Business Overview and Detailed History Inhibrx Biosciences, Inc. is a clinical-stage biopharmaceutical company that has transformed itself into a resilient and innovative force in the competitive oncology landscape. The company's strategic pivot, marked by the spin-off of its INBRX-101 program and the acquisition of its core therapeutic candidates, has positioned Inhibrx Biosciences for long-term success.
Inhibrx Biosciences, formerly a division of Inhibrx, Inc., was spun off in May 2024 following the latter's $1.9 billion sale of its INBRX-101 program to Sanofi S.A. This transformative event allowed Inhibrx Biosciences to streamline its focus on its two lead therapeutic candidates, ozekibart INBRX-109 and INBRX-106, which are currently in various stages of clinical development.
The company was originally founded as Inhibrx, Inc. in 2017 with the mission of leveraging its proprietary modular protein engineering platforms to develop a broad pipeline of novel biologic therapeutic candidates. In July 2020, the company secured significant funding through a loan and security agreement with Oxford Finance LLC, receiving an aggregate principal amount of $200 million over seven tranches. This financial boost enabled the company to accelerate its research and development efforts for its therapeutic candidates.
A major turning point came in January 2024 when Inhibrx, Inc. announced its intent to spin off the INBRX-101 program, an optimized, recombinant alpha-1 antitrypsin augmentation therapy. The spin-off was completed on May 29, 2024, with the distribution of 92% of the issued and outstanding shares of Inhibrx Biosciences to Inhibrx, Inc.'s shareholders. This transaction was accounted for as a reverse spin-off, with Inhibrx Biosciences considered the accounting spinnor and the successor to the former parent company.
The company's lead oncology program, ozekibart INBRX-109, is a tetravalent death receptor 5 (DR5) agonist currently being evaluated in patients with difficult-to-treat cancers, such as chondrosarcoma, mesothelioma, colorectal cancer, Ewing sarcoma, and pancreatic adenocarcinoma. In June 2021, the FDA and EMA granted orphan drug designation for the treatment of unresectable or metastatic conventional chondrosarcoma, and the company initiated a registration-enabling Phase 2 trial for this indication. Preliminary data from the Phase 1 trial of ozekibart INBRX-109 in combination with irinotecan and temozolomide for the treatment of advanced or metastatic, unresectable Ewing sarcoma showed promising safety and efficacy results, leading the company to expand the ongoing Phase 1/2 trial.
Inhibrx Biosciences' second lead candidate, INBRX-106, is a precisely engineered hexavalent single-domain antibody (sdAb)-based therapeutic targeting OX40, designed to be an optimized agonist of this co-stimulatory receptor. The company is currently investigating INBRX-106 as a single agent and in combination with Keytruda (pembrolizumab) in patients with locally advanced or metastatic solid tumors. Parts 1 and 3 of the Phase 1/2 trial, evaluating dose escalation as a single agent and in combination with Keytruda, respectively, have been completed, with durable responses observed across multiple tumor types. The company is now enrolling patients in Part 4 of the trial, focusing on non-small cell lung cancer (NSCLC) and head and neck squamous cell carcinoma (HNSCC), both in combination with Keytruda.
In addition to its two lead programs, Inhibrx Biosciences maintains a robust discovery pipeline, leveraging its innovative protein engineering platforms to address a wide range of therapeutic targets and indications.
It's worth noting that the company was involved in a trade secrets lawsuit with I-Mab Biopharma, which it prevailed in on November 4, 2024. This legal victory further strengthens the company's position in the competitive biopharmaceutical landscape.
Financial Performance and Liquidity As of September 30, 2024, Inhibrx Biosciences reported $196.3 million in cash and cash equivalents, a significant increase from the $277.9 million it held as of December 31, 2023. This robust cash position is the result of the company's successful spin-off and the Acquirer's assumption of its outstanding debt, as well as the company's prudent financial management.
For the nine months ended September 30, 2024, Inhibrx Biosciences reported a net income of $1.74 billion, driven primarily by the $2.0 billion gain recognized from the transaction with the Acquirer. This remarkable financial performance stands in contrast to the company's net loss of $147.8 million for the same period in the previous year.
Inhibrx Biosciences' research and development expenses increased by 56% year-over-year, reaching $170.4 million for the nine months ended September 30, 2024. This increase was mainly attributable to the expansion of the company's ongoing clinical trials, as well as the initiation of new trials for its lead candidates. General and administrative expenses also increased significantly, reaching $111.2 million, primarily due to expenses related to the Merger and the company's pre-commercialization activities.
Despite the increase in expenses, Inhibrx Biosciences' cash and cash equivalents position remains strong, and the company believes its existing resources will be sufficient to fund its operations for at least the next 12 months. The company plans to finance its future cash needs through a variety of means, including equity offerings, debt financings, and potential collaborations or strategic transactions.
Looking at the company's historical financial performance, for the fiscal year 2023, Inhibrx Biosciences reported revenue of $1.63 million, with a net loss of $154.96 million. Operating cash flow (OCF) was negative $129.01 million, and free cash flow (FCF) was negative $133.60 million. In the most recent quarter (Q3 2024), the company reported no revenue, a net loss of $43.86 million, OCF of negative $30.28 million, and FCF of negative $30.53 million.
The company's liquidity position remains solid, with a debt-to-equity ratio of 0.010282012921156292 as of the most recent quarter. The current ratio and quick ratio both stand at 4.704524322485542, indicating a strong ability to meet short-term obligations.
Competitive Landscape and Risks Inhibrx Biosciences operates in the highly competitive oncology market, where it faces challenges from both established pharmaceutical giants and emerging biotechnology companies. The company's ability to successfully navigate this landscape and advance its pipeline of novel therapeutic candidates will be crucial to its long-term success.
One of the key risks the company faces is the inherent uncertainty and challenges associated with the clinical development of its therapeutic candidates. The success or failure of its ongoing and future clinical trials could have a significant impact on the company's financial position and future prospects.
Additionally, Inhibrx Biosciences is subject to various regulatory requirements and the potential for changes in the regulatory landscape, which could affect the company's ability to obtain necessary approvals for its products.
The biotechnology sector has shown a compound annual growth rate (CAGR) of around 8-10% over the past 5 years, indicating a generally favorable industry trend. However, as a clinical-stage company without any approved products for commercial sale, Inhibrx Biosciences faces significant challenges in terms of revenue generation and profitability in the near term.
Outlook and Conclusion Inhibrx Biosciences has demonstrated its resilience and adaptability in the face of significant challenges, as evidenced by its successful spin-off and the continued advancement of its pipeline. The company's focus on innovative protein engineering and its commitment to addressing unmet medical needs in oncology and other therapeutic areas position it for potential long-term success.
The company's two lead candidates, ozekibart INBRX-109 and INBRX-106, continue to show promise in clinical trials. The recent initiation of a seamless Phase 2/3 clinical trial for INBRX-106 in combination with Keytruda as a first-line treatment for patients with locally advanced recurrent or metastatic HNSCC represents a significant milestone in the company's development efforts.
As Inhibrx Biosciences continues to navigate the complexities of the biopharmaceutical industry, investors will be closely watching the progress of its lead candidates, as well as the company's ability to manage its financial resources and expand its pipeline. With a strong balance sheet and a robust portfolio of therapeutic candidates, Inhibrx Biosciences appears poised to capitalize on the opportunities in the oncology market and create value for its shareholders.
However, it's important to note that as a clinical-stage company, Inhibrx Biosciences faces significant risks and uncertainties. The company's future success will depend on its ability to successfully advance its pipeline, secure regulatory approvals, and eventually commercialize its products. The lack of current revenue and the ongoing net losses underscore the speculative nature of an investment in this early-stage biopharmaceutical company.
Despite these challenges, Inhibrx Biosciences' recent legal victory, strong cash position, and promising clinical pipeline provide reasons for cautious optimism. As the company continues to progress its therapeutic candidates through clinical development, it has the potential to address significant unmet medical needs and create substantial value in the rapidly evolving oncology landscape.