MIRA PHARMACEUTICALS INC

Overview

We are a pre-clinical-stage pharmaceutical development company with two neuroscience programs targeting a broad range of neurologic and neuropsychiatric disorders. We hold exclusive license rights in the U.S., Canada and Mexico forKetamir-2, a novel, patent pending oral ketamine analog under pre-clinical investigation to potentially deliver ultra-rapid antidepressant effects, providing hope for individuals battling treatment-resistant depression (or TRD), major depressive disorder with suicidal ideation (or MDSI) and potentially post-traumatic stress disorder (or PTSD).

Additionally, our novel oral pharmaceutical marijuana molecule,MIRA-55, is being studied for its potential to alleviate neuropathic pain, as well as anxiety and cognitive decline, symptoms commonly associated with early-stage dementia. MIRA-55, if approved by the U.S. Food and Drug Administration (or FDA), could mark a significant advancement in addressing various neuropsychiatric, inflammatory, and neurologic diseases and disorders.

The U.S. Drug Enforcement Administration (DEA)’s scientific review of Ketamir-2 concluded that it would not be considered a controlled substance or listed chemical under the Controlled Substances Act (CSA) and its governing regulations. Additionally, we have submitted the required paperwork for MIRA-55 to be evaluated by the DEA.

We were incorporated under the laws of the State of Florida in September 2020 and commenced substantive operations, including our pharmaceutical development program, in late 2020.

Our Product Candidates in Development

KETAMIR-2

Major Depressive Disorder (or MDD) is a significant global health concern, affecting over 264 million people worldwide and ranking among the leading causes of disability according to the World Health Organization. In the United States alone, it impacts nearly 21.1 million adults, accounting for about 8.3 % of the adult population in 2-2021 according to data form the National Institutes of Health. This widespread mental health disorder not only undermines the quality of life and daily functioning of individuals but also imposes a substantial economic burden, with costs in the U.S. amounting to tens of billions of dollars annually. MDD is also a major risk factor for suicide, a leading cause of death globally, highlighting its profound impact on public health and the urgent need for effective treatment and management strategies. If approved by the FDA, Ketamir-2 may potentially provide antidepressant therapeutic effects.

Despite the fact that antidepressants have been on the market for decades, with imipramine being the first FDA-approved antidepressant in 1959, the need for a rapid-acting antidepressant that can help patients with Treatment-Resistant Depression (or TRD) using a novel mechanism of action (e.g. not a monoamine reuptake inhibitor) has been growing. In 2019, ketamine was introduced but required by the FDA to utilize a Risk Evaluation and Mitigation Strategy (REMS) because of its: (1) poor oral availability requiring intravenous (or IV) or intranasal (or IN) administration, (2) ability to cause side effects including dissociation, sedation and acute hypertension, and (3) potential abuse liability.

Ketamir-2 is a new chemical entity, an analog of ketamine that is designed to potentially preserve the same rapid antidepressant response but with improved bioavailability. It may also have decreased side effects, and decreased abuse liability, though such conclusions are within the sole authority of the FDA. This combination is intended to potentially facilitate safer and less cumbersome dosing requirements, with the goal of obtaining an orally administered pill that can be taken at home.

Figure: Chemicalstructures of ketamine and Ketamir-2 for comparison purposes.

The DEA conducted a scientific review of the Ketamir-2 in 2023 in accordance with the definitions within the CSA and its implementing regulations. Based on this review, DEA determined that” Ketamir-2 is “not a controlled substances or listed chemical under the CSA.”

Mechanism of Action of Ketamir-2

Ketamir-2’s mechanism of action (or MOA) as a rapid acting antidepressant is the same as ketamine’s, based on the fact that the two share a common inhibitory effect on the N-methyl-D-aspartate (or NMDA) receptor, a type of glutamate receptor that is believed to be integral to the antidepressant effects of both of these ketamine and Ketamir-2. In fact, Ketamir-2 and ketamine differ in less than 2% in their antagonist activity at the GRIN1/GRIN2B receptor subunit of the NMDA receptor (based inin silico analysis, see below). This subunit combination is prominently linked to neuroplasticity, believed to be a key factor in depression and the action of antidepressants such as ketamine. GRIN2B-containing NMDA receptors are implicated in synaptic plasticity changes associated with depression and its treatment.

Ketamine’s mechanism of action (or MOA) as a rapidly acting antidepressant is multifaceted and distinct from traditional antidepressants like selective serotonin reuptake inhibitors (or SSRIs) and tricyclic antidepressants. While ketamine has shown promise as a rapid-acting antidepressant, especially in treatment-resistant depression, its use is limited due to potential side effects and abuse potential that Ketamir-2 has been targeted to minimize. Moreover, whereas ketamine has a poor oral bioavailability and must therefore be given IV or IN, Ketamir-2 has a much better bioavailability suggesting it may be appropriate for oral use.

The following is a detailed synopsis of the MOAs of both Ketamir-2 and ketamine:

In summary, while Ketamir-2’s and ketamine’s antidepressant MOA are still being studied and explored, current evidence suggests a complex and involved synergistic action on various neural pathways, primarily through the modulation of glutamatergic neurotransmission, enhancement of neuroplasticity, and potentially through anti-inflammatory and neuroendocrine mechanisms. Both drugs rapid onset and efficacy in treatment-resistant cases make them potentially valuable tools in psychiatry, but the potentially improved side effect profile and oral bioavailability are what differentiate Ketamir-2 and ketamine as described below.

Ketamir-2 Clinical Development Program

The clinical development plan for Ketamir-2 involves a series of methodically structured phases, starting with IND-enabling studies and progressing through Phase 1 and Phase 2 clinical trials. These trials aim to establish the safety, efficacy, and optimal use of Ketamir-2 in treating psychiatric conditions like TRD, Major Depressive Disorder with Suicidal Ideation (MDSI), and potentially PTSD. The strategy underscores patient safety while evaluating Ketamir-2’s therapeutic benefits and risks. The successful development of Ketamir-2 could significantly impact the treatment landscape for depression, offering a novel approach that addresses the shortcomings of current therapies.

Initially, the development process begins with completion of all necessary IND-enabling studies. These preclinical studies, encompassing pharmacokinetics, pharmacodynamics, toxicology, and safety pharmacology, are crucial for ensuring that the investigational drug meets regulatory standards. The successful completion of these studies allows for the submission of an Investigational New Drug (IND) application to the FDA, specifically targeting TRD. We anticipate that we will submit our IND for Ketamir-2 by the end of 2024. See the section below titled “Research and Testing to Date – Ketamir-2” for more information.

Upon FDA acceptance of our Ketamir-2 IND, our plan progresses to Phase 1 clinical trials. These trials are designed to assess the safety and tolerability of Ketamir-2 in healthy volunteers. They are typically randomized, double-blind, and placebo-controlled, and aim to determine the appropriate dosing while closely monitoring for adverse effects. Key to this phase is the collection of pharmacokinetic and pharmacodynamic data, which guides the dosing strategies for subsequent trials.

Phase 1: Safety and Dosage Determination in Healthy Volunteers

Following the establishment of safety and initial dosing parameters in Phase 1, the development plan moves into Phase 2. This phase involves trials with patients diagnosed with TRD. The primary goal here is to evaluate the optimal dose and tolerability of Ketamir-2 in this specific patient population. Additionally, these trials provide preliminary data on the efficacy of Ketamir-2 for the treatment of TRD. Safety remains a priority, with close monitoring for any adverse events and detailed assessments using depression rating scales.

Phase 2: Dose, Tolerability, and Early Efficacy in TRD

As the development of Ketamir-2 progresses, there is potential to expand its indications. One such area is MDSI, where Ketamir-2’s application could be particularly beneficial given ketamine’s established efficacy in this domain. This would involve designing a trial specifically targeting MDSI, with a focus on the rapid onset of action and short-term safety considerations.

Furthermore, given the emerging research suggesting ketamine’s therapeutic potential in PTSD, a similar approach could be considered for Ketamir-2. Developing a trial protocol for PTSD treatment requires a careful balance, considering the complexity of the disorder, potential comorbidities, and the need for robust safety and efficacy data.

Pursuing Additional INDs:

In summary, the clinical development plan for Ketamir-2 is a meticulous, multi-phase strategy that prioritizes patient safety while exploring the drug’s potential in treating complex psychiatric conditions. Each phase is carefully designed to address specific research questions and regulatory requirements, ensuring a thorough evaluation of Ketamir-2’s therapeutic benefits and risks.

Manufacture of Product for Pre-Clinical and Clinical Development Activities

Recipharm Israel LTD, a leading global contract development and manufacturing organization (or CMDO), is currently developing a large-scale synthesis protocol for us and will be supplying quantities of Ketamir-2 and MIRA-55 needed for our pre-clinical and clinical development activities. We previously utilized Curia Global as our CMDO and are currently in discussions with other partners to have Ketamir-2 and MIRA-55 formulated into solid oral dosage forms for clinical trials.

We also utilize Frontage Laboratories and Pharmaseed LTD to conduct preclinical studies on Ketamir-2.

MIRA1A

In early February 2024, we made a significant discovery during the manufacturing and scale-up process of our patented molecule known as “MIRA1a,” which we believed was the molecule used in our pre-clinical trials and had been synthesized by contract manufacturer. Through this process, we identified a novel and improved version of the molecule, which we call MIRA-55.

As part of our due diligence and subsequent testing, which began in late 2023, we discovered that the pre-clinical studies we conducted, previously attributed to MIRA1a, were in fact performed on MIRA-55. Following this revelation, in early March 2024, we promptly filed a provisional patent for MIRA-55, which encompasses all pre-clinical studies disclosed in our two registration statements on Form S-1, declared effective on August 2, 2023, and December 27, 2023 (File Nos. 333-273024 and 333-276118, respectively). If such patent is issued, we would own the patent rights to both MIRA1a and MIRA-55.

Moreover, based on our pre-clinical analyses to date, we believe that MIRA-55 is an improvement over MIRA1a in that it displays enhanced potency and potential for efficacy.

Based on our discoveries to date, we decided to advance MIRA-55 as our lead compound for our oral pharmaceutical marijuana drug candidate while still retaining our rights to MIRA1a. As such, we do not intend to move MIRA1a forward as of the date of this Report.

MIRA-55

Our objective is to develop and commercialize new treatment options for neuropsychiatric, inflammatory, and neurologic diseases and disorders. Cannabinoids are a class of chemical compounds that are naturally occurring and are primarily found in cannabis plant extracts. The two major cannabinoids found in cannabis plant extracts include tetrahydrocannabinol, a compound that is the main psychoactive ingredient of cannabis (or THC) and cannabidiol, the second most prevalent active ingredient in cannabis which does not have psychoactive properties (or CBD). These compounds bind to CB1 and CB2 cannabinoid receptors, which are found throughout the body. Specifically, CB1 receptors are concentrated in the central nervous system (or CNS), while CB2 receptors are found mostly in peripheral organs and are associated with the immune system. When the chemical compounds bind to these cannabinoid receptors, the process elicits certain physiological responses. Physiological responses to cannabinoids may vary among individuals. Some of the effects of cannabinoids have been shown to impact nervous system functions, immune responses, muscular motor functions, gastrointestinal maintenance, blood sugar management, and the integrity of ocular functions. Based on pre-clinical testing, our product candidate, MIRA-55, appears to have a strong selectivity for CB2 versus CB1, and is designed to minimize the risk of psychoactive adverse events associated with CB1 activation.

Mechanism of Action of MIRA-55

We believe that the effects of MIRA-55 at the cannabinoid receptors CB1 and CB2 is predicted to account for the majority of its potential therapeutic effects, especially as it relates to its anti-anxiety, anti-pain and anti-inflammatory properties. For example, the difference in the dose-response effects of MIRA-55 compared with THC on CB1 receptors appears to coincide with its improved therapeutic profile. If approved by the FDA, MIRA-55 may potentially provide therapeutic effects and enhanced cognition for anxiety, pain and inflammation.

THC has been demonstrated to have biphasic physiological effects (meaning effects in two phases), which have been described for over 40 years: at low levels THC has positive effects while high doses cause the opposite, undesirable symptoms. Examples of biphasic effects at low versus high levels of THC include the anti-anxiety versus pro-anxiety effects, respectively. Through pre-clinical test, we obtained the following dose-response effects for MIRA-55 and THC at the CB1 receptor (see below). In contrast to THC, which displays an initial maximally stimulatory and then inhibitory response at CB1, MIRA-55 appears to act as a monophasic partial agonist (meaning it has a lower intrinsic activity than full agonists) in that it creates a stimulation throughout its dose range, achieving a moderate activation of the CB1 even at high doses. We believe that this accounts for the potential broad therapeutic efficacy of MIRA-55 and the observed absence of negative symptoms even at maximal doses of the drug.

**Figure:**Compound activity with the selected GPCR Biosensor Assays: THC vs MIRA-55 agonist activity at the CB1 Receptor.

In pharmacology, “efficacy” or “Emax” refers to the maximum response that can be achieved with a drug or agent. It represents the extent or magnitude of the response produced by the drug once it has bound to its target, typically referred to as a receptor. The binding between a drug and its receptor is characterized by affinity, which quantifies the strength of their interaction. Efficacy, however, assesses the action or effect of the drug following binding to the receptor.

The dose-response curve is a commonly used graph in pharmacology that depicts the relationship between the effect of a drug and its dosage. The X-axis represents the increasing doses of the drug, while the Y-axis represents the response produced by the drug. In the case of the figure above, the term “% Efficacy” on the Y-axis refers to the maximum response that can be achieved with the agonist (MIRA-55 or THC) in relation to its ability to activate GPCR receptors (specifically CB1 receptors). GPCRs are G-protein-coupled receptors that form a large group of proteins which are expressed on the cell surface of eukaryotic cells to detect molecules outside the cell and activate cellular response.

The data presented in the figure above has been normalized to the maximal and minimal responses observed in the presence of a control compound and vehicle, respectively. This normalization allows for a standardized comparison of the agonist’s efficacy.

MIRA-55 Pre-clinical Developments and Studies

As of the date of this Report, we completed several pre-clinical studies of MIRA-55, including, but not limited to, radio-ligand binding assay, elevated plus maze (or EPM) model of anxiety and hot plate model thermal sensitivity testing.

We have studied the effects of acute administration of MIRA-55 on anxiety-related phenotypes in mice to model human conditions. An intraperitoneal injection of Placebo [PBO] (e.g. saline) or MIRA-55 (e.g. 50mg/kg = Treatment) was administered to C57Bl/6 mice (n=5/group) that were 8-12 weeks old. Thirty minutes following injection, mice were tested in anxiety related measures using the Elevated Plus Maze (EPM). The EPM is a widely used pre-clinical behavioral assay for rodents and it has been validated to assess the anti-anxiety effects of pharmacological agents. If determined and approved by the FDA or other regulatory agencies, MIRA-55 appears to have anti-anxiety effects at doses that lacked side effects of sedation or intoxication in mice. The EPM is a test measuring anxiety in rodents as a screening test for putative anxiolytic compounds and as a general research tool in neurobiological anxiety research such as Generalized Anxiety Disorder (or GAD) or Post-Traumatic Stress Disorder (or PTSD). The model is based on the animal’s aversion to open spaces which are present in the open arms (Open Arm) of the maze. Anti-anxiety effects of test agents are demonstrated by an increase in the percentage of time spent in the Open Arm with treatment compared to placebo. The total distance traveled is a measure of the overall level of arousal and mobility of the mice undergoing testing on the EPM and is used to rule out any sedating or intoxicating effects of the test agent.

Pre-clinical studies also have shown the potential of MIRA-55 for relieving pain. A number of clinically approved pharmacological agents used to treat pain, including opioids, have been demonstrated to delay or ameliorate the onset of heat sensitivity upon paw exposure of mice to heat. Thirty minutes after treatment with either a placebo (control) or MIRA-55, mice were placed on a heated plate to measure the time it took for each mouse to lift its paw in response to the mild pain they felt from the heat. Mice treated with pain alleviating drugs took significantly longer to become bothered by the heat and to lift their paws. Similarly, mice treated with MIRA-55 statistically took significantly more time to lift their legs, indicating MIRA-55’s potential effectiveness as a possible treatment for pain in this model. If approved by the FDA, MIRA-55 may potentially provide therapeutic effects for pain control.

MIRA-55 is a CB2 agonist which may also be an optimal treatment for neurodegenerative diseases associated with neuroinflammation caused by microglial activation. CB2 agonism has been shown in pre-clinical studies to regulate neuroinflammatory processes, reducing the neuronal damage characteristic of degeneration. We believe there may be a strong rationale for CB2 agonism in neurodegenerative diseases, given increased CB2 expression in patients with these diseases as well as preliminary results from animal models. We see potential for a potent CB2 agonist to treat a range of neurodegenerative diseases. MIRA-55, through its robust activity at CB2 compared to CB1, was designed to minimize the risk of psychotropic adverse events associated with CB1 activation. If approved by the FDA, MIRA-55 may potentially provide therapeutic effects for neurodegenerative and neuroinflammatory illnesses.

Our pre-clinical development program for MIRA-55 has included a variety of testing. Summarized below are the tests we have completed. Our interpretation of results derived from pre-clinical data or our conclusions based on our pre-clinical data may prove inaccurate and are not necessarily predictive indicators of future results. See the section below titled “Research and Testing to Date – MIRA-55” for more information.

Our MIRA-55 Clinical Development Program

Following the pre-clinical development plan outlined above, we plan to submit to the FDA an Investigational New Drug application (or IND) focused on investigating MIRA-55 for the treatment of anxiety and cognitive decline in elderly patients.

We expect that our first IND application submission relating to MIRA-55 for the treatment of elderly patients suffering from anxiety with some cognitive decline is currently planned for the end of the second quarter of 2025, as we believe this is a patient population with unmet needs. If allowed to proceed by the FDA, a Phase I trial will be initiated 30 days post-IND submission. We expect that our second IND for MIRA-55 will focus on investigating MIRA-55 for the treatment of neuropathic pain.

All development plans depend on FDA acceptance of our IND applications. As appropriate and pursuant to discussions with the FDA, we may periodically adjust the timeline for certain filings and associated clinical trials. It is important to note that the process for conducting clinical trials is uncertain and there is no assurance that our clinical development activities will meet the planned timelines set forth above.

Our Market Opportunity and Market Advantage

Ketamir-2’s market opportunity and market advantage was analyzed by IQVIA who were contracted to perform an independent Market Characterization and Drug Valuation Analysis. TRD and MDSI indications represent areas of high unmet medical need, with significant disease burden and limited effective treatments available. Ketamir-2’s formulation as a once-daily oral medication addresses shortcomings in existing treatments, such as route of administration (RoA) and time to effectiveness.

The market opportunity for Ketamir-2 is substantial. Based on the IQVIA analysis, the U.S. has a large patient pool looking for effective treatments, with diagnosed prevalence rates of 3.1% for MDSI and 2.4% for TRD, translating to total addressable populations of 4.9 million and 3.8 million patients respectively. Based on total estimates of MDSI and TRD together, this represents a Total Diagnosed Prevalence rate of 12.3 million patients and, assuming a Treatment Rate of 65%, the Total Addressable Population is 8.7 million patients This represents a significant market, especially considering the current limitations and side effects associated with existing treatments.

**Figure:**Estimates by IQVIA of the total addressable populations affected with MDSI and TRD.

Ketamir-2’s market advantage lies in its novel profile and potential to address these unmet needs. As a synthetic ketamine derivative, we believe it potentially offers an improved mechanism to treat disease, building on the success of existing marketed therapeutics but with differences to the base molecules that potentially reduce unwanted side effects. Ketamir-2’s oral formulation is being developed to potentially not require health care professional supervision, potentially improving patient compliance and ease of use.

**Figure:**Summary of assessment by IQVIA of valuation of Ketamir-2, including the background, commercial opportunity, and drivers of valuation assessment.

The projected addressable market for Ketamir-2 are promising. If approved by the FDA and deemed safe, peak annual net sales in the U.S. are estimated to potentially reach approximately $3 billion across both MDSI and TRD, with a base case eNPV (expected net present value) of around $92 million. In the high case scenario, the unadjusted peak revenue opportunity could go up to about $7.8 billion by 2035, with the eNPV potentially reaching $324 million. The estimated patient pool for Ketamir-2 treatment may reach approximately 0.2 million patients in the U.S. by 2036. The NPV (net present value) ranges from approximately $270 million to $4.6 billion, with the base case being around $1.4 billion.

**Figure:**Actual valuation of Ketamir-2 over time, including base and peak revenue opportunities in the US.

These estimates are based on several key assumptions, including the market share Ketamir-2 might achieve, the years to peak sales, gross price per dose, and the Probability of Technical & Regulatory Success (PTRS). Feedback from key opinion leaders (KOLs) and payors suggests that there is a significant unmet need in behavioral health, particularly for treatments like Ketamir-2 with fewer adverse effects and more consistent outcomes. However, issues such as pricing, insurance coverage, and potential DEA scheduling are important considerations that could affect Ketamir-2’s market penetration.

As such, we believe Ketamir-2 presents a significant market opportunity in the treatment of TRD and MDSI, with the potential in the PTSD market, offering a novel approach with potential advantages over existing therapies in terms of efficacy, safety, and patient compliance. The financial outlook is positive, contingent upon successful market penetration and realization of its therapeutic potential.

MIRA-55, if approved, will compete in three key overlapping growth markets: the anxiety, cognitive decline (CNS/dementia), and neuropathic pain markets where multiple products with varying safety and efficacy profiles are already on the market. MIRA-55 competes at the intersection of these three markets given the target patient profile for MIRA-55.

MIRA-55 will compete primarily within the CNS market that encapsulates anxiety, dementia, other pain, Alzheimer’s, migraines and related conditions. Based on the market size of the CNS opportunity as set forth in IQVIA’s Global Use of Medicines 2023 analysis (the “IQVIA Report”), we estimate that by 2027, the U.S. CNS market will be worth $48 billion, growing between two and five percent during the period from 2023 to 2027. Within that market opportunity, anxiety is worth between approximately $10 billion and $15 billion in annual sales. If approved by the FDA, MIRA-55 may potentially provide therapeutic effects for anxiety, dementia and pain.

Anxiety and pain are expected to grow approximately five percent over the same period according to the IQVIA Report, while Alzheimer’s is expected to grow approximately twelve percent. This is critical given MIRA-55’s focus on early-stage patients with dementia, as according to the Alzheimer’s Association2023 Alzheimer’s Disease Facts and Figuresanalysis (the “Alzheimer Association”), 500,000 new Alzheimer cases emerge in the U.S. each year. According to the Alzheimer Association, about 60 to 80 percent of Alzheimer cases evolve into dementia. Thus, Alzheimer case directions are an important signal and gateway for MIRA-55-related opportunities in dementia. Based on that epidemiology, the U.S. Center for Disease Control (“CDC”) estimates that approximately 5.8 million Americans are living with Alzheimer’s, with that number expected to grow to 14 million by 2060 (“CDC Alzheimer”).

MIRA-55’s other key market will be the neuropathic pain market. Developing targeted and efficient therapies for neuropathic pain stands as a priority to address this common source of suffering and morbidity. Innovative strategies are under exploration to tackle the distinctive challenges posed by this type of pain. According to the International Association for The Study of Pain, neuropathic pain affects approximately 7-10% of the world’s population. Examples include diabetic peripheral neuropathy, postherpetic neuralgia, and multiple sclerosis related neuropathy.

Our initial focus will be a dual path: potentially winning in traditional markets as well as the marijuana analog markets using a safe, effective and, if determined by the FDA, an FDA-approved treatment option since safety and efficacy determinations are in the exclusive purview of the FDA. According to Grandview Research, today, legal medical marijuana is a $11.6 billion industry whereas legal recreational marijuana is a $26.9 billion industry. Both are sub-sets of the traditional pain and anxiety markets. However, in many patient populations, non-U.S. legal, and cultural settings, marijuana may not be the first or a viable option for treatment of neurological disorders. As a result, these patients will typically use non-steroidal anti-inflammatory drugs (NSAIDs) or various mood management drugs, opening them up to a range of non-ideal outcomes. The objective of MIRA-55 is to offer physicians and patients an approved, viable synthetic option. Thus, if approved by the FDA, we believe that MIRA-55 may potentially provide a preferred alternative in such patient populations, as it is not derived from the marijuana plant.

MIRA-55 is being developed as the first manufactured prescription drug to potentially target the CB1 and CB2 receptors for neuropathic pain and anxiety without the impurities of marijuana or its side effects, such as increased appetite and paranoia. MIRA-55 has demonstrated the ability to rapidly and significantly improve cognitive performance with acute use—i.e. doubling cognitive performance after a single dose in normal mice MIRA-55 is a novel synthetic cannabinoid analog directed at potentially treating patients with dementia associated cognitive decline and anxiety diagnoses. Unlike other cannabinoids in the market, MIRA-55 is not derived from plants. Plants generate alkaloids as a defense mechanism, and it has been speculated that plant-derived cannabinoids have adverse side effects in humans.

Furthermore, in animal studies conducted by us, MIRA-55 has preliminarily demonstrated more than 30-fold increased CB2 activation compared to CBD.

Our Strategy

The goal is to continue develop Ketamir-2 as an orally administered medication with potentially fewer side effects, free from the restrictions such as those imposed by ketamine’s REMS, to fill the current clinical need for a rapid acting antidepressant to manage TRD and MDSI in patients who are able to take Ketamir-2 at home. The strategic plan for Ketamir-2’s development encompasses several critical stages, from scaling up manufacturing to exploring effective exit strategies.

Additionally, the potential for an acquisition from a larger pharmaceutical company remains a viable exit strategy, especially if Ketamir-2 demonstrates substantial promise.

Throughout this process, it is crucial for us to maintain a robust intellectual property strategy, regularly assess the antidepressant market landscape, especially for TRD, and engage with key stakeholders. Implementing a risk management plan is also essential to navigate potential development and commercialization challenges. This strategic plan must be adaptable, capable of responding to new data, regulatory feedback, and changes in the market. Regular assessments and checkpoints will ensure the project aligns with our strategic goals and the evolving landscape of pharmaceutical development.

Our goal is to develop therapeutics targeting well-characterized CB1 and CB2 receptors with optimized pharmacological properties to transform the lives of patients with neurological diseases. Key elements of our strategy to achieve this goal include:

Competition

The principle competitor of Ketamir-2 is ketamine or ketamine analogs. Ketamine, originally known as a dissociative anesthetic, has emerged as a significant breakthrough in the treatment of depression, particularly due to its rapid-acting antidepressant properties. The FDA approved in 2019 esketamine delivered intranasal, developed by Janssen with the brand name Spravato. This has opened new avenues in psychiatric treatment, especially for patients who do not respond to traditional antidepressants, have depression with suicidal ideation, or require rapid antidepressant responses.

In contrast to most novel antidepressants, which are multi-billion dollar drugs annually, for 2023 Janssen reported $683 million in revenue from Spravato. We believe the primary reason for Spravato’s revenue performance versus other antidepressants is because Spravato’s REMS requires Spravato to be patient administered but clinician observed for 2 hours, with the patient unable to drive for the rest of the day. As described further below, we believe this presents challenges for both patients and clinicians, which has restricted the use of this form of ketamine from patients who would benefit from this treatment (e.g. those with TRD and MDSI). Ketamir-2, if ultimately FDA approved without the requirement of a REMS, could potentially avoid these challenges.

Niche Filled by ketamine

Limitations of ketamine Due to Side Effects

Requirements of ketamine under the REMS (Risk Evaluation and Mitigation Strategy)

The use of ketamine, especially Esketamine (a nasal spray form of ketamine approved for treatment-resistant depression), is regulated under the Risk Evaluation and Mitigation Strategy (REMS) program to ensure safe use:

Ketamine’s possible role as a rapid-acting antidepressant could fill a crucial niche in the management of treatment-resistant depression and acute suicidality. However, its potential use is tempered by significant side effects and the stringent requirements of the REMS program, which necessitate careful patient selection and monitoring to optimize safety and efficacy.

The finding of up to 80% oral bioavailability with the potential for decreased abuse liability (e.g. because of the lack of opiate agonist activity) and potentially decreased side effects (e.g. fewer dissociative experiences and less hypertension) puts Ketamir-2 in a situation to potentially offer the same antidepressant effects but with fewer restrictions, perhaps even permitting patients to take it orally at home.

We are subject to competition from pharmaceutical and biotechnology companies and academic and research institutions. We believe our future success will depend, in large part, on our ability to maintain a first mover advantage and competitive lead in our industry.

Competition arises mainly from two sources, traditional cell-based in vitro culture approaches and traditional in vivo animal models and testing. We also face future competition from companies developing cannabinoid therapies, as summarized in the table below:

Sativex (delta-9-tetrahydrocannibinol and cannabidiol in the EU) is an oromucosal spray indicated as treatment for symptom improvement in adult patients with moderate to severe spasticity due to multiple sclerosis (MS) who have not responded adequately to other anti-spasticity medication and who demonstrate clinically significant improvement in spasticity related symptoms during an initial trial of therapy. Sativex is not assigned a schedule in the U.S. by the DEA as it is not approved but is a Class B controlled drug under the Misuse of Drugs Act 1971 and is placed in Schedule 4 to the Misuse of Drug Regulations 2001 in the United Kingdom.

Marinol (dronabinol) is an oral cannabinoid indicated in adults for the treatment of: Anorexia associated with weight loss in patients with AIDS and nausea and vomiting associated with cancer chemotherapy in patients who have failed to respond adequately to conventional antiemetic treatments. Marinol is a Schedule III controlled substance.

Cesamet (Nabilone) is a synthetic cannabinoid for oral administration that are indicated for the treatment of the nausea and vomiting associated with cancer chemotherapy in patients who have failed to respond adequately to conventional antiemetic treatments. Cesamet contains nabilone, which is a controlled in Schedule II of the Controlled Substances Act (CSA).

Research and Testing to Date

Preclinical Research Findings

In Silico Analysis of Targets of Ketamir-2 vs ketamine

In silico analysis, referring to computer-based techniques, has become an integral part of pharmaceutical research and development.7 This approach utilizes computational methods to analyze and predict the properties and behaviors of pharmaceutical compounds. The use of in silico analysis is especially crucial in the early stages of drug development, as it aids in identifying potential drug targets and elucidating differences between a new drug and its parent compound. By analyzing large datasets, such as genomic, proteomic, and metabolomic data, researchers can predict how different compounds might interact with various biological targets. This approach helps in understanding the mechanism of action of new drugs and can significantly reduce the time and cost associated with experimental screening. InSilico Trials was contracted to provide a comparison between targets of Ketamir-2 vs ketamine employing their target identification protocol. The following characterize some of the unique targets that are predicted to interact with either Ketamir-2 or ketamine, thereby differentiating one drug from the next.

Ketamir-2 selective target:

BRD4, or Bromodomain-containing protein 4, is a member of the bromodomain and extra-terminal (BET) family of proteins and has been implicated in the regulation of gene expression, particularly those involved in cell cycle progression and inflammatory responses.8 In the context of depression, research has started to explore the role of BRD4 and its potential impact.

Ketamine selective targets:

Alpha-2a adrenergic receptor: Alpha-2a adrenergic receptors are G protein-coupled receptors (GPCRs) involved in the modulation of neurotransmitter release. They are generally thought to be inhibitory, reducing the release of norepinephrine when activated, which can lead to various physiological effects.

Sigma Opioid Receptor: Ketamine is known for its dissociative anesthetic properties, which are primarily attributed to its antagonism of the N-methyl-D-aspartate (NMDA) receptor. However, the sigma receptors, particularly the sigma-1 receptor, have also been implicated in the psychotomimetic and dissociative effects of ketamine. Here’s how ketamine’s interaction with sigma opioid receptors might contribute to its dissociative side effects:

Mu-Opioid Receptor: The Mu-opioid receptor (MOR) is one of the principal targets within the central nervous system for endogenous opioids like endorphins and enkephalins, as well as for exogenous opioid analgesics such as morphine and fentanyl. Activation of MOR typically results in analgesic effects, reduced gastrointestinal motility, respiratory depression, and can influence the reward system in the brain, which is associated with the pleasurable sensations or euphoria. Activation of the MOR by ketamine could contribute to side effects related to its abuse liability:

Bioavailability:

The Caco-2 cell model, originating from a human colorectal adenocarcinoma cell line, plays a significant role in pharmaceutical research for estimating the intestinal absorption and indirectly the bioavailability of drugs. Bioavailability, the proportion of a drug that enters the systemic circulation when introduced into the body, is crucial for determining a drug’s effectiveness. Traditionally, bioavailability is determined through in vivo studies, including human and animal trials, as well as in vitro models like the Caco-2 cell model and in silico computational approaches.

The Caco-2 model involves culturing cells that differentiate into a monolayer mimicking the intestinal epithelium, complete with tight junctions and microvilli. This model is pivotal in permeability studies to assess how well drugs can pass through the intestinal barrier and in understanding both active and passive drug transport mechanisms. While primarily used for estimating drug absorption, the Caco-2 model also serves to predict potential drug-drug interactions within the gastrointestinal system.

The Caco-2 model offers a high-throughput, cost-effective, and human-relevant system, making it a preferred choice for initial screening of multiple compounds. In pharmaceutical research, the Caco-2 model often serves as an initial study to predict the absorption properties of new drugs and is typically validated against clinical data once that becomes available. It plays a crucial role in the early stages of drug development, influencing decisions on which compounds to advance.

CaCO-2 cells are human epithelial colorectal adenocarcinoma cells that are widely used as an in vitro model of the intestinal barrier. The CaCO-2 assay is employed to study the absorption and transport of orally administered drugs across the intestinal epithelium. The assay evaluates the permeability of a drug from the apical (AP) side, representative of the intestinal lumen, to the basolateral (BL) side, representative of the blood side, and vice versa.

The bidirectional transport assays conducted with CaCO-2 cells can provide the following insights about two different drugs:

In summary, the CaCO-2 intestinal absorption (AB-BA) assay is a valuable tool for predicting the intestinal absorption and oral bioavailability of drugs. Differences in the assay results between two drugs can provide important information about their absorption characteristics, potential interactions with transporters, overall oral bioavailability, and possible drug-drug interactions.

**Figure:**Model of the CaCO-2 model of drug intestinal absorption and how well it correlates with actual measures of human intestinal absorption.

**Figure:**Data obtained from the CaCO-2 model of intestinal absorption. Propranolol, a commonly prescribed beta-blocker that is taken orally and used to treat hypertension, is included as a positive control. The intestinal absorption (AB), Intestinal efflux (BA) and net absorption (AB-BA) are shown.

As can be seen in in the figure above, the absorption from the intestinal lumen into the blood that is 80% greater (80.6 vs 44.5), the rate of efflux back into the intestinal lumen that is 35% less (-38.7 vs -59.6), and the net absorption (AB-BA) rate is 3.77 fold greater [(41.9+15.1)/15.1=3.77], respectively. Since the reported oral bioavailability of ketamine has been reported to be between 16-30% (average of 23%), then the predicted oral bioavailability of Ketamir-2 could be as high as 87% (i.e. Ketamir-2’s oral bioavailability is 3.77 fold greater than ketamine’s = 23%*3.77=87%).

This is just an approximation, and when sufficient Ketamir-2 has been synthesized to do in vivo animal initially and then human Pharmacokinetic (PK) studies, it will be possible to get a more precise estimate of Ketamir-2’s Oral Bioavailability compared to ketamine by testing and calculating the area under the concentration-time curve (AUCoral) for oral dosing divided by the AUC for IV dosing (i.e. AUCoral/AUCiv). But based on the available preliminary estimates, it appears highly likely that the oral bioavailability of Ketamir-2 in humans is going to be substantially larger than that of ketamine. Orally available Ketamir-2, as opposed to IV or IN ketamine, would be much easier to be patient self-delivered at home, thereby improving on the ease and availability of this rapid acting antidepressant for TRD & MDSI.

Eurofins DiscoverX has developed a panel of cell lines stably expressing non-tagged GPCRs that signal through cyclic adenosine monophosphate, a messenger used for intracellular signal transduction in many different organisms (or cAMP). Hit Hunter® cAMP assays are specialized tests that track the activation of a type of cell receptor known as GPCR. GPCRs play a crucial role in how cells respond to external signals, and they are activated through two pathways: Gi and Gs secondary messenger signaling. These pathways are like internal communication systems in cells that relay signals from the outside to trigger specific responses inside the cell. The assay is conducted in a straightforward, uniform manner without the need for image-based analysis. This method uses a technology developed by DiscoverX called Enzyme Fragment Complementation (or EFC). In EFC, fragments of an enzyme, specifically β-galactosidase (β-Gal), are brought together to become functional only when the GPCR is activated. β-Galactosidase, the enzyme used as a functional reporter in this assay, is typically inactive in fragmented form and becomes active when the fragments reassemble, indicating the activation of the GPCR. In this case, the GPCR target was CB1 receptor. Compounds were tested in agonist and antagonist mode with the requested GPCR Biosensor Assays. For agonist assays, data was normalized to the maximal and minimal response observed in the presence of control ligand and vehicle. This Eurofins DiscoverX system was used to test THC vs MIRA-55 agonist activity at the CB1 receptor.

Unlike CB1 receptors that mediate many of the psychotropic effects of cannabinoids on the CNS, CB2 receptors are predominantly present on cells of the immune system. Based on preliminary results of our GPCR biosensor assays, the CB2 receptor agonistic effects of MIRA-55 are 8-fold more potent than THC and 30-fold more potent than CBD.

The study regarding the ability of MIRA-55 vs THC vs CBD to activate CB2Receptors and alter intracellular cAMP levels was performed by the CRO Eurofins DiscoverX.

As can be seen in the table below, the EC50 (i.e. concentration required to induce a half maximal response) for MIRA-55 was 8 times more potent than THC and at least 30 times more potent that CBD—i.e. it only took 1 uM of MIRA-55 to induce the same response that required 8 uM of THC and >30 uM of CBD.

**Figure:**The foregoing measurements were performed as follows:

DiscoverX has developed a panel of cell lines that stably express non-tagged GPCRs (G-protein coupled receptors) capable of signaling through cAMP. The Hit Hunter® assay platform is used to investigate the functionality and response of these GPCRs.

In the case of the CB2 receptor, which is a GPCR involved in various physiological processes and has potential therapeutic implications, the Hit Hunter® assay can be employed to study the effects of drug agonists on CB2 receptor activity.

To measure the half maximal response (EC50) of CB2 receptor activation by a drug agonist that leads to a decrease in cAMP levels, an alternative approach may be required. One common method involves using forskolin, an activator of adenylate cyclase, to stimulate cAMP production. Forskolin bypasses the GPCR signaling and directly activates adenylate cyclase, resulting in increased cAMP levels.

In the presence of forskolin, the drug agonist at the CB2 receptor can then be tested at various concentrations to determine its ability to inhibit the forskolin-induced cAMP production. The drug’s concentration that leads to a 50% reduction in forskolin-stimulated cAMP levels can be considered the half maximal response or EC50.

Completed Pre-Clinical Tests*

*These were non-human studies that were not powered for statistical significance and as such, no p-values are available.

Figure: Effects of MIRA-55 vs Placebo Treatment on Mouse Behavior in the Elevated Plus Maze.

EPM is a widely used behavioral test to assess anxiety-like behavior in rodents. Typically, rodents tend to avoid open spaces due to their natural aversion to potentially dangerous areas. Therefore, spending more time in the open arms of the maze indicates decreased anxiety-like behavior. Similarly, the total distance travelled can reflect general locomotor activity and exploratory behavior, which can be influenced by the state of anxiety and the effect of drugs.

The EPM apparatus consists of two open arms and two enclosed arms elevated above the floor. Blue Bars represent the percentage of time spent in the open arms by mice in the placebo and drug-treated groups. Green Bars show the total distance travelled by mice in both groups during the EPM test.

**Figure:**In this thermal sensitivity test, mice are placed on a heated metal plate (e.g. 52-55 degrees Celsius). The time taken for the mouse to show a pain response - licking or shaking of the paws, jumping, or trying to escape from the hot plate - is measured. This time interval is known as the “hot-plate latency”. A longer latency is indicative of reduced pain sensation or a higher pain tolerance.

The Thermal Sensitivity Model of Pain in mice is a widely used experimental approach to study nociception, which is the perception of pain. In this model, thermal stimuli are applied to the hind paws of mice to assess their sensitivity to heat-induced pain. The procedure typically involves placing the mouse on a temperature-controlled surface, such as a hot plate or a radiant heat source. The temperature is gradually increased, and the response of the mouse is measured, such as the latency to withdraw its paw from the heat source. The withdrawal latency is considered an indicator of pain sensitivity, with shorter latencies indicating greater sensitivity. By comparing the response of normal mice to that of mice with altered pain sensitivity, such as genetically modified mice or mice treated with analgesic drugs, researchers can gain insights into the mechanisms underlying pain perception and potential therapeutic interventions. The Thermal Sensitivity Model of Pain in mice provides a controlled and reproducible method for studying thermal nociception, allowing researchers to investigate the effects of various genetic, pharmacological, and environmental factors on pain sensitivity. This model has contributed significantly to our understanding of pain pathways and the development of novel analgesic treatments.

As performed at Johns Hopkins, in our thermal sensitivity test, which measured sensitivity to thermal pain, MIRA-55 significantly increased the time it took mice to lift their legs in comparison to placebo (p=0.006) at 75mg/kg. This indicates that MIRA-55 has an analgesic effect and may be a potential treatment for pain. Each group (i.e. placebo and 75 mg/kg) was comprised of 9 mice, for a total of 18 mice.

The issue of how to test the effect of MIRA-55 on cognition was complicated by the following:1) MIRA-55 has anti-anxiety (i.e. anxiolytic) effects, 2) anxiolytics can potentially improve cognitive assessment outcomes by reducing anxiety levels that may otherwise hinder cognitive functioning. Thus, in commonly performed tests of cognition in mice, such as novel object recognition and Morris water maze, anxiolytic medications can indirectly result in improved performance by decreasing anxiety rather than by directly improving cognition. In order to separate assessments of the impact of MIRA-55 on cognitive performance from its demonstrated anti-anxiety effects, we employed a model of context fear conditioning wherein we dosed the mice after training. Context fear conditioning in mice is a behavioral paradigm used to measure cognitive processes related to associative learning and memory. Associative learning, where an individual learns to associate specific stimuli or contexts with particular outcomes, in this case the mice associate being in a specific chamber with receiving a mild foot shock that occurs during training the day before testing. This process of forming associations between stimuli, actions, and consequences is involved in numerous skills and behaviors in everyday life: it underlies learning new skills, developing habits, and acquiring knowledge through experiences and conditioning. The use of associating the chamber with the foot shock on day one, means that when the mice are returned to the chamber on day 2 a measure of how much freezing they do corresponds to a read out of how well they can recall the experiences they had during training on day 1 (i.e. the greater the freezing, the better the recollection of the association between the chamber and food shock). Since the mice are given MIRA-55 AFTER training that takes place on day 1, and only before testing on day 2, there is no concern about the anxiolytic effects of MIRA-55 on learning during training, but rather this model tests MIRA-55’s effects on performance only—which in this case represents memory (i.e. the ability to recognize and recall the chamber where they had previously been shocked) and to translate that into an associated behavior (i.e. freezing). As published in the Journal of Neuropharmacology in 2023, THC and cannabis impair context fear conditioning, both when given prior to training (because of its anti-anxiety effects) and when given prior to testing (because of its cognitive impairing effects). As demonstrated in the figure below, MIRA-55 resulted a dramatic effect on cognitive performance in the context fear conditioning model: as shown in B, the second panel from the left, the percentage of time spent freezing—that is a demonstration of their memory and association—in the mice who received MIRA-55 at a dose of 75 mg/kg was more than twice that of those who received 0 mg/kg=placebo (i.e. 55% vs 25%, p<0.0001). Thus, MIRA-55 doubled the cognitive performance of the mice compared to placebo. This degree of improvement in cognitive performance in healthy mice dosed just prior to testing and after learning has not been demonstrated with any cannabinoid compound previously.

**Figure:**The Contextual Fear Conditioning Model of Cognition in mice is an experimental paradigm used to study associative learning and memory processes. It focuses on the ability of mice to form an association between a specific environmental context and an aversive stimulus, which leads to the acquisition and subsequent retrieval of contextual memories. During the acquisition phase of the model, mice are exposed to a distinct context, such as a particular chamber or environment. In this context, they receive an aversive stimulus, typically a mild foot shock. The presentation of the foot shock creates an association between the contextual cues and the aversive experience. Following the acquisition phase, the mice undergo a testing phase to assess their memory of the association between the context where they received the foot shock and the memory of the aversive stimulus. They are returned to the same context where the conditioning took place and their behavioral responses, particularly fear-related behaviors such as freezing or defensive reactions, are measured.

These behavioral responses serve as indicators of the mice’s ability to retrieve the associative memory formed during the acquisition phase. The Contextual Fear Conditioning Model of Cognition in mice has been widely used in neuroscience research to explore the mechanisms of associative learning, memory formation, and the neural circuits involved in fear-related associations. It has contributed to our understanding of how animals, including humans, learn to associate environmental cues with aversive experiences, and has implications for understanding and treating conditions related to associative learning, memory deficits, and emotional disorders.

As performed at Johns Hopkins, in the Contextual Fear Conditioning Model the data shows that during training (in the absence of any treatment) the mice learned as indicated by increased freezing over time. The following day, 30 minutes after MIRA-55 administration, the mice were tested in the context test, which showed significantly increased % freezing (p=<0.0001) in females given 50mg/kg or 75mg/kg MIRA-55. The experiments were conducted with 10 mice in each group (placebo, 50 or 75 mg/kg MIRA-55) for a total of 30 mice.

In the context conditioning figure above, mice learn to associate the neutral context (the chamber) with the aversive stimulus (the foot shock), leading to a conditioned fear response (freezing). This is indicated by ‘freezing’ behavior - a fear-related response in mice characterized by immobility except for respiratory movements.

A timeline of the experimental procedure, indicating acclimatization, training (conditioning), and testing phases is shown above. Panel A, the left-most panel, shows that on day 1 the pairing of a neutral context (the conditioning chamber shown in panel C) with an aversive stimulus (a mild foot shock). With successive foot shocks the mice show increasing amounts of freezing, since they instinctively freeze in anticipation of being shocked. Panel B, titled “Context Recognition: Fear Conditioning,” shows the percentage freezing the mice did on day 2 after receiving placebo or MIRA-55 just prior to being placed in the same chamber they had been shocked on day 1. Since mice freeze in anticipation of receiving a shock, the relative amount of freezing in those mice given 0 mg/kg (placebo) vs either 50 or 75 mg/kg MIRA-55 is a readout of (i.e. proportional to) how well the mice recalled that the chamber they were returned to was the one in which they had been shocked. As shown in panel B, the mice who received 75 mg/kg of MIRA-55 right before being placed into the chamber showed 200% of the freezing than did the mice who received placebo (55% vs 25%, respectively. Panel D, in the lower right corner of the figure, shows that at 1 min after being placed in the chamber on day 2, the mice that got vehicle (=0 mg/kg MIRA-55), relative to those that got MIRA-55, have much less freezing, and in fact have less freezing over time. The mice given MIRA-55 start off with better recognition and recall of the chamber (demonstrated as increased freezing) at 1 minute and increase the association of the chamber with the prior shocks (because they increase freezing over time).

Because MIRA-55 is an anxiolytic, we decided to test whether it could impair cognitive function. We therefore sought to determine if MIRA-55 could impair attention—a different aspect of cognition than memory, recall and associative learning, and one that is affected negatively by sedating compounds (e.g. THC, Cannabis, benzodiazepine, etc.) and positively by stimulants (e.g. caffeine, nicotine, amphetamine) In order to assess whether MIRA-55 affected attention as compared to THC required a different testing model—Psychomotor Vigilance Test (PVT). The rat Psychomotor Vigilance Test (rPVT) is a widely used method to measure sustained attention in rodents. In the rPVT model, rats are trained to respond to a visual stimulus by pressing a lever, with shorter reaction times indicative of better attentional performance. Mice with longer reaction times or higher variability in response times may be considered to have attention deficits or altered vigilance. Data is shown as percentage accuracy at pressing the lever within the allowed reaction time vs dose of drug used. In the figure below, it can be seen that at doses of THC that impair attention, MIRA-55 had no negative effects on attention (i.e. their accuracy at pressing a lever at the right amount of time after receiving a trained cue was not impaired at all).

**Figure:**Comparison of MIRA-55 versus THC on Psychomotor Vigilance Test (PVT) Performance in Rats. The figure displays the percentage accuracy of rats in the Psychomotor Vigilance Test (PVT) following administration of MIRA-55 (blue) or THC (red). The y-axis represents the percentage accuracy (% Accuracy), indicating the proportion of correct responses in the PVT task. The x-axis represents the treatment condition, with increasing amount of compound being given to the rats before testing. The data shows that rats treated with MIRA-55 exhibited no decrease in percentage accuracy compared to the THC group (p < 0.05). The results indicate that administration of MIRA-55 had no negative impact on attention performance in the PVT task, as evidenced by the maintenance of 100% accuracy across the dosage range, compared to THC that impaired attention leading to decreased accuracy more and more with increasing dosages.

The Psychomotor Vigilance Test (PVT) is a behavioral test used in rats to assess attention and speed of response, providing insights into their vigilance and cognitive performance. It is based on the measurement of reaction times to visual stimuli, typically presented in a simple reaction time task paradigm.

In the PVT, rats are typically placed in an operant chamber or testing apparatus equipped with a visual stimulus, such as a light or LED. The rats are trained to perform a specific response, such as pressing a lever or nose-poking, when the visual stimulus appears. The timing of the visual stimuli is randomized to prevent predictability and maintain the animals’ attention.

During the test, the rats are required to pay attention to the visual stimuli and respond as quickly as possible when they appear. The reaction time, which represents the time it takes for the rat to initiate the response upon stimulus presentation, is recorded. This measure reflects the speed of response and can provide an indication of the rat’s attentional state and ability to sustain attention over time. By analyzing the reaction time data, researchers can evaluate the rat’s attentional performance, including measures such as mean reaction time, variability in response times, and the occurrence of lapses or errors. The PVT has been widely used to investigate the effects of different manipulations, such as pharmacological interventions that cause sedation, sleep deprivation, or experimental treatments, on attention, alertness, and cognitive performance in rats.

Therefore, the combination of cognitive assessments demonstrated the following: despite having anxiolytic effects, 1) MIRA-55 significantly improved associative learning, memory and recall in the context fear conditioning model, and 2) MIRA-55 had no negative effects on attention at doses that THC showed significant impairment. This is the first time a cannabinoid has been shown to enhance (rather than inhibit) cognition when given to normal healthy mice after training but before testing, demonstrating a specific cognitive improvement as a direct effect on the brain that is independent of indirect effects—such as with acute administration by decreasing anxiety or with long term administration by having anti-inflammatory effects in neurodegenerative diseases.

Due to further optimization of the manufacturing process, our pre-clinical work in 2024 will include the conduct of several other pre-clinical studies and initiation of a 7-day maximum tolerated dose study of MIRA-55 in rats and dogs.

We further plan on neurobehavioral evaluation of orally and intraperitoneally administered MIRA-55 in rats and mice, respiratory evaluation of orally administered MIRA-55 in rats, and in vitro testing for effects of MIRA-55 on hERG (the human Ether-à-go-go-Related Gene) channel currents. The hERG is an early in vitro assay required by the FDA to alert companies of any potential cardiac abnormalities by the product before proceeding with dose studies in humans. hERG is a gene that codes for a protein known as the alpha subunit of a potassium ion channel. This ion channel (sometimes simply denoted as ‘hERG’) is best known for its contribution to the electrical activity of the heart: the hERG channel mediates the repolarizing current in the cardiac action potential, which helps coordinate the heart’s beating. When this channel’s ability to conduct electrical current across the cell membrane is inhibited or compromised, either by application of drugs or by rare mutations in some individuals, it can result in a potentially fatal disorder called long QT syndrome.

Testing is anticipated to conclude in the first quarter of 2025. Additionally, a 28-day toxicology analysis for dogs and rats is expected to begin at the end of the fourth quarter of 2024 and continue through the first quarter of 2025.

We have started the analytical development and manufacturing of MIRA-55 as of January 2023. By the third quarter of 2024, we anticipate our suppliers will be developing MIRA-55 at scale and manufactured under GLP/cGMP conditions, expanding on earlier non-GMP volumes of MIRA-55 for use in our initial testing programs. We plan to work closely with our suppliers to generate sufficient volumes of cGMP-grade MIRA-55 materials for the planned pre-clinical toxicity programs, expanded animal testing and human trials expected to be performed in 2025, subject to FDA approval.

Regulation

The FDA and comparable regulatory authorities in state and local jurisdictions impose substantial and burdensome requirements upon companies involved in the clinical development, manufacture, marketing, and distribution of drugs. 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 drug candidates.

U.S. Government Regulation

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending New Drug Applications (or NDAs), withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

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

Pre-clinical studies

Before testing any drug or biological product candidate in humans, the product candidate must undergo rigorous pre-clinical testing. The pre-clinical developmental stage generally involves laboratory evaluations of drug chemistry, formulation, and stability, as well as studies to evaluate toxicity in animals, to assess the potential for adverse events (“AEs”) and, in some cases, to establish a rationale for therapeutic use. The conduct of pre-clinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies. An IND sponsor must submit the results of the pre-clinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND.

An IND is a request for authorization from the FDA to ship an investigation product and then administer it to humans and must be allowed to proceed by the FDA before human clinical trials may begin. Some long-term pre-clinical testing, such as animal tests of reproductive AEs and carcinogenicity, may continue after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions before that time related to one or more proposed clinical trials and places the trial on clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical trials

The clinical stage of development involves the administration of the investigational product to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by, or under control of, the trial sponsor, in accordance with GCPs, which include the requirement that all research patients provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria and the parameters to be used to monitor subject safety and assess efficacy. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND. Furthermore, each clinical trial must be reviewed and approved by an IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. There also are requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries. Information about most clinical trials must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website. Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed in some cases for up to two years after the date of completion of the trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.

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

Post-approval trials, sometimes referred to as Phase IV clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow up. In certain instances, the FDA may mandate the performance of Phase IV clinical trials as a condition of approval of an NDA or a Biologics License Application (“BLA”).

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if significant adverse events (“SAEs”) occur. The FDA or the sponsor may suspend or terminate a clinical trial at any time, or the FDA may impose other sanctions on various grounds, including a finding that the research patients are being exposed to an unacceptable health risk. Similarly, an IRB can refuse, suspend, or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

Concurrently with clinical trials, companies usually complete additional pre-clinical studies and must also develop additional information about the physical characteristics of the drug or biological product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, potency, and purity of the final biological product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life.

Marketing Approval

Assuming successful completion of the required clinical testing, the results of the pre-clinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls, and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee.

The review process typically takes twelve months from the date the NDA is submitted to the FDA. The FDA conducts a preliminary review of all NDAs within the first 60 days after submission to determine whether they are sufficiently complete to permit substantive review before accepting them for “filing.” The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information and may be subject to an additional application user fee. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged, or held meets standards designed to assure the product’s continued safety, quality and purity. Under the current guidelines in effect in the Prescription Drug User Fee Act (PDUFA), the FDA has a goal to review and act on the submission within ten months from the completion of the preliminary review of a standard NDA for a new molecular entity.

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

The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical trials or pre-clinical studies in order for FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Post-approval requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

Intellectual Property

KETAMIR-2

We license the U.S., Canadian, and Mexican patent rights for the use of KETAMIR-2 in human applications from MIRALOGX. MIRALOGX filed international application no. PCT/US2024/018594 under the Patent Cooperation Treaty (PCT) on March 6, 2024, titled, ANTIDEPRESSANT COMPOUNDS, PHARMACEUTICAL COMPOSITIONS, AND METHODS OF TREATING DEPRESSION AND OTHER DISORDERS, and in due course intends to enter the national phase in the United States, Canada and Mexico, among other countries. These applications, if granted and subject to payment of patent maintenance fees, would offer protection extending through at least March 6, 2044. The patent rights for KETAMIR-2 outside of the United States, Canada, and Mexico are not included in our current patent rights.

Our license from MIRALOGX is set forth in the Exclusive License Agreement, dated November 15, 2023, pursuant to which the licensed field of use includes therapeutic treatments and other medical or health uses in humans, and related preclinical studies and activities conducted in furtherance of obtaining regulatory approval for and commercialization of human therapeutic treatments and uses (the “MIRALOGX License Agreement”). “Licensed Product” is defined as a drug product containing as an active agent 2-(2-chlorophenyl)-2-(methylamino)cyclopentan-1-one or a pharmaceutically acceptable salt or ester thereof. We also have the right to grant corresponding sublicenses under the licensed patent rights. The MIRALOGX License Agreement provides for the payment to MIRALOGX of an 8% royalty (payable quarterly) on our net sales of Licensed Products by us or our sublicensees and on non-royalty bearing milestone revenue, with the royalty obligation ceasing upon the later of the expiration of the last-to-expire licensed patent. The agreement also provides for an up-front Cost Reimbursement of $100,000 payable to MIRALOGX to cover the already-incurred costs associated with the patent rights. The Cost Reimbursement is the only payment made to date under the agreement. MIRALOGX may terminate the agreement upon insolvency, an uncured breach including the failure to make any payment owed under the agreement or the failure to use commercially reasonable efforts to develop the licensed product, or upon a default of the November 15, 2023 Promissory Note and Loan Agreement. The MIRALOGX License Agreement provides that MIRALOGX will have sole control over the filing, prosecution, maintenance, and management of the licensed patent rights, provided that we will be responsible for the cost of prosecuting and maintaining the licensed patents. The agreement grants to us the primary right, but not the obligation, to enforce the licensed patent rights.

Besides relying on patents, we also rely on trade secrets, proprietary know-how and continuing innovation to develop and maintain our competitive position, especially when we do not believe that patent protection is appropriate or can be obtained. We seek protection of these trade secrets, proprietary know-how and any continuing innovation, in part, through confidentiality and proprietary information agreements. However, these agreements may not provide meaningful protection for, or adequate remedies to protect, our technology in the event of unauthorized use or disclosure of information. Furthermore, our trade secrets may otherwise become known to, or be independently developed by, our competitors. We intend to seek appropriate patent protection for technology in our research and development programs, where applicable, and their uses by filing patent applications in the United States and other selected countries. We intend for these patent applications to cover, where possible, claims for compositions of matter, medical uses, processes for preparation and formulations.

We have a pending provisional patent application directed to MIRA-55, a structure that was synthesized and isolated during the research and development of MIRA1a titled “Synthetic Cannabinoid Analogs, Pharmaceutical Compositions and Methods of Treating Anxiety and Other Disorders”. The Company intends to pursue domestic and foreign filings based on the provisional application to seek global patent protection for MIRA-55.

MIRA1a

The U.S. Patent 10,787,675 B2, titled “Purified Synthetic Marijuana and Methods of Treatment by Administering Same,” which covers the MIRA1a compoundper se as a racemic mixture, an isolated R-enantiomer, or an isolated S-enantiomer, as well as pharmaceutical formulations of the compound, was assigned to our Company by SRQ Patent Holdings II, LLC (“SRQ”) in December 2021. This patent also covers MIRA1a in methods of treating Alzheimer’s disease, anxiety, depression, and addictions. Subject to payment of patent maintenance fees, the ‘675 patent offers protection extending through at least February 11, 2039. According to the assignment and royalty agreement, we owe 8% in royalty revenue on net sales price and royalty revenue and 8% of milestone payment revenue to SRQ.

The royalties shall continue, in each country on a product-by-product and country-by-country basis until the later of i) the date of expiration of the last to expire patent included within the Innovation, or ii) the date of expiration of the last strategic partnership/licensing agreement including the Innovation.

We currently have no plans to develop the MIRA1a compound for approval and commercialization in or outside of the United States. See “Risk Factors— Risks Related to Our Intellectual Property— We own the rights associated with our patents in the United States, but we do not own the rights to patents covering MIRA1a in foreign jurisdictions.”