Adial Pharmaceuticals, Inc. (NASDAQ: ADIL; ADILW)
(“Adial” or the “Company”) a clinical-stage biopharmaceutical
company focused on developing therapies for the treatment and
prevention of addiction and related disorders, today announced that
Adovate, LLC (formerly known as Adenomed, LLC) (“Adovate”), has
provided irrevocable notice of exercise of its previously announced
option to acquire the assets and business of Purnovate, Inc., a
wholly owned subsidiary of the Company, under the terms previously
agreed. Adovate was recently formed by William Stilley, co-founder
and former CEO of Adial, for the sole purpose of acquiring, funding
and advancing Purnovate’s business. The option exercise is
effective May 16, 2023.
With the notice, Adial received a non-refundable
option exercise fee and upfront payment of $450,000, and, after a
final acquisition agreement is signed, will receive expense
reimbursement of approximately $0.9 million for Purnovate
expenditures incurred and paid by Adial after December 1, 2022
through and including May 15, 2023. Any Purnovate expenses incurred
on and subsequent to May 16, 2023, will become the responsibility
of Adovate. In addition, the Company is entitled to receive up to
approximately $11 million in development and approval milestones
for each compound (up to $33 million in total development and
approval milestones for the first three compounds alone), as well
as a total of $50 million in additional commercial milestones, for
a total consideration of up to $83 million with potential milestone
payments on additional compounds. Additionally, the Company will
receive a single digit royalty and receive a 19.9% equity stake in
Adovate.
Cary Claiborne, President and Chief Executive
Officer of Adial, stated, “We believe this is another significant
milestone for Adial as it demonstrates our commitment to maximizing
the value of our assets, as well as advancing our assets in the
most cost-efficient way possible. By executing this agreement with
Adovate, we will effectively reduce our cash burn rate, receive
upfront non-dilutive capital, and maintain meaningful equity and
downstream economics. In addition, this will enable us to focus
exclusively on advancing AD04 which remains our top priority
through potential regulatory approvals and prioritize our resources
accordingly. Given recent positive developments as it relates to
AD04, we believe it is an ideal time for us to sell the Purnovate
assets and business in order to maximize the value of both AD04 and
Purnovate for our shareholders.”
Mr. Stilley commented, “I’m proud to support
Adial through this partnership and look forward to advancing
Purnovate’s drug candidates to meaningful developmental milestones
as we build Adovate around Purnovate’s drug development platform.
These next-generation compounds have already demonstrated
preclinical efficacy and are well-positioned for clinical
translation, further validating our belief in their potential to
address important unmet medical needs. I believe that by allocating
distinct and separate resources to the Purnovate assets, we can
accelerate development to important inflection points and maximize
the value of these assets for both Adovate and the Adial
shareholders. Moving forward my primary focus will be on Adovate
and I am departing from my active management role with Adial. I
will, however, continue to lend my support, and look forward to
ongoing collaboration as both a significant Adial shareholder and
member of the board.”
Using the Purnovate adenosine drug development
platform, Adovate intends to focus on inventing and developing
best-in-class adenosine receptor agonists and antagonists. The
adenosine receptors have been associated with a broad range of
disease classes, including pain, oncology, addiction, pulmonary,
inflammation and others. Historically, the majority of adenosine
compounds have been limited to a nonclinical setting due in part to
inadequate solubility profiles that limit their distribution to the
target tissue (bioavailability). The Purnovate technology is
designed to address this limitation by delivering substantially
improved biodistribution. These next-generation compounds have
already demonstrated preclinical efficacy and are being advanced
towards clinical studies.
The transaction was independently evaluated and
unanimously approved, first by the Adial Audit Committee of the
Board of Directors, and then by its full Board of Directors, with
Mr. Stilley, a current board member, abstaining from the vote.
About Adial Pharmaceuticals,
Inc.
Adial Pharmaceuticals is a clinical-stage
biopharmaceutical company focused on the development of treatments
for addictions. 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 (estimated to be approximately one-third of the
AUD population) 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. The Company’s Purnovate subsidiary
has been also developing adenosine analogs for the treatment of
pain and other disorders. 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 the Company’s proposed sale of Purnovate to Adovate, LLC
(formerly known as Adenomed, LLC), entering into a final
acquisition agreement for the transaction pursuant to which the
Company will receive $450,000 upon the exercise of the option and
then be reimbursed for any Purnovate expenditures incurred and paid
after December 1, 2022, the Company receiving up to approximately
$11 million in development and approval milestones for each
compound and a total of $50 million in additional commercial
milestones, for a total consideration of up to $83 million on the
first three compounds, receiving potential milestone payments on
additional compounds, a single-digit royalty and a 19.9% equity
stake in Adovate, maximizing the value of the Company’s assets,
advancing the Company’s assets in the most cost-efficient way
possible, reducing the Company’s cash burn rate and maintaining
meaningful equity and downstream economics, focusing exclusively on
advancing AD04 through potential regulatory approvals and
prioritizing the Company’s resources accordingly, being an ideal
time for the Company to sell the Purnovate assets and business in
order to maximize the value of both AD04 and Purnovate for its
shareholders, advancing Purnovate’s drug candidates to meaningful
developmental milestones as Adovate is built around Purnovate’s
drug development platform, the potential of Purnovate’s compounds
to address important unmet medical needs, accelerating development
to important inflection points by allocating distinct and separate
resources to the Purnovate assets, 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 complete
the sale of the assets and business of Purnovate to Adovate as
planned and receive up to $83 million in development/commercial
milestones and other compensation, our ability to reduce our
current burn rate and extend our cash runway, our ability to
implement our strategic plan for AD04 and continue discussions with
potential pharmaceutical partners, Adovate’s ability to advance
Purnovate’s drug candidates to meaningful developmental milestones,
our ability to complete clinical trials on time and achieve desired
results and benefits as expected, our ability to obtain regulatory
approvals for commercialization of product candidates or to comply
with ongoing regulatory requirements, 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, our ability to establish and maintain
collaborations, our ability to obtain or maintain the capital or
grants necessary to fund our research and development activities,
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, 2022, 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.
Contact:Crescendo Communications, LLCDavid
Waldman / Alexandra SchiltTel: 212-671-1021Email:
adil@crescendo-ir.com
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