Item 1A Risk Factors 19
Item 1B Unresolved Staff Comments 42
Item 1C Cybersecurity 42
Item 2 Properties 43
Item 3 Legal Proceedings 43
Item 4 Mine Safety Disclosures 43
Item 6 [Reserved] 45
Item 7A Quantitative and Qualitative Disclosures About Market Risk 52
Item 8 Financial Statements and Supplementary Data 52
Item 9A Controls and Procedures 52
Item 9B Other Information 53
Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 53
PART III 54
Item 10 Directors, Executive Officers and Corporate Governance 54
Item 11 Executive Compensation 58
Item 14 Principal Accountant Fees and Services 72
Item 15 Exhibits and Financial Statement Schedules 73
SIGNATURES 76
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations,
assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which
may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of
historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our
use of words such as “may,” “can,” “anticipate,” “assume,” “should,” “indicate,”
“would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,”
“continue,” “plan,” “point to,” “project,” “predict,” “could,”
“intend,” “target,” “potential” and other similar words and expressions of the future. The matters
discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause our actual results
to differ materially from those projected, anticipated or implied in the forward-looking statements. As a result, you should not place
undue reliance on any forward-looking statements. Except to the limited extent required by applicable law, we undertake no obligation
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Risk
Factors Summary
Below
is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address
all of the risks and uncertainties that we face. Additional discussion of the risks and uncertainties summarized in this risk factor
summary, as well as other risks and uncertainties that we face, can be found under “Risk Factors” in Part I, Item 1A of this
Annual Report on Form 10-K. The below summary is qualified in its entirety by that more complete discussion of such risks and uncertainties.
You should consider carefully the risks and uncertainties described under “Risk Factors” in Part I, Item 1A of this Annual
Report on Form 10-K as part of your evaluation of the risks associated with an investment in our securities.
Risks
Related to Our Financial Condition and Capital Requirements
Risks
Related to Clinical Development and Regulatory Approval
Risks
Related to Our Reliance on Third Parties
Risks
Related to Commercialization of Our Product Candidates
Risks
Related to Our Intellectual Property
Risks
Related to Our Business Operations and Industry
● Healthcare reform measures could adversely affect our business;
Risks
Associated to our Common Stock
● Our common stock is controlled by insiders;
PART
I
Item
1. Business.
Overview
Protagenic
Therapeutics, Inc. (together with its subsidiary, “Protagenic,” the “Company,” “we,” “our”
or “us”) is a biopharmaceutical company focused on discovering and developing therapeutics for stress-related neuropsychiatric
and mood disorders. Our proprietary, patent-protected, first-in-class lead compound, PT00114, is a synthetic form of Teneurin Carboxy-terminal
Associated Peptide-1 (“TCAP-1”). TCAP-1 is an endogenous brain signaling peptide that can dampen overactive stress responses.
In preclinical animal models, PT00114 has demonstrated efficacy in depression, anxiety, substance abuse and addiction, and PTSD, and
it works through a novel mechanism of action. We own exclusive, worldwide rights to PT00114 through our license agreement with the University
of Toronto, and we hold an exclusive right to license additional intellectual property generated by Dr. David Lovejoy’s laboratory
at the University of Toronto. We are also developing follow-on compounds in the TCAP family. Extensive peer-reviewed research underscores
the central role that stress plays in the onset and progression of disorders such as depression, anxiety, substance abuse and addiction,
and PTSD. The mechanism of action of TCAP-1 suggests that it counterbalances excess stress signaling at the cellular level within the
brain’s stress response cascade. In preclinical animal models of these disorders, TCAP-1 has been observed to alleviate the harmful
behavioral, biochemical, and physiological effects of stress while supporting brain health. We completed the preclinical work required
to begin a clinical trial in the first half of 2023. We began our first human trial, designed to evaluate the safety and efficacy of
PT00114, on September 26, 2023. On May 22, 2024, we announced the complete results of the single-dose portion of our Phase I trial. In
December 2025, we announced that we had completed the multiple-dose portion of our Phase I study in healthy volunteers. We expect to
begin a Phase 2 study in late 2026 to evaluate PT00114 in a targeted population of patients affected by chronic stress-related psychiatric
disorders.
As
Protagenic transitions into a clinical-stage company, we aim to complete certain key strategic and tactical milestones over the coming
two years, including:
Prior
Phytanix Bio Business
During
the year ended March 31, 2026, the Company entered into a reverse merger with Phytanix Bio as well as an unwind of this merger. Due to
this reverse merger, the Company presents the historical financial information of Phytanix Bio and only includes the financial information
for Protagenic for the period after the reverse merger. The financial numbers for Phytanix Bio are consolidated only through the date
of the unwind. (See Note 4) This limits comparability of the Company’s number between the years presented.
The
prior Phytanix Bio business consisted of the following drug candidate programs:
PHYX-001:
Kv7.2/7.3 Agonist for Epilepsy and Mood Disorders
PHYX-001
is an in-licensed Kv7.2/7.3 agonist (non-cannabinoid) epilepsy asset that shares the same mechanism of action as compounds currently
in late-stage development, including BVH-7000 and XEN1101. These comparator molecules are in Phase 3 clinical trials for focal onset
seizures (FOS), generalized tonic-clonic seizures (GTCS), and major depressive disorder (MDD). XEN1101 (Azetukalner) has demonstrated
encouraging efficacy and safety in Phase 2 studies (French et al., 2023). The intellectual property covering PHYX-001 includes two patent
families (PHB0001 and PHB0002) related to our platform of potassium channel modulators with coverage in epilepsy. Patent family PHB0001
includes a granted U.S. patent expiring in June 2037. Patent family PHB0002 includes a granted U.S. patent and a pending European application,
which, if granted, would cover up to 39 countries and extend until December 2038. These protections provide a substantial runway for
development, and additional analogs may be introduced into the pipeline to further expand this franchise.
PHYX-002:
Cannabinoid-Based Therapeutics
PHYX-002
is an internally developed cannabinoid asset with the potential to address a wide range of therapeutic areas. The Company anticipates
further intellectual property filings as this program advances, with the goal of developing a product with improved potency and lower
dosing requirements compared to currently available cannabinoid medicines, including Epidiolex. Potential clinical indications span epilepsy,
schizophrenia, autism spectrum disorder, anxiety, depression, and cardiovascular disorders. Because this program involves new proprietary
molecules, we anticipate the possibility of restarting the intellectual property “clock,” which could extend the exclusivity
horizons if composition-of-matter claims are obtained.
PHYX-003:
Anti-Obesity Candidate
PHYX-003
is an internally developed preclinical asset targeting obesity. New intellectual property is being generated around this program, including
potential composition-of-matter patents (which, if granted, would establish ownership of the underlying molecule), therapeutic use patents,
synthetic route patents, and formulation patents.
The
program is designed to potentially enhance weight-loss outcomes compared with current blockbuster therapies such as tirzepatide (Mounjaro/Zepbound)
and semaglutide (Ozempic/Wegovy). Given the rapid growth and high level of unmet need in the global obesity market, PHYX-003 could represent
a significant opportunity for the Company.
PHYX-004:
Cannabis Extract for Bladder Pain Syndrome / Interstitial Cystitis
PHYX-004
is an internally developed cannabis-derived extract in preclinical development for the treatment of bladder pain syndrome / interstitial
cystitis. Intellectual property is expected to be generated in several categories, including extraction methodology (process patents),
extract composition, formulation, and therapeutic use claims. There is a significant unmet medical need in this indication, particularly
due to limitations associated with the current standard of care, Elmiron. As such, PHYX-004 has the potential to address a patient population
with few effective therapeutic options.
PHYX-005:
Modified Stilbenoid Program for Central Nervous System (CNS) and Inflammatory Indications
PHYX-005
is an internally developed stilbenoid-based asset with potential applications in central nervous system and inflammatory conditions,
including treatment-resistant seizures. The intellectual property portfolio supporting this program includes two patent families (PTX0001
and PTX0002). Patent family PTX0001 includes UK patent GB2609814, which provides composition-of-matter and medical use coverage extending
until March 2041. Corresponding applications have been filed in Europe, Australia, Brazil, Canada, China, Israel, India, Japan, Republic
of Korea, Mexico, the United States, South Africa, and the United Kingdom. Grants are anticipated shortly in the U.S., Europe, Australia,
and Canada. The PTX0002 patent family remains pending and is expected to expand coverage through composition-of-matter and medical use
filings. Collectively, these protections support a long-term platform around modified stilbenoids, complementing our cannabinoid-based
portfolio.
IND
Submission
We
currently anticipate re-submitting an investigational new drug (IND) application, later in 2026, in advance of initiating the Phase IIa
portion of our present clinical study, to ascertain whether this portion of the study may be conducted in the United States. The Phase
I/IIa study, to evaluate the safety, tolerability, and early activity of PT00114 (TCAP) in healthy volunteers and patients with psychiatric
illnesses, commenced in the third quarter of 2023. The IND enabling studies, including the preclinical efficacy data generated, as well
as the GLP toxicology study, and a summary of the Phase I clinical trial plan, were among the components of this regulatory submission.
Clinical
Development
The
clinical development program will be led by our expert consultant, Dr. Maurizio Fava, MD, PhD, a world-leader in psychiatric disorders,
the Psychiatrist-in-Chief of the Massachusetts General Hospital and Slater Family Professor of Psychiatry at Harvard Medical School.
Dr. Fava was co-principal investigator of STAR*D, the largest research study ever conducted in depression, has coauthored more than 800
medical journal publications, and is one of the top enrolling psychiatry clinicians in the U.S. Protagenic’s Phase I/II clinical
study was designed by Dr. Fava, who will also serve as the trial’s principal investigator.
We
will launch our clinical program with atrial designed first to evaluate the safety of TCAP in a small cohort of healthy volunteers, immediately
followed by the evaluation of safety, pharmacological and clinical activity in cohorts of patients with stress-related neuropsychiatric
disorders. We plan to start with patients diagnosed with Generalized Anxiety Disorder (GAD). Following that trial, we will explore other
disorders including, but not limited to depression, addiction, and Post-Traumatic Stress Disorder (PTSD). We will be using this study
for both safety and preliminary efficacy to prioritize indications for later phase development that would ultimately support a New Drug
Application (NDA) and registration. The four indications were chosen for multiple reasons, including the mechanism of TCAP in reducing
biological stress signals, preclinical evidence of efficacy in animal models of these disorders and the high unmet need in these patient
populations, which creates significant market opportunity. Healthy volunteers will be the first cohort and subsequent parallel cohorts
will include patients with:
Furthermore,
although patient populations and their responses to CNS agents can be highly variable in clinical studies, we attempt to mitigate this
by stratifying the initial series of cohorts to select for and control for corticosterone levels to enable the broadest window of effect
detection. Preclinical studies of TCAP demonstrate that its beneficial actions are most easily observed in stressed animals, which show
elevations of plasma corticosterone levels at baseline before TCAP treatment. Anxious or depressed patients have elevated corticosterone
levels, providing an opportunity to identify patients more likely to benefit pharmacologically and potentially clinically. This also
provides a useful translational bridge between preclinical behavioral models and human clinical studies and enables flexibility in evaluating
routes of administration.
Market
for Stress-Related Neuropsychiatric Disorders: Depression, Addiction, Anxiety, and PTSD
Humans
living in our modern world, in both developed and developing nations, are being exposed to a multitude of life stressors that are progressively
taking a toll on our mental health. The recent COVID-19 has exacerbated both near-term and long-term global impacts of stress-induced
disorders on modern society. Stress-related mental, mood and behavioral disorders include, but are not limited to: treatment resistant
depression (TRD), which is a subgroup of major depressive disorder (MDD); addiction or substance use disorder (SUD); and anxiety, including
generalized anxiety disorder (GAD) and post-traumatic stress disorder (PTSD). These disorders are a leading cause of disability worldwide
and also a major contributor to suicide. Yet, the majority of these patients are inadequately served by current therapeutic options,
which can have limited efficacy, significant side effects and high treatment burden. We believe these stress-related disorders are suitable
indications for the use of Protagenic Therapeutics neuropeptide-based drug candidates.
Major
depressive disorder (MDD) is highly prevalent and disabling. The lifetime prevalence is approximately 12% with a past year prevalence
of 7.8% of adults in the United States in 2019, translating to over 19 million adults each year. The World Health Organization estimates
264 million people globally suffer from depression, which ranks depression as one of the highest causes of disability and mortality in
the world. Stress plays a significant role in this illness and affects as many as half of people diagnosed with depression. MDD is characterized
by multiple symptoms, potentially including depressed mood, loss of interest or pleasure, change in appetite or weight, sleep disturbance,
fatigue or loss of energy, neurocognitive dysfunction, psychomotor agitation or retardation, feelings of worthlessness or excessive guilt,
and suicidal ideation and behavior. MDD is highly treatment resistant, with 45-50% of patients who receive initial treatment for MDD
not achieving long term remission, generally referred to as Treatment Resistant Depression (TRD). Patients suffering with TRD are at
greater risk of hospitalization for their psychiatric illness and are more likely to abuse drugs and alcohol. These patients have a lower
long-term quality of life and are at increased risk of attempting suicide. MDD is also highly recurrent and the estimated rate of recurrence
over two years is over 40%, which rises to 75% after two episodes within five years.
Treatment
guidelines recommend the combination of pharmacotherapy plus psychotherapy, but pharmacotherapy alone and psychotherapy alone are frequently
used. For initial pharmacotherapy with antidepressants, selective serotonin reuptake inhibitors (SSRIs) are recommended. However, several
classes of antidepressants are available, including serotonin-norepinephrine reuptake inhibitors (SNRIs), atypical antidepressants, and
serotonin modulators, with efficacy generally comparable across and within classes. Drug choice is based on multiple factors, including
side effect profile, comorbid illnesses, concurrent medications, patient preference, and cost. Physicians typically cycle through multiple
generics if the initial response is suboptimal or patients experience AEs. Efficacy of therapy is challenged by non-compliance during
the weeks to months required to achieve therapeutic benefit in combination with daily dosing requirements. However, SSRIs can produce
significant quality of life side effects that interfere with medication adherence, including sexual dysfunction, gastrointestinal nausea
and diarrhea, insomnia and weight gain. As a last resort, this disease is currently managed by invasive treatment, primarily electroconvulsive
therapy (ECT). However, the side effects and high cost prevent widespread adoption. Several drugs that have launched in recent years
validate the market for branded agents in this field, in spite of their marginal improvements in safety or efficacy.
Generalized
anxiety disorder (GAD) is one of the most common mental disorders in both community and clinical settings. In the United States, the
estimated lifetime prevalence of GAD is 5.7%, corresponding to 18.9 million individuals, respectively. GAD is characterized by excessive
and persistent worrying that causes significant distress or impairment on most days and is hard to control. Other symptoms can include
apprehensiveness, irritability, increased fatigue and muscular tension. GAD is also associated with increased rates of substance abuse,
posttraumatic stress disorder, and obsessive-compulsive disorder. GAD is a potentially chronic illness, with symptom severity fluctuating
over time. A 12-year study of treated patients showed approximately 60% of patients had symptoms resolve, but around one-half of those
subsequently relapsed.
Pharmacotherapy
for GAD is primarily selective-serotonin reuptake inhibitors (SSRIs) and serotonin-norepinephrine reuptake inhibitors (SNRIs), which
are mildly efficacious. Clinical trials for different SSRIs and SNRIs have shown approximately the same effectiveness, with response
rates of approximately 60- 70% for the drug and 40% for placebo. However, SSRIs can produce significant quality of life side effects
that interfere with medication adherence, including sexual dysfunction, gastrointestinal nausea and diarrhea, insomnia and weight gain.
Thus, choice of agent is often dependent on the patient’s side effect profile for individual drugs. Benzodiazepines are efficacious
and can reduce emotional and somatic symptoms within hours. However, concerns about dependence risk has contributed to a decline in their
use. Buspirone has similar efficacy to benzodiazepines without the risk of dependence but has a time to onset of approximately four weeks.
As the majority of these agents are now available as generics, the worldwide market for GAD therapies was expected to reach $1.8 billion
in 2023 and with an anticipated forecasted value of $4.3 billion by 2033 (https://www.futuremarketinsights.com/reports/generalized-anxiety-disorder-treatment-market).
Post-traumatic
stress disorder (PTSD) is one of the most common psychiatric disorders, with an estimated past-year and lifetime prevalence of 4.7% and
6.1%, translating to 11.5M adults in the US each year. PTSD develops in some patients following exposure to a traumatic event involving
actual or threatened injury to themselves or others, such as war, natural disasters, rape or assault. Symptoms can be severe, chronic
and disabling, which can include intrusive thoughts, nightmares and flashbacks of past traumatic events, avoidance of reminders of trauma,
hypervigilance, and sleep disturbance, all of which lead to significant occupational and social impairment. Currently, PTSD is treated
with psychotherapy and/or pharmacotherapy, with psychotherapy as the recommended primary intervention. Logistics and cost often limit
access to psychotherapy, which results in many patients needing to rely on pharmacotherapy. Guidelines for pharmacotherapy recommend
first-line treatment with sertraline and paroxetine, selective serotonin reuptake inhibitors (SSRI) antidepressants, as these are the
only approved medications for PTSD. However, these only treat one aspect of symptomology and efficacy is limited, with fewer than 30%
of patients experiencing remission. The side effect profile of these agents results in significant rates of discontinuation, particularly
the severe effects such as suicidality and sexual dysfunction. Serotonin-norepinephrine reuptake inhibitors (SNRI) and second-generation
antipsychotics are used off-label in some patients, but efficacy is sporadic, and side-effects can make these undesirable therapeutic
options. As all these options are currently generic, branded commercial sales for PTSD is almost non-existent. Given the size of the
potential addressable population and limited therapeutic options available, a therapy with a superior therapeutic index could achieve
significant market penetration and sales.
Substance
use disorders (SUDs) are highly prevalent. According to the 2020 National Survey on Drug Use and Health (NSDUH), 40.3 million Americans,
aged 12 or older, had a substance use disorder (SUD) in the past year. The majority of SUDs involve alcohol use disorder (14 million),
followed by illicit drug use disorder (8 million). Illicit drug use and nonmedical use of medications alone or in combination with alcohol
are associated with a substantial proportion of emergency department visits in the United States. Pharmacologic options to treat SUDs
typically have limited efficacy, high treatment burden, with suboptimal side-effect profiles, ultimately leading to limited uptake and
high remaining unmet medical need. 40- 60% of patients who receive SUD care experience chronic or relapsing disease course.
The
incidence of opioid use disorder (OUD) and overdose deaths have reached epidemic proportions. Opioid use disorder is typically a chronic,
relapsing illness, associated with significantly increased rates of morbidity and mortality. Opioid use disorder can be related to misuse
of pharmaceutical opioids, heroin, or other opioids such as fentanyl and its analogues. In 2021, 3.3% of those 12 or older in the US
were estimated to have used heroin at some point in their lives, translating 9.2 million people (https://www.samhsa.gov/data/sites/default/files/reports/rpt39443/2021NSDUHFFRRev010323.pdf).,
Worldwide, an estimated 60 million people engaged in non-medical opioid use in 2021 (https://www.unodc.org/res/WDR-2023/WDR23_Exsum_fin_DP.pdf,
https://www.unodc.org/res/wdr2022/MS/WDR22_Booklet_3.pdf ). Correspondingly, overdose deaths involving opioids in the US increased
from an estimated 70,029 in 2020 to 80,816 in 2021, representing a 15% increase.
Unmet
needs are particularly high in OUD. First-line treatment for most patients is medication-assisted treatment, consisting of pharmacotherapy
with an opioid agonist or antagonist in combination with psychotherapy. Pharmacotherapy can include an opioid agonist (methadone or buprenorphine)
and/or an opioid antagonist (e.g. naltrexone). Guidelines for mild opioid use disorder suggest first-line treatment with long-acting
injectable naltrexone (e.g. Vivitrol) administered monthly. Guidelines for moderate to severe opioid use disorder suggest initial use
of buprenorphine (e.g. Suboxone) due to the higher risk of lethal overdose with methadone. Treatment can allow patients to return to
a productive lifestyle but has low success rates and can be extremely burdensome. These therapies require patients remain on maintenance
treatment with an opioid agonist for many years as they are physically dependent upon the medications. A minority may be tapered off
after a few years, with the taper itself taking several months to years.
The
global OUD market was estimated at USD 5.29 billion in 2024 and is projected to reach USD 10.25 billion by 2030, growing at a CAGR of
11.7% from 2025 to 2030.( https://www.grandviewresearch.com/industry-analysis/opioid-use-disorder-market) The treatment burden and side
effect profile of these therapies is substantial. Buprenorphine is classified as a schedule III controlled substance in the United States,
with use limited to certified and specially trained physicians. Side effects include sedation, headache, nausea, constipation, insomnia,
and sweating. Death is possible if buprenorphine is taken in combination with other substances, especially benzodiazepines and alcohol.
Methadone is highly regulated in the United States, where it is classified as a schedule II drug. Only licensed opioid treatment programs
or inpatient hospital units are permitted to dispense. Typical side effects of methadone include constipation, drowsiness, sweating,
peripheral edema, reduced libido, and erectile dysfunction, with some patients experiencing severe adverse effects including cardiac
arrhythmias, hyperalgesia, and overdose.
Alcohol
use disorder (AUD) is extraordinarily prevalent. Approximately 30% of adults in the United States use alcohol in an unhealthy manner
and may need some form of intervention. The 2019 United States National Survey on Drug Use and Health estimated that of Americans over
the age of 12 in the past 30 days, 24% reported binge drinking (five or more drinks on one occasion) and 6% reported heavy drinking (five
or more drinks on each of five or more days). The National Institute on Alcohol Abuse and Alcoholism (NIAAA) reports 28% of US adults
exceed thresholds for risky use alcohol consumption, with 19% exceeding the daily limit and 9% exceeding both the daily and weekly limits.
Rates of diagnosable AUD by DSM-5 criteria from the third National Epidemiologic Survey on Alcohol and Related Conditions showed that
29% had met criteria for an alcohol use disorder in their lifetime and 14% met criteria for a current alcohol use disorder. Worldwide,
the World Health Organization estimates that 5% of adults (>283 million people) had alcohol use disorder within the prior 12 months.
AUD
is responsible for significant mortality and morbidity. Excessive alcohol consumption is the third leading preventable cause of death
in the United States directly causing approximately 85,000 deaths per year, roughly 10% of deaths among working age adults. Nearly 5%
of all deaths worldwide (approximately three million each year) have been attributed to alcohol use with 5% of those specifically due
to AUD. The economic cost of excessive alcohol use in the United States is estimated to be $249 billion in 20101 by the CDC.
Therapeutic unmet needs are significant for AUD and the condition is frequently untreated. Psychosocial interventions can be effective
for treatment, but up to 70% of individuals return to heavy drinking. For patients who met DSM-IV criteria for alcohol abuse, 46% were
in remission, 24% continued to meet abuse criteria, and 30% met criteria for alcohol dependence in the future. For patients who met DSM-IV
criteria for alcohol dependence, 39% were in remission, 15% met criteria for abuse only, and 46% continued to meet dependence criteria.
Several
medications can be used to treat AUD, which can lead to reduced heavy drinking and increased days of abstinence. For most patients treated
with moderate to severe alcohol use disorder, guidelines recommend first-line treatment with naltrexone (e.g., Vivitrol), an opioid antagonist.
Vivitrol is an extended-release injectable naltrexone that allows for once monthly dosing that was approved in 2006. Vivitrol is priced
at $~1,738/month (https://www.drugs.com/price-guide/vivitrol ) and 2023 worldwide sales have grown to $400.4 million (https://investor.alkermes.com/news-releases/news-release-details/alkermes-plc-reports-financial-results-fourth-quarter-and-year-3).
The manufacturer projects Vivitrol net sales to be between $460 million and $480 million for the full year 2026. (https://investor.alkermes.com/static-files/5f9eb70d-a7bd-42a7-8617-42c30f63e5b4),
with patent expiry in 2029 (https://www.fdanews.com/articles/192221-alkermes-grants-amneal-generic-rights-for-vivitrol). Acamprosate
(e.g., Campral) is recommended for those in whom naltrexone is contraindicated, such as those taking opioids or with acute hepatitis.
Campral (Acamprosate) was approved by the FDA in 2004 and reached peak worldwide sales of $87M in 2008. Acamprosate is currently only
available as generic in the U.S but is still sold as branded Campral ex-US. Given the overall prevalence of AUD, these relatively low
sales numbers indicate the vast majority of patients with AUD are not treated with pharmacotherapy.
Teneurin
Carboxy-terminal Associated Peptide (TCAP) as a Therapy
Our
approach to treating stress-related neuropsychiatric and mood disorders is based on research into brain mechanisms conducted over the
last 15 years in the laboratory of the company’s scientific founder, Dr. David Lovejoy, from the University of Toronto. TCAP was
discovered in a genome-wide search for proteins related to corticotropin releasing factor (CRF), an endogenous brain peptide known to
be the central mechanism coupling external stress to psychological, behavioral, and endocrine responses. Dr. Lovejoy and his colleagues
discovered and characterized Teneurin Carboxy-terminal Associated Peptide (TCAP); their further work revealed that TCAP is of ancient
evolutionary origin and plays a central role in maintaining healthy brain structure and function in the face of the negative effects
of stress. Although four TCAP peptides were discovered, only TCAP-1 is expressed independent of a larger Teneurin protein and is the
primary focus of our development (PT00114).1 As of March 2023, these are the most recent data released by the CDC.
TCAP
reverses the impact of stress on the Hypothalamic-Pituitary-Adrenal (HPA) axis, the endocrine and behavioral control system which connects
environmental stress to behavioral responses via brain levels of Corticotropin Releasing Factor (CRF) and blood levels of the stress
hormone cortisol. Stress elevates CRF, which in turn elevates cortisol levels. Studies have demonstrated that TCAP counteracts the effects
of either endogenous or pharmacologically-administered CRF via a non-CRF receptor pathway in the brain, that is believed to be evolved
over millions of years as a homeostasis-related pathway. There has been strong interest in the pharmaceutical industry for decades to
develop drug candidates that block the negative effects of CRF by attempting to directly antagonize the CRF receptor, however clinical
results to date with prior CRF receptor antagonists have been disappointing. Because TCAP counteracts the action of CRF by activating
separate receptors instead of directly blocking CRF receptors, we believe it is a superior approach to alleviating stress-related neuropsychiatric
disorders; TCAP-1 acts by binding to Latrophilin-1 and Latrophilin-3, G-protein-coupled receptors (GPCRs) expressed on nerve cells in
the extended amygdala, the region of the brain involved in memory, emotion, and fear. TCAP acts through these receptors to block the
effects of CRF and potentially other stress mediators such as Arginine-Vasopressin (AVP). Due to differences in the mechanism of action,
TCAP is expected to be efficacious in clinical settings in which earlier studies with CRF receptor antagonists were not. We believe this
novel mechanism of action can provide an attractive therapeutic profile for patients who are not fully responsive to currently available
therapies.
Two
key effects of TCAP may contribute to its pharmacological activity in reversing or preventing stress-induced behavioral distortions.
In settings of stress and depression, the activity of specific neural circuits can be diminished compared to the levels of activity observed
in healthy brain tissue. After administration, TCAP crosses the blood brain barrier and concentrates in regions of the brain associated
with the regulation of mood disorders. Administered TCAP can lead to increases in activity in some of the neuronal circuitry implicated
in depression, demonstrated by increases in the utilization of glucose, a surrogate for cell activity. The fact that the pharmacological
effects of TCAP persist after the drug has been cleared aligns with findings that TCAP applied to neurons in culture stabilizes dendritic
spines, structures that sprout from the surface of neurons and can form synapses with other neurons to create functional circuitry. Stress
and the associated rise in CRF have been reported to cause loss of synapses in animal models. The fact that the pharmacological actions
of TCAP persist for weeks are consistent with its producing lasting changes in neuronal function by changing patterns of gene expression
and thus creating relatively stable changes in neuronal function. In a number of these models, a single subcutaneous dose of TCAP will
prevent the behavioral consequences of stress encountered three weeks later. This is especially notable since the administered dose of
TCAP is eliminated from the plasma within hours of administration.
Our
lead compound is a 41-residue peptide synthetic TCAP-1, which we have designated PT00114. In addition, we have a portfolio of earlier
stage neuropeptides targeting the TCAP pathway that are in preclinical evaluation. The initial dosage form is intended as a subcutaneous
injection but is also amenable to other routes of administration including sublingually or intra-nasally. This affords a range of target
product profiles and opportunities for lifecycle management.
While
many of the initial studies of TCAP had been generated in the lab of Dr. David Lovejoy, we have designed several preclinical studies
over the last four years to validate the safety and efficacy of PT00114, for which we hired multiple independent contract research organizations
(CROs) to conduct these studies. In preclinical rodent models, administration of PT00114 results in reproducible, dose-dependent reversal
of a range of stress-induced behavioral distortions, including depression, stress-exacerbated anxiety, excessive startle, drug seeking,
and opioid withdrawal. Stress-induced anxiety was measured by an elevated plus maze, an open field with stressed animals, and acoustic
startle in CRF-treated animals. Depression was measured by tail suspension and forced swim. Stress-induced changes in tube-restrained
rodents were used as a well-validated model for sub-acute stress. Notably, PT00114 was found to be pharmacologically active in stressed
rodents but relatively inactive in non-stressed rodents.
In
studies conducted with Charles River Laboratories in Kuopio, Finland, PT00114 showed beneficial effects in Chronic Social Defeat, a murine
model of stress-induced behavioral dysfunction that has features of depression. In this model, male mice are placed in cages along with
older, dominant male mice. This results in progressively more “resigned” behaviors in the mice experiencing this domineering
exposure. This results in a series of behaviors in the cowed mice, termed Chronic Social Defeat. PT00114 reverses many of the component
behaviors typically measured in this model, suggesting that it reverses the negative effects of stress in the “defeated”
animals.
PT00114
demonstrated efficacy in a variable chronic stress model that has features of anxiety and PTSD. In an open field assessment, mice or
rats are stressed by being placed in a tube for several hours, then placed in an open box where their movement is observed for 20 minutes.
Control animals exhibit stress response behavior by not moving around much and staying near the edges of the box. Animal receiving PT00114
at the end of the stress condition moved around the open field. Animals receiving multiple administrations of a control small molecule
CRH antagonist did not venture into the open field, indicating they were stressed. These results are also reflected in blood cortisol
levels, where control mice had increased cortisol levels, which were reduced by treatment with PT00114, but not by the small molecule
CRF antagonist.
Stress
plays a central role in a broad range of addictions, including alcohol and opioids. The ability of PT00114 to blunt excessive stress
may be able to provide non-dependence forming treatment of addictions. A series of studies conducted at Porsolt Laboratories in Lavel,
France support the potential utility of PT00114 as a treatment to help people defeat opioid addiction. In rats addicted to opioids, administering
CRF models environmental stress, causing them to frantically seek opioids. PT00114 reduces opioid seeking behavior in response to CRF
administration. Further studies conducted by Porsolt following EMEA guidelines demonstrated that on its own, PT00114 was not addictive
and rats did not develop dependence on the peptide after chronic administration.
PT00114
has also demonstrated pre-clinical efficacy in a murine model of Naloxone-precipitated opioid withdrawal (Saelens test).). In this test,
mice are addicted to opioids and the animals are then administered the opioid antagonist naloxone, which immediately blocks opioid action
and triggers profound stress and opioid withdrawal. This manifests as a behavioral stress response with the mice jumping up to six inches
into the air over 70 times in a 20-minute observation period. Administering PT00114 at three different time points within the experiment
– before the naloxone-driven withdrawal, before the period of opioid addiction, or up to three weeks before the induced withdrawal
– results in a reproducible, dose-dependent restoration to non-stressed behavior and reduced jumping. Significantly, this is not
accompanied by any evidence of sedation or reduced activity. This effect appears independent of the opioid used as PT00114 ameliorates
this withdrawal-triggered jumping stress behavior in mice experiencing withdrawal from both fentanyl and morphine.
Preclinical
Safety and Toxicology
Preclinical
safety data for PT00114 demonstrates a robust profile in both rats and non-human primates. As the mechanism is unique and TCAP is a part
of healthy brain signaling, we believe PT00114 will have a differentiated side effect profile relative to existing antidepressant and
antipsychotic agents. A key aspect of the TCAP mechanism is that it does not completely block the perception of and responses to stress;
it rather protects against stress overload. Some perception of environmental stress and a proportionate response to that stress is adaptive
behavior and it is not desirable to completely block stress responses. Unlike benzodiazepines that can cause sedation and are prone to
dependence, TCAP prevents the maladaptive response to environmental stress without sedation and without developing dependence.
We
have completed non-GLP Dose-Range-Finding (DRF) toxicology studies of PT00114 administered subcutaneously daily for five days in rats
and non-human primates. The doses tested were substantially above the anticipated clinical doses and were well tolerated and safe, with
no dose-limiting toxicities observed at doses at least 50-fold higher than anticipated clinical exposures. No major changes in hematology
or clinical chemistries were seen, including prolactin levels or testosterone levels, changes in which may impact libido. Distinct from
SSRI’s, there was no impact on ambulation, sedation or weight gain. Importantly, further studies conducted following EMEA guidelines,
demonstrated that on its own PT00114 was not addictive and rats did not develop dependence to the peptide after chronic administration.
The in life 28-day GLP toxicology testing in both the rats and non-human primate have been completed. There have been no changes in clinical
chemistries or pathology that would prompt a stop in the program and the therapeutic margin is large. The final audited reports are currently
being compiled.
Process
Development and Manufacturing
We
currently do not own any manufacturing facilities and rely on 3rd party contract manufacturers for synthesis of PT00114. We
manufactured sufficient PT00114 synthesized under the Good Manufacturing Practices (cGMP) conditions for our Ph1 study that was completed
in 2025. PT00114 is highly soluble and has shown excellent preliminary stability in several storage conditions, with the material being
stable for at least 12 months.
The
initial dosage form developed will be a subcutaneous injection. Because PT00114 is also amenable to other routes of administration including
sublingually or intra-nasally, we will be doing preliminary process work to develop these formulations, and anticipate using one of these
dosage forms in later stage clinical studies.
Technology
License Agreement
On
July 31, 2005, the Company had entered into a Technology License Agreement (“License Agreement”) with the University of Toronto
(the “University” or “UT”) pursuant to which the University agreed to license to the Company patent rights and
other intellectual property, among other things (the “Technologies”). The Technology License Agreement was amended on February
18, 2015. Unless earlier terminated, the term of this License Agreement shall terminate on the expiration or invalidity of the last issued
Patent in the License Agreement
Pursuant
to the License Agreement and its amendment, the Company obtained an exclusive worldwide license to make, have made, use, sell and import
products based upon the Technologies, or to sublicense the Technologies in accordance with the terms of the License Agreement and amendment.
In consideration, the Company agreed to pay the University a royalty payment of 2.5% of net sales of any product based on the Technologies.
If the Company elects to sublicense any rights under the License Agreement and amendment, the Company agrees to pay to the University
10% of any up-front sub-license fees for any sub-licenses that occurred on or after September 9, 2006, and, on behalf of the sub-licensee,
2.5% of net sales by the sub-licensee of all products based on the Technologies. The Company had no sales revenue for the year ended
March 31, 2026 and therefore was not subject to paying any royalties.
In
the event the Company fails to provide the University with semi-annual reports on the progress or fails to continue to make reasonable
commercial efforts towards obtaining regulatory approval for products based on the Technologies, the University may convert our exclusive
license into a non-exclusive arrangement. Interest on any amounts owed under the License Agreement and amendment will be at 3% per annum.
All intellectual property rights resulting from the Technologies or improvements thereon will remain the property of the other inventors
and/or Dr. David Lovejoy at the University, and/or the University, as the case may be. The Company has agreed to pay all out-of-pocket
filing, prosecution, and maintenance expenses in connection with any patents relating to the Technologies. In the case of infringement
upon any patents relating to the Technologies, the Company may elect, at its own expense, to bring a cause of action asserting such infringement.
In such a case, after deducting any legal expenses the Company may incur, any settlement proceeds will be subject to the 2.5% royalty
payment owed to the University under the License Agreement and amendment.
The
patent applications were made in the name of Dr. Lovejoy and other inventors, but the Company’s exclusive, worldwide rights to
such patent applications are included in the License Agreement and its amendment with the University. The Company maintains exclusive
licensing agreements and it currently controls the six intellectual patent properties.
Sales
and Marketing
We
currently have no sales, marketing, or distribution capabilities. To commercially market PT00114 and any product candidates we develop
in the future, we would either need to develop an internal sales team and marketing department or collaborate with third parties who
have sales and marketing capabilities. As we commenced clinical trials in the third quarter of 2023, we expect to seek a Market Access
expert or consultancy to better understand clinician and payor dynamics in the therapeutic areas we are focused on, so that, as we begin
later stage studies, we are working on a deeper commercial assessment in parallel.
Competition
The
pharmaceutical and biotechnology industries are highly competitive and characterized by rapidly evolving technology and intense research
and development efforts. We expect to compete with companies, including major international pharmaceutical companies and other institutions
that have substantially greater financial, research and development, marketing and sales capabilities and have substantially greater
experience in undertaking preclinical and clinical testing of products, obtaining regulatory approvals and marketing and selling biopharmaceutical
products. We will face competition based on, among other things, product efficacy and safety, the timing and scope of regulatory approvals,
product ease of use and price.
Despite
a large patient population and current treatments that leave much room for improvement, industry-wide developmental pipelines are sparse
and few novel candidates are in development. The serendipitous discoveries of current drug classes, side effects, and lack of efficacy
have led to shrinkage or extinction of many pharma or small biotech neuroscience research programs.
Set
forth below is a discussion of competitive factors for each of the current drug classes commercially available for TRD, and the competitive
advantages that we believe PT00114 may offer. The basis for our beliefs regarding the competitive advantages that PT00114 may offer over
its competitors is our own pre-clinical animal studies. We acknowledge that these beliefs and conclusions about competitive advantages
must be regarded as theoretical until such time as we have human clinical data that supports and re-affirms the results seen in pre-clinical
animal studies.
Opioid
receptor modulators
Opioid
receptor modulators have the potential to be therapeutic drugs for TRD but have a high likelihood of abuse and thus regulatory restrictions.
We believe that our competitive advantage is that PT00114 targets a different receptor system, therefore it is not likely to have a clinical
overlap with opioid receptor modulators.
Atypical
Antipsychotics with antidepressant effects (dopamine receptor modulators)
Brexpiprazole
(Rexulti from Otsuka) is a dopamine (D2 receptor) partial stimulator (agonist) approved as an oral adjunctive TRD therapy. Its side effects
include suicidal risk, weight gain, and restlessness. Cariprazine (Vraylar from AbbVie) is an oral dopamine D2 and D3 receptor antagonist
approved for schizophrenia and bipolar disorder in development for TRD. The most common side effects reported were extrapyramidal symptoms,
the urge to move (akathisia), indigestion (dyspepsia), vomiting, drowsiness (somnolence), and restlessness. We believe that our competitive
advantage is that PT00114, due to its low toxicity profile, will be clinically preferable to these antipsychotic drugs.
Ketamine
and Esketamine
Ketamine
and Esketamine (Spravato nasal spray from Johnson & Johnson) the S(+) enantiomer of the drug ketamine act primarily as a non-competitive
NMDA receptor antagonist but is also a dopamine reuptake inhibitor. Although ketamine is used off-label and Esketamine was recently approved
for TRD, limitations and concerns around use limit uptake in a broader population. We believe that our competitive advantage is that
the toxicity profile is likely to be less favorable when compared with PT00114.
GABA
receptor modulators
GABA
receptors, when bound by inhibitory neurotransmitters found throughout the brain, act as a brake on nerve activity. Sage Therapeutics
is developing multiple compounds that target this mechanism and more candidates are expected to come from this therapeutic class that
may present a competitive challenge for PT00114.
NMDA
receptor modulators
The
N-methyl-D-aspartate (or NMDA) receptor is a molecule that appears on the surface of neurons. When “activated” by a drug
that binds with it, the NMDA receptor is a potential natural way to counteract TRD. More candidates are expected to come from this therapeutic
class that may present a competitive challenge for PT00114.
PT00114’s
Competitive Advantages
Our
preclinical data and the corroborated mechanism of action of PT00114 indicates its advantages as compared to current approved therapies:
● PT00114 naturally crosses the blood brain barrier;
Intellectual
Property
We
believe that patents, trademarks, copyrights and other proprietary rights are important to our business. We also rely on trade secrets,
know-how, continuing technological innovations and licensing opportunities to develop and maintain our competitive position. We seek
to protect our intellectual property rights by a variety of means, including obtaining patents, maintaining trade secrets and proprietary
know-how, and technological innovation to operate without infringing on the proprietary rights of others and to prevent others from infringing
on our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, actively seeking patent
protection in the United States and foreign countries.
As
of March 31, 2026, we have five patents issued by the Governments of the United States, Canada, Great Britian, Hong Kong, and European
Union on our original platform technology, all of which have expired. The patent applications were made in the name of Dr. David A. Lovejoy
and inventors, but the Company’s exclusive, worldwide rights to such patent applications are included in the License Agreement
with UT. We have five further patent families which the Company has rights in or owns, as noted in the table below and include: five
issued/registered patents in Canada, U.S., GB, EP, and HK, six pending patent applications in Canada, U.S., EP and HK and one allowed
patent application in Canada. Our success will depend in part on our ability to maintain our proprietary position through effective patent
claims and their enforcement against our competitors. Although we believe our patent applications provide a competitive advantage, the
patent positions of companies like ours are generally uncertain and involve complex legal and factual questions. We do not know whether
any of our patent applications will result in the issuance of any patents. Those patents that may be issued in the future or those acquired
by us may be challenged, invalidated or circumvented, and the rights granted under any issued patent may not provide us with proprietary
protection or competitive advantages against competitors with similar technology. In particular, we do not know if competitors will be
able to design variations on our treatment methods to circumvent our current and anticipated patent claims. Furthermore, competitors
may independently develop similar technologies or duplicate any technology developed by us. Because of the extensive time required for
the development, testing and regulatory review of a potential product, it is possible that, before any of our products can be commercialized
or marketed, any related patent claim may expire or remain in force for only a short period following commercialization, thereby reducing
the advantage of the patent.
We
also rely upon trade secrets, confidentiality agreements, proprietary know-how and continuing technological innovation to remain competitive,
especially where we do not believe patent protection is appropriate or obtainable. We continue to seek ways to protect our proprietary
technology and trade secrets, including entering into confidentiality or license agreements with our employees and consultants, and controlling
access to and distribution of our technologies and other proprietary information. While we use these and other reasonable security measures
to protect our trade secrets, our employees or consultants may unintentionally or willfully disclose our proprietary information to competitors.
Our
commercial success will depend in part on our ability to operate without infringing upon the patents and proprietary rights of third
parties. It is uncertain whether the issuance of any third-party patents would require us to alter our products or technology, obtain
licenses or cease certain activities. Our failure to obtain a license to technology that we may require to discover, develop or commercialize
our future products may have a material adverse impact on us. One or more third-party patents or patent applications may conflict with
patent applications to which we have rights. Any such conflict may substantially reduce the coverage of any rights that may issue from
the patent applications to which we have rights. If third parties prepare and file patent applications in the United States that also
claim technology to which we have rights, we may have to participate in interference proceedings in the USPTO to determine priority of
invention.
We
may collaborate in the future with other entities on research, development, and commercialization activities. Disputes may arise about
inventorship and corresponding rights in know-how and inventions resulting from the joint creation or use of intellectual property by
us and our subsidiaries, collaborators, partners, licensors and consultants. As a result, we may not be able to maintain our proprietary
position.
As
of March 31, 2026, we own or have rights in the following intellectual property:
COUNTRY FILED SERIAL# ISSUED PATENT# STATUS
COMPOSITIONS, METHODS AND USES FOR ENHANCING MUSCLE FUNCTION*
COUNTRY FILED SERIAL# ISSUED PATENT# STATUS
COMPOSITIONS, METHODS AND USES FOR TREATING POST-TRAUMATIC STRESS DISORDER *
COUNTRY FILED SERIAL# ISSUED PATENT# STATUS
COUNTRY FILED SERIAL# ISSUED PATENT# STATUS
COUNTRY FILED SERIAL# ISSUED PATENT# STATUS
In
the future, we may file additional patent applications based on proprietary formulations, indications, and novel compounds in the TCAP
family.
Properties
The
Company does not currently own any real property. Our principal offices are located at 149 Fifth Avenue, Suite 500, New York, New York
10010, in a conference room of Agenus, Inc. We utilize our principal office for quarterly board meetings and our annual shareholder meeting
at no cost.
Legal
Proceedings
From
time to time, we may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions,
administrative actions, investigations or claims are pending against us or involve us that, in the opinion of our management, could reasonably
be expected to have a material adverse effect on our business and financial condition.
Subsidiary
PTI
Canada was incorporated in 2006 in the Province on Ontario, Canada. PTI Canada is a wholly-owned subsidiary of Protagenic. It provides
operational support and assistance for the implementation of corporate and operational activities conducted in Canada. It also oversees
and supports research and development activities conducted under auspices of UTPTI Canada also benefits through tax incentive programs
provided by the governments of Canada and the Province of Ontario. We did not earn any Canadian research and development tax credits
for the years ended March 31, 2026 and 2025, respectively.
Employees
We
currently have two full-time and one part-time employees. We also engage consultants and temporary employees from time to time to provide
services that relate to our research and development activities as well as for general administrative and accounting services. We believe
that our current personnel are capable of meeting our operating requirements in the near term. We expect that as our business grows we