Alzamend Neuro, Inc. (NASDAQ:ALZN) is a clinical-stage biopharmaceutical company focused on developing novel products for the treatment of Alzheimer's disease, bipolar disorder, major depressive disorder, and post-traumatic stress disorder. The company's pipeline consists of two lead product candidates: AL001, an ionic cocrystal of lithium, and ALZN002, a cell-based therapeutic vaccine.
Business Overview
Alzamend was incorporated in 2016 to acquire and commercialize patented intellectual property and know-how to prevent, treat, and potentially cure Alzheimer's disease. The company has licensed exclusive worldwide rights to two novel therapeutic drug candidates from the University of South Florida Research Foundation.AL001
, the company's lead product candidate, is a patented ionic cocrystal technology delivering a therapeutic combination of lithium, salicylate, and proline. Based on preclinical data, AL001 has shown the potential to prevent cognitive deficits, depression, and irritability, and improve associative learning and memory compared to traditional lithium treatments. Alzamend is currently evaluating AL001 in a Phase IIA clinical trial for Alzheimer's disease and plans to initiate additional trials for bipolar disorder, major depressive disorder, and post-traumatic stress disorder.ALZN002
, the company's second product candidate, is a patented method using a mutant peptide sensitized cell as a cell-based therapeutic vaccine that seeks to restore the ability of a patient's immune system to combat Alzheimer's disease. Alzamend recently initiated a Phase I/IIA clinical trial for ALZN002 to assess its safety, tolerability, and efficacy in patients with mild to moderate Alzheimer's.Financials
For the fiscal year ended April 30, 2023, Alzamend reported no revenue and a net loss of 9.9 million. The company's annual operating cash flow was -8.3 million, and its annual free cash flow was -8.4 million.During the nine months ended January 31, 2024, Alzamend reported no revenue and a net loss of 9.1 million. The company's operating cash flow for the nine-month period was -6.8 million, and its free cash flow was -6.9 million.
The decrease in net loss, operating cash flow, and free cash flow during the nine-month period compared to the full fiscal year was primarily due to lower research and development expenses, as the company completed its Phase IIA clinical trial for AL001 and initiated the Phase I/IIA trial for ALZN002.
Liquidity
As of January 31, 2024, Alzamend had cash of 283,000, a working capital deficiency of 3.2 million, an accumulated deficit of 53.2 million, and a stockholders' deficit of 4.3 million. The company believes its current cash on hand is not sufficient to fund its planned operations through one year after the date the financial statements are issued, raising substantial doubt about its ability to continue as a going concern.To address its liquidity concerns, Alzamend has been pursuing various financing options, including an at-the-market (ATM) offering and the sale of convertible preferred stock. During the nine months ended January 31, 2024, the company raised 1.0 million through the ATM offering and 1.2 million from the sale of Series B Convertible Preferred Stock. Subsequent to the quarter end, the company raised an additional 266,000 through the ATM offering.
While these financing activities have provided some relief, Alzamend's long-term success will depend on its ability to secure additional funding to advance its clinical programs and address its working capital deficiency. The company's inability to obtain sufficient financing could significantly impact its ability to continue as a going concern and execute on its strategic plans.
Recent Developments
In 2022, Alzamend submitted Investigational New Drug (IND) applications to the FDA for AL001 in bipolar disorder, major depressive disorder, and post-traumatic stress disorder. The company received "study may proceed" letters from the FDA for the bipolar disorder and major depressive disorder INDs in 2023, allowing it to initiate clinical trials for these indications.For ALZN002, Alzamend submitted an IND application in 2022 and received a "study may proceed" letter from the FDA, enabling the company to initiate a Phase I/IIA clinical trial to evaluate the safety, tolerability, and efficacy of the product candidate in patients with mild to moderate Alzheimer's disease.
However, in February 2024, the company received notice from its contract research organization, Biorasi, LLC, that it was terminating the contract. Alzamend is currently pursuing the engagement of a replacement CRO to continue the ALZN002 trial.
Risks and Challenges
Alzamend faces several risks and challenges that could impact its future performance and growth prospects. These include:- Ongoing liquidity concerns and the need for additional financing to fund its operations and clinical development activities.
- Potential delays or setbacks in the clinical development of its product candidates due to regulatory, operational, or other factors.
- Intense competition in the Alzheimer's and neuropsychiatric therapeutic markets, which could impact the commercial potential of its product candidates.
- Reliance on third-party partners, such as contract research organizations and manufacturers, to support its clinical and commercial activities.
- Potential intellectual property disputes or challenges that could affect the company's ability to protect its proprietary technologies.