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Item 1. Business

2022-03-03 compared with 2021-03-04 · 1772 added, 2077 removed, 78 unchanged (98% of the section changed)

objective is to develop and commercialize our product candidates to treat diseases where the innate immune system is not functioning

normally and contributing to the patient’s disease.

This can be in cancer where Natural Killer (“NK”) cells

are inactive and contribute to a tumor’s evasion of the immune system and/or disease progression while expression of MUC4

and cells of the tumor microenvironment such as Myeloid Derived Suppressor Cells (“MDSC”) proliferate to protect the

tumor from attack by the patient’s immune system or this can be other diseases such as neurologic and metabolic diseases

where chronic inflammation results in innate immune system dysfunction and disease progression or infectious disease where cytokine

storm causes a hypermetabolic state that causes the need to seek medical attention.

Our initial focus will be the treatment of

cancer, treatment of Alzheimer’s Disease (“AD”), treatment of Treatment Resistant Depression (“TRD”),

treatment of immune mediated complications due to COVID-19 and non-alcoholic steatohepatitis (“NASH”).

we plan to pursue two parallel development programs:

(1) with INKmune we will initially focus on treating resistant disease women

with relapse refractory ovarian carcinoma and patients with high-risk myelodysplastic syndrome (high risk MDS);

(2) with INB03,

we will treat patients with advanced cancers with elevated biomarkers of inflammation in their blood and evidence of disease that

is resistant to immunotherapy including women with MUC4 expressing HER2+ breast cancer.

Our third drug candidate XPro1595, targets

Alzheimer’s Disease and TRD.

XPro1595 for AD is progressing through Phase I trials and is being prepared for Phase II trials.

XPro1595 for TRD is being prepared for Phase II trials.

Our fourth drug candidate, LIVNate, will be used to treat patients with

Our final drug, Quellor is in Phase II trials for the treatment of pulmonary complications due to COVID-19 infection.

principal components of our strategy to achieve this objective are to:

development strategies and regulatory approval pathways that allow the treatment of oncology patients with our lead product

candidates, INKmune and INB03;

pursue development

strategies and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead

product candidates, XPro1595;

pursue development

strategies and regulatory approval pathways that allow the treatment of pulmonary complications from COVID-19 infection patients

with our lead product candidate, Quellor;

development strategies and regulatory approval pathways that allow the treatment of NASH in patients with our lead product candidates,

a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition

and expand our IP suite into related immunotherapeutic areas;

clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit

reimbursement for our product candidates;

with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes

INB03, XPro1595, Quellor and LIVNate product candidates and other products that will benefit from development or marketing

beyond our current resources.

development and regulatory approval pathways.

We believe Quellor, INKmune, INB03 and XPro1595 may be approvable under pathways

that are potentially shorter than those typically available for drug products based on novel active ingredients, including as

an orphan drug under the Orphan Drug Act and approval under the Food and Drug Administration (the “FDA”) Accelerated

Approval Program (see “Government Regulation”).

We have not yet had a discussion with the Medicines and Healthcare

Products Regulatory Agency (“MHRA”) and/or FDA regarding such designation, but plan to do so in the future.

both our INB03 HER2+ metastatic breast cancer program, high risk MDS and ovarian carcinoma treatment programs and our program

Quellor to treat respiratory complications due to COVID19 infection fit the criteria used by the FDA to grant these regulatory

designations.

We believe that it would take a minimum of six months to receive Orphan Drug status once we submit an application

and a minimum of 12 months to receive a designation once we submit an application.

We might never have these discussions, submit

applications under the Orphan Drug Act as the FDA Accelerated Approval Program or have these applications approved if we do.

a two-pronged patent strategy.

We are pursuing a two-pronged product development strategy that will seek to solidify our existing

IP to prevent competition and expand our IP suite into related therapeutic areas.

We are confident that our core in-licensed IP

(see “Intellectual Property”) will allow us both freedom-to-operate and provide robust protection from outside competition.

We will continue to invest in expanding our patent suite.

We will also seek to further to strengthen our IP position by looking

to in-license IP related to our focus on the innate immune system.

clear value propositions to third-party payors to merit reimbursement for our product candidates .

We are designing our clinical

development programs to demonstrate compelling, competitive advantages to patients and prescribers, and to demonstrate value propositions

to third-party payors.

We believe the use of INKmune and/or INB03 in patients with a high risk of tumor progression and death

from tumor should prolong survival, improve the patient’s quality of life and decrease the total cost of care for patients

with these lethal malignancies.

For example, ovarian cancer patients relapse frequently.

Each relapse requires an expensive, hospital-based

treatment regimen that has decreasing benefits.

Treatment with INKmune as an out-patient may provide a more durable remission

and limit the need for treatment-associated hospitalizations.

At the patient level, we believe INKmune and INB03 therapy, once

approved, should improve survival and quality of life.

At the payor level, we believe INKmune, once approved, should provide more

predictable costs and outcomes.

Therapies for Alzheimer’s disease are needed for medical, social and economic reasons.

cost of Alzheimer’s disease to the government is large and growing.

The cost to families and care givers is real and burdensome.

We believe treatment of patients with dementia, including Alzheimer’s disease, may provide a strategy to alter the costly

dynamic of this disease in society today.

NASH, a silent epidemic in the US due to the high incidence of obesity, is expected

to be the most common cause of liver transplant 2030.

There are no approved therapies for the NASH at this time.

We believe treatment

of patients requiring hospitalization due to medical complications of COVID-19 infection may alter the arc of the pandemic.

effective, Quellor should allow patients to be discharged from the hospital more quickly and decrease the risk of respiratory

failure requiring mechanical ventilation.

to maximize the value of our technology .

Our objective is to develop and commercialize our product candidates

to treat diseases where the innate immune system is not functioning normally and contributing to the patient’s disease.

be in cancer where Natural Killer (“NK”) cells are inactive and contribute to a tumor’s evasion of the immune system

and/or disease progression while expression of MUC4 and immunosuppressive cells of the tumor microenvironment proliferate to protect the

tumor from attack by the patient’s immune system or this can be other diseases such as neurologic and metabolic diseases where chronic

inflammation results in innate immune system dysfunction.

Our initial focus will be the treatment of cancer, treatment of Alzheimer’s

Disease (“AD”), and the treatment of Treatment Resistant Depression (“TRD”).

In cancer, we plan to pursue two

parallel development programs:

(1) with INKmune we will initially focus on treating women with resistant disease relapse refractory ovarian

carcinoma and patients with high-risk myelodysplastic syndrome (high risk MDS);

(2) with INB03, we will treat patients with cancers that

express MUC4, a mucinous polyglucan on the surface of some epithelial cancer cells, that appears to predict resistant to immunotherapy

including women with MUC4 expressing HER2+ breast cancer.

Our third drug candidate XPro1595 (“XPro"), targets Alzheimer’s

Disease and TRD.

XPro for AD has completed Phase I trials and is being prepared for Phase II trials.

XPro for TRD is being prepared for

Phase II trials.

During 2021, we closed our Phase II clinical trial for treatment of pulmonary complications due to COVID-19 infection

as the Company determined it was a high-risk, low reward program due to the development of vaccinations and therapies which were not available

when we started the clinical trial.

The principal components of our strategy to achieve this objective are to:

pursue development strategies and regulatory approval pathways that allow the treatment of oncology patients with our lead product candidates, INKmune and INB03;

pursue development strategies

and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead product candidates,

adopt a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition and expand our IP suite into related immunotherapeutic areas;

provide clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit reimbursement for our product candidates;

with other pharmaceutical companies with respect to, among other things, our INKmune and the DN-TNF platform that includes INB03 and

XPro product candidates and other products that will benefit from development or marketing beyond our current resources.

Pursue development and

regulatory approval pathways.

We believe INKmune, INB03 and XPro may be approvable under pathways that are potentially shorter

than those typically available for drug products based on novel active ingredients, including as an orphan drug under the Orphan Drug

Act and approval under the Food and Drug Administration (the “FDA”) Accelerated Approval Program (see “Government Regulation”).

We have not yet had a discussion with the Medicines and Healthcare Products Regulatory Agency (“MHRA”) and/or FDA regarding

such designation, but plan to do so in the future.

We believe the INKmune MDS cancer program may qualify for orphan status.

that it would take a minimum of six months to receive Orphan Drug status once we submit an application and a minimum of 12 months

to receive a designation once we submit an application.

We might never have these discussions, submit applications under the Orphan Drug

Act as the FDA Accelerated Approval Program or have these applications approved if we do.

Adopt a two-pronged patent

We are pursuing a two-pronged product development strategy that will seek to solidify our existing IP to prevent competition

and expand our IP suite into related therapeutic areas.

We are confident that our core in-licensed IP (see “Intellectual Property”)

will allow us both freedom-to-operate and provide robust protection from outside competition.

We will continue to invest in expanding

our patent suite.

We will also seek to further to strengthen our IP position by looking to in-license IP related to our focus on the innate

immune system.

Provide clear value propositions

to third-party payors to merit reimbursement for our product candidates .

We are designing our clinical development programs to demonstrate

compelling, competitive advantages to patients and prescribers, and to demonstrate value propositions to third-party payors.

the use of INKmune and/or INB03 in patients with a high risk of tumor progression and death from tumor should prolong survival, improve

the patient’s quality of life and decrease the total cost of care for patients with these lethal malignancies.

For example, ovarian

cancer patients relapse frequently.

Each relapse requires a complex treatment regimen that has decreasing benefits.

Treatment with INKmune

as an out-patient may provide a more durable remission and limit the need for treatment-associated hospitalizations.

At the patient level,

we believe INKmune and INB03 therapy, once approved, should improve survival and quality of life.

At the payor level, we believe INKmune,

once approved, should provide more predictable costs and outcomes.

Therapies for Alzheimer’s disease are needed for medical, social

and economic reasons.

The cost of Alzheimer’s disease to the government is large and growing.

The cost to families and care givers

is real and burdensome.

We believe treatment of patients with dementia, including Alzheimer’s disease, may provide a strategy to

alter the costly dynamic of this disease in society today.

Collaborate to maximize

the value of our technology .

We believe there are two reasons for us to enter collaborations with other companies.

The first is the further development of INKmune, INB03, Quellor, LIVNate and XPro1595 by either providing additional innovations

to the product, including combination therapy strategies, and/or providing resources to improve the speed and breadth of the development

The second is to optimize the commercialization of our products either globally or regionally.

The ideal partner will

benefit us in both ways.

continue to look for ways to utilize our unique capabilities to optimize clinical application of cell therapies.

We believe that

we have identified a way to manufacture human mesenchymal stem cells for the medical research and biotech community that offers

large volumes of high-quality, low passage human umbilical cord mesenchymal stem cells with minimal batch-to-batch variability.

We believe this may solve the problem associated with supplying an adequate supply of human mesenchymal stem cells for clinical

applications.

The process to produce pooled, human umbilical cord mesenchymal stem cells was developed at University College London.

We have established a reliable supply of human umbilical cords based on our agreement with the Anthony Nolan Cord Blood Bank in

the United Kingdom.

We have developed a validated manufacturing process that reliably produces contract manufacturer of the clinical

grade (“cGMP”) quality mesenchymal stem cells.

The manufacturing process can be performed at a contract manufacturing

site under the direction of Mark Lowdell, the Company’s CSO.

We have negotiated an exclusive 10-year license to the manufacturing

process from University College London Business, the licensing organization of University College London.

The first is the

further development of INKmune, INB03 and XPro by either providing additional innovations to the product, including combination therapy

strategies, and/or providing resources to improve the speed and breadth of the development process.

The second is to optimize the commercialization

of our products either globally or regionally.

The ideal partner will benefit us in both ways.

We continue to look for ways to utilize our unique capabilities to

optimize clinical application of cell therapies.

We believe that we have identified a way to manufacture human mesenchymal stem cells

for the medical research and biotech community that offers large volumes of high-quality, low passage human umbilical cord mesenchymal

stem cells with minimal batch-to-batch variability.

We believe this may solve the problem associated with supplying an adequate supply

of human mesenchymal stem cells for clinical applications.

We have established a reliable supply of human umbilical cords based on our

agreement with the Anthony Nolan Cord Blood Bank in the United Kingdom.

We have developed a validated manufacturing process that reliably

produces contract manufacturer of the clinical grade (“cGMP”) quality mesenchymal stem cells that we call CORDstrom.

The manufacturing

process can be performed at a contract manufacturing site under the direction of Mark Lowdell, the Company’s CSO.

We will seek academic

laboratories and biopharma companies who need a reliable source of high quality pooled human umbilical cord mesenchymal stem cells

for research of and development of clinical products.

Once identified, we plan to act as a cGMP for the development of therapeutic

products by utilizing contract manufacturers.

Because the production of the product is not continuous, we do not expect to engage

a contract manufacturer until we have a customer identified.

We have identified several contract manufacturers in the UK that

have the capability to produce cGMP stem cells.

We expect the commercial arrangement with academic laboratories or biopharma companies

to be a combination of fee-for-service and licensing that does not require additional investment by us.

laboratories and biopharma companies who need a reliable source of high quality pooled human umbilical cord mesenchymal stem cells for

research of and development of clinical products.

Once identified, we plan to act as a cGMP for the development of therapeutic products

by utilizing contract manufacturers.

Because the production of the product is not continuous, we do not expect to engage a contract manufacturer

until we have a customer identified.

To date, we are supporting two academic clinical trials with CORDstrom.

One program is a Phase 2

trial sponsored by the Great Ormond Street Children’s Hospital in the UK treating children with erythematous bullousa, a disfiguring

skin disease in children that is similar to a second degree burn and the second program is treatment of system lupus in adults.

studies are ongoing.

INmune Bio is supplying the clinical product for treatment of these patients.

The Company does not know the results

of these trials until they are announced by the principle investigators at the clinical sites.

We have identified contract manufacturers

in the UK that have the capability to produce cGMP stem cells.

We expect the commercial arrangement with academic laboratories or biopharma

companies to be a combination of fee-for-service and licensing that does not require additional investment by us.

We will be opportunistic

in pursuing therapeutic opportunities for our own portfolio with this platform in the future if resources become available.

regulatory path for therapeutic applications of the mesenchymal stem cell products is well established and similar to the regulatory

approval process for other cell therapies.

We will only be responsible for regulatory compliance related to manufacturing of the

mesenchymal stem cells when the product is being developed by a third party.

When developing a therapeutic product for the Company’s

commercial portfolio, the Company will be responsible for all aspects of the regulatory process.

of Immunotherapy for Cancer

immune system has two parts, innate and adaptive.

The innate immune system is the body’s first line of defense against an

infection, providing immediate, non-specific responses to eliminate harmful cells in the body.

Components of the innate immune

system include cytokines, chemokines, macrophages, neutrophils and NK cells, among others.

adaptive immune system is often initially triggered by the innate immune system, mounts a delayed response against diseased cells

and plays a role protecting against re-infection.

An adaptive immune response is highly specific to a pathogen or antigen and

is developed or learned from prior exposure.

Key components of the adaptive immune system include antibodies which bind to antigens

and mark them for destruction by other immune cells, B-cells which produce these antibodies upon exposure to antigens, and T-cells

which attack and eliminate the diseased cells.

biopharmaceutical industry has made significant advances in harnessing specific components of innate and adaptive immune systems

for therapeutic use.

Some of these approaches are summarized below.

One of the early applications of immunotherapy is the use of cytokines, including interferons and interleukin-2 (“IL-2”).

Interferons are molecules that inhibit the growth and replication of diseased cells and stimulate innate immune cells to attack

They have been used as standard of care for hepatitis B and C and multiple sclerosis, and to a lesser extent, as treatment

for certain cancers, including chronic myeloid leukemia, cutaneous T-cell lymphoma, myeloma and non-Hodgkin’s lymphoma.

However, the use of interferons has generally decreased over the years due to serious adverse events ( e.g.

, flu-like symptoms

and dramatic weight loss) and introduction of new therapies with higher efficacy, better safety profiles and more convenient administration

although Alpha-interferon remains the treatment of choice for some hematological conditions such as polycythemia.

IL-2 activates

T-cells and NK cells to attack diseased cells.

IL-2 has been used to treat select cancers, but due to its relatively poor safety

profile, physicians often only resort to this therapy for the most advanced settings.

Tumor Necrosis Factor alpha (“TNF”)

is the focus of INB03.

TNF biology has four elements that include two cytokines, soluble TNF and trans-membrane TNF (“sTNF”

and “tmTNF,”

respectively), and two receptors, TNF Receptor 1 and 2 (“TNFR1”

and “TNFR2”).

The biology of TNF ligation of TNFR varies dramatically based on what elements of the TNF system that are used.

sTNF binding to

TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes proliferation of regulatory T cells

(“Treg”).

In patients with advanced cancers, increased sTNF is not favorable to long-term survival because it promotes

epithelial-mesenchymal transformation and metastasis while making the tumor microenvironment more immunosuppressive promoting

resistance to therapy.

The regulatory

path for therapeutic applications of the mesenchymal stem cell products is well established and similar to the regulatory approval process

for other cell therapies.

We will only be responsible for regulatory compliance related to manufacturing of the mesenchymal stem cells

when the product is being developed by a third party.

When developing a therapeutic product for the Company’s commercial portfolio,

the Company will be responsible for all aspects of the regulatory process.

Overview of Immunotherapy for Cancer

The immune system has two

parts, innate and adaptive.

The innate immune system is the body’s first line of defense against an infection, providing immediate,

non-specific responses to eliminate harmful cells in the body.

Components of the innate immune system include cytokines, chemokines, macrophages,

neutrophils and NK cells, among others.

The adaptive immune system

is often initially triggered by the innate immune system, mounts a delayed response against diseased cells and plays a role protecting

against re-infection.

An adaptive immune response is highly specific to a pathogen or antigen and is developed or learned from prior exposure.

Key components of the adaptive immune system include antibodies which bind to antigens and mark them for destruction by other immune cells,

B-cells which produce these antibodies upon exposure to antigens, and T-cells which attack and eliminate the diseased cells.

The biopharmaceutical industry

has made significant advances in harnessing specific components of innate and adaptive immune systems for therapeutic use.

Some of these

approaches are summarized below.

of the early applications of immunotherapy is the use of cytokines, including interferons and interleukin-2 (“IL-2”).

are molecules that inhibit the growth and replication of diseased cells and stimulate innate immune cells to attack them.

They have been

used as standard of care for hepatitis B and C and multiple sclerosis, and to a lesser extent, as treatment for certain cancers, including

chronic myeloid leukemia, cutaneous T-cell lymphoma, myeloma and non-Hodgkin’s lymphoma.

However, the use of interferons has generally

decreased over the years due to serious adverse events ( e.g.

, flu-like symptoms and dramatic weight loss) and introduction of new

therapies with higher efficacy, better safety profiles and more convenient administration although Alpha-interferon remains the treatment

of choice for some hematological conditions such as polycythemia.

IL-2 activates T-cells and NK cells to attack diseased cells.

been used to treat select cancers, but due to its relatively poor safety profile, physicians often only resort to this therapy for the

most advanced settings.

Tumor Necrosis Factor alpha (“TNF”) is the focus of INB03.

TNF biology has four elements that include

two cytokines, soluble TNF and trans-membrane TNF (“sTNF” and “tmTNF,” respectively), and two receptors, TNF Receptor

1 and 2 (“TNFR1” and “TNFR2”).

The biology of TNF ligation of TNFR varies dramatically based on what elements

of the TNF system that are used.

sTNF binding to TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes

proliferation of regulatory T cells (“Treg”).

In patients with advanced cancers, increased sTNF is not favorable to long-term

survival because it promotes epithelial-mesenchymal transformation and metastasis while making the tumor microenvironment more immunosuppressive

promoting resistance to therapy.

In the CNS, sTNF promotes neuronal cell death, demyelination and synaptic pruning while tmTNF promotes

nerve cell survival, improves synaptic function and stimulates remyelination.

In brief, sTNF is the “bad”

tmTNF is the “good”

In patients with cancer, infection or neurologic disease, blockade of tmTNF function has

negative consequences such as immunosuppression, increased infection, synaptic dysfunction and demyelination.

In brief, sTNF is the “bad” TNF and tmTNF is

the “good” TNF.

In patients with cancer, infection or neurologic disease, blockade of tmTNF function has negative consequences

such as immunosuppression, increased infection, synaptic dysfunction and demyelination.

Antibody therapy.

Antibodies exist in three formats:

monoclonals (“mAbs”), oligo/polyclonal and antibody-drug conjugates.

mAbs represent an effective therapeutic modality and are important to the treatment paradigm of various diseases.

Drug manufacturers

have leveraged mAbs’

ability to induce an antibody-dependent cell-mediated cytotoxicity, or ADCC effect to develop better

treatments that prolong survival and quality of life of patients.

In addition, mAbs designed to inhibit specific checkpoints in

the immune system have overcome in vivo immune suppression and the resulting immune responses have led to profound therapeutic

benefit in some patients.

monoclonals (“mAbs”),

oligo/polyclonal and antibody-drug conjugates.

mAbs represent an effective therapeutic modality and are important to the treatment paradigm

of various diseases.

Drug manufacturers have leveraged mAbs’ ability to induce an antibody-dependent cell-mediated cytotoxicity,

or ADCC effect to develop better treatments that prolong survival and quality of life of patients.

In addition, mAbs designed to inhibit

specific checkpoints in the immune system have overcome in vivo immune suppression and the resulting immune responses have led to profound

therapeutic benefit in some patients.

However, the degree of efficacy of these therapies is heavily reliant on the immune system of patients,

many of whom are severely immuno-compromised.

For example, despite over $1.0 billion of sales generated by recently launched PD-1

and PDL1 checkpoint inhibitors, they are reported to be generally only effective in approximately 10% to 25% of the addressable

patient population.

In addition, mAbs are manufactured through a complex process that requires purification of cell products created

from a cell line.

Polyspecific antibodies, for example bi-specific antibodies, are able to target more than one antigen.

are often used to bring and effector T cell in contact with a target cell.

Antibody drug conjugates are mAbs attached to a toxin,

chemotherapy or radio therapy that delivers the cancer killing payload directly to the cancer.

Cell Therapies.

This approach is designed to indirectly stimulate a patient’s T-cells by leveraging the role of

dendritic cells in presenting antigens to T-cells.

In addition, mAbs are manufactured through a complex process that requires purification

of cell products created from a cell line.

Polyspecific antibodies, for example bi-specific antibodies, are able to target more than one

These are often used to bring and effector T cell in contact with a target cell.

Antibody drug conjugates are mAbs attached to

a toxin, chemotherapy or radio therapy that delivers the cancer killing payload directly to the cancer.

Dendritic Cell Therapies.

This approach is designed to indirectly stimulate a patient’s T-cells by leveraging the role of dendritic cells in presenting antigens

Cancer vaccines are the most common application of dendritic cells.

FDA-approved dendritic cell therapy is PROVENGE, which entails collecting monocytes from the patient, maturing them into dendritic

cells, “loading”

ex vivo with the patient’s cancer antigens, and then re-infusing in the patient.

this process is cumbersome and expensive, and again, relies on an intact and effective immune system of the patient.

additional ongoing preclinical studies and clinical trials being conducted by our competitors aimed at addressing certain of the

limitations associated with this approach.

To date, current clinical results of dendritic cell therapies have been mixed.

and TCR Therapies.

T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside

the diseased cells.

CAR-T therapy entails genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens

on the surface of cancer cells.

TCR therapy modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular

antigens that must be presented on the surface of target cells.

In early clinical trials, CAR-T and TCR therapies have demonstrated

impressive anti-tumor activity in a narrow spectrum of hematologic cancers and garnered significant attention by research institutions

and biopharmaceutical companies.

We believe a key limitation of adaptive autologous immunotherapy is the need to retrieve non-compromised

immune cells from a cancer patient which requires a complex and costly manufacturing process to develop the therapy.

The complexity

of this personalized process is reflected in the price of the two approved therapies.

CAR-T therapies - tisagenlecleucel and axicabtagene

ciloleucel for advanced leukemia and lymphoma respectively.

The only FDA-approved dendritic cell therapy is PROVENGE,

which entails collecting monocytes from the patient, maturing them into dendritic cells, “loading” ex vivo with the

patient’s cancer antigens, and then re-infusing in the patient.

Currently, this process is cumbersome and expensive, and again,

relies on an intact and effective immune system of the patient.

There are additional ongoing preclinical studies and clinical trials being

conducted by our competitors aimed at addressing certain of the limitations associated with this approach.

To date, current clinical results

of dendritic cell therapies have been mixed.

CAR-T and TCR Therapies.

T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside the diseased cells.

CAR-T therapy entails

genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens on the surface of cancer cells.

modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular antigens that must be presented on the surface

of target cells.

In early clinical trials, CAR-T and TCR therapies have demonstrated impressive anti-tumor activity in a narrow spectrum

of hematologic cancers and garnered significant attention by research institutions and biopharmaceutical companies.

We believe a key limitation

of adaptive autologous immunotherapy is the need to retrieve non-compromised immune cells from a cancer patient which requires a complex

and costly manufacturing process to develop the therapy.

The complexity of this personalized process is reflected in the price of the

two approved therapies.

CAR-T therapies - tisagenlecleucel and axicabtagene ciloleucel for advanced leukemia and lymphoma respectively.

The cost of a single therapy is many hundreds of thousands of dollars.

As a consequence of this need to harvest active T-cells, current Phase I clinical trials for autologous CAR-T cell therapy in

large part enroll patients from highly selected, often relatively early-stage disease in a narrow spectrum of cancers, including

bulky hematological cancers.

In addition, Phase I clinical trials of CAR-T cell immunotherapy have reported severe adverse toxicities

of cytokine release syndrome and neurotoxicity, requiring hospitalization, pre-conditioning and, in some instances, intensive

care unit admission following side effects associated with cytokine release syndrome.

As a result, though our competitors continue

to develop their CAR-T and TCR product candidates with the goal of addressing certain of the limitations associated with these

approaches, we believe these serious challenges may limit their potential and use in a variety of indications, including solid

As a consequence of this need to harvest active T-cells, current

Phase I clinical trials for autologous CAR-T cell therapy in large part enroll patients from highly selected, often relatively early-stage

disease in a narrow spectrum of cancers, including bulky hematological cancers.

In addition, Phase I clinical trials of CAR-T cell immunotherapy

have reported severe adverse toxicities of cytokine release syndrome and neurotoxicity, requiring hospitalization, pre-conditioning and,

in some instances, intensive care unit admission following side effects associated with cytokine release syndrome.

As a result, though

our competitors continue to develop their CAR-T and TCR product candidates with the goal of addressing certain of the limitations associated

with these approaches, we believe these serious challenges may limit their potential and use in a variety of indications, including solid

Checkpoint Inhibitors.

Immune cells express proteins that are immune checkpoints that control and down-regulate the immune response.

These are best defined in T lymphocytes and include PD-1, CTLA-4, TIM-3 and LAG3.

These are best defined

in T lymphocytes and include PD-1, CTLA-4, TIM-3 and LAG3.

Tumor cells express the ligands to these receptors.

When T cells bind the ligand to these proteins on the tumor cells, the T cell is turned off and does not attempt to attack the

Thus, checkpoint inhibitors (“CPI”) are part of the complex strategy used by the tumor to evade the patient’s

immune system and are responsible for resistance to immunotherapy.

Biopharmaceutical companies have successfully developed CPI

that block the receptor/ligand interaction to promote the adaptive immune response to the tumor.

Six CPI are currently approved,

pembrolizumab, nivolumab, atezolizumab, avelumab, durvalumab, and ipilimumab for a wide variety of solid tumors including melanoma,

lung, bladder, gastric cancers and others.

More CPI are in development and more tumor types will be added to the list of sensitive

tumors over the next years.

CPI have become the backbone of cancer therapy and are expected to be the best -selling class of drugs

NK cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of

the immune system responsible for innate immunity.

Unlike adaptive immune cells, they are ever present and ready to attack, having

the inherent ability to detect and eliminate diseased cells without the need for antigen presentation, which is why they are called

“natural killers.”

cells bind to stress ligands expressed by the diseased cells and directly eliminate them.

This binding induces NK cells to release

cytokines, including, interferons and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses

NK cells also represent a critical effector cell for ADCC, whereby target cells bound with human antibodies, whether

made by the patient’s body or administered, are selectively destroyed by the NK cells.

MDSC are present in very low quantities in healthy patients.

MDSC develop and proliferate in patients with chronic

infection and with cancer.

In cancer, MDSC are a unique and well-defined cell population that home to the cancer and secrete immunosuppressive

cytokines that provide a protective, immunosuppressive shield to the tumor.

This protective immunosuppressive shield prevents

the patient’s immune system from attacking the tumor.

The presence of MDSC in the tumor microenvironment and/or circulating

in the patient’s blood predict for more advanced disease, resistance to immunotherapy and a worse patient survival.

Innate Immune Dominant-Negative TNF product candidate

renamed XPro1595, which we license from Xencor, to INB03 when it is used for cancer related indications.

We will continue

to call the drug XPro1595 when used for treatment of neuropsychiatric diseases, including Alzheimer’s disease and TRD discussed

We call the drug Quellor and LIVNate respectively for treatment of pulmonary complications of COVID-19 and NASH respectively.

Quellor, LIVNate, INB03 and XPro1595 are the same drug with different names for marketing purposes.

INB03 is a novel innate immune

system check-point inhibitor that we believe decreases expression of MUC4 by the tumor, an important resistance mechanism to immunotherapy,

decreases proliferation of MDSC and decreases the secretion of immunosuppressive cytokines that protect the tumor from the patient’s

immunologic attack and help make the tumor resistant to immunotherapy.

INB03, by inhibiting soluble TNF without inhibiting trans-membrane

TNF or TNF receptors (“tmTNF”

and “TNFR”

respectively), decreases expression of MUC4, alters the immunoregulatory

cell and cytokine profile of the tumor microenvironment to decrease the population of MDSC, decrease immunosuppressive cytokines

and increase immunoregulatory cytokines that changes the patient’s immune response to their tumor with improved NK/DC crosstalk

that causes expansion of the immune response including recruitment of the adaptive immune system with an increase in effector

and cytotoxic T cells that attack the cancer allowing for decreased resistance to immunotherapy including immune checkpoint inhibitors

(CPR), anti-HER2 immunotherapy such as Herceptin and kinase inhibitors such as lapatinib.

By using INB03 as part of combination

therapy for cancer, we believe the patient’s dysregulated immune response, a hallmark of cancer progression and resistance

to therapy, to be converted to a coordinated immune response that can overcome resistance mechanisms to immunotherapy.

responses have been studied in two animal models.

In a murine model of an inflammatory cancer, where 3-methylcholanthrese is given

to mice in a subcutaneous injection that causes the development of multiple cutaneous fibrosarcoma.

This model was developed by

Y Akamatsu in 1967 while working at the National Cancer Institute of the NIH.

In research published by Professor Nikola Vujanovic

in Cancer Immunology Research in 2016, treatment with INB03 resulted in smaller and fewer cancers with increased

INB03 is an engineered PEGylated protein that neutralizes human soluble TNF, a human inflammatory cytokine that is increased

in patients with advanced cancer.

By specifically neutralizing the cytokine, there is decreased phosphorylation of STAT3, an essential

step required for the proliferation of the MDSC population, and secretion of the immunosuppressive cytokines.

The combination

of decreased MDSC proliferation and decreased immunosuppressive cytokines allows the immune system to respond to the tumor.

data was published in an article entitled Inhibition of Soluble Tumor Necrosis Factor Prevents Chemically Induced Carcinogenesis

in Mice in Cancer Immunology Research in Cancer Immunology Research 2016.

In summary, INB03 functions as an innate

immune system checkpoint inhibitor by eliminating the population of MDSC that provides an immunosuppressive shield protecting

the tumor, the patient’s immune system is able to function normally to the benefit of the patient –

it can attack

TNF plays an important role in breast cancer (Schillaci R, Front.

Oncol., 22 April 2020 | https://doi.org/10.3389/fonc.2020.00584 ).

In a murine model of trastuzumab resistant breast cancer using JMIT-1 cells, a human cell line of HER2 positive breast cancer

resistant to trastuzumab placed into immunocompromised mice, INB03 downregulates MUC4 from the surface of the JMIT-1 HER2+ breast

cancer cells to allow the trastuzumab resistant cells to become trastuzumab sensitive (Figure A from Bruni, NYAS 2020) to decrease

tumor growth (from Schillaci SABCS 2018, Figure B).

JMIT-1 cells are also resistant to lapatinib, a TKI inhibitor used as a second

line therapy in women with trastuzumab resistant HER2+ breast cancer.

The addition of INB03 to lapatinib in the animal model reverses

lapatinib resistance in part by decreasing expression of MUC4 (from Bruni NYAS 2020, Figure C).

In addition to decreasing resistance

to trastuzumab by decreasing MUC4 expression, INB03 decreases the immunosuppressive tumor microenvironment (Schillaci SABCS 2018,

Bruni NYAS 2020).

These data are relevant to all tumors that express HER2 and MUC4 including upper gastrointestinal malignancies

such as gastric and pancreatic cancer.

INB03 targets the patient’s immune system and not the tumor, we believe INB03 is an immunotherapy that can be used to treat

many types of hematologic malignancies and solid tumors as part of combination therapy.

The decision to use INB03 in a patient

will be based on biomarkers that should predict that a patient will benefit from treatment with the drug.

MDSC rarely exist in

patients without cancer or chronic inflammation.

Because MDSC can be measured in the tumor and/or blood of patients with immune

dysregulation and chronic inflammation caused by their cancer, MDSC blood levels i) have prognostic value predicting cancer stage

and risk of dying from cancer;

ii) may be used as a biomarker to target patients who will benefit from INB03 therapy and iii)

should be biomarkers demonstrating a pharmacodynamic effect of INB03.

Other biomarkers of inflammation may be useful in predicting

if a patient will benefit from therapy with INB03 such as Our Phase I clinical trial focused on using INB03 as monotherapy.

is a typical Phase I clinical trial design for first-in-man trials in cancer.

We expect to use INB03 as part of combination therapy

with approved cancer therapies as part of Phase II development.

We do not expect to need to modify INB03 therapy to treat each

different type of cancer, because INB03 therapy targets the immune system, not the cancer.

We do expect to develop the INB03 beyond

Phase II to target a specific type of cancer to meet the current system of regulatory approval.

For instance, INB03 may be approved

to treat patients with elevated MDSC who have lung cancer.

To get subsequent approval for the treatment of patients with renal

cell cancer who have increased MDSC, we will need to perform a pivotal trial in patients with renal cancer.

Likewise, if we want

to get approval of treatment of women with HER2 positive breast cancer who express MUC4, we will need to perform a trial in those

patients and the results of that trial may be independent of MDSC levels.

After the first regulatory approval, if and when achieved,

we believe the difficulty and cost of achieving these labels extensions will decline with each successive approval.

At this time,

we cannot predict if patients without biomarkers of inflammation, elevated MDSC or cytokines, or increased expression of MUC4

will benefit from treatment with INB03.

Those studies may be performed in the future, but they are not a priority.

neutralizes soluble TNF in the brain in exactly the same way INB03 neutralizes soluble TNF in the tumor microenvironment but the

effects of soluble TNF neutralization in the brain are different.

The cause of the destructive neuroinflammation in the brain

are microglial and astroglial cells.

The glial cell are two of four cells in the neural unit that also includes oligodentrocytes

and nerve cells.

Activated microglial cells are considered the resident macrophages of the brain.

The primary role of microglial

cells is to protect the neural unit from infection.

When innate immune dysfunction causes chronic inflammation, activated microglial

cells produce soluble TNF that activates astrocytes.

Activated glial cells cause nerve cell and oligodrocyte dysfunction that

results in synaptic pruning, nerve cell death and demyelination of neurons.

These pathologies contribute, in part, to neurodegenerative

diseases such as AD, Parkinson’s disease, ALS, MS, Huntington’s disease, glaucoma and TBI (traumatic brain injury)

may contribute to neuropsychiatric diseases such as depression, bi-polar disease, sleep disorders, autism, schizophrenia and PTSD.

In the setting of AD, microglial activation causes dendritic pruning, synaptic dysfunction and nerve cell death that contributes

to cognitive decline and the behavioral manifestations of AD including depression, aggressiveness, sleep disorders, hallucinations

and anhedonia.

When T cells bind the ligand

to these proteins on the tumor cells, the T cell is turned off and does not attempt to attack the tumor cell.

Thus, checkpoint inhibitors

(“CPI”) are part of the complex strategy used by the tumor to evade the patient’s immune system and are responsible

for resistance to immunotherapy.

Biopharmaceutical companies have successfully developed CPI that block the receptor/ligand interaction

to promote the adaptive immune response to the tumor.

Six CPI are currently approved, pembrolizumab, nivolumab, atezolizumab, avelumab,

durvalumab, and ipilimumab for a wide variety of solid tumors including melanoma, lung, bladder, gastric cancers and others.

are in development and more tumor types will be added to the list of sensitive tumors over the next years.

CPI have become the backbone

of cancer therapy and are expected to be the best -selling class of drugs by 2027.

cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of the immune system responsible

for innate immunity.

Unlike adaptive immune cells, they are ever present and ready to attack, having the inherent ability to detect and

eliminate diseased cells without the need for antigen presentation, which is why they are called “natural killers.”

NK cells bind to stress ligands

expressed by the diseased cells and directly eliminate them.

This binding induces NK cells to release cytokines, including, interferons

and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses by the host.

NK cells also represent a critical

effector cell for ADCC, whereby target cells bound with human antibodies, whether made by the patient’s body or administered, are

selectively destroyed by the NK cells.

Our Innate Immune Dominant-Negative

TNF product candidate

We renamed XPro, which

we license from Xencor, to INB03 when it is used for cancer related indications.

We will continue to call the drug XPro when

used for treatment of neuropsychiatric diseases, including Alzheimer’s disease and TRD discussed below.

INB03 and XPro are the

same drug with different names for marketing purposes.

INB03 is a novel innate immune system check-point inhibitor that we believe

decreases expression of MUC4 by the tumor, an important resistance mechanism to immunotherapy, decreases proliferation of MDSC,

promotes recruitment of cytotoxic T cells to the TME and may convert immunosuppressive tumor macrophages into tumor phagocytic

In murine models, these changes make the tumor reverse resistance to treatment with immunotherapy alone or in

combination with tyrosine kinase inhibitors (TKI) such a lapatinib.

MUC4 expression is increased by sTNF.

Resistance to trastuzumab

therapy by MUC4 expressing HER2+ breast and gastric cancer cells is driven by steric hinderance.

By neutralizing sTNF with INB03,

MUC4 expression decreases allow trastuzumab to bind HER2/neu.

The mechanism by which combination of INB03 with TKI improves efficacy

over TKI alone remains under investigation.

By using INB03 as part of combination therapy for cancer, we believe the patient’s

dysregulated immune response, a hallmark of cancer progression and resistance to therapy, to be converted to a coordinated immune

response that can overcome resistance mechanisms to immunotherapy.

These immune responses have been studied in at least two animal

In a murine model of an inflammatory cancer, where 3-methylcholanthrese is given to mice in a subcutaneous injection that

causes the development of multiple cutaneous fibrosarcoma.

This model was developed by Y Akamatsu in 1967 while working at the

National Cancer Institute of the NIH.

In research published by Professor Nikola Vujanovic in Cancer Immunology

Research in 2016, treatment with INB03 resulted in smaller and fewer cancers with increased survival.

INB03 is an engineered

PEGylated protein that neutralizes human soluble TNF, a human inflammatory cytokine that is increased in patients with advanced

By specifically neutralizing the cytokine, there is decreased phosphorylation of STAT3, an essential step required for the

proliferation of the MDSC population, and secretion of the immunosuppressive cytokines.

The combination of decreased MDSC

proliferation and decreased immunosuppressive cytokines allows the immune system to respond to the tumor.

This data was published in

an article entitled Inhibition of Soluble Tumor Necrosis Factor Prevents Chemically Induced Carcinogenesis in Mice in Cancer

Immunology Research in Cancer Immunology Research 2016.

In summary, INB03 functions as an innate immune system

checkpoint inhibitor by eliminating the population of MDSC that provides an immunosuppressive shield protecting the tumor, the

patient’s immune system is able to function normally to the benefit of the patient – it can attack the tumor.

an important role in breast cancer (Schillaci R, Front.

Oncol., 22 April 2020

| https://doi.org/10.3389/fonc.2020.00584 ).

In a murine model of trastuzumab resistant breast cancer using JMIT-1 cells,

a human cell line of HER2 positive breast cancer resistant to trastuzumab placed into immunocompromised mice, INB03 downregulates

MUC4 from the surface of the JMIT-1 HER2+ breast cancer cells to allow the trastuzumab resistant cells to become trastuzumab

sensitive (Figure A from Bruni, NYAS 2020) to decrease tumor growth (from Schillaci SABCS 2018, Figure B).

JMIT-1 cells are also

resistant to lapatinib, a TKI inhibitor used as a second line therapy in women with trastuzumab resistant HER2+ breast cancer.

addition of INB03 to lapatinib in the animal model reverses lapatinib resistance in part by decreasing expression of MUC4 (from

Bruni NYAS 2020, Figure C).

In addition to decreasing resistance to trastuzumab by decreasing MUC4 expression, INB03 decreases the

immunosuppressive tumor microenvironment (Schillaci SABCS 2018, Bruni NYAS 2020).

Recently, Dr.

Schillaci reported the MUC4

expressing triple negative breast (TNBC) cancer patients have a worse overall survival.

(Schillaci SABCS 2021).

These data may be

relevant to all tumors that express HER2 or MUC4 including upper gastrointestinal malignancies such as gastric and pancreatic

We believe MUC4 expression is a biomarker of resistance that may dictate changes therapeutic strategy by clinical teams

Because INB03 targets the

patient’s immune system and not the tumor, we believe INB03 is an immunotherapy that can be used to treat many types of hematologic

malignancies and solid tumors as part of combination therapy.

The decision to use INB03 in a patient will be based on biomarkers that

should predict that a patient will benefit from treatment with the drug.

We believe the ideal biomarker is easy to use and is determined

before treatment begins.

MUC4 expression by epithelial tumors is an example of this type of biomarker.

Our Phase I clinical trial preceded

the identification of MUC4 as a biomarker and focused on using INB03 as monotherapy.

This is a typical Phase I clinical trial design for

first-in-man trials in cancer.

We expect to use INB03 as part of combination therapy with approved cancer therapies as part of Phase II

We do not expect to need to modify INB03 therapy to treat each different type of cancer, because INB03 therapy targets the

immune system, not the cancer.

We do expect to develop the INB03 beyond Phase II to target a specific type of cancer to meet the current

system of regulatory approval.

For instance, INB03 may be approved to treat patients with HER2+/MUC4+ breast cancer.

To get subsequent

approval for the treatment of patients with MUC4+ TNBC or MUC4+ pancreatic cancer, we will need to perform a pivotal trial in patients

with TNBC and pancreatic cancer respectively.

After the first regulatory approval, if and when achieved, we believe the difficulty and

cost of achieving these labels extensions will decline with each successive approval.

At this time, we cannot predict if patients without

biomarkers of inflammation, elevated MDSC or cytokines, or increased expression of MUC4 will benefit from treatment with INB03.

studies may be performed in the future, but they are not a priority.

XPro neutralizes soluble

TNF in the brain in exactly the same way INB03 neutralizes soluble TNF in the tumor microenvironment but the effects of soluble TNF neutralization

in the brain are different.

The cause of the destructive neuroinflammation in the brain are microglial and astroglial cells.

cell are two of four cells in the neural unit that also includes oligodentrocytes and nerve cells.

Activated microglial cells are considered

the resident macrophages of the brain.

The primary role of microglial cells is to protect the neural unit from infection.

immune dysfunction causes chronic inflammation, activated microglial cells produce soluble TNF that activates astrocytes.

Activated glial

cells cause nerve cell and oligodrocyte dysfunction that results in synaptic pruning, nerve cell death and demyelination of neurons.

pathologies contribute, in part, to neurodegenerative diseases such as AD, Parkinson’s disease, ALS, MS, Huntington’s disease,

glaucoma and TBI (traumatic brain injury) may contribute to neuropsychiatric diseases such as depression, bi-polar disease, sleep disorders,

autism, schizophrenia and PTSD.

In the setting of AD, microglial activation causes dendritic pruning, synaptic dysfunction and nerve cell

death that contributes to cognitive decline and the behavioral manifestations of AD including depression, aggressiveness, sleep disorders,

hallucinations and anhedonia.

Elimination of microglial activation should reverse these symptoms.

Because soluble TNF is the apex cytokine in

the inflammatory cytokine cascade, neutralization of soluble TNF with XPro1595 should prevent glial activation and normalizes

function of the neural unit.

Company has an on-going Phase I trial using XPro1595 to reverse neuroinflammation in patients with Alzheimer’s disease.

The trial is being performed in Australia and is partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s

The clinical trial is the first in the Company’s development program for the treatment of dementia.

label, dose escalation trial in patients with Alzheimer’s disease with biomarkers of peripheral inflammation (one of CRP>1.5mg/L,

HgbA1c>6.0, ESR>10sec or have ApoE4) treats the patients with XPro1595 as a once-a-week subcutaneous injection for 3 months.

Patients have multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in blood

and cerebral spinal fluid, volatile biomarkers in breath, behavioral biomarkers (neuropsychiatric symptoms of AD) and neuroimaging

biomarkers using MRI.

The primary goal of this short, open label study is to demonstrate that treatment with XPro1595 decreases

neuroinflammation safely and to define the dose of XPro1595 to use in the Phase II trial.

Studies of cognitive function are performed

on the patients but are not expected to show significant change because of the short duration of the trial and the wide range

of disability in patients enrolled in the clinical trial (MMSE range:

The goal of the planned Phase II trial will be to

demonstrate the prolonged control of neuroinflammation in patients with dementia will help control cognitive decline.

the trial has not been designed, we expect the trial be of a longer duration than the Phase I trial.

trial continues to enroll patients.

More than half of the expected 18 patients have been enrolled.

Preliminary data was presented

in a webinar on 13 July 2020.

Because soluble TNF is the apex cytokine

in the inflammatory cytokine cascade, neutralization of soluble TNF with XPro should prevent glial activation and normalizes function

of the neural unit.

The Company has completed a Phase I trial using XPro to reverse neuroinflammation

in patients with Alzheimer’s disease.

The trial was performed in Australia and is partially funded by a $1M USD Part-the-Cloud Award

from the Alzheimer’s Association.

The clinical trial is the first in the Company’s development program for the treatment of

The open label, dose escalation trial in patients with Alzheimer’s disease with biomarkers of peripheral inflammation

(one of CRP>1.5mg/L, HgbA1c>6.0, ESR>10sec or have ApoE4) treats the patients with XPro as a once-a-week subcutaneous injection

for 3 months.

Patients have multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in

blood and cerebral spinal fluid, behavioral biomarkers (neuropsychiatric symptoms of AD) and neuroimaging biomarkers using MRI.

goal of this short, open label study is to demonstrate that treatment with XPro decreases neuroinflammation safely and to define the dose

of XPro to use in the Phase II trial.

Studies of cognitive function are performed on the patients but are not expected to show significant

change because of the short duration of the trial and the wide range of disability in patients enrolled in the clinical trial (MMSE range:

The goal of the planned Phase II trial will be to demonstrate the prolonged control of neuroinflammation in patients with dementia

will help control cognitive decline.

The Company plans two Phase II trials, one each in mild cognitive impairment (MCI) and mild AD.

trial enrolled 18 patients at doses of 0.3, 0.6 and 1.0mg/kg given once a week as subcutaneous injection for three months.

the 10mg/kg group were offered extended us of the drug for up to 12 months.

Three patients remained on XPro for 12 months.

data was presented in a webinar on 13 July 2020.

Neuroimaging data from six patients were presented in the figure below.

In summary, treatment with

XPro1595 at either 0.3 or 1.0mg/kg once-a-week as a subcutaneous injection (low and high dose respectively) decreased white matter

free water (WMFW) as measured by MRI.

treatment with XPro at either 0.3 or 1.0mg/kg once-a-week as a subcutaneous injection (low and target dose respectively) decreased white

matter free water (WMFW) as measured by MRI.

WMFW is a validated biomarker of neuroinflammation.

Although the number of patients is low,

there was a dose response with a greater decrease in WMFW in the high dose compared to the low dose group.

there was a dose response with a greater decrease in WMFW in the target dose compared to the low dose group.

An analysis of inflammation

in white matter tracts demonstrated a significant decrease in WMFW (40%;

range 20-52%) in the arcute fasciculus, a white matter

tract important in the control of language and short-term memory (Figure D).

These data suggest XPro1595 is decreasing neuroinflammation

in patients with Alzheimer’s disease who have biomarkers of peripheral inflammation.

data was presented on January 21, 2021.

The goal of the January 21 data release was to show a correlation between the white matter

free water, a novel biomarker of inflammation with cerebral spinal fluid (“CSF”) cytokines and chemokine levels, a

traditional measure neuroinflammation.

CSF cytokine/chemokines were measure in 9 patients before and after 12 weeks of weekly

therapy with XPro1595 using a panel from OLINK Target 48 Cytokine ( https://www.olink.com/products/olink-target-48-cytokine/ ),

range 20-52%) in the arcute fasciculus, a white matter tract

important in the control of language and short-term memory (Figure D).

These data suggest XPro is decreasing neuroinflammation in patients

with Alzheimer’s disease who have biomarkers of peripheral inflammation.

Additional data was presented on January 21, 2021.

The goal of the

January 21 data release was to show a correlation between the white matter free water, a novel biomarker of inflammation with cerebral

spinal fluid (“CSF”) cytokines and chemokine levels, a traditional measure neuroinflammation.

CSF cytokine/chemokines were

measure in 9 patients before and after 12 weeks of weekly therapy with XPro using a panel from OLINK Target 48 Cytokine ( https://www.olink.com/products/olink-target-48-cytokine/ ),

that measures 45 (Figure AD1).

the 6 patients in the 1mg/kg per week dose, only one cytokine and chemokine, interferon gamma (INFg) did not change in the CSF

of patients, the remainder all decreased on average of 15%.

Using data from all patients treated for 12 weeks (3 low dose, 6 high

dose), a high correlation (R 2 =.7561) between the white matter free water safe mase and the inflammation composite score

is shown in figure AD2.

The data analyzed provides evidence that XPro1595 decreases neuroinflammation in patients with Alzheimer’s

We believe these data

support the use of XPro1595 to treat other diseases where neuroinflammation is a part of the pathophysiology of the disease.

company studied the consequences of decreasing neuroinflammation in the 6 patients from high dose group (XPro1595 1mg/kg for 12

weeks) be looking at the CSF proteome using technology for Proteome Sciences using their TMT Calibrator™

platform ( https://www.proteomics.com/services/tmtcalibrator-workflow ).

A large data set of proteins were identified.

Early analysis of the data focusing on 26 AD related proteins demonstrated changes

in inflammation, neuronal and synaptic proteins caused by decreasing neuroinflammation after treatment with XPro1595 (Figure AD3).

The proteome also demonstrated a clear dose response with a greater number of proteins being affected by the high dose compared

to low dose XPro1595 therapy (0.3 vs 1.0 mg/kg/week for 12 weeks) (Figure AD4).

In the 6 patients in the 1mg/kg per week dose, only one cytokine and

chemokine, interferon gamma (INFg) did not change in the CSF of patients, the remainder all decreased on average of 15%.

Using data from

all patients treated for 12 weeks (3 low dose, 6 target dose), a high correlation (R 2 =.7561) between the white matter free

water safe mask and the inflammation composite score is shown in figure AD2.

The data analyzed provides evidence that XPro decreases neuroinflammation

in patients with Alzheimer’s disease.

We believe these data support the use of XPro to treat other diseases

where neuroinflammation is a part of the pathophysiology of the disease.

The company studied the consequences of decreasing neuroinflammation

in the 6 patients from target dose group (XPro 1mg/kg for 12 weeks) be looking at the CSF proteome using technology for Proteome Sciences

using their TMT Calibrator™ platform ( https://www.proteomics.com/services/tmtcalibrator-workflow ).

A large data set of proteins

were identified.

Early analysis of the data focusing on 26 AD related proteins demonstrated changes in inflammation, neuronal and synaptic

proteins caused by decreasing neuroinflammation after treatment with XPro (Figure AD3).

The proteome also demonstrated a clear dose response

with a greater number of proteins being affected by the target dose compared to low dose XPro therapy (0.3 vs 1.0 mg/kg/week for 12 weeks)

(Figure AD4).

The CSF proteome data is only partially analyzed.

Additional data may result from these ongoing analytics.

In summary, these data allow the Company to commit to initiating a blinded

randomized Phase II trial in Alzheimer’s disease patients with peripheral biomarkers of inflammation in the second half of

The design of the trial has not been finalized nor has the Company had discussions with the FDA.

Hence the precise start

date depends on gaining regulatory approval for trial initiation by the FDA and resolution of the COVID19 pandemic.

infection causes a cytokine storm in many patients.

The cytokine storm includes elevated levels of TNF, IL6, IL1 and other pro-inflammatory

cytokines in the patient’s blood.

The cytokine storm correlates with symptoms of COVID19 of one or more organ systems -

neurologic, gastrointestinal, pulmonary, cardiovascular and renal.

In 20% of patients, the cytokine storm causes severe enough

symptoms to require hospitalization.

Targeting soluble TNF may have benefit in hospitalized patients with cytokine storm for two

TNF may be the “master cytokine”.

Up-regulation of TNF is required for expression of IL6 and IL1, the two

other prominent cytokines of the cytokine storm.

TNF activates endothelial cells to upregulate Tissue Factor that cause the formation

of blood clots.

Aberant blood clots contribute to the pathology in patients with COVID-19 infection.

Company initiated a blinded randomized trial using Quellor to treat hospitalized patients with respiratory symptoms due to a COVID-19

The 366-patient trial is being perform under an FDA IND#151,834 in multiple centers in the US.

The trial includes a

Go/NoGo decision by the Data Safety Monitoring Board (“DSMB”) after the first 100 patients.

No data will be released

by the DSMB other than the trial should continue or be closed.

The trial enrolls patients admitted to the hospital who are considered

high risk for developing the need for mechanical respiratory support.

Patients are randomized to receive a single dose of Quellor,

1mg/kg as a subcutaneous injection or placebo.

If patients remain in the hospital for one week, they may get a second dose of

the investigational product.

The primary end-point is the need for mechanical ventilation or death by 28 days.

The final safety

visit is at or about day 40.

Quellor is identical to XPro1595, INB03 and LIVNate.

The trial is listed on www.clinicaltrials.gov .

therapy for TRD is a large unmet need.

Twenty percent of patients with a Major Depressive Disorder have TRD.

Once third of TRD

patients have peripheral biomarkers to inflammation (elevated CRP).

This is a large patient population.

The role of TNF and anti-TNF

therapeutics was explored in a small open label clinical trial by Prof.

Andrew Miller, MD of Emory University demonstrated the

patients have elevated TNF levels and treatment with infliximab treated their depression (Miller, 2011).

The Company received

a $2.9M USD award from the National Institute of Mental Health (“NIMH”) to treat TRD with XPro1595.

The blinded, randomized

Phase II trial will use a biomarkers of peripheral inflammation to select patients with TRD for enrollment.

The results of the Phase I study demonstrates that XPro safely decreases

neuroinflammation in patients with AD who have biomarkers of peripheral inflammation or are ApoE4 positive when given for at least 3 months

at the 1mg/kg once a week dose.

Decreasing neuroinflammation with XPro appears to decrease neurodegeneration and improve synaptic function

and promote remyelination.

The biologic characteristics suggests XPro therapy in patients with peripheral biomarkers of inflammation or

ApoE4 allele(s) may impact cognitive decline.

Although there were anecdotes of improved cognitive function in patients receiving the target

dose of XPro, this cannot be verified because the trial was not a blinded, randomized trial.

The impact on cognition of controlling neuroinflammation

with XPro will be studied in the Phase II programs.

The Company plans two Phase

II trials in patients with AD with biomarkers of inflammation.

A blinded randomized trial in patients with mild AD plans to enroll 201

patients in a 2:1 ratio (XPro:placebo) at 1mg/kg once a week.

Patients will be treated for 6 months.

A patient enrichment strategy will

be used to ensure patients have neuroinflammation – patients must have at least two of elevated CRP, hemoglobinA1c, ESR or have

an ApoE4 allele.

The primary end-point is Early/Mild Alzheimer’s Cognitive Composite (EMACC), a sensitive cognitive end-point validated

for use in patients with early AD.

Secondary cognitive (ADAS-Cog13, CDR-SB and NPI) and functional (GAS, ADCS-ADL) end-points will be

Biomarkers of inflammation using white and gray matter analytics measured by MRI DTI similar to those used in the Phase I trial

will also be used.

All patients will be eligible to continue on XPro for at least 6 additional months.

Clinical and MRI metrics will be

followed during the extension trial.

The second Phase II trial will be a blinded randomized trial in patients

with MCI in which the Company plans to enroll 60 patients in two arms in a 2:1 ratio (1mg/kg/week XPro, placebo).

Patients will be treated

Primary end-points include both clinical and neuroimaging measures.

The final trial design is ongoing and discussions

with the FDA are not complete.

The Company anticipates receiving authorization to initiate the clinical trial in the second half

neutralizes soluble TNF in the treatment of NASH the same way that INB03 and XPro1595 neutralize soluble TNF for the treatment

of cancer and neurodegenerative diseases respectively.

NASH is a complex disease with inflammatory, metabolic and fibrotic components

that contribute to disease progression.

The effects of LIVNate on NASH are diverse.

Based on murine data, we believe there are

3 major pathologic cycles that contribute to NASH.

The peripheral pathologic cycle is metabolic with obesity and insulin resistance

contributing to the inflammatory and metabolic process that drives NASH.

The regional pathologic cycle includes intestinal inflammation

with resulting leaky gut that drives the development mesenteric fat.

All three elements contribute to a highly inflammatory mileau

delivered directly to the liver via the portal vein.

The local pathologic loop includes lipotoxicity and innate immune dysfunction

caused by activated hepatic stellate cell, natural killer cells and hepatocytes.

These pathologic cycles cause hepatocyte death,

inflammation and fibrosis –

the pathologic hallmarks of NASH.

In murine models of NASH, LIVNate has effects on each pathologic

cycle decreasing insulin resistance, intestinal inflammation and leak, hepatic inflammation, hepatocyte death and fibrosis.

results must be confirmed in humans.

XPro1595, Quellor and LIVNate, are delivered as a subcutaneous injection, similar to an insulin treatment, given one to three

times per week.

Because this is a simple subcutaneous injection similar to an insulin injection (the therapy patients give themselves

for treatment of Type 1 diabetes mellitus), we expect patients to administer the therapy to themselves and not require expensive

or logistically challenging clinic visits to receive the therapy.

step process to preparation for INB03, XPro1595, Quellor and LIVNate for human clinical trials:

of INB03, XPro1595, Quellor and LIVNate drug supply

DN-TNF product (INB03, XPro1595, Quellor and LIVNate) are available for clinical development after completion of release testing.

The annual process for release testing was completed in February 2018, January 2019, December 2019 and November 2020.

of DN-TNF product is limited, but enough to complete the planned Phase I study in Alzheimer’s disease and Phase II studies

in hospitalized patients with COVID-19.

The re-release dossier has been submitted to the regulatory authorities in Australia and

the US (the FDA).

We received notification on May 2018 that the INB03 can be used for oncology clinical trials and in May 2019

that XPro1595 can be used in Alzheimer’s disease clinical trials in AUS and in August 2020 that Quellor can be used for

the COVID-19 clinical trial in the US.

For future trials, new batches of INB03, XPro1595, Quellor and LIVNate will need to be

We plan to use a two-step approach to production of the new drug supply.

We hope to improve the yield of the drug product

using the existing E.coli based system.

Once the new process is validated and functional, we will perform a manufacturing

campaign drug for future clinical trials.

This process has started at our manufacturing vendor KBI.

The company expects the first

batches of new drug to be available 4Q21 assuming that manufacturing materials remain available and are not consumed by COVID-19

vaccine manufacturers.

We expect the existing drug supply to support clinical development program until mid-2021.

New drug supply

may not be available before the existing drug supply has been exhausted.

with Regulatory Authorities Regarding INB03, XPro1595 and LIVNate Development

We have completed a

Phase I trial with INB03 in oncology.

We are enrolling patients in a Phase I trial with XPro1595 in patients with Alzheimer’s

disease and a Phase II trial with Quellor to treat hospitalized patients with respiratory complications from COVID-19.

II program with Alzheimer’s disease will start after completion of the on-going Phase I program.

The Phase I trial with XPro1595

in patients with Alzheimer’s disease is performed in Australia under the regulatory authority of the TGA using the Clinical

Trials Exemption (“CTX”) scheme.

Our first interaction with the regulatory body occurred in March 2018.

received approval to initiate the Phase I trial with INB03 in patients with advanced solid tumors on May 21, 2018.

interaction with the regulatory body occurred in March 2019.

for 3 months.

Patients must have at least one ApoE4 allele to qualify for the trial.

The primary end-point is EMACC, a sensitive cognitive

end-point validated for use in patients with early AD.

Secondary clinical endpoints include the CDR-SB, Cogstate Battery, E-Cog, NPI,

and ADCS-ADL.

Imaging endpoints of neuroinflammation (White matter free water), white matter integrity (apparent fiber density, radial

diffusivity), and gray matter quality (cortical disarray measurement) will be assessed via MRI.

Changes in brain metabolism will be assessed

Additional secondary measures of function include EEG, and speech and language.

All patients will be eligible to continue

on XPro for at least 9 additional months.

Clinical and MRI metrics will be followed during the extension trial.

The Company may

amend the clinical trial design from time-to-time to improve the quality of the data or the probability of success.

Effective therapy for TRD is a large unmet need.

Twenty percent of

patients with a Major Depressive Disorder have TRD.

Once third of TRD patients have peripheral biomarkers to inflammation (elevated CRP).

This is a large patient population.

The role of TNF and anti-TNF therapeutics was explored in a small open label clinical trial by Prof.

Andrew Miller, MD of Emory University whereby it was demonstrated that patients which have elevated TNF levels responded to treatment

with infliximab (Miller, 2011).

The Company received a $2.9M

USD award from the National Institute of Mental Health (“NIMH”) to treat TRD with XPro.

The blinded, randomized Phase II trial

will use a biomarkers of peripheral inflammation to select patients with TRD for enrollment.

Patients will be treated for 6 weeks.

end-points include both clinical and neuroimaging measures.

The final trial design is ongoing and discussions with the FDA are not complete.

The Company anticipates receiving authorization to initiate the clinical trial in the second half of 2022.

INB03 and XPro are delivered

as a subcutaneous injection, similar to an insulin treatment, given one to three times per week.

Because this is a simple subcutaneous

injection similar to an insulin injection (the therapy patients give themselves for treatment of Type 1 diabetes mellitus), we expect

patients to administer the therapy to themselves and not require expensive or logistically challenging clinic visits to receive the therapy.

Three step process to preparation

for INB03 and XPro for human clinical trials:

Release of INB03 and XPro drug supply

GMP DN-TNF product (INB03 and XPro) are available for clinical development

after completion of release testing.

The annual process for release testing was completed in February 2018, January 2019, December 2019

and November 2020.

The supply of DN-TNF product is limited, but allowed completion of the Phase I study in Alzheimer’s disease and

support of patients in the extension study.

For future trials, new batches of XPro have been produced.

The Company engaged KBI Biopharma

to manufacture 6 lots of XPro/INB03 at the Boulder, Colorado facility using the original master cell bank and updated manufacturing process.

Two lots have been converted into drug product using the US fill/finish facility of Vetter Pharma.

Two of the lots are frozen as drug

substance at -80C with a plan to convert to drug product the second half of 2023.

The final two lots are frozen as a cell paste with a

plan to process to drug substance in during 2023 or 2024 as needed to support the clinical trials.

We plan to use a two-step approach

to improve the yield of the drug substance from the fermentation process.

We hope to improve the yield of the drug product using the existing E.coli

based system.

Once the new process is validated and functional, we will perform a manufacturing campaign drug for future clinical trials.

In the future, the Company may consider a strain change to improve yield of the fermentation step further.

The decision for strain improvements

and strain change will be made in the future as clinical development programs proceed.

Interaction with Regulatory Authorities Regarding

INB03 and XPro Development

We have completed a Phase I trial with INB03 in oncology and a Phase

I trial with XPro in patients with Alzheimer’s disease.

The Phase II program with Alzheimer’s disease will start first half

The Phase I trial with XPro in patients with Alzheimer’s disease is performed in Australia under the regulatory authority

of the TGA using the Clinical Trials Exemption (“CTX”) scheme.

Our first interaction with the regulatory body occurred in

The Company received approval to initiate the Phase I trial with INB03 in patients with advanced solid tumors on May 21, 2018.

second interaction with the regulatory body occurred in March 2019.

The Company received approval to initiate the Phase I trial with

XPro1595 in patients with Alzheimer’s disease in May 2019.

Our first interaction with the FDA occurred in July 2020.

We received authorization to begin enrolling patients in the COVID19 trial late August 2020.

We plan to discuss the Phase II Alzheimer’s

disease and Phase II TRD clinical trials with the FDA during the first half of 2021.

Product Development Path:

Proposed Phase II Studies in patients with cancer

I open label study in patients with advance solid tumors has been completed.

All future studies cancer will use INB03 as part

of combination therapy.

Based on the results of the Phase I study and work performed and reported by Prof.

Roxana Schillaci, we

are planning a study of INB03 in combination with currently approved second line therapy for treatment of tumors that express

This may include a study in women with trastuzumab resistant HER2+ metastatic breast cancer where primary or secondary resistance

to trastuzumab is common and may include women with brain metastasis.

Alternatively, a combination therapy trial in MUC4 expressing

tumors of the upper gastrointestinal tract such as gastric or pancreatic cancer may be performed.

These trials will not be initiated

until the COVID-19 pandemic has run its course.

We do not expect to treat patients in a Phase II trial with INB03 before 2022.

Registration Studies and/or Partnering

plan to pursue an efficient registration strategy using INB03 to improve the lives of patients with cancer and biomarkers of inflammation.

We believe that this strategy has use across many types of solid tumors including patients who have failed CPI, tyrosine kinase

inhibitors (“TKI”) and anti-cancer antibody therapy We have an active partnering position as it relates to INB03 development

in cancer, although no partnering discussion are underway at this time.

We do not expect partnering discussions to begin until

Phase II data demonstrating efficacy of INB03 as part of combination therapy for cancer are available.

INB03 platform can be used in cancer patients in many ways.

The Phase I trial suggests the drug should not be used alone to treat

cancer but used in combination with, but not limited to, other cancer therapies including cytotoxic chemotherapy, immunotherapy,

radiation and surgery.

We believe that INB03 can also be used to treat many types of hematologic and epithelial cancers.

XPro1595, Quellor and LIVNate Regulatory Strategy

from the DN-TNF platform will be developed using adequately powered, well designed studies with the goal to demonstrate a meaningful

clinical benefit to patients.

In general, these will be blinded, randomized clinical trials using validated end-points that have

been authorized by a regulatory authority –

the FDA, TGA, MHRA, EMA, etc.

Currently, all planned studies will be performed

in North America, AUS and/or the UK.

Studies will be expanded to Europe and beyond as resources permit and development needs expand.

Because there are no therapies similar to INB03, XPro1595, Quellor or LIVNate approved in any market and no therapies approved

for the treatment of the diseases we are pursuing, we plan to take advantage of the regulatory opportunities afforded to therapies

that treat markets with a high unmet need.

In the U.S., this includes Orphan Drug Designation and expedited programs for approval

including Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation, and priority review (see “Government

Regulation”), and in the setting of COVID-19, Emergency Use Authorization.

We cannot predict which, if any, of these programs

we will benefit from without further discussions with the FDA.

XPro in patients with Alzheimer’s disease in May 2019 and received authorization to start the Phase II trial in patients with mild

AD on January 5, 2022.

Our first interaction with the FDA occurred in July 2020 as part of the Phase II Quellor program to treat respiratory

failure in patients hospitalized with COVID19 infection.

We plan to complete the regulatory process for the Phase II clinical trials in

patients with Alzheimer’s disease and Phase II TRD clinical trials with the FDA during the first half of 2022.

INB03 Product Development Path:

Proposed Phase

II Studies in patients with cancer

Phase I open label study in

patients with advance solid tumors has been completed.

All future studies cancer will use INB03 as part of combination therapy.

on the results of the Phase I study and work performed and reported by Prof.

Roxana Schillaci, we are planning a study of INB03 in combination

with currently approved second line therapy for treatment of tumors that express MUC4.

This may include a study in women with trastuzumab

resistant HER2+ metastatic breast cancer where primary or secondary resistance to trastuzumab is common and may include women with brain

Alternatively, the Phase II trial may include women with MUC4+ TNBC or patients with MUC4+/HER2+ gastric cancer or MUC4+ pancreatic

These trials will not be initiated until the COVID-19 pandemic has run its course.

We do not expect to treat patients in an oncology

INB03 Phase II trial with INB03 before 2023.

Pre-clinical studies of INB03 in MUC4 expressing tumors continue.

INB03 Registration Studies and/or Partnering

We plan to pursue an efficient

registration strategy using INB03 to improve the lives of patients with cancer and biomarkers of inflammation such as MUC4.

that this strategy has use across many types of solid tumors including patients who have failed CPI, tyrosine kinase inhibitors (“TKI”)

and anti-cancer antibody therapy such as trastuzumab monoclonal antibodies and trastuzumab based antibody drug conjugates.

active partnering position as it relates to INB03 development in cancer, although no partnering discussion are underway at this time.

We do not expect partnering discussions to begin until Phase II data demonstrating efficacy of INB03 as part of combination therapy for

cancer are available.

Our INB03 platform can be

used in cancer patients in many ways.

The Phase I trial suggests the drug should not be used alone to treat cancer but used in combination

with, but not limited to, other cancer therapies including cytotoxic chemotherapy, immunotherapy, radiation and surgery.

We believe that

INB03 can also be used to treat many types of hematologic and epithelial cancers.

INB03 and XPro Regulatory Strategy

Drugs from the DN-TNF platform will be developed using adequately powered,

well designed studies with the goal to demonstrate a meaningful clinical benefit to patients.

Beyond Phase I, these will be blinded, randomized

clinical trials using validated end-points that have been authorized by a regulatory authority – the FDA, TGA, MHRA, EMA, etc.

all planned studies will be performed in North America, AUS and/or the UK.

Studies will be expanded to Europe and beyond as resources

permit and development needs expand.

Because there are no therapies similar to INB03 or XPro approved in any market and no therapies approved

for the treatment of the diseases we are pursuing, we plan to take advantage of the regulatory opportunities afforded to therapies that

treat markets with a high unmet need.

In the U.S., this includes Orphan Drug Designation and expedited programs for approval including

Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation, and priority review (see “Government Regulation”),

and in the setting of COVID-19, Emergency Use Authorization.

We cannot predict which, if any, of these programs we will benefit from without

further discussions with the FDA.

Similar programs exist in the EU with the EMA.

We will engage the

EMA once we have initiated Phase II trials in the United States and Australia.

Immunotherapy

for Treatment of Alzheimer’s Disease

is being developed for the treatment of Alzheimer’s disease.

XPro1595 is identical to INB03, Quellor and LIVNate in every

way but name.

The name XPro1595 will be used as the drug name in the Alzheimer’s disease development program.

activation and neuroinflammation are important causes of the synaptic dysfunction and nerve cell death that causes cognitive decline

in patient with dementia and Alzheimer’s disease.

The relationship between β

amyloid plaques and tau neurofibrillary

tangles, the traditional targets in AD drug development and neuroinflammation is complex.

We believe targeting plaques and tangles

is not an effective treatment strategy, but that targeting neuroinflammation, the final common pathway of synaptic dysfunction

and nerve cell death is.

Substantial direct pre-clinical data supports the use of XPro1595 in murine models of AD.

indirect data supports use of XPro1595 in humans including a decreased risk of AD in patients treated with non-selective TNF inhibitors

for rheumatoid arthritis and treatment using direct injection into paraspinous venous plexus.

Because of different mechanism of

action of XPro1595 compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression and demyelinating

diseases such as MS.

The Company reported preliminary data on July 13, 2020 and January 21, 2021 supporting the use of XPro1595

to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral inflammation (see above)

continue to enroll patients into an open label, biomarker directed, Phase I clinical trial in AUS that approaches AD as an immunologic

Patients with dementia who have the diagnosis of AD with biomarkers of chronic inflammation that includes at least one

of a hs-CRP>1.5 mg/L, a ESR>10 mm/h, a HbgA1C>6.0% or are ApoE4 positive will be treated with XPro1595 for 12 weeks.

Three dosing cohorts were planned –

We will engage the EMA once we have initiated Phase II

trials in the United States and Australia.

Immunotherapy for Treatment of Alzheimer’s Disease

XPro is being developed for

the treatment of Alzheimer’s disease.

Microglial activation and neuroinflammation are important causes of the synaptic dysfunction

and nerve cell death that causes cognitive decline in patient with dementia and Alzheimer’s disease.

The relationship between β

amyloid plaques and tau neurofibrillary tangles, the traditional targets in AD drug development and neuroinflammation is complex.

targeting plaques and tangles is not an effective treatment strategy, but that targeting neuroinflammation, the common pathway leading

to synaptic dysfunction and nerve cell death, may be an effective treatment strategy.

Substantial pre-clinical data supports the use of

XPro in murine models of AD.

Substantial indirect data supports use of XPro in humans including a decreased risk of AD in patients treated

with non-selective TNF inhibitors for rheumatoid arthritis and treatment using direct injection into paraspinous venous plexus.

of different mechanism of action of XPro compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression and

demyelinating complications such as multiple sclerosis (MS).

The Company reported preliminary data on July 13, 2020 and January 21, 2021

supporting the use of XPro to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral inflammation

We completed enrollment of

patients into an open label, biomarker directed, Phase I clinical trial in AUS that approaches AD as an immunologic disease.

with dementia with the diagnosis of AD with biomarkers of chronic inflammation that includes at least one of a hs-CRP>1.5 mg/L, a ESR>10

mm/h, a HbgA1C>6.0% or are ApoE4 positive will be treated with XPro for 12 weeks.

Three dosing cohorts were preformed – 0.3,

0.6 and 1.0 mg per week as a subcutaneous injection.

Patients will have 5 groups

of inflammatory biomarkers test before therapy, at 6 weeks and at 12 weeks.

Biomarkers will be tested in blood and cerebral spinal

fluid, white matter free water will be determined by MRI and a “breath test”

measuring exhaled volatile organ compounds

will be used to determine a signature of inflammation in AD patients.

Finally, behavioral biomarkers of fatigue, depression aggression,

anhedonia and sleep disorders, behaviors that are very sensitive to neuroinflammation, will be cataloged using validated scales

to determine if these behaviors improve as neuroinflammation is brought under control.

The first patient was enrolled in the low

dose 0.3mg/kg/week cohort in the last week of November 2019.

Patients had multiple inflammatory biomarkers test before therapy, at 6 weeks and

Biomarkers were reported in blood and cerebral spinal fluid, MRI measures of white matter tract neuroinflammation, axonal

quality and axon myelin, and MRI measures of gray matter quality after XPro therapy.

Cognitive end-points were not the focus of the Phase

1 clinical trial because of the wide range of disease severity enrolled and lack of a placebo group.

Patients enrolled in the Phase I

trial had MMSE ranging from 24 to 12.

This wide range of disease severity at the time of enrollment and the lack of a blinded concurrent

control group did not allow for determination of cognitive benefit beyond several anecdotal reports.

The first patient was enrolled in

the low dose 0.3mg/kg/week cohort in the last week of November 2019.

The Safety Review Committee met by teleconference on January 7, 2020

to review the course of the patients in the first cohort and voted to open the second cohort, 1.0mg/kg/week, to enrollment.

first patients were enrolled in the cohort the second week of February 2020.

Based on preliminary data released on July 13, 2020

and January 21, 2021, we are confident that the clinical trial will be closed after completion of a 0.6mg/kg treatment group.

We have canceled plans to treat patients with 3.0mg/kg.

If safety is confirmed, the data from the Phase I trial will allow the

Company to choose a dose to bring forward into the Phase II trial and select biomarkers for that trial.

We plan to meet with the

FDA to present our plans for the Phase II study in patients with AD in the first half of 2021.

If those meetings and subsequent

regulatory filings are successful, we plan to start treating patients in the Phase II trial in the second half of 2021.

Registration Studies and/or Partnering

plan to aggressively pursue an efficient registration strategy using XPro1595 to improve the lives of patients with AD with biomarkers

of inflammation.

We believe AD is not the only indication for XPro1595 in neurodegenerative and neuropsychiatric diseases.

plan to pursue other indications in neurodegenerative diseases as resources become available.

We have received NIMH funding to

support a Phase II TRD program that hopes to start patient enrollment in the second half of 2021.

We have an active partnering

position as it relates to XPro1595 development in neurodegenerative and neuropshyciatric diseases, although no partnering discussion

are underway at this time.

There are two partnering opportunities with this novel immunotherapy for the treatment of neurologic

and psychiatric diseases.

The first is a traditional partnership focused on the developing the drug for all neurodegenerative

and neuropsychiatric applications.

The second is a more focused partnership developing XPro1595 as part of a combination therapy

for a company’s existing therapy.

patients were enrolled in the cohort the second week of February 2020.

Based on preliminary data released on July 13, 2020 and January

21, 2021, we closed after completion of a 0.6mg/kg treatment group.

We canceled plans to treat patients with 3.0mg/kg.

The data from the

Phase I trial allow the Company to choose a design the Phase II trials described above.

XPro Registration Studies and/or Partnering

We plan to aggressively pursue an efficient registration strategy using

XPro to improve the lives of patients with ADi.

We define ADi as Alzheimer’s disease with biomarkers of inflammation.

ADi is not the only indication for XPro in neurodegenerative and neuropsychiatric diseases.

We plan to pursue other indications in neurodegenerative

diseases as resources become available.

We have received NIMH funding to support a Phase II TRD program that hopes to start patient enrollment

in the second half of 2022.

We have an active partnering position as it relates to XPro development in neurodegenerative and neuropshyciatric

diseases, although no partnering discussion are underway at this time.

There are two partnering opportunities with this novel immunotherapy

for the treatment of neurologic and psychiatric diseases.

The first is a traditional partnership focused on the developing the drug for

all neurodegenerative and neuropsychiatric applications.

The second is a more focused partnership developing XPro as part of a combination

therapy for a company’s existing therapy.

After completion of proof-of-concept Phase II studies, we will decide what the most efficient

registration strategy is available to the company with XPro.

We may to have biopharma partners participate in this decision

We may also seek to be acquired at this stage.

Immunotherapy

for the treatment of NASH

is being developed for the treatment of NASH.

LIVNate is identical to INB03, Quellor and XPro1595 in every way but name.

LIVNate will be used as the drug name in the NASH development program.

NASH is a pleiotropic disease with elements of metabolic,

immunologic and fibrotic pathophysiology contributing to disease development and progression.

The Company believes targeting the

metabolic and immunologic pathology is the best way to treat NASH.

Furthermore, we believe there are three pathologic drivers

of NASH, two which originate beyond the liver (refer to Figure 7 below).

The peripheral pathologic loop includes obesity and insulin

The regional pathologic loop includes intestinal inflammation, intestinal leak and mesenteric fat, a source of inflammatory

factors that are concentrated in portal blood.

Finally, the local pathologic loop is caused by lipotoxicity and innate immune

activation in the liver that results in hepatocyte death, hepatitis and fibrosis, the hallmarks of NASH.

In murine studies of

NASH, LIVNate reverses insulin resistance, intestinal inflammation and decreases the NAS (“NAFLD Activity Score”)

and Fibrosis score suggesting that LIVNate may be an effective therapy for the treatment of NASH.

are planning an open label Phase II study of patients with NASH.

The study is planned as a proof-of-concept study in patients

with F3/F3 disease defined by non-invasive laboratory and imaging studies.

Patients will be treated with LIVNate for 6 months

by once a week subcutaneous injection.

We do not plan to perform liver biopsies as any part of the study.

If the study is positive,

further development of LIVNate in NASH will be considered.

Further development may include additional clinical trials alone or

with a partner or divesting the program.

This clinical trial has been delayed due to the COVID-19 pandemic.

We do not expect to

enroll patients into a NASH Phase II clinical trial until 2022 at the earliest.

Registration Studies and/or Partnering Programs

NASH is an exceptionally dynamic area of drug development, the Company will decide on a development and/or partnering program

after the completion of the Phase II study.

At this time, it is impossible to predict the development and commercial landscape

or to know if LIVNate can be used to treat NASH as a stand-alone drug or as part of combination therapy.

Finally, the market for

treatments of metabolic and inflammatory liver diseases may expand to include non-alcoholic fatty liver disease (“NAFLD”)

in the near future.

This market expansion may impact the Company’s development plans for LIVNate.

We may to have biopharma partners participate in this decision making.

may also seek to be acquired at this stage.

Our NK cell Directed Product Candidate

is our lead product candidate that converts resting NK cells into primed NK cells, an essential step in them becoming activated

cancer-killing NK cells.

We have shown this works ex vivo in human tissue cell cultures, and we believe that this will work in

vivo which is the purpose of our planned clinical trials.

grow and relapse because they evade the immune system.

NK cells are the most important cell for the elimination of residual

disease that causes cancer relapse.

NK cells target cells based on a series of complex antigens on the cancer cell surface

that signal the NK cells to activate and kill the cancer cell.

We call these cancer antigens “priming signals”

and “triggering signals”

respectively.

An NK cell must receive a series of multiple signals through a network

of cell surface receptors constituting of both priming and triggering signals.

Crucially, we have shown that the priming signals

can be delivered independent of the triggering such that one cell, such as INKmune, may deliver priming signals and the patient

cancer cell deliver the second set and induce killing.

Cancer cells defective in priming signals evade NK killing so the cancer

cell survives and grows.

Both priming and triggering signals are not a single surface molecule on the NK cell, but a complex

combination of signals from multiple cell surface ligands which lead to NK priming and triggering respectively.

also express molecules which can inhibit NK cell priming and triggering and the final outcome of the NK-cancer cell conjugation

is a balance of all of these signals.

In summary, INKmune shifts that balance of stimulating and inhibitory signals to enhance

the ability of resting NK cells to kill a wide range of patient cancers.

[Sabry Lowdell Frontiers, North et al JI and Sabry

et al JI and Tsirogianni et al AmJ Hematol].

This concept is shown in the schematic form in Figure 1 below.

main “job”

of a cancer cell is to survive and grow.

Unfortunately, the “successful”

cancer cell ultimately

kills the host.

The first priority for survival is to evade NK cell killing.

The vast majority, >98%, of cancer cells do

this by downregulating expression of priming ligands.

When an NK cell interrogates a cancer cell lacking sufficient priming

signals the NK cell is unable to trigger lysis.

This allows the cancer to evade NK cell killing to grow, and, we believe,

is one of the causes of cancer relapse.

have described the functional biology underlying the interaction of NK cells and cancer cells.

We believe that we have learned

to counteract the loss of the priming signals by artificially providing these signaling ligands to the resting NK cell by

exposure to a proprietary tumor cell line which constitutively expresses them.

We call this product candidate INKmune.

we deliver INKmune to a resting NK cell, it provides priming signals to convert the resting NK cell into a tumor primed NK

cell (“TpNK”).

TpNK are poised to kill any cancer cell that expresses adequate triggering ligands.

extensive pre-clinical testing, we believe this covers a large and heterogenous array of primary human cancers including hematologic

malignancies such as acute myelogenous leukemia, multiple myeloma, lymphoma, and solid tumors such as breast, prostate, renal,

lung, and ovarian cancer.

The TpNK binds to the cancer cell, becomes an activated NK cell that will kill the cancer cell that

was previously resistant to NK cell killing.

Based on the pre-clinical data, we believe INKmune will convert the patient’s

resting NK cells to primed NK cells will allow the patient’s NK cells to kill their tumor.

believe there are advantages of NK cells primed with INKmune (“TpNK”) compared to cytokine primed NK cells (“LAK”)

or monoclonal antibody targeted NK cells (“MabNK”).

Both LAK and MabNK require the priming/targeting agent to

be present at all times for the NK cell to be a cancer killing cell.

As soon as the cytokine or Mab are removed, the NK cell

becomes a resting NK cell that cannot kill the cancer cell.

INKmune provides a sustained “on”

switch even after

the INKmune reagent has been removed.

Once INKmune causes the resting NK cell to become a TpNK, the NK cell remains primed

and ready to kill until its lytic capacity has been exhausted by lysis of tumor cells.

The second advantage is that TpNK can

prime resting NK cells by contact-dependent activation and thus enhance the initial INKmune-mediated priming.

do not require a specific target compared to MabNK.

Trastuzumab (Herceptin™), a Mab targeting HER2 on breast cancer

is an illustrative example.

Women with HER2 positive breast cancer, 20% of all women with breast cancer, can be treated with

and benefit from Herceptin immunotherapy.

Unfortunately, the other 80% who are HER2 negative, have a worse survival rate because

they can not avail themselves to Trastuzumab immunotherapy.

INKmune may benefit the women with HER2 negative breast cancer.

We believe the pre-clinical and clinical data using tumor primed NK cells indicates that signals delivered by cancer cells

are adequate to provide priming and activation of NK cells to kill the cancer and possibly eliminate the need for MabNK.

have demonstrated TpNK killing of many tumor types in laboratory studies.

Tumor priming is effective regardless of the source

of the NK cells and in many types of tumors –

both cell lines and primary tumors from patients.

The principle of TpNK

killing has also been demonstrated in two Phase I trials in patient with acute myelogenous leukemia (“AML”).

trials were not supported by us and used a first-generation personalized cell therapy product.

In these trials, haplo-identical

NK cells obtained from a first degree relative by leukapheresis were primed ex-vivo using a lysate of the parent cell line

from which we derived INB16 - INKmune.

Once the TpNK therapy has been produced and passed quality testing, the patient received

conditioning therapy with chemotherapy (cyclophosphamide and fludarabine), the primed haplo-identical NK cells were given

to patients by intravenous infusion.

Two Phase I clinical trials have been performed using the first-generation treatment

An investigator initiated trial performed at the Royal Free Hospital in London 2009 was funded by a UK charity.

INKmune is our lead product candidate that converts the patient’s

resting NK cells into cancer memory like NK cells, an essential step to allow them to participate in the immune control the patient’s

We have shown this works ex vivo in human tissue cell cultures, and we believe that this will work in vivo which is the purpose

of our planned clinical trials.

Cancers grow and relapse

because they evade the immune system.

In many cancers, NK cells are the most important cell for the elimination of residual disease that

causes cancer relapse.

NK cells target cells based on a series of complex antigens on the cancer cell surface that signal the NK cells

to activate and kill the cancer cell.

NK cells develop a memory like NK cell phenotype to enhance killing of cancer cells.

This phenotype

requires multiple simultaneous signals to be delivered to the NK cells.

A cocktail of three cytokines, IL12, IL15 and IL18 can be used

to convert a resting NK cell to cytokine induced memory like NK cells (CIML) [Fehneger 2016 ] or by INKmune priming with INB16 (TpNK

– tumor primed NK cells).

Although the intracellular biology if these two strategies has yet to be worked out, they do not appear

to be identical.

In summary, INKmune converts resting NK cells in to tumor killing memory like NK cells.

(Figure 1 below).

The ability of NK cells to kill tumor cells depends on the strength

and duration of the cell-cell interaction.

This is call avidity.

The higher the avidity the greater the tumor cell killing.

Cytokine stimulation

may increase avidity of NK binding to some cancer cells whereas, in all experiments to date, INKmune priming enhances NK binding to all

cancer cells tested.

The relative increase in avidity to specific cancer cells is cytokine specific;

as shown below, IL15 increases NK

avidity for the ovarian cancer line SKOV-3 whereas IL2 has a limited effect.

IL15 primed NK cells lyse SKOV-3 cells whereas IL2 primed

INKmune primed NK (TpNK) showed the highest avidity for the tumor cells and the highest level of cytotoxicity.

that the use of multiple cytokines will achieve the same level of avidity and cytotoxicity as INKmune but studies with multiple cytokines

have not yet been performed (Figure below).

We have demonstrated TpNK

killing of many tumor types in laboratory studies.

Tumor priming is effective regardless of the source of the NK cells (normal volunteers

or patients with cancer) and in many types of tumors – both cell lines and primary tumors from patients.

The principle of TpNK killing

has also been demonstrated in two Phase I trials in patient with acute myelogenous leukemia (“AML”).

These trials were not

supported by us and used a first-generation personalized cell therapy product and treatment strategy that is different from the INKmune

product and treatment strategy.

In these trials, haplo-identical NK cells obtained from a first degree relative by leukapheresis were

primed ex-vivo using a lysate of the parent cell line from which we derived INB16 - INKmune.

Once the TpNK therapy has been produced and

passed quality testing, the patient received conditioning therapy with chemotherapy (cyclophosphamide and fludarabine), the primed haplo-identical

NK cells were given to patients by intravenous infusion.

Two Phase I clinical trials have been performed using that first-generation adoptive

cell therapy treatment strategy.

An investigator initiated trial performed at the Royal Free Hospital in London 2009 was funded by a UK

Fifteen patients with relapsed, high-risk AML were enrolled in the trial.

Because of drop-out due to disease progression,

delays in product production and complications of conditioning therapy, only 7 of the fifteen patients were treated with the

TpNK cell product.

Four of seven patients showed clear benefit from the treatment with the TpNK product with prolonged relapse

free remission and, in one patient, conversion of a partial remission to full remission.

Because of drop-out due to disease progression, delays

in product production and complications of conditioning therapy, only 7 of the fifteen patients were treated with the TpNK cell product.

Four of seven patients showed clear benefit from the treatment with the TpNK product with prolonged relapse free remission and, in one

patient, conversion of a partial remission to full remission.

None of the remissions were durable;

all patients ultimately died from disease progression.

The safety of the product was found to be a combination of toxicity

from the chemotherapy conditioning regimen and the TpNK therapy.

In general, the complications were well tolerated although

did require medical intervention including prolonged periods of aplasia in two heavily pretreated patients that resolved with

supportive care.

The results of this study have been published in a medical journal (PLoS One.

all patients ultimately died from disease

The safety of the product was found to be a combination of toxicity from the chemotherapy/radiotherapy conditioning regimen

and the TpNK therapy.

In general, the complications were well tolerated although did require medical intervention including prolonged

periods of aplasia in two heavily pretreated patients that resolved with supportive care.

The results of this study have been published

in a medical journal (PLoS One.

2015 Jun 10;10(6):e0123416.

1 unchanged sentence

eCollection 2015).

In 2013, a second open label, multi-center trial was performed in the

US using virtually the same product and procedures but targeting a slightly different patient population.

In the second trial,

12 patients in first remission with AML were treated with the haplo-identical TpNK product produced using the first generation

ex-vivo priming process.

After conditioning with chemotherapy, the patients received TpNK in three dosing cohorts –

3x10^5, 1x10^6 or 3x10^6 TpNK per kilogram.

In 2013, a second open

label, multi-center trial was performed in the US using the same product and procedures but targeting a slightly different patient population.

In the second trial, 12 patients in first remission with AML were treated with the haplo-identical TpNK product produced using the first

generation ex-vivo priming process.

After conditioning with chemotherapy alone, the patients received TpNK in three dosing cohorts –

3x10^5, 1x10^6 or 3x10^6 TpNK per kilogram.

Patients were followed for safety and relapse free survival.

This trial confirmed

the safety of the TpNK treatment in patients with AML and reinforced many of the efficacy findings seen in the first trial

with none of the previously experienced side effects.

Patients benefited from haplo-identical TpNK therapy with prolonged

relapse free survival including two patients that remain in remission more than 42 months after treatment.

This trial has

been published.

This trial confirmed the safety

of the TpNK treatment in patients with AML and reinforced many of the efficacy findings seen in the first trial with none of the previously

experienced side effects.

Patients benefited from haplo-identical TpNK therapy with prolonged relapse free survival including two patients

that remain in remission more than 42 months after treatment.

This trial has been published.

(Biol Blood Marrow Transplant.

S1083-8791(18)30132-0.

10.1016/j.bbmt.2018.03.019.)

The results of the laboratory and Phase I studies provide evidence that our strategy for treating residual disease is sensible

but unproven.

Because INKmune

primes NK cells to target naturally occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers

including hematologic malignancy (AML, MM, CML, high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas

We expect the list of INKmune sensitive tumors to continue to expand.

The primary role

for INKmune will be an immunotherapy targeting residual disease in patients after debulking cancer therapies such as cytotoxic

chemotherapy and surgery.

At this time, we plan to give INKmune as monotherapy.

We do not rule out the possibility of using

INKmune as part of combination therapy in the future.

We do not expect to need to modify INKmune to treat these additional

types of cancer, because we believe INKmune is a universal cancer therapy where “one size fits all”.

for INKmune to receive regulatory approval for each cancer indication, clinical trials will need to be performed which demonstrate

its safety and effectiveness as a treatment for each such cancer.

We believe the difficulty and cost of achieving these labels

extensions will decline with each successive approval, if and when achieved.

For example, if INKmune is proven to be effective

therapy in patients with ovarian cancer and high-risk MDS, we will need to perform separate pivotal trials for approval in

lung, prostate or renal cancer.

step process to preparation for INKmune human clinical trials:

GMP scale-up for Phase I/II clinical material

working cell banks and individual INKmune product to be used in the patients for the clinical trial have been produced at the

Royal Free Hospital in the CCGTT to full cGMP (MHRA MIA(IMP)11149).

All manufacturing has been under the direction of Professor

Mark Lowdell.

The Company can produce enough INKmune to complete both Phase I clinical trials in women with ovarian cancer and

in patients with high-risk MDS.

We have validated storage of INKmune for up to 12 months in vapor phase nitrogen and have a fully

scalable, closed system manufacturing process which can produce up to 6 patient doses per week during phase I and II trials.

intermediate scale we can manufacture 40 doses per week in a single 80 liter bioreactor.

Importantly, we have validated the storage

of INKmune at -80oC for up to three months which greatly facilitates the delivery and local storage of the drug for clinical trials

and post commercialization.

In contrast, as far as we know all other NK cell therapies and T cell therapies require complex shipping

of drug products in vapor phase nitrogen below -150 o C and specialized arrangements for ongoing storage at the clinical

10.1016/j.bbmt.2018.03.019.) The results of the laboratory and Phase I studies provide evidence that

our strategy for treating residual disease is sensible but unproven.

Because INKmune primes NK cells to target naturally

occurring antigens, we believe INKmune can be used in to treat a wide variety of cancers including hematologic malignancy (AML, MM, CML,

high risk MDS) and solid tumors (renal, prostate, breast, ovarian, pancreas and lung).

We expect the list of INKmune sensitive tumors

to continue to expand.

The primary role for INKmune will be an immunotherapy

targeting residual disease in patients after debulking cancer therapies such as cytotoxic chemotherapy and surgery.

At this time, we plan

to give INKmune as monotherapy.

We do not rule out the possibility of using INKmune as part of combination therapy in the future.

not expect to need to modify INKmune to treat these additional types of cancer, because we believe INKmune is a universal cancer therapy

where “one size fits all”.

We believe for INKmune to receive regulatory approval for each cancer indication, clinical trials

will need to be performed which demonstrate its safety and effectiveness as a treatment for each such cancer.

We believe the difficulty

and cost of achieving these labels extensions will decline with each successive approval, if and when achieved.

For example, if INKmune

is proven to be effective therapy in patients with ovarian cancer and high-risk MDS, we will need to perform separate pivotal trials for

approval in lung, prostate or renal cancer.

Three step process to preparation for INKmune

human clinical trials:

INKmune GMP scale-up for Phase I/II clinical

The working cell banks and

individual INKmune product to be used in the patients for the clinical trial have been produced at the Centre for Cell, Gene & Tissue

Therapeutics at Royal Free Hospital / University College London to full cGMP (MHRA MIA(IMP)11149).

All manufacturing has been under the

direction of Professor Mark Lowdell.

The Company can produce enough INKmune to complete both Phase I clinical trials in women with ovarian

cancer and in patients with high-risk MDS.

We have validated storage of INKmune for up over 3 years in vapor phase nitrogen and have a

fully scalable, closed system manufacturing process in validation which can produce up to 6 patient doses per week during phase I and

At intermediate scale we can manufacture 40 doses per week in a single 80 liter bioreactor.

Importantly, we have validated

the storage of INKmune at -80 o C for up to 27 days which greatly facilitates the delivery and local storage of the drug for

clinical trials and post commercialization use.

In contrast, as far as we know all other NK cell therapies and T cell therapies require

complex shipping of drug products in vapor phase nitrogen below -150 o C and specialized arrangements for ongoing storage at

the clinical sites.

We may need additional INKmune for future clinical trials.

Biomarker Development Program

have discovered two biomarker strategies that we believe can be used to demonstrate:

INKmune Biomarker Development Program

We have discovered two biomarker

strategies that we believe can be used to demonstrate:

i) who should receive INKmune therapy;

if the INKmune therapy is working;

and iii) when INKmune therapy should be repeated.

For the initial Phase I/II trials in patients

with ovarian cancer and high-risk MDS, we expect the biomarker testing will be performed in a single laboratory under our direction.

In the near future, we will develop assay systems with standard operating procedures to ensure uniform testing of the biomarker

across clinical sites.

This will facilitate expansion of the clinical programs to multiple sites.

We anticipate that, in the future,

the biomarker program may be a surrogate marker for both clinical effectiveness and marketing purposes.

with Regulatory Authorities Regarding INKmune Development

INKmune Phase I studies in high-risk MDS and ovarian cancer will be performed in the UK.

ii) if the INKmune therapy is working;

iii) when INKmune therapy should be repeated.

For the initial Phase I/II trials in patients with ovarian cancer and high-risk MDS, we

expect the biomarker testing will be performed in a single laboratory under our direction.

We may develop training programs for our standard

operating procedures to ensure uniform testing of the biomarkers to facilitate expansion of the clinical programs to multiple sites.

anticipate that, in the future, the biomarker program may be a surrogate marker for both clinical effectiveness and marketing purposes.

Interaction with Regulatory Authorities Regarding

INKmune Development

INKmune Phase I studies in high-risk MDS and ovarian cancer will be performed in the UK and US.

We met with the Medicines and Healthcare

Products Regulatory Agency (“MHRA”), the UK version of the FDA as part of a Scientific Advice Meetings in preparation

for submitting the CTA for each program.

The purpose of the meeting was to explain to the MHRA our manufacturing process and clinical

plan for the development of INKmune in a Phase I relapse/refractory ovarian cancer and high risk MDS respectively.

Product Development Path Proposed Phase I Study in patients with ovarian cancer

the evolution of the COVID-19 pandemic in 2021, we plan to initiate an open label Phase I cancer study in patients with ovarian

Patients will be enrolled who have a low burden of relapse refractory disease and have peripheral blood or ascites

NK cells which can respond to INKmune in a laboratory test on NK function.

The study design agreed upon after discussion with

the MHRA on September 12, 2017 was for a two-step Phase I/II study but this has been modified to an classic Phase I study followed

by a randomized phase II.

At present we anticipate the Phase I to be performed under the modified CTA at a single UK site, Sheffield

University Hospital.

We expect to initiate trial by the third quarter of 2021.

In the Phase I trial, women with relapse refractory

ovarian cancer will be treated with INKmune, given as an intra-peritoneal infusion through an indwelling peritoneal catheter in

a traditional open label study to demonstrate safety and determine the dose of INKmune to be carried into the larger Phase II

portion of the study.

Products Regulatory Agency (“MHRA”), the UK version of the FDA as part of a Scientific Advice Meetings in preparation for

submitting the CTA for our first planned program.

The purpose of the meeting was to explain to the MHRA our manufacturing process and

clinical plan for the development of INKmune in a Phase I relapse/refractory ovarian cancer.

We plan to expand the MDS program beyond

This may include sites in the EU and the US.

We will need to work with the relevant regulatory authorities as we make those expansions.

We will seek regulatory approval to start the ovarian cancer program in the US after the first cohort of patients have been treated in

INKmune Product Development Path Proposed Phase

I Study in patients with ovarian cancer

Pending the resolution of

the COVID-19 pandemic in 2022, we plan to initiate an open label Phase I cancer study in patients with ovarian carcinoma.

Patients will

be enrolled who have a low burden of relapse refractory disease and have peripheral blood or ascites NK cells which can respond to INKmune

in a laboratory test on NK function.

The study design agreed upon after discussion with the MHRA on September 12, 2017 was for a two-step

Phase I/II study but this has been modified to an classic Phase I study followed by a randomized phase II.

At present we anticipate the

Phase I to be performed under the modified CTA at a single UK site, Sheffield University Hospital.

We expect to initiate trial by the

third quarter of 2022.

In the Phase I trial, women with relapse refractory ovarian cancer will be treated with INKmune, given as an intravenous

infusion in a traditional open label study to demonstrate safety and determine the dose of INKmune to be carried into the larger Phase

II portion of the study.

Based on pre-clinical studies that indicate that women with relapsed/refractory ovarian cancer have NK cells

in their peritoneal cavity that response to INKmune to kill SKOV3, an NK-resistant ovarian cell line, we believe intra-peritoneal

delivery of INKmune will be therapeutically effective.

Three clinical trials support this observation.

Two clinical trials have

been performed using the first generation haplo-identical TpNK product in patients with AML.

Both of those studies have been published

2015 Jun 10;10(6):e0123416.

10.1371/journal.pone.0123416.

eCollection 2015) and (Biol Blood Marrow Transplant.

S1083-8791(18)30132-0.

10.1016/j.bbmt.2018.03.019.).

In summary, the studies showed that TpNK therapy,

when delivered by intravenous infusion after conditioning therapy, was effective in providing prolong remissions with a toxicity

profile that was manageable.

TpNK therapy has not been delivered via intraperitoneal infusion, but a similar treatment strategy

is used for the delivery of TALL-104 cells.

TALL-104 is a replication incompetent human MHC non-restricted cytotoxic T-cell leukemic

cell line that has been extensively studied and used to treat a number of cancers.

Currently, Galileo Research, an Italian biotech

company, has used TALL-104 in a Phase II clinical trial to treat women with ovarian cancer (http://www.galileoresearch.it/en/pipeline/TALL-104.html).

In that study, TALL-104 is delivered via intraperitoneal infusion.

Although the efficacy of the therapy is not yet known, the

therapy is well tolerated with toxicities mainly related to the infusion catheter, not related to the TALL-104 infusion.

end points of the INKmune Phase I trial are safety and determining the dose of INKmune to take into the Phase II portion of the

clinical trial.

The key secondary efficacy end-points to be studied are i) increased NK cell priming as determined by multicolor

flow cytometry of NK cells from the patient;

ii) increased NK cell killing of SKOV3 tumor in a bioassay as shown in Figure 2 below;

in their peritoneal cavity that response to INKmune to kill SKOV3, an NK-resistant ovarian cell line, we believe intravenous delivery

of INKmune will be therapeutically effective in treating intra-peritoneal disease.

The key secondary efficacy end-points to be studied

are i) increased NK cell priming as determined by multicolor flow cytometry of NK cells from the patient;

ii) increased NK cell killing

of SKOV3 tumor in a bioassay as shown in Figure 2 below;

and iii) a decrease in tumor burden as measured by CA125 levels in the blood.

Once safety and the optimal INKmune dose have been

determined, a randomized study of women treated with INKmune will be compared to a group of control patients who receive only

standard of care.

We expect to treat six patients in the Phase I portion of the trial, but this number can increase by as many

Product Development Path Proposed Phase I Study in patients with high-risk MDS

2021, we plan to initiate an open label Phase I cancer study in patients with high-risk myelodysplastic syndrome (“MDS”).

Patients will be enrolled who have a low burden of disease after completion of conventional therapy and have peripheral blood

NK cells which can respond to INKmune in a laboratory test of NK function.

At present we anticipate the Phase I to be performed

at a single UK site, University Hospital Southampton.

A UK contract research organization has been appointed and we expect to

initiate trial by the third quarter of 2021.

In the Phase I trial, patients with detectable residual disease in bone marrow and/or

peripheral blood (<15% blasts by conventional tests) will be treated with intravenous infusions of INKmune and monitored for

changes in peripheral blood NK activation, NK function and changes in residual blast counts in blood and bone marrow.

We and others

have previously shown that MDS patients with inadequate NK function have statistically significantly poorer prognosis than matched

patients with normal levels of NK function (Tsirogianni et al 2019) and we have shown in laboratory experiments that the functional

activity of NK cells from MDS patients can be enhanced by exposure to INKmune.

Moreover, INKmune-primed NK cells are not inhibited

by the hypoxic conditions of the diseased bone marrow microenvironment.

Because both INKmune programs are being run in the UK,

delays due to the COVID-19 pandemic may delay initiation of the clinical trial.

Registration Studies and/or Partnering

completion of proof-of-concept Phase II studies with INKmune, we will decide whether to continue to develop INKmune as a treatment

for ovarian carcinoma indication and/or high risk MDS.

Other solid cancers are of interest including nasopharyngeal cancer (“NPC”)

which is a known target for NK cells and an important unmet clinical need in emerging markets such as mainland China.

to have biopharma partners participate in this decision.

Once safety and the optimal INKmune dose have been determined, a randomized study of women treated with INKmune will be compared to a

group of control patients who receive only standard of care.

We expect to treat six patients in the Phase I portion of the trial, but

this number can increase by as many as 18.

INKmune Product Development Path Proposed Phase

I Study in patients with high-risk MDS

During 2021, we initiated an open label Phase I cancer study in patients

with high-risk myelodysplastic syndrome (“MDS”).

Patients are being enrolled who have a low burden of disease after completion

of conventional therapy.

At present we anticipate the Phase I to be performed at two sites UK site and will expand into additional sites

in EU and/or US during 2022.

The first patients was enrolled in the first quarter of 2021.

In the Phase I trial, patients with detectable

residual disease in bone marrow and/or peripheral blood (<15% blasts by conventional tests) will be treated with intravenous infusions

of INKmune and monitored for changes in peripheral blood NK activation, NK function and changes in residual blast counts in blood and

We and others have previously shown that MDS patients with inadequate NK function have statistically significantly poorer

prognosis than matched patients with normal levels of NK function (Tsirogianni et al 2019) and we have shown in laboratory experiments

that the functional activity of NK cells from MDS patients can be enhanced by exposure to INKmune.

Moreover, INKmune-primed NK cells are

not inhibited by the hypoxic conditions of the diseased bone marrow microenvironment.

The first patient was treated in the second quarter of 2021.

is now more than 6 months out from therapy with INKmune.

The patient, part of the first cohort, received 1x10^8 INKmune cells on day 1,8

and 15 as an in-patient.

The patient did not require any type of conditioning therapy or cytokine support.

The patient tolerated the three

infusions without any problems.

The patient underwent intensive monitoring over 120 days.

There are 4 observations from this first patient.

The patient has dramatically increased the number of activated, “memory-like” NK cells in circulation.

Memory-like NK cells

(mlNK) are activated NK cells with a unique cell surface protein phenotype and which show enhanced lysis of tumor cell in vitro.

treatment with INKmune, elevated levels of mlNK cells were present in the patients in the peripheral blood for more than 119 days when

trial follow-up ceased.

The patient mlNK actively kill NK resistant cancer targets in vitro.

Finally, the patient has had a significant

clinical improvement with a reduction of his ECOG score from 2 to 0 and a significant reduction in blood product support.

Two compassionate use cases

have also been treated.

Both were young patients with AML who had failed previous hematopoietic stem cell transplants (HSCT).

compassionate-treatment patient showed such improved neutrophil and platelet counts that she was discharged from hospital for the first

time in six months.

She remains well and at home three months under the care of her clinical team.

The second patient treated compassionately

had failed two high risk HSCT and entered the course of INKmune therapy with high percentage of blasts in his bone marrow.

NK cells responded in differentiation into mlNK as hoped but it is too early to determine if INKmune has provide any clinical benefit.

Because both INKmune programs

are being run in the UK, delays due to the COVID-19 pandemic continues to delay enrolment into the MDS clinical trial and is delaying

site initiation for the ovarian cancer trial.

INKmune Registration Studies and/or Partnering

After completion of proof-of-concept

Phase II studies with INKmune, we will decide whether to continue to develop INKmune as a treatment for ovarian carcinoma indication and/or

high risk MDS.

Other solid cancers are of interest including nasopharyngeal cancer (“NPC”) which is a known target for NK

cells and an important unmet clinical need in emerging markets such as mainland China.

Renal cell carcinoma is also a known target for

We expect to have biopharma partners participate in this decision.

We may also seek to be acquired at this stage or partner INKmune.

our development strategy is focused on North America and Europe, we believe INKmune will also be attractive for markets on the

Pacific Rim, South Asia and South America, but will wait for partners to help with the development in those regions, however,

at this time, we are not negotiating with any potential partners.

we have published data demonstrating INKmune efficacy at priming allogeneic NK cells ex-vivo (described above) and this includes

priming of NK cells differentiated from cord-blood derived hematopoietic stem cells (Domogala et al Cytotherapy 2017:

Numerous companies are developing therapeutic strategies using cord blood derived NK cell products and one or more may wish to

partner with us to potentiate their product by co-incubation or co-administration with INKmune.

Regulatory Strategy

is a new therapy for the treatment of cancer that will need to be proven safe and effective by well-designed clinical trials that

show a meaningful clinical benefit to patients.

We believe that registration trials will need to be designed as randomized trials

in patients with cancer where one group of patients received INKmune and another receive best available care.

We received advice

from the MHRA on September 12, 2017 on the design clinical trial for ovarian cancer.

And have used that advice to plan both current

phase I trials.

We plan to perform the Phase I trials with INKmune in the United Kingdom under two clinical trials authorizations

(“CTA”) –

one for each indication.

If either phase I elicits “positive”

data we plan to open one

or more Phase II programs to additional sites in the United Kingdom and the US.

We will meet with the FDA once we have data from

the Phase I trials.

Because there are no therapies similar to INKmune approved in any market, we plan to take advantage of the

regulatory opportunities afforded to therapies that treat small markets with a high unmet need.

In the U.S., this includes Orphan

Drug Designation and expedited programs for approval including Accelerated Approval, Breakthrough Therapy Designation, Fast Track

Designation, and priority review (see “Government Regulation”).

We cannot predict which of these programs we will

benefit from, if any at all, without further discussions with the FDA.

Similar programs exist in the EU with the European Medicines

Agencies (“EMA”).

Market Opportunity

cancer therapy market is large, diverse and competitive.

Although the concept of immunotherapy with monoclonal antibodies has

been around for more than 20 years, the concept that patient derived immunosuppressive factors was a barrier to effective cancer

treatment was recently recognized and had its first therapy approved just four years ago (ipilimumab, Yervoy, BMS, March 2011).

Since then, five additional “check point”

inhibitors have been approved, but the market is in its infancy.

the focus on strategies for modulating tumor-based immunosuppression focus is on the adaptive immune system (“T-cells”).

The role of, and the importance of manipulating the innate immune system has more recently become a target of therapeutic development.

NK cells are part of the innate immune system and are critical in both tumor surveillance (prevention) and treatment (killing).

MDSCs are part of the innate immune system that only appear once the patient has chronic inflammation, a common occurrence in

patients with cancer.

The main role of the MDSC is to protect the tumor from attack by the patient’s immune system.

T-cell focused strategies do not have an effect on the innate immune system, patient’s receiving such treatments may fail

to recruit half of the patient’s immune system, the innate immune system, to attack the patient’s cancer.

increasingly recognize that durable responses to cancer require a coordinated attack by the patient’s adaptive and innate

immune system.

Although our development strategy is focused on North America and Europe, we believe INKmune will also be attractive for markets on the

Pacific Rim, South Asia and South America, but will wait for partners to help with the development in those regions, however, at this

time, we are not negotiating with any potential partners.

Importantly, we have published

data demonstrating INKmune efficacy at priming allogeneic NK cells ex-vivo (described above) and this includes priming of NK cells differentiated

from cord-blood derived hematopoietic stem cells (Domogala et al Cytotherapy 2017:

Numerous companies are developing

therapeutic strategies using cord blood derived NK cell products and one or more may wish to partner with us to potentiate their product

by co-incubation or co-administration with INKmune.

We are also aware of companies developing cytokine primed NK cells (CIML) for the

treatment of cancer.

We believe tumor primed NK cells are superior to ex vivo or in vivo cytokine strategies.

Data to support this belief

should be presented in 2022.

INKmune Regulatory Strategy

INKmune is a new therapy for the treatment of cancer that will need

to be proven safe and effective by well-designed clinical trials that show a meaningful clinical benefit to patients.

We believe that

registration trials will need to be designed as randomized trials in patients with cancer where one group of patients received INKmune

and another receive best available care.

We received advice from the MHRA on September 12, 2017 on the design the Phase I clinical trial

for ovarian cancer.

And have used that advice to plan both current phase I trials.

We plan to initiate the Phase I trials with INKmune

in the United Kingdom under two clinical trials authorizations (“CTA”) – one for each indication.

Both trials will be

expanded to sites in the US after opening of an IND.

We expect those IND’s to be open by the end of 2022.

If either phase I elicits

“positive” data we plan to open one or more Phase II programs to additional sites in the United Kingdom, EU and/or US.

each regulatory jurisdiction outside of the UK, the competent regulatory authority will need to be engaged.

In the US, that is the FDA.

In the EU, it will be the country specific regulatory authority.

These follow-on regulatory submissions will include data from the patients

treated in the UK in the clinical trials or as part of compassionate use.

Because there are no therapies similar to INKmune approved in

any market, we plan to take advantage of the regulatory opportunities afforded to therapies that treat small markets with a high unmet

In the U.S., this includes Orphan Drug Designation and expedited programs for approval including Accelerated Approval, Breakthrough

Therapy Designation, Fast Track Designation, and priority review (see “Government Regulation”).

We cannot predict which of

these programs we will benefit from, if any at all, without further discussions with the FDA.

Similar programs exist in the EU with the

European Medicines Agencies (“EMA”) and in the UK with the MHRA.

Emerging Market Opportunity

The cancer therapy market

is large, diverse and competitive.

Although the concept of immunotherapy with monoclonal antibodies has been around for more than 20 years,

the concept that patient derived immunosuppressive factors was a barrier to effective cancer treatment was recently recognized and had

its first therapy approved just four years ago (ipilimumab, Yervoy, BMS, March 2011).

Since then, more than five additional “check

point” inhibitors have been approved, but the market is in its infancy.

Most of the focus on strategies for modulating tumor-based

immunosuppression focus is on the adaptive immune system (“T-cells”).

The role of, and the importance of manipulating the

innate immune system has more recently become a target of therapeutic development.

NK cells are part of the innate immune system and are

critical in both tumor surveillance (prevention) and treatment (killing).

MDSCs and Tumor Associated Macrophages (TAM) are part of the

innate immune system that only appear in the TME of patients with cancer.

The main role of the MDSC and TAM is to protect the tumor from

attack by the patient’s immune system.

Because T-cell focused strategies do not have an effect on the innate immune system, patient’s

receiving such treatments may fail to recruit half of the patient’s immune system, the innate immune system, to attack the patient’s

Clinicians increasingly recognize that durable responses to cancer require a coordinated attack by the patient’s adaptive

and innate immune system.

Normalizing the response of the innate immune system requires eliminating the dysregulated innate immune response

that decreases the patient’s ability to see and attack the cancer as well as mechanisms the protect the cancer from immunologic

attack (effector and protector function respectively).

1 unchanged sentence

INB03, by decreasing

the proliferation and function of MDSC, will lessen the immunosuppressive shield that protects the tumor from immunologic attack

and, through NK/DC crosstalk, recruit the adaptive immune system to the fight.

in the Market for Our Product Candidates

market for new oncology therapies is busy, complicated, and rapidly evolving.

We will be competing with companies that are older,

larger, better financed and have greater experience.

There are two types of drug companies –

development companies and commercial

Development companies take the risk of developing new products to proof-of-concept.

Once proof-of-concept has been

achieved, if the drug provides clinical benefit, the product is usually acquired by a commercial company, which completes the

drug’s clinical development and markets the product.

We are a development company which will seek to develop products such

as INKmune from the bench to the bedside to demonstrate proof-of-concept.

The goal for us is to successfully develop such products

to the point where they are attractive targets for potential partners/acquirers.

to a recent Markets and Markets report, the immunotherapy market is growing rapidly at an annual rate of over 13%.

Recently, the

market is biased towards T cell-based immunotherapies including bi-specific antibody therapies, checkpoint inhibitors and CAR-T

cell-based therapies.

There are substantial numbers of clinical trials that are focused on the adaptive immune system versus clinical

trials that are focused on the innate immune system for the treatment of cancer.

Our challenge will be to educate partners on

the value of NK cell-based therapeutic strategies.

the immunosuppressive function of MDSC and TAM, will lessen the immunosuppressive shield that protects the tumor from immunologic attack

and, through NK/DC crosstalk, recruit the adaptive immune system to the fight and potentially increase local innate anti-tumor effects

such as improved NK cell function and anti-tumor macrophage phagocytic activity.

Challenges in the Market for Our Product Candidates

The market for new oncology

therapies is busy, complicated, and rapidly evolving.

We will be competing with companies that are older, larger, better financed and

have greater experience.

There are two types of drug companies – development companies and commercial companies.

Development companies

take the risk of developing new products to proof-of-concept.

Once proof-of-concept has been achieved, if the drug provides clinical benefit,

the product is usually acquired by a commercial company, which completes the drug’s clinical development and markets the product.

We are a development company which will seek to develop products such as INKmune from the bench to the bedside to demonstrate proof-of-concept.

The goal for us is to successfully develop such products to the point where they are attractive targets for potential partners/acquirers.

According to a recent Markets

and Markets report, the immunotherapy market is growing rapidly at an annual rate of over 13%.

Recently, the market is biased towards

T cell-based immunotherapies including bi-specific antibody therapies, checkpoint inhibitors and CAR-T cell-based therapies.

substantial numbers of clinical trials that are focused on the adaptive immune system versus clinical trials that are focused on the innate

immune system for the treatment of cancer.

Our challenge will be to educate partners on the value of NK cell-based therapeutic strategies.

The need to educate people of the importance of INB03 is equally challenging.

At the academic level, there is recognition that therapies targeting MDSC are needed to improve the results of immunotherapies.

Investors and potential partners are only now learning about MDSC.

We will be responsible for educating them on the importance

of MDSC and why INB03 may be an important addition to the oncologist’s armamentarium.

We believe educating investors and

partners about new therapeutic opportunities is an easier task than trying to differentiate our company from the many other cancer

immunotherapy companies.

We plan to use a combination of publication, presentation and investor relations to promote INKmune and

INB03 and to educate the clinical, biopharma and investor community on the value of these novel therapeutic approaches.

our knowledge, there are no other innate immune system check-point inhibitors in development that combine the characteristics

of neutralizing soluble TNF, decreasing the population and function of MDSC while promoting NK/DC crosstalk that expands, decreases

expression of MUC4 and recruits the adaptive immune response to attack the patient’s tumor.

Lilly is developing LY3022855,

a human IgG1 monoclonal antibody designed to target the CSF1R that should inhibit MDSC from receiving CSF1 signals, decreasing

their survival and relieving the effect of MDSC in the tumor.

Daiichi Sankyo Inc., in collaboration with Bristol Myers Squibb,

is testing DS-8273a, a TRIAL-R2 agonistic antibody in combination with a PDL1 inhibitor to decrease the number of MDSC in patients

with colorectal cancer.

Rgenix Inc., is developing RGX-104, an orally bioavailable small molecule immunotherapy that targets LXR

(liver X Receptor).

At the academic and investor level, there is little recognition

of the role MUC4 plays in causing resistance to immunotherapy.

The concept of adding a drug to modify the immunosuppressive environment

of the TME to allow immunotherapy to be effective is also new.

We will be responsible for educating them on the importance of MUC4 expression,

TAM, MDSC and why INB03 may be an important addition to the oncologist’s armamentarium.

We believe educating investors and partners

about new therapeutic opportunities is an easier task than trying to differentiate our company from the many other cancer immunotherapy

We plan to use a combination of publication, presentation and investor relations to promote INKmune and INB03 and to educate

the clinical, biopharma and investor community on the value of these novel therapeutic approaches.

DN-TNF Competition

To our knowledge, there are

no other innate immune system check-point inhibitors in development that combine the characteristics of neutralizing soluble TNF, decreasing

the population and function of MDSC while promoting NK/DC crosstalk that expands, decreases expression of MUC4 and recruits the adaptive

immune response to attack the patient’s tumor.

Lilly is developing LY3022855, a human IgG1 monoclonal antibody designed to target

the CSF1R that should inhibit MDSC from receiving CSF1 signals, decreasing their survival and relieving the effect of MDSC in the tumor.

Daiichi Sankyo Inc., in collaboration with Bristol Myers Squibb, is testing DS-8273a, a TRIAL-R2 agonistic antibody in combination with

a PDL1 inhibitor to decrease the number of MDSC in patients with colorectal cancer.

Rgenix Inc., is developing RGX-104, an orally bioavailable

small molecule immunotherapy that targets LXR (liver X Receptor).

RGX-104 reportedly depletes MDSC.

Syntrix Biosystems is developing SX-682.

SX-682 is a small-molecule dual-inhibitor

of CXCR1 and CXCR2, the chemokine receptors pivotal to tumor metastasis, therapy-resistance, and myeloid cell suppression of cancer

surveillance by the adaptive immune system.

By blocking the CXCR1/2 pathway, SX-682 may prevent recruitment of MDSC to the tumor

microenvironment.

The University of Minnesota has a trivalent antibody program aimed at treating patients with advanced hematologic

malignancies.

SX-682 is a small-molecule dual-inhibitor of CXCR1 and CXCR2, the chemokine receptors pivotal to tumor metastasis, therapy-resistance,

and myeloid cell suppression of cancer surveillance by the adaptive immune system.

By blocking the CXCR1/2 pathway, SX-682 may prevent

recruitment of MDSC to the tumor microenvironment.

The University of Minnesota has a trivalent antibody program aimed at treating patients

with advanced hematologic malignancies.

This CD16/IL-15/CD33 (161533) Tri-Specific Killer Engagers (TriKes) product may target CD33+ MDSC.

Siamab Therapeutics

is developing an anti-sialyl-Tn monoclonal antibody that targets MDSC in some tumor types.

Clathera Biosciences, in collaboration

with Incyte, a US based biotech, is developing CB-1158 (INCB01158), an arginase inhibitor to decreases MDSC.

A Phase II clinical

trial is open that combines CB-1158 with nivolumab, an anti-PD1 CPI marketed by Bristol Myers Squib.

Siamab Therapeutics is developing an anti-sialyl-Tn monoclonal antibody that targets MDSC in some tumor types.

Clathera Biosciences, in

collaboration with Incyte, a US based biotech, is developing CB-1158 (INCB01158), an arginase inhibitor to decreases MDSC.

clinical trial is open that combines CB-1158 with nivolumab, an anti-PD1 CPI marketed by Bristol Myers Squib.

Reata Pharmaceuticals is

testing omaveloxolone (RTA 408) in the phase Ib/II REVEAL trial in combination with either ipilimumab (Yervoy) or nivolumab (Opdivoo)

in patients with advanced unresectable or metastatic melanoma.

Currently approved non-selective TNF inhibitors, infliximab, etanercept,

adalimumab and others, are not considered direct competitors of INB03 in the treatment of cancer because of their mechanism of

action and safety side effects.

testing omaveloxolone (RTA 408) in the phase Ib/II REVEAL trial in combination with either ipilimumab (Yervoy) or nivolumab (Opdivo) in

patients with advanced unresectable or metastatic melanoma.

Currently approved non-selective TNF inhibitors, infliximab, etanercept, adalimumab

and others, are not considered direct competitors of INB03 in the treatment of cancer because of their mechanism of action and safety

side effects.

Non- selective TNF inhibitors block the function of both sTNF and tmTNF.

Blockade of tmTNF is

immunosuppressive increasing the risk of infection and cancer in patients.

This is shown in Figure 3 below where maintaining function

to tmTNF by genetic or pharmacologic means results in an immunocompetent animal that can protect itself against infection.

or knock-out of both sTNF and tmTNF results in death from infection.

industry is highly competitive and subject to rapid and significant technological change.

Our potential competitors include large

pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government

agencies and research institutions.

We believe that key competitive factors that will affect the development and commercial success

of our product candidates are efficacy, safety, tolerability, reliability, price, and reimbursement level.

Many of our potential

competitors, including many of the organizations named below, have substantially greater financial, technical, and human resources

than we do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other

regulatory approvals of products and the commercialization of those products.

Accordingly, our competitors may be more successful

than us in obtaining FDA approval for and achieving widespread market acceptance of their drugs.

Our competitors’

may be more effective, or more effectively marketed and sold, than any drug we may commercialize and may render our product candidates

obsolete or non-competitive before we can recover the expenses of developing and commercializing any of our product candidates.

We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced technologies become

Further, the development of new treatment methods for the conditions we are targeting could render our drugs non-competitive

is an immunotherapy that harnesses the biology of NK cells for the treatment of cancer.

There is a long list of immunotherapy

strategies for the treatment of cancer and the immunotherapy for cancer market is growing rapidly.

There are at least three ways

to classify immunotherapy for cancer.

The list below classifies immunotherapy strategies beginning with those that are most closely

related to INKmune:

Companies in the

NK cell therapy business;

Companies in the

personalized immune-oncology business;

Companies in the

precision immuno-oncology business.

are not aware of any approved treatments that are classified as NK cell therapies.

We are aware of public companies in the NK

cell therapy business such as NantKwest, Nkarta, Fate Therapeutics and Glycostem.

These companies are developing products that

involve replacing or supplementing NK cells of the patient for the treatment cancer.

Their product requires extensive ex-vivo

cell manipulations which, with respect to NantKwest and Fate Therapeutics, may include gene therapy.

The next larger group of

companies are in the personalized immuno-oncology business with products focused on T cell activation strategies.

The most popular

are the CAR-T cell therapies which are a patient specific ex-vivo gene therapy approach to a single disease (for example:

CAR-T therapy has become wildly popular of late and includes many private companies, newer public companies such as Bluebird,

Juno Therapeutics and Mustang Bio as well as established companies such as Novartis and Gilead.

For many of the companies, CAR-T

cell therapies is their only business.

For the latter two, CAR-T cell therapies is a newly in-licensed program with marketing

authorization in the US.

Finally, the precision immune-oncology category also includes companies with anti-cancer antibody products

and the newer “check-point”

Antibody therapies are all about “illuminating”

the cancer to

the innate immune system (NK cells).

Monoclonal antibodies were the original immunotherapy that drove the growth of well-known

biopharma companies including Genentech/Roche, Amgen, Merck and others.

Each of these products is disease specific (ie:

only HER2+ breast cancer).

Modern therapeutic antibodies are much more complicated bi-specific and tri-specific antibodies that

attempt to connect the cancer with activated T-cells of the adaptive immune system.

Check-point inhibitors are currently the most

rapidly expanding product category in immuno-oncology.

Blockade of tmTNF is immunosuppressive increasing

the risk of infection and cancer in patients.

This is shown in Figure 3 below where maintaining function to tmTNF by genetic or pharmacologic

means results in an immunocompetent animal that can protect itself against infection.

Blockade or knock-out of both sTNF and tmTNF results

in death from infection.

INKmune Competition

Our industry is highly competitive

and subject to rapid and significant technological change.

Our potential competitors include large pharmaceutical and biotechnology companies,

specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions.

that key competitive factors that will affect the development and commercial success of our product candidates are efficacy, safety, tolerability,

reliability, price, and reimbursement level.

Many of our potential competitors, including many of the organizations named below, have

substantially greater financial, technical, and human resources than we do and significantly greater experience in the discovery and development

of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products.

our competitors may be more successful than us in obtaining FDA approval for and achieving widespread market acceptance of their drugs.

Our competitors’ drugs may be more effective, or more effectively marketed and sold, than any drug we may commercialize and may

render our product candidates obsolete or non-competitive before we can recover the expenses of developing and commercializing any of

our product candidates.

We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced

technologies become available.

Further, the development of new treatment methods for the conditions we are targeting could render our

drugs non-competitive or obsolete.

INKmune is an immunotherapy

that harnesses the biology of NK cells for the treatment of cancer.

There is a long list of immunotherapy strategies for the treatment

of cancer and the immunotherapy for cancer market is growing rapidly.

There are at least three ways to classify immunotherapy for cancer.

The list below classifies immunotherapy strategies beginning with those that are most closely related to INKmune:

Companies in the NK cell therapy business;

Companies in the personalized immune-oncology business;

Companies in the precision immuno-oncology business.

We are not aware of any approved

treatments that are classified as NK cell therapies.

We are aware of public companies in the NK cell therapy business such as Century

Therapeutics, Immunity Bio, Nkarta, Fate Therapeutics, Glycostem and others.

These companies are developing products that involve replacing

or supplementing NK cells of the patient for the treatment cancer.

Their product requires extensive ex-vivo cell manipulations which,

with respect to Century Therapeutics and Fate Therapeutics, may include gene therapy.

The next larger group of companies are in the personalized

immuno-oncology business with products focused on T cell activation strategies.

The most popular are the CAR-T cell therapies which are

a patient specific ex-vivo gene therapy approach to a single disease (for example:

pediatric ALL).

CAR-T therapy has become wildly popular

of late and includes many private companies, newer public companies such as Bluebird, Juno Therapeutics and Mustang Bio as well as established

companies such as Novartis and Gilead.

For many of the companies, CAR-T cell therapies is their only business.

For the latter two, CAR-T

cell therapies is a newly in-licensed program with marketing authorization in the US.

Finally, the precision immune-oncology category

also includes companies with anti-cancer antibody products and the newer “check-point” inhibitors.

Antibody therapies are

all about “illuminating” the cancer to the innate immune system (NK cells).

Monoclonal antibodies were the original immunotherapy

that drove the growth of well-known biopharma companies including Genentech/Roche, Amgen, Merck and others.

Each of these products is

disease specific (ie:

treat only HER2+ breast cancer).

Modern therapeutic antibodies are much more complicated bi-specific and tri-specific

antibodies that attempt to connect the cancer with activated T-cells of the adaptive immune system.

Check-point inhibitors are currently

the most rapidly expanding product category in immuno-oncology.

These CTLA-4 (ipilimumab) and PD-1 inhibitors (pembrolizumab and nivolumab)

2 unchanged sentences

and GSK (ipilimumab and nivolumab).

There are many others trying to join this promising therapeutic area including large companies

such as BMS and Roche.

are several FDA approved drugs that improve the ability of the innate immune system (NK-cells) to treat cancer including mono-clonal

antibody therapies (for example:

Rituximab®;

and Herceptin®

marketed by Roche/Genentech);

and “check-point”

inhibitors (Yervoy®

and Opdivo®, BMS, Keytruda®, Merck and others).

There is a large amount of development activity

in the immune checkpoint inhibitor field from both pharmaceutical giants including AstraZeneca, Merck & Co, Pfizer, Merck

KGaA, Roche, GSK, Novartis and Amgen and many start-ups, small companies and university spin-offs which have emerged in the past

Examples (in alphabetical order) include Agenus, Alligator Bioscience, Ambrx, AnaptysBio, argenx, Bioceros, BioNovion,

Cellerant Therapeutics, Checkpoint Therapeutics, Compugen, CureTech, Enumeral, Five Prime Therapeutics, Genmab, GITR, ImmuNext,

IOmet Pharma, iTeos Therapeutics, Jounce Therapeutics, KAHR Medical, Multimeric Biotherapeutics, Nativis, Orega Biotech, Pelican

Therapeutics, Pieris Pharmaceuticals, Prima BioMed, Redx Pharma, Sorrento Therapeutics, Tesaro, TG Therapeutics, Theravectys and

ToleroTech active in the field.

The list of companies with poly-specific antibodies that attempt to link the cancer with a cytotoxic

T cell is long, includes both private and public companies (Amgen, Xencor, F-Star, Merus and many others).

Finally, two CAR-T

cell therapies were just approved for the treatment of ALL –

Kymriah™

(Novartis) and Yescarta™

expect additional drugs to gain marketing authorization in the immune-oncology space.

our knowledge, there are no innate immune check-point inhibitors in development that have the unique characteristics of INB03

that neutralize sTNF to:

i) decreases the proliferation of MDSC;

ii) decreasing local and systemic immunosuppression caused by

MDSC by stopping production of immunosuppressive cytokines and;

iii) improving NK/DC cross-talk to recruit the adaptive immune

system to fight the cancer.

seek to protect our therapeutic programs by continuously developing patent properties covering novel compositions, formulations,

purpose-limited compositions, combination treatments, methods of medical treatment, and other inventions in the United States

Patent & Trademark Office (the “USPTO”), the World Intellectual Property Organization (“WIPO”) under

the Patent Cooperation Treaty (“PCT”), and in patent offices for various foreign jurisdictions.

While each invention

is unique and territories for protection are decided on a case by case basis, we generally pursue patents in Australia, Canada,

Europe, Japan, and the United States, and sometimes in Brazil, China and/or Korea.

The following sections and corresponding tables

summarize, for each of our current therapeutic programs, our pending and granted patent positions, to the extent publicly available,

as of the time of preparing this document:

Platform Technology (Cancer, Neurologic Diseases, Metabolic Diseases, COVID-19)

The DN-TNF Platform

Technology covers a variety of dominant negative tumor necrosis factor (“DN-TNF”) variant proteins, including the pegylated

DN-TNF protein variants known as XPro1595, INB03, LIVNate, and Quellor.

These DN-TNF protein variants can be considered a platform

technology for treating the underlying immune dysfunction associated with many disease manifestations.

The following table summarizes

current IP covering our DN-TNF Platform Technology:

PROTEIN BASED TNF-ALPHA

VARIANTS FOR THE TREATMENT OF TNF-ALPHA RELATED DISORDERS

PROTEIN BASED TNF-ALPHA

VARIANTS FOR THE TREATMENT OF TNF-ALPHA RELATED DISORDERS

METHODS FOR RATIONAL

PEGYLATION OF PROTEINS

PEGYLATED TNF-a VARIANT

(Neurologic Diseases)

The patent suite for

XPro1595 includes the DN-TNF patents (above) and other patents and patent applications directed to methods of treatment of disease.

This patent suite continues to expand with active prosecution on use of XPro1595 (a DN-TNF variant) in neurologic diseases.

following table summarizes current IP expanding our DN-TNF Platform Technology for CNS-related methods of treatment:

EP 2892547 B1

A DOMINANT NEGATIVE

TNF-ALPHA INHIBITOR FOR USE IN TREATING NEUROLOGICAL DISORDERS OF THE CNS

EP 20178121 A

METHODS OF TREATING

NEUROLOGICAL DISEASES

METHODS OF TREATING

NEUROLOGICAL DISEASES

METHODS OF TREATING

NEUROLOGICAL DISEASES

patent suite for INB03 includes the DN-TNF patents (above) and other patents and patent applications directed to methods of treatment

This patent suite continues to expand with active prosecution on use of INB03 (a DN-TNF variant) in oncology.

following table summarizes current IP expanding our DN-TNF Platform Technology for oncology-related methods of treatment:

US 10,543,264

“CANCER PREVENTION