Annovis Bio Inc

Previous wording

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. In several studies, Buntanetap was observed to inhibit the synthesis of neurotoxic proteins - APP/Aβ (“APP”), tau/phospho-tau (“tau”) and α-Synuclein (“αSYN”) - that are one of the main causes of neurodegeneration. High levels of neurotoxic proteins lead to impaired axonal transport, which is responsible for the communication between and within nerve cells. When that communication is impaired, the immune system is activated and attacks the nerve cells, eventually killing them. We have observed in our clinical studies in early AD and early PD patients and pre-clinical studies in mice and rats that Buntanetap lowered neurotoxic protein levels leading to improved axonal transport, reduced inflammation, lower nerve cell death and improved affected function.

Current wording

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. 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 reduced axonal transport, which is responsible for the communication between and within nerve cells. 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.

Previous wording

We designed the studies by applying our understanding of the underlying neurodegenerative disease states and measured both target and pathway validation in the spinal fluid of patients to determine whether patients improved following treatment. In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics of Buntanetap, our AD/PD Trials met exploratory endpoints of measures of biomarkers and improvements in cognition in AD patients, and in function in PD patients. We believe that the AD/PD Trials represent the first double-blind placebo-controlled studies that showed improvements in AD patients, as measured by ADAS-Cog, and in PD patients, as measured by UPDRS. Following completion of the AD/PD Trials, we submitted our data to the U.S. Food and Drug Administration (“FDA”) and requested direction to further pursue the development of Buntanetap in early PD patients. With the FDA’s guidance, we initiated a Phase 3 study in early PD patients in August 2022 (our “Phase 3 PD Study”). In the Phase 3 PD Study, early PD patients were defined as those at Hoehn & Yahr

Current wording

We designed the studies by applying our understanding of the underlying neurodegenerative disease states and measured both target and pathway validation in the spinal fluid of patients to determine whether patients improved following treatment. In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics of Buntanetap, our AD/PD Trials met exploratory endpoints for measures of biomarkers and improvements in cognition in AD patients, as well as function in PD patients. We believe that the AD/PD Trials represent the first double-blind placebo-controlled studies that showed improvements in AD patients, as measured by ADAS-Cog, and in PD patients, as measured by UPDRS. Following completion of the AD/PD Trials, we submitted our data to the U.S. Food and Drug Administration (“FDA”) and requested direction to further pursue the development of Buntanetap in early PD patients. With the FDA’s guidance, we initiated a Phase 3 study in early PD patients in August 2022 (our “Phase 3 PD Study”). In the Phase 3 PD Study, early PD patients were defined as those at Hoehn &

Previous wording

stages 1, 2 or 3 and OFF times of less than two hours per day. OFF time refers to when PD motor and/or non-motor symptoms occur between medication doses. We also submitted a proposed protocol for the treatment of moderate AD to the FDA, and after receiving permission to proceed, we initiated a Phase 2/3 study in mild to moderate AD patients in February 2023 (our “Phase 2/3 AD Study”). In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with an MMSE score between 14 and 24.

Current wording

Yahr stages 1, 2 or 3 and OFF times of less than two hours per day. OFF time refers to when PD motor and/or non-motor symptoms occur between medication doses. We also submitted a proposed protocol for the treatment of moderate AD to the FDA, and after receiving permission to proceed, we initiated a Phase 2/3 study in mild to moderate AD patients in February 2023 (our “Phase 2/3 AD Study”). In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with an MMSE score between 14 and 24.

Previous wording

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. 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 data showed that in two subgroups, Buntanetap improved UPDRS 2, 3, 2+3 and total. It also showed that in the whole 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. We expect to discuss the PD data with the FDA in the fall of 2024. During that meeting we plan to propose continued development of Buntanetap in an 18-month disease-modifying trial.

Current wording

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. 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 data showed that in two subgroups, Buntanetap improved UPDRS 2, 3, 2+3 and total. It also showed that in the whole 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. We expect to discuss the PD data with the FDA at an end-of-study meeting in early 2025. During that meeting, we plan to propose continued development of Buntanetap with pivotal Phase 3 trials.

Previous wording

For the 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. 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. We have reported the data to the FDA and asked for an end-of-Phase 2 meeting for AD. We expect to discuss the AD data with the FDA in the fall of 2024. We are also proposing continued development of Buntanetap in an 18-month disease-modifying trial, focused on biomarker-positive early AD patients. We presented the data at AAIC 2024 and further plan to publish it in a peer-reviewed journal.

Current wording

For the AD Study, we disclosed the results of the pre-planned 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 expected. 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.

Previous wording

We believe that we are the only company developing a drug for AD and PD that inhibits more than one neurotoxic protein and has a mechanism of action designed to restore nerve cell axonal and synaptic activity. By improving brain function, our goal is to treat memory loss and dementia associated with AD, as well as body and brain function associated with PD. Based on pre-clinical and clinical data collected to date, we believe that Buntanetap has the potential to be the first drug to interfere with the underlying mechanism of neurodegeneration, potentially enabling Buntanetap to be the only drug to improve cognition in AD and motor function in PD. The industry has encountered challenges in specifically targeting one neurotoxic protein, be it APP, tau or αSYN, indicating that doing so only modestly or 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 four most relevant neurotoxic proteins. Studies have found that AD and PD are the most common neurodegenerative diseases in the U.S. and accordingly, these diseases present two unmet needs of the aging population and two potentially large U.S. markets if a DMD is developed and approved.

Current wording

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

Previous wording

We have never been profitable and have incurred net losses since inception. Our accumulated deficit at June 30, 2024 was $116,346.4 thousand. 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. 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, or if, we will be able to achieve or maintain profitability.

Current wording

We have never been profitable and have incurred net losses since inception. Our accumulated deficit at September 30, 2024 was $129.0 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. 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, or if, we will be able to achieve or maintain profitability.

Previous wording

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. We believe that our cash and cash equivalents as of June 30, 2024, combined with warrant exercise proceeds from July 2024 and proceeds from share issuances under our ELOC Purchase Agreement (both discussed below), will be sufficient to fund our operating expenses and capital expenditure requirements until we initiate additional FDA approved studies for AD and PD, which we expect to take place after the planned end-of-study meetings, in the second half of 2024. We will need to raise substantial additional capital to complete the development and commercialization of our product candidates through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. 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.

Current wording

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. We believe that our cash and cash equivalents as of September 30, 2024, will be sufficient to fund our operating expenses and capital expenditure requirements until we initiate the aforementioned 6-month Phase 3 study for AD, which we expect to take place during the first quarter of 2025. We will need to raise substantial additional capital to complete the development and commercialization of our product candidates through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. 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.

Previous wording

Research and development expenses for the three months ended June 30, 2024 were $5,785.2 thousand, compared to $8,262.2 thousand for the three months ended June 30, 2023. The $2,477.0 thousand decrease was primarily attributable to decreased contract research expenditures of $5,310.4 thousand given timing of study costs with respect to our Phase 3 study in early PD patients and Phase 2/3 in AD patients, offset by an increase of $2,398.4 thousand for increased contract manufacturing and drug substance costs for future planned clinical supply, as well as an increase of $471.7 thousand resulting from various biostatistical and bioanalytical projects and associated with the completed PD and AD clinical studies.

Current wording

Research and development expenses for the three months ended September 30, 2024 were $2.7 million, compared to $13.8 million for the three months ended September 30, 2023. The $11.1 million decrease was attributable to decreased contract research expenditures of $11.8 million, given the wind-down of activities for our completed Phase 3 study in early PD patients and Phase 2/3 in AD patients during 2024, partially offset by an increase of $0.6 million in contract manufacturing and drug substance costs incurred for planned Phase 3 clinical supply.

Previous wording

Financing costs were $1,346.1 thousand for the three months ended June 30, 2024. We did not incur any financing costs for the three months ended June 30, 2023. The $1,346.1 thousand increase was attributable to issuance costs as well as changes in derivative fair value associated with our ELOC financing with the ELOC Purchaser, described further below.

Current wording

Financing costs were $0.5 million for the three months ended September 30, 2024. We did not incur any financing costs for the three months ended September 30, 2023. The change was attributable to issuance costs as well as changes in derivative fair value associated with our ELOC financing with the ELOC Purchaser, described further below.

Previous wording

Change in fair value of warrants was a gain of $10,761.0 thousand for the six months ended June 30, 2024. There was no change in fair for the six months ended June 30, 2023. This increase was attributable to the fair value remeasurement with respect to our liability-classified Canaccord Warrants during 2024. The associated gain recorded in Results of Operations was primarily driven by the decrease in our stock price during 2024, which caused the fair value of the liability to decrease.

Current wording

Change in fair value of warrants was a loss of $7.9 million for the three months ended September 30, 2024. There was no change in fair value for the three months ended September 30, 2023. This change was attributable to the fair value remeasurement with respect to our liability-classified Canaccord Warrants during the third quarter of 2024. The associated loss recorded in the statements of operations was primarily driven by warrant exercises made at higher stock prices during the third quarter of 2024, triggering remeasurement.

Previous wording

The following table summarizes the results of our operations for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes the results of our operations for the nine months ended September 30, 2024 and 2023:

Previous wording

Financing costs were $1,346.1 thousand for the six months ended June 30, 2024. We did not incur any financing costs for the six months ended June 30, 2023. The $1,346.1 thousand increase was attributable to issuance costs as well as changes in derivative fair value associated with our ELOC financing with the ELOC Purchaser, described further below.

Current wording

Financing costs were $1.9 million for the nine months ended September 30, 2024. We did not incur any financing costs for the nine months ended September 30, 2023. The change was attributable to issuance costs as well as changes in derivative fair value associated with our ELOC financing with the ELOC Purchaser, described further below.

Previous wording

Change in fair value of warrants was a gain of $4,062.3 thousand for the three months ended June 30, 2024. There was no change in fair value for the three months ended June 30, 2023. The $4,062.3 thousand increase was attributable to the fair value remeasurement with respect to our liability-classified Canaccord Warrants during the second quarter of 2024. The associated gain recorded in the Statements of Operations was primarily driven by the decrease in our stock price during the second quarter of 2024, which caused the fair value of the liability to decrease.

Current wording

Change in fair value of warrants was a gain of $2.9 million for the nine months ended September 30, 2024. There was no change in fair value for the nine months ended September 30, 2023. This change was attributable to the fair value remeasurement with respect to our liability-classified Canaccord Warrants, as well as the impacts of warrant exercises, during 2024. The associated gain recorded in statements of operations was primarily driven by the decrease in our stock price since the end of 2023, which caused the liability fair value to decrease, offset by the impacts of warrant exercises in the third quarter of 2024, triggering remeasurement.

Previous wording

Interest income was $26.0 thousand for the three months ended June 30, 2024. Interest income was $222.6 thousand for the three months ended June 30, 2023. The decrease of $196.6 thousand was the result of lower cash and cash equivalent balances when compared to the prior year period.

Current wording

Interest income was $0.2 million for the nine months ended September 30, 2024. Interest income was $0.6 million for the nine months ended September 30, 2023. The decrease of $0.4 million was the result of lower cash and cash equivalent balances when compared to the prior year period.

Previous wording

Since our inception in 2008, we have devoted most of our cash resources to research and development and general and administrative activities. We have financed our operations primarily with the proceeds from the sale of common stock and warrants. To date, we have not generated any revenue from the sale of products, and we do not anticipate generating any revenue from the sale of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of June 30, 2024, our principal source of liquidity was our cash and cash equivalents, which totaled $3,997.8 thousand. We do not believe that our cash on hand will be sufficient to fund our operations for at least twelve months beyond the date of this filing.

Current wording

Since our inception in 2008, we have devoted most of our cash resources to research and development and general and administrative activities. We have financed our operations primarily with the proceeds from the sale of common stock and warrants. To date, we have not generated any revenue from the sale of products, and we do not anticipate generating any revenue from the sale of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of September 30, 2024, our principal source of liquidity was our cash and cash equivalents, which totaled $12.6 million. We do not believe that our cash on hand will be sufficient to fund our operations for at least twelve months beyond the date of this filing.

Previous wording

Upon execution of the ELOC Purchase Agreement, we agreed to issue 33,937 shares of common stock as commitment shares to the ELOC Purchaser. In addition to the commitment shares referenced above, we sold 700.0 thousand shares of our common stock under the purchase agreement and received net proceeds of $4,236.0 thousand. No shares were issued under the purchase agreement prior to the second quarter of 2024. The ELOC Purchaser has agreed that during the term of the Purchase Agreement, neither it nor any of its affiliates will engage in any short sales or hedging transactions involving the Company’s common stock.

Current wording

Upon execution of the ELOC Purchase Agreement, we agreed to issue 33,937 shares of common stock as commitment shares to the ELOC Purchaser. In addition to the commitment shares referenced above, as of September 30, 2024 we have sold approximately 1.2 million shares of our common stock under the purchase agreement and received net proceeds of $8.6 million. The ELOC Purchaser has agreed that during the term of the Purchase Agreement, neither it nor any of its affiliates will engage in any short sales or hedging transactions involving the Company’s common stock.

Previous wording

On both March 15, 2024 and March 21, 2024, we entered into separate securities purchase agreements with an institutional investor. When aggregating the results of both purchase agreements, we issued 431.4 thousand shares for net proceeds of $3,875.0 thousand.

Current wording

On both March 15, 2024 and March 21, 2024, we entered into separate securities purchase agreements with an institutional investor. When aggregating the results of both purchase agreements, we issued 0.4 million shares for net proceeds of $3.9 million.

Previous wording

On April 7, 2023, we sold 84.5 thousand shares of common stock in a private placement to individual members of our Board of Directors and management, for net proceeds of $1,065.0 thousand.

Current wording

On April 7, 2023, we sold 0.1 million shares of common stock in a private placement to individual members of our Board of Directors and management, for net proceeds of $1.1 million.

Previous wording

On March 31, 2023, we entered into an ATM Equity Offering Sales Agreement with BofA Securities, Inc. and ThinkEquity LLC, as sales agents, pursuant to which the Company could offer and sell, shares of the Company’s common stock from time to time, having an aggregate offering price of up to $50,000.0 thousand. Prior to termination of the Sales Agreement, the Company sold 704.0 thousand shares, for net proceeds of $7,506.2 thousand.

Current wording

On March 31, 2023, we entered into an ATM Equity Offering Sales Agreement with BofA Securities, Inc. and ThinkEquity LLC, as sales agents, pursuant to which the Company could offer and sell, shares of the Company’s common stock from time to time, having an aggregate offering price of up to $50.0 million. Prior to termination of the Sales Agreement, the Company sold 0.7 million shares, for net proceeds of $7.5 million.

Previous wording

The following table provides a summary of our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table provides a summary of our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

Cash used in operating activities was $10,408.0 thousand for the six months June 30, 2024, compared to $21,232.6 thousand for the six months ended June 30, 2023. The decrease in cash used in operations was primarily driven by decreases in operating expenditures associated with clinical trial expenses, given timing of study costs with respect to our Phase 3 study in early PD patients and Phase 2/3 in AD patients.

Current wording

Cash used in operating activities was $13.6 million for the nine months September 30, 2024, compared to $30.6 million for the nine months ended September 30, 2023. The decrease in cash used in operations was primarily driven by decreases in clinical trial expenditures year over year, given the wind-down of our AD and PD studies during 2024.

Previous wording

Contingent upon continued achievement of our fundraising requirements, we expect cash used in operating activities to continue to be elevated during and after 2024, due to expected operating losses associated with continued development of our product candidates, including clinical trial expenses for our planned disease-modifying studies.

Current wording

Contingent upon continued achievement of our fundraising requirements, we expect cash used in operating activities to return to elevated levels after 2024, due to expected operating expenditures associated with continued development of our product candidates, including but not limited to clinical trial expenses for our planned pivotal Phase 3 studies for both AD and PD.

Previous wording

Cash provided by financing activities was $8,651.0 thousand for the six months ended June 30, 2024, compared to $8,579.6 thousand for the six months ended June 30, 2023. During the six months ended June 30, 2024, cash provided by financing activities primarily consisted of proceeds of $540.0 thousand from warrant exercises and a combined $3,875.0 thousand received from our March registered direct offerings and $4,236.0 thousand of proceeds from share issuances under our ELOC Purchase Agreement. During the six months ended June 30, 2023, cash provided by financing activities primarily consisted of $1,065.0 thousand in proceeds from our April 2023 Private Placement and $7,506.2 thousand in proceeds from our March 2023 ATM.

Current wording

Cash provided by financing activities was $20.5 million for the nine months ended September 30, 2024, compared to $8.6 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, cash provided by financing activities primarily consisted of proceeds of $8.0 million from warrant exercises, a combined $3.9 million received from our March registered direct offerings and $8.6 million of proceeds from share issuances under our ELOC Purchase Agreement. During the nine months ended September 30, 2023, cash provided by financing activities primarily consisted of $1.1 million in proceeds from our April 2023 Private Placement and $7.5 million in proceeds from our March 2023 ATM.

Previous wording

The preparation of financial statements in conformity with GAAP requires us to use judgment in making certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in our financial statements and accompanying notes. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require difficult, subjective and complex judgments by Management in order to make estimates about the effect of matters that are inherently uncertain. During the three and six month periods ended June 30, 2024, there were no significant changes to our critical accounting policies from those described in our annual financial statements for the 2023 fiscal year, which we included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

The preparation of financial statements in conformity with GAAP requires us to use judgment in making certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in our financial statements and accompanying notes. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require difficult, subjective and complex judgments by Management in order to make estimates about the effect of matters that are inherently uncertain. During the three and nine month periods ended September 30, 2024, there were no significant changes to our critical accounting policies from those described in our annual financial statements for the 2023 fiscal year, which we included in our Annual Report on Form 10-K for the year ended December 31, 2023.