INmune Bio's XPro: A Missed Milestone or a Hidden Gem in Alzheimer's Drug Development?

The recent Phase 2 results for INmune Bio's (NASDAQ: INMB) XPro™ in Alzheimer's disease (AD) sent its stock plummeting—down over 60% in a single day. But buried within the data lies a compelling narrative for investors willing to look past the primary endpoint failure. The trial's mixed outcomes, particularly its striking benefits in a predefined inflammatory subgroup, could position XPro as a key player in a growing paradigm shift: moving beyond amyloid-centric therapies to target neuroinflammation. Here's why this setback might just be a setup for a comeback.

The Primary Endpoint Miss: A Speedbump, Not a Roadblock

The Phase 2 MINDFuL trial enrolled 200 early AD patients and failed to meet its primary endpoint—the change in cognitive function measured by the Early Mild Alzheimer's Cognitive Composite (EMACC). This disappointment, however, overshadowed critical details. The drug demonstrated statistically significant benefits in a subgroup of 100 patients with two or more biomarkers of inflammation (e.g., elevated CRP, ESR, HbA1c, or ApoE4 status). In this cohort, XPro achieved a 0.27 effect size on EMACC—meaningful progress in a disease where even small effect sizes can redefine care. Secondary endpoints, like reduced neuropsychiatric symptoms (effect size -0.24) and lower levels of the AD biomarker pTau217 (-0.20 effect size), further bolstered the data's credibility.

Safety: A Double-Edged Sword

XPro's safety profile is a mixed bag. Injection site reactions (ISRs) occurred in 80% of patients, leading to 10 discontinuations. While this poses a logistical challenge, the good news is that these reactions were transient and not life-threatening. More importantly, no serious neurological risks like amyloid-related imaging abnormalities (ARIA) were observed—a common hurdle for competing therapies. This distinction could make XPro a safer, more tolerable option for older patients, if approved.

Why Neuroinflammation Matters Now

The amyloid hypothesis has dominated AD research for decades, but its failures (e.g., Biogen's Aduhelm) have fueled skepticism. XPro's focus on neuroinflammation—a complementary mechanism—aligns with emerging evidence that chronic inflammation accelerates cognitive decline. The subgroup's response suggests XPro could work in patients where inflammation is a primary driver of disease, a population that may not respond to amyloid-targeting drugs. With ~1 in 3 AD patients carrying ApoE4 (a risk factor included in the subgroup), this represents a significant market opportunity.

The Regulatory Path to Pivotal Success

INmune Bio's next moves are critical. The company plans to seek FDA Breakthrough Therapy designation, which could accelerate XPro's path to approval. A Breakthrough nod would open the door to a streamlined pivotal trial, potentially halving the timeline compared to standard protocols. Management also aims to finalize a pivotal trial design by Q4 2025, with parallel discussions in the EU and UK. If regulators buy into the subgroup's data, XPro could leapfrog competitors stuck in the amyloid quagmire.

Investment Thesis: A Contrarian Play on AD Innovation

The stock's post-trial selloff has created a compelling entry point. At current levels, INMB trades at just ~$0.30, near 52-week lows. While the company's cash runway is limited (management claims enough for 12-18 months), securing Breakthrough status could attract partnerships or financing. The $4B global AD drug market is ripe for disruption, and a therapy targeting inflammation—a segment with no FDA-approved treatments—could command premium pricing.

Risks to Consider

• Funding: INmune's cash may not stretch to pivotal trial completion without dilution or a partnership.
• Regulatory Hurdles: Even with Breakthrough status, the FDA could demand larger or longer trials, extending timelines.
• Competitor Moves: Biogen's lecanemab and Eisai's leqembi are already on the market, though they focus on amyloid.

Verdict: Buy the Dip If…

Investors should consider INMB a speculative play with high reward potential—if the following milestones are met:
1. Breakthrough designation secured by end of 2025.
2. Pivotal trial design approved by Q1 2026.
3. Positive subgroup data replicated in larger cohorts.

The Alzheimer's space is littered with failures, but XPro's novel mechanism and subgroup efficacy carve out a unique niche. For those willing to bet on a paradigm shift, this could be a rare opportunity to buy a potential breakthrough at a discount.

Final Note: INmune Bio's XPro isn't dead—it's evolving. The question now is whether the FDA and investors see the same potential in this subgroup data that the science does.