Appili Therapeutics Reports Financial and Operational Results for Second Quarter of Fiscal Year 2023

Appili completes strategic reprioritization of programs to focus on ATI-1701, a biodefense tularemia vaccine candidate, ATI-1801, a topical antiparasitic product for the treatment of a disfiguring disease, and ATI-1501, a liquid oral formulation of the antibiotic metronidazole.

Appili Therapeutics Inc. (TSX:APLI; OTCQX: APLIF) (the “Company” or “Appili”), a biopharmaceutical company focused on drug development for infectious diseases and biodefense, today announced its financial and operational results for the second quarter of its fiscal year 2023, which ended on September 30, 2022.

“We continue to move significantly closer to being able to provide a safe and effective vaccine for the bacteria Francisella tularensis, which poses a great threat to public health and is considered by many governments to be a top-priority biothreat,” said Don Cilla, Pharm.D., M.B.A., Chief Development Officer of Appili Therapeutics. “As both biothreats and threats from infectious diseases continue to pose great challenges to communities around the world, we’re grateful for the anticipated commitment of over $US10 million in new funding from the Department of Defense’s Defense Threat Reduction Agency (DTRA).”

Second quarter and recent operational highlights include:

• Announced a commitment of over US$10 million in funding from DTRA to advance our biodefense tularemia vaccine candidate ATI-1701 to help combat the bacteria Francisella tularensis, the causative agent of tularemia and a top-priority biothreat. Appili expects this program may be eligible for a Priority Review Voucher (“PRV”) if approved by the United States Food and Drug Administration (“FDA”).
• Remain on track to seek FDA approval by the end of 2023 for ATI-1501, our liquid oral formulation of the antibiotic metronidazole which was designed to help patients burdened by difficult-to-treat bacterial infections.
• Presented an update, including Phase 3 efficacy data, on our cutaneous leishmaniasis product, topical paromomycin, ATI-1801 at the WorldLeish7 Conference in Cartagena, Colombia. ATI-1801 may be eligible for a valuable Priority Review Voucher if approved by the FDA.

Financial Results

The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standard Board and Part I of Chartered Professional Accountants of Canada Handbook–Accounting. All figures are stated in Canadian dollars unless otherwise stated.

The net loss and comprehensive loss of $4 million or $0.04 loss per share for the six months ended September 30, 2022 was $14.5 million lower than the net loss and comprehensive loss of $18.5 million, or $0.30 loss per share, during the six months ended September 30, 2021. This relates mainly to a decrease in research and development expenses by $14.9 million, a decrease in general and administrative expenses by $0.3 million, and a decrease in business development by $0.5 million. These decreases were offset by an increase in financing costs by $0.2 million, an increase in foreign exchange loss by $0.4 million, and a decrease in government assistance by $0.5 million.

As of September 30, 2022, the Company had cash of $2.4 million, compared to $6.7 million on March 31, 2022. As of November 9, 2022, the Company had 121,226,120 issued and outstanding Common Shares, 8,293,040 stock options, and 49,817,879 warrants outstanding.

This press release should be read in conjunction with the Company’s unaudited interim condensed financial statements for the second quarter of the 2023 fiscal year and the related management discussion and analysis (MD&A), copies of which are available on SEDAR at www.sedar.com.

Appili Portfolio Reprioritization

Appili also announced plans to focus its resources on advancing its portfolio of infectious disease and biodefense assets, including ATI-1701, ATI-1801, and ATI-1501. The Company will discontinue development of its remaining portfolio programs ATI-2307, a broad-spectrum anti-fungal, and ATI-1503, a broad-spectrum antibiotic targeting multi-drug resistant Gram-negative bacteria.

About Appili Therapeutics

Appili Therapeutics is an infectious disease biopharmaceutical company that is purposefully built, portfolio-driven, and people-focused to fulfill its mission of solving life-threatening infections. By systematically identifying urgent infections with unmet needs, Appili’s goal is to strategically develop a pipeline of novel therapies to prevent deaths and improve lives. The Company is currently advancing a diverse range of anti-infectives, including a vaccine candidate to eliminate a serious biological weapon threat, a topical antiparasitic for the treatment of a disfiguring disease, and a novel, easy to use, liquid oral formulation targeting parasitic and anaerobic infections. Led by a proven management team, Appili is at the epicenter of the global fight against infection. For more information, visit www.AppiliTherapeutics.com.

Forward Looking Statements

This news release contains “forward-looking statements”, including with respect to the Company’s development of its products and expected funding arrangements. Wherever possible, words such as “may,” “would,” “could,” “should,” “will,” “anticipate,” “believe,” “plan,” “expect,” “intend,” “estimate,” “potential for” and similar expressions have been used to identify these forward-looking statements. These forward-looking statements reflect the current expectations of the Company’s management for future growth, results of operations, performance and business prospects and opportunities and involve significant known and unknown risks, uncertainties and assumptions, including, without limitation, risks and assumptions related to securing the full anticipated funding from DTRA and those risks, uncertainties and assumptions listed in the annual information form of the Company dated June 23, 2022 and the other filings made by the Company with the Canadian securities regulatory authorities (which may be viewed at www.sedar.com). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.

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