Alzamend Neuro(ALZN) - 2023 Q2 - Quarterly Report

Drug Development and Clinical Trials - Alzamend Neuro aims to develop treatments for Alzheimer's, bipolar disorder, major depressive disorder, and post-traumatic stress disorder through patented intellectual property and immunotherapy approaches[93]. - The company submitted an Investigational New Drug (IND) application for AL001 to the FDA on June 30, 2021, and received a "Study May Proceed" letter for a Phase I study on July 28, 2021[101]. - Phase I clinical trial data for AL001 indicated that a 150 mg dosage is bioavailable compared to the marketed 300 mg lithium carbonate product, with safety profiles being benign[103]. - AL001 has the potential to provide benefits from lithium at up to 50% of the currently approved lithium carbonate dosage, potentially treating over 40 million Americans suffering from Alzheimer's and other neurodegenerative diseases[104]. - The company plans to file INDs for bipolar disorder, major depressive disorder, and PTSD upon completion of the current Phase IIA study for AL001[110]. - Alzamend Neuro has an additional preclinical candidate, ALZN002, which aims to restore the immunological system's ability to combat Alzheimer's and has shown positive anti-inflammatory responses[112]. - An IND application for ALZN002 was submitted to the FDA on September 29, 2022, to conduct a Phase I/IIA clinical trial assessing safety, tolerability, and efficacy in subjects with mild to moderate Alzheimer's[113]. - The Phase IIA study for AL001 will evaluate safety and tolerability under multiple-dose conditions, targeting a maximum tolerated dose for further studies[107]. - The company received a "study may proceed" letter from the FDA for a phase I/IIA clinical trial of ALZN002, expecting to dose the first patient in Q1 2023[114]. Financial Performance - Total operating expenses for the three months ended October 31, 2022, were $3.1 million, a decrease of 13$3.6 million in the same period of 2021[117]. - Research and development expenses for the three months ended October 31, 2022, were $1.5 million, down 12$1.8 million in the same period of 2021[124]. - General and administrative expenses for the three months ended October 31, 2022, were $1.6 million, a decrease of 14$1.8 million in the same period of 2021[119]. - The net loss for the three months ended October 31, 2022, was $3.1 million, a 14$3.6 million in the same period of 2021[117]. - The company did not generate any revenue during the three months ended October 31, 2022, and does not anticipate generating revenue for the foreseeable future[118]. - Basic and diluted net loss per common share for the three months ended October 31, 2022, was $(0.03), an improvement from$(0.04) in the same period of 2021[117]. - Total operating expenses for the six months ended October 31, 2022, were $6.1 million, an increase of 4$5.9 million in the same period of 2021[131]. - The company reported a net loss of $6.2 million for the six months ended October 31, 2022, compared to a net loss of$5.9 million in the same period of 2021[146]. - Cash as of October 31, 2022, was $9.2 million, with an accumulated deficit of$35.3 million[146]. - Net cash used in operating activities was $4.9 million for the six months ended October 31, 2022, compared to$3.3 million in 2021[151]. Expenses and Financing - The company incurred professional fees of $1.5 million for the three months ended October 31, 2022, primarily related to clinical trial monitoring and IND preparation[126]. - The company expects to require additional financing to fund future operations due to various factors including clinical testing progress and regulatory approvals[115]. - Stock-based compensation expense for the six months ended October 31, 2022, was$1.6 million, a decrease of 10% from $1.8 million in the same period of 2021[136]. - Salaries and benefits increased by 29$443,000 for the six months ended October 31, 2022, compared to $343,000 in 2021[137]. - Professional fees decreased by 29$377,000 for the six months ended October 31, 2022, down from $532,000 in 2021[138]. - Research and development expenses rose by 9$2.9 million for the six months ended October 31, 2022, compared to $2.7 million in 2021[140]. - The company expects to continue incurring losses and will need to raise additional capital to fund operations and development activities[149]. Milestones and Payments - The company has successfully completed the pre-IND meeting, IND application filing, and the Phase I clinical trial milestones for AL001 and ALZN002[158]. - The company is required to pay milestone payments totaling$1,000,000 upon the first patient treated in a Phase III clinical trial, which is due 36 months from the completion of the first Phase II clinical trial[161]. - The company has paid initial license fees of $20,000 for two additional royalty-bearing exclusive worldwide licenses for AL001, which includes a 3$8,000,000 is due for the first commercial sale, which is 8 years from the effective date of the agreement[161]. - The company has a payment structure that includes $500,000 due 24 months from the completion of the first Phase I clinical trial[161]. - The company has a payment of$175,000 due 12 months from the first patient dosed in Phase I[161]. - The company has a payment of $50,000 due upon IND application filing, which has been completed[161]. - The company has a payment of$150,000 due 12 months from IND filing date upon the first dosing of a patient in a clinical trial[161]. - The company has a payment of $400,000 due 12 months from the first patient dosing upon completion of the first clinical trial[161]. Regulatory and Reporting - The company is classified as a smaller reporting company, which impacts the applicability of certain market risk disclosures[164].