Alzamend Neuro(US:ALZN)2024-03-25 21:27Product Development - Alzamend Neuro aims to develop therapeutics for Alzheimer's, bipolar disorder, major depressive disorder, and post-traumatic stress disorder, with two main product candidates: AL001 and ALZN002[101]. - AL001 has shown positive preclinical results, preventing cognitive deficits and improving memory compared to lithium carbonate, with a maximum tolerated dose identified at 240 mg three times daily[112][113]. - The company plans to initiate two safety and efficacy clinical trials for AL001 in Alzheimer's patients, with Investigational New Drug applications submitted for bipolar disorder, major depressive disorder, and post-traumatic stress disorder[115]. - ALZN002 is an active immunotherapy vaccine designed to treat mild to moderate dementia of the Alzheimer's type, with a Phase I/IIA clinical trial initiated in April 2023[118][119]. - Alzamend's strategy includes advancing clinical development and exploring additional indications for its product candidates[111]. Financial Performance - Total operating expenses for the three months ended January 31, 2024, were $2.66 million, a decrease of 51% from $5.42 million in the same period of 2023[125]. - Research and development expenses decreased by 34% to $1.91 million for the three months ended January 31, 2024, compared to $2.89 million in 2023[125]. - The net loss for the three months ended January 31, 2024, was $2.66 million, a reduction of 51% from a net loss of $5.43 million in the same period of 2023[125]. - No revenue was generated during the three months ended January 31, 2024, and the company does not anticipate generating revenue in the foreseeable future[126]. - General and administrative expenses for the three months ended January 31, 2024, were $751,000, down 70% from $2.53 million in 2023[133]. - Clinical trial fees for the three months ended January 31, 2024, were $1.25 million, a decrease of 39% from $2.05 million in 2023[130]. - For the nine months ended January 31, 2024, total operating expenses were $9.09 million, a decrease of 21% from $11.57 million in the same period of 2023[141]. - Research and development expenses for the nine months ended January 31, 2024, were $6.27 million, an increase of 8% from $5.80 million in 2023[143]. - The company incurred a net loss of $9.1 million for the nine months ended January 31, 2024, compared to a net loss of $6.7 million for the same period in 2023[156]. - The company reported general and administrative expenses of $2.8 million for the nine months ended January 31, 2024, a decrease of 51% from $5.8 million in the prior year[150]. - Clinical trial fees increased to $3.3 million for the nine months ended January 31, 2024, up from $2.6 million in the same period in 2023, with $1.9 million allocated to the Phase IIA clinical trial for AL001[147]. - Stock-based compensation expense decreased to $660,000 for the nine months ended January 31, 2024, down 79% from $3.1 million in the prior year[152]. Compliance and Regulatory Issues - Alzamend received a deficiency letter from Nasdaq on September 26, 2023, indicating that the market value of its listed securities fell below the $35 million requirement for continued listing[121]. - The company has until March 25, 2024, to regain compliance with the Nasdaq listing rule by maintaining a market value of $35 million or more for at least 10 consecutive business days[121]. - Nasdaq issued a Deficiency Letter due to the Common Stock bid price closing below $1.00 for 30 consecutive business days, with a compliance deadline of July 30, 2024[122]. Funding and Capital Structure - As of January 31, 2024, the company had cash of $283,000 and a working capital deficiency of $3.2 million[157]. - The company sold 816,426 shares of Common Stock for gross proceeds of $1.0 million during the nine months ended January 31, 2024, as part of an At-the-Market Offering[161]. - The company entered into an agreement to sell up to $6 million of Series B Convertible Preferred Stock, with the first closing resulting in $1.22 million raised[162]. - Net cash used in operating activities was $6.8 million for the nine months ended January 31, 2024, primarily due to the net loss[168]. - The company plans to finance future development activities largely through the sale of equity securities and additional debt financing[157]. - The company has not been able to initiate Phase II clinical trials for AL001 due to insufficient financing[159]. Licensing and Royalties - AL001 License Agreements require combined royalty payments of 4.5% on net sales, with minimum royalties starting at $40,000 in the first year[171]. - ALZN002 License Agreement mandates 4% royalty on net sales, with minimum royalties beginning at $20,000 in the first year[174]. - November AL001 License Agreements stipulate 3% royalty on net sales, with minimum royalties starting at $40,000 in the first year[176]. - Total milestone payments for AL001 technologies include $1,250,000 due in March 2025 upon first patient treated in a Phase III clinical trial[178]. - ALZN002 License includes milestone payments of $1,000,000 upon first patient treated in a Phase III clinical trial[180]. - Additional AL001 licenses require a payment of $2,000,000 due in March 2026 upon first patient treated in a Phase III clinical trial[181]. - The company has paid an initial license fee of $200,000 for both AL001 and ALZN002 licenses[173][174]. - The Licensor received 148,528 shares for AL001 and 240,120 shares for ALZN002 as part of the licensing agreements[173][174]. - The AL001 and ALZN002 licenses have indefinite terms until certain conditions are met, including the expiration of patent rights[177]. - The company has entered multiple amendments to the ALZN002 License Agreement, modifying payment timing[173].