Adial Pharmaceuticals Q1 2024 Financial Results and Business Update

May 15, 2024-- Adial Pharmaceuticals, Inc. (NASDAQ: ADIL), a clinical-stage biopharmaceutical entity, has provided a comprehensive update on its business activities and financial results for the first quarter of 2024. Cary Claiborne, President and CEO, has shared insights into the company's progress, particularly regarding their leading investigational drug, AD04.

Adial Pharmaceuticals has made significant strides in its clinical development plan for AD04, following positive feedback from the FDA in the previous year. The company is preparing to conduct two simultaneous Phase 3 clinical trials of AD04 to expedite potential approval while mitigating risks. To bolster these efforts, Adial has appointed Tony Goodman as Chief Operating Officer. Goodman, a seasoned pharmaceutical executive and a board member since 2017, has been pivotal in advancing Adial's strategic growth, clinical development, and commercial planning for AD04. His contributions also extend to fostering partnership discussions.

Further, Adial is dedicated to strengthening its patent portfolio for AD04. The company received two key patents from the United States Patent and Trademark Office in 2024. The first, patent number 11,905,562, secures AD04's unique mechanism targeting the serotonin transporter gene for treating opioid use disorder (OUD). The second, patent number 11,957,664, encompasses the combination of Adial's proprietary genetic diagnostic with AD04 for treating alcohol use disorder (AUD), OUD, and other drug dependencies. These patents are crucial as they address genotypes identified in post hoc analysis that respond positively to AD04, representing a market worth approximately $40 billion in the U.S. alone. They also lay the groundwork for expanding AD04's focus on AUD and OUD treatments.

Adial Pharmaceuticals has demonstrated its commitment to advancing AD04 by presenting promising clinical results. On April 10, 2024, the company announced the publication of a peer-reviewed article highlighting the safety and efficacy of AD04 (low-dose ondansetron) in treating AUD. The study, published in the European Journal of Internal Medicine, provides a detailed analysis of AD04's liver safety profile compared to a placebo in patients with AUD and a specific genetic marker. AUD, associated with excessive alcohol consumption and loss of control, significantly contributes to alcohol-associated liver disease (ALD), a leading cause of liver transplants and global mortality.

In financial developments, on March 1, 2024, Adial entered into an agreement for the immediate exercise of outstanding warrants to purchase 1,150,000 shares of its common stock, originally issued in October 2023. This move generated gross proceeds of approximately $4.3 million for the company, before deducting fees and expenses.

For the first quarter of 2024, Adial reported cash and cash equivalents totaling $5.0 million as of March 31, 2024, up from $2.8 million on December 31, 2023. The company received around $4.3 million from warrant exercises during the quarter, which it believes will support the accelerated development of AD04 and cover operating expenses into the first quarter of 2025.

Research and development expenses saw an increase of $88,000 in the first quarter of 2024 compared to the same period in 2023, driven by enhanced drug development activities, including chemistry and manufacturing, and personnel salaries. These costs were partially offset by reduced regulatory consultant fees and clinical trial expenses following the completion of data analysis from the ONWARD trial.

Conversely, general and administrative expenses decreased by $512,000 in the first quarter of 2024 compared to the previous year. This reduction was due to lower costs in several areas such as personnel salaries, director compensation, legal expenses, patent costs, and travel expenses.

Adial Pharmaceuticals reported a net loss of $6.5 million for the first quarter of 2024, up from $2.9 million in the first quarter of 2023. The increase was primarily attributed to a one-time, non-cash charge of $4.5 million related to the issuance of new warrants to induce the exercise of existing warrants.

Adial Pharmaceuticals continues to focus on developing AD04, a serotonin-3 receptor antagonist, for the treatment of AUD in patients with specific genotypes. The drug has shown promise in reducing heavy drinking without significant safety concerns and may also have potential applications in treating other addictive disorders such as OUD, gambling, and obesity.

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