, pipeline prioritization, INB-100, INB-400, warrants, capital raise

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