UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended April 30, 2023
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
For the transition period from
_______________ to _______________
Commission file number 001-40483
ALZAMEND NEURO, INC.
(Exact name of registrant
as specified in its charter)
Securities registered under Section 12(b) of the
Act:
Title of Each Class Trading Symbol Name of each exchange on which registered
Common Stock, $0.0001 par value per share ALZN NASDAQ Capital Market
Securities registered under Section 12(g) of the
Act: None
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ̈Nox
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ̈Nox
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding year (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yesx No ̈
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesx No ̈
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ̈ Accelerated filer ̈
Non-accelerated filer x Smaller reporting company x
Emerging growth company x
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ̈
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ̈
If securities are registered
pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. o
Indicate by check mark
whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ̈Nox
The aggregate market value of the common stock
held by non-affiliates of the registrant, based on the closing price of the shares of common stock on October 31, 2022 (the last business
day of the registrant’s most recently completed second fiscal quarter), as reported by The Nasdaq Stock Market LLC on such date
was approximately $66.4 million. Shares of the registrant’s common stock held by each executive officer and director and by each
other person who may be deemed to be an affiliate of the registrant have been excluded from this computation. This calculation does not
reflect a determination that certain persons are affiliates of the registrant for any other purpose.
There were 96,940,124 shares of common stock outstanding
as of July 24, 2023.
Documents incorporated by reference: None
ALZAMEND NEURO, INC.
FORM 10-K
FOR THE FISCAL YEAR ENDED APRIL 30, 2023
INDEX
Page
PART I
Item 1. Business 2
Item 1A. Risk Factors 22
Item 1B. Unresolved Staff Comments 46
Item 2. Properties 46
Item 3. Legal Proceedings 46
Item 4. Mine Safety Disclosures 46
PART II
Item 6. [Reserved] 47
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57
Item 8. Financial Statements and Supplementary Data 57
Item 9A. Controls and Procedures 58
Item 9B. Other Information 60
Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections 60
PART III
Item 10. Directors, Executive Officers and Corporate Governance 61
Item 11. Executive Compensation 65
Item 12. Security Ownership of Certain Beneficial Owners and Management 70
Item 14. Principal Accountant Fees and Services 74
PART IV
Item 15. Exhibit and Financial Statement Schedules 75
Signatures 77
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (the “Annual
Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. We have
attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “expects,”
“can,” “continue,” “could,” “estimates,” “expects,” “intends,”
“may,” “plans,” “potential,” “predict,” “should” or “will” or
the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may
cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or
activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Our expectations are as of the date this Annual Report is filed, and we do not intend to update any of the forward-looking statements
after the date this Annual Report is filed to confirm these statements to actual results, unless required by law.
This Annual Report also contains estimates and
other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves
a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified
the statistical and other industry data generated by independent parties and contained in this Annual Report and, accordingly, we cannot
guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions
and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a
high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere
in this Annual Report. These and other factors could cause results to differ materially from those expressed in the estimates made by
the independent parties and by us.
RISK FACTOR SUMMARY
Below is a summary of
the principal factors that make an investment in our common stock speculative. This summary does not address all of the risks that we
face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under
the heading “Risk Factors” and should be carefully considered, together with other information in this Annual Report and our
other filings with the Securities and Exchange Commission (the “SEC”), before making investment decisions regarding our common
stock.
PART I
ITEM 1. BUSINESS
In this Annual Report, unless
the context requires otherwise, references to the “Company,” “Alzamend,” “we,” “our company”
and “us” refer to Alzamend Neuro, Inc., a Delaware corporation.
Company Overview
We are a clinical-stage biopharmaceutical company focused on developing
novel products for the treatment of Alzheimer’s disease (“Alzheimer’s”), bipolar disorder (“BD”),
major depressive disorder (“MDD”) and post-traumatic stress disorder (“PTSD”). With our two product candidates,
we aim to bring treatments or potential cures to market as quickly as possible. Far too many individuals, patients and caregivers suffer
from the burden created by these devastating, and often fatal, diseases. Our primary target, Alzheimer’s, was among the most-feared
diseases (second only to cancer) among Americans, according to a 2011 survey by the Harvard School of Public Health. Alzheimer’s
is also the seventh leading cause of death in the United States (“U.S.”) according to a 2021 report from the Alzheimer’s
Association, a nonprofit that funds research. Existing Alzheimer’s treatments only temporarily relieve symptoms and while one treatment
has been shown to slow the progression of the disease, no treatments have been shown to halt the progression of the disease, which currently
affects roughly 6.7 million Americans and that number is expected to grow to 13 million individuals by 2050. Alzheimer’s also impacts
more than 11 million Americans who provide an estimated 18 billion hours of unpaid care per year, valued at $340 billion, according to
data provided by the Alzheimer’s Association. In 2022, the estimated healthcare costs for treating individuals with Alzheimer’s
in the U.S. will be $321 billion, including $206 billion in Medicare and Medicaid payments. These costs could rise to as high as $1 trillion
per year by 2050 if no permanent treatment or cure for Alzheimer’s is found, the Alzheimer’s Association reported.
Our pipeline consists of two
novel therapeutic drug candidates:
Our
most advanced product candidate (lead product) is licensed and in clinical development in humans is AL001, an ionic cocrystal of lithium
for the treatment of Alzheimer’s, BD, MDD and PTSD. Based on our preclinical data involving mice models, AL001 treatment prevented
cognitive deficits, depression and irritability and is superior in improving associative learning and memory and irritability compared
with lithium carbonate treatments, supporting the potential of AL001 for the treatment of Alzheimer’s, BD, MDD and PTSD in humans.
Lithium has been marketed for more than 35 years and human toxicology regarding lithium use has been well characterized, potentially mitigating
the regulatory burden for safety data.
The
results of randomized, placebo-controlled, clinical trials of lithium in the treatment of patients with Alzheimer’s dementia and
subjects with mild cognitive impairment have been widely published. Clinical studies have indicated that lithium administered at doses
lower than those used for affective disorders can favorably impact Alzheimer’s outcomes. A study by O.V. Forlenza, et al., entitled
“Disease-Modifying Properties of Long-Term Lithium Treatment for Amnestic Mild Cognitive Impairment: Randomized Controlled Trial,”
appearing in the British Journal of Psychiatry (2011) reported that lithium was superior to a placebo, evidencing a slower decline of
cognitive function as measured by the Alzheimer’s Disease Assessment Scale cognitive subscale. Given the absence of adequate, widely
adapted treatments that can slow, halt or even reverse the decline of this highly prevalent disease, the potential efficacy of lithium
in the long-term management of Alzheimer’s may positively impact public health. There is an unmet medical need for safe and effective
Alzheimer’s treatments, particularly for treatments with neuroprotective properties.
There
is increasing evidence to suggest that depressive illness, particularly in the elderly, is associated with neuronal cell loss. These findings
suggest that lithium may exert some of its long-term beneficial effects in the treatment of affective disorders via underappreciated neuroprotective
effects. Molecular biology and animal studies have also suggested that lithium may offer protection against Alzheimer’s. Given the
absence of other adequate treatments, research and commercialization of the potential efficacy of lithium in the long-term treatment of
neurodegenerative disorders may be worth pursuing.
Our Business Strategy
We intend to develop and commercialize
therapeutics that are better than existing treatments and have the potential to significantly improve the lives of individuals afflicted
by Alzheimer’s, BD, MDD and PTSD. To achieve these goals, we are pursuing the following key business strategies:
Our Development Pipeline
The
following chart provides an overview of the current development stages of our product candidates.
Our
product candidates will require extensive clinical evaluation, regulatory review and approval, significant marketing efforts and substantial
investment before either of them or any successors are likely to provide us with any revenue. As a result, if we do not successfully develop,
achieve regulatory approval for and commercialize our product candidates, our long-term business plans will not be met, and we will be
unable to generate the revenue we have forecast for the foreseeable future, if any. We do not anticipate that we will generate our maximum
revenue for several years, or that we will achieve profitability for any of our therapeutic drug candidates until at least a few years
after generating material revenue, if at all. If we are unable to generate revenue or raise substantial additional capital, we will not
be able to pursue any expansion of our business or acquire additional intellectual property, we will not become profitable with our therapeutic
drug candidates, and we will be unable to continue our operations at the currently planned pace, if at all.
AL001 Drug Candidate
Our
lead product candidate that we have licensed and have begun clinical development of in humans is an ionic cocrystal of lithium for the
treatment of Alzheimer’s, BD, MDD and PTSD. Lithium salts have a long history of human consumption beginning in the 1800s. In psychiatry,
they have been used to treat mania and as a prophylactic for depression since the mid-20th century. Today, lithium salts are used as a
mood stabilizer for the treatment of BD. Although the FDA has approved no medications as safe and effective treatments for suicidality,
lithium has proven to be the only drug that consistently reduces suicidality in patients with neuropsychiatric disorders. Despite these
effective medicinal uses, current FDA-approved lithium pharmaceutics (lithium carbonate and lithium citrate) are limited by a narrow therapeutic
window that requires regular blood monitoring of plasma lithium levels and blood chemistry by a clinician to mitigate adverse events.
Because conventional lithium salts (carbonate and citrate) are eliminated relatively quickly, multiple administrations throughout the
day are required to safely reach therapeutic plasma concentrations. Existing lithium drugs, such as lithium chloride and lithium carbonate,
suffer from chronic toxicity, poor physicochemical properties and poor brain bioavailability. Because lithium is so effective at reducing
manic episodes in patients with BD, it is still used clinically despite its narrow therapeutic index. This has led researchers to begin
to look for other treatment methods to lithium with similar bioactivities.
Scientists
from the University of South Florida have developed a new lithium cocrystal composition and method of preparation that, under
certain clinical and/or testing conditions, have been shown to allow for lower dosages to achieve therapeutic brain levels of
lithium for psychiatric disorders, which could lead to a broadening of lithium’s therapeutic index. Our studies and tests have
indicated that the compound offers improved physiochemical properties compared to existing forms of lithium, giving it the potential
to be developed as an anti-suicidal drug and for use against mood disorders.
Recent
evidence suggests that lithium may be efficacious for both the treatment and prevention of Alzheimer’s. Unlike traditional medications,
which only address a single therapeutic target, lithium appears to be neuroprotective through several modes of action. For example, recent
studies have indicated that it exerts neuroprotective effects, in part, by increasing a brain-derived neurotrophic factor leading to restoration
of learning and memory. Another neuroprotective mechanism of lithium indicated by recent studies is the attenuation of the production
of inflammatory cytokines like IL-6 and nitric oxide in activated microglia. Results from recent clinical studies suggest that lithium
treatment may reduce the progression of dementia while preserving cognitive function and reducing biomarkers associated with Alzheimer’s.
AL001,
the novel ionic cocrystal of lithium, which was designed, synthesized and characterized by a team of inventors from the University of
South Florida has been shown to exhibit improved nonclinical pharmacokinetics compared to currently available FDA-approved lithium products
and is also bioactive in many in vitro models of Alzheimer’s. AL001 may constitute a means of treating Alzheimer’s, BD, MDD
and PTSD.
We
believe that our ability to re-engineer lithium solid dosage forms in order to optimize performance has the potential to address a wide
range of clinical applications ranging from neurodegenerative disorders, not merely Alzheimer’s, but also amyotrophic lateral sclerosis
(known as ALS and Lou Gehrig’s disease), Huntington’s disease, multiple sclerosis, Parkinson’s disease and traumatic
brain injury, to more psychiatric conditions such as BD, MDD, mania, PTSD and suicidality. This novel approach is intended to achieve
the desired therapeutic outcome of enhanced penetration through the blood-brain barrier and sustained brain lithium concentrations while
systemic exposures (and toxicities) are mitigated for other organ systems. The optimal modified-release lithium dosing approach for AL001
should avoid acutely toxic peak concentrations in blood, as well as in the brain, and should maintain such relatively minor blood concentrations
for a predictable, clinically relevant time, with overall low systemic exposures that mitigate the potential for adverse events. We anticipate
that the lithium delivery system will be adaptable to a dosing regimen that maintains therapeutic brain lithium concentrations consistently
for the longest possible time while allowing only modest exposures and providing adequate recovery periods between doses for other organ
systems.
Clinical Trials
Phase I Study
On September 13, 2021, we initiated a randomized, balanced, Phase I,
single-dose, open-label, two-treatment, two-period, two- sequence, crossover, relative bioavailability clinical trial to investigate lithium
pharmacokinetics and safety of AL001 formulation compared to a marketed immediate release lithium carbonate formulation in healthy subjects.
The primary objective of this clinical trial was to assess the relative bioavailability of the AL001 lithium formulation relative to a
marketed lithium carbonate formulation in healthy subjects for the purpose of determining potential clinically safe and effective AL001
dosing in future studies. Additionally, we wanted to characterize safety and tolerability of the tested formulations under the conditions
of this clinical trial. This was a first-in-human clinical trial of the AL001 formulation; this trial was designed to assess the relative
bioavailability of the AL001 lithium formulation compared to a marketed lithium carbonate formulation in at least 24 completed healthy
subjects (30 subjects were to be enrolled) for the purpose of determining potential clinically safe and effective AL001 dosing in future
clinical trials. The AL001 lithium content was nearly half of the reference lithium carbonate capsule dosage as it was expected that treatment
of frail Alzheimer’s patients will require half the lithium dose used for treatment of BD. Lithium carbonate 300 mg (Reference product)
was given as a single dose in this clinical trial; this is often used as a starting dose for treatment of BD when given three times daily.
The shape of the AL001 lithium plasma concentration versus time curve was unknown prior to this study. Also unknown were the AL001 rate
and extent of lithium absorption. The Phase I study was completed in March 2022 with the following results:
· AL001 was shown to be safe and well-tolerated in healthy adult subjects;
· No serious adverse events and no deaths were reported during the trial;
Phase IIA Study
On May 5, 2022, we initiated
a multiple-dose, steady-state, double-blind, ascending dose safety, tolerability, pharmacokinetic clinical trial (www.clinicaltrials.gov,
identifier: NCT05363293) of AL001 in patients with mild to moderate Alzheimer’s and healthy subjects with the following objectives:
o Facilitate recruitment into subsequent AL001 clinical trials; and
We completed the Phase IIA
clinical trial in March 2023 and announced positive topline data in June 2023. We announced that we successfully identified an MTD for
development of AL001 from a multiple-ascending dose study as assessed by an independent safety review committee. This dose, providing
lithium at a lithium carbonate equivalent dose of 240 mg 3-times daily (“TID”), is designed to be unlikely to require lithium
therapeutic drug monitoring (“TDM”). Also, this MTD is risk mitigated for the purpose of treating fragile populations, such
as Alzheimer’s patients.
Lithium is a commonly prescribed
drug for manic episodes in BD type 1 as well as maintenance therapy of BP in patients with a history of manic episodes. Lithium is also
prescribed off-label for MDD, BD and treatment of PTSD, among other disorders. Lithium was the first mood stabilizer approved by the FDA
and is still a first-line treatment option (considered the “gold standard”) but is underutilized, perhaps because of the need
for TDM. Lithium was the first drug that required TDM by regulatory authorities in product labelling because the effective and safe range
of therapeutic drug blood concentrations is narrow and well defined for treatment of BP when using lithium salts. Excursions above this
range can be toxic, and below can impair effectiveness.
Planned Future Studies
Based on the results from
our Phase IIA MAD study, we plan to initiate two safety and efficacy clinical trials in subjects with mild to moderate dementia of the
Alzheimer’s type. Additionally, we intend to investigate the potential of AL001 for patients suffering from BD, MDD and PTSD by
submitting IND applications to the FDA for these indications by the end of 2023. After FDA permission to proceed on the IND’s, we
intend to initiate clinical trials at this MTD to determine relative increased lithium levels in the brain compared to a marketed lithium
salt for BD, MDD and PTSD, based on published mouse studies that predict that lithium can be given at lower doses for equivalent therapeutic
benefit when treating with AL001. For example, the goal is to replace a 300 mg TID lithium carbonate dose for treatment of BD with a 240
mg TID AL001 lithium equivalent, which represents a daily decrease of 20% of lithium given to a patient.
ALZN002 Drug Candidate
The other product candidate
that we have licensed to clinically develop in humans is ALZN002, a patented method using a mutant peptide sensitized cell as a cell-based
therapeutic vaccine which seeks to restore the ability of the patient’s immunological system to combat Alzheimer’s. The proposed
mechanism of action is through the pulsed-Dendritic Cell (“DC”) activation of T-cells that stimulates the immune system, resulting
in the clearance of brain amyloid. Preclinical studies conducted from April 2005 to July 2010 demonstrated that the infusion of transgenic
(or genetically modified) mice with ALZN002-pulsed DCs is associated with lower amyloid burden and improved neuro-behavioral performance.
This is likely to be mediated by an anti-inflammatory effect in addition to the immunogenicity of this therapy.
ALZN002 is based on the theory
that Alzheimer’s symptoms may be caused in large part by plaque deposits that can cluster in the brain composed of protein fragments
called beta-amyloids that build up between nerve cells. One hypothesis is that a special type of immune cell, natural beta-amyloid antibodies,
may play a role in preventing plaque build-up in people without Alzheimer’s. As people age, their immune systems may degrade, and
some people may be unable to produce natural beta-amyloid antibodies, the absence of which leads to the plaque build-up causing Alzheimer’s.
ALZN002 is intended to elicit an immune response to produce anti-amyloid
antibodies, which can then neutralize circulated beta-amyloids and prevent additional plaque build-up. The mutant antigen within ALZN002
was selected specifically for its high human leukocyte antigens binding affinity, thereby avoiding the need for an adjuvant, which may
cause an adverse (Th1) immune response.
ALZN002 is an autologous
modified DC treatment. More precisely, it is a patient-specific therapy where the patient undergoes leukapheresis, a nonsurgical treatment
used to reduce the quantity of white blood cells in the bloodstream, to isolate peripheral blood monocytes that are subsequently matured
into DCs using cytokine therapy (IL4+ GM-CSF) cocktail. The DCs are incubated with a modified amyloid beta (Aβ) peptide to sensitize
them, and then administered to the same patient.
Significant evidence
has accumulated recently suggesting that immunotherapy is a highly promising modality of treatment in Alzheimer’s. Most current
immune-based active investigations are focused on passive immunization by pre-prepared Aβ antibody administration. Active immunization
may offer additional or more lasting effects on the clearance of amyloid and a safer approach due to its reliance on autologous immune
mechanisms. Further, preliminary evidence suggests a recurrence of the amyloid accumulation after clearance with the immunoglobulins.
A prior attempt at engaging the immune system to treat Alzheimer’s was conducted using the immunization with pre-aggregated synthetic
Aβ (AN-1792) combined with the immunogenic adjuvant QS-21. The Phase IIA study with AN-1792 was terminated by the FDA due to severe
meningoencephalitis in approximately 6% of vaccinated subjects. We believe that this may have been caused by using a QS-21 adjuvant in
the vaccine formulation.
Clinical Trials
Pre-Clinical
On July 23, 2021, we announced
that Alzamend received positive toxicology results for ALZN002 in a good laboratory practices (“GLP”) toxicology study using
a transgenic mouse model of Alzheimer’s. The study was conducted by Charles River Laboratories. ALZN002 is a patented method using
a mutant-peptide sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability of a patient’s immunological
system to combat Alzheimer’s.
A
five-dose GLP study with ALZN002-sensitized cells was completed using a transgenic mouse model of Alzheimer’s to investigate the
tolerability of ALZN002. Single injections were administered on days 1, 30, 50, 70, and 90. The mice were evaluated for potential toxicity
and reversibility of any findings at 75 and 90 days after the final dosing.
Histopathology
results demonstrate that there was no indication of T-cell infiltration or meningoencephalitis, which suggests that ALZN002 therapy is
safe and tolerable as there were no adverse findings over a 90-day period and 90 days after the last dose. There were no treatment-related
mortalities or reports of adverse effects on clinical observations, body weight parameters, organ weight parameters, clinical pathology
parameters, gross pathology observations, or histopathologic observations during the main study or the recovery phase.
Modified cell therapies, especially
DCs, may provide a safer and more patient-specific active immunization. Ex-vivo modification of DCs as a modality of treatment has been
previously used in oncological therapeutics. It has been shown to be relatively safe and capable of engaging the immune system to attack
the target tissues with success. Its use in Alzheimer’s therapeutics is relatively recent.
Phase I/II Study
We submitted a pre-IND meeting
request for ALZN002 and supporting briefing documents to the Center for Biological Evaluation and Research of the FDA on July 30, 2021.
We received a written response relating to the pre-IND from the FDA providing a path for Alzamend’s planned clinical development
of ALZN002 on September 30, 2021. The FDA agreed to allow Alzamend to submit an IND to conduct a combined Phase I/II study.
On
September 28, 2022, we submitted an IND to the FDA for ALZN002 and received a “study may proceed” letter on October 31, 2022.
The product candidate is an immunotherapy vaccine designed to treat mild to moderate dementia of the Alzheimer’s type. ALZN002 is
a proprietary “active” immunotherapy product, which means it is produced by each patient’s immune system. It consists
of autologous DCs consisting of activated white blood cells taken from each individual patient so that they can be engineered outside
of the body to attack Alzheimer’s-related amyloid-beta proteins. These DCs are pulsed with a novel amyloid-beta peptide (E22W) designed
to bolster the ability of the patient’s immune system to combat Alzheimer’s; the goal is to foster tolerance to treatment
for safety purposes while stimulating the immune system to reduce the brain’s beta-amyloid protein burden, resulting in reduced
Alzheimer’s signs and symptoms. Compared to passive immunization treatment approaches that use foreign blood products (such as monoclonal
antibodies), active immunization with ALZN002 is anticipated to offer a more robust and long-lasting effect on the clearance of amyloid.
This approach could prove safer due to its reliance on autologous immune components, using each individual patient’s own white blood
cells rather than foreign cells and/or blood products.
On April 3, 2023,
we announced the initiation of a phase I/IIA clinical trial for ALZN002 to treat mild to moderate dementia of the Alzheimer’s type.
The purpose of this trial is to assess the safety, tolerability, and efficacy of multiple ascending doses of ALZN002 compared with that
of a placebo in 20-30 subjects with mild to moderate morbidity. The primary goal of this clinical trial is to determine an appropriate
dose of ALZN002 for treatment of patients with Alzheimer’s in a larger Phase IIB efficacy and safety clinical trial, which Alzamend
expects to initiate within three months of receiving data from the initial trial.
The continuation
of our current development plans with respect to completing our IND applications and conducting the series of human clinical trials for
each of our therapeutics requires us to raise additional capital to fund our operations.
Intellectual Property and Licensing Agreements
On July 2, 2018, we entered into two Standard
Exclusive License Agreements with Sublicensing Terms for AL001 with the Licensor and its affiliate, the University of South Florida (the
“AL001 Licenses”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide licenses limited to the
field of Alzheimer’s, under U.S. Patent Nos. (i) 9,840,521, entitled “Organic Anion Lithium Ionic Cocrystal Compounds and
Compositions”, filed September 24, 2015 and granted December 12, 2017, and (ii) 9,603,869, entitled “Lithium Co-Crystals for
Treatment of Neuropsychiatric Disorders”, filed May 21, 2016 and granted March 28, 2017. On February 1, 2019, we entered into the
First Amendments to the AL001 Licenses, on March 30, 2021, we entered into the Second Amendments to the AL001 Licenses and on June 8,
2023, we entered into the Third Amendments to the AL001 Licenses (collectively, the “AL001 License Agreements”).
The AL001 License Agreements
require that we pay combined royalty payments of 4.5% on net sales of products developed from the licensed technology for AL001. We have
already paid an initial license fee of $200,000 for AL001. As an additional licensing fee for the license of the AL001 technologies, the
Licensor received 2,227,923 shares of our common stock. Minimum royalties for AL001 License Agreements are $40,000 on the first anniversary
of the first commercial sale, $80,000 on the second anniversary first commercial sale and $100,000 on the third anniversary of the first
commercial sale and every year thereafter, for the life of the AL001 License Agreements.
On
May 1, 2016, we entered into a Standard Exclusive License Agreement with Sublicensing Terms for ALZN002 with the Licensor (the “ALZN002
License”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide license limited to the field of Alzheimer’s
Immunotherapy and Diagnostics, under U.S. Patent No. 8,188,046, entitled “Amyloid Beta Peptides and Methods of Use,” filed
April 7, 2009 and granted May 29, 2012. On August 18, 2017, we entered into the First Amendment to the ALZN002 License, on May 7, 2018,
we entered into the Second Amendment to the ALZN002 License, on January 31, 2019, we entered into the Third Amendment to the ALZN002 License,
on January 24, 2020, we entered into the Fourth Amendment to the ALZN002 License, on March 30, 2021, we entered into the Fifth Amendment
to the ALZN002 License and on April 17, 2023, we entered into the Sixth Amendment to the ALZN002 License (collectively, the “ALZN002
License Agreement”).
The ALZN002 License Agreement
requires us to pay royalty payments of 4% on net sales of products developed from the licensed technology for ALZN002. We have already
paid an initial license fee of $200,000 for ALZN002. As an additional licensing fee for the license of ALZN002, the Licensor received
3,601,809 shares of our common stock. Minimum royalties for ALZN002 are $20,000 on the first anniversary of the first commercial sale,
$40,000 on the second anniversary first commercial sale and $50,000 on the third anniversary of the first commercial sale and every year
thereafter, for the life of the ALZN002 License Agreement.
On November 19, 2019, we entered
into two Standard Exclusive License Agreements with Sublicensing Terms for two additional indications of AL001 with the Licensor (the
“November AL001 License”), pursuant to which the Licensor granted us a royalty bearing exclusive worldwide licenses limited
to the fields of (i) neurodegenerative diseases excluding Alzheimer’s and (ii) psychiatric diseases and disorders. On March 30,
2021, we entered into the First Amendments to the November AL001 License and on April 17, 2023, we entered into the Second Amendments
to the November AL001 License (collectively, the “November AL001 License Agreements”).
The November AL001 License
Agreements require us to pay royalty payments of 3% on net sales of products developed from the licensed technology for AL001 in those
fields. We paid an initial license fee of $20,000 for the additional indications. Minimum royalties for November AL001 License Agreements
are $40,000 on the first anniversary of the first commercial sale, $80,000 on the second anniversary first commercial sale and $100,000
on the third anniversary of the first commercial sale and every year thereafter, for the life of the November AL001 License Agreements.
These license agreements have
an indefinite term that continue until the later of the date no licensed patent under the applicable agreement remains a pending application
or enforceable patent, the end date of any period of market exclusivity granted by a governmental regulatory body, or the date on which
the licensee’s obligations to pay royalties expire under the applicable license agreement. Under our various license agreements,
if we fail to meet a milestone by its specified date, Licensor may terminate the license agreement. The Licensor was also granted a preemptive
right to acquire such shares or other equity securities that may be issued from time to time by us while the Licensor remains the owner
of any equity securities of our company.
Additionally, we are required
to pay milestone payments on the due dates to the Licensor for the license of the AL001 technologies and for the ALZN002 technology, as
follows:
Original AL001 Licenses:
Payment Due Date Event
$ 50,000 * Completed September 2019 Pre-IND meeting
$ 65,000 * Completed June 2021 IND application filing
$ 500,000 * Completed March 2022 Upon Completion of first clinical trial
* Milestone met and completed
ALZN002 License:
Payment Due Date Event
$ 50,000 * Upon IND application filing Upon IND application filing
* Milestone met and completed
Additional AL001 Licenses:
Payment Due Date Event
Market Opportunity
According
to the National Institute of Health (“NIH”), there are more than 43.7 million Americans afflicted with Alzheimer’s,
BD, MDD and PTSD. The rise in the prevalence of these diseases/disorders and the various risks, such as high stress, substance abuse,
and advancements in a combination of drugs are primarily propelling market growth. Advancements in technology allowing more accurate diagnosis/detection
of Alzheimer’s, BD, MDD, and PTSD are also positively influencing market growth. Other factors, such as increasing research and
development activities (via clinical trials) and investments by the government to improve the healthcare industry, are expected to further
drive market growth. Additionally, increased awareness about Alzheimer’s, BD, MDD and PTSD via the various disease/disorder-specific
non-profit organizations is accelerating market growth. The potential marketplace for a commercialized therapy or treatment would be tremendously
significant with large financial support available from numerous national and international pharmaceutical companies and various governments
and worldwide agencies. We were founded with a mission to further develop AL001 and ALZN002, by funding them through human clinical trials
administered by the FDA and ultimately, if successful, potentially making them available to the market.
Industry Overview
Alzheimer’s
Currently, Alzheimer’s
is the seventh leading cause of death in the U.S. and, when extrapolated globally, the market for preventions, treatments and cures of
this crippling disease is massive. Since 1990, life expectancy has increased by six years and the worldwide average continues to increase.
With the increase in the mean age of the population in developed countries, the prevalence of deteriorating neurological diseases has
also increased. According to the Alzheimer’s Association, in the U.S. alone, one of nine persons over the age of 65 have Alzheimer’s,
with roughly 6.7 million Americans currently living with it. It is estimated that this number will grow to 13 million by 2050 barring
the development of medical breakthroughs to prevent, slow or cure the disease. Many Alzheimer’s related associations believe the
actual number of adults with Alzheimer’s may be much higher since current statistics do not account for deaths from complications
or from related diseases like pneumonia or heart attack. These death certificates only list the most immediate cause. The fastest growing
age group in the U.S. is the “over 85” group within which one in three individuals have Alzheimer’s.
It is estimated that the cost of caring for people with Alzheimer’s
and other dementias will increase from an estimated $345 billion in 2023 to a projected $1 trillion per year by 2050 with Medicare and
Medicaid covering approximately 70% of such costs. Over 11 million Americans provide unpaid care for people with Alzheimer’s or
other dementias. The Alzheimer’s Association estimates that, in 2023, caregivers to individuals with Alzheimer’s will provide
18 billion hours of care valued at $339.5 billion.
Alzheimer’s Therapeutic Landscape
According to the Alzheimer’s
Association, the following is a pictorial representation of the more recent published data encompassing the Alzheimer’s therapeutics
landscape.
There
are currently several experimental therapeutic agents for Alzheimer’s in various stages of development with clinical testing directed
towards amyloid-beta, or Aβ, clearance, and inhibition of Tau protein aggregation or phosphorylated-Tau, or pTau, clearance. In June
2021, the FDA approved Biogen’s Alzheimer’s drug aducanumab, also known as Aduhelm, making it the first medication cleared
by U.S. regulators to reduce amyloid plaques in people living with Alzheimer’s and the first new medication for the disease in nearly
two decades. There were previously no drugs cleared by the FDA that can slow the mental decline caused by Alzheimer’s, which is
the seventh-leading cause of death in the U.S. In July 2023, an anti-beta amyloid antibody known as Lecanemab-irmb (“Leqembi”),
received full approval by FDA for treatment of Alzheimer’s. Given the current weight of evidence, amyloid is now established as
a cause of Alzheimer’s. Leqembi is a humanized monoclonal antibody that binds with high affinity to soluble amyloid-beta oligomers,
which reportedly are toxic to neurons. Leqembi reduced biomarkers of amyloid in early Alzheimer’s and resulted in moderately less
decline on measures of cognition and function compared to placebo at 18 months. Since Leqembi only provides passive immunity, antibody
infusions are needed every 2 weeks. Leqembi supports and validates the amyloid theory, but in routine medical practice there will be a
large burden on the health care system due to the need for every 2-week infusions. As a first-rendition anti-beta amyloid antibody product,
it is a major landmark requiring innovation.
Bipolar Disorder
BD,
previously known as manic depression, is a mood disorder characterized by periods of depression and periods of abnormally elevated happiness
that each lasts from days to weeks. If the elevated mood is severe or associated with psychosis, it is called mania; if it is less severe,
it is called hypomania. During mania, an individual behaves or feels abnormally energetic, happy, or irritable, and they often make impulsive
decisions with little regard for the consequences. There is usually also a reduced need for sleep during manic phases. During periods
of depression, the individual may experience crying and have a negative outlook on life and poor eye contact with others. The risk of
suicide is high; over a period of 20 years, 6% of those with BD died by suicide, while 30–40% engaged in self-harm. Other mental
health issues, such as anxiety disorders and substance use disorders, are commonly associated with BD.
While the causes
of BD are not clearly understood, both genetic and environmental factors are thought to play a role. Many genes, each with small effects,
may contribute to the development of the disorder. Genetic factors account for about 70–90% of the risk of developing BD. Environmental
risk factors include a history of childhood abuse and long-term stress. The condition is classified as bipolar I disorder if there has
been at least one manic episode, with or without depressive episodes, and as bipolar II disorder if there has been at least one hypomanic
episode (but no full manic episodes) and one major depressive episode. If these symptoms are due to drugs or medical problems, they are
not diagnosed as BD. Other conditions that have overlapping symptoms with BD include attention deficit hyperactivity disorder, personality
disorders, schizophrenia, and substance use disorder as well as many other medical conditions. Medical testing is not required for a diagnosis,
though blood tests or medical imaging can rule out other problems.
BD
occurs in approximately 1% of the global population. According to the NIH, roughly seven million, are estimated to be affected at some
point in their life; rates appear to be similar in females and males. Symptoms most commonly begin between the ages of 20 and 25 years
old; an earlier onset in life is associated with a worse prognosis. Interest in functioning in the assessment of patients with BD is growing,
with an emphasis on specific domains such as work, education, social life, family, and cognition. Around one-quarter to one-third of people
with BD have financial, social or work-related problems due to the illness. BD is among the top 20 causes of disability worldwide and
leads to substantial costs for society. Due to lifestyle choices and the side effects of medications, the risk of death from natural causes
such as coronary heart disease in people with BD is twice that of the general population.
Bipolar Disorder Therapeutic Landscape
Mood stabilizers,
including lithium and certain anticonvulsants, such as valproate and carbamazepine, as well as atypical antipsychotics, such as aripiprazole,
are the mainstay of long-term pharmacologic relapse prevention. Antipsychotics are additionally given during acute manic episodes as well
as in cases where mood stabilizers are poorly tolerated or ineffective. In patients where compliance is of concern, long-acting injectable
formulations are available. There is some evidence that psychotherapy improves the course of BD. The use of antidepressants in depressive
episodes is controversial; they can be effective but have been implicated in triggering manic episodes. The treatment of depressive episodes,
therefore, is often difficult. Electroconvulsive therapy (“ECT”) is effective in acute manic and depressive episodes, especially
with psychosis or catatonia. Admission to a psychiatric hospital may be required if a person is a risk to themselves or others; involuntary
treatment is sometimes necessary if the affected person refuses treatment.
Major Depressive Disorder
MDD, also known simply as depression, is a mental disorder characterized
by at least two weeks of pervasive low mood, low self-esteem, and loss of interest or pleasure in normally enjoyable activities. Those
affected may also occasionally have delusions or hallucinations. Introduced by a group of U.S. clinicians in the mid-1970s, the term was
adopted by the American Psychiatric Association for this symptom cluster under mood disorders in the 1980 version of the Diagnostic and
Statistical Manual of Mental Disorders (DSM-III) and has become widely used since.
The diagnosis of MDD is based on the person's reported experiences
and a mental status examination. There is no laboratory test for the disorder, but testing may be done to rule out physical conditions
that can cause similar symptoms. The most common time of onset is in a person’s 20s, with females affected about twice as often
as males. The course of the disorder varies widely, from one-episode lasting months to a lifelong disorder with recurrent major depressive
episodes.
MDD is believed to be caused by a combination of genetic, environmental,
and psychological factors, with about 40% of the risk being genetic. Risk factors include a family history of the condition, major life
changes, certain medications, chronic health problems, and substance use disorders. It can negatively affect a person's personal life,
work life, or education as well as sleeping, eating habits, and general health. According to the NIH, MDD affected approximately 21 million
adults (8.4% of all U.S. adults) in 2020. The prevalence of adults with a major depressive episode was higher among adult females (10.5%)
than males (6.2%). The prevalence of adults with a major depressive episode was highest among individuals aged 18-25 (17.0%). MDD causes
the second-most years lived with disability, after lower back pain.
Major Depressive Therapeutic Landscape
Those with MDD are typically treated with psychotherapy and antidepressant
medication. Medication appears to be effective, but the effect may predominantly be significant in the most severely depressed. Hospitalization
(which may be involuntary) may be necessary in cases with associated self-neglect or a significant risk of harm to self or others. ECT
may be considered if other measures are not effective.
Although lithium does not have an FDA approved indication for augmentation
of an antidepressant in MDD, it has been prescribed off-label for this purpose for decades. While a wide variety of medications have been
used historically in this capacity, lithium is one of the few agents that has demonstrated efficacy in multiple randomized controlled
trials. Although the ideal role for lithium augmentation has yet to be established, there is evidence to support the clinical practice
of adding lithium to conventional antidepressants in pursuit of MDD remission. Lithium augmentation has been cited as a main strategy
for depressed patients not responding to an antidepressant, lithium prophylaxis for recurrent unipolar depression as an alternative to
prophylaxis with an antidepressant, and for lithium's anti-suicidal properties, where appropriate.
Post-Traumatic Stress Disorder
PTSD
is a mental and behavioral disorder that can develop because of exposure to a traumatic event, such as sexual assault, warfare, traffic
collisions, child abuse, domestic violence, or other threats to a person’s life. Symptoms may include disturbing thoughts, feelings,
or dreams related to the events, mental or physical distress to trauma-related cues, attempts to avoid trauma-related cues, alterations
in the way a person thinks and feels, and an increase in the fight-or-flight response. These symptoms may remain for more than a month
after the event. A person with PTSD is at a higher risk of suicide and intentional self-harm.
Most people who experience traumatic events do not develop PTSD. People
who experience interpersonal violence such as rape, other sexual assaults, being kidnapped, stalking, physical abuse by an intimate partner,
and incest or other forms of childhood sexual abuse are more likely to develop PTSD than those who experience non-assault-based trauma,
such as accidents and natural disasters. Those who experience prolonged trauma, such as slavery, concentration camps, or chronic domestic
abuse, may develop complex post-traumatic stress disorder (“C-PTSD”). C-PTSD is similar to PTSD but has a distinct effect
on a person's emotional regulation and core identity.
According
to the NIH, about 3.6%, or roughly nine million, adults in the U.S. have PTSD in a given year, and 9% of people develop it at some point
in their life. In much of the rest of the world, rates for a given year are between 0.5% and 1% of the population. Higher rates may occur
in regions of armed conflict. It is more common in women than men. PTSD was first mentioned in the American Psychiatric Association Diagnostic
and Statistical Manual of Mental Disorders (DSM-I) in the 1950s under the term “gross stress reaction.” Although this diagnosis
included psychological problems related to traumatic events such as wartime combat, it limited symptoms to six months. This diagnosis
was removed from the American Psychiatric Association Diagnostic and Statistical Manual of Mental Disorders (DSM-II) in 1968, representing
a regression in accurate PTSD characterization. The long-term psychological disabilities experienced by trauma survivors, including Vietnam
veterans, sexual assault victims and Holocaust survivors led to the introduction of PTSD in the American Psychiatric Association Diagnostic
and Statistical Manual of Mental Disorders (DSM-III) in 1980, where, for the first time, the definition of PTSD highlighted the critical
connection between traumatic events and long-term psychological symptoms.
Post-Traumatic Stress Disorder Therapeutic
Landscape
Prevention may be possible
when counselling is targeted at those with early symptoms but is not effective when provided to all trauma-exposed individuals whether
or not symptoms are present. The main treatments for people with PTSD are counselling (psychotherapy) and medication. Antidepressants
of the selective serotonin reuptake inhibitors (“SSRI”) or serotonin-norepinephrine reuptake inhibitors (“SNRI”)
type are the first-line medications used for PTSD and are moderately beneficial for about half of people. Benefits from medication are
less than those seen with counselling. It is not known whether using medications and counselling together has greater benefit than either
method separately.
Sertraline (Zoloft) and Paroxetine (Paxil) are FDA-approved medications
for PTSD. Reviews by a group of doctors of pharmacological monotherapy in 2015 and 2021 found that paroxetine, fluoxetine, sertraline
and venlafaxine could be effective for PTSD, but the magnitude of the effect was small and the clinical relevance was unclear. These reviews
excluded lithium treatments. Medications, other than some SSRIs or SNRIs, do not have enough evidence to support their use and, in the
case of benzodiazepines, may worsen outcomes.
Case reports suggest
that lithium treatment may be useful for irritability/anger outbursts in PTSD patients. For example, one study by Kitchner and Greenstein
provided case histories of four males (aged approximately 31–42 years) who suffered from PTSD resulting from their experiences in
the Vietnam War. Results from treatment with low doses (300–600 mg/day) of lithium carbonate were reported to indicate that treatment
was effective in reducing inappropriate anger, irritability, anxiety, and insomnia.
The clinical observation of mood swings
beyond the normal range but milder than those associated with BD reportedly suggested the presence of a subthreshold mood disorder in
these PTSD patients. It has also been proposed that treatment of trauma with lithium to forestall the development of PTSD may be provided
by pharmacological induction of a mild transient amnesia.
Manufacturing
Currently, we do not have
in-house manufacturing capabilities. We have outsourced and expect to continue to outsource the manufacturing of our products to third
party contractors, with special capabilities to manufacture chemical drugs and biologic drug candidates for submission and clinical testing
under FDA guidelines and, for AL001 and ALZN002, have received Good Manufacturing Practices, or GMP, material manufactured for clinical
trial. There are several sources of manufacturing available once a therapy or treatment can achieve Phase II study as identified in a
publication by Pharma.org released in 2013 (http://www.phrma.org/sites/default/files/Alzheimer’s%202013.pdf).
Distribution and Marketing
We
intend to develop AL001 and ALZN002 through successive de-risking milestones towards regulatory approval and seek marketing approval of
AL001 and ALZN002 or enter into partnering transactions with biopharmaceutical companies seeking to strategically fortify pipelines and,
in turn, receiving funding for the costly later-stage clinical development required to achieve successful commercialization. We do not
anticipate selling products directly into the marketplace, though we may do so depending on market conditions. Our focus is to strategically
effect partnering transactions that will provide distribution and marketing capabilities to sell products into the marketplace.
Government Regulation
Clinical trials, the pharmaceutical
approval process, and the marketing of pharmaceutical products, are intensively regulated in the United States and in all major foreign
countries.
Human Health Product
Regulation in the United States
In the United States, the
FDA regulates pharmaceuticals under the Federal Food, Drug, and Cosmetic Act and related regulations promulgated thereunder. Pharmaceuticals
are also subject to other federal, state, and local statutes and regulations. Failure to comply with applicable U.S. regulatory requirements
at any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial
sanctions. These sanctions could include the imposition by the FDA of an Institutional Review Board, or IRB, a clinical hold on trials,
a refusal to approve pending applications, withdrawal of an approval, warning letters, product recalls, product seizures, total or partial
suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution. Any agency or judicial enforcement
action could have a material adverse effect on us.
The FDA and comparable regulatory
agencies in state and local jurisdictions impose substantial requirements upon the clinical development, manufacturing and marketing of