Executive Summary / Key Takeaways

• Clinical Proof vs. Capital Reality: IN8bio's gamma-delta T cell platform has generated best-in-class durability data—100% one-year survival in AML and 16-month median progression-free survival in glioblastoma—yet the company holds only $10.7 million in cash against a $136.2 million accumulated deficit, triggering a going concern warning that defines the investment risk.

• Platform Differentiation with Measurable Advantages: The DeltEx platform's genetic modifications enable chemotherapy-resistant T cells and suicide gene controls, while the INB-600 T cell engager program demonstrates potent target elimination with minimal cytokine release syndrome, offering a potentially wider therapeutic window than CD3-based competitors.

• Pipeline Prioritization Creates Focus but Limits Optionality: Suspending the INB-400 Phase 2 trial conserved cash but left the company dependent on INB-100 and INB-200 readouts, making near-term clinical milestones binary events for survival.

• Financing Pathway Dictates Equity Dilution Risk: With cash expected to last only into June 2026, management must secure strategic partnerships or execute additional equity offerings, likely at prices that would substantially dilute current shareholders given the $7.8 million market capitalization.

• Competitive Positioning Offers Acquisition Appeal: Against distressed peers like TC BioPharm (TCBP) and acquisition-target Lava Therapeutics (LVTX), IN8bio's demonstrated 4-year GBM remission and allogeneic AML persistence create a compelling target for larger biopharma seeking gamma-delta T cell assets, offering the primary upside asymmetry.

Setting the Scene: Gamma-Delta T Cells at the Crossroads

IN8bio operates at the frontier of cellular immunotherapy, engineering gamma-delta T cells to attack cancers and autoimmune diseases through mechanisms that conventional CAR-T therapies cannot replicate. Founded in 2015 as Incysus and rebranded in August 2020, the company built its intellectual property foundation through exclusive licenses with UAB Research Foundation and Emory University, securing early access to gamma-delta T cell engineering techniques that remain core to its DeltEx platform today. This history matters because it explains why IN8bio's approach incorporates both allogeneic cell therapies and T cell engagers—a dual-platform strategy that provides multiple shots on goal but also spreads limited resources across competing priorities.

The gamma-delta T cell field sits at an inflection point where clinical proof-of-concept is emerging but no company has yet achieved commercial validation. More than 25 trials globally target this space, yet the market remains pre-commercial with a projected $13 billion opportunity growing at 9.5% annually. IN8bio's positioning within this landscape reflects a deliberate focus on high-unmet-need indications: acute myeloid leukemia post-transplant and newly diagnosed glioblastoma multiforme, diseases where standard-of-care survival measured in months creates a low bar for transformative impact. This focus sharpens the company's value proposition for potential acquirers seeking differentiated assets but also concentrates execution risk in two high-stakes clinical programs.

Technology, Products, and Strategic Differentiation

The DeltEx platform's core innovation lies in genetically modifying gamma-delta T cells to survive chemotherapy exposure while maintaining tumor-killing capacity—a feature that directly addresses the limitation of conventional cell therapies washing out during standard cancer treatment. INB-200 exemplifies this approach, with drug-resistant immunotherapy enabling repeated dosing that produced a 16.1-month median progression-free survival in GBM, more than doubling the 6.9-month expected outcome and surpassing the historical 14.6-month median overall survival. This durability creates a compelling case for the platform's mechanism of action, as one patient remains progression-free beyond four years, a milestone rarely observed in GBM trials.

INB-100 demonstrates a different advantage: allogeneic cells that persist for one year post-transplant without causing severe graft-versus-host disease, achieving 100% complete remission and overall survival rates that exceed real-world controls by 25-33 percentage points. The observation of grade 1-2 GvHD in approximately 60% of patients presents a manageable safety profile compared to the life-threatening GvHD seen with traditional allogeneic approaches, suggesting IN8bio has solved a key limitation that previously restricted allogeneic T cell use in transplant settings. This matters because it opens a path to off-the-shelf therapies that could scale more efficiently than autologous products requiring patient-specific manufacturing.

The INB-600 T cell engager platform addresses a separate market opportunity by redirecting existing gamma-delta T cells rather than manufacturing new ones, with preclinical data showing complete B cell depletion in lupus patient samples while releasing minimal inflammatory cytokines. Unlike traditional CD3-based bispecific engagers that risk cytokine release syndrome and T cell exhaustion, INB-619 and INB-633 selectively activate gamma-delta subsets, potentially enabling higher dosing and broader therapeutic windows. This platform provides a pipeline-in-a-pill optionality that could extend IN8bio's reach into autoimmune diseases where chronic dosing demands superior safety profiles.

Financial Performance: Burning Cash to Prove Concept

IN8bio's financial statements tell a story of disciplined cash management amid severe constraint, with operating cash burn decreasing to $10.6 million for the nine months ended September 30, 2025, down from $20.1 million in the prior year period. This 47% reduction in cash consumption reflects deliberate cuts: research and development expenses fell $5.8 million year-over-year through workforce reductions and the INB-400 trial suspension, while general and administrative costs dropped $2.7 million via lower insurance premiums and professional fees. The company is stretching its remaining capital further, but the absolute numbers reveal how little room remains for error.

The balance sheet presents a stark picture: $10.7 million in cash against $136.2 million in accumulated losses, with management explicitly stating this amount cannot fund 12 months of operations from the November 2025 filing date. This admission triggers the going concern warning that hangs over every clinical milestone, as the company must raise capital before June 2026 to avoid insolvency. The $8.5 million generated from selling 1.82 million shares through the at-the-market program during 2025 demonstrates management's willingness to dilute shareholders, while the one-for-thirty reverse stock split in June 2025 reveals the desperation required to maintain Nasdaq listing compliance.

Outlook, Guidance, and Execution Risk

Management's guidance centers on three near-term catalysts that could alter the financing equation: completing INB-100 expansion cohort enrollment by year-end 2025 or early 2026, presenting longer-term survival data for INB-200 and INB-400 at the November 2025 SNO meeting, and publishing additional INB-600 preclinical data through 2026. The INB-100 timeline is particularly critical, as the FDA has already provided guidance for a Phase 2 trial with progression-free survival as the primary endpoint, potentially enabling a registration-directed study that would attract strategic partners. However, the company's own cash preservation measures may delay these milestones, creating a circular problem where capital scarcity slows clinical progress that could unlock capital.

The path forward narrows to three options: secure a strategic collaboration that provides non-dilutive funding, license the DeltEx platform to a better-capitalized partner, or execute another equity raise that would likely price at a significant discount to current levels given the $1.70 share price and $7.8 million market capitalization. Management's commentary emphasizes they are "actively seeking additional funding sources, potential accelerated approval pathways, and/or strategic opportunities," but offers no assurance these efforts will succeed on acceptable terms. The $4.1 million potential from Series B warrant exercises and $8.1 million from Series C warrants provides minimal cushion relative to the quarterly burn rate.

Risks and Asymmetries: What Can Break the Thesis

The going concern warning represents the primary risk, as failure to secure financing by mid-2026 would force the company into distressed asset sales or bankruptcy regardless of clinical data quality. This risk is compounded by manufacturing complexity: dependence on a single third-party supplier for lentiviral vectors and automated manufacturing equipment creates a bottleneck where any disruption could delay trials and accelerate cash depletion. The observed GvHD in INB-100, while manageable, could escalate with broader dosing, and the allogeneic platform faces unproven challenges in scaling donor cell consistency.

Competitive dynamics threaten to erode IN8bio's window of opportunity. Adicet Bio (ACET)'s $125 million cash position and recent $80 million financing provide a multi-year runway that IN8bio cannot match, while Adicet's expansion into autoimmune diseases with positive lupus data could capture partnership interest that might otherwise flow to IN8bio's INB-600 platform. Lava Therapeutics' pending acquisition by XOMA (XOMA), despite its own trial discontinuation, demonstrates that gamma-delta assets can find buyers, but at valuations likely below prior peaks. TC BioPharm's collapse into liquidation removes a direct competitor but also signals how quickly clinical-stage biotechs can fail when capital dries up.

The regulatory environment adds another layer of uncertainty. The One Big Beautiful Bill Act's Medicaid cuts and the Inflation Reduction Act's drug pricing provisions could limit reimbursement for novel cell therapies, while the draft march-in rights framework creates theoretical risk that government-funded IP could be licensed to competitors if prices are deemed excessive. These macro pressures matter because they affect the commercial potential that strategic partners would underwrite, potentially reducing upfront payments or milestone values in any deal IN8bio might strike.

Valuation Context: Option Value on Clinical Durability

At $1.70 per share, IN8bio trades at a $7.8 million market capitalization that reflects near-certain equity dilution or strategic asset sale rather than fundamental business value. The company carries no debt and maintains a current ratio of 6.91, indicating sufficient near-term liquidity, but the -$2.9 million enterprise value (calculated as market cap minus net cash) suggests the market assigns negative value to the operating business after accounting for cash burn. This valuation metric is less meaningful for a clinical-stage company than for profitable firms, but it underscores how severely the market discounts the pipeline absent near-term catalysts.

Peer comparisons provide the only quantitative anchor for valuation. Adicet Bio trades at a $76.4 million market cap with $125 million in cash, implying investors value its gamma-delta platform and pipeline at a negative enterprise value similar to IN8bio's, though Adicet's superior runway commands a premium. Lava Therapeutics' acquisition terms remain undisclosed but likely reflect a modest multiple on its preclinical assets given its trial discontinuation and restructuring. TC BioPharm's delisting and liquidation demonstrate the zero-value outcome that awaits IN8bio if financing fails, making the $1.70 share price essentially an option on successful partnership negotiations.

For investors, the relevant metrics are cash runway and burn rate: $10.7 million supports approximately six to nine months of operations at the current $3.5-4.0 million quarterly burn rate, creating a hard deadline for clinical data to catalyze external funding. The path to value creation runs exclusively through partnership or acquisition, as the company cannot reach commercialization without capital infusion that would likely exceed its current market cap. Any positive INB-100 or INB-200 data readout could trigger a re-rating toward peer-average valuations of $50-100 million, representing a 6-12x return from current levels, while failure to secure financing by Q2 2026 implies near-total loss.

Conclusion: A Compelling Science Story with a Ticking Clock

IN8bio has demonstrated clinical durability that positions its DeltEx platform among the most promising gamma-delta T cell approaches in development, with INB-100's 100% survival rates and INB-200's four-year GBM remission representing genuine breakthroughs in diseases with dismal standard-of-care outcomes. The INB-600 T cell engager platform further broadens the company's strategic appeal by addressing autoimmune indications with a best-in-class safety profile. This scientific validation creates the potential for significant value creation through partnership or acquisition, particularly as larger biopharma companies seek differentiated cell therapy assets.

The central thesis hinges on whether management can convert clinical promise into non-dilutive capital before cash runs out in mid-2026. The company's disciplined burn rate reduction and focused pipeline strategy improve the odds of reaching key milestones, but the $10.7 million cash position leaves no margin for clinical setbacks, manufacturing delays, or competitive data readouts that could diminish IN8bio's negotiating leverage. For investors, the asymmetry is stark: successful INB-100 enrollment completion or INB-200 survival data at SNO could drive a multi-bagger re-rating, while any financing delay beyond Q2 2026 likely results in near-total loss. The stock at $1.70 represents a call option on management's ability to navigate this narrow window, making it a high-conviction speculation for risk-tolerant investors who believe durability data will trump balance sheet weakness in the near term.