ADILW Adial Pharmaceuticals Inc

Adial Pharmaceuticals, Inc. (NASDAQ: ADIL; ADILW) ("Adial" or the "Company"), a clinical-stage biopharmaceutical company focused on the development of AD04, a genetically targeted, serotonin-3 receptor antagonist for the treatment of Alcohol Use Disorder (“AUD”), today provided a summary of feedback received following recent meetings with both US and EU regulators, as well as an update on the Company’s current clinical development plan based on guidance received.

Feedback from the FDA as well as key country-level regulatory agencies in Europe included:

• Acknowledgment and confirmation of the importance of ongoing research in the AUD therapeutic area as a persistent high unmet need.   
• Confirmation of the primary US endpoint based on Percentage of No Heavy Drinking Days (“PNHDD”), which utilized a responder analysis of patients who reduced their alcohol consumption to zero heavy drinking days in the last 2 months of a 6-month study.
• Acknowledgment of results from the Phase 2 and Phase 3 post hoc analysis against the US endpoint of PNHDD, which demonstrated statistical significance of responder analysis of specific genotypes as useful information for planning future studies of AD04.
• Reviewed the safety data from the ONWARD trial and did not express any concerns with the data.
• Confirmation of the importance of identifying a patient subgroup where a relevant treatment effect and compelling evidence of a favorable risk-benefit profile can be assessed.
• Acknowledgment that the post hoc analysis showing a statistical and clinically meaningful effect in specific genetic subtypes was positive and promising. They requested additional data to support an NDA or MA submission and approval for AD04.

“Based on positive feedback received from the relevant global regulatory bodies and overlapping clinical requirements, we made the strategic decision to focus our efforts on the US as the US standards should translate to acceptance in other international markets. We have a high level of confidence that AD04 will achieve success in clinical development based on our post hoc analysis and the regulatory feedback on the pre-specified primary endpoint that the FDA has now confirmed, specifically, a reduction of heavy drinking days to zero at months 5 and 6. This is also vital for our ongoing partnering efforts based on discussions with companies active in the US and Europe. Importantly, the regulators acknowledged the valuable insights of the post hoc analysis, which demonstrated that patients with a specific genetic subtype (AG+), achieved a statistical significance of p=0.031 and p=0.021 respectively in both the Phase 2 and Phase 3 trials. Additionally, these patients averaged over 17 (17.23) heavy drinking days per month at the study start and achieved under 3 (2.37) heavy drinking days per month at study completion. These clinically meaningful results are important as evidenced by the US healthcare provider research completed after the ONWARD trial, which suggests AD04 would play an important role as a medication for physicians currently treating patients with AUD. Also, market research with US payors, completed in 2012 and repeated most recently in 2022, supports AD04 pricing and reimbursement assumptions and confirms AD04 as an attractive commercial opportunity,” stated Cary Claiborne, CEO of Adial Pharmaceuticals.

Adial has assessed the impact of the regulatory guidance on the future business and operating plan requirements to meet the needs of the FDA and EU regulators for submission and approval of AD04 to treat genetic subtypes of AUD. While the Company is in the process of confirming the impact on the clinical development plans and timing with its external advisors and ongoing partnership discussions, the following provides a working summary subject to final discussions with the regulatory agencies.

Efficacy Requirements

• Regulatory feedback indicates that even though a single additional Phase 3 trial with convincing data may suffice for approval, it would be a review issue for the agencies following trial completion to determine if the data was sufficient for approval.
• Therefore, while possible to file for registration with one additional trial, current planning assumptions are that Adial will need to conduct two Phase 3 trials with AD04, where the active arm of patients will be compared to placebo and the second trial may include a biomarker negative patient arm to satisfy any ongoing questions from the regulators regarding efficacy parameters. This is expected to support potential approval in the shortest time frame possible and removes future regulatory filing and review risk that would be associated with conducting a single additional trial, as the Company would plan to run the studies in parallel. Adial believes that conducting two trials in parallel is the best strategy to minimize risk, optimize timing and costs, as well as improve the probability of regulatory authority acceptance and approval in the US and Europe.
• The new clinical development plan includes both the US and EU endpoints and will be designed to satisfy both US and EU AD04 submission requirements. Confirmation of the clinical development plan and pathway is currently being conducted by Adial’s clinical development and regulatory advisors.

Safety Requirements

• FDA agreed to Adial’s plan to comply with ICH E1A by adding a long-term safety follow-up to the planned Phase 3 trial, thereby exposing at least 100 patients to AD04 for one year.
• A thorough QT study will not be required.
• FDA noted it may potentially reduce certain safety requirements such as food effect, ECG monitoring and bioequivalence pending review of additional manufacturing data establishing that AD04 has an identical formulation to Zofran.

Incorporating the above assumptions into the business and clinical development plan would bring AD04 to registration with the FDA in Q3 of 2025, assuming the two trials are successful. The trials are expected to cost approximately $25 million in total to complete. Adial is currently in active discussions with potential commercial partners that have expressed an interest in supporting the trials and advancing commercialization in both the US and European markets.     

About Alcohol Use Disorder

According to an article in the widely respected publication The Lancet, alcohol is the number one cause of death globally among both men and women ages 15 to 49 years. In the US alone, approximately 35 million people have AUD resulting in significant health, social and financial costs (NIAAA Alcohol Facts & Statistics). AUD contributes to over 200 different diseases, and 10% of children live with a person that has an alcohol problem. According to the American Society of Clinical Oncologists, 5-6% of new cancers and cancer deaths globally are directly attributable to alcohol. The Centers for Disease Control (CDC) has reported that AUD costs the U.S. economy about $250 billion annually, with heavy drinking accounting for greater than 75% of the social and health-related costs. In addition, according to the NIAAA, the problem in the United States appears to be growing with an approximately 50% increase in AUD prevalence between 2002 and 2013.

Despite the high prevalence and high costs, according to an article in the JAMA 2015 publication, only 7.7% of patients (i.e., approximately 2.7 million people) with AUD are estimated to have been treated in any way and only 3.6% by a physician (i.e., approximately 1.3 million people). The most common treatments for AUD are directed at achieving abstinence, and typical treatments include psychological and social interventions. All current therapies in the US require abstinence even prior to initiating therapy. Abstinence requires dramatic lifestyle changes often with serious work and social consequences. Significant side effects of current pharmacologic therapies include mental side effects, such as psychiatric disorders and depressive symptoms, and physical side effects, such as nausea, dizziness, vomiting, abdominal pain, arthritis and joint fitness. These problems with the currently available therapies appear to limit the willingness of people with AUD to seek treatment and then to limit compliance with treatment requirements and, therefore, the ultimate results for many people attempting currently available therapies.

About Adial Pharmaceuticals, Inc.

Adial Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the development of AD04, a genetically targeted, serotonin-3 receptor antagonist, therapeutic agent for the treatment of Alcohol Use Disorder (AUD) in heavy drinking patients. AD04 was recently investigated in the Company’s ONWARD™ pivotal Phase 3 clinical trial for the potential treatment of AUD in subjects with certain target genotypes (estimated to be approximately one-third of the AUD population) identified using the Company’s proprietary companion diagnostic genetic test. ONWARD showed promising results in reducing heavy drinking in heavy drinking patients, and no overt safety or tolerability concerns. AD04 is also believed to have the potential to treat other addictive disorders and health conditions, including Opioid Use Disorder, gambling, and obesity. Additional information is available at www.adial.com.

Forward Looking Statements

This communication contains certain “forward-looking statements” within the meaning of the U.S. federal securities laws. Such statements are based upon various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. The forward-looking statements include statements regarding US standards translating to acceptance in other international markets, AD04 achieving success in clinical development based the Company’s post hoc analysis and the regulatory feedback on the pre-specified primary endpoint that the FDA has now confirmed, the Company’s ongoing partnering efforts with companies active in the US and Europe, AD04 playing an important role as a medication for physicians currently treating patients with AUD, AD04 being an attractive commercial opportunity, the Company needing to conduct two Phase 3 trials with AD04, the two Phase 3 trials with AD04 supporting potential approval in the shortest time frame possible and removing future regulatory filing and review risk that would be associated with conducting a single additional trial, conducting two trials in parallel being the best strategy to minimize risk, optimize timing & costs and improve probability of regulatory authority acceptance and approval in the US and Europe, the new clinical development plan satisfying both US and EU AD04 submission requirements, bringing AD04 to registration with the FDA in Q3 of 2025 assuming the two trials are successful, the two Phase 3 trials costing approximately $25 million to complete, the Company being in active discussions with potential commercial partners that have expressed an interest in supporting the trials and advancing commercialization in both the US and European markets and the potential of AD04 to treat other addictive disorders such as Opioid Use Disorder, gambling, and obesity. Any forward-looking statements included herein reflect our current views, and they involve certain risks and uncertainties, including, among others, the ability of AD04 to be approved by regulatory authorities for treatment of AUD, our ability to secure commercial partners to support the two Phase 3 trials and advance commercialization in both the US and European markets, our ability to run the two Phase 3 trials in parallel and minimize risk, optimize timing & costs and improve probability of regulatory authority acceptance and approval in the US and Europe, our ability to satisfy both US and EU AD04 submission requirements with the new clinical development plan, our ability to complete the two Phase 3 trials at a cost of approximately $25 million and bring AD04 to registration with the FDA in Q3 of 2025, our ability to commercialize product candidates or to comply with ongoing regulatory requirements, regulatory limitations relating to our ability to promote or commercialize our product candidates for specific indications, acceptance of its product candidates in the marketplace and the successful development, marketing or sale of products, our ability to maintain our license agreements, the continued maintenance and growth of our patent estate, our ability to establish and maintain collaborations, our ability to obtain or maintain the capital or grants necessary to fund its research and development activities, and our ability to retain our key employees or maintain our Nasdaq listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statement included in our Annual Report on Form 10-K for the year ended December 31, 2021, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.

Contact:Crescendo Communications, LLCDavid Waldman / Alexandra SchiltTel: 212-671-1020Email: ADIL@crescendo-ir.com