Indaptus Therapeutics Reports First Quarter 2023 Financial Results and Provides Corporate Update

Enrollment Continues for Phase 1 Clinical Trial of Decoy20 for Treatment of Solid Tumors with First Patient Dosed In March 2023

NEW YORK, May 11, 2023 (GLOBE NEWSWIRE) -- Indaptus Therapeutics, Inc. (Nasdaq: INDP) (“Indaptus” or the “Company”), today announced financial results for the first quarter ended March 31, 2023 and provided a corporate update.

“Following the dosing and completion of our first patient in the first cohort of our INDP-D101 trial of Decoy20 for the treatment of solid tumors, we continue the screening and enrollment process to complete our first cohort,” said Jeffrey Meckler, chief executive officer of Indaptus. “In the interim, we have presented significant data at the American Association for Cancer Research scientific conference and received additional recognition within the scientific community. We have also received important additions to our intellectual property portfolio, now having patent protections for our Decoy immunotherapy platform in all 32 countries for which we applied. As we continue to screen and enroll patients for our trial, we will continue to prudently manage our cash position.”

Key highlights from Q1 2023 to date:

• The Company reported the first dosing of a study subject in the INDP-D101 trial in March 2023. After Decoy20 dosing, the subject experienced expected and manageable adverse events believed to be related to the immune system activating components known to be in the product. The study’s objectives are to assess the safety and tolerability of Decoy20, to determine the maximum tolerated dose (MTD) and recommended phase 2 dose (RP2D), as well as to assess Decoy20 pharmacokinetics (PK), pharmacodynamics and clinical activity. The Phase 1 study has begun with a single dose escalation followed by an expansion with continuous administration of Decoy20. The initial trial site was the USC Norris Cancer Center in Los Angeles, CA. More information can be found at www.clinicaltrials.gov.
  
  
• In February 2023, Indaptus activated Morristown Medical Center as the second trial site in the INDP-D101 trial. The third site, Emory Winship Cancer Institute in Atlanta, GA, was activated in March 2023.
  
  
• A compound from the Company’s Decoy platform was featured in a poster presentation at the American Association for Cancer Research. The poster, titled, “A systemically administered killed bacteria-based multiple immune receptor agonist for pulsed anti-tumor immunotherapy,” demonstrated 90% reduction of LPS-endotoxin activity and use of 100% killed, non-pathogenic bacteria.
  
  
• The Company’s Chief Scientific Officer, Michael Newman, Ph.D., was named chair for two of the three days of the 4^th STING & TLR-Targeting Therapies Summit held in Boston on May 9-11, where he was also a featured speaker.
  
  
• Robert Martell, M.D., Ph.D. was elected to the Indaptus Therapeutics Board of Directors in February 2023.
  
  
• Indaptus received patent allowances for its immunotherapy platform in Brazil and India. The Indian patent allowance brought the number of countries in which the Company holds IP protection to 32.   
  

Financial Highlights for the First Quarter Ended March 31, 2023

Research and development expenses, for the three-month period ended March 31, 2023, were approximately $1.9 million, an increase of approximately $600,000 compared with approximately $1.3 million in the three-month period ended March 31, 2022. The increase was primarily for payroll and related expenses and for our phase 1 clinical trial that was initiated in December 2022.

General and administrative expenses, for the three-month period ended March 31, 2023, were approximately $2.6 million, an increase of approximately $500,000 compared with approximately $2.1 million in the three-month period ended March 31, 2022. The increase was primarily for legal fees, recruitment costs and other professional fees and was primarily offset by a decrease in directors’ and officers’ insurance expenses and in payroll and related expenses.

Loss per share for the three-month period ended March 31, 2023 was approximately $0.51 compared with approximately $0.41 for the three-month period ended March 31, 2022.

As of March 31, 2023, the Company had cash and cash equivalents and marketable securities of approximately $21.7 million. As of December 31, 2022, the Company had cash and cash equivalents and marketable securities of approximately $26.4 million. The Company expects that its current cash, cash equivalents and marketable securities will support its ongoing operating activities into the second quarter of 2024. This cash runway guidance is based on the Company’s current operational plans and excludes any additional funding and any business development activities that may be undertaken. Indaptus continues to assess all financing options that would support its corporate strategy.

Net cash used in operating activities was approximately $5.0 million for the three-month period ended March 31, 2023, compared with net cash used in operating activities of approximately $3.1 million for the three-month period ended March 31, 2022. The increase of approximately $1.9 million in net cash used was primarily attributable to expenses related to research and development activities in connection with the Phase 1 clinical trial and an increase in general and administrative expenses.

Net cash provided by investing activities was approximately $2.1 million for the three months ended March 31, 2023 which was related to the maturity of $9.0 million in marketable securities, offset by net investment of approximately $6.9 million in marketable securities. Net cash used in investing activities was approximately $2.8 million for the three months ended March 31, 2022 which was primarily related to net investment in marketable securities in the amount of approximately $3.0 million, offset by approximately $0.2 million from the proceeds received for assets held for sale.

There was no net cash provided by or used in financing activities in the three months ended March 31, 2023 and in the three months ended March 31, 2022.

About Indaptus Therapeutics

Indaptus Therapeutics has evolved from more than a century of immunotherapy advances. The Company’s novel approach is based on the hypothesis that efficient activation of both innate and adaptive immune cells and pathways and associated anti-tumor and anti-viral immune responses will require a multi-targeted package of immune system-activating signals that can be administered safely intravenously (i.v.). Indaptus’ patented technology is composed of single strains of attenuated and killed, non-pathogenic, Gram-negative bacteria producing a multiple Toll-like receptor (TLR) agonist Decoy platform. The products are designed to have reduced i.v. toxicity, but largely uncompromised ability to prime or activate many of the cells and pathways of innate and adaptive immunity. Decoy products represent an antigen-agnostic technology that have produced single-agent activity against metastatic pancreatic and orthotopic colorectal carcinomas, single agent eradication of established antigen-expressing breast carcinoma, as well as combination-mediated eradication of established hepatocellular carcinomas and non-Hodgkin’s lymphomas in standard pre-clinical models, including syngeneic mouse tumors and human tumor xenografts. In pre-clinical studies tumor eradication was observed with Decoy products in combination with anti-PD-1 checkpoint therapy, low-dose chemotherapy, a non-steroidal anti-inflammatory drug, or an approved, targeted antibody. Combination-based tumor eradication in pre-clinical models produced innate and adaptive immunological memory, involved activation of both innate and adaptive immune cells, and was associated with induction of innate and adaptive immune pathways in tumors after only one i.v. dose of Decoy product, with associated “cold” to “hot” tumor inflammation signature transition. IND-enabling, nonclinical toxicology studies demonstrated safe i.v. administration without sustained induction of hallmark biomarkers of cytokine release syndromes, possibly due to passive targeting to liver, spleen, and tumor, followed by rapid elimination of the product. Indaptus’ Decoy products have also produced significant single agent activity against chronic hepatitis B virus (HBV) and chronic human immunodeficiency virus (HIV) infections in pre-clinical models.

Forward-Looking Statements

This press release contains forward-looking statements with the meaning of the Private Securities Litigation Reform Act. These include statements regarding management’s expectations, beliefs and intentions regarding, among other things: our expectations and plans regarding the Phase 1 clinical trial of Decoy20, including the timing and design thereof; the plans and objectives of management for future operations; our research and development activities and costs; the sufficiency of our cash, cash equivalents and marketable securities to fund our ongoing activities and our cash management strategy; and our assessment of financing options to support our corporate strategy. Forward-looking statements can be identified by the use of forward-looking words such as “believe”, “expect”, “intend”, “plan”, “may”, “should”, “could”, “might”, “seek”, “target”, “will”, “project”, “forecast”, “continue” or “anticipate” or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to the following: our limited operating history; the need for, and our ability to raise, additional capital given our lack of current cash flow; our clinical and preclinical development, which involves a lengthy and expensive process with an uncertain outcome; our incurrence of significant research and development expenses and other operating expenses, which may make it difficult for us to attain profitability; our pursuit of a limited number of research programs, product candidates and specific indications and failure to capitalize on product candidates or indications that may be more profitable or have a greater likelihood of success; our ability to obtain and maintain regulatory approval of any product candidate; the market acceptance of our product candidates; our reliance on third parties to conduct our preclinical studies and clinical trials and perform other tasks; our reliance on third parties for the manufacture of our product candidates during clinical development; our ability to successfully commercialize Decoy20 or any future product candidates; our ability to obtain or maintain coverage and adequate reimbursement for our products; the impact of legislation and healthcare reform measures on our ability to obtain marketing approval for and commercialize Decoy20 and any future product candidates; product candidates of our competitors that may be approved faster, marketed more effectively, and better tolerated than our product candidates; our ability to adequately protect our proprietary or licensed technology in the marketplace; the impact of, and costs of complying with healthcare laws and regulations, and our failure to comply with such laws and regulations; information technology system failures, cyberattacks or deficiencies in our cybersecurity; and unfavorable global economic conditions. These and other important factors discussed under the caption “Risk Factors” included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 to be filed with the SEC, our most recent Annual Report on Form 10-K filed with the SEC on March 17, 2023, and our other filings with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. All forward-looking statements speak only as of the date of this press release and are expressly qualified in their entirety by the cautionary statements included in this press release. We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by applicable law.

Contact: [e-mail]

Investor Relations Contact:
CORE IR
Louie Toma
[e-mail]

Media Contact:
CORE IR
Jules Abraham
[e-mail] 
917-885-7378

INDAPTUS THERAPEUTICS, INC.
Unaudited Condensed Consolidated Balance Sheets
		March 31, 2023				December 31, 2022
Assets
Current assets:
Cash and cash equivalents		$	6,805,146			$	9,626,800
Marketable securities			14,875,693				16,806,009
Prepaid expenses and other current assets			470,751				811,433
Total current assets			22,151,590				27,244,242
Non-current assets:
Property and equipment, net			1,698				2,019
Right-of-use asset			236,506				79,294
Other assets			754,728				738,251
Total non-current assets			992,932				819,564
Total assets		$	23,144,522			$	28,063,806
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and other current liabilities		$	1,722,622			$	3,352,847
Operating lease liability, current portion			99,837				80,494
Total current liabilities			1,822,459				3,433,341
Non-current liabilities:
Operating lease liability, net of current portion			136,669				-
Total non-current liabilities			136,669				-
Total liabilities			1,959,128				3,433,341
Commitments and contingent liabilities			-				-
Stockholders’ equity:
Common stock: $0.01 par value, 200,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 8,401,047 shares issued and outstanding as of March 31, 2023 and December 31, 2022			84,011				84,011
Additional paid in capital			55,170,849				54,443,705
Accumulated deficit			(34,246,923	)			(29,993,685	)
Accumulated other comprehensive income			177,457				96,434
Total stockholders’ equity			21,185,394				24,630,465
Total liabilities and stockholders’ equity		$	23,144,522			$	28,063,806

Unaudited Condensed Consolidated Statements of Operations
		Three Months Ended March 31,
		2023				2022
Operating expenses:
Research and development		$	1,879,900			$	1,297,098
General and administrative			2,575,266				2,104,975
Total operating expenses			4,455,166				3,402,073
Loss from operations			(4,455,166	)			(3,402,073	)
Other income, net			201,928				36,919
Net loss		$	(4,253,238	)		$	(3,365,154	)
Net loss available to common stockholders per share of common stock, basic and diluted		$	(0.51	)		$	(0.41	)
Weighted average number of shares used in calculating net loss per share, basic and diluted			8,401,047				8,258,597
Net loss		$	(4,253,238	)		$	(3,365,154	)
Other comprehensive income (loss):
Reclassification adjustment for realized gain on marketable securities included in net loss			(129,229	)			-
Unrealized gain (loss) on marketable securities			210,252				(9,221	)
Comprehensive loss		$	(4,172,215	)		$	(3,374,375	)

Unaudited Condensed Consolidated Statements of Cash Flows
		For the three months ended
		March 31,
		2023				2022
Cash flows from operating activities:
Net loss		$	(4,253,238	)		$	(3,365,154	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			321				534
Stock-based compensation			727,144				831,183
Realized gain on marketable securities			(129,229	)			-
Realized gain on assets held for sale			-				(24,155	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			324,205				364,708
Accounts payable and other current liabilities			(1,630,225	)			(925,204	)
Operating lease right-of-use asset and liability, net			(1,200	)			360
Net cash used in operating activities			(4,962,222	)			(3,117,728	)
Cash flows from investing activities:
Proceeds received for assets held for sale			-				172,555
Maturity of marketable securities			9,000,000				-
Purchase of marketable securities			(6,859,432	)			(2,970,681	)
Net cash provided by (used in) investing activities			2,140,568				(2,798,126	)
Net decrease in cash and cash equivalents			(2,821,654	)			(5,915,854	)
Cash and cash equivalents at beginning of period			9,626,800				39,132,165
Cash and cash equivalents at end of period		$	6,805,146			$	33,216,311
Noncash investing and financing activities
Change in unrealized gain/loss on marketable securities		$	81,023			$	-
ASC 842 lease renewal option exercise		$	236,506			$	-
Reclassification of security deposit		$	16,477			$	-
Supplemental Disclosures
Cash received for interest earned on deposits		$	36,123			$	1,318