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, 2024
̈
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. ̈
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, 2023 (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 $6.7 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 841,240shares of common stock outstanding as of July 29, 2024.
Documents incorporated by reference: None
ALZAMEND NEURO, INC.
FORM 10-K
FOR THE FISCAL YEAR ENDED APRIL 30, 2024
INDEX
Page
PART I
Item 1. Business 2
Item 1A. Risk Factors 23
Item 1B. Unresolved Staff Comments 47
Item 1C. Cybersecurity 47
Item 2. Properties 48
Item 3. Legal Proceedings 48
Item 4. Mine Safety Disclosures 48
PART II
Item 6. [Reserved] 49
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 60
Item 8. Financial Statements and Supplementary Data 60
Item 9A. Controls and Procedures 61
Item 9B. Other Information 62
Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections 62
PART III
Item 10. Directors, Executive Officers and Corporate Governance 63
Item 11. Executive Compensation 67
Item 14. Principal Accountant Fees and Services 76
PART IV
Item 15. Exhibit and Financial Statement Schedules 77
Signatures 79
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.
· Our intellectual property rights present a number of risks.
· Our affiliates and related party transactions present a number of risks.
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 and its subsidiary.
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,
is among the most-feared diseases (second only to cancer) among Americans, according to a 2023 Center for Disease Control survey. Alzheimer’s
is also the seventh leading cause of death (in 2020 and 2021) in the United States (“U.S.”) according to a 2024 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, none had been shown to halt the progression of the disease,
which currently affects roughly 6.9 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, according to data provided
by the Alzheimer’s Association. In 2024, the estimated healthcare costs for treating individuals with Alzheimer’s in the U.S.
will be $360 billion, including $231 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, according to the Alzheimer’s Association.
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 was the first
mood stabilizer approved by the U.S. Food and Drug Administration (“FDA”) and is still a first-line treatment option (considered
the “gold standard”) for BD and is prescribed off-label for MDD and PTSD. Moreover, lithium has been marketed for more than
35 years and human toxicology regarding its 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,” which appeared 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 adopted 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 long-term beneficial effects in the treatment of affective disorders via underappreciated neuroprotective
effects. Molecular biology and animal studies have also indicated that lithium may offer protection against Alzheimer’s. Given the
absence of other adequate treatments, we believe that research and commercialization of the potential efficacy of lithium in the long-term
treatment of neurodegenerative disorders is well 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 materialize, 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 never become profitable, 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 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 than lithium but that may evince 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 in 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 popularly referred to as 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 and 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 death or serious adverse events 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 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 dosages below it can impair effectiveness.
Planned Future Studies
We intend to initiate clinical
trials at the 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. We will also include cohorts of healthy subjects and
Alzheimer’s patients. We anticipate partnering with a reputable research institution for the study in the second half of 2024.
Based on the results from our Phase IIA
MAD study for AL001, we also plan to initiate two safety and efficacy clinical trials in subjects with mild to moderate dementia of the
Alzheimer’s type. These studies would most likely commence after the “lithium in brain” study.
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.
The development of ALZN002 is predicated
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 or 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. On February 13, 2024, we received
notice from the company we engaged as our contract research organization (“CRO”), Biorasi, LLC (“Biorasi”) that
Biorasi was terminating our contract with them. We are currently pursuing the engagement of a replacement CRO.
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 Third
Amendments to the AL001 Licenses modified the timing of the payments for the license fees.
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
14,853 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 of the 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, on April
17, 2023, we entered into the Sixth Amendment to the ALZN002 License and on December 11, 2023, we entered into the Seventh Amendment to
the ALZN002 License (collectively, the “ALZN002 License Agreement”). The Seventh Amendment to the ALZN002 License modified
the timing of the payments for the license fees.
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 24,012 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 of the 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 Second Amendments to the November AL001 License modified
the timing of the payments for the license fees.
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 of the 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 that 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
$ 1,250,000 March 2025 Upon first patient treated in a Phase III clinical trial
* Milestone met and completed
ALZN002 License:
Payment Due Date
$ 50,000 * Upon IND application - completed January 2022
$ 50,000 Upon first dosing of patient in first Phase I clinical trial
$ 500,000 Upon completion of first Phase IIB clinical trial
$ 1,000,000 Upon first patient treated in a Phase III clinical trial
* Milestone met and completed
Additional AL001 Licenses:
Payment Due Date Event
$ 2,000,000 March 2026 Upon first patient treated in a Phase III clinical trial
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, making them available to the public.
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 older than 65 has Alzheimer’s,
with roughly 6.9 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 has Alzheimer’s.
It is estimated that the cost of caring
for people with Alzheimer’s and other dementias will increase from an estimated $360 billion in 2024 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 estimated that, in 2023, caregivers to individuals
with Alzheimer’s provided 18.4 billion hours of care valued at $346.6 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. In July 2024, the FDA approved Eli Lilly’s Alzheimer’s drug donanemab, also known as Kisunla,
which targets amyloid in the brain. Given the current weight of evidence, amyloid is now established as a cause of Alzheimer’s.
Both Leqembi and Kisunla are humanized monoclonal
antibodies that bind with high affinity to soluble amyloid-beta oligomers, which reportedly are toxic to neurons. Both Leqembi and Kisunla
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 and Kisunla only provide passive immunity, antibody infusions are needed every 2 or 4
weeks, respectively. Both Leqembi and Kisunla support and validate the amyloid theory, but in routine medical practice there will be a
large burden on the health care system due to the need for bi-weekly or monthly infusions.
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 lives; 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 3.5%, 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 low 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 referrals to the Department of Justice for criminal prosecution.
Any agency or judicial enforcement action could have a material adverse effect on us.
The FDA and comparable regulatory agencies