Adial Pharmaceuticals, Inc. (NASDAQ: ADIL) is a clinical-stage biopharmaceutical company focused on the development of a therapeutic agent for the treatment of alcohol use disorder “AUD” using its lead investigational new drug product, AD04. A Phase 2b University of Virginia investigator-sponsored clinical trial of AD04 for the treatment of AUD showed promising results and no overt safety concerns (there were no statistically significant serious adverse events reported). The Company plans to commence a Phase 3 clinical trial using AD04 for the potential treatment of AUD in subjects with certain target genotypes.
On November 14th, 2018, the Company announced the business update for the third quarter of 2018, as well as recent activities
William Stilley, CEO of Adial Pharmaceuticals, stated, “This has been a very active period for the Company following our successful IPO in July. In addition to the funding we received through the IPO, we are also exploring a variety of non-dilutive funding options that we believe may help to accelerate our activities. In the meantime, we are rapidly moving forward on our clinical activities related to our Phase 3 trial for AD04 and look forward to providing further updates in the very near term. Towards this end, we have expanded our senior management team with the addition of Monika Z. Rogozinska, who is helping spearhead many of our initiatives.”
- Completed IPO in July for gross proceeds of $7.32 million
- Appointed Monika Z. Rogozinska as Senior Vice President of Drug and Business Development
- Reported successful results related to the stability testing of the clinical trial material for AD04
- Passed the patent opposition period in Europe without any challenges on its patent for AD04
- Received Notice of Allowance from the Canadian Intellectual Property Office on its patent for AD04
Additionally, Adial is also making tremendous progress expanding its IP portfolio. ADIL recently announced that it passed the patent opposition period in Europe, an important milestone that provides it broad coverage in 36 European countries through at least 2031. The company also received a Notice of Allowance from the Canadian Intellectual Property Office, which provides its coverage through 2029 with additional Canadian patents pending that are expected to extend its protection through 2032. In addition to these patents, Adial is actively pursuing additional patents in the U.S. and around the world, that will not only strengthen its coverage for AD04 in alcohol use disorder (AUD) but also expand its coverage into other indications, based on the mechanism of action for AD04.”
Analysts Review and Target Price:
Analyst tracking the stock are bullish about the company and are encouraged by the recent stability testing results, which exceeded management’ expectations as well. Additionally, the drug was manufactured through a process and at a scale that could be used to support a commercial product.
Thus, value investors should consider exposure in this sector as the backdrop remains favorable. Per www.marketbeat.com, Their average twelve-month price target is $5.00, suggesting that the stock has a possible upside of 30.21%. The high price target for ADIL is $5.00, and the low-price target for ADIL is $5.00. There are currently two buy ratings for the stock, resulting in a consensus rating of “Buy.”
Below are the excerpts of recent ratings by brokerage house:
About the company: Adial Pharmaceuticals is a clinical-stage biopharmaceutical company focused on the development of treatments for addictions. The Company’s lead investigational new drug candidate, AD04, is a genetically targeted therapeutic agent for the treatment of alcohol use disorder (AUD). A Phase 2b clinical trial of AD04 for the treatment of AUD showed promising results in reducing the frequency of drinking, quantity of drinking and heavy drinking (all with statistical significance), and no overt safety concerns (there were no statistically significant serious adverse events reported).
The Company plans to commence a Phase 3 clinical trial using AD04 for the potential treatment of AUD in subjects with certain target genotypes, which are to be identified using the Company’s proprietary companion diagnostic genetic test. AD04 is also believed to have the potential to treat other addictive disorders such as opioid use disorder, gambling, and obesity.
Other recent announcements: Crown CRO (“Crown”) to help oversee the trial.
On Nov. 29, 2018, the company announced that it has established a Scientific Advisory Board (SAB) and has appointed Dr. Giovanni Addolorato, a leading global expert in the field of alcohol use disorder (AUD), as its first member and Chairperson. The SAB will help to guide the Company’s strategy and advance AD04, its lead therapeutic agent for AUD, with Phase 3 trials expected to commence in the first half of 2019.
William Stilley, CEO of Adial Pharmaceuticals, stated, “We are pleased to officially launch our new Scientific Advisory Board to support the development efforts of AD04, our lead product candidate. We welcome Dr. Addolorato as the first member of our SAB, as he brings tremendous knowledge and experience in AUD and is expected to play an integral role as we prepare to begin our Phase 3 clinical trial.”
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 United States 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. Also, 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. Most therapies 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.
Third Quarter 2018 Highlights:
- Research and Development: R&D expenses increased by approximately $191,000 (147%) during the nine months ended September 30, 2018, as compared to the nine months ended September 30, 2017. The increase was primarily due to increased salaries and headcount of development-directed officers and employees, post-IPO, as well as an increase in development expenses of about $30,000 in the first six months of the year.
- Liquidity: As of September 30, 2018, we had approximately $4,817,000 in cash and cash equivalents and $4,922,000 of working capital, compared to approximately $18,000 in cash and cash equivalents and $(1,005,000) of negative working capital as of December 31, 2017.
Key risk factors and potential stock drivers:
- Successful completion of the upcoming milestones would lead future direction for the company. Any adversities related to these upcoming milestones might adversely impact the overall investor sentiments.
- ADIL is still an early stage entity and has not yet generated meaningful revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it.
- The company’ business risk profile is significantly dependent upon the success of its lead product candidate, AD04, which requires significant additional clinical testing before Adial could seek regulatory approval and potentially launch commercial sales. The company does not have any other products in clinical development.
- ADIL has a history of operating losses. Therefore, any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor.
- On Monday, December 3, 2018, ADIL was at $3.05, with volume of 924K shares exchanging hands. Market capitalization is $18.39 million. The current RSI is 62.19.
- In the past 52 weeks, shares of ADIL have traded as low as $1.11 and as high as $5.00
- At $3.05, shares of ADIL are trading above its 50-day moving average (MA) at $2.17
- The present support and resistance levels for the stock are at $2.67 & $5.59 respectively.