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What changed in Annovis Bio, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Annovis Bio, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+498 added−476 removedSource: 10-K (2025-03-21) vs 10-K (2024-03-29)

Top changes in Annovis Bio, Inc.'s 2024 10-K

498 paragraphs added · 476 removed · 371 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

151 edited+51 added−69 removed102 unchanged
Biggest changeIn addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, impose certain requirements relating to the privacy, security and transmission of individually identifiable health information; and ● the federal Physician Payment Sunshine Act requirements, under the Patient Protection and Affordable Care Act, which require manufacturers of certain drugs and biologics to track and report to CMS payments and other transfers of value they make to U.S. physicians and teaching hospitals as well as physician ownership and investment interests in the manufacturer.
Biggest changeIn addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, impose certain requirements relating to the privacy, security and transmission of individually identifiable health information; and ● the federal Physician Payment Sunshine Act requirements, under the Patient Protection and Affordable Care Act, which require manufacturers of certain drugs and biologics to track and report to CMS payments and other transfers of value they make to U.S. physicians and teaching hospitals as well as physician ownership and investment interests in the manufacturer. 26 Table of Contents Regulation Outside of 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.
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.
The inclusion criteria for the AD portion of the AD/PD Trials were MMSE 18-28 and age 45 and older. For the PD portion of the AD/PD Trials, inclusion criteria were MMSE 18-30, age 45 and older and Hoehn & Yahr 1, 2 or 3.
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 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 by UPDRS.
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.
Stroke Mice Model Buntanetap was also 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.
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.
Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of our lead product candidate, buntanetap, or any other candidate for which we may seek regulatory approval.
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.
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 ultimately reduce the levels of APP, tau and αSYN, which play a central role in the pathogenesis of both AD and PD.
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 were randomly assigned to receive either 7.5, 15 or 30 mg of Buntanetap or placebo once per day.
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 were excluded from participating. Patients were randomly assigned to receive either 7.5, 15 or 30 mg of buntanetap or placebo, once per day.
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.
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 periods when PD motor and/or non-motor symptoms occur between medication doses.
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.
TBI Study 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.
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.
Parkinson’s Disease Market PD is also a progressive neurodegenerative disorder with both 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.
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.
The second part of the AD/PD Trials was a dose response analysis performed 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.
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.
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 underlying disease condition improved following treatment.
The term “remuneration” has been broadly interpreted to include anything of value; 31 Table of Contents ● federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent; ● provisions of the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services.
The term “remuneration” has been broadly interpreted to include anything of value; ● federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, which prohibits anyone from, among other things, knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services that are false or fraudulent; ● provisions of the U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services.
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”).
To market our future products in the European Economic Area (“EEA”), which is comprised of the 27 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”).
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.
When that communication is compromised, 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.
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.
Furthermore, the treated group’s improvement from baseline was 3.1 points, or 8.8%, better than the placebo group’s improvement from baseline. 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.
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.
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 looked at the incidence of mixed pathologies diagnosed community-dwelling older persons.
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.
By improving brain function, our goal is to treat memory loss and dementia associated with AD, as well as body and brain function issues associated with PD.
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 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 were excluded from the trial. Patients were randomly assigned to receive either 10 or 20 mg of buntanetap or placebo, once per day.
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 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 took, whether for PD, for AD or for other conditions, as long as they were stable on such medication.
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.
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. Ms. Gaines holds a B.A. in Psychology from Millersville University of Pennsylvania.
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.
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, rats were subjected to either fluid percussion injury (“FPI”) or sham operation to one side of the brain.
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 a more complete picture of the study and treatment results.
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 were intended to provide a more complete picture of the study and treatment results.
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.
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 more than 10 million people worldwide, of which nearly one million are in the U.S.
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.
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 for public dissemination on www.clinicaltrials.gov.
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.
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 pending patent applications were invented and filed by Annovis 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 prevention and treatment of disease states due to metal dis-homeostasis such as AD or PD as well as other acute or chronic neurodegenerative diseases; ● a method of treating viral and bacterial infections of the brain, including COVID-19; ● a method of inhibiting cancer metastasis; ● combinations of Buntanetap with some drugs and uses of these combinations to treat neurodegenerative diseases; ● a method of treating neuropsychiatric indications; and ● a new composition of matter of Posiphen, form B or ANVS402.
The pending patent applications invented and filed by Annovis 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 prevention and treatment of disease states due to metal dis-homeostasis such as AD or PD as well as other acute or chronic neurodegenerative diseases; ● a method of treating viral and bacterial infections of the brain, including COVID-19; ● a method of inhibiting cancer metastasis; ● combinations of buntanetap with some drugs and uses of these combinations to treat neurodegenerative diseases; ● a method of treating neuropsychiatric indications; ● a new composition of matter of Posiphen, Form B or ANVS402; and ● new methods for making buntanetap and Posiphen Form B.
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.
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, manufacturing, marketing and distribution of drugs, such as those we are developing.
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls. ● Fines, warning letters or holds on post-approval clinical trials. 30 Table of Contents ● Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals. ● Product seizure or detention, or refusal to permit the import or export of products. ● Injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls. ● Fines, warning letters or holds on post-approval clinical trials. ● Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals. ● Product seizure or detention, or refusal to permit the import or export of products. ● Injunctions or the imposition of civil or criminal penalties.
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.
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.
Progress across these newer technology platforms has been slow. 24 Table of Contents 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.
Progress across these newer technology platforms has been slow. 18 Table of Contents Intellectual Property Overview 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.
The first divisional of this application was approved in December 2022, it covers the prevention of neurodegenerative diseases. 25 Table of Contents The fourth patent application family relates to 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.
The first divisional of this application was approved in December 2022, it covers the prevention of neurodegenerative diseases. The fourth patent application family relates to 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.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations. ● Submission to the FDA of an IND, which must become effective before human clinical trials may begin. ● Approval by an independent institutional review board (“IRB”), at each clinical site before each trial may be initiated. ● Performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”), requirements to establish the safety and efficacy of the proposed drug product for each indication. ● Submission to the FDA of an NDA. ● Satisfactory completion of an FDA advisory committee review, if applicable. ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity. ● Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data. 27 Table of Contents ● Payment of user fees and securing FDA approval of the NDA. ● Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and the potential requirement to conduct post-approval studies.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● Completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations. ● Submission to the FDA of an Investigational New Drug application (“IND”), which must become effective before human clinical trials may begin. ● Approval by an independent institutional review board (“IRB”), at each clinical site before each trial may be initiated. ● Performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”), requirements to establish the safety and efficacy of the proposed drug product for each indication. ● Submission to the FDA of an NDA. ● Satisfactory completion of an FDA advisory committee review, if applicable. ● Satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity. ● Satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data. ● Payment of user fees and securing FDA approval of the NDA. ● Compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and the potential requirement to conduct post-approval studies.
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. 22 Table of Contents Alzheimer’s Disease Market AD is a neurodegenerative disorder with cognitive, functional, and behavioral alterations.
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 both AD and PD patients. 16 Table of Contents Alzheimer’s Disease Market AD is a neurodegenerative disorder with cognitive, functional, and behavioral alterations.
The tenth patent application family relates to the new Form B of Posiphen (ANVS402); it demonstrates that it can be used instead of Buntanetap, including in the foregoing uses of Buntanetap of the Company’s patent portfolio.
The thirteenth patent application family relates to the new Form B of Posiphen (ANVS402); it demonstrates that it can be used instead of buntanetap, including in the foregoing uses of buntanetap of the Company’s patent portfolio.
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.
Clinical trials are conducted under protocols detailing, among other 22 Table of Contents 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.
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.
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, 25 Table of Contents Medicaid, TRICARE and the Veterans Administration, as well as managed care organizations and private health insurers.
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.
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. Company Leadership Maria L. Maccecchini, our Founder, President and CEO, founded Annovis in May 2008 to develop improved therapeutics for neurodegeneration.
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.
Item 1. Business. Our Company We are a late-stage clinical 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.
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.
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 a patient can effectively be treated.
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.
As a condition of approval, the FDA may require a 23 Table of Contents 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.
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.
Nearly eightfold as many people have preclinical AD as have symptomatic AD and are at risk for progressing to full manifestation of the disease. Disease modifying treatments (“DMTs“) that will prevent or delay the onset or slow the progression of AD are urgently needed.
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.
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 some of the main causes of neurodegeneration. High levels of neurotoxic proteins lead to reduced axonal transport, which is responsible for the communication between and within nerve cells.
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 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 Trial”).
Solid forms of chemical compounds can exist in different crystalline structures. One crystalline structure of Posiphen is Buntanetap. Annovis, through its research efforts, invented a new crystalline form of Posiphen, known as Form B (ANVS402). Form B (ANVS402) has demonstrated certain improvements over Buntanetap and was filed as a new composition of matter.
Solid forms of chemical compounds can exist in different crystalline structures. One crystalline structure of Posiphen is buntanetap. Annovis, through its research efforts, invented a new crystalline form of Posiphen, known as Form B (“ANVS402”). Form B, or ANVS402, has demonstrated certain improvements over buntanetap and was filed as a new composition of matter patent application.
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.
She was previously the Founder and CEO of Symphony Pharmaceuticals/Annovis, a biotech company that was sold to Transgenomic in 2001. She was previously the General Manager of Bachem Bioscience, the U.S. subsidiary of Bachem AG, Switzerland. Dr. Maccecchini completed one postdoc at Caltech and another at the Roche Institute of Immunology.
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. * P 17 Table of Contents 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.
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. 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.
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 secondary endpoints were 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 a site rater.
The first patent application family we filed, which would be expected to expire in 2031, before any patent term adjustments or extensions, 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, frontotemporal dementia, Lewy bodies disease, and chronic traumatic encephalopathy, based on our preclinical research.
The first patent application family we filed, which would be expected to expire in 2031, before any patent term adjustments or extensions, covers the use of buntanetap in the treatment of AD, PD and other neurodegenerative disorders such as Huntington’s disease, prion diseases, amyotrophic lateral sclerosis, tauopathies, frontotemporal dementia, Lewy bodies disease, and chronic traumatic encephalopathy, based on our preclinical research.
The market exclusivity period prevents a successful generic or biosimilar applicant from 32 Table of Contents commercializing its product in the EU until 10 years have elapsed from the initial authorization of the reference product 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 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 secondary endpoints were 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.
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.
These agencies and other federal, state and local entities regulate, among other things, the research and development, testing, manufacturing, 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. 21 Table of Contents U.S.
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.
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.
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.
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. This is visually illustrated below.
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. 23 Table of Contents Approaches and Competition Alzheimer’s Disease Approaches Drug development for AD has proven to be very difficult.
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. Therapeutic Approaches and Competition Alzheimer’s Disease Approaches Drug development for AD has historically proven to be very difficult.
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.
In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics (“PK”) of buntanetap, our AD/PD Trials also met exploratory endpoints of measures of biomarkers and improvements in cognition in AD patients, as well as function in PD patients.
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.
Thus, ANVS405 demonstrated the ability to protect 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.
The SEC maintains an internet website, www.sec.gov, that contains reports, 33 Table of Contents proxy, and information statements, and other information regarding issuers, including us, that file electronically with the SEC.
The SEC maintains an internet website, www.sec.gov, that contains reports, proxy, and information statements, and other information regarding issuers, including us, that file electronically with the SEC.
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 a more complete picture of the study and treatment results.
The FDA requested the inclusion of two co-primary endpoints to have an objective primary endpoint (ADAS-Cog, cognition) and a subjective primary endpoint (ADCS-CGIC, activities of daily living). Together, these co-primary endpoints were intended to provide a more complete picture of the study and treatment results.
The eighth patent application family relates to treatment of neurodegenerative diseases via co-administration of Buntanetap or related compounds and an additional therapeutic agent. In January 2024, we filed a provisional U.S. patent application directed to treatment of neurodegenerative diseases via administration of this combination.
The twelfth patent application family relates to treatment of neurodegenerative diseases and other diseases via co-administration of buntanetap or related compounds and an additional therapeutic agent. In February 2025, we filed a provisional U.S. Patent application directed to treatment of neurodegenerative diseases and other diseases via administration of this combination.
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 As of February 29, 2024, we had six full-time employees. We also utilize the services of ten part-time employees or consultants.
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 As of February 28, 2025, we had eight full-time employees. We also utilize the services of seven key part-time employees or consultants.
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.
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. Annovis would like to petition the FDA to classify buntanetap as a breakthrough therapy in the future.
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.
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.
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.
Buntanetap was observed to specifically increase the affinity between this special region and the RNA binding protein, preventing the mRNA from being released and translated. The process outlined above leads to lower translation, lower levels of neurotoxic proteins, and less toxicity in the brain.
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 participating in the trial were age 55-85, had a study partner, were of non-child-bearing age or agreed to effective contraception, and had no evidence of suicidal ideation. Patients participating in the trial were permitted to remain on any drugs they regularly took, whether for AD or for other conditions, as long as they were stable on such medication.
Patients visited the clinic for the first-time dosing in clinic, followed by an at home dosing period of 12 weeks. The study plan incorporated an interim analysis at six-weeks, the results of which were disclosed on October 23,2023. As for the PD study based on the outcome of the interim analysis, we proceeded with the study as planned.
Patients visited the clinic for the first-time dosing in clinic, followed by an at home dosing period of 12 weeks. The study plan incorporated an interim analysis at six-weeks, the results of which were disclosed on October 23,2023.
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.
At the termination of the treatment, all of the rats were first tested for their performance in a water 15 Table of Contents maze, and then they were sacrificed for brain staining of living cells and determination of microglia activation. 10 mg/kg ANVS405 was shown to improve memory and learning as measured by water maze performance.
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.
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.
Annovis has filed ten (10) families of patents and patent applications to prolong the patent life of Buntanetap.
Annovis has filed fourteen (14) families of patents and patent applications to prolong the patent life of buntanetap.
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.
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.
Posiphen Form B may be the compound of choice in current uses of Buntanetap, because it may have advantageous properties such as better stability and higher purity. The Company has filed with the USPTO two patent applications as to Posiphen Form B. The Company expects to further file patent applications as to Posiphen Form B and uses thereof.
Posiphen Form B may be the compound of choice in current uses of buntanetap, because it may have advantageous properties such as better stability and higher purity. In 2023, the Company filed with the USPTO two provisional patent applications as to Posiphen Form B. In 2024, the Company filed an International (PCT) as to Posiphen Form B and uses thereof.
In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with a MMSE score between 14 and 24.
In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with a MMSE score between 14 and 24. Our Phase 3 PD Study and Phase 2/3 AD Study each had built in interim analyses.
As of February 9, 2024, our patent portfolio comprised 36 total issued patents plus 17 pending patent applications in various jurisdictions. The patents have expiration dates between 2031 and 2045.
As of February 9, 2024, our patent portfolio comprised 39 total issued patents plus 18 pending patent applications in various jurisdictions. The patents, granted and if granted based on the pending applications, have expiration dates between 2031 and 2045.
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.
Drugs which have been approved for the treatment of AD include cholinesterase inhibitors (tacrine, donepezil, rivastigmine, galantamine),an N-methyl-D-aspartate receptor antagonist (memantine) and more recently, monoclonal antibody treatments (donanemab, lecanemab). Many failures in AD drug development have occurred, with both small molecules and immunotherapies failing to show a dramatic drug/placebo difference or having unacceptable toxicity.
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. 20 Table of Contents 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.
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. 14 Table of Contents The transfer of information in a nerve cell is called axonal transport.
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.
The FDA reviews an NDA to determine, among other things, whether the drug is safe and 24 Table of Contents 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.
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. 26 Table of Contents Manufacturing Buntanetap is a small molecule that is manufactured using a patented process.
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 disclosed the results of the interim analysis for our Phase 2/3 AD Study on October 23, 2023, and as for the PD study based on the outcome of the interim analysis we proceeded with the study as planned. The Phase 2/3 AD study was completed on February 13, 2024.
With respect to the Phase 2/3 AD Study, we disclosed the results of the interim analysis on October 23, 2023, and similar to our PD study, based on the outcome of the interim analysis, we proceeded with the study as planned.
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.
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 in cognitively normal people or those who have genetic profiles that place them at high(er) risk for developing AD. An increasing number of agents are also directed at tau-related targets.
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.
The combined treatment also significantly improved cognitive function more than the single treatment with PFT-α. Potential Markets for our Lead Drug Candidate 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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; ● the Federal Food, Drug and Cosmetic Act (“FDCA”), which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; ● the U.S. federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics, and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the government information related to certain payments and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and ● analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 60 Table of Contents Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available under such laws, it is possible that some of our business activities, including our consulting agreements and other relationships with physicians and other healthcare providers, some of whom receive stock or stock options as compensation for their services, could be subject to challenge under one or more of such laws.
Biggest changeHITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; ● the Federal Food, Drug and Cosmetic Act (“FDCA”), which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; ● the U.S. federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics, and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the government information related to certain payments and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members; and ● analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of marketing exclusivity for our product candidates, our business may be materially harmed. Patents have a limited lifespan.
If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and under similar legislation in foreign countries, thereby potentially extending the term of marketing exclusivity for our product candidates, our business may be materially harmed. Patents have a limited lifespan.
Collaborations involving Buntanetap or any future product candidates would pose significant risks to us, including the following: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not perform their obligations as expected or at all; ● we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; ● collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; ● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or drugs, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; ● a collaborator with marketing and distribution rights to any product candidate that achieves regulatory approval may not commit sufficient resources to the marketing and distribution of such products; ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws, resulting in civil or criminal proceedings; ● disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; ● collaborators may not properly enforce, maintain or defend our or their intellectual property rights or may use our or their proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us to potential litigation; ● collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● collaborators may not provide us with timely and accurate information regarding development, regulatory or commercialization status or results, which could adversely impact our ability to manage our own development efforts, 75 Table of Contents accurately forecast financial results or provide timely information to our stockholders regarding our out-licensed product candidates; ● we may be required to invest resources and attention into such collaboration, which could distract from other business objectives; ● disputes may arise between the collaborators and us regarding ownership of or other rights in the intellectual property generated in the course of the collaborations; ● collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all; ● if a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated; and ● collaborations may be terminated, including for the convenience of the collaborator, prior to or upon the expiration of the agreed upon terms and, if terminated, we may find it more difficult to enter into future collaborations or be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Collaborations involving buntanetap or any future product candidates would pose significant risks to us, including the following: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not perform their obligations as expected or at all; ● we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; ● collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; ● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or drugs, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; ● a collaborator with marketing and distribution rights to any product candidate that achieves regulatory approval may not commit sufficient resources to the marketing and distribution of such products; ● a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws, resulting in civil or criminal proceedings; ● disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays in or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; ● collaborators may not properly enforce, maintain or defend our or their intellectual property rights or may use our or their proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual property or proprietary information or expose us to potential litigation; 70 Table of Contents ● collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● collaborators may not provide us with timely and accurate information regarding development, regulatory or commercialization status or results, which could adversely impact our ability to manage our own development efforts, accurately forecast financial results or provide timely information to our stockholders regarding our out-licensed product candidates; ● we may be required to invest resources and attention into such collaboration, which could distract from other business objectives; ● disputes may arise between the collaborators and us regarding ownership of or other rights in the intellectual property generated in the course of the collaborations; ● collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all; ● if a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated; and ● collaborations may be terminated, including for the convenience of the collaborator, prior to or upon the expiration of the agreed upon terms and, if terminated, we may find it more difficult to enter into future collaborations or be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for Buntanetap or any other future product candidates; ● the clinical development plans we establish for Buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for Buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC quality and commercial personnel; 36 Table of Contents ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and ● the costs associated with any products or technologies that we may in-license or acquire; 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.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for buntanetap or any other future product candidates; ● the clinical development plans we establish for buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC, quality and commercial personnel; ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and ● the costs associated with any products or technologies that we may in-license or acquire; 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 31 Table of Contents obtain regulatory approval and commercialize buntanetap or any future product candidates.
The degree of market acceptance of our product candidates, if approved, will depend on a number of factors, including but not limited to: ● the efficacy and potential advantages compared to alternative treatments; 53 Table of Contents ● the indications for which our product candidates are approved; ● the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling; ● effectiveness of sales and marketing efforts; ● the cost of treatment in relation to alternative treatments, including any similar generic treatments; ● our ability to offer our products for sale at competitive prices; ● the convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support; ● the availability of third-party coverage and adequate reimbursement; ● the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement; ● the prevalence and severity of any side effects; ● any restrictions on the use of our product together with other medications; ● potential product liability claims; ● the timing of market introduction of our products as well as availability, safety and efficacy of competitive drugs; and ● unfavorable publicity relating to the product.
The degree of market acceptance of our product candidates, if approved, will depend on a number of factors, including but not limited to: ● the efficacy and potential advantages compared to alternative treatments; ● the indications for which our product candidates are approved; ● the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling; ● effectiveness of sales and marketing efforts; ● the cost of treatment in relation to alternative treatments, including any similar generic treatments; ● our ability to offer our products for sale at competitive prices; ● the convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support; 48 Table of Contents ● the availability of third-party coverage and adequate reimbursement; ● the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement; ● the prevalence and severity of any side effects; ● any restrictions on the use of our product together with other medications; ● potential product liability claims; ● the timing of market introduction of our products as well as availability, safety and efficacy of competitive drugs; and ● unfavorable publicity relating to the product.
Patient enrollment and retention in clinical trials depends on many factors, including: ● the patient eligibility and exclusion criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature and design of the trial protocol; ● the existing body of safety and efficacy data with respect to the product candidate; 43 Table of Contents ● the proximity of patients to clinical sites; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; ● competing clinical trials being conducted by other companies or institutions; ● our ability to obtain and maintain patient consents; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
Patient enrollment and retention in clinical trials depends on many factors, including: ● the patient eligibility and exclusion criteria as defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature and design of the trial protocol; ● the existing body of safety and efficacy data with respect to the product candidate; ● the proximity of patients to clinical sites; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; ● competing clinical trials being conducted by other companies or institutions; ● our ability to obtain and maintain patient consents; and 38 Table of Contents ● the risk that patients enrolled in clinical trials will drop out of the trials before completion.
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.
If approved, buntanetap and any future product candidates may not achieve commerciab 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.
Any termination of collaborations we enter into in the future, or any delay in entering into collaborations related to Buntanetap or any future product candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Any termination of collaborations we enter into in the future, or any delay in entering into collaborations related to buntanetap or any future product candidates, could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market, which could have a material adverse effect on our business, financial condition, results of operations and future commercial prospects.
If we obtain regulatory approval of product candidates and ultimately commercialize our products in foreign markets, we would be subject to additional risks and uncertainties, including: ● different regulatory requirements for approval of drugs in foreign countries; ● reduced protection for intellectual property rights; ● the existence of additional third-party patent rights of potential relevance to our business; ● unexpected changes in tariffs, trade barriers and regulatory requirements; ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with export control and import laws and regulations; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● foreign reimbursement, pricing and insurance regimes; ● workforce uncertainty in countries where labor unrest is common; ● differing regulatory requirements with respect to manufacturing of products; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
If we obtain regulatory approval of product candidates and ultimately commercialize our products in foreign markets, we would be subject to additional risks and uncertainties, including: ● different regulatory requirements for approval of drugs in foreign countries; ● reduced protection for intellectual property rights; ● the existence of additional third-party patent rights of potential relevance to our business; ● unexpected changes in tariffs, trade barriers and regulatory requirements; 42 Table of Contents ● economic weakness, including inflation, or political instability in particular foreign economies and markets; ● compliance with export control and import laws and regulations; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● foreign reimbursement, pricing and insurance regimes; ● workforce uncertainty in countries where labor unrest is common; ● differing regulatory requirements with respect to manufacturing of products; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
Clinical trials can be delayed for a variety of reasons, including delays related to: ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory approval to commence a trial; ● reaching an agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining Institutional Review Board (“IRB”) approval at each site, or Independent Ethics Committee (“IEC”) approval at sites outside the United States; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● patients failing to complete a trial or return for post-treatment follow-up; ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements or follow trial protocols; ● clinical sites deviating from trial protocol or dropping out of a trial; ● addressing patient safety concerns that arise during the course of a trial; ● adding a sufficient number of clinical trial sites; or 40 Table of Contents ● manufacturing sufficient quantities of product candidate for use in clinical trials.
Clinical trials can be delayed for a variety of reasons, including delays related to: ● the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical studies; ● obtaining regulatory approval to commence a trial; ● reaching an agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining Institutional Review Board (“IRB”) approval at each site, or Independent Ethics Committee (“IEC”) approval at sites outside the United States; ● recruiting suitable patients to participate in a trial in a timely manner and in sufficient numbers; ● patients failing to complete a trial or return for post-treatment follow-up; ● imposition of a clinical hold by regulatory authorities, including as a result of unforeseen safety issues or side effects or failure of trial sites to adhere to regulatory requirements or follow trial protocols; ● clinical sites deviating from trial protocol or dropping out of a trial; ● addressing patient safety concerns that arise during the course of a trial; ● adding a sufficient number of clinical trial sites; or ● manufacturing sufficient quantities of product candidate for use in clinical trials.
If we are unable to obtain additional patent protection to prolong the patent life of our product candidates, we may not be able to continue development of our product candidate. We seek to protect and prolong our proprietary position by filing patent applications in the United States and abroad related to our development programs and product candidates.
If we are unable to obtain additional patent protection to prolong the patent life of our product candidates, we may not be able to continue development of our product candidates. We seek to protect and prolong our proprietary position by filing patent applications in the United States and abroad related to our development programs and product candidates.
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.
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 future commercial prospects.
We and our CROs will be required to comply with the Good Laboratory Practice requirements for our preclinical studies and GCP requirements for our clinical trials, which are regulations and guidelines enforced by the FDA and are also required by comparable foreign regulatory authorities.
We and our CROs will be required to comply with the Good Laboratory Practice (“GLP”) requirements for our preclinical studies and GCP requirements for our clinical trials, which are regulations and guidelines enforced by the FDA and are also required by comparable foreign regulatory authorities.
Therefore, we cannot be certain that we or our licensors were the first to invent the inventions claimed in any of our licensed patents or pending patent applications, or that we or our licensors were the first to make the inventions claimed in those owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.
Therefore, we cannot be certain that we or our licensors were the first to invent or file on the inventions claimed in any of our licensed patents or pending patent applications, or that we or our licensors were the first to make the inventions claimed in those owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.
In addition, manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims; ● Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
In addition, manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims; 54 Table of Contents ● Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute 80 Table of Contents payments not previously approved.
For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are 75 Table of Contents applicable to other public companies that are not emerging growth companies, including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such product; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; ● we may be required to implement a REMS or create a medication guide outlining the risks of such side effects for distribution to patients; ● we could be sued and held liable for harm caused to patients; ● the product may become less competitive; and ● our reputation may suffer.
Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approvals of such product; 40 Table of Contents ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; ● additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof; ● we may be required to implement a REMS or create a medication guide outlining the risks of such side effects for distribution to patients; ● we could be sued and held liable for harm caused to patients; ● the product may become less competitive; and ● our reputation may suffer.
If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment or restructuring of our operations, any of which could adversely affect our ability to 55 Table of Contents operate our business and our results of operations.
The auditor’s opinion on our audited financial statements for the year ended December 31, 2023 includes an explanatory paragraph stating that we have incurred recurring losses from operations that raise substantial doubt about our ability to continue as a going concern for the next twelve months from the date of the financial statements included in this Annual Report on Form 10-K.
The auditor’s opinion on our audited financial statements for the year ended December 31, 2024 includes an explanatory paragraph stating that we have incurred recurring losses from operations that raise substantial doubt about our ability to continue as a going concern for the next twelve months from the date of the financial statements included in this Annual Report on Form 10-K.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; ● restrictions on the labeling or marketing of products; ● restrictions on product distribution or use; ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or untitled letters; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure; or ● injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes or failure to comply with regulatory requirements, may yield various results, including: ● restrictions on manufacturing such products; ● restrictions on the labeling or marketing of products; ● restrictions on product distribution or use; 43 Table of Contents ● requirements to conduct post-marketing studies or clinical trials; ● warning letters or untitled letters; ● withdrawal of the products from the market; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● refusal to permit the import or export of our products; ● product seizure; or ● injunctions or the imposition of civil or criminal penalties.
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.
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.” 35 Table of Contents 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.
To the extent that any actual or perceived disruption or security breach affects our systems (or those of our third-party collaborators, service providers, contractors or consultants) or were to result in a loss of or accidental, unlawful or unauthorized access to, use of, release of, or other processing of personally identifiable information, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, the further development and commercialization of Buntanetap or any future product candidates could be delayed, and we could be subject to significant fines, penalties or liabilities.
To the extent that any actual or perceived disruption or security breach affects our systems (or those of our third-party collaborators, service providers, contractors or consultants) or were to result in a loss of or accidental, unlawful or unauthorized access to, use of, release of, or other processing of personally identifiable information, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, the further development and commercialization of buntanetap, Posiphen Form B, or any future product candidates could be delayed, and we could be subject to significant fines, penalties or liabilities.
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.
Until such time, if ever, that 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, regardless of merit or eventual outcome, product liability claims may result in: ● impairment of our business reputation and significant negative media attention; ● withdrawal of participants from our clinical trials; ● significant costs to defend the litigation; ● distraction of management’s attention and our resources from our primary business; ● substantial monetary awards to patients or other claimants; ● inability to commercialize Buntanetap or any other product candidate; ● product recalls, withdrawals or labeling, marketing or promotional restrictions; ● decreased market demand for any product; ● significant negative financial impact; and ● a decline in our stock price.
In addition, regardless of merit or eventual outcome, product liability claims may result in: ● impairment of our business reputation and significant negative media attention; ● withdrawal of participants from our clinical trials; ● significant costs to defend the litigation; ● distraction of management’s attention and our resources from our primary business; ● substantial monetary awards to patients or other claimants; ● inability to commercialize buntanetap or any other product candidate; ● product recalls, withdrawals or labeling, marketing or promotional restrictions; ● decreased market demand for any product; 45 Table of Contents ● significant negative financial impact; and ● a decline in our stock price.
The total addressable market across all of the potential indications for Buntanetap and any future 46 Table of Contents product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each such product candidate which receives marketing approval for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of such product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement.
The total addressable market across all of the potential indications for buntanetap and any future product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final label for each such product candidate which receives marketing approval for these indications, the availability of alternative treatments and the safety, convenience, cost and efficacy of such product candidates relative to such alternative treatments, acceptance by the medical community and patient access, drug pricing and reimbursement.
If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully 57 Table of Contents commercialize any product candidate that we develop.
If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reason, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develop.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States, Europe and 66 Table of Contents elsewhere that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.
We cannot guarantee that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States, Europe and elsewhere that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.
Even if we believe 65 Table of Contents third party infringement claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize the applicable product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.
Even if we believe third party infringement claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize the applicable product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.
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.
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 33 Table of Contents facilities, processes and controls are adequate.
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: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ● the FDA or comparable foreign regulatory authorities may disagree with our safety interpretation of our drug; ● the FDA or comparable foreign regulatory authorities may disagree with our efficacy interpretation of our drug; ● the FDA or comparable foreign regulatory authorities may regard our CMC package as inadequate.
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: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; 36 Table of Contents ● the FDA or comparable foreign regulatory authorities may disagree with our safety interpretation of our drug; ● the FDA or comparable foreign regulatory authorities may disagree with our efficacy interpretation of our drug; ● the FDA or comparable foreign regulatory authorities may regard our CMC package as inadequate.
Some of the policies we currently maintain include general liability, employment benefits liability, workers’ compensation, products liability, and directors’ and officers’ insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage.
Some of the policies we currently maintain include general liability, cyber security liability, employment benefits liability, workers’ compensation, products liability, and directors’ and officers’ insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage.
Namely, the current presidential administration has taken several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially 49 Table of Contents delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.
Namely, the current presidential administration has taken several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.
The following examples are illustrative: ● others may be able to make products that are similar to Buntanetap or our future product candidates but that are not covered by the claims of the patents that we own or license from others; ● others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our intellectual property rights; ● we or any of our collaborators might not have been the first to conceive and reduce to practice the inventions covered by the patents or patent applications that we own, license or will own or license; ● we or any of our collaborators might not have been the first to file patent applications covering certain of the patents or patent applications that we or they own or have obtained a license, or will own or will have obtained a license; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● our competitors might conduct research and development activities in countries where we do not have patent rights, or in countries where research and development safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● ownership of our patents or patent applications may be challenged by third parties; and ● the patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business.
The following examples are illustrative: ● others may be able to make products that are similar to buntanetap, Posiphen Form B, or our future product candidates but that are not covered by the claims of the patents that we own or license from others; ● others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our intellectual property rights; ● we or any of our collaborators might not have been the first to conceive and reduce to practice or file on the inventions covered by the patents or patent applications that we own, license or will own or license; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● our competitors might conduct research and development activities in countries where we do not have patent rights, or in countries where research and development safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● ownership of our patents or patent applications may be challenged by third parties; and ● the patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business.
Some claimants may have substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.
Some claimants may have 60 Table of Contents substantially greater resources than we do and may be able to sustain the costs of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.
Because PTA added to the term of patents covering 69 Table of Contents pharmaceutical products has particular value, our business may be adversely affected if the PTA is successfully challenged by a third party and our ability to exclude competitors is reduced or eliminated. Intellectual property rights do not address all potential threats to our competitive advantage.
Because PTA added to the term of patents covering pharmaceutical products has particular value, our business may be adversely affected if the PTA is successfully challenged by a third party and our ability to exclude competitors is reduced or eliminated. Intellectual property rights do not address all potential threats to our competitive advantage.
The report of our independent registered accounting firm on our audited financial statements for the fiscal year ended December 31, 2023 contains an explanatory paragraph relating to our ability to continue as a going concern.
The report of our independent registered accounting firm on our audited financial statements for the fiscal year ended December 31, 2024 contains an explanatory paragraph relating to our ability to continue as a going concern.
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.
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 34 Table of Contents the foregoing.
These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding 48 Table of Contents the distribution of samples to physicians and recordkeeping and GCP requirements for any clinical trials that we conduct post-approval.
These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and GCP requirements for any clinical trials that we conduct post-approval.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent with the USPTO. This applies to all of our U.S. patents, even those issued before March 16, 2013.
Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent with the USPTO. This applies to all of our 62 Table of Contents U.S. patents, even those issued before March 16, 2013.
If we fail to satisfy the continued listing requirements of the New York Stock Exchange, such as the corporate governance requirements or the minimum closing bid price requirement, the New York Stock Exchange may take steps to delist our common stock.
If we fail to satisfy the continued listing requirements of the New York Stock Exchange, such as the corporate governance requirements, market capitalization or the minimum closing bid price requirement, the New York Stock Exchange may take steps to delist our common stock.
Alternatively, if a court were to find this provision of our charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs 81 Table of Contents associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
Alternatively, if a court were to find this provision of our charter inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
Accordingly, such events could cause adverse effects and material disruptions to our operations or systems or those of our business partners; compromise the security, integrity, availability, and confidentiality of customer information, employee information, strategic projects, product formulas and other trade secrets, other business or personal sensitive data, including third party confidential information in our possession.
Accordingly, such events could cause adverse 71 Table of Contents effects and material disruptions to our operations or systems or those of our business partners; compromise the security, integrity, availability, and confidentiality of customer information, employee information, strategic projects, product formulas and other trade secrets, other business or personal sensitive data, including third party confidential information in our possession.
A security breach or other compromise of our information 76 Table of Contents security safeguards could expose our confidential information, including third party confidential information in our possession (such as customer information) to theft and misuse, which could in turn adversely affect our relationships with such third parties and have an adverse effect on our business, financial condition, results of operations and cash runway.
A security breach or other compromise of our information security safeguards could expose our confidential information, including third party confidential information in our possession (such as customer information) to theft and misuse, which could in turn adversely affect our relationships with such third parties and have an adverse effect on our business, financial condition, results of operations and cash runway.
Because we have not conducted a formal freedom to operate analysis for patents related to Buntanetap since 2008, we may not be aware of patents issued since then that a third-party might assert are infringed by Buntanetap or any future product candidates, which could materially impair our ability to commercialize Buntanetap or any future product candidates.
Because we have not conducted a formal freedom to operate analysis for patents related to buntanetap since 2008, we may not be aware of patents issued since then that a third-party might assert are infringed by buntanetap, Posiphen Form B, or any future product candidates, which could materially impair our ability to commercialize buntanetap, Posiphen Form B, or any future product candidates.
The market price of our common stock may be subject to wide fluctuations in response to a variety of factors, including the following: ● results of our clinical trials, and the results of trials of our competitors or those of other companies in our market sector; ● our ability to enroll subjects in our future clinical trials; ● delays or unanticipated developments in the completion of our planned clinical trials; ● any delay in submitting an NDA and any adverse development or perceived adverse development with respect to the FDA’s review of that NDA; ● our ability to obtain and maintain regulatory approval of Buntanetap or any future product candidates or additional indications thereof, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ● failure to successfully develop and commercialize Buntanetap or any future product candidates; ● the degree and rate of physician and market adoption of any of our current and future product candidates; ● inability to obtain additional funding or obtaining funding on unattractive terms; 77 Table of Contents ● regulatory or legal developments in the United States and other countries applicable to Buntanetap or any other product candidates; ● adverse regulatory decisions; ● changes in the structure of healthcare payment systems; ● manufacturing, supply or distribution delays or shortages, including our inability to obtain adequate product supply for Buntanetap or any other product candidates, or the inability to do so at acceptable prices; ● the success or failure of our efforts to identify, develop, acquire or license additional product candidates; ● introduction of new products, services or technologies by our competitors; ● failure to meet or exceed financial projections we provide to the public; ● failure to meet or exceed the estimates and projections of the investment community; ● changes in the market valuations of companies similar to ours; ● market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations; ● announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; ● any changes to our relationship with any manufacturers, suppliers, collaborators or other strategic partners; ● significant lawsuits, including patent or shareholder litigation, and disputes or other developments relating to our proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● additions or departures of key scientific or management personnel; ● sales of our common stock by us or our stockholders in the future; ● changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; ● changes in accounting standards, policies, guidelines, interpretations or principles; ● trading volume of our common stock; ● actual or anticipated fluctuations in our financial condition and results of operations; ● publication of news releases by other companies in our industry, and especially direct competitors, including about adverse developments related to safety, effectiveness, accuracy and usability of their products, reputational concerns, reimbursement coverage, regulatory compliance, and product recalls; ● announcement or progression of geopolitical events (including in relation to the conflict between Russia and Ukraine); and ● the other factors described in this “Risk Factors” section. 78 Table of Contents In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
The market price of our common stock may be subject to wide fluctuations in response to a variety of factors, including the following: ● results of our clinical trials, and the results of trials of our competitors or those of other companies in our market sector; ● our ability to enroll subjects in our future clinical trials; ● delays or unanticipated developments in the completion of our planned clinical trials; ● any delay in submitting an NDA and any adverse development or perceived adverse development with respect to the FDA’s review of that NDA; ● our ability to obtain and maintain regulatory approval of buntanetap or any future product candidates or additional indications thereof, or limitations to specific label indications or patient populations for its use, or changes or delays in the regulatory review process; ● failure to successfully develop and commercialize buntanetap or any future product candidates; 72 Table of Contents ● the degree and rate of physician and market adoption of any of our current and future product candidates; ● inability to obtain additional funding or obtaining funding on unattractive terms; ● regulatory or legal developments in the United States and other countries applicable to buntanetap or any other product candidates; ● adverse regulatory decisions; ● changes in the structure of healthcare payment systems; ● manufacturing, supply or distribution delays or shortages, including our inability to obtain adequate product supply for buntanetap or any other product candidates, or the inability to do so at acceptable prices; ● the success or failure of our efforts to identify, develop, acquire or license additional product candidates; ● introduction of new products, services or technologies by our competitors; ● failure to meet or exceed financial projections we provide to the public; ● failure to meet or exceed the estimates and projections of the investment community; ● changes in the market valuations of companies similar to ours; ● market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations; ● announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; ● any changes to our relationship with any manufacturers, suppliers, collaborators or other strategic partners; ● significant lawsuits, including patent or shareholder litigation, and disputes or other developments relating to our proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● additions or departures of key scientific or management personnel; ● sales of our common stock by us or our stockholders in the future; ● changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; ● changes in accounting standards, policies, guidelines, interpretations or principles; ● trading volume of our common stock; ● actual or anticipated fluctuations in our financial condition and results of operations; ● publication of news releases by other companies in our industry, and especially direct competitors, including about adverse developments related to safety, effectiveness, accuracy and usability of their products, reputational concerns, reimbursement coverage, regulatory compliance, and product recalls; 73 Table of Contents ● announcement or progression of geopolitical events (including in relation to the conflict between Russia and Ukraine or Isreal and Hamas); and ● the other factors described in this “Risk Factors” section.
Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to advance the clinical development of 35 Table of Contents 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.
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.
Inflation could adversely affect our business and results of operations. While inflation in the United States has been relatively low in recent years, during 2022 and 2023, the economy in the United States encountered a material level of inflation.
Inflation could adversely affect our business and results of operations. While inflation in the United States has been relatively low in recent years, during 2023 and 2024, the economy in the United States encountered a material level of inflation.
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.
Efforts by biopharmaceutical and pharmaceutical companies in treating AD and PD have seen limited success in drug development, and there are few FDA-approved disease modifying therapeutic options available for patients with AD and PD.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Because of a possibly different evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
We can be held liable for 61 Table of Contents the corrupt or other illegal activities of our employees, agents, CROs, contractors and other collaborators and partners, even if we do not explicitly authorize or have actual knowledge of such activities, and any training or compliance programs or other initiatives we undertake to prevent such activities may not be effective.
We can be held liable for the corrupt or other illegal activities of our employees, agents, CROs, contractors and other collaborators and partners, even if we do not explicitly authorize or have actual knowledge of such activities, and any training or compliance programs or other initiatives we undertake to prevent such activities may not be effective.
Even if patents do successfully issue and even if such patents further cover Buntanetap or any future product candidate, third parties may challenge their validity, enforceability, or scope, which may result in such patents being narrowed, invalidated, or held unenforceable. Our patent rights may be subject to such priority, validity, inventorship, scope and enforceability disputes.
Even if patents do successfully issue and even if such patents further cover buntanetap, Posiphen Form B, or any future product candidate, third parties may challenge their validity, enforceability, or scope, which may result in such patents being narrowed, invalidated, or held unenforceable. Our patent rights may be subject to such priority, validity, inventorship, scope and enforceability disputes.
These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. 70 Table of Contents However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
Although at this time, we are unaware of any intellectual property that interferes with ours or is complementary and needed to commercialize Buntanetap, a third party may also hold intellectual property, including patent rights that are important or necessary to the future development or commercialization of Buntanetap or our future product candidates.
Although at this time, we are unaware of any intellectual property that interferes with ours or is complementary and needed to commercialize buntanetap, or Posiphen Form B, a third party may also hold intellectual property, including patent rights that are important or necessary to the future development or commercialization of buntanetap, Posiphen Form B, or our future product candidates.
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.
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, Isreal and Hamas, terrorism or other geopolitical events.
Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies. A variety of risks associated with operating internationally could materially adversely affect our business.
Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies. 49 Table of Contents A variety of risks associated with operating internationally could materially adversely affect our business.
There are a limited number of suppliers for the raw materials that we may use to manufacture our product candidates and we may need to assess alternative suppliers to prevent a possible disruption of the manufacture of our product candidates. Finding new CMOs or third-party suppliers involves additional cost and requires our management’s time and focus.
There are a limited number of suppliers for the raw materials that we may use to manufacture our product candidates and we may need to assess alternative suppliers to prevent a possible disruption of the manufacture of our product candidates. 51 Table of Contents Finding new CMOs or third-party suppliers involves additional cost and requires our management’s time and focus.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it 68 Table of Contents difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
Activities subject to these laws could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, creation of fraudulent data in preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation.
Activities 50 Table of Contents subject to these laws could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, creation of fraudulent data in preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation.
The tenth patent application family relates to the new Form B of Posiphen (ANVS402); it demonstrates that it can be used instead of Buntanetap, including in the foregoing uses of Buntanetap of the Company’s patent portfolio.
The thirteenth patent application family relates to the new Form B of Posiphen (ANVS402); it demonstrates that it can be used instead of buntanetap, including in the foregoing uses of buntanetap of the Company’s patent portfolio.
If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner.
If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may 64 Table of Contents obtain approval to market competing products sooner.
Our expenses will also increase substantially if and as we: ● continue to progress our development in AD and PD with additional studies, or conduct clinical trials for any other product candidates; ● scale-up cGMP drug supply manufacturing and complete necessary work to support an NDA for Buntanetap in AD or in PD; ● are required by the FDA to complete additional toxicological/pharmacological studies to support an NDA for Buntanetap in AD or in PD; ● establish a sales, marketing and distribution infrastructure to commercialize our drug, if approved, and for any other product candidates for which we may obtain marketing approval; ● maintain, expand and protect our intellectual property portfolio; ● hire additional clinical, scientific and commercial personnel; ● add operational, financial and management information systems and personnel, including personnel to support our product development and future commercialization efforts, as well as to support our requirements as a public reporting company; and ● acquire or in-license or invent other product candidates or technologies.
Our expenses will also increase substantially if and as we: ● continue to progress our development in AD and PD with additional pivotal Phase 3 studies, or conduct clinical trials for any other product candidates; ● scale-up cGMP drug supply manufacturing and complete necessary work to support an NDA for buntanetap in AD or in PD; 29 Table of Contents ● are required by the FDA to complete additional toxicological/pharmacological studies to support an NDA for buntanetap in AD or in PD; ● establish a sales, marketing and distribution infrastructure to commercialize our drug, if approved, and for any other product candidates for which we may obtain marketing approval; ● maintain, expand and protect our intellectual property portfolio; ● hire additional clinical, scientific and commercial personnel; ● add operational, financial and management information systems and personnel, including personnel to support our product development and future commercialization efforts, as well as to support our requirements as a public reporting company; and ● acquire or in-license or invent other product candidates or technologies.
We expect to have to train medical personnel 45 Table of Contents using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death.
We expect to have to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is favorable for disputes with us or our directors, which may discourage meritorious claims from being asserted against us and our directors.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a 76 Table of Contents judicial forum that the stockholder believes is favorable for disputes with us or our directors, which may discourage meritorious claims from being asserted against us and our directors.
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, progression of geopolitical events (including in the relation to the conflict between Russia and Ukraine), diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.
Our ability to raise additional funds may be adversely impacted by 30 Table of Contents 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, progression of geopolitical events (including in the relation to the conflict between Russia and Ukraine and the conflict between Hamas and Israel), diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.
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 tax net operating losses is uncertain. We have incurred significant net operating losses since our inception. As of December 31, 2023, we had U.S. federal net operating loss carryforwards of approximately $38.1 million.
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 tax net operating losses is uncertain. We have incurred significant net operating losses since our inception. As of December 31, 2024, we had U.S. federal net operating loss carryforwards of approximately $54.1 million.
In addition, any proprietary name we may propose to use with Buntanetap or any future product candidate in the United States must be approved by the FDA, regardless of whether we have registered, or applied to register, the proposed proprietary name as a trademark.
In addition, any proprietary name we may propose to use with buntanetap, Posiphen Form B, or any future product candidate in the United States must be approved by the FDA, regardless of whether we have registered, or applied to register, the proposed proprietary name as a trademark.
Change in control as defined by Section 382 occurs when there is an ownership change among stockholders owning directly or indirectly 5% or more of our common stock, as well as an aggregate ownership change with respect to such stockholders of more than 50% of our common stock.
Change in control as defined by Section 382 occurs when there is an ownership change among stockholders owning directly or indirectly 5% or more of our common stock, as well as an aggregate ownership change with respect to such stockholders of 32 Table of Contents more than 50% of our common stock.
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.
For example, 37 Table of Contents 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.
If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may 73 Table of Contents experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources.
We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of 61 Table of Contents their substantially greater financial resources.
It may be necessary for us to use the patented or proprietary technology of third parties to commercialize Buntanetap or our product candidates, in which case we would be required to obtain a license from these third parties.
It may be necessary for us to use the patented or proprietary technology of third parties to commercialize buntanetap, Posiphen Form B, or our product candidates, in which case we would be required to obtain a license from these third parties.
If we are unsuccessful in identifying and developing additional product 39 Table of Contents 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.
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.
Consequently, we may not be able to prevent any third party from using any of our technology that is in the public domain to compete with Buntanetap and any future product candidates or technologies.
Consequently, we may not be able to prevent any third party from using any of our technology that is in the public domain to compete with buntanetap, Posiphen Form B, and any future product candidates or technologies.
They may also 56 Table of Contents terminate or refuse to renew their agreement at a time that is costly or otherwise inconvenient for us. If we were unable to find an adequate CMO or another acceptable solution in time, our clinical trials could be delayed, or our commercial activities could be harmed.
They may also terminate or refuse to renew their agreement at a time that is costly or otherwise inconvenient for us. If we were unable to find an adequate CMO or another acceptable solution in time, our clinical trials could be delayed, or our commercial activities could be harmed.
These organizations may have significantly greater 51 Table of Contents resources than we do and may conduct similar research; seek patent protection; and establish collaborative arrangements for research, development, manufacturing and marketing of products that may compete with us.
These organizations may have significantly greater resources than we do and may conduct similar research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and marketing of products that may compete with us.
It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our product candidates. No uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor.
It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our product candidates. 47 Table of Contents No uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor.
If we license products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture.
If we license products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate 69 Table of Contents them with our existing operations and company culture.
Adverse differences between preliminary or interim data and final data could significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.
Adverse differences between preliminary or interim data and final data could significantly harm our 39 Table of Contents business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the price of our common stock.
Although we are given an opportunity to respond to such rejections, we may be unable to overcome them. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.
Although we are given an opportunity to respond to such rejections, we may be unable to overcome them. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market 66 Table of Contents confusion.
Our directors, executive officers and certain stockholders own a significant percentage of our common stock and, if they choose to act together, will be able to exert significant control over matters subject to stockholder approval. Our directors, executive officers, and stockholders affiliated with our directors and executive officers own 25.6% of the current voting power of our outstanding common stock.
Our directors, executive officers and certain stockholders own a significant percentage of our common stock and, if they choose to act together, will be able to exert significant control over matters subject to stockholder approval. Our directors, executive officers, and stockholders affiliated with our directors and executive officers own 14.3% of the current voting power of our outstanding common stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIncidents are documented for internal reporting processes and regularly shared with senior management. Our third-party IT service provider is a key part of our cybersecurity program. We partner with a cybersecurity company and leverage their technology and expertise to better protect the Company.
Biggest changeIncidents (if any) are documented for internal reporting processes and regularly shared with senior management. Our third-party IT service provider is a key part of our cybersecurity program. We partner with a cybersecurity company and leverage their technology and expertise to better protect the Company.
See “Risk Factors—Risks Related to Our Business Operations—Disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations” for additional information regarding cybersecurity risks. 82 Table of Contents Governance Roles and Responsibilities Cybersecurity is an important part of our risk management processes and an area of focus for the Annovis management and Board of Directors.
See “Risk Factors—Risks Related to Our Business Operations—Disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations” for additional information regarding cybersecurity risks. 77 Table of Contents Governance Roles and Responsibilities Cybersecurity is an important part of our risk management processes and an area of focus for the Annovis management and Board of Directors.
As of December 31, 2023, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company's business strategy, results of operations, or financial condition, although we may be materially affected in the future by such risks or future material incidents.
As of December 31, 2024, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company's business strategy, results of operations, or financial condition, although we may be materially affected in the future by such risks or future material incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our offices are in Malvern, Pennsylvania, where we have leased and have access to 1,500 square feet of office space pursuant to a short-term lease agreement. We believe that our facilities are adequate to meet our current needs. ​
Biggest changeItem 2. Properties. Our offices are in Malvern, Pennsylvania, where we have leased and have access to approximately 1,500 square feet of office space pursuant to a short-term lease agreement. We believe that our facilities are adequate to meet our current needs. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceedings against us that we believe could have a material adverse effect on our business, operating results or financial condition. Item 4. Mine Safety Disclosures. Not applicable. ​ 83 Table of Contents PART II
Biggest changeWe are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceedings against us that we believe could have a material adverse effect on our business, operating results or financial condition. Item 4. Mine Safety Disclosures. Not applicable. ​ 78 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures. 83 ​ ​ Part II. 84 ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 84 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 84 ​ ​ ​
Biggest changeItem 4. Mine Safety Disclosures. 78 ​ ​ Part II. 79 ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 79 ​ ​ ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 79 ​ ​ ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The information called for by this item regarding equity compensation plans is incorporated by reference to Part III, Item 12 of this Annual Report on Form 10-K. Issuer Purchases of Equity Securities None.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The information called for by this item regarding equity compensation plans is incorporated by reference to Part III, Item 12 of this Annual Report on Form 10-K. Issuer Purchases of Equity Securities None. Recent Sales of Unregistered Securities None. ​
From January 29, 2020, the date of our initial public offering, to November 17, 2021, our common stock traded on the NYSE American. Prior to January 29, 2020, there was no public market for our stock. Holders of Record As of March 28, 2023, there were approximately 23 holders of record of shares of our common stock.
From January 29, 2020, the date of our initial public offering, to November 17, 2021, our common stock traded on the NYSE American. Prior to January 29, 2020, there was no public market for our stock. Holders of Record As of March 18, 2025, there were approximately 23 holders of record of shares of our common stock.
Removed
Recent Sales of Unregistered Securities On November 27, 2023, the Company sold 207,660 shares of its common stock in a private placement to directors and officers at a price of $6.10 per share for aggregate proceeds of $1.27 million.
Removed
The securities were sold pursuant to an exemption from registration under Section 4 (2) of the Securities Act of 1933, as amended. ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+42 added−21 removed33 unchanged
Biggest changeResults of Operations Years ended December 31, 2023 and 2022 Operating expenses and other income were comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2023 2022 ​ ​ (in thousands) Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ $ 38,790.6 $ 16,515.5 General and administrative ​ $ 6,244.4 ​ $ 8,995.7 Other income (expense): ​ ​ ​ ​ ​ ​ Change in fair value of warrants ​ $ (11,837.2) ​ $ — Interest income ​ $ 667.9 ​ $ 182.7 ​ Research and Development Expenses Research and development expenses increased by $22,275.1 thousand for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Biggest changeResults of Operations Years ended December 31, 2024 and 2023 Operating expenses and other income (expense) were comprised of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2024 2023 ​ ​ Change ​ ​ (in thousands) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 19,995 ​ $ 38,791 ​ $ (18,796) General and administrative ​ ​ 6,699 ​ ​ 6,244 ​ ​ 455 Total operating expenses ​ ​ 26,694 ​ ​ 45,035 ​ ​ (18,341) Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ ​ 332 ​ ​ 668 ​ ​ (336) Other financing costs ​ ​ (1,853) ​ ​ - ​ ​ (1,853) Change in fair value of warrants ​ ​ 3,626 ​ ​ (11,837) ​ ​ 15,463 Other income (expense), net ​ ​ 2,105 ​ ​ (11,169) ​ ​ 13,274 Net loss ​ $ 24,589 ​ $ 56,204 ​ $ (31,615) ​ Research and Development Expenses Research and development expenses decreased by $18.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for Buntanetap or any other future product candidates; ● the clinical development plans we establish for Buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for Buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC quality and commercial personnel; ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and 89 Table of Contents ● the costs associated with any products or technologies that we may in-license or acquire.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: ● the initiation, progress, timing, costs and results of preclinical studies and clinical trials, including patient enrollment in such trials, for buntanetap or any other future product candidates; ● the clinical development plans we establish for buntanetap and any other future product candidates, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● the number and characteristics of product candidates that we discover or in-license and develop; ● the outcome, timing and cost of regulatory meetings and reviews by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than those that we currently expect; ● the requirements of regulatory authorities in any additional jurisdictions in which we may seek approval for buntanetap and any future product candidates and our anticipated timing for seeking approval in such jurisdictions; ● the costs of filing, prosecuting, defending and enforcing any patent claims and maintaining and enforcing other intellectual property and proprietary rights; ● the effects of competing technological and market developments; ● the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC, quality and commercial personnel; ● the costs and timing of the implementation of commercial-scale manufacturing activities, if any product candidate is approved, including as a result of inflation, any supply chain issues or component shortages; ● the costs and timing of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval; 85 Table of Contents ● our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; ● the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and ● the costs associated with any products or technologies that we may in-license or acquire.
At the end of each reporting period, the estimation process involves identifying services that have been performed on our behalf by third-parties, estimating and accruing expenses in our consolidated financial statements based on the evaluation of the progress to completion of specific tasks and the facts and circumstances known to us at the time of the estimate, and assessing the accuracy of these estimates going forward to determine if adjustments are required.
At the end of each reporting period, the estimation process involves identifying services that have been performed on our behalf by third-parties, estimating and accruing expenses in our financial statements based on the evaluation of the progress to completion of specific tasks and the facts and circumstances known to us at the time of the estimate, and assessing the accuracy of these estimates going forward to determine if adjustments are required.
Payments for these activities performed by our third-party vendors are based on the terms of the individual arrangements with our third-party vendors, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued research and development expense, as applicable.
Payments for these activities performed by our third-party vendors are based on the terms of the individual arrangements with our third-party vendors, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as applicable.
ASC 718 requires all stock-based payments, including grants of stock options, to be recognized in the consolidated statements of operations based on their grant date fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted. We recognize forfeitures as they occur.
ASC 718 requires all stock-based payments, including grants of stock options, to be recognized in the statements of operations based on their grant date fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted. We recognize forfeitures as they occur.
Research and Development Expenses and Clinical Trial Accruals As part of the process of preparing the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we are required to estimate and record expenses, for which a large portion are research and development expenses.
Research and Development Expenses and Clinical Trial Accruals As part of the process of preparing the financial statements included elsewhere in this Annual Report on Form 10-K, we are required to estimate and record expenses, for which a large portion are research and development expenses.
We measure and record compensation expense using the applicable accounting guidance for share-based payments using the Black-Scholes option pricing model to value option awards which requires the use of subjective assumptions, including the expected life of the option and expected share price volatility.
We measure and record stock compensation expense using the applicable accounting guidance for share-based payments using the Black-Scholes option pricing model to value option awards which requires the use of subjective assumptions, including the expected life of the option and expected share price volatility.
Research and development costs are either expensed as incurred or recorded separately as a prepaid asset, and the expense recognized when the service is performed. Clinical development expenses for our product candidates are a significant component of our current research and development expenses.
Research and development costs are either expensed as incurred or recorded separately as a prepaid asset, whereby expense is recognized when the service is performed. Clinical development expenses for our product candidates are a significant component of our current research and development expenses.
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.
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 underlying disease condition improved following treatment.
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.
When that communication is compromised, 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.
Research and development expenses include, among other categories, development, clinical trials, patent costs, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. We rely on third-parties to conduct our clinical studies and to provide many of these services, including data management, statistical analysis and electronic compilation.
Research and development expenses include, among other categories - development, clinical trials, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. We rely on third-parties to conduct our clinical studies and to provide many of these services, including data and project management, statistical analysis and electronic compilation.
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.
By improving brain function, our goal is to treat memory loss and dementia associated with AD, as well as body and brain function issues associated with PD.
This could substantially limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years.
This could substantially limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership 82 Table of Contents changes may further affect the limitation in future years.
We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Any changes to estimates will be recorded in the period in which a circumstance causing a change in estimate becomes known and the impact of any change in estimate could be material.
We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Any changes to estimates will be recorded in the 87 Table of Contents period in which a circumstance causing a change in estimate becomes known and the impact of any change in estimate could be material.
On an ongoing basis, we evaluate our estimates and judgments, including those related to clinical development expenses and stock-based compensation. The clinical development cost to advance any of our product candidates to marketing approval is substantial and involves numerous risks and uncertainties associated with pharmaceutical product development.
On an ongoing basis, we evaluate our estimates and judgments, including those related to clinical development expenses, fair value of warrants and stock-based compensation. The clinical development cost to advance any of our product candidates to marketing approval is substantial and involves numerous risks and uncertainties associated with pharmaceutical product development.
Product candidates in later stage clinical development generally have higher research and development expenses than those in earlier stages of development, primarily due to increased size and duration of the clinical trials. We track and record information regarding external research and development expenses for each study or trial that we conduct.
Product candidates in later stage clinical development generally have higher research and development expenses than those in earlier stages of development, primarily due to increased size (e.g., patient population) and duration of the clinical trials. We track and record information regarding external research and development expenses for each study or trial that we conduct.
In other words, an 92 Table of Contents “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies.
In other words, an “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies.
The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development. Due to the stage of our research and development, we are unable to accurately determine the duration or completion costs of our development of Buntanetap.
The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development. Due to the ongoing and uncertain nature of our research and development, we are unable to accurately determine the duration or completion costs of our development of buntanetap.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, 91 Table of Contents stock price volatility, the risk-free interest rate, and expected dividends.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves income tax disclosures by requiring: (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction.
Recent Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which improves income tax disclosures by requiring: (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction.
All changes in the fair value are recorded in the statement of operations each reporting period.
All changes in the fair value are recorded in the statements of operations each reporting period.
We expect to incur significant operating losses for the foreseeable future, and for these losses to further increase, as we ramp up our clinical development programs and begin activities for commercial launch readiness. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.
We also expect these losses to further increase, as we ramp up our clinical development programs and begin activities for commercial launch readiness. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.
Valuation of Common Stock Warrant Liabilities The fair value of Common Stock Warrant Liabilities is determined using a Monte Carlo valuation model. Determining the appropriate fair value model and calculating the fair value of Common Stock Warrants requires considerable judgment. Any change in the estimates used may cause the value to be higher or lower than that reported.
Valuation of Common Stock Warrant Liabilities The fair value of Common Stock Warrant Liabilities is determined using a Black-Scholes option-pricing model. Determining the appropriate fair value model and calculating the fair value of Common Stock Warrants requires considerable judgment. Any change in the estimates used may cause the value to be higher or lower than that reported.
In several studies, Buntanetap was observed to inhibit the synthesis of neurotoxic proteins—APP/Aβ 84 Table of Contents (“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.
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 some of the main causes of neurodegeneration. High levels of neurotoxic proteins lead to reduced axonal transport, which is responsible for the communication between and within nerve cells.
Financing Activities Cash provided by financing activities was $17,344.3 thousand during the year ended December 31, 2023, which was primarily attributable to proceeds from issuance of common stock and warrants for capital raises, as well as proceeds from exercises of our Canaccord Warrants.
Cash provided by financing activities was $17.3 million during the year ended December 31, 2023, which was primarily attributable to proceeds from issuance of common stock and warrants for capital raises, including proceeds from our equity financing with Canaccord as well as proceeds from exercises of our Canaccord Warrants.
We expect that our research and development expenses in 2024 and for the next several years will continue to remain elevated as a result of costs associated with completing our Phase 3 trial for PD, our Phase 2/3 trial for AD and subsequent planned activities leading up to an NDA filing with the FDA.
We expect that our research and development expenses in 2025 and for the next several years will continue to remain elevated as a result of costs associated with completing our Phase 3 trial for AD, our planned Phase 3 trial for PD and other subsequent planned activities leading up to a potential NDA filing(s) with the FDA.
From time to time, we use third-party CROs, contractor laboratories and independent contractors in clinical studies. We recognize the expenses associated with third parties performing these services for us in our clinical studies based on the percentage of each study completed at the end of each reporting period.
We often use third-party CROs, contractor laboratories and independent contractors to help us complete clinical studies. We recognize the expenses associated with third parties performing these services for us in our clinical studies based on the percentage of each study (or study activity) completed at the end of each reporting period.
Our research and development expenses in 2023 were primarily related to our Phase 3 study in early PD patients and our Phase 2/3 study in AD patients. Our research and development expenses in 2022 were primarily related to our Phase 3 study in early PD patients.
Our research and development expenses in 2023 were primarily related to the execution of our Phase 3 study in early PD patients and our Phase 2/3 study in AD patients.
Income Taxes As of December 31, 2023, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $38,085,386 which may be available to offset future income tax liabilities. Federal NOL carryforwards generated in 2017 and prior of $2,764,240 will expire beginning 2032. The remaining federal NOL carryforwards generated beginning in 2018, do not expire.
Income Taxes As of December 31, 2024, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $54.1 million, which may be available to offset future income tax liabilities. Federal NOL carryforwards generated in 2017 and prior of $2.8 million will expire beginning 2032. The remaining federal NOL carryforwards generated beginning in 2018, do not expire.
Our accumulated deficit at December 31, 2023 was $110,259,087. We expect to incur losses for the foreseeable future, and we expect these losses to increase as we continue our development of, and seek regulatory approvals for, our product candidates.
Our accumulated deficit at December 31, 2024 was $134.8 million. We expect to incur losses for the foreseeable future, and we expect these losses to increase as we continue our development of, and seek regulatory approvals for, our product candidates.
Stock-based compensation expense was $4.6 million and $9.2 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had $2.2 million of unrecognized stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 0.92 years.
Stock-based compensation expense was $3.8 million and $4.6 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had $2.4 million of unrecognized stock-based compensation expense, related to service-based options, which will be recognized over a remaining weighted-average period of 1.0 years.
S. state NOL carryforwards of $40,632,269 which may be available to offset future income tax liabilities and will expire beginning in 2028. 86 Table of Contents NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (the “IRS”) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code.
NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (the “IRS”) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code.
We have financed our operations primarily with the proceeds from the sale of common stock, convertible preferred stock and convertible promissory notes. To date, we have not generated any revenues from the sale of products, and we do not anticipate generating any revenues from the sales of products for the foreseeable future.
We have financed our operations primarily with the proceeds from the sale of common stock and warrants. To date, we have not generated any revenues from the sale of products, and we do not anticipate generating any revenues from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception.
As a result, we are unable to accurately predict the timing or amount of increased expenses and, as a result, clinical development expense could be materially different as the costs are incurred.
As a result, we are unable to accurately predict the timing or amount of increased expenses and, as a result, clinical development expense could be materially different as the costs are incurred. In determining warrant fair value, we maximize the use of quoted prices and observable inputs.
The Company has not determined the impact ASU 2023-09 may have on the Company’s financial statement disclosures. JOBS Act Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
JOBS Act Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
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. Following completion of the AD/PD Trials, we submitted our data to the U.S.
In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics (“PK”) of buntanetap, our AD/PD Trials also met exploratory endpoints of measures of biomarkers and improvements in cognition in AD patients, as well as function in PD patients.
Overview Company Overview We are 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.
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.
Financial Operations Overview The following discussion sets forth certain components of our statements of operations as well as factors that impact those items. 85 Table of Contents Research and Development Expenses Our research and development (“R&D”) expenses consist of expenses incurred in development and clinical studies relating to our product candidates, including: ● expenses associated with clinical development; ● personnel-related expenses, such as salaries, benefits, travel and other related expenses, including stock-based compensation; and ● payments to third-party contract research organizations (“CROs”), contractor laboratories and independent contractors.
Research and Development Expenses Our research and development (“R&D”) expenses consist of expenses incurred in development and clinical studies relating to our product candidates, including: ● expenses associated with clinical development; 81 Table of Contents ● personnel-related expenses, such as salaries, benefits, travel and other related expenses, including stock-based compensation; and ● payments to third-party contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), contractor laboratories and other independent contractors.
These exercises resulted in aggregate proceeds of $0.42 million, net of underwriter commissions. 88 Table of Contents Future Capital Requirements We do not have sufficient capital on hand to fund our operations for the next 12 months and will need to raise additional capital to meet our obligations as they become due.
Future Capital Requirements We do not have sufficient capital on hand to fund our operations for the next 12 months and will need to raise additional capital to meet our obligations as they become due.
Cash Flows The following table summarizes our cash flows from operating, investing and financing activities. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2023 2022 ​ ​ (in thousands) Statement of Cash Flows Data: ​ ​ Total net cash used in: ​ ​ Operating activities ​ $ (39,967.3) ​ $ (17,312.9) Financing activities ​ 17,344.3 ​ 4.6 Net decrease in cash and cash equivalents ​ $ (22,623.0) ​ $ (17,308.3) ​ Operating Activities For the year ended December 31, 2023, cash used in operations was $39,967.3 thousand compared to $17,312.9 thousand for the year ended December 31, 2022.
Cash Flows The following table summarizes our cash flows from operating, investing and financing activities the years ended December 31, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2024 2023 ​ ​ (in thousands) Total net cash (used in) provided by: ​ ​ Operating activities ​ $ (21,895) ​ $ (39,967) Financing activities ​ 26,692 ​ 17,344 Net increase (decrease) in cash and cash equivalents ​ $ 4,797 ​ $ (22,623) ​ Operating Activities For the year ended December 31, 2024, cash used in operations was $21.9 million compared to $40.0 million for the year ended December 31, 2023.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when we will be able to achieve or maintain profitability, if at all.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when we will be able to achieve or maintain profitability, if at all. Financial Operations Overview The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.
Risk Factors of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Risk Factors of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. 79 Table of Contents Overview Company Overview We are a late-stage clinical drug platform company addressing neurodegeneration, such as Alzheimer’s disease (“AD”) and Parkinson’s disease (“PD”).
General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of salaries, benefits and other related costs, including stock-based compensation, for personnel serving in our executive, finance, accounting, and administrative functions. Our general and administrative expenses also include professional fees for legal services, including patent-related expenses, consulting, tax and accounting services, insurance, rent and general corporate expenses.
General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of salaries, benefits and other related costs, including public company costs as well as stock-based compensation, for personnel serving in our executive, finance, accounting, and administrative functions.
NOL carryforwards generated beginning in 2018 are permitted to offset 80% of taxable income in future years. As of December 31, 2023, the Company also had U.
NOL carryforwards generated beginning in 2018 are permitted to offset 80% of taxable income in future years. As of December 31, 2024, the Company also had U.S. state NOL carryforwards of $56.6 million, which may be available to offset future income tax liabilities and will expire beginning in 2028.
However, there can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. We have no committed external sources of funds.
However, there can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital or defer sufficient operating expenses, we may be compelled to reduce the scope of our operations.
If we are unable to raise sufficient additional capital or defer sufficient operating expenses, we may be compelled to reduce the scope of our operations. Accordingly, we have concluded that substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued.
Accordingly, we have concluded that substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued. We expect to incur significant operating losses for the foreseeable future.
We believe that our current cash and cash equivalents and funding from existing grants will be sufficient to fund our operating expenses and capital expenditure requirements until the second quarter of 2024, including our ongoing Phase 2/3 AD Trial and our ongoing Phase 3 PD Trial.
We believe that our current cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025.
Our Phase 3 PD Study and Phase 2/3 AD Study each have built in interim analyses, which were both promising. Based on the results of the interim analysis, we proceeded with the Phase 3 PD and with the Phase 2/3 AD Study as planned in accordance with the previously established protocol.
Based on the results of the interim analysis, we proceeded with the Phase 3 PD Study as planned in accordance with the previously established protocol. The study was completed on December 4, 2023, and we released the topline PD Study efficacy data on July 2, 2024.
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.
The industry has historically encountered challenges in specifically targeting one neurotoxic protein, be it APP, tau or αSYN, indicating that doing so does not change the underlying course of neurodegeneration.
Cash provided by financing activities was $4.6 thousand during the year ended December 31, 2022, attributable to attributable to proceeds from the exercise of stock options. 90 Table of Contents Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
The increase was primarily the result of higher interest rates compared to the prior year being earned on our cash and cash equivalents. Liquidity and Capital Resources Since our inception in 2008, we have devoted most of our cash resources to research and development and general and administrative activities.
For the year ended December 31, 2023, the change in fair value was primarily attributable to issuance of the liability-classified Canaccord Warrants and the increase in our stock price during the fourth quarter. Liquidity and Capital Resources Since our inception in 2008, we have devoted most of our cash resources to research and development and general and administrative activities.
This change was attributable to the loss on the change in fair value of our liability-classified Canaccord Warrants from the date of issuance in the fourth quarter of 2023 to December 31, 2023.
Change in Fair Value of Warrants Change in fair value of warrants was a gain of $3.6 million for the year ended December 31, 2024 compared to a loss of $11.8 million the year ended December 31, 2023. This change was attributable to the fair value remeasurement with respect to our liability-classified Canaccord Warrants during 2024.
(“BofA”) and ThinkEquity LLC (“ThinkEquity” and, together with BofA, the “Sales Agents”), as sales agents, pursuant to which the Company may offer and sell, from time to time through the Sales Agents, shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $50.0 million.
In accordance with the terms of the Distribution Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million from time to time through or to OpCo, acting as our agent or principal.
We expect that our general and administrative expenses will increase with the continued development and potential commercialization of our product candidates. We expect that our general and administrative expenses in 2024 and for the next several years will be significantly higher than in 2023 as we increase our employee count.
Our general and administrative expenses also include professional fees for legal services, including patent-related expenses, consulting, tax and accounting services, insurance, rent and general corporate expenses. We expect that our general and administrative expenses will increase as a result of the continued clinical development and potential commercialization of our product candidates.
We expect cash used in operating activities to increase in 2024 as compared to 2023 due to an expected increase in our operating losses associated with continued development of our product candidates and planned increases in our personnel count.
We expect cash used in operating activities to once again increase in 2025 as compared to 2024, due to an expected increase in our operating losses associated with continued development of our product candidates (i.e., pivotal Phase 3 AD Program) as well as planned increases in our personnel count. 86 Table of Contents Financing Activities Cash provided by financing activities was $26.7 million during the year ended December 31, 2024, which was primarily attributable to proceeds from issuance of common stock and warrants for capital raises, including our ELOC and ATM facilities, as well as proceeds from exercises of our Canaccord Warrants.
General and Administrative Expenses General and administrative expenses decreased by $2,751.3 thousand for the year ended December 31, 2023, compared to the year ended December 31, 2022.
General and Administrative Expenses General and administrative expenses increased by $0.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily a result of warrant exercise commissions expensed during the current year.
We have incurred losses and generated negative cash flows from operations since inception. As of December 31, 2023, our principal source of liquidity was our cash and cash equivalents, which totaled $5,754.7 thousand. Equity Financings On March 31, 2023, the Company, entered into an ATM Equity Offering Sales Agreement SM (the “Sales Agreement”) with BofA Securities, Inc.
As of December 31, 2024, our principal source of liquidity was our cash and cash equivalents, which totaled $10.6 million. Equity Financings March 2024 Registered Direct Offerings On March 15, 2024 and March 21, 2024, we entered into two separate securities purchase agreements with the same institutional investor.
The change in fair value was primarily driven by the change in our stock price during the fourth quarter of 2023. 87 Table of Contents Interest Income Interest income increased $487.8 thousand for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The current year loss recorded in the statements of operations was primarily 83 Table of Contents driven by warrant exercises made at higher stock prices during the third quarter of 2024, triggering remeasurement. The remaining change in fair value was primarily driven by the change in our stock price during 2024.
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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 collaboration with the Alzheimer’s Disease Cooperative Study (“ADCS”), we also conducted a trial in 16 early AD patients (the “ADCS Trial”). All three clinical trials were double-blind, placebo-controlled studies.
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We believe that the AD/PD Trials represent the first double-blind, placebo-controlled study 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.
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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.
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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 periods when PD motor and/or non-motor symptoms occur between medication doses.
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Both studies have been completed and presently we are organizing and cleaning the data, while we are still blinded to all data. We plan to consult with the FDA following completion of the full analyses of the two studies, to obtain feedback on our planned AD and PD studies, including conducting disease-modifying studies and open label extensions.
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In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with a MMSE score between 14 and 24. Our Phase 3 PD Study and Phase 2/3 AD Study each had built in interim analyses.
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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.
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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.
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The increase was primarily the result of an increase of $23,707.8 thousand in expenses related to our clinical trial and CMC costs, due to the fact that our primary CROs and other outsource partners were fully operational and conducting Phase 2 and Phase 3 studies for all of 2023.
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The study data showed that in two subgroups, buntanetap improved UPDRS 2, 3, 2+3 and total. It also showed that in the entire intent to treat (“ITT”) population, buntanetap stopped the loss of cognition and that in the 12% of patients that already had cognitive issues, buntanetap improved cognition in a dose-dependent, statistically significant way.
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This increase is partially offset by a decrease of $1,160.9 thousand for R&D stock-based compensation expense, driven by lower fair values being amortized in 2023 as compared to 2022 as a result of lower stock price and a decrease of $452.2 thousand for lower employee cost allocations to R&D.
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We expect to discuss the Phase 3 PD data with the FDA at an end-of-study meeting during 2025. During that meeting, we plan to propose continued development of buntanetap with an additional, pivotal Phase 3 trial.
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The decrease was primarily the result of decreases of $3,363.3 thousand in stock-based compensation expense, driven by lower fair values being amortized in 2023 as compared to 2022 as a result of lower stock price, decreases of $237.9 thousand employee in related costs related to lower cash bonuses accrued in 2023, as well as a decrease in corporate insurance expense of $204.6 thousand given lower renewal premiums year over year.
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With respect to the Phase 2/3 AD Study, we disclosed the results of the interim analysis on October 23, 2023, and similar to our PD study, based on the outcome of the interim analysis, we proceeded with the study as planned.
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These decreases were partially offset by increases of $942.3 thousand for professional fees relating primarily to increased accounting, audit and legal costs incurred as a result of the material weakness identified in 2023 and associated remediation efforts.
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The Phase 2/3 AD study was completed on February 13, 2024, and on April 29, 2024, we announced topline efficacy data. The data showed that in early AD patients, buntanetap improved ADAS-Cog11 in a dose-dependent fashion and was statistically significant from placebo and from baseline.
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Change in Fair Value of Warrants Change in fair value of warrants decreased by $11,837.2 thousand for the year ended December 31, 2023 compared to the year ended December 31, 2022.
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On October 10, 2024, the Company met with the FDA in an end-of-phase 2 meeting to discuss its Phase 2/3 AD data and to agree on a regulatory path forward. Annovis and the FDA have aligned on a development path for buntanetap towards the filing of New Drug Applications (“NDAs”), one for short-term and one for long-term efficacy.
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On April 4, 2023, the Company delivered written notice to BofA and ThinkEquity to terminate the Sales Agreement, effective April 9, 2023, pursuant to Section 9(a) of the Sales Agreement. The Company is not subject to any termination penalties related to the termination of the Sales Agreement.
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The Phase 3 AD program will investigate buntanetap in patients with early AD and will consist of one study that first incorporates a 6-month study period aimed at confirming buntanetap’s symptomatic effects, then later transitioning into an 18-month study period, designed to demonstrate potential disease-modifying effects.
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Prior to termination of the Sales Agreement, the Company sold 704,000 shares of Common Stock pursuant to the Sales Agreement at a price of $10.88 per share, for gross proceeds of $7.60 million before commissions.
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While the overall study will span the combined 18-month treatment period, the completion of the first 6-month period, if well-designed and well-executed, may be sufficient to support an NDA filing, potentially within one year of the 6-month treatment period initiation. 80 Table of Contents During the end-of-phase 2 meeting for AD, the FDA raised no concerns with the Company’s data on buntanetap’s safety, including impact on liver enzymes, drug interactions, dose selection, pharmacokinetics and population pharmacokinetics.

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