The medical industry is changing rapidly. Fueled by heavy investor interest, technological innovation, and discoveries by some of the most intelligent minds in the world, new treatments are extending and improving the quality of life. This is where INmune Bio (NASDAQ: INMB) comes in.
What Is INmune Bio?
INMB is a clinical-stage biotechnology company. However, instead of focusing on therapies to treat ailments by attacking the ailment directly, INmune is focused on the development of immunotherapies.
This means that the company’s therapeutic candidates are designed to empower the body’s innate immune system to target and fight back against some of the world’s most debilitating conditions.
In particular, the company is currently working on programs that target both cancer indications and Alzheimer’s disease, and doing so with smashing early success.
This success is coming from the company’s willingness to pay attention to parts of the immune system that are largely ignored. In particular, in the cancer indications, INMB is developing treatments designed to fight resistance to treatment within the tumor microenvironment. On the Alzheimer’s side, the company’s candidate is designed to address the neuroinflammation that is believed to be the cause of the condition.
At the moment, INmune Bio is working on three key candidates. The first of these is known as INKmune, and takes an interesting approach to avoiding relapses in patients that are in remission.
Once cancer treatment is completed and a patient goes into remission, it doesn’t necessarily mean that all cancer cells are gone. In fact, following treatment it is expected that patients have residual disease. For many, this residual disease is in such small quantities that the body’s immune system will eliminate it. However, for those who relapse, that’s not the case.
Unfortunately, in patients that relapse, the body’s NK cells, or cells that are known to target residual cancer cells, fail to eliminate the remainder of the disease after treatment. INMB is working to keep this from happening with INKmune.
The immunotherapy targets the patients NK cells to support them in the fight against residual disease. Furthermore preclinical and early clinical data suggest that INKmune is doing just that, generating positive responses.
Next in line, we have INB03. The treatment targets myeloid derived suppressor cells, or MDSC. Essentially, it is believed that MDSC are the reason that many cancer patients do not respond to checkpoint inhibitor treatments. In fact, only 27% of patients will respond to checkpoint inhibitors due to the fact that MDSC blocks the method of action of these therapies.
However, INmune’s INB03 candidate specifically targets MDSC. In fact, the data suggest that the treatment changes the tumor microenvironment, blocking the resistance created through MDSC and allowing checkpoint inhibitor therapies to work more effectively.
Finally, we have XPro1595. The treatment is currently under development as a potential option for patients with Alzheimer’s disease and dementia. It is believed that these conditions are the result of neuroinflammation caused by soluble TNF or sTNF binding with TNFR. Unfortunately, the pressure put on the brain as a result of this inflammation leads to cell death, causing these conditions.
With XPro1595, INMB is targeting the inhibition of sTNF. By inhibiting sTNF, it is rendered unable to bind with TNFR and therefore no neuroinflammation is created. As a result, it is expected that XPro1595 will lead to a symptomatic improvement in those affected by Alzheimer’s disease and dementia.
Targeted Indications Come With Incredible Market Potential
The potential of an investment in INmune Bio to yield incredible returns becomes clear once you look at the market potential that comes with the indications targeted by the company’s candidates. At the moment, INMB is targeting three key indications. These include:
- Alzheimer’s Disease – By the year 2026, it is expected that the Alzheimer’s disease therapeutics market will grow to be worth more than $12 billion annually.
- Cancer Residual Disease – The cancer residual disease market is a vast one. In fact, about 1.7 million patients are affected by this every year, with nearly 610,000 patients dying as a result.
- Checkpoint Inhibitor Market – Finally, it is expected that the global checkpoint inhibitor market will grow to be worth more than $40 billion annually by the year 2026.
Considering that the market cap at INMB is just over $100 million, even capturing a small percentage of just one of these markets would be meaningful for INmune Bio and its investors.
Multiple Catalysts Ahead
At the moment, all three of the candidates in the company’s pipeline are either currently in Phase 1 clinical studies or are gearing up to start Phase 1 clinical studies in the very near term. Considering this, there are multiple catalysts ahead.
After all, the average clinical study provides catalysts like first patient enrolled, enrollment completion, preliminary data readouts, interim analysis readouts, and final data readouts. Each one of these events has the potential to send the stock upward.
With three candidates in the midst of Phase 1 clinical development, these catalysts are on the horizon. Not to mention, the company is currently working on preclinical development of INKmune and INB03 in new indications. This work also has the potential to lead to market-moving news ahead.
A Rare Thing To See In Clinical Stage Biotechnology Stocks
Developing new therapeutic options doesn’t happen for free. In fact, it’s not even cheap. Companies spend tens – and sometimes hundreds – of millions of dollars to bring new options through the development process.
So, it’s not surprising to think that the average clinical stage biotechnology company, one with no approved therapies and therefore no way to generate revenue, would have debt. In fact, debt is so common in this space that it is expected for these companies to have it.
However, that’s not the case at INMB. Interestingly, the company has absolutely no debt! That’s a rare thing to see in the world of clinical stage biotechnology.
Insiders Are Footing The Bill
Moreover, much of the company and its operations have been funded by its insiders. In fact, INmune Bio is one of the few clinical stage biotechnology companies on the market that have more than 50% insider ownership.
This is an important factor to consider. While it’s important for companies in this industry and any other industry to have some insider ownership, it’s rare to see more than half of a publicly traded company at INMB’s stage owned by insiders. Based on recent filings, these insiders are continuing to buy more stock!
This goes to show that the CEO, CFO, CMO, and other members of the management team, all of whom have strong holdings in the company, have a vested interest in its success and the welfare of its investors. Ultimately, when interests are aligned between investors and management teams, investors have much less to worry about.
A Ridiculously Low Valuation Outlines The Opportunity
In the world of biotechnology, specifically, immunotherapy companies looking to combat diseases like cancer and Alzheimer’s disease, we tend to see pretty high market caps. In fact, it’s not uncommon to see a company in Phase 1 of clinical development for these types of treatments to be trading at a market cap in the billions.
The market cap at INmune Bio is nowhere near this high. The stock trades with a market cap of around $100 million. This is ridiculously low considering a few things.
First and foremost, we’re talking about a company that has not just one asset under clinical development, but three. Moreover, insiders are the group that holds the majority of shares, showing that insider interests are closely tied to the interests of retail investors. Moreover, the company has absolutely no debt and an attractive cap structure. So, the valuation of just $100 million goes to show just how discounted this stock truly is at the moment.
The Bottom Line
The bottom line here is simple. The science at INmune Bio is impressive to say the least. By focusing on harnessing the power of the body’s innate immune system, in the long run, the company could become a leader in various oncology indications and in the treatment of Alzheimer’s disease, that is, if it’s not acquired before then for access to the company’s innovative proprietary candidates. With no debt, heavy insider holdings, and science that could change the shape of high value indications, this is a stock that’s well worth paying attention to.
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