Adial Pharmaceuticals Reports First Quarter 2024 Financial Results and Provides Business Update

GLEN ALLEN, Va., May 15, 2024 (GLOBE NEWSWIRE) -- Adial Pharmaceuticals, Inc. (NASDAQ:ADIL) ("Adial" or the "Company"), a clinical-stage biopharmaceutical company focused on developing therapies for the treatment and prevention of addiction and related disorders, today provided a business update and reported its financial results for the first quarter of 2024.

Cary Claiborne, President and Chief Executive Officer of Adial, stated, "We are making steady progress as it relates to AD04. We have initiated new activities related to our clinical development plan after incorporating favorable feedback received from the FDA last year. We anticipate conducting two parallel Phase 3 clinical trials of AD04 to support potential approval in the shortest timeframe possible while minimizing risk. To support our efforts, we formally hired Tony Goodman as our Chief Operating Officer during the quarter. Given his impressive background as an accomplished pharmaceutical industry executive, as well as serving on our Board of Directors since 2017, he has played a key role in advancing our strategic growth initiatives, including clinical development and commercial planning for AD04, while also furthering partnership discussions."

"In addition, we are committed to developing a robust patent estate around AD04 and have been awarded key patents from the United States Patent and Trademark Office in 2024. First, we were awarded patent number 11,905,562, which further protects AD04 and covers its unique ability to target the serotonin transporter gene for the potential treatment of opioid use disorder (OUD). More recently, we were issued patent number 11,957,664, which covers important aspects of the combination of our proprietary genetic diagnostic and AD04 to treat alcohol use disorder (AUD), OUD, and other drug dependencies. These patents are important given our post hoc analysis identified genotypes that positively responded to AD04, which represents an addressable market of approximately $40 billion in the U.S. alone. Additionally, these patents enable us to expand our focus on AUD in the future, including advancing AD04 for the potential treatment of OUD."

"Overall, we believe we are well positioned to execute on meaningful milestones ahead, while having preserved a strong balance sheet. We look forward to updating our shareholders as developments unfold," concluded Mr. Claiborne.

Other Developments

Publications

On April 10, 2024, Adial announced the publication of a peer-reviewed article highlighting the promising clinical results, strong safety profile and high compliance among patients administered AD04 (low-dose ondansetron), the Company's lead investigational new drug product being developed for the treatment of Alcohol Use Disorder (AUD). The publication also reported the results of a new study analyzing the liver safety profile of AD04 compared with placebo in subjects with AUD in the Company's prior Phase 3 clinical trial.

The published study provides a comprehensive analysis of the liver safety profile of AD04 compared to a placebo in individuals with AUD and a specific 5-marker genetic profile. AUD, characterized by compulsive alcohol consumption and loss of control over intake, poses significant health risks and is a major contributor to alcohol-associated liver disease (ALD), a leading cause of liver transplantation and global mortality.

The manuscript entitled, "Safety and compliance of long-term low-dose ondansetron in alcohol use disorder treatment," was published in the European Journal of Internal Medicine. The publication is available via Open Access at: https://www.ejinme.com/article/S0953-6205(24)00123-7/fulltext

Warrants

On March 1, 2024 Adial announced entering into a definitive agreement for the immediate exercise of certain outstanding warrants to purchase up to an aggregate of 1,150,000 shares of common stock of the Company originally issued in October 2023, having an exercise price of $2.82 per share and eighteen months term. The gross proceeds to the Company from the exercise of the warrants were approximately $4.3 million, prior to deducting placement agent fees and estimated offering expenses.

        

First Quarter 2024 Financial Results

• Cash and cash equivalents were $5.0 million as of March 31, 2024, compared to $2.8 million as of December 31, 2023. During the quarter, the Company received total gross proceeds of approximately $4.3 million from recent warrant exercises. Including the proceeds from warrant exercises, the Company believes that its existing cash and cash equivalents will allow it to accelerate the development of AD04 and fund its operating expenses into the first quarter of 2025.
• Research and development expenses increased by approximately $88 thousand in the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This change was due to increases in activities related to drug development planning, chemistry, and manufacturing expenses, and for R&D directed personnel salaries. These increases were partially offset by the decreased expense of regulatory consultants and direct clinical trial expenses. These changes were the result of the completion of data analysis and other follow-up activity associated with our recent ONWARD trial and the ramp up of planning for the next steps in the development of our drug candidate, AD04.
• General and administrative expenses decreased by approximately $512 thousand in the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The three months ended March 31, 2024, saw substantial decreases in expense in several areas, including the salaries of G&A directed personnel and cash director compensation, corporate legal expenses, direct patent expenses, and travel expenses.
• Net Loss was $6.5 million for the three months ended March 31, 2024, compared to a net loss of $2.9 million for the three months ended March 31, 2023. This increase was more than accounted for by a one-time, non-cash charge of $4.5 million recognized on issuance of new warrants to induce the exercise of existing warrants by the holder on March 1, 2024.

About Adial Pharmaceuticals, Inc.

Adial Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the development of therapies for the treatment and prevention of addiction and related disorders. The Company's lead investigational new drug product, AD04, is a genetically targeted, serotonin-3 receptor antagonist, therapeutic agent for the treatment of Alcohol Use Disorder (AUD) in heavy drinking patients and was recently investigated in the Company's ONWARD™ pivotal Phase 3 clinical trial for the potential treatment of AUD in subjects with certain target genotypes identified using the Company's proprietary companion diagnostic genetic test. ONWARD showed promising results in reducing heavy drinking in heavy drinking patients, and no overt safety or tolerability concerns. AD04 is also believed to have the potential to treat other addictive disorders such as Opioid Use Disorder, gambling, and obesity. Additional information is available at www.adial.com.

Forward-Looking Statements

This communication contains certain "forward-looking statements" within the meaning of the U.S. federal securities laws. Such statements are based upon various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. The forward-looking statements include statements regarding initiating new activities related to the Company's clinical development plan, conducting two parallel Phase 3 clinical trials of AD04 to support potential approval in the shortest timeframe possible while minimizing risk, advancing strategic growth initiatives including clinical development and commercial planning for AD04 while also furthering partnership discussions, developing a robust patent estate around AD04, the Company's patents enabling it to expand its focus on AUD in the future including advancing AD04 for the potential treatment of OUD, being well positioned to execute on meaningful milestones ahead, updating shareholders as developments unfold, existing cash and cash equivalents allowing the Company to accelerate the development of AD04 and fund its operating expenses into the first quarter of 2025 and the potential of AD04 to treat other addictive disorders such as opioid use disorder, gambling, and obesity. Any forward-looking statements included herein reflect our current views, and they involve certain risks and uncertainties, including, among others, our ability to pursue our regulatory strategy, our ability to advance ongoing partnering discussions, our ability to obtain regulatory approvals for commercialization of product candidates or to comply with ongoing regulatory requirements, our ability to develop strategic partnership opportunities and maintain collaborations, our ability to obtain or maintain the capital or grants necessary to fund our research and development activities, our ability to complete clinical trials on time and achieve desired results and benefits as expected, regulatory limitations relating to our ability to promote or commercialize our product candidates for specific indications, acceptance of our product candidates in the marketplace and the successful development, marketing or sale of our products, our ability to maintain our license agreements, the continued maintenance and growth of our patent estate and our ability to retain our key employees or maintain our Nasdaq listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statement included in our Annual Report on Form 10-K for the year ended December 31, 2023, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.

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