Adial Pharmaceuticals Reports First Quarter 2023 Financial Results and Provides Business Update - Seite 2

Other Recent Developments

Purnovate

The Company recently announced that Adovate, LLC (formerly known as Adenomed, LLC) (“Adovate”), submitted an irrevocable notice of exercise on May 8, 2023 of its option to acquire the assets and business of our Purnovate subsidiary effective May 16, 2023 under an Option Agreement, dated as of January 27, 2023. The Option Agreement provides that the parties will enter into a final acquisition agreement for the sale of the Purnovate assets under previously agreed financial terms. Adovate was recently formed by William Stilley, co-founder and former CEO of Adial, for the sole purpose of acquiring, funding and advancing the Purnovate assets.

Adial received an upfront payment of $450 thousand on the notification date (May 8, 2023). After a final acquisition agreement is signed Adial will receive approximately $0.9 million for Purnovate expenditures incurred and paid by Adial after December 1, 2022. Any Purnovate expenses incurred subsequent to May 15, 2023, are now the responsibility of Adovate. In addition, the Company will be 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.

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.

Partnering

The Company has engaged The Keswick Group, LLC, a biotech strategic commercial and business development advisory firm, to support the advancement of the Company’s partnering activities. The Keswick Group is led by Tony Goodman, a current member of Adial’s Board of Directors. Mr. Goodman’s career spans over 23 years in the pharmaceutical and biotech industries. Having held senior leadership and business development positions at a variety of pharmaceutical companies, Mr. Goodman brings significant expertise and experience in strategically important partnering transactions and extensive relationships in the healthcare market.