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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

For the fiscal year ended December 31, 2022

For the transition period from to

Commission file number 001-39202

Annovis Bio, Inc.

(Exact name of registrant as specified in its charter)

1055 Westlakes Drive, Suite 300

Berwyn, PA19312

(Address of principal executive offices including zip code)

(610) 727-3913

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered

Common Stock, par value $0.0001 per share ANVS New York Stock Exchange

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 Section 15(d) of the Exchange 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.

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 Section 240.10D-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 ☒

As of June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $63,483,880 based on the closing sale price as reported on the NYSE.

The number of shares of the issuer’s common stock outstanding as of March 30, 2023, was 8,216,678.

Documents Incorporated by Reference

Certain portions, as expressly described in this report, of the registrant’s proxy statement for the 2023 Annual Meeting of the Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

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Page

Cautionary Note Regarding Forward-Looking Statements. 3

Summary of Risk Factors. 4

Part I. 6

Item 1. Business. 6

Item1A. Risk Factors. 32

Item1B. Unresolved Staff Comments. 80

Item 2. Properties. 81

Item 3. Legal Proceedings. 81

Item 4. Mine Safety Disclosures. 81

Part II. 82

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 91

Item 8. Financial Statements and Supplementary Data. 91

Item 9A. Controls and Procedures. 91

Item 9B. Other Information. 92

Part III. 92

Item 10. Directors, Executive Officers and Corporate Governance. 92

Item 11. Executive Compensation. 93

Item 14. Principal Accountants Fees and Services. 93

Part IV. 93

Item 15. Exhibits and Financial Statement Schedules. 93

Index to Financial Statements. F-1

Signatures. 92

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Explanatory Note

Restatement of Previously Issued Quarterly Financial Statements

During the preparation of our 2022 audited combined financial statements and notes thereto, we concluded that there were material research and development expenses and related balance sheet errors in our previously issued unaudited condensed financial statements as of and for each of the quarterly and year to date periods ended March 31, 2022, June 30, 2022 and September 30, 2022, primarily relating to the timing of payments for research and development expenses and recognition of expenses. As a result of such errors, we concluded that each of the issued 2022 unaudited condensed financial statements were materially misstated, and have restated herein our previously issued unaudited condensed financial statements for each of the quarterly and year to date periods ended March 31, 2022, June 30, 2022, and September 30, 2022. The restatement corrections impact certain components within operating cash flows of the unaudited condensed statements of cash flows. Total operating cash flows, investing activities, financing activities, and cash and cash equivalents are unchanged as a result of the restatements and as a result are not restated herein.

In this Annual Report on Form 10-K for the year ended December 31, 2022, we are restating (the “Restatement”) our previously issued (i) unaudited condensed balance sheets as of March 31, 2022, June 30, 2022 and September 30, 2022, (ii) unaudited condensed statements of operations and comprehensive loss for the three months ended March 31, 2022, three and six months ended June 30, 2022, and three and nine months ended September 30, 2022, (iii) unaudited condensed statements of cash flows for the three months ended March 31, 2022, six months ended June 30, 2022 and nine months ended September 30, 2022, in each of the Quarterly Reports on Form 10- Q for the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022 (the “Prior Quarterly Financial Statements”).

The financial information that was previously filed or otherwise reported for the Prior Quarterly Financial Statements is superseded by the information in this Annual Report on Form 10-K, Note 12 - Restatement of Previously Issued Unaudited Condensed Financial Statements. We have not filed and do not intend to file amendments to our Quarterly Reports on Form 10-Q for any of the quarterly periods in fiscal year 2022. Accordingly, investors should rely only on the restated Financial Statements and related disclosures included in this 2022 Form 10-K for the applicable periods or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications including the Financial Statements.

Internal Control Considerations

In connection with the Restatement described above, management has determined that there was a material weakness in the Company's operation of effective internal control over financial reporting related to its application of ASC 606 for collaboration and license agreements as of December 31, 2022. For a discussion of management’s considerations of the Company’s disclosures controls and procedures, internal controls over financial reporting, and the material weakness identified, refer to “Controls and Procedures” in Part II, Item 9A.

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Cautionary Note Regarding Forward-Looking Statements.

This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” or “would,” and or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Annual Report on Form 10-K, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.

The forward-looking statements in this Annual Report on Form 10-K include, among other things, statements about:

● the timing of regulatory submissions;

● our business strategies;

● risks related to market acceptance of products;

● risks associated with our reliance on third-party organizations;

● our competitive position;

● the industry in which we operate; and

● the trends that may affect the industry or us.

You should refer to Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of the risks, uncertainties and assumptions described under “Risk Factors” and elsewhere, we cannot assure you that the forward-looking statements in this Annual Report on Form 10-K will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity,

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performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to new information, actual results or changes in our expectations, except as required by law.

Summary of Risk Factors.

The following is a summary of the principal risks described below in Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K. We believe that the risks described in the “Risk Factors” section are material to investors, but other factors not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Annual Report on Form 10-K .

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PART I

Item 1. Business.

Our Company

Annovis Bio, Inc. is a clinical stage, drug platform company addressing neurodegeneration, such as Alzheimer’s disease (“AD”) and Parkinson’s disease (“PD”). We are developing our lead product candidate, Buntanetap, which is designed to address AD, PD, and potentially other chronic neurodegenerative diseases. Buntanetap is a synthetically produced small molecule, orally administered, brain penetrant compound. In several studies, Buntanetap was observed to inhibit the synthesis of neurotoxic proteins—APP/Aβ (“APP”), tau/phospho-tau (“tau”) and α-Synuclein (“αSYN”)—that are one of the main causes of neurodegeneration. High levels of neurotoxic proteins lead to impaired axonal transport, which is responsible for the communication between and within nerve cells. When that communication is impaired, the immune system is activated and attacks the nerve cells, eventually killing them. We have observed in our clinical studies in early AD and early PD patients and pre-clinical studies in mice and rats that Buntanetap lowered neurotoxic protein levels leading to improved axonal transport, reduced inflammation, lower nerve cell death and improved affected function.

In 2021, we completed two Phase 1/2 clinical studies: one in 14 early AD patients, and one in 54 early PD patients (together, the “AD/PD Trials”). In the AD/PD Trials, early AD patients were defined as those with a Mini Mental State Examination (MMSE) score between 19 and 28 and early PD patients as those patients at Hoehn & Yahr stages 1, 2 or 3. MMSE is a brief screening instrument used to assess cognitive function, with total scores ranging from 0 to 30 and a lower score indicating greater disease severity, while the Hoehn & Yahr scale is a medical assessment used to measure staging of the functional disability associated with PD where a higher stage indicates greater disease severity. In collaboration with the Alzheimer’s Disease Cooperative Study (“ADCS”), we also conducted a trial in 16 early AD patients (the “ADCS Trial”). In the ADCS Trial, early AD patients were defined as those patients with a MMSE score between 19 and 28. All three clinical trials were double-blind, placebo-controlled studies. We designed the studies by applying our understanding of the underlying neurodegenerative disease states, and measured both target and pathway validation in the spinal fluid of patients to determine whether patients improved following treatment. In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics of Buntanetap, our AD/PD Trials met exploratory endpoints of measures of biomarkers and improvements in cognition in AD patients, and in function in PD patients. We believe that the AD/PD Trials represent the first double-blind placebo-controlled studies that showed improvements in AD patients, as measured by ADAS-Cog, and in PD patients, as measured by UPDRS. Following completion of the AD/PD Trials, we submitted our data to the U.S. Food and Drug Administration (“FDA”) and requested direction to further pursue the development of Buntanetap in early PD patients. With the FDA’s guidance, we initiated a Phase 3 study in early PD patients in August 2022 (our “Phase 3 PD Study”). In the Phase 3 PD Study, early PD patients were defined as those at Hoehn & Yahr stages 1, 2 or 3 and OFF times of less than two hours per day. OFF time refers to when PD motor and/or non-motor symptoms occur between medication doses. We also submitted a proposed protocol for the treatment of moderate AD to the FDA, and after receiving permission to proceed, we initiated a Phase 2/3 study in mild to moderate AD patients in February 2023 (our “Phase 2/3 AD Study”). In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with a MMSE score between 14 and 24. At the completion of the ADCS Trial, the data showed that Buntanetap is a translational inhibitor in humans just like in animals, and we further observed that there was statistical improvement in cognition in early AD patients, just like in the AD/PD Trials.

Our Phase 3 PD Study and Phase 2/3 AD Study each have built in interim analyses. Our Phase 3 PD Study incorporated an interim analysis at two months, the results of which were disclosed on March 31, 2023. The pre-planned interim analysis was conducted by our data analytics provider based on 132 patients from all cohorts collectively for which baseline and two-month data was available. As the interim analysis was conducted at two months of the six-month endpoint and only on 132 patients, it may not be indicative of the results at six months for the full patient population because as the trial progresses, clinical outcomes may materially change as patient enrollment continues and more patient data become available, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated. Based on the results of the interim analysis, we intend to proceed with the Phase 3 PD Study as planned in accordance with the previously established protocol. We remain blinded to the Phase 3 PD Study and we do not have safety or efficacy data from the trial. A separate safety interim analysis is in process and we expect that interim analysis to be released in the second quarter of 2023. We intend to disclose the results of an interim analysis for our Phase

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2/3 AD Study in Fall 2023. We plan to consult with the FDA following completion of these interim analyses, to obtain feedback on our ongoing and planned AD and PD studies, including conducting an open label extension study following the completion of the initial trials. Using the data from the Phase 3 PD Study interim analysis, we intend to design an 18-month long disease-modifying Phase 3 study in the same early PD patients. In addition, we intend to conduct a short 6-month study in advanced PD patients during the second half of the 18-month disease modifying Phase 3 study, at which time we will define the advanced PD patient population for the purposes of such study. Similarly, using the data from the Phase 2/3 AD Study interim analysis, we intend to design an 18-month disease modifying Phase 3 study in the same early AD patient population. In addition, we intend to conduct a short 6-month study in advanced AD patients during the second half of the 18-month disease modifying Phase 3 study, at which time we will define the advanced AD patient population for the purposes of such study. We expect both the ongoing Phase 3 PD Study and the Phase 2/3 AD Study to be completed by the end of 2023, and we intend to announce the data from the final analyses in the first quarter of 2024.

By the end of 2026, our goal is to have conducted the required pivotal studies for Buntanetap to be able to file two new drug applications (“NDAs”) with the FDA.

We believe that we are the only company developing a drug for AD and PD that is designed to inhibit more than one neurotoxic protein, and has a mechanism of action designed to restore nerve cell axonal and synaptic activity. By improving brain function, our goal is to treat memory loss and dementia associated with AD as well as body and brain function associated with PD. Based on pre-clinical and clinical data collected to date, we believe that Buntanetap has the potential to be the first drug to interfere with the underlying mechanism of neurodegeneration, potentially enabling Buntanetap to be the only drug to improve cognition in AD and motor function in PD. The industry has encountered challenges in specifically targeting one neurotoxic protein, be it APP, tau or αSYN, indicating that doing so does not change the course of neurodegeneration. Our goal is to develop a disease modifying drug (“DMD”) for patients with neurodegeneration by leveraging our clinical and pre-clinical data to inhibit the three most relevant neurotoxic proteins. Studies have found that AD and PD are the most common neurodegenerative diseases in the U.S., and accordingly these diseases present two unmet needs of the aging population and two potentially large U.S. markets if a DMD is developed and approved.

Our leadership team has substantial experience and extensive industry knowledge, and has been successful with respect to meeting clinical timelines, enrollment progression and data readouts. Maria L. Maccecchini, our Founder, President and CEO, founded Annovis in May 2008 to develop better therapeutics for neurodegeneration. She was previously the Founder and CEO of Symphony Pharmaceuticals/Annovis, a biotech company that sold to Transgenomic in 2001. She was also the General Manager of Bachem Bioscience, the U.S. subsidiary of Bachem AG, Switzerland. Dr. Maccecchini did one postdoc at Caltech and one at the Roche Institute of Immunology. Her PhD in biochemistry is from the Biocenter of Basel with a two-year visiting fellowship at The Rockefeller University. Henry Hagopian, our Chief Financial Officer, has over 30 years of experience in corporate finance, accounting, treasury and capital raising in both public and private companies. Prior to joining Annovis, Mr. Hagopian was Senior Vice President, Finance and Treasurer at Organogenesis, where he assisted in raising several rounds of capital in excess of $310 million. He spent 15 years in positions at AT&T, Lucent Technologies and CIRCOR International, Inc. Mr. Hagopian holds an M.B.A. and M.S. from the Carroll Graduate School of Management at Boston College. Cheng Fang, Senior Vice President, Research and Development, has broad scientific knowledge and over a decade of experience working in the field of neurodegenerative diseases. She previously worked at Clarivate Analytics and the Cornell Institute for Medical Research. As a Research Assistant Professor at Boston University, she designed projects on prion disease and AD. She has a PhD in biology and neuroscience from Pennsylvania State University. She also holds a B.S. in biopharmaceutics from Nanjing University. Eve Damiano, Senior Vice President, Regulatory, has spent over 35 years in the biotechnology sector, focusing on the definition and execution of regulatory strategies. Ms. Damiano has held various senior management positions throughout her career, with experience garnered at companies including Centocor, MedImmune, OraSure Technologies and Vicuron Pharmaceuticals. Ms. Damiano holds a track record in the definition and execution of regulatory strategies. She holds an M.S. from the Drexel University College of Medicine. Melissa Gaines, Vice President, Clinical Operations, is an accomplished clinical research professional with over 20 years’ experience garnered from positions held in academia, contract research organizations and pharmaceutical companies. She was previously Senior Director, Clinical Operations, for Worldwide Clinical Trials, and has over a decade of experience at INC Research. She has demonstrated proven success in leading cross-functional teams as well as driving operational success. She holds a B.A. in Psychology from Millersville University of Pennsylvania.

Mechanism of Action

Our lead product candidate, Buntanetap, is designed as an oral translational inhibitor of neurotoxic aggregating proteins (“TINAP”) such as APP, tau and αSYN. To understand how Buntanetap can potentially inhibit translation, we undertook two

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complementary approaches: a macro approach to examine all proteins in the cell whose translation is affected by Buntanetap, and a micro approach to study the mechanism of action using molecular biology, to understand and validate the binding and function.

First, the non-biased proteomics approach was applied to explore what proteins in the total protein universe were specifically downregulated by Buntanetap. We have observed that, in addition to the proteins already known to be reduced by Buntanetap, other neurotoxic aggregating proteins - huntingtin protein (“HTT”) and TDP43 - were downregulated as well.

A detailed analysis of the reduction of these protein levels was conducted in five different laboratories using multiple methodologies. The results observed in the analysis revealed that the mRNAs of these proteins have a special region, an atypical stem loop, that is preserved and responsible for their translation. When this region is bound to an RNA binding protein, the mRNA is not translated. When this region is free, the mRNA is translated. In neurodegenerative conditions, the mRNA coding for these neurotoxic proteins is over-translated, produces high levels of these proteins and causes them to become toxic. Buntanetap was observed to specifically increase the affinity between this special region and the RNA binding protein, thereby showing the potential to prevent the mRNA from being released and translated.

This leads to lower translation, lower levels of neurotoxic proteins, and less toxicity in the brain. By preventing the overexpression of these neurotoxic proteins, Buntanetap is designed to reverse the downstream toxic cascade that leads to neurodegeneration and reinstates homeostasis.

This rigorous approach to understanding the mode of action shows that while Buntanetap does lower the levels of more than one neurotoxic protein, it is exquisitely specific for the atypical stem loops in the mRNAs of these proteins.

The following illustration shows the mechanism of action of Buntanetap:

MOA; Chen XQ et al. Pharmaceutics 09-2021 Iron and Neurodegeneration; Wong f. et al. Frontiers Aging Neuroscience; 03-2022

The special region in the mRNA is a 5’UTR iron responsive element (“IRE”) present in all mRNAs of neurotoxic aggregating proteins. The RNA binding protein is the Iron Regulatory Protein -1 (“IRP1”) that specifically binds the IREs of neurotoxic aggregating proteins.

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The Toxic Cascade Leading to Nerve Cell Death and Loss of Function

The toxic cascade in neurodegeneration begins with high levels of neurotoxic proteins which lead to impaired axonal transport, inflammation, death of nerve cells and loss of cognition and motor function. Buntanetap and ANVS405, our product candidates designed to treat acute neurodegeneration, including traumatic brain injury (“TBI”), have a mechanism of action we believe to be unique. The mechanism of action is designed to inhibit the over-translation of and reduce the levels of APP, tau and αSYN, which play a central role in the pathogenesis of both AD and PD. This leads us to believe that Buntanetap has the potential to be a promising drug for the treatment of both AD and PD. Our approach is innovative in that we do not have a single therapeutic target for a single disease; instead, we are developing a technology platform that has the potential to target the mRNAs of multiple neurotoxic proteins, which are potentially impactful for multiple diseases.

In our AD/PD Trials, we observed that Buntanetap reduced levels of neurotoxic proteins, improved axonal transport and synaptic function, reduced inflammation, improved the health of nerve cells and improved cognition and function in mild to moderate AD and PD patients.

We have observed that Buntanetap reduced the levels of multiple neurotoxic proteins in animals and reversed the toxic cascade. In addition, Buntanetap was observed to reverse the entire toxic cascade in animals and recover function, be it in the brain, the body, or the eyes.

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Pipeline

Our pipeline consists of: Buntanetap for chronic neurodegeneration - including AD and PD; ANVS405 for acute neurodegeneration; and ANVS301 for advanced AD.

Buntanetap

Our lead product candidate, Buntanetap, is an orally administered drug being developed for chronic indications such as AD and PD, and it has been observed to improve axonal transport in these diseases in preclinical studies by inhibiting the overproduction of neurotoxic proteins that kill nerve cells. Buntanetap further demonstrated improvements of cognition, including memory and learning, in AD mice and movement, including colonic motility and grip strength, in PD mice. Buntanetap was tested in three Phase 1 clinical studies that showed it to be well tolerated. This safety data is applicable to the clinical development of Buntanetap for AD, PD, and potentially other chronic neurodegenerative diseases. We have completed three Phase 1/2 clinical trials for Buntanetap. We are presently treating PD patients in our Phase 3 PD Study and AD patients in our Phase 2/3 AD Study.

We believe that Buntanetap has the potential to be the only drug to improve both cognition in AD patients, and motor function in PD patients. Additionally, Buntanetap was observed to protect nerve cells from dying in the brain of traumatic brain injury mice and to protect nerve cells from dying in the eye of glaucoma rats.

ANVS405

ANVS405 is an intravenous drug being developed for acute indications, and focused on protecting the brain after TBI and/or stroke. ANVS405 is the same compound as Buntanetap, given in cases of acute head and brain trauma. ANVS405 was given to rats intravenously after TBI to determine whether ANVS405 would reach the brain in less than 15 minutes, as opposed to 1.5 hours if given orally. TBI rats that were treated with ANVS405 after the insult exhibited enhanced memory and learning and lower microglia activation, a measure of inflammation. The program has been funded by a grant from the U.S. Army which has been completed, and we plan to seek additional grant funding to further the development of ANVS405 for acute indications of brain and nerve trauma. If and when we receive such sufficient funding, we plan to conduct a follow-on study to evaluate the effect of ANVS405 administered to TBI rats at various intervals post-injury to determine how long after a TBI we can effectively treat a patient. Our plan is to seek further funding to conduct the toxicology and pharmacokinetics (“PK”) studies in animals, file the initial new drug application (“IND”), conduct the safety and PK studies in humans and continue with Phase 2 and Phase 3 efficacy studies.

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ANVS301

ANVS301 is an orally administered drug being developed to increase cognitive capability in later stages of AD and dementia. ANVS301 was observed to improve memory and learning in very old rats by lowering the number of errors from six to three and shortening run times from approximately 75 to approximately 28 seconds. ANVS301 is in a Phase 1 clinical trial that was conducted and financed by the National Institutes of Health (“NIH”). The single ascending dose study has been completed, and we expect to evaluate the continued development of ANVS301 based upon funding availability. When both the single and multiple ascending dose safety studies are complete, we will review the data and decide whether to pursue the indication of advanced AD.

Clinical Trials of Buntanetap

Development Plan for Alzheimer’s Disease

The development of Buntanetap for AD is expected to include a short study for moderate AD showing symptomatic efficacy, a long 18-month study in early AD showing disease-modifying efficacy, and a second short 6-month study in advanced AD. We expect to discuss the development plan with the FDA following receipt of the results from the interim analysis of the first study in Fall 2023.

In February 2023, we initiated the first of the three studies: a Phase 2/3 clinical trial of Buntanetap in 320 mild to moderate AD patients, which were separated into four cohorts of 80 patients (the “Phase 2/3 AD Trial”). The Phase 2/3 AD Trial is expected to be conducted at approximately 80 sites in the U.S. The Phase 2/3 AD Trial is a double-blind placebo-controlled efficacy study which treats mild to moderate AD. The inclusion criteria for mild to moderate AD is a MMSE score of 14 to 24. Patients participating in the trial are age 55-85, have a study partner, are of non-child-bearing age or agree to effective contraception, and have no evidence of suicidal ideation. Patients participating in the trial can remain on any drugs they regularly take, whether for AD or for other conditions, as long as they are stable on such medication. Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients with cancer within the last year and patients suffering from alcohol or substance abuse are excluded from participating.

Patients will be randomly assigned to receive either 7.5, 15 or 30 mg of Buntanetap or placebo once per day. Patients will visit the clinic for the first-time dosing in clinic, followed by an at home dosing period of 12 weeks. The study plan incorporates an interim analysis at six-weeks, the results of which are expected in Fall 2023. The Phase 2/3 AD Trial is designed to assess the efficacy, safety, tolerability, and PK of Buntanetap. The co-primary endpoints of the Phase 2/3 AD Trial are evaluated using the following measures: Alzheimer's Disease Assessment Scale-Cognitive Subscale 11 (ADAScog 11), which measures cognitive functions and non-cognitive functions such as mood and behavior; and ADCS-Clinical Global Impression of Change (ADCS-CGIC), which focuses on clinicians' observations of change in the patient's cognitive, functional, and behavioral performance since the beginning of a trial. The FDA requested to include two co-primary endpoints to have an objective primary endpoint (ADAScog, cognition) and a subjective primary endpoint (ADCS-CGIC, activities of daily living). Together, these co-primary endpoints are intended to provide in a more complete picture of the study and treatment results. The secondary endpoints are evaluated using the following measures: the ADCS-Instrumental Activities of Daily Living Scale (ADCS-ADL), which measures 6 basic activities of daily living items, including basic self-care tasks such as feeding, mobility and bathing, and 17 instrumental activities of daily living items, which include a broad range of activities based on cultural norms and gender roles; MMSE; and the digital symbol substitution test (DSST), which asks individuals to record associations between different symbols and numbers within time limits to assess cognition.

The second trial we intend to conduct is an 18-month disease-modifying Phase 3 study in early AD patients, in which patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, to be determined based upon the results of the Phase 2/3 AD Trial.

The third trial we intend to conduct is a six-month study in advanced AD patients, which is expected to take place during the second half of the 18-month disease modifying Phase 3 study. In this six-month study, patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, to be determined based upon the results of the Phase 2/3 AD Trial.

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Development for Parkinson’s Disease

The development plan of Buntanetap for PD is expected to include a short study for early PD patients showing symptomatic efficacy, a long 18-month study in the same patient population showing disease-modifying efficacy, and a second short 6-month study in advanced PD.

In August 2022, we initiated a Phase 3 clinical trial of Buntanetap in 450 early PD patients, which were separated into three cohorts of 150 patients (the “Phase 3 PD Trial”). The Phase 3 PD Trial is expected to be conducted at approximately 53 sites in the U.S. and 49 sites in the EU. The Phase 3 PD Trial is a double-blind placebo-controlled efficacy study which treats early PD. The inclusion criteria for early PD are Hoehn & Yahr 1, 2 and 3 with less than 2 hours of OFF time, as well as a MMSE score of 22 to 30. Patients participating in the trial are age 40-85, are of non-child-bearing age or agree to effective contraception, and have no evidence of suicidal ideation. Patients participating in the trial can remain on any drugs they regularly take, whether for PD or for other conditions, as long as they are stable on such medication. Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients with cancer within the last year and patients suffering from alcohol or substance abuse are excluded from the trial. Patients are randomly assigned to receive either 10 or 20 mg of Buntanetap or placebo once per day. Patients visit the clinic for the first-time dosing in clinic, followed by an at home dosing period of 6 months. The study plan incorporated an interim analysis at two months, the results of which were disclosed by the Company on March 31, 2023. The pre-planned interim analysis was conducted by our data analytics provider based on 132 patients from all cohorts collectively for which baseline and two-month data was available. As the interim analysis was conducted at two months of the six-month endpoint and only on 132 patients, it may not be indicative of the results at six months for the full patient population because as the trial progresses, clinical outcomes may materially change as patient enrollment continues and more patient data become available, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated. Based on the results of the interim analysis, we intend to proceed with the Phase 3 PD Study as planned in accordance with the previously established protocol. We remain blinded to the Phase 3 PD Study and we do not have safety or efficacy data from the trial. A separate safety interim analysis is in process and we expect that interim analysis to be released in the second quarter of 2023. The study is designed to assess the efficacy, safety, tolerability, and PK of Buntanetap. The Phase 3 PD Trial’s primary endpoints are evaluated using the following measures: the MDS-Unified Parkinson's Disease Rating Scale (MDS-UPDRS) Part II and III, which is a 42-item rating scale designed to assess Parkinson's disease-related disability and impairment, and evaluates activities of daily living and motor function; and safety and tolerability, which is assessed using physical examinations, vital signs, clinical laboratory test results,

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electrocardiogram findings, adverse events (AEs) leading to study discontinuation, drug related AEs, severity of AEs and AEs. Specifically, The FDA requested two co-primary endpoints to have an objective primary endpoint (MDS-UPDRS Part III, motor function) and a subjective primary endpoint (MDS-UPDRS Part II, activities of daily living). Together, these co-primary endpoints are intended to provide in a more complete picture of the study and treatment results. The secondary endpoints are evaluated using the following measures: the MDS-UPDRS total score, which includes the Part II and III measures we well as mentation, behavior, and mood symptoms, and complications of dopaminergic therapy; the participant global impression of change (PGIC), a participant-reported outcome which asks how their condition has changed compared to their condition at the beginning of treatment; and the Change on Clinical Global Impression of Severity (CGIS), which measures the severity of movement impairment as assessed by the site rater.

The second trial we intend to conduct is an 18-month disease-modifying Phase 3 study in early PD patients, in which patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, to be determined based upon the results of the Phase 3 PD Trial.

The third study we intend to conduct is a six-month study in advanced PD patients, which is expected to take place during the second half of the 18-month disease modifying Phase 3 study. In this six-month study, patients will be randomly assigned to receive either placebo or a dose of Buntanetap once per day, to be determined based upon the results of the Phase 3 PD Trial.

Phase 1/2 AD/PD Trials

In 2021, we completed a Phase 1/2 clinical trial of Buntanetap in 14 early AD and 54 early PD patients (the “AD/PD Trials”) which were conducted at 12 sites in the U.S. The AD/PD Trials were double-blind placebo-controlled studies which treated mild to moderate AD and early PD patients for 25 +/- 2 days. The inclusion criteria for the AD portion of the AD/PD Trials were MMSE 18-28 and age 45 and older and for the PD portion of the AD/PD Trials were MMSE 18-30, age 45 and older and Hoehn & Yahr 1, 2 or 3. Patients participating in the trial were of non-child-bearing age or agreed to effective contraception, and had no evidence of suicidal ideation. Patients participating in the trial could remain on any drugs they regularly take, whether for PD, for AD or for other conditions, as long as they were stable on such medication. Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients who had cancer within the prior year and patients who suffered from alcohol or substance abuse were excluded from the trial.

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The AD/PD Trials were designed to assess the safety, tolerability, and PK of Buntanetap. The studies met their primary endpoints of safety and tolerability, as measured by the percentage of patients with treatment-emergent adverse events in the Buntanetap treatment arms as compared to the placebo groups, and secondary endpoint of pharmacokinetics of Buntanetap, as measured by the concentration of Buntanetap in plasma. The studies also met exploratory endpoints of measures of biomarkers related to neurotoxic protein cascade, and improvements in cognition in AD patients and function in PD patients. We believe the AD/PD Trials were the first double-blind, placebo-controlled studies that showed improvements in AD patients as measured by ADAS-Cog, and in PD patients as measured in UPDRS.

The studies were conducted in two parts. The first part of the AD/PD Trials was in 14 early AD patients and 14 early PD patients. Patients were randomly assigned to receive either 80 mg of Buntanetap or placebo once per day. The second part of the AD/PD Trials was a dose response analysis in 40 early PD patients in which patients were randomly assigned to receive 5 mg, 10 mg, 20 mg, or 40 mg of Buntanetap once per day. In both parts of the AD/PD Trials, patients visited the clinic for the first-time dosing in clinic, followed by an at home dosing period of 25 +/- 2 days. We measured levels of neurotoxic proteins, neurotransmitters, neurotrophic factors, inflammation, and nerve cell death in all patients, as well as cognitive and functional improvements.

Safety and PK

Safety results show that Buntanetap was well-tolerated in all dose groups. No serious adverse events were reported. The adverse events seen included problems related to CNS sampling: headaches, back and leg pain. PK parameters for Buntanetap in plasma of AD and PD patients were similar to those seen in Phase 1 in our single ascending dose (“SAD”) and multiple ascending dose (“MAD”) studies in healthy volunteers, and in a proof-of-concept study in mild-cognitive impaired (“MCI”) patients.

Reduction of Neurotoxic Proteins

We observed that Buntanetap administration for 25 days lowered secreted APP α and β as well as total-tau and phosphorylated-tau levels in AD patients, and alpha-synuclein levels in PD patients. APP and its downstream products and tau are the neurotoxic proteins involved in AD, while αSYN is the primary neurotoxic culprit of PD.

Changes in Biomarkers After 25 Days Treatment with Buntanetap

* All values are in comparison to placebo based on all data points.

Cerebrospinal fluid (“CSF”) was extracted before starting the study at baseline and at time 0 to 6 hours at the end of the study in both placebo and Buntanetap treated patients. The values from time 0 to 6 hours were pooled to lower variability and the placebo values were deducted from the treated values. In all but one case, Ab42, we saw that the levels in Buntanetap treated patients were lower than in placebo patients. With respect to Ab42, we observed that levels were slightly higher, which is consistent with our hypothesis that Ab42 levels are lower in advanced AD and higher in early AD. We believe that higher Ab42 levels we observed suggest that the course of AD was reversed and the patients improved.

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Inflammation

We observed that Buntanetap reduced inflammation in both AD and PD patients, shown by Complement C3, YKL-40, GFAP and sTREM2.

Changes in Inflammatory Markers after 25 Days Treatment with Buntanetap

*All values are in comparison to placebo based on all data points.

Again, CSF was extracted at baseline and for 6 hours after the study and the values of the placebo patients were subtracted from the Buntanetap treated patients. We observed that inflammatory markers were generally reduced in both patient populations.

Axonal and Synaptic Function

We observed that Buntanetap reduced neurofilament light (“NFL”) levels in both AD and PD patients, suggesting a potential improvement in axonal integrity. We also observed that Buntanetap reduced neurogranin (“NG”) levels in both AD and PD, potentially suggesting more intact synaptic functions.

Changes in Synaptic Markers after 25 Days Treatment with Buntanetap

*All values are in comparison to placebo based on all data points.

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The same CSF as above was used to measure neurofilament light and neurogranin before and after treatment and to compare Buntanetap patients to placebo. In both patient populations neurofilament light and neurogranin are lower in treated than in placebo patients.

We believe these results suggest that Buntanetap has the potential to reduce neurotoxic proteins, rescue axonal transport, reduce inflammation, and protect synaptic functions.

Cognition in AD Patients

We performed ADAS-Cogs and WAIS coding tests to evaluate Buntanetap’s effects on AD patients’ cognition.

* P<0.05

ADAS-Cog11 was performed at the beginning of the study at baseline and at the end at 25 days in the Buntanetap-treated and the placebo groups. Although the study was not powered for efficacy, ADAS-Cog11 improved by 4.4 points, a statistically significant improvement of 28.57%. A result is considered to be statistically significant when the probability of the result occurring by random chance, rather than from the efficacy of the treatment, is sufficiently low. The conventional method for determining the statistical significance of a result is known as the “p-value,” which represents the probability that random chance caused the result (e.g., a p=0.01 means that there is a 1% probability that the difference between the control group and the treatment group is purely due to random chance). Generally, a p-value less than 0.05 is considered statistically significant. An improvement in ADAS-Cog11, which is reflected by a lower ADAS-Cog11 result, indicates increased cognitive performance. At 25 days, the treated group’s improvement from baseline was 3.3 points, or 20.71%, better than the placebo group’s improvement from baseline.

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* P<0.05

The WAIS coding test measures speed in movement and thinking. Treated AD patients showed a 6.6 point, or 16.17%, statistically significant improvement from baseline. Furthermore, the treated group’s improvement from baseline was 3.1 points, or 8.8%, better than the placebo group’s improvement from baseline.

Motor Function in PD Patients

In Parkinson’s disease, we pooled the original 14 PD patients with the additional 40 PD patients, and looked at the MDS-UPDRS and WAIS coding tests to evaluate Buntanetap’s effects on PD patients’ mobility and functionality. We the 54 PD patients received doses of either 5mg, 10mg, 20mg, 40mg or 80mg Buntanetap treatment or placebo once per day. We observed a statistically significant improvement in Part II, III and IV individually. Specifically, Part III of the MDS-UPDRS measures the motor functions and has long been used as a standard to assess drugs’ effects on patients’ mobility.

**p<0.01

We combined the two best doses, 10 and 20 mgs, and all doses, and saw an improvement of 3.6 (16.4%) for 10 and 20 mg, and of 2.4 (13.3%) for all doses combined compared to baseline.

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* p<0.05 ** P<0.01 *** P<0.001

In the WAIS coding test, PD patients show a statistically significant improvement both from baseline (17.1% for 10+20mg; 13.3% for all doses combined) and from placebo (27.1% for 10+20mg; 23.3% for all doses combined).

Phase 1/2 ADCS Trial

We also completed a double-blind, placebo-controlled Phase 1/2 study in early AD patients in conjunction with the ADCS. We treated patients for four weeks with Buntanetap and measured target and pathway engagement in the spinal fluid. This means that we measured levels of neurotoxic proteins, neurotransmitters, neurotrophic factors, inflammation and nerve cell death as well as cognitive improvement. Since Buntanetap is designed as a translation inhibitor, we also measured the rate of synthesis and degradation of Aβ (SILK – stable isotope labeling kinetic study) to determine if our drug changes the speed of translation. Under an agreement with the University of California San Diego, where ADCS is located, we contracted to provide study supplies and PK analysis at our cost but the remaining costs of the ADCS Trial are paid for by the NIH. The study ended after 16 patients were enrolled and treated. Patients participating in the study were of non-child-bearing age or agreed to effective contraception and had no evidence of suicidal ideation. Patients participating in the study could remain on any drugs they regularly take, either for AD or for other conditions, as long as they were stable on such medication. Patients with uncontrolled diabetes, cardiovascular issues or seizures, patients with clinically significant abnormal laboratory values, patients who had cancer within the prior year and patients who suffered from alcohol or substance abuse were excluded from the study. The study was conducted at six sites in the U.S., including the University of California San Diego, Johns Hopkins, Indiana University, Washington University, Cleveland Clinic, and Columbia University. While only 16 patients were treated in total, based on the SILK data, we observed that Buntanetap has the potential to slow the translation of APP/Abeta, leading to overall lower levels and lower overall synthesis of the neurotoxic protein. The Alzheimer’s Disease Assessment Scale –Cognitive Subscale (ADAScog) of the treated patients demonstrated what we observed in our small AD/PD study – statistical improvement in cognition at one month of treatment.

Phase 1 Studies

Three phase 1 clinical studies have been completed with Buntanetap. Clinical studies with single and repeated daily oral administration of Buntanetap, showed Buntanetap to be well tolerated up to doses of 80 mg once a day or 60 mg four times a day. A single dose of 160 mg was associated with an increased incidence of nausea and vomiting; therefore, higher doses were not tested. Buntanetap is not an AChE inhibitor, but its N1 dimethyl metabolite has some AChE inhibitor activity and may be responsible for these observations. The only consistent AEs seen were dizziness/fainting and headaches. These effects were seen to varying degrees at all doses of Buntanetap and in the placebo group. There were no serious AEs in any of the clinical studies. In the repeat dose studies,

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treatment with 60 mg four times a day was not associated with any side effects not also seen in placebo. The adverse events seen included nausea, vomiting and dizziness.

Proof-of-Concept Study in Humans

In the human proof-of-concept (“POC”) study, four patients with MCI were treated for 10 days with Buntanetap with a dose of 60 mg four times a day (240 mg/day), which we observed in a previous safety study to be a well-tolerated level. CSF and plasma were drawn over 12 hours on Day 0 before any administration of Buntanetap and on Day 11 after the last administration of Buntanetap. During each 12-hour period, a total of nine CSF samples were taken and levels of Buntanetap and metabolites were measured in plasma and CSF at all time points. The human POC study was discontinued prior to completion as a cost saving measure.

Pharmacokinetics

Buntanetap’s PK in plasma corresponded to what we had seen in the previous clinical safety studies: a half-life of five hours. In CSF, however, Buntanetap showed a much longer half-life of over 12 hours. We conducted an identical experiment in rats, where it is possible to measure the PK of Buntanetap in plasma, CSF and brain. By taking the human plasma/CSF and rat plasma/CSF/brain levels, we were able to extrapolate to the human brain levels and calculate them to be eight times higher than plasma levels. This is generally consistent with the data we have in mice, where in several studies, Buntanetap levels were found to be approximately six to eight times higher in brain than in plasma.

Buntanetap’s extended presence in the brain is matched by an extended effect, reducing levels of APP, tau and αSYN for the whole 12-hour period tested. The extended effect of Buntanetap in the four human patients was generally consistent with the preclinical data in rodent brains.

We believe the persistence of Buntanetap in the CSF and brain and the extended pharmacodynamic effect observed has the potential to make Buntanetap a good candidate for once-a-day dosing. Extrapolated brain levels of Buntanetap at 60 mg four times a day were far in excess of levels we believe are required to down-regulate APP and αSYN. The doses of Buntanetap needed to lower the levels of neurotoxic proteins are similar for the toxic proteins, suggesting similar dosing in AD and PD. We further compared Buntanetap brain levels of mice that showed improved memory, learning and colonic motility and estimated that the optimum brain levels measured were between 150 and 500 nM. Using three different extrapolation/comparison calculations we estimated that a daily dose of 5 mg to 25 mg may be able to achieve potentially desired brain levels in humans.

Pharmacodynamics

Buntanetap pharmacodynamics was performed on the same 18 CSF samples taken from each person as above. Since we had data for four patients with 18 time points each, it was possible to conduct statistical analysis of the data using a repeated measure mixed model analysis of variance. The p-value represents the probability that the difference between compared groups is due to chance rather than drug effect, and when that probability is less than 5%, or p<0.05, the result is considered statistically significant. FDA evidentiary standards for drug approval require that the trial design must permit a valid comparison with a control group to permit a quantitative assessment of the effect of the drug, which may include demonstration of statistical significance.

Comparison with Healthy Volunteers

We also compared the levels found in four healthy volunteers with the levels seen in the four MCI patients before and after 10 days of Buntanetap administration. The heathy volunteers did not go through the entire study as did the MCI patients. They gave one CSF sample taken by lumbar puncture in the morning and that sample was only used to measure sAPPα, sAPPβ and tau.

We used a single measurement from the same time point in each of the mornings of Day 0 and Day 11 for each MCI patient because this was similar to the timing for the healthy volunteers. In this very limited comparison, we were able to show that all four patients experienced a decrease in sAPPα, sAPPβ and tau. These reductions brought the average levels of sAPPα, sAPPβ and tau in the treated MCI patients close to the average levels we measured in healthy volunteers.

We used the same 18 samples collected from the CSF of the mildly cognitive impaired patients and measured four inflammatory factors and one control factor. In accordance with our hypothesis the levels of inflammatory markers were significantly

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reduced. We also measured Factor FH, a complement regulatory protein, as our control factor. As we had expected, Factor FH was not downregulated by Buntanetap.

Axonal Transport in Human Nerve Cells

When the information highway of a nerve cell slows down, the nerve cell is unable to properly communicate with other nerve cells, internal organs and the periphery and it gets sick and dies.

The transfer of information in a nerve cell is called axonal transport and when transport and synaptic transmission are impaired, the cell releases lower levels of neurotransmitters, leading to impaired nerve cell health. The diseased cell is then attacked by the immune system, which is activated when it detects a diseased cell, and it eventually kills the cell. Impairment in axonal transport, therefore, leads to inflammation and eventually to nerve cell death.

Preclinical Animal Studies

By inhibiting the overexpression of neurotoxic proteins, Buntanetap improved or prevented the symptoms associated with chronic as well as acute neurodegeneration in several animal models.

APP/PS1 Transgenic Mouse Model of AD

APP/PS1 AD transgenic (“tg”) mice were treated for one month with Buntanetap, before behavioral evaluation. Buntanetap was observed improving spatial-working memory in a 2-day radial arm water maze test in this mouse AD model at a 25 mg/kg oral dose and showing a dose response at 10 mg/kg oral dose. In the same study, Buntanetap was observed improving synaptic function and long-term potentiation in hippocampal slices at both doses in a dose-dependent fashion. Buntanetap treatment did not affect wild-type mice.

Trisomic Mouse Model of AD-DS

DS trisomic mice display several abnormal behaviors reminiscent of AD, including memory loss. They have elevated levels of APP that has been shown in mice to contribute to deficient memory and learning, cognitive impairment as well as dementia. DS trisomic mice are used as a model for AD, because they exhibit similar deficits as seen in AD. Thus, we considered whether

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Buntanetap could re-establish healthy behavior in these mice like that seen in wild-type mice. We measured the rate of spontaneous alternations in a Y-maze and found that the alternation rate is significantly lower in DS trisomic mice versus wild-type mice reflecting impaired working memory. While Buntanetap treatment increased alternation rate in DS trisomic mice it had no obvious effects in wild-type mice. We also found an effect on the exploratory activity reflected by the number of arm entries, again reflecting impaired working memory. All DS trisomic mice treated with Buntanetap displayed improved working memory to a variable extent.

SNCAA53T and SNCAA30P Mouse Models of PD

We used these PD tg mice as models of early gastrointestinal dysfunction, which is common in PD patients and precedes the onset of motor symptoms by many years to decades. Untreated PD tg mice resemble pre-Parkinson’s patients, showing symptoms of constipation by three months of age. Here we assessed the colonic motility by measuring the time required to expel a glass bead inserted into the colon at four and seven months of age. Buntanetap statistically significantly (p=0.034 at four months and p=0.0001 at seven months) decreased the bead expulsion time between Buntanetap treated and placebo treated mice; thus, it improved the colonic motility of PD tg mice. Furthermore, even after we stopped treatment for nine weeks, the constipation was still reduced.

TBI in Rats

TBI causes severe cognitive and neurological impairment, which can incapacitate the patient, reduce quality of life, and increase the risk of morbidity and mortality. TBI is known to increase the risk for neurodegenerative disorders such as AD and PD. Several studies have analyzed changes in the brain after TBI and identified up-regulation of neurotoxic proteins, such as APP, tau, and αSYN.

In our study (manuscript in preparation), rats were subjected to either fluid percussion injury (“FPI”) or sham operation to one side of the brain. Three different ANVS405 doses or saline were given intraperitoneally to rats subjected to FPI for four weeks, with the first dose administered one hour post-injury. At the termination of the treatment, all the rats were first tested for their performance in the water maze, and then they were sacrificed for brain staining of living cells and determination of microglia activation. 10 mg/kg ANVS405 improved memory and learning as measured by water maze performance. Furthermore, sections of the brain were stained with tyrosine hydroxylase (“TH”), wherein TH stains only live cells. The amounts of TH immunoreactivity in the whole striatum of the brain slices were measured. The rats treated with all three doses of ANVS405 showed higher TH staining in the ipsilateral area of the brain than the vehicle treated animals. Thus, ANVS405 protects the striatum following FPI in rats.

Because FPI can induce microglial activation, we next checked whether ANVS405 would reverse this pathology. In our study, we found that ANVS405 increased the number of resting microglia and reduced the number of activated microglia.

Stroke Mice

Buntanetap was tested in a stroke model, in which mice were challenged with MCAo-induced stroke (middle carotid artery occlusion induced stoke) and after four weeks, the number of surviving neurons was quantified. After four weeks the locomotor function, behavior, and cognition of these mice were also evaluated.

Buntanetap in combination with pifithrin-α (PFT-α) given to mice after the induced stroke improved mice locomotor activity and cognitive function. While both treatments yielded improvements in locomotor and cognitive function, the combined Buntanetap/PFT-α treatment proved able to enhance stroke-induced endogenous neurogenesis and improve the functional recovery in stroke animals. The combined treatment also significantly improved cognitive function more than the single treatment with PFT-α

Markets

With there being a very large potential market for neurodegenerative diseases, most pharma companies have a program studying some aspect of nerve and brain degeneration. Some newer approaches target tau, whose expression is more closely associated with cognitive decline. Similarly, for PD, several companies are trying to inhibit αSYN. So far, we believe that neither drugs attacking tau nor αSYN have shown positive results. Hence there is a substantial need for a different disease-modifying strategy. There is more than one neurotoxic protein in the brain of AD and of PD patients, and the same neurotoxic proteins are involved in the pathogenesis of AD and PD. A significant portion of AD patients’ brains display mixed PD pathology and vice versa. Therefore, just attacking one

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of these proteins may result in no or lower efficacy than attacking them all. To prove that this approach is possible, we are studying the effects of Buntanetap on the levels of several neurotoxic proteins and other surrogate markers, in parallel, in AD and PD patients.

Alzheimer’s Disease Market

AD is a neurodegenerative disorder with cognitive, functional, and behavioral alterations. AD is age related, and its incidence is increasing with the aging of the population. It is estimated that currently 44 million victims of AD dementia exist in the world and by 2050, more than 100 million people worldwide will be living with AD. In the United States, it is estimated that there are six million patients with AD. Nearly eightfold as many people have preclinical AD as have symptomatic AD and are at risk for progressing to manifest disease. Disease modifying treatments (“DMTs“) that will prevent or delay the onset or slow the progression of AD are urgently needed. Similarly, medications to effectively improve cognition or ameliorate neuropsychiatric symptoms of patients in the symptomatic phases of AD are needed to improve memory and behavior.

The incidence rate of AD increases significantly with age. Individuals between ages 64 to 75 have an incidence rate of 0.4%, which increases to 3.2% for people between ages 75 and 84 and finally to 7.6% for people aged 85 and above. These incidence rates are cumulative as an individual ages, which means that an individual reaching 90 years of age will have a 38% chance of suffering from AD while an individual reaching the age of 95 will have a 76% chance of suffering from AD. AD is becoming increasingly common as the global population ages and as the health systems in developing countries improve. There is a significant need to identify drugs that prevent, delay the onset, slow the progression, or improve the symptoms of AD.

Parkinson’s Disease Market

PD is also a progressive neurodegenerative disorder with movement and non-movement symptoms, functional, behavioral and cognitive alterations. PD, like AD, is age related and is becoming markedly more common with the aging of the world’s population. PD affects about 1% of the population over the age of 60, while in individuals over the age of 85, this prevalence reaches 5%, highlighting the impact that advancing age has on the risk of developing this condition.

PD affects about 10 million people worldwide, of which nearly one million are in the U.S. While a 2014 study estimated that the incidence in the U.S. will rise to 1.2 million by 2030, a later 2022 study found that there are nearly 90,000 new cases of PD diagnosed each year in the U.S., potentially supporting an even greater future incidence rate.

The National Parkinson’s Foundation estimates that the economic burden of PD is at least $25 billion a year in the United States.

To date, there are no available treatments capable of curing PD, with current therapies seeking only to ameliorate dopamine-related motor symptoms of the disease. There is a clear and unmet medical need for new DMTs that can slow or prevent PD progression.

Mixed Pathologies Market

In addition to the unmet need of AD and PD patients, approximately 50% of patients exhibit mixed pathologies, with some pathologies resembling AD and some resembling PD.

Dementia is increasingly being recognized in cases of PD; such cases are termed PD dementia (“PDD”). The spread of fibrillar αSYN pathology from the brainstem to limbic and neocortical structures seems to be the strongest neuropathological correlate of emerging dementia in PD. Up to 50% of patients with PDD develop sufficient numbers of Aβ plaques and tau-containing neurofibrillary tangles for a secondary diagnosis of Alzheimer’s disease, and these pathologies may act synergistically with αSYN pathology to confer a worse prognosis.

Another study looking at the incidence of mixed pathologies diagnosed community-dwelling older persons. Those with dementia most often have multiple brain pathologies, which greatly increases the odds of dementia. Specifically, in people with

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dementia, over 50% had multiple diagnoses (AD, PD/Lewy body dementia, PDD or infarcts). After accounting for age, persons with multiple diagnoses were almost three times more likely to exhibit dementia compared to those with one pathologic diagnosis.

We believe that a therapy that only addresses Aβ, tau or αSYN is less likely to help people with mixed pathologies. Since Buntanetap is designed to inhibit more than one neurotoxic protein, we believe that it may have the potential to slow or eventually stop AD, PD and mixed pathology diseases.

Approaches and Competition

Alzheimer’s Disease Approaches

Drug development for AD has proven to be very difficult. Drugs which have been approved for the treatment of AD include cholinesterase inhibitors (tacrine, donepezil, rivastigmine, galantamine) and an N-methyl-D-aspartate receptor antagonist (memantine). Many failures in AD drug development have occurred, with both small molecules and immunotherapies failing to show a drug/placebo difference or having unacceptable toxicity.

Most clinical trials conducted have addressed amyloid targets. Since Aβ accumulates for years before the symptoms of AD are visible, some pharmaceutical companies are testing their drugs earlier, including cognitively normal people or those who have genetic profiles that place them at high risk for developing AD.

An increasing number of agents are directed at tau-related targets. Neurofibrillary tangles are one of two major pathological hallmarks of AD. Correlation studies conducted by Braak and Braak demonstrate that neurofibrillary tangle burden more closely correlates with cognitive decline than amyloid plaque load. Several phase 3 studies conducted with tau approaches have failed. There are still several anti-tau approaches in the clinic.

In summary, at present we believe there are no disease-modifying agents on the market. The first large effort to develop a DMD for AD has targeted Aβ42, but all Aβ42 approaches to date have failed. The first companies testing tau have shown negative results. Many companies have pulled out of AD research and are waiting to see what approach might have a better outcome. Since the AD brain contains several neurotoxic proteins—amyloid precursor protein and its toxic fragments Aβ42 and IC99, a well as tau and αSYN. We believe that a DMD drug needs to target more than just one toxic protein to be efficacious and we are developing Buntanetap with this approach in mind.

A concerning observation derived from a review of the AD pipeline is the lack of agents targeting the moderate to advanced stages of AD. With over 15 million people affected by AD dementia worldwide, there is an urgent need to develop more effective symptomatic treatments for moderate to advanced stage disease. The paucity of agents directed at this population represents a significant weakness of the AD drug development pipeline.

Parkinson’s Disease Approaches

Levodopa (“L-DOPA”) was introduced for use in treating PD more than 40 years ago and remains the mainstay of therapy for improving the symptoms of the disease. Unlike dopamine, which cannot cross the blood—brain barrier, L-DOPA is effectively absorbed into the brain, where it metabolizes into dopamine. It is typically administered five times a day and works well in controlling symptoms for one to five years. Unfortunately, the effects of L-DOPA in any patient diminish with time. There are several other drugs available to treat PD, which also seek to modulate dopamine levels. Combination drug therapy is common in PD. For instance, the use of other drug classes such as the catechol-O-methyltransferase (COMT) inhibitors and the monoamine oxidase (MAO) inhibitors allow patients to reduce L-DOPA dosing levels.

The market for PD drugs is estimated at $2 to $3 billion worldwide, despite high-volume generics. The most important current therapy for PD, L-DOPA, is prescribed as a generic. While volume growth in the category is expected to remain healthy, dollar growth will likely remain relatively flat as some of the category’s larger brands contend with generic inroads. The size of the current market reflects the absence of innovative branded therapies more than it does the medical need.

So far, we believe that only Buntanetap and Exenatide are in the later stages of clinical development for disease-modification and no products have yet shown efficacy in PD patients long term. Although several drugs have shown potential neuroprotective

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ability in preclinical studies, demonstrating these effects in clinical studies remains a challenge. Beyond drug therapies, a few cell and gene therapy approaches are also being explored. Progress across these newer technology platforms has been slow.

Intellectual Property

We strive to protect and enhance the proprietary technologies, inventions and improvements that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions outside of the United States related to our proprietary technology, inventions, improvements, platforms and our product candidates that are important to the development and implementation of our business.

Annovis has filed seven families of patents and patent applications to prolong the patent life of Buntanetap. The pending patent applications were invented and filed by Annovis and include claims directed to:

● a method of treating neurodegenerative diseases such as AD and PD;

● a method of treating and/or preventing acute brain and nerve injuries;

● a method of inhibiting cancer metastasis;

● a combination with some drugs; and

● a method of treating neuropsychiatric indications.

As of February 14, 2023, our patent portfolio comprised 44 total issued patents plus 13 pending patent applications in various jurisdictions.

The issued patents have expiration dates, assuming all required fees and other charges are paid, between 2031 and 2038. Assuming each of our current patent applications are approved, our patent coverage will extend until 2043. The first patent application family we filed, which would be expected to expire, assuming all required fees and other charges are paid, in 2031, covers the use of Buntanetap at much lower doses and expands its use to the treatment of AD, PD and other neurodegenerative disorders such as Huntington’s disease, prion diseases, amyotrophic lateral sclerosis, tauopathies and frontotemporal dementia, based on our preclinical research. In August 2019, the U.S. Patent and Trademark Office (“USPTO”) granted the first of our Annovis patents from this family covering PD and Lewy body diseases. Subsequently the USPTO also granted patents covering tau and tauopathies, chronic traumatic encephalopathy, prion diseases, amyotrophic lateral sclerosis, Alzheimer’s and Huntington’s disease. The second patent application family covers ANVS405’s use in acute brain and nerve trauma and would be expected to expire, assuming all required fees and other charges are paid, in 2036, before any patent term adjustments or extensions. In December 2020, the European Patent Office (“EPO”) approved the whole patent, and it has since been approved in number of other countries. However, the USPTO entered a species restriction as to the condition being treated and we are therefore currently pursuing claims directed to traumatic brain injury. We intend to file additional divisional applications when we have successfully reached a conclusion to the pending application, assuming we are not able to cover the remaining acute conditions (stroke, nerve injury and spinal cord injury) for which patent coverage is being sought in the pending application. The third patent application family relates to the use of the mechanism of action of Buntanetap and ANVS405 to prevent and treat neurodegenerative diseases and would be expected to expire, assuming all required fees and other charges are paid, in 2038, before any patent term adjustments or extensions. The first divisional of this application was approved in December 2022; it covers the prevention of neurodegenerative diseases and we are awaiting the official publishing of the patent. In May 2020, we filed a patent application with the USPTO concerning a method of inhibiting, preventing, or treating neurological injuries due to viral, bacterial, fungal, protozoan, or parasitic infections in humans and in animals via administration of Buntanetap or related compounds which would be expected to expire, assuming all required fees and other charges are paid, in 2041, before any

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patent term adjustments or extensions; we have not received any office actions, yet. Recently we also filed three provisional patents - Buntanetap in cancer, Buntanetap and combinations, Buntanetap in neuropsychiatric indications.

Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our collaborators, employees and consultants and invention assignment agreements with our employees. We also have confidentiality agreements or invention assignment agreements with our collaborators and selected consultants.

Sales and Marketing

If Buntanetap is approved for AD or PD, we plan to enter into sales and marketing agreements with one or several pharmaceutical companies to sell to neurologists, geriatric specialists and to primary care physicians. We also may explore the use of a variety of types of collaboration, co-promotion, distribution and other marketing arrangements with one or more third parties to commercialize our product candidates.

Manufacturing

Buntanetap is a small molecule that is manufactured using a patented process. We do not own, operate, and currently have no plans to establish, any manufacturing facilities. We therefore rely, and expect to continue to rely, solely on third-party contractors for manufacturing clinical supplies for our current and future potential product candidates, and plan to do so for commercial supplies also if any of our product candidates received marketing approval. We also rely on these third parties for encapsulating, packaging and stabilizing clinical trial materials. Presently we are working with a U.S. supplier for the manufacture of good manufacturing practice (“cGMP”) active pharmaceutical ingredient (API) to meet our Buntanetap clinical study supply demands. We have also engaged a backup API manufacturing contractor, with primary operations in China. We have an agreement with a local U.S. supplier for the encapsulating, packaging, and stability of the clinical trial material. These arrangements will allow us to enter large and long-term advanced clinical studies. We have only limited supply agreements in place with respect to Buntanetap and our product candidates, and these arrangements do not extend to commercial supply. We do not have long term committed arrangements with respect to Buntanetap, any of our other product candidates, or other materials.

Government Regulation

The FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs, such as those we are developing. These agencies and other federal, state and local entities regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of our product candidates.

U.S. Government Regulation of Drug Products

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and its implementing regulations. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

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● Submission to the FDA of an NDA.

● Satisfactory completion of an FDA advisory committee review, if applicable.

● Payment of user fees and securing FDA approval of the NDA.

Preclinical Studies

Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some preclinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to initiate.

Clinical Trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it initiates at that institution. Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on www.clinicaltrials.gov.

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

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Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.

Special FDA Expedited Review and Approval Programs

The FDA has various programs, including fast track designation, accelerated approval, priority review, and breakthrough therapy designation, which are intended to expedite or simplify the process for the development and FDA review of drugs that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs. The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

To be eligible for a fast-track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need. The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors. The FDA may review sections of the NDA for a fast-track product on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.

The FDA may give a priority review designation to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists. A priority review means that the goal for the FDA to review an application is six months, rather than the standard review of ten months under current PDUFA guidelines. Under the current PDUFA agreement, these six- and ten-month review periods are measured from the “filing” date rather than the receipt date for NDAs for new molecular entities, which typically adds approximately two months to the timeline for review and decision from the date of submission. Most products that are eligible for fast-track designation are also likely to be considered appropriate to receive a priority review.

In addition, products tested for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may be eligible for accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (“IMM”) that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on IMM or other clinical endpoint, and the drug may be subject to accelerated withdrawal procedures.

Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act passed in July 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Drugs designated as breakthrough therapies are also eligible for accelerated approval. The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite the development and review of an application for approval of a breakthrough therapy. At the completion of our two Phase 2 trials, one in PD and one in AD, Annovis will petition the FDA to classify Buntanetap as a breakthrough therapy.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. We may explore some of these opportunities for our product candidates as appropriate.

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of

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the disease or condition will be recovered from sales of the product). A company must request orphan product designation before submitting an NDA. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product with orphan status receives the first FDA approval for a disease or condition, the product generally will be receiving orphan product exclusivity. Orphan product exclusivity means that the FDA may not approve any other applications for the same product for the same indication for seven years, except in certain limited circumstances. If a drug or drug product designated as an orphan product ultimately receives marketing approval for an indication broader than what was designated in its orphan product application, it may not be entitled to exclusivity. Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand. Further, the FDA may approve more than one product for the same orphan indication or disease if the products contain different active ingredients. Moreover, competitors may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

Marketing Approval and Post-Approval Requirements

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee. Under the Prescription Drug User Fee Act (“PDUFA”) guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA, for a new molecular entity to review and act on the submission. This review typically takes twelve months from the date the NDA is submitted to FDA because the FDA has approximately two months to make a “filing” decision.

The FDA also may require submission of a REMS plan to ensure that the benefits of the drug outweigh its risks. The REMS plan could include medication guides, physician communication plans, assessment plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries, or other risk minimization tools.

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements.

The FDA may refer an application for a novel drug to an advisory committee. While the FDA is not bound by the recommendations of an advisory committee, it considers such recommendations carefully when making decisions.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing for the FDA to reconsider the application. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the

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product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS.

Once an approval of a drug or medical device is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

● Fines, warning letters or holds on post-approval clinical trials.

● Injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs or devices may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

U.S. Coverage and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of our lead product candidate, Buntanetap, or any other for which we may seek regulatory approval. Sales in the U.S. will depend in part on the availability of adequate financial coverage and reimbursement from third-party payors, which include government health programs such as Medicare, Medicaid, TRICARE and the Veterans Administration, as well as managed care organizations and private health insurers. Prices at which we or our customers seek reimbursement for our product candidates can be subject to challenge, reduction or denial by payors.

The process for determining whether a payor will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payor will pay for the product. Third-party payors may limit coverage to specific products on an approved list or formulary, which might not include all the FDA-approved products for a particular indication. Also, third-party payors may refuse to include a branded drug on their formularies or otherwise restrict patient access to a branded drug when a less costly generic equivalent or another alternative is available. Medicare Part D, Medicare’s outpatient prescription drug benefit, contains protections to ensure coverage and reimbursement for oral oncology products, and all Part D prescription drug plans are required to cover substantially all oral anti-cancer agents. However, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be available. Private payors often rely on the lead of the governmental payors in rendering coverage and reimbursement determinations. Sales of Buntanetap or any other product candidates will therefore depend substantially on the extent to which the costs of our products will be paid by third-party payors. Achieving favorable coverage and reimbursement from the Centers for Medicare and Medicaid Services (“CMS”) and/or the Medicare Administrative Contractors is typically a significant gating issue for successful introduction of a new product.

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. In order to obtain coverage and reimbursement for any product that might be approved for marketing, we may need to conduct studies in order to demonstrate the medical necessity and cost-effectiveness of any products, which would be in addition to the costs expended to obtain regulatory approvals. Third-party payors may not consider our product candidates to be medically necessary or cost-effective compared to other available therapies, or the

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rebate percentages required to secure favorable coverage may not yield an adequate margin over cost or may not enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development.

U.S. Healthcare Fraud and Abuse Laws and Compliance Requirements

We are subject to various federal and state laws targeting fraud and abuse in the healthcare industry. These laws may impact, among other things, our proposed sales and marketing programs. In addition, we may be subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The laws that may affect our operations include:

Regulation Outside the United States

To the extent that any of our product candidates, once approved, are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals.

To market our future products in the European Economic Area (“EEA”), which is comprised of the 28 Member States of the EU plus Norway, Iceland and Liechtenstein, and many other foreign jurisdictions, we must obtain separate regulatory approvals. More concretely, in the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization (“MA”). There are two types of MAs:

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Under the above-described procedures, before granting the MA, the EMA or the competent authorities of the Member States of the EEA assess the risk-benefit balance of the product based on scientific criteria concerning its quality, safety and efficacy.

Data and Marketing Exclusivity

In the EEA, new products authorized for marketing, or reference products, qualify for eight years of data exclusivity and an additional two years of market exclusivity upon marketing authorization. The data exclusivity period prevents generic or biosimilar applicants from relying on the pre-clinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product in the EU. The 10-year market exclusivity period can be extended to a maximum of eleven years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

Orphan Drug Designation

In the EEA, a medicinal product can be designated as an orphan drug if its sponsor can establish that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the EU when the application is made, or that the product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the drug in the EU would generate sufficient return to justify the necessary investment in development. For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the drug will be of significant benefit to those affected by that condition.

In the EEA, an application for designation as an orphan product can be made any time prior to the filing of an application for approval to market the product. Marketing authorization for an orphan drug leads to a ten-year period of market exclusivity. During this market exclusivity period, the EMA or the member state competent authorities, cannot accept another application for a marketing authorization, or grant a marketing authorization, for a similar medicinal product for the same indication. The period of market exclusivity is extended by two years for medicines that have also complied with an agreed PIP.

This period may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan drug designation, for example because the product is sufficiently profitable not to justify market exclusivity. Market exclusivity can be revoked only in very selected cases, such as consent from the marketing authorization holder, inability to supply sufficient quantities of the product, demonstration of “clinical superiority” by a similar medicinal product, or, after a review by the Committee for Orphan Medicinal Products, requested by a member state in the fifth year of the marketing exclusivity period (if the designation criteria are believed to no longer apply). Medicinal products designated as orphan drugs are eligible for incentives made available by the EU and its Member States to support research into, and the development and availability of, orphan drugs.

Human Capital Resources

As of February 2023, we had five full-time employees. We also utilize the services of twelve consultants. We also contract with additional consultants and third parties for the conduct of certain clinical development, accounting and administrative activities. We are in the process of hiring additional employees as we advance in our clinical trial program. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.

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Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, training, incentivizing, and integrating our existing and new employees, advisors and consultants. We offer competitive compensation packages. We incentivize high performers through an annual bonus program based on our performance for which all employees are eligible. We also offer equity incentive plans, the purpose of which are to attract, retain and reward personnel through the granting of stock-based compensation awards in order to increase stockholder value and the success of our company by motivating team members to perform to the best of their abilities and achieve our objectives.

Corporate Information

We were incorporated in Delaware in 2008. Our principal executive offices are located at 1055 Westlakes Drive, Suite 300, Berwyn, PA 19312 and our telephone number is (610)727 3913. Our website address is www.annovisbio.com. The inclusion of our website address is, in each case, intended to be an inactive textual reference only and not an active hyperlink to our website. The information contained in, or that can be accessed through, our website is not part of this Annual Report on Form 10-K.

Item 1A. Risk Factors

Risks Related to Our Financial Position and Need for Additional Capital

Because our auditor has issued a going concern opinion regarding our company, there is an increased risk associated with an investment in our company.

As of December 31, 2022 we had cash and cash equivalents of $28,377,693, and we have continually operated at a loss with an accumulated deficit of $54,054,744 as of December 31, 2022. We have not attained profitable operations and are dependent upon obtaining financing to continue operations for the next twelve months from the date of these financial statements. Our future is dependent upon our ability to obtain financing or upon future profitable operations. We reserve the right to seek additional funds through public/private placements of our common stock and/or through debt financing. Our ability to raise additional financing is unknown. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.

We have incurred significant net losses since inception and anticipate that we will continue to incur net losses for the foreseeable future. We are not currently profitable, and we may never achieve or sustain profitability.

Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We are a clinical stage biopharmaceutical company with a limited operating history and have incurred losses since our formation. We incurred net losses of $25,328,567 and $14,487,132 for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $54,054,744. We have not commercialized any products and have never generated revenue from the commercialization of any product. To date, we have devoted most of our financial resources to research and development, including our preclinical and clinical work, and to intellectual property.

We expect to incur significant additional operating losses for the next several years, at least, as we advance Buntanetap and any other product candidates through clinical development, complete clinical trials, seek regulatory approval and commercialize the drug or any other product candidates, if approved. The costs of advancing product candidates into each clinical phase tend to increase substantially over the duration of the clinical development process. Therefore, the total costs to advance any of our product candidates to marketing approval in even a single jurisdiction will be substantial. Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to begin generating revenue from the commercialization of any products or achieve or maintain profitability. Our expenses will also increase substantially if and as we:

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● maintain, expand and protect our intellectual property portfolio;

● hire additional clinical, scientific and commercial personnel;

● acquire or in-license or invent other product candidates or technologies.

Furthermore, our ability to successfully develop, commercialize and license any product candidates and generate product revenue is subject to substantial additional risks and uncertainties, as described under “—Risks Related to Development, Clinical Testing, Manufacturing and Regulatory Approval” and “—Risks Related to Commercialization.” This will require us to be successful in a range of challenging activities, including completing clinical trials and preclinical studies of Buntanetap and any other product candidates, acquiring additional product candidates, obtaining regulatory approval for Buntanetap and any other product candidates, and manufacturing, marketing, and selling any products for which we may obtain regulatory approval. We are only in the preliminary stages of most of these activities. As a result, we expect to continue to incur net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. The amount of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenues. If we are unable to develop and commercialize one or more product candidates, either alone or through collaborations, or if revenues from any product that receives marketing approval are insufficient, we will not achieve profitability. Even if we do achieve profitability, we may not be able to sustain profitability or meet outside expectations for our profitability. If we are unable to achieve or sustain profitability or to meet outside expectations for our profitability, the value of our company will be materially and adversely affected. Furthermore, this could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our product candidates, achieve our strategic objectives or even continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment.

We will require substantial additional capital to fund our operations, and if we fail to obtain necessary financing, we may not be able to complete the development and commercialization of Buntanetap.

The development of biopharmaceutical product candidates is capital-intensive. Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to advance the clinical development of Buntanetap. If we obtain receive regulatory approval for Buntanetap or any other product candidates, we also expect to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution. We will require additional capital for the further development and potential commercialization of Buntanetap and may also need to raise additional funds sooner to pursue a more accelerated development of Buntanetap. Because the outcome of any clinical trial or preclinical study is highly uncertain, we cannot reliably estimate the actual amount of financing necessary to successfully complete the development and commercialization of Buntanetap or any other product candidates. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

Based on our current operating plan, we believe that our current cash and cash equivalents and funding from existing grants will enable us to fund our operating expenses and capital expenditure requirements until the fourth quarter of 2023. We have based this estimate on assumptions that may prove to be wrong, and we could deploy our available capital resources sooner than we currently expect. Our operating plans and other demands on our cash resources may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned. Our current cash and cash equivalents and funding

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from existing grants may not be sufficient to complete development of Buntanetap or any other product candidates, and we will require substantial capital in order to advance Buntanetap or any other product candidates through clinical trials, regulatory approval and commercialization. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, inflation, the conflict between Russia and Ukraine and other factors, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts, or even cease operations. We expect to finance our cash needs through public or private equity or debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. Attempting to secure additional financing may divert our management from our day-to-day activities, which may adversely affect our ability to develop Buntanetap or any other product candidates.

Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

● the effects of competing technological and market developments;

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Conducting clinical trials and preclinical studies and potentially identifying future product candidates is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and commercialize Buntanetap or any future product candidates. If approved, Buntanetap and any future product candidates may not achieve commercial success. Our commercial revenue, if any, will initially be derived from sales of Buntanetap, which we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to expand our operations or otherwise capitalize on our business opportunities due to a lack of capital, our ability to become profitable will be compromised.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through a combination of equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or other sources. We do not currently have any committed external source of funds. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, intellectual property, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we would be required to delay, limit, reduce or terminate product candidate development or future commercialization efforts, or grant rights to develop and market product candidates that we might otherwise prefer to develop and market ourselves, or on less favorable terms than we would otherwise choose.

We have limited operating history and no history of commercializing pharmaceutical products.

We were established and began operations in 2008. Our operations to date have been primarily focused on conducting preclinical and clinical studies. We have not yet demonstrated the ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing biopharmaceutical products. In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.

As we continue to build our business, we expect our financial condition and operating results may fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, reliance should not be placed upon the results of any particular quarterly or annual period as indications of future operating performance.

Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations.

In general, under Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change net operating loss carryforwards (“NOLs”) to offset future taxable income. Due to previous ownership changes, our ability to use our NOLs could be limited by Section 382 of the Code. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code. Furthermore, our ability to use NOLs of companies that we may acquire in the

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future may be subject to limitations. For these reasons, we may not be able to use a material portion of the NOLs, even if we attain profitability in the future.

Inflation could adversely affect our business and results of operations.

While inflation in the United States has been relatively low in recent years, during 2021 and 2022, the economy in the United States encountered a material level of inflation. The impact of COVID-19, geopolitical developments such as the Russia-Ukraine conflict and global supply chain disruptions continue to increase uncertainty in the outlook of near-term and long-term economic activity, including whether inflation will continue and how long, and at what rate. Increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.

Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.

The global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, terrorism or other geopolitical events. Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves, or on less favorable terms than we would otherwise choose. In addition, if one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our clinical development goals on schedule and on budget.

Risks Related to Development, Clinical Testing, Manufacturing and Regulatory Approval

We are heavily dependent on the success of Buntanetap, our most advanced product candidate, which is still under clinical development, and if this drug does not receive regulatory approval or is not successfully commercialized, our business will be materially harmed.

We do not have any products that have gained regulatory approval. Currently, our lead clinical stage product candidate is Buntanetap. As a result, our business is entirely dependent on our ability to successfully complete clinical development of, obtain regulatory approval for, and, if approved, successfully commercialize Buntanetap in a timely manner. This may make an investment in our company riskier than similar companies that have multiple product candidates in active development and may be able to better sustain the delay or failure of a lead product candidate. We cannot commercialize Buntanetap in the United States without first obtaining regulatory approval from the FDA; similarly, we cannot commercialize Buntanetap outside of the United States without obtaining regulatory approval from comparable foreign regulatory authorities. Before obtaining regulatory approvals for the commercial sale of Buntanetap for a target indication, we must demonstrate with substantial evidence gathered in preclinical studies and clinical trials, generally including two adequate and well-controlled clinical trials, and, with respect to approval in the United States, to the satisfaction of the FDA, that Buntanetap is safe and effective for use for that target indication and that the manufacturing facilities, processes and controls are adequate. If the FDA is not satisfied with the quantity and nature of the data we collect, we may be forced to undertake additional preclinical studies or clinical trials to obtain regulatory approval, which will lead to delays in our

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clinical development plans and cause us to incur additional costs, both of which may have a material adverse effect on our business. Even if Buntanetap were to successfully obtain approval from the FDA and comparable foreign regulatory authorities, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements. If we are unable to obtain regulatory approval for Buntanetap in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of any other product candidate that we may in-license, develop or acquire in the future. Furthermore, even if we obtain regulatory approval for Buntanetap, we will still need to develop a commercial organization, establish commercially viable pricing and obtain approval for adequate reimbursement from third-party and government payors. If we are unable to successfully commercialize Buntanetap, we may not be able to earn sufficient revenue to continue our business

If we are not successful in discovering, developing and commercializing additional product candidates, our ability to expand our business and achieve our strategic objectives would be impaired.

Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following:

We have limited financial and personnel resources and, as a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater market potential. Our resource allocation decisions may cause it to fail to capitalize on viable commercial drugs or profitable market opportunities. If we do not accurately evaluate the commercial potential or target market for a particular product, we may relinquish valuable rights to that product through collaboration, licensing or other royalty arrangements in circumstances under which it would have been more advantageous for us to retain sole development and commercialization rights to such product. If we are unsuccessful in identifying and developing additional product candidates or are unable to do so, our business, results of operations, cash flows, financial condition and/or prospects may be materially and adversely affected.

Business disruptions, including but not limited to those associated with widespread health emergencies, could harm our ability to complete or could materially delay our clinical trials, as well as cause disruptions to the FDA and other governmental authorities.

Our operations and the operations of our suppliers, contract research organizations (“CROs”), hospitals, clinical trial sites, regulators, consultants and other third parties with whom we conduct business could be subject to earthquakes, power shortages, telecommunications or infrastructure failures, cybersecurity incidents, physical security breaches, water shortages, floods, hurricanes, typhoons, blizzards and other extreme weather conditions, fires, and other natural or manmade disasters or business interruptions, for which we are predominantly self-insured. We rely on third-party manufacturers or suppliers to produce Buntanetap and its components and on CROs and clinical sites to conduct our clinical trials, and do not have a redundant source of supply for all components of our product candidate. Our ability to obtain clinical or, if approved, commercial, supplies of Buntanetap or any future product candidates could be disrupted if the operations of these suppliers were affected by a man-made or natural disaster or other business interruption, and our ability to commence, conduct or complete our clinical trials in a timely manner could be similarly adversely affected by any of the foregoing. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

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Furthermore, the emergence of widespread health emergencies or pandemics, such as COVID-19, could lead to quarantines, business shutdowns, labor shortages, disruptions to the healthcare system, and overall economic instability. If the suppliers, CROs, hospitals, clinical trial sites, regulators, consultants and other third parties with whom we conduct business were to experience shutdowns or other business disruptions, our ability to enroll patients and conduct our clinical trials in the manner and on the timelines presently planned could be materially and negatively impacted. As an example, in March 2020, the clinical trial sites participating in our Phase 1/2 trial in AD patients in collaboration with the ADCS temporarily suspended enrollment of new patients because of the ongoing COVID-19 pandemic and patient recruitment and treatment were completed later than anticipated. In addition, due to restrictions related to COVID-19 during 2020, we experienced delays in opening clinical trial sites for our AD/PD Trials. The extent to which other future emerging widespread health emergencies or pandemics could have a material impact on our clinical trials is dependent on the spread of the disease and government and healthcare system responses to such spread, which are presently unpredictable.

The COVID-19 pandemic and any future epidemic or pandemic disease outbreak could also potentially further affect the business of the FDA, EMA or other regulatory authorities, which could result in delays in meetings related to our planned clinical trials. The COVID-19 pandemic and mitigation measures have had and may continue to have, and any future epidemic disease outbreak may have, an adverse impact on global economic conditions which could have an adverse effect on our business and financial condition, including impairing our ability to raise capital when needed. The extent to which the COVID-19 pandemic impacts our results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus, including the identification of new variants, the rate of vaccine administration, and the actions to contain its impact.

Clinical trials are expensive, time-consuming and difficult to design and implement, and involve an uncertain outcome.

Clinical development is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Because the results of preclinical studies and early clinical trials are not necessarily predictive of future results, Buntanetap and our other product candidates may not have favorable results in later preclinical and clinical studies or receive regulatory approval. The historical failure rate for product candidates in our industry is high, particularly in the earlier stages of development. Furthermore, product candidates in later stages of clinical trials may fail to show the desired safety and efficacy characteristics despite having progressed through preclinical studies and initial clinical trials. We may experience delays in initiating and completing any clinical trials that we intend to conduct, and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, or at all. Clinical trials can be delayed for a variety of reasons, including delays related to:

● obtaining regulatory approval to commence a trial;

● patients failing to complete a trial or return for post-treatment follow-up;

● clinical sites deviating from trial protocol or dropping out of a trial;

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● addressing patient safety concerns that arise during the course of a trial;

● adding a sufficient number of clinical trial sites; or

We could also encounter delays if a clinical trial is suspended or terminated by us, the IRBs or IECs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board (“DSMB”), for such trial or the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Furthermore, we rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and, while we have agreements governing their committed activities, we have limited influence over their actual performance, as described in “—Risks Related to Our Dependence on Third Parties.”

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for Buntanetap or any other product candidates, our business will be substantially harmed.

The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. We have not obtained regulatory approval for any product candidate and it is possible that we will never obtain regulatory approval for Buntanetap or any other product candidate. We are not permitted to market any of our product candidates in the United States until we receive regulatory approval of an NDA from the FDA. Approval from the FDA and comparable foreign authorities may be delayed or denied for a variety of reasons, including:

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Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or foreign regulatory agencies, that such product candidates are safe and effective for their intended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. Even if we believe the preclinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval by the FDA and other regulatory authorities. For diseases like AD and PD, the FDA has stated that one single Phase 3 trial is adequate for approval if it demonstrates robust and unquestionable efficacy. However, the circumstances under which a single adequate and controlled study can be used as the sole basis of demonstrating efficacy of a drug are exceptional.

The FDA or any foreign regulatory bodies can delay, limit or deny approval of our product candidates or require us to conduct additional preclinical or clinical testing or abandon a program for many reasons, including:

Of the large number of drugs in development, only a small percentage successfully complete the regulatory approval processes and are commercialized. This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in our failing to obtain regulatory approval to market Buntanetap or another product candidate, which would significantly harm our business, results of operations and prospects.

In addition, the FDA or the applicable foreign regulatory agency also may approve a product candidate for a more limited indication or patient population than we originally requested, and the FDA or applicable foreign regulatory agency may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

We have concentrated our research and development efforts on the treatment of AD and PD, diseases that have seen limited success in drug development. Further, Buntanetap is based on a new approach to treating AD and PD, which makes it difficult to predict the time and cost of development and subsequent obtaining of regulatory approval.

Efforts by biopharmaceutical and pharmaceutical companies in treating AD and PD have seen limited success in drug development, and there are no FDA-approved disease modifying therapeutic options available for patients with AD and PD. As a result, the design and conduct of clinical trials of Buntanetap or any future product candidate may take longer, be more costly or be less effective as a result of the novelty of development in these diseases. We cannot be certain that our approach will lead to the development of approvable or marketable products. In some cases, we may use endpoints or methodologies that regulatory authorities may not consider to be clinically meaningful and that we may not continue to use in clinical trials or that we may determine after the initiation of the trial to no longer be an appropriate endpoint or methodology. Any such regulatory authority may require evaluation of additional or different clinical endpoints in our clinical trials or ultimately determine that these clinical endpoints do not support marketing approval. In addition, if we are required to use additional or different clinical endpoints by regulatory authorities, Buntanetap may not achieve or meet such clinical endpoints in our clinical trials. Even if a regulatory authority finds our clinical trial success criteria to be sufficiently validated and clinically meaningful, we may not achieve the pre-specified endpoint to a degree of statistical significance in any pivotal or other clinical trials we may conduct for our product candidate. Further, even if we do achieve the prespecified criteria, our trials may produce results that are unpredictable or inconsistent with the results of other efficacy endpoints in the trial. Regulatory authorities also could give overriding weight to other efficacy endpoints over a primary endpoint even if we achieve statistically significant results on that primary endpoint if we do not do so on our secondary efficacy endpoints. Regulatory authorities also weigh the benefits of a product against its risks and may view the efficacy results in the context of safety as not being supportive of approval.

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The only drugs approved by the FDA to treat AD and PD to date address the diseases’ symptoms. No new treatments have been approved for AD since 2003. From 2004 to 2022, phase 2 and 3 clinical trials for unique compounds with various mechanisms of action intended to combat AD had a development success rate of just 2%. AD drug candidates have the highest failure rate of nearly 100%, compared to 50% to 80% for all other drug candidates. As a result, the FDA has a limited set of products to rely on in evaluating Buntanetap. This could result in a longer than expected regulatory review process, increased expected development costs or the delay or prevention of commercialization of Buntanetap for the treatment of AD and PD. We cannot be sure that Buntanetap, or any other product candidate we develop, will ultimately prove to be safe and effective, scalable or profitable. Moreover, public perception of drug safety issues, including adoption of new therapeutics or novel approaches to treatment, may adversely influence the willingness of subjects to participate in clinical trials, or if approved, of physicians to prescribe novel treatments.

Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.

As product candidates progress through clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize safety, efficacy, yield and manufacturing batch size, minimize costs and achieve consistent quality and results. For example, the manufacturing process being used to produce clinical material for our planned clinical trials is different than that used in prior trials of Buntanetap. There can be no assurance that such changes will achieve these intended objectives. These changes and any future changes we may make to Buntanetap or any future product candidates may also cause such candidates to perform differently and affect the results of future clinical trials conducted with the altered materials. Such changes or related unfavorable clinical trial results could delay initiation or completion of additional clinical trials, require the conduct of bridging studies or clinical trials or the repetition of one or more studies or clinical trials, increase development costs, delay or prevent potential marketing approval and jeopardize our ability to commercialize Buntanetap or any future product candidates, if approved, and generate revenue.

We may develop Buntanetap and future product candidates for use in combination with other therapies, which could expose us to additional regulatory risks.

We may develop Buntanetap and future product candidates for use in combination with one or more other approved therapies for AD or PD. Even if any product candidate we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risk that the FDA or comparable foreign regulatory authorities could revoke approval of the therapy used in combination with our product candidate or that safety, efficacy, manufacturing or supply issues could arise with these existing therapies. This could result in our own products being removed from the market or being less successful commercially.

Further, we will not be able to market and sell any product candidate we develop in combination with an unapproved AD or PD therapy for a combination indication if that unapproved therapy does not ultimately obtain marketing approval either alone or in combination with our product. In addition, unapproved AD and PD therapies face the same risks described with respect to our product candidates currently in development and clinical trials, including the potential for serious adverse effects, delay in their clinical trials and lack of FDA approval.

Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials, and even once enrolled, we may be unable to retain a sufficient number of patients to complete any of our trials. For example, during the COVID-19 pandemic, we had difficulties enrolling a sufficient number of patients for our clinical trials.

Patient enrollment and retention in clinical trials depends on many factors, including:

● the patient eligibility and exclusion criteria defined in the protocol;

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● the nature and design of the trial protocol;

● the proximity of patients to clinical sites;

● competing clinical trials being conducted by other companies or institutions;

● our ability to obtain and maintain patient consents; and

Potential patients for any planned clinical trials may not be adequately diagnosed or identified with the diseases which we are targeting, which could adversely impact the outcomes of our trials and could have safety concerns for the potential patients. Additionally, other pharmaceutical companies targeting these same diseases are recruiting clinical trial patients from these patient populations, which may make it more difficult to fully enroll our clinical trials. We may not be able to initiate or continue clinical trials if we are unable to locate a sufficient number of eligible patients to participate in the clinical trials required by the FDA or comparable foreign regulatory authorities. In addition, the process of finding and recruiting patients may prove costly. The timing of our clinical trials depends, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. If patients are unwilling or unable to participate in our trials for any reason, including the existence of concurrent clinical trials for similar target populations, the availability of approved or authorized therapies, the effects of the COVID-19 pandemic, or the fact that enrolling in our trials may prevent patients from taking a different product, or we otherwise have difficulty enrolling a sufficient number of patients, the timeline for recruiting patients, conducting trials and obtaining regulatory approval of our product candidates may be delayed. Our inability to enroll a specified number of patients for any of our future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.

Results of preclinical studies, early clinical trials or analyses may not be indicative of results obtained in later trials.

The results of preclinical studies, early clinical trials or analyses of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. Furthermore, results of early clinical trials may differ from results of later clinical trials due to changes in patient population size. The clinical trials that we have completed to date included a limited patient population, and we may observe differences in the safety and efficacy of Buntanetap and our other product candidates as the patient population increases in size. Accordingly, the data that we have observed to date may not be reflective of ongoing and future clinical trial data. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. In addition, conclusions based on promising data from analyses of clinical results may be shown to be incorrect when implemented in prospective clinical trials. Even if our clinical trials for Buntanetap are completed as planned, we cannot be certain that their results will support the safety and efficacy sufficient to obtain regulatory approval.

Further, others, including regulatory agencies may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular development program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure. Any information we determine not to disclose may ultimately be deemed meaningful by others with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. If the

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interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, product candidates may be harmed, which could significantly harm our business prospects.

Interim “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are further subject to audit and verification procedures that could result in material changes in the final data. Furthermore, undue reliance on interim analyses may be detrimental to our long-term clinical development plans, which could harm our business, operating results, prospects or financial condition.

ANVS US Equity

ANVS · 10-K · period ended 2022-12-31

Item 1. Business.

Item 1A. Risk Factors

ANVS US Equity☆

ANVS · 10-K · period ended 2022-12-31

Item 1. Business.

Item 1A. Risk Factors

ANVS US Equity