UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
10-K
(Mark
One)
For
the fiscal year ended June 30, 2025
or
Commission
File No. 001-40388
ANEBULO
PHARMACEUTICALS, INC.
(Exact
name of Registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
(512)598-0931
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock ANEB Nasdaq Stock Market LLC
Securities
registered pursuant to 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 ☐ NO ☒
Indicate
by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
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 12 months (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. Yes ☒ 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). Yes ☒ 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 ☒ Smaller reporting company ☒
Emerging growth company ☒
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 § 240.1D-1(b). ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The
aggregate market value of the voting and non-voting common stock held by non-affiliates of the Registrant was $15,057,677 based on the
closing price of the Registrant’s common stock on the Nasdaq Capital Market on December 31, 2024. The calculation of the aggregate
market value of voting and non-voting common stock excludes shares held by executive officers, directors and stockholders that the Registrant
concluded were affiliates of the Registrant on such date. Exclusion of such shares should not be construed to indicate that any such
person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the Registrant or that
such person is controlled by or under common control with the Registrant.
The
number of shares of the Registrant’s common stock, par value $0.001 per share, outstanding
as of September 25, 2025 was 41,084,731 shares.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
Anebulo
Pharmaceuticals, Inc.
Table
of Contents
Page Number
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 3
SUMMARY OF RISK FACTORS 4
PART I 6
Item 1. Business 6
Item 1A. Risk Factors 26
Item 1B. Unresolved Staff Comments 60
Item 1C. Cybersecurity 60
Item 2. Properties 60
Item 3. Legal Proceedings 61
Item 4. Mine Safety Disclosures 61
Item 6. [Reserved] 61
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 71
Item 8. Financial Statements and Supplementary Data 71
Item 9A. Controls and Procedures 71
Item 9B. Other Information 72
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevents Inspections 72
PART III 72
Item 10. Directors, Executive Officers and Corporate Governance 72
Item 11. Executive Compensation 77
Item 14. Principal Accountant Fees and Services 94
Item 15. Exhibits and Financial Statement Schedules 95
In
this Annual Report on Form 10-K (this “Annual Report”), unless otherwise stated or as the context otherwise requires, references
to “Anebulo Pharmaceuticals,” “Anebulo,” “the Company,” “we,” “us,” “our”
and similar references refer to Anebulo Pharmaceuticals, Inc. The Anebulo logo, and other trademarks or service marks of Anebulo Pharmaceuticals,
Inc. appearing in this Annual Report are the property of Anebulo Pharmaceuticals, Inc. This Annual Report also contains registered marks,
trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this Annual Report
are the property of their respective holders. We do not intend our use or display of other companies’ trade names, trademarks or
service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
which are subject the “safe harbor” created by those sections. These forward-looking statements about us and our industry
involve substantial risks and uncertainties and our actual results could differ materially from those anticipated in these forward-looking
statements as a result of various factors, including those set forth below under Part I, Item 1A, “Risk Factors” in this
Annual Report. All statements other than statements of historical facts contained in this Annual Report, including statements regarding
our future financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking
statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,”
“could,” “will,” “estimate,” “continue,” “anticipate,” “intend,”
“seek,” “plan,” “expect,” “should,” “would,” “potentially” or
the negative of these terms or similar expressions in this Annual Report.
We
have based these forward-looking statements largely on our current expectations, beliefs, estimates and projections, and various assumptions,
many of which, by their nature, are inherently uncertain and beyond our control. In addition, statements that “we believe”
and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available
to us as of the date of this Annual Report, and while we believe such information forms a reasonable basis for such statements, such
information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry
into, or review of, all potentially available relevant information. These forward-looking statements include, but are not limited to,
statements about:
● the timing or outcome of any of our regulatory submissions;
● our expectations regarding future growth;
● the performance of our third-party suppliers and manufacturers;
● the impact on our business of economic or political events or trends; and
● the impact of governmental laws and regulations.
You
should not place undue reliance on these forward-looking statements. Unless required by law, we undertake no obligation to update or
revise any forward-looking statements to reflect new information or future events or developments. Thus, you should not assume that our
silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. You should carefully
read this Annual Report, including the section titled “Risk Factors” and the documents that we reference in this Annual Report
and have filed as exhibits to this Annual Report completely and with the understanding that our actual future results may be materially
different from what we expect. We qualify all of the forward-looking statements in this report by these cautionary statements.
SUMMARY
OF RISK FACTORS
Our
business is subject to numerous risks and uncertainties of which you should be aware, including those described in the section entitled
“Risk Factors.” These risks include the following:
Risks
Related to our Business, Financial Condition and Capital Requirements
Risks
Related to Our Intellectual Property
Risks
Related to Product Development, Regulatory Approval, Manufacturing and Commercialization
Risks
Related to Our Reliance on Third Parties
Risks
Related to Government Regulation of our Industry
Risks
Related to Ownership of Our Common Stock
● We do not expect to pay any dividends on our common stock.
General
Risk Factors
● Inflation may adversely affect us by increasing our costs.
The
summary risk factors described above should be read together with the text of the full risk factors below, in the section entitled “Risk
Factors” and the other information set forth in this Annual Report, including our financial statements and the related notes, as
well as in other documents that we file with the Securities and Exchange Commission (the “SEC”). The risks summarized above
or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that
we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and
future growth prospects.
PART
I
Item
1. Business.
Overview
We
are a clinical-stage pharmaceutical company developing treatments for cannabis-induced toxicity, such as acute cannabis-induced toxicity
in children, acute cannabinoid intoxication (“ACI”) and the broader landscape of acute cannabis-induced conditions. Our lead
product candidate, selonabant (formerly ANEB-001), is intended to rapidly reverse the negative effects of cannabis-induced toxicity and
reduce time to recovery. Pediatric patients exposed to cannabis are at risk of serious and life-threatening outcomes including Central
Nervous System (“CNS”) depression, respiratory depression, seizures, and coma. ACI in adults is characterized by signs and
symptoms that may include anxiety, panic attacks, agitation, psychosis, and tachycardia. There are no approved medical treatments currently
available to specifically treat cannabis-induced toxicity, and we are not aware of any competing products that are further along in the
development process than selonabant in reversing the effects of cannabinoids like delta-9-tetrahydrocannabinol, better known as THC,
the principal psychoactive constituent of cannabis.
Cannabis-induced
toxicity has become a widespread health issue in the United States, particularly in the increasing number of states that have legalized
cannabis for medical and recreational use. Unintentional or excessive ingestion of THC via edible products such as gummies, candies,
and brownies, is a major cause of THC-related emergency room visits.
Hospital
emergency rooms across the United States have seen a dramatic increase in patient visits with cannabis-related conditions. In 2014, there
were an estimated 1.1 million cannabis-related emergency department patient visits, according to data published in “Trends and
Characteristics of Cannabis-Associated Emergency Department Visits in the United States, 2006-2018,” Drug Alcohol Depend. 2022
Mar 1;232:109288. doi: 10.1016/j.drugalcdep.2022.109288. Epub 2022 Jan 10. PMID: 35033959; PMCID: PMC9885359) by Roehler DR, Hoots BE,
Holland KM, Baldwin GT, and Vivolo-Kantor AM, which provided a national estimate analyzing data from The Nationwide Emergency Department
Sample (“NEDS”), the largest database of U.S. hospital-owned emergency department visits. Based on our evaluation of a published
analysis of the most recent NEDS data, we believe that the number of cannabis related emergency department visits grew to approximately
1.8 million patients in 2021. We believe the number of cannabis-related emergency department visits and health problems associated with
unintentional cannabis poisoning and ACI will continue to increase substantially as more states pass laws legalizing cannabis for medical
and recreational use. Given the consequences, there is an urgent need for a treatment to rapidly reverse the symptoms of cannabis-induced
toxicity.
Previous
clinical trials completed by a third party have shown that oral selonabant is rapidly absorbed, well tolerated and, when repeatedly administered
to obese subjects, leads to weight loss, an effect that is consistent with central antagonism of the cannabinoid receptor type-1 (“CB1”),
the primary target of agonists like THC. In March 2021, our European clinical trial application (“CTA”), which is equivalent
to an investigational new drug application in the United States, was accepted in the Netherlands to allow us to utilize oral selonabant
in a randomized, double-blind, placebo-controlled Phase 2 human proof-of-concept clinical trial for potential use as a treatment for
ACI (NCT05282797). The study (the “Netherlands Trial”) was designed to evaluate the safety, tolerability, pharmacokinetics,
and effectiveness of a single oral dose of selonabant in treating healthy adult subjects challenged with THC. On March 28, 2023, we announced
complete results from Part A and Part B of the Netherlands Trial, in a total of 134 subjects. Dosing of an additional 20 subjects in
an open-label extension of the study (“Part C”) was initiated in July 2023 and the study was completed in August 2023. We
met with the U.S. Food and Drug Administration (the “FDA”) in July 2023 for a Type B meeting to discuss the Part A and B
Phase 2 data and the potential path forward for Phase 3 development of oral selonabant for the treatment of adult ACI and received the
minutes of the meeting in August 2023. The FDA indicated that a single well-controlled study of oral selonabant in ACI patients presenting
to the emergency department combined with a larger THC challenge study in volunteers could potentially provide substantial evidence to
support a new drug application. In addition, an observational study in patients presenting to emergency departments with acute cannabis-induced
toxicity is currently ongoing. The study is designed to determine concentrations of THC and metabolites in plasma and gather information
on signs and symptoms, patients’ disposition and selected assessments, where possible. We believe the data generated from the Netherlands
Trial provide support for our development pathway.
Rather
than proceeding directly with the Phase 3 studies of oral selonabant in adults with ACI, we are prioritizing the advancement of a selonabant
intravenous (“IV”) formulation as a potential treatment for pediatric patients with unintentional cannabis poisoning, which
we believe offers the potential for a faster timeline to approval relative to the adult oral product. We have scaled up the IV formulation
for initial clinical safety studies. We met with the FDA in December 2024 for a Pre-IND meeting to discuss the development of IV selonabant
and the initial plan for clinical testing. FDA acknowledged the unmet need for a treatment for children exposed to cannabis toxicity,
and proposed a close, ongoing collaboration to efficiently advance the selonabant program for the pediatric indication. We initiated
a single ascending dose (“SAD”) study of IV selonabant in healthy adults in the third quarter of calendar 2025.
The
recent decision by the United States Department of Justice to support the rescheduling of marijuana from a schedule I to a schedule III-controlled
substance is a move that we believe will ultimately lead to increased use of cannabis-containing products among US households. This potentially
includes edible products that are often the cause of unintentional cannabis poisoning in children. We have evaluated the potential advantages
of prioritizing a near-term solution for children with more serious symptoms over progressing our plans for clinical studies to support
an adult oral ACI treatment and have decided to focus current efforts on the pediatric indication at this time. Our decision to prioritize
the development of an intravenous treatment for children is driven by multiple factors. Our recent development of a suitable IV selonabant
formulation enables its use in the pediatric population. Our prior discussions with the FDA have highlighted the need for an alternative
formulation of selonabant for treating younger patients. There is increasing recognition among clinicians that this is a growing, unmet
medical need in a vulnerable population where there are no approved treatments. Our belief is that the path to approval for an oral treatment
for adult ACI may be facilitated by an initial approval for intravenous treatment of unintentional cannabis poisoning in the pediatric
population. Furthermore, with this unprecedented change in cannabis regulation, Anebulo is uniquely positioned to become a provider of
a rapid and clinically impactful solution for Emergency Departments to treat pediatric patients suffering from unintentional cannabis
poisoning. Research has shown children are much more sensitive to the serious toxic effects of cannabis. Key factors such as underdeveloped
endocannabinoid system with more CB1 receptors in the brain than adults, and reduced ability to metabolize THC, potentially contribute
to a much greater risk to children. The risk is also evident in how cannabis effects this population; in contrast to adults who are exposed
to acute cannabis-induced toxicity, children are at risk of serious and life-threatening outcomes such as CNS depression, respiratory
depression, seizures, and coma.
Our
Lead Product Candidate
Our
objective is to develop and commercialize new treatment options for patients suffering from cannabis-induced toxicity. Our lead product
candidate is selonabant, a potent, small molecule antagonist of cannabinoid binding receptor type-1 (“CB1”), the primary
receptor involved in the psychotropic effects of cannabinoids, with the potential to address the unmet medical need for a therapy to
treat cannabis toxicity. Selonabant is orally bioavailable, rapidly absorbed, and has also been formulated for intravenous treatment.
Both oral and IV selonabant are being designed to rapidly reverse the symptoms of cannabis toxicity and reduce the time to recovery.
Our proprietary position in the treatment of cannabis toxicity is protected by three issued US patents and rights to six additional patent
applications, two pending Patent Cooperation Treaty (PCT) applications and additional international patent applications, covering various
methods of use of the compound, aspects of selonabant, and delivery systems. We initiated a SAD study of IV selonabant in healthy adults in the third quarter of calendar 2025.
Cannabinoids
are a class of chemical compounds that are naturally occurring and are primarily found in cannabis plant extracts. The two major cannabinoids
found in cannabis plant extracts include THC and CBD. These compounds bind themselves to CB1 and CB2 cannabinoid receptors, which are
found throughout the body. Specifically, CB1 receptors are concentrated in the brain and central nervous system, while CB2 receptors
are found mostly in peripheral organs and are associated with the immune system. When the chemical compounds bind themselves to these
cannabinoid receptors, the process elicits certain physiological responses. Physiological responses to cannabinoids may vary among individuals.
Some of the effects of cannabinoids have been shown to impact nervous system functions, immune responses, muscular motor functions, gastrointestinal
maintenance, blood sugar management, and the integrity of ocular functions.
Individuals
can use or consume cannabinoids in natural or unnatural formulations, orally or by inhalation, and intentionally and unintentionally,
all of which can result in intoxication. Natural formulations include edibles and marijuana cigarettes; unnatural formulations include
synthetics. Individuals consume cannabinoids orally by ingesting edibles or synthetics and by inhalation through smoking or vaping marijuana
or synthetics. Cannabinoids can also be ingested unintentionally through these same methods where, for example, children consume edibles
by mistaking them for common consumer items like candy that would not otherwise contain THC. Pediatric patients accidentally exposed
to cannabis are at risk of serious and life-threatening outcomes including CNS depression, respiratory
depression, seizures, and coma. ACI in adults is characterized by signs and symptoms that may include anxiety, panic attacks, agitation,
psychosis, and tachycardia. Many of these symptoms can require emergency medical attention and can take hours to days to resolve depending
on the particular product and amount ingested. Currently, there is no specific treatment to reverse ACI and physicians have to rely on
supportive care, including benzodiazepines, and wait for the body to metabolize the THC or synthetic cannabinoid.
We
are relying on studies performed by a third party for a different indication, obesity, and the FDA or a foreign equivalent regulator
may disagree with our ability to reference the clinical data generated by such third-party trials in connection with the indication for
cannabis toxicity and addiction. See “Risk Factors —Risks Related to Product Development, Regulatory Approval, Manufacturing
and Commercialization.”
Our
Market Opportunity
Cannabis
toxicity has become a widespread health issue in the United States as an increasing number of states have legalized cannabis for medical
or recreational use. As of June 30, 2025, cannabis was legal for recreational use in 24 states and the District of Columbia and for medical
use in 40 states.
We
believe that both the number of cannabis-associated emergency department visits and the unmet medical need will continue to grow due
to the increasing availability and consumption of edibles. In THC-containing edibles, the dose of THC can be as much as eight times more
potent than a rolled marijuana cigarette. Edibles are frequently manufactured as common consumer products, such as brownies, cookies,
candies and gummy snacks with brightly-colored packaging. THC concentrations in edibles peak after a delay of about two to four hours
from ingestion. This time to peak concentration contrasts with smoking cannabis, which causes THC concentrations to peak in about three
to 10 minutes from inhalation. Consumers possibly will approach edibles with the same serving size expectations as consumer products
without THC. Moreover, children are particularly at risk for accidentally consuming edibles due to the edibles’ brightly-colored
packaging and formulation into candies and sweets. The confluence of these factors can be dangerous and increases the risk of cannabis
toxicity. Emergency department visits were 33 times more likely for edibles as compared with other routes of cannabis consumption, according
to the article “Mental Health-related Emergency Department Visits Associated with Cannabis in Colorado,” published in Academic
Emergency Medicine (May 2018). Sales of edibles are rapidly growing, according to data collected by Statista, and are expected to continue
growing into the future.
We
believe that intoxication in adults due to synthetic cannabinoids is an area with particularly high unmet medical need. Synthetics are
among the fastest growing class of psychoactive drugs worldwide and can be as much as 85 times as potent as THC. This likely reflects
the structural promiscuity of the CB1 receptor. In addition, the negative effects of an intoxication from synthetics can be longer lasting
and more severe when compared with THC. These negative effects could include seizures and other dangerous outcomes. Compared with natural
cannabis products, synthetics have lower shipping weights and can more readily evade traditional drug screening methods.
Our
Growth Strategy
Our
goal is to create a therapeutic to treat the underlying cause of cannabis toxicity in patients with ACI and unintentional cannabis poisoning.
As noted above, there are currently no FDA approved medical treatments on the market to specifically alleviate the negative neuropsychological
effects of cannabis toxicity in adults and the serious and life-threatening effects in children. The absence and growing unmet need for
such treatments gives us the unique opportunity to create novel solutions and become a leader in the cannabinoid treatment space. To
achieve our goal, our strategy will be guided by the following principles:
Our
Clinical Trials and Milestones
We
are developing selonabant as an acute treatment to quickly and effectively combat the symptoms of cannabis toxicity. Selonabant was originally
under development by Vernalis as a potential chronic treatment for obesity and other metabolic indications.
Preclinical
Data
The
initial preclinical characterization of selonabant was performed at Vernalis’ internal laboratory in the United Kingdom between
2003 and 2006. The compound was tested as a displacer in established radioligand binding assays for the CB1 receptor. Selonabant displaced
the antagonist radioligand, [3H]-SR141716A from the human CB1 receptor with high affinity (0.55 nM) and was shown to be a competitive
antagonist in cAMP assays. In vitro testing as a displacer in 90 binding assays and 19 enzyme and functional assays, showed that selonabant
had >1000x selectivity with the human CB1 receptor over all other tested receptors. Further, Vernalis demonstrated that oral administration
of selonabant reduced THC-induced hypolocomotion in mice after 30 minutes, effectively reversing the action of THC. C57 mice administered
THC 3 mg/kg in 10 minutes pre-test exhibited reduced locomotor activity when placed in automated locomotor activity cages for 15 minutes.
Providing it orally at a dose of 30 mg/kg 30 minutes pre-test significantly reversed the action of THC on the total activity time parameter
(p<0.01 by one way ANOVA and Newman Keuls test, n=7 per group).
Historical
Clinical Studies
In
2006 and 2007, two Phase 1 studies for the treatment of obesity were conducted by Vernalis for selonabant. A third Phase 1 study, which
involved four weeks of daily dosing in overweight and obese subjects, was also conducted by Vernalis. The primary endpoint of this study
was safety related to blood pressure, and also included weight loss as a secondary endpoint.
First
Phase 1 Trial
The
Phase 1 study (V24343-1Ob-01) administered single (Part A) and multiple (Part B) ascending doses of selonabant dosed daily for
up to 14 days in otherwise healthy overweight and mildly obese subjects.
Pharmacokinetic
measurements in Part A of the Phase 1 study demonstrated that selonabant was rapidly absorbed by the body following oral administration
and achieved blood concentrations anticipated to be sufficient to block the CB1 cannabinoid receptor.
Vernalis
also measured the impact of selonabant on anxiety and depression in Part B of the Phase 1 study. Vernalis measured anxiety by using the
Spielberger state score, a commonly used measure of trait and state anxiety. Vernalis found no significant impact on anxiety, except
for the 200/50 mg arm (which represents a loading dose of 200mg followed by a once daily (“OD”) 50mg dose), which showed
increased anxiety at all assessment times. The change was driven by a single subject and may be explained by somatic adverse events,
which contributed to the Spielberger score. For depression, HAMD21 was used and small increases were noted in the 75/15 mg and 200/50
mg dose, which we believe were likely driven by somatic symptoms.
Summarizing
the results from the Phase 1 study, selonabant doses between 1 mg and 150 mg were found to be well tolerated in both single and multiple
doses with an adverse events profile similar to placebo. There was no observed effect on the cardiovascular system, ECGs, labs or physical
exams and no significant effects on anxiety or depression scores.
With
regard to pharmacodynamics, a marked reduction in test meal energy intake was seen even at the lowest dose level in Phase 1 Part B (p<0.01
on Day 14 for OD 100 mg, p<0.05 on Day 7 for OD 100 mg, not statistically significant for all other cohorts). Further, Vernalis observed
statistically significant decreases in body weight (p<0.001 on Day 14 for OD 100 mg, p<0.05 for OD 50/5 mg and OD 200/50 mg, not
significant for OD75/15 mg) indicating that selonabant was able to cross the blood-brain barrier and antagonize central cannabinoid receptors.
P-value is the probability that the difference between two data sets was due to chance. The smaller the p-value, the more likely the
differences are not due to chance alone. In general, if the p-value is less than or equal to 0.05, the outcome is considered statistically
significant. The FDA’s evidentiary standard of efficacy generally relies on a p-value of less than or equal to 0.05.
Second
Phase 1 Trial
The
second Phase 1 study conducted by Vernalis (V24343-1Ob-02) compared the pharmacokinetics of a single oral dose (1 to 200 mg) of selonabant
between fed and fasted states in eight subjects that were lean and in eight subjects that were overweight. There were no apparent differences
in the tolerability of selonabant between the subjects that were in fed and fasted states or between subjects that were lean and overweight.
Total AUC (or area under the curve) was approximately 30% higher in subjects in the fed state compared to the subjects in the fasted
state, with similar systemic exposure for the lean and overweight subjects.
The
results of the historical Phase 1 studies demonstrate that selonabant was well tolerated among healthy and obese subjects. There were
no serious adverse events. The most commonly reported adverse event was gastrointestinal discomfort, which also occurred in subjects
that were administered placebos. Based on the promising results of the historical Phase 1 studies, we believe selonabant may offer the
following clinical and product benefits:
Anebulo
Clinical Studies
Phase
2 THC Challenge Study in Healthy Volunteers
We
commenced the Netherlands Trial (AN01AC11) in December 2021 at the Center for Human Drug Research (“CHDR”) to evaluate the
safety, tolerability, pharmacokinetics, and effectiveness of a single dose of selonabant in treating healthy adult subjects challenged
with THC.
Part
A of the study was a randomized, double-blind, placebo-controlled trial in 60 healthy adult occasional cannabis users randomized to three
treatment arms of 20 subjects per arm. All subjects were challenged with a single oral dose of 10.5 mg THC and then treated with single
oral doses of 50 mg selonabant, 100 mg selonabant, or placebo. Subjects were monitored for 24 hours to assess safety, tolerability, and
pharmacokinetics, and repeatedly tested to determine potential effects on endpoints related to ACI symptoms. The tests also included
a series of validated measures of subjective CNS symptoms using visual analog scale (“VAS”) assessments, as well as objective
measures of intoxication. Part B of the study was an adaptive design that included six cohorts of up to 15 healthy adults to examine
different doses of THC and selonabant, and the impact of delayed dosing of selonabant or placebo. Part B of the study was a randomized,
double-blind, placebo-controlled phase. A total of 74 subjects participated in Part B. On March 28, 2023, we announced complete results
from our Part A and Part B of the Netherlands Trial in a total of 134 subjects. Dosing of an additional 20 subjects in an open-label
extension of the study (Part C) was initiated in July 2023 and completed in August 2023. Part C of the study was an open-label phase
with 2 cohorts of 10 subjects. Pharmacodynamic outcomes were assessed by mixed-effect model repeated measures (“MMRM”) analysis
of covariance (“ANCOVA”) through 8 hours post-selonabant dosing. Safety was assessed by continuous observation for 24 hours
and followed up at 7 to 14 days after treatment. Selonabant was well tolerated in this study and there were no serious adverse events.
We believe the data generated from the Netherlands Trial provide support for our development pathway.
Data
from Part A of the study showed positive protective effects of a single oral dose of 50 or 100 mg selonabant when co-administered with
an oral challenge dose of 10.5 mg THC. Subjects challenged with 10.5 mg THC and treated with placebo showed substantial CNS effects including
feeling high, decreased alertness, increased body sway, and increased heart rate. Compared to placebo, treatment of subjects with selonabant
led to a significant, robust, and sustained reduction in the VAS feeling high score (p < 0.0001 at both dose levels) and improvement
in the VAS alertness scale (p < 0.01). In addition, the proportion of subjects reporting feeling high on the VAS was significantly
reduced by selonabant (p < 0.001). Although THC-induced effects on body sway and heart rate in Part A of the study were small, there
was also a trend towards statistical improvement of these parameters with selonabant treatment compared to placebo. The 50 mg and 100
mg doses had similar results, suggesting that lower doses should be explored.
These
data demonstrated a highly statistically significant reduction in key symptoms of ACI, with only 10% of subjects in the 50 mg selonabant
group and 30% in the 100 mg group reporting feeling high compared to 75% of subjects in the placebo group (p < 0.001). selonabant
was well tolerated in these healthy volunteers. Preliminary safety information showed all adverse events were mild and transient, except
in the case of one subject in the 50 mg selonabant group who experienced moderate nausea and vomiting.
Based
on the encouraging data from Part A, we initiated Part B of the study at CHDR on July 26, 2022. In total, Parts A and B of the Phase
2 study enrolled 134 healthy adult subjects. In Part B of the study, subjects were challenged with substantially higher oral doses of
THC (21, 30, or 40 mg) and treated with lower doses of selonabant (10 or 30 mg) or a matching placebo. Delayed dosing of selonabant was
also examined by introducing a one-hour pause between the THC challenge and treatment with the selonabant or placebo. The final cohort
of the study included the administration of a high-fat meal prior to the THC challenge.
Based
on the final data for Part B of the study, a single low oral dose of selonabant (10 mg) administered 1 hour after a THC challenge rapidly
and statistically significantly reversed key psychotropic effects of THC doses as high as 30 mg, including a reduction in the VAS for
feeling high (p=<0.0001) and improvement in VAS alertness (p=0.0042) and reduced body sway (p=0.0196). In a pre-specified pooled analysis
of data for the combined 21 mg or 30 mg THC dose levels, a single 10 mg of selonabant administered one hour after THC achieved statistical
significance on all primary outcomes, including a reduction in VAS feeling high (p=<0.0001), improvement in VAS alertness (p=0.0024),
reduced body sway (p=0.0014), and reduction in heart rate (p=0.0125). Selonabant also reduced the time required for the THC effects to
normalize back to baseline.
At
the 30 mg THC dose, prior to dosing selonabant or placebo, subjects developed mild to moderate THC-related symptoms including moderate
euphoria, nausea, and/or vomiting, and mild bradyphrenia, dizziness, paresthesia, and/or feeling emotional. After delayed dosing of 10
mg selonabant or placebo following a 21 mg or 30 mg THC challenge dose, the adverse events considered possibly or probably related to
selonabant were mild except for one case of moderate nausea/vomiting at THC doses of 21 mg and 30 mg; the incidence of dizziness and
euphoria was greater in the placebo treated subjects. Administration of a high-fat meal delayed the absorption of THC resulting in blunted
effects of a 30 mg THC dose on many of the outcomes. However, delayed dosing of 10 mg ANB-001 still significantly reduced VAS feeling
high in fed subjects (p=0.0030).
Part
C of the study was an open-label phase with two cohorts of 10 subjects each. Subjects in Cohort 7 received a single oral dose of 40 mg
of THC together with a single oral dose of 10 mg of selonabant. Subjects in Cohort 8 received a single oral dose of 60 mg of THC together
with a single oral dose of 20 mg of selonabant. In the earlier Part B of the study, a single oral dose of 40 mg THC without selonabant
was not well tolerated due to overt THC-related effects. However, the use of even higher THC challenge doses was considered acceptable
by an independent institutional review board (“IRB”) provided that all subjects would also receive selonabant. Part C of
the study was therefore conducted as an open-label design without a placebo arm. Subjective and objective assessments performed during
the open-label Part C of the study were similar to those used in Parts A and B, with the addition of several new outcome measures intended
to explore further evidence of clinically meaningful effects. Based on preliminary safety observations, THC challenge doses of 40 mg
and 60 mg were well-tolerated when dosed in combination with selonabant, and all treatment-related adverse events were mild and transient.
A single dose of 10 mg selonabant administered with 40 mg THC or 20 mg selonabant administered with 60 mg THC mitigated the major effects
of these high THC doses when compared to pooled placebo data at 20 mg or 30 mg of THC in Part B of the study. Selonabant significantly
decreased visual analog scale (“VAS”) “Feeling High,” significantly increased VAS “Alertness,” significantly
reduced body sway, and significantly reduced heart rate when compared to the pooled placebo data. A publication on the full results of
Part C is planned. In total, 189 subjects have been dosed with selonabant in the various Phase 1 and Phase 2 studies.
Enrollment
in our observational pharmacokinetic study in the United States is ongoing. The purpose of the study is to gather data on plasma levels
of cannabinoids and metabolites in subjects with cannabis toxicity in the emergency department setting, and where possible, to assess
their condition. We are currently modifying the goals of this clinical study to focus on more pediatric cannabis-induced toxicity. The
data from the study are expected to further support selonabant development.
We
believe the completed Phase 2 study provides support for our continuing discussions with the FDA and potential future discussions with
comparable foreign regulatory authorities, and allows us to design and conduct future clinical trials with the goal of generating additional
clinical data that could ultimately enable us to file a marketing application with the FDA.
Vernalis
License Agreement
On
May 26, 2020, we entered into an exclusive license agreement (the “License Agreement”) with Vernalis Development Limited,
formerly Vernalis (R&D) Limited (“Vernalis”). Pursuant to the License Agreement, Vernalis granted us an exclusive worldwide
royalty-bearing license to develop and commercialize a compound that we refer to as selonabant, as well as access to and a right of reference
with respect to any regulatory materials under its control. The License Agreement allows us to sublicense the rights thereunder to any
person with similar or greater financial resources and expertise without Vernalis’ prior consent, provided the proposed sublicensee
is not developing or commercializing a product that contains a CB1 antagonist or is for the same indication covered by the trials or
market authorization for selonabant. In exchange for the exclusive license, we agreed to pay Vernalis a non-refundable signature fee
of $0.2 million, total potential developmental milestone payments of up to $29.9 million (of which $0.4 million has been paid), total
potential sales milestone payments of up to $35.0 million and low to mid-single digit royalties on net sales.
We
have the sole discretion to carry out the development and commercialization of selonabant, including obtaining regulatory approvals,
and we are responsible for all costs and expenses in connection therewith. We have access to certain regulatory materials, including
study reports from clinical and non-clinical trials, under Vernalis’ control. We agreed to use commercially reasonable efforts
to (i) develop and commercialize selonabant in the United States and certain European countries and (ii) dose a patient as part of a
Phase 2 clinical trial within two years of the commencement date of the License Agreement (which obligation we have met), and dose a
patient as part of a Pivotal Trial (as such term is defined in the License Agreement) within four years of commencement of the License
Agreement, which period was in accordance with the terms of the License agreement extended for a nominal fee. We also agreed to provide
Vernalis with periodic reports of our activities and notice of market authorization within specified timeframes.
With
respect to intellectual property, both parties agreed to retain sole ownership over their respective intellectual property as of the
date of the License Agreement. In addition, we retain the sole right over certain patent rights (including patent applications) and know-how
controlled by us that are necessary or reasonably useful to developing and commercializing selonabant during the term of the License
Agreement.
The
License Agreement continues for an indefinite term unless and until it is terminated or until such time as all royalties and other sums
cease to be payable thereunder. Our obligations to pay royalties commence upon the first commercial sale of our product and cease upon
the later to occur of: (i) the tenth anniversary of the first commercial sale of our product, or (ii) the expiration date of the regulatory
exclusivity of our product. We may terminate the License Agreement in its entirety at any time by providing 60 days’ prior notice
to Vernalis. Moreover, a party may terminate the License Agreement for cause (i) upon written notice when the other party commits a material
breach not remedied within the specified timeframes and defaults on its obligations thereunder, or (ii) when the other party is insolvent
as more particularly described therein. In the event of termination, all rights and licenses granted by Vernalis will revert immediately
to Vernalis; all outstanding sums as of the termination date will be immediately due and payable to Vernalis; and we will return or destroy,
at Vernalis’ request, any regulatory materials, information pertaining to selonabant, and any unused API purchased from Vernalis.
If Vernalis terminates the License Agreement due to our material breach or insolvency, or if we terminate the License Agreement at will,
both parties will negotiate in good faith to grant Vernalis a license to such intellectual property and regulatory materials needed to
develop and commercialize selonabant and provide appropriate compensation to us within six months of the termination date.
Competition
The
clinical biotechnology industry is a competitive industry characterized by technological innovation and growth. Our competitors include
other biotechnology and pharmaceutical companies, academic institutions, and public and private research institutions. These entities
engage in efforts to research, discover and develop new medicines and treatments for substance use. These entities also seek patent protection
and licensing revenues for their research results and may compete with us in recruiting skilled talent. Some of these entities are larger
and better funded than us. Our management can make no assurances that we can effectively compete with these competitors. Potential current
competitors include Aelis Farma, which is developing a medication based on a pregnenolone derivative to treat cannabis use disorders
in collaboration with Indivior PLC. We also may be unable to keep pace with technological developments and other market factors. Technological
competition from medical device, pharmaceutical and biotechnology companies, universities, governmental entities and others diversifying
into the field is intense and is expected to increase. These entities represent significant competition for us.
Research
and Development
We
are making, and expect to continue to make, substantial expenditures to fund proprietary research and development of our selonabant product
candidate and to support preclinical testing and clinical trials necessary for regulatory filings. Our research and development team,
including a third-party CRO, is continually undertaking efforts to advance research and development goals. During the fiscal years ended
June 30, 2025 and June 30, 2024, we incurred research and development expenses of approximately $4.3 million and $3.5 million, respectively.
Regulation
Government
Regulation and Product Approval
We
operate in an extensively regulated industry. Governmental authorities at all levels in the United States and in other countries regulate
aspects of bringing therapeutics, drugs, and other biologics to market, including research, testing, safety, product approval, development,
manufacture, efficacy, quality control, packaging, storage, record-keeping, promotion, labeling, advertising, marketing, distribution,
sales, imports and exports of our products.
As
a therapeutic product for human use, selonabant will be subject to regulation in the United States by the FDA under the Federal Food,
Drug and Cosmetic Act (“FDCA”) and similar regulatory requirements in other countries. Regulatory requirements include, among
other things, rigorous preclinical and clinical testing. The processes obtaining regulatory approval, commercializing our product and
maintaining compliance with applicable statutes and regulations require the substantial expenditure of time and financial resources and
play a significant role in our research and development, production, and marketing activities. Failure to comply with these regulatory
processes and other requirements could delay our ability to receive regulatory approvals, adversely affect the commercialization of our
product, and hinder our ability to receive royalties or revenues.
In
the United States, the FDA regulates drugs under the FDCA and its implementing regulations. Failure to comply with such regulations during
and after the product development and approval process could result in administrative or judicial sanctions. Such sanctions include the
FDA’s refusal to approve pending applications, withdrawal of an approval, placement on a clinical hold, untitled or warning letters,
product recalls, seizure of products, partial or complete suspension of production or distribution, injunctions, fines, refusal of government
contracts, restitution, disgorgement, civil penalties and criminal penalties. The FDA generally requires the following before a drug
can be marketed in the United States:
● Preparation and submission of a New Drug Application (“NDA”);
● FDA review and approval of the NDA.
Given
that the testing and approval process requires a substantial commitment of time, effort and financial resources, we cannot ensure that
our product will be granted approval on a timely basis.
As
part of the IND, an IND sponsor must submit the preclinical test results, along with manufacturing information, analytical data and any
available clinical data or literature, to the FDA. The sponsor must also include a protocol detailing the objectives of the initial clinical
study, the parameters for monitoring safety, and the effectiveness criteria to be assessed (among other things) if the initial clinical
study lends itself to an efficacy evaluation. Some preclinical testing may continue after submission of the IND. The IND becomes automatically
effective 30 days after receipt by the FDA, unless the FDA raises questions or concerns in response to a proposed clinical study and
places the study on a clinical hold within the 30-day timeframe. In such a case, the IND sponsor and the FDA must resolve any outstanding
issues before commencing the clinical study. The FDA may impose clinical holds due to safety concerns or non-compliance on all product
candidates within a certain pharmaceutical class at any time before or during clinical studies. In addition, the FDA can impose partial
clinical holds prohibiting the initiation of clinical studies for a certain dose or of a certain duration.
In
accordance with GCP regulations, all clinical studies must be conducted under the supervision of one or more qualified investigators.
These regulations require informed consent in writing from all research subjects before their participation in any clinical study. An
IRB must review and approve the plan for any clinical study before it commences at any institution, and the IRB must continuously review
and re-approve the study at least annually. Among other things, the IRB considers whether the risks to individual participants in the
clinical study are minimal and reasonable in relation to the anticipated benefits. The IRB also approves the information regarding the
clinical study and the consent form that must be given to each clinical study subject or his or her legal representative. The IRB must
also monitor the clinical study until completed. Each new clinical protocol and any amendments thereto must be submitted to the FDA for
review, and to the IRB for approval. The protocols detail the objectives of the clinical study, dosing procedures, subject selection
and exclusion criteria, and the parameters to be used to monitor subject safety (among other things). Study sites are subject to inspection
for compliance with GCP.
Information
about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, for public dissemination
on the ClinicalTrials.gov website.
Human
clinical studies are typically conducted in three sequential phases that may overlap or be combined:
Progress
reports explaining the results of the clinical studies must be submitted to the FDA at least annually. Safety reports must be submitted
to the FDA and the investigators for serious and unexpected suspected adverse events. There is no guarantee that Phase 1, Phase 2 and
Phase 3 testing will be completed successfully within any specified period, if at all. The FDA or the sponsor may suspend or terminate
a clinical study at any time for various reasons, including a finding that the research subjects or patients are being exposed to an
unacceptable health risk. Likewise, an IRB can suspend or terminate approval of a clinical study at its institution if the clinical study
is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm
to patients.
U.S.
Review and Approval Processes
Upon
the successful completion of the required clinical testing, an NDA is submitted to the FDA requesting approval to market the product.
The NDA reports the results of product development, preclinical and clinical studies, descriptions of the manufacturing process, analytical
tests conducted on the drug, proposed labeling and other relevant information.
In
connection with the submission of an NDA, the payment of a substantial application user fee is required (although a waiver is available
under limited circumstances, including, for the first human drug application submitted by a small business or its affiliate). The sponsor
of an approved NDA is also required to pay annual program user fees.
The
FDA may also require a Risk Evaluation and Mitigation Strategy (“REMS”) to mitigate any identified or suspected serious risks.
The REMS typically includes risk minimization tools, medication guides, assessment plans, physician communication plans, and elements
to ensure safe use, including restricted distribution methods, and patient registries.
The
FDA reviews all NDAs submitted to ensure they are sufficiently complete for substantive review before it accepts them for filing. Rather
than accept an application for filing, the FDA may request additional information. In such a case, an applicant must re-submit the application
along with the additional information, which remains subject to further FDA review. Once an application is accepted for filing, the FDA
performs an in-depth substantive review to determine whether the product is safe and effective for its intended use.
The