Executive Summary / Key Takeaways

• Anebulo Pharmaceuticals is a clinical-stage company focused on developing selonabant, a CB1 receptor antagonist, as a rapid treatment for cannabis-induced toxicity, addressing a growing unmet medical need.
• The company has strategically prioritized the development of an intravenous (IV) formulation of selonabant for pediatric cannabis-induced CNS depression, believing it offers a potentially faster path to regulatory approval compared to the adult oral indication.
• Recent financial results for the nine months ended March 31, 2025, show a net loss of $6.34 million and cash and cash equivalents of $13.3 million, bolstered by a $14.9 million net proceeds private placement in December 2024.
• Management projects the current cash position, combined with access to a $3.0 million loan facility, is sufficient to fund operations for at least 12 months from the May 13, 2025 filing date, but significant future funding will be required.
• Key catalysts and risks include the successful initiation and outcome of the planned Phase 1 SAD study for IV selonabant in Q3 2025, potential future clinical trial results, regulatory approvals, the ability to secure additional financing, and the competitive landscape.

A Focused Approach to a Growing Problem

Anebulo Pharmaceuticals, Inc., founded in 2020, is a clinical-stage biopharmaceutical company dedicated to addressing the increasing health challenge of cannabis-induced toxicity. With the widespread legalization of cannabis for medical and recreational use, instances of acute cannabinoid intoxication (ACI) in adults and, particularly concerning, unintentional ingestion and toxicity in children are on the rise. These conditions can lead to serious symptoms, including central nervous system (CNS) depression, respiratory issues, and psychosis, highlighting a significant unmet medical need for rapid, effective treatments.

Anebulo's core strategy centers on the development of selonabant, a potent, small molecule cannabinoid receptor type 1 (CB1) antagonist. CB1 receptors are the primary target of THC, the psychoactive component of cannabis. By blocking THC's action at these receptors, selonabant is designed to rapidly reverse the negative effects of cannabis toxicity and reduce recovery time. This targeted mechanism represents a key technological differentiator, offering a specific antidote where none currently exist. While precise, publicly available quantitative data comparing selonabant's speed of reversal directly against current supportive care is limited, the company's Phase 2 trial results for the oral formulation showed statistically significant reductions in subjective "feeling high" scores, suggesting a tangible benefit in mitigating psychotropic effects. The development of both oral and intravenous (IV) formulations underscores the strategic intent to address different patient populations and clinical settings, from potentially outpatient adult ACI to emergency pediatric care. The company holds rights to issued U.S. patents and pending applications covering selonabant's use and delivery, providing intellectual property protection expected through 2042 for crystalline forms, which forms a foundational layer of its competitive moat.

The competitive landscape for Anebulo is complex. While larger biopharmaceutical companies like Jazz Pharmaceuticals (JAZZ), Alkermes (ALKS), and Intra-Cellular Therapies (ITCI) operate in the broader CNS and addiction treatment markets, Anebulo is not aware of any direct competitors further along in the development process specifically targeting the reversal of acute cannabis-induced toxicity with a CB1 antagonist. This niche focus provides Anebulo with a potential first-mover advantage in this specific indication. However, Anebulo's clinical-stage status and lack of commercial products mean it operates at a significantly smaller scale and with less financial maturity compared to these established players. Larger competitors benefit from diversified revenue streams, established manufacturing and distribution networks, and greater financial resources for R&D and market penetration. Anebulo's vulnerability lies in its dependency on successful clinical trial outcomes and future financing, whereas competitors can leverage existing product portfolios to weather pipeline setbacks. Barriers to entry in the biopharmaceutical space, particularly high R&D costs and stringent regulatory pathways, do offer some protection for Anebulo's specific focus by deterring new entrants, potentially solidifying its position if selonabant reaches the market.

Strategic Evolution and Operational Progress

Anebulo's journey began with licensing selonabant from Vernalis Development Limited. Initial development focused on an oral formulation, leading to the Phase 2 proof-of-concept Netherlands Trial in healthy adults challenged with THC. Parts A and B of this study, involving 134 subjects, were completed in March 2023, followed by an open-label extension (Part C) completed in August 2023. Discussions with the FDA in July 2023 regarding the adult ACI indication indicated that a single well-controlled study in ACI patients combined with a larger THC challenge study could potentially provide sufficient evidence for a New Drug Application (NDA).

However, the company has since made a strategic pivot. Rather than immediately pursuing Phase 3 studies for oral selonabant in adults, Anebulo is prioritizing the advancement of an intravenous (IV) formulation of selonabant for the potential emergency treatment of cannabis-induced CNS depression in pediatric patients. This decision is driven by several factors, including the successful development of a suitable IV formulation, prior FDA feedback highlighting the significant unmet need in this vulnerable population, and the belief that the pediatric indication may offer a faster timeline to approval. The increasing prevalence of cannabis edibles, which pose a particular risk for unintentional ingestion by children, further underscores the urgency of this need. Children are considered more sensitive to cannabis toxicity due to physiological differences, including a higher density of CB1 receptors in the brain and reduced THC metabolism, leading to potentially life-threatening outcomes.

This strategic shift is supported by a two-year cooperative grant awarded in July 2024 from the National Institute on Drug Abuse (NIDA), part of the NIH, providing up to approximately $1.9 million to support the IV selonabant development, with an initial tranche of $0.9 million received. Future funding under the grant is contingent on milestones, including the FDA permitting the Investigational New Drug (IND) application for a Phase 1 single ascending dose (SAD) study of IV selonabant in healthy adults to proceed. Anebulo plans to initiate this Phase 1 SAD study in the third quarter of calendar year 2025, subject to FDA clearance of the protocol. An observational study in emergency department patients with acute cannabis-induced toxicity is also ongoing to gather valuable clinical data.

Financial Performance and Liquidity

As a clinical-stage company, Anebulo has not generated any revenue since its inception and has incurred significant operating losses. For the nine months ended March 31, 2025, the company reported a net loss of $6.34 million, a slight improvement compared to a net loss of $6.85 million for the same period in the prior year. Operating expenses totaled $6.89 million for the nine months ended March 31, 2025, a modest decrease from $6.97 million in the prior year period.

Breaking down operating expenses, research and development (R&D) expenses were $3.17 million for the nine months ended March 31, 2025, an increase of $0.1 million from the prior year, primarily driven by increased contract manufacturing and other R&D costs in preparation for the planned Phase 1 SAD study of IV selonabant. For the three months ended March 31, 2025, R&D expenses decreased by $0.1 million compared to the prior year quarter, mainly due to the timing of clinical studies, partially offset by the aforementioned increase in contract manufacturing. The company anticipates R&D expenses will increase as it scales up the IV formulation and commences clinical safety studies.

General and administrative (G&A) expenses were $3.72 million for the nine months ended March 31, 2025, a decrease of $0.2 million from $3.89 million in the prior year period. This decrease was primarily due to lower compensation and professional fees resulting from strategic cost reductions, partially offset by an increase in stock-based compensation expense ($1.11 million for the nine months ended March 31, 2025, vs $0.58 million in the prior year). For the three months ended March 31, 2025, G&A expenses increased by $0.3 million compared to the prior year quarter, driven by higher professional and consultant fees related to debt refinancing, registration statement, and proxy filing, in addition to increased stock-based compensation.

Other income and expenses included interest expense related to the amortization of loan commitment fees and a one-time write-off in February 2025 due to a decrease in borrowing capacity under the modified Loan Agreement. Interest income fluctuated based on average cash balances and interest rates. Notably, the company recognized grant income of $0.8 million for the nine months ended March 31, 2025, and $0.4 million for the three months ended March 31, 2025, from the NIDA grant, which was not present in the prior year periods.

As of March 31, 2025, Anebulo held approximately $13.3 million in cash and cash equivalents. This position was significantly strengthened by a private placement offering in December 2024, which generated approximately $14.9 million in net proceeds. The company also has access to a Loan Agreement, modified in February 2025, providing a maximum borrowing capacity of $3.0 million at a 0.25% annual interest rate, maturing in February 2028. No balance has been drawn under this facility as of the filing date. Net cash used in operating activities was $4.7 million for the nine months ended March 31, 2025, while net cash provided by financing activities was $14.88 million, primarily reflecting the December 2024 financing.

Management expects that the current cash and cash equivalents, combined with the available funds under the Loan Agreement, will be sufficient to fund operating expenses and capital expenditures for at least 12 months from the filing date of May 13, 2025. However, the company explicitly states the need to raise additional funding in the future to achieve its development and commercialization objectives, beyond the amount available under the loan facility.

Risks and Challenges

Investing in a clinical-stage biopharmaceutical company like Anebulo involves significant risks. The successful development and potential commercialization of selonabant are subject to numerous uncertainties, including the outcomes of ongoing and planned clinical trials, the ability to obtain necessary regulatory approvals from the FDA and other agencies, and the eventual market acceptance of the product, if approved. There is no guarantee that clinical trials will be successful or that regulatory approval will be granted, and delays or denials could have a material adverse impact on the company's prospects.

Competition, while currently lacking a direct competitor with a similarly advanced product for acute cannabis toxicity reversal, remains a risk. Larger companies in related CNS fields could potentially develop or acquire competing therapies. Protecting intellectual property rights is also critical, and the company's patent position, while providing some protection, could be challenged.

Anebulo's financial health is dependent on its ability to secure future funding. While the recent private placement provides a near-term runway, the company will require substantial additional capital to complete clinical development and prepare for potential commercialization. The inability to raise funds on acceptable terms, or at all, could force delays, scaling back, or even the termination of development programs. Future equity financings would likely result in dilution for existing stockholders, and the Loan Agreement also includes provisions for issuing shares upon drawing funds.

Operational risks include dependence on third-party contract research organizations (CROs) for clinical trials and contract manufacturing organizations (CMOs) for drug supply. Changes in U.S. government policies, such as potential limitations on NIH grant funding, could also impact the company's ability to receive future grant support, although the NIDA grant is currently supporting the IV formulation development. The company recently resolved a Nasdaq compliance issue related to the December 2024 private placement, but maintaining listing standards remains a requirement.

Conclusion

Anebulo Pharmaceuticals is pursuing a focused strategy to address the growing public health issue of cannabis-induced toxicity with its lead product candidate, selonabant. The strategic pivot to prioritize the intravenous formulation for pediatric CNS depression appears to be a calculated move aimed at potentially accelerating the path to market by targeting a population with a clear and urgent unmet need, supported by positive engagement with the FDA and a non-dilutive grant from NIDA.

While the company remains in the pre-revenue stage and continues to incur operating losses, the recent private placement has significantly bolstered its cash position, providing a projected runway of at least 12 months. This capital infusion is critical as the company prepares to advance the IV selonabant program into clinical studies in 2025. The core investment thesis hinges on the successful execution of these clinical trials, demonstrating selonabant's safety and efficacy, and navigating the complex regulatory pathway. Investors should closely monitor the progress of the planned Phase 1 SAD study for IV selonabant, future clinical trial readouts, and the company's ability to secure the substantial additional funding that will be necessary to bring selonabant to market, while also considering the competitive landscape and the unique positioning Anebulo aims to carve out in the emergency treatment of cannabis toxicity.