Adial Pharmaceuticals Receives Notice of Exercise from Adovate for the Acquisition of Purnovate’s Assets and Business
- Adial will receive an upfront payment of $450,000 and expense reimbursement of approximately $0.9 million
- They are entitled to receive up to $83 million in milestone payments and a 19.9% equity stake in Adovate
- None.
Adial to receive potential development and commercial milestone payments of up to
CHARLOTTESVILLE, Va., May 10, 2023 (GLOBE NEWSWIRE) -- 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
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
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