Appili Therapeutics Reports Fiscal Year 2024 Financial and Operational Results

Rhea-AI Summary

Appili Therapeutics reported its fiscal year 2024 results, highlighting the FDA approval and commercial launch of LIKMEZ (ATI-1501) for metronidazole oral suspension. The company secured funding from the U.S. Air Force Academy to advance ATI-1701, a biodefense vaccine, and is engaging with regulatory authorities regarding ATI-1801, a topical antiparasitic product.

Financially, Appili experienced a net loss of $3.8 million, an improvement from the $9.2 million loss in the previous year, aided by an increase in government assistance and revenue. The company reported cash reserves of $0.1 million as of March 31, 2024, compared to $2.5 million the prior year, and highlighted a going concern note due to reliance on closing a transaction with Aditxt and other funding.

Appili entered an agreement with Aditxt, where shareholders would receive a combination of cash and stock, contingent on Aditxt raising additional capital. The deal is expected to finalize by Q3 2024.

Positive

• FDA approval and commercial launch of LIKMEZ (ATI-1501).
• Secured US$14 million from the U.S. Air Force Academy for ATI-1701.
• Net loss reduced to $3.8 million from $9.2 million due to increased government assistance and revenue.
• Reduction in general and administrative expenses by $1.4 million.

Negative

• Cash reserves decreased to $0.1 million from $2.5 million.
• Going concern note highlighting dependency on financing and timely USAFA funding.
• Increased research and development expenses by $2 million.
• Arrangement with Aditxt contingent on raising additional capital.

LIKMEZ™ (ATI-1501) for Metronidazole Oral Suspension 500mg/5mL launched and commercial sales ongoing

Funding commitments from U.S. Air Force Academy intended to advance ATI-1701 toward an IND submission to the FDA

Engaging regulatory authorities to align on ATI-1801 development plans 

HALIFAX, Nova Scotia, June 25, 2024 (GLOBE NEWSWIRE) -- Appili Therapeutics Inc. (TSX:APLI; OTCPink: APLIF) (the “Company” or “Appili”), a biopharmaceutical company focused on drug development for infectious diseases and medical countermeasures, today announced its financial and operational results for the fiscal year ended March 31, 2024 (“FYE 2024”), and provided an update on the Company’s strategy for fiscal 2025. All figures are stated in Canadian dollars unless otherwise stated.

“Notably, during this past fiscal year, the Company’s most advanced asset LIKMEZ (ATI-1501), received U.S. Food and Drug Administration (“FDA”) approval, and together with our partner, Saptalis launched the product and commercial sales which remain ongoing. The launch of LIKMEZ, shortly after securing patent coverage through 2039, is an important milestone that demonstrates Appili’s ability to identify promising opportunities, accelerate their development, and unlock value for the benefit of both patients and shareholders,” said Don Cilla, Pharm.D., M.B.A., President and Chief Executive Officer of Appili. “The U.S. Air Force Academy (“USAFA”) also awarded funding commitments for the advancement of ATI-1701, bringing the total program funding awarded to approximately US$14 million. These funding commitments strengthen Appili’s foundation in biodefense and should enable us to continue to advance this program towards an Investigational New Drug (“IND”) application.”

LIKMEZ™ ATI-1501, is FDA Approved for the Treatment of Anaerobic bacterial Infections,

During FYE 2024, Appili announced the FDA approval of LIKMEZ™ (ATI-1501), our proprietary taste-masked liquid suspension formulation of metronidazole, through our U.S. partner, Saptalis Pharmaceuticals LLC (“Saptalis”).

LIKMEZ is the first and only FDA approved ready-made suspension of metronidazole for the treatment of antimicrobial infections that addresses the unmet need in patients with dysphagia to avoid risks associated with drug compounding, and discontinuation related anti-microbial resistance. Saptalis launched LIKMEZ in November 2023 and commercial sales in the United States are ongoing.

In May 2023, United States Patent and Trademark Office published patent claims for ATI-1501 under the US Application No. 18/072,154, which covers the composition and preparation methods for the drug through 2039. Collaborating with Saptalis, Appili earned US$600,000 in milestone payments during FYE 2024. Appili expects to receive additional sales-based milestone payments and royalties from Saptalis based on sale of the product.

ATI-1701, Biodefense Vaccine Candidate with Funding Awarded from the U.S. Air Force Academy

ATI-1701, a novel, live-attenuated vaccine for the prevention of F. Tularensis, has received awards totaling US$14 million from the U.S. Air Force Academy (“USAFA”). Under the terms of the USAFA Cooperative Agreement, Appili will oversee a comprehensive development program for ATI-1701, which includes nonclinical studies, CMC/manufacturing, clinical preparatory, and regulatory activities to support an IND submission in 2025.

Appili has had interactions with the FDA in the form of a pre-IND meeting, confirming the development pathway for the Company’s efforts through IND submission and is incorporating suggested changes in the development plan.

ATI-1801, our Licensed Topical Antiparasitic Product demonstrated safe and effective across Phase 3 studies.

ATI-1801 is a novel topical formulation of paromomycin (15% w/w) under advanced clinical development for the treatment of cutaneous leishmaniasis, a disfiguring infection of the skin that affects hundreds of thousands of people around the world annually.

Appili is currently engaging with the FDA and submitted a type-B meeting request with the FDA in 2024, to discuss linking to the previously generated Phase 3 data and agreeing on the necessary registration package to support a New Drug Application submission, which the Company expects will include available nonclinical, manufacturing, and clinical data generated to date. Appili expects to pursue non-dilutive funding and partnership opportunities with NGOs and government agencies which share the Company’s focus on tropical diseases to help complete remaining development work.

ATI-1801 has received an Orphan Drug Designation from the FDA for the treatment of certain forms of cutaneous leishmaniasis. The Company is actively evaluating the eligibility of ATI-1801 for a priority review voucher (“PRV”) which, if confirmed, would make ATI-1801 the second PRV eligible program at Appili, joining ATI-1701, subject to renewal of certain legislation in the United States.

Aditxt Arrangement

Subsequent to FYE 2024, on April 2, 2024, the Company announced that it had entered into a definitive arrangement agreement (the “Arrangement Agreement“) pursuant to which Aditxt Inc. (“Aditxt”), through its wholly-owned subsidiary, Adivir, Inc., agreed to acquire all of the issued and outstanding Class A common shares of the Company (“Common Shares”) by way of a court-approved plan of arrangement (the “Arrangement”) under the Canada Business Corporations Act .Under the terms of the Arrangement Agreement, shareholders of the Company will receive (i) 0.002745004 of a share of common stock of Aditxt and (ii) US$0.0467 in cash, for each Common Share held at the time of the closing of the proposed Arrangement.

The Arrangement is subject to certain customary conditions, including court and shareholder approval. The Arrangement is also subject to Aditxt raising a minimum of US$20 million in additional funding.  Since the date of the Arrangement Agreement, Aditxt has raised approximately US $5.5 million. However, these funds have not been specifically reserved for the Arrangement.  Aditxt is continuing its efforts to raise additional capital as required to complete the Arrangement.

A special meeting of the shareholders of Appili is expected to be held in calendar Q3 2024 and, subject to satisfaction or waiver of the applicable closing conditions, the Arrangement is expected to be completed before the end of calendar Q3 2024.  For further details regarding the Arrangement, please see Appili’s press release dated April 2, 2024 (the “Arrangement Press Release”).  Additional information regarding the Arrangement will be included in the management information circular of Appili to be mailed to the Appili shareholders prior to the Appili shareholders meeting.  

Annual Financial Results

The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standard Board and Part I of Chartered Professional Accountants of Canada Handbook – Accounting.

The net loss and comprehensive loss of $3.8 million or $0.03 loss per share for FYE 2024, was $5.4 million lower than the net loss and comprehensive loss of $9.2 million or $0.08 loss per share during the year ended March 31, 2023. This relates mainly to a $5.7 million increase in government assistance, relating to the USAFA Cooperative Agreement, a $0.5 million increase in revenue, $1.4 million decrease in general and administrative expenses, and $0.3 million decrease in exchange loss, offset by a $2 million increase in research and development expenses, and $0.5 million increase in financing costs.

On March 31, 2024, the Company had cash of $0.1 million compared to $2.5 million on March 31, 2023. The Company has included a going concern note in its financial statements for the FYE 2024. In particular, the Company is dependent in large part on successfully closing the proposed transaction with Aditxt or raising additional financing through equity and/or non-dilutive funding and receiving all USAFA funding in a timely manner. Delays in reimbursement for previously submitted expenses in the near term may, in the absence of alternative funding arrangements, result in the Company not being able to meet various covenant obligations as required pursuant to its long-term debt arrangements with Long Zone Holdings Inc. For further details, please refer to the Company’s going concern note in the Company’s management’s discussion and analysis (the “MD&A”) for the FYE 2024.

As of June 25, 2024, the Company had 121,266,120 issued and outstanding Common Shares, 11,520,281 stock options and 44,856,874 warrants outstanding.

This press release should be read in conjunction with the Company’s audited annual consolidated financial statements for the FYE 2024, and the related MD&A, copies of which are available under the Company’s profile on SEDAR+ at www.sedarplus.ca.

About Appili Therapeutics
Appili Therapeutics is an infectious disease biopharmaceutical company that is purposefully built, portfolio-driven, and people-focused to fulfill its mission of solving life-threatening infections. By systematically identifying urgent infections with unmet needs, Appili’s goal is to strategically develop a pipeline of novel therapies to prevent deaths and improve lives. The Company is currently advancing a diverse range of anti-infectives, including an FDA approved ready-made suspension of metronidazole for the treatment of antimicrobial infections, a vaccine candidate to eliminate a serious biological weapon threat, and a topical antiparasitic for the treatment of a disfiguring disease. Led by a proven management team, Appili is at the epicenter of the global fight against infection. For more information, visit www.AppiliTherapeutics.com.  

Forward looking statements
This news release contains “forward-looking statements”, including with respect to the funding commitment from USAFA and expected timing of invoice payment, advancing program towards IND, further anticipated milestones and the timing thereof, the Company’s development plans and timelines with respect to ATI-1501, ATI-1701 and ATI-1801, the timing of any milestone and/or royalty payments in respect of ATI-1501,  consideration to be received by shareholders in connection with the proposed Arrangement and the Company’s expectations with respect to its ability to operate as a going concern and satisfy its ongoing working capital requirements. Wherever possible, words such as “may,” “would,” “could,” “should,” “will,” “anticipate,” “believe,” “plan,” “expect,” “intend,” “estimate,” “potential for” and similar expressions have been used to identify these forward-looking statements. These forward-looking statements reflect the current expectations of the Company’s management for future growth, results of operations, performance and business prospects and opportunities and involve significant known and unknown risks, uncertainties and assumptions, including, without limitation, those listed in the annual information form of the Company dated June 25, 2024, and the other filings made by the Company with the Canadian securities regulatory authorities (which may be viewed at www.sedarplus.ca). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.

All statements included in this press release relating to the Arrangement are qualified by reference to the “Forward Looking Statements” section included in the Arrangement Press Release.

Media Contact:
Jenna McNeil, Communications Manager
Appili Therapeutics
E: JMcNeil@AppiliTherapeutics.com

Investor Relations Contact:
Don Cilla, President and CEO
Appili Therapeutics
E: Info@AppiliTherapeutics.com

FAQ

What is the latest financial performance of APLIF?

Appili reported a net loss of $3.8 million for fiscal year 2024, which is an improvement from the $9.2 million loss in the previous year.

Has APLIF received FDA approval for any products?

Yes, LIKMEZ (ATI-1501), a metronidazole oral suspension, received FDA approval and has been commercially launched.

What funding has APLIF secured for its projects?

Appili secured US$14 million from the U.S. Air Force Academy to advance ATI-1701 towards IND submission.

What are the financial concerns for APLIF?

Appili reported decreased cash reserves of $0.1 million and noted a going concern due to dependency on successful financing and USAFA funding.

What is the status of the Aditxt arrangement for APLIF?

Appili and Aditxt have an agreement where shareholders will receive cash and stock, contingent on Aditxt raising additional capital, expected to finalize by Q3 2024.