Adial Pharmaceuticals Inc.

08/17/2026 | Press release | Distributed by Public on 08/17/2026 05:18

Adiel Pharmaceuticals Reports 2026 Second Quarter Financial Results and Provides Business Update (Form 8-K)

Adiel Pharmaceuticals Reports 2026 Second Quarter Financial Results and Provides Business Update

Completed acquisition of Azora Therapeutics, adding AT177, a fully synthetic, oral, colon-targeted aryl hydrocarbon receptor ("Ahr") agonist in development for ulcerative colitis, to its pipeline

Closed initial $32 million tranche, including the conversion of notes, of an up to $64 million private placement from biotech specialist investors

Glen Allen, VA - August 17, 2026 - Adial Pharmaceuticals, Inc. (NASDAQ: ADIL) ("Adial" or the "Company") today provided a business update and reported its financial results for the 2026 second quarter ended June 30, 2026.

"The acquisition of Azora Therapeutics and the concurrent financing mark an important inflection point for Adial," said Cary Claiborne, Chief Executive Officer of Adial Pharmaceuticals. "AT177 establishes a new strategic focus for the Company around a differentiated approach to treating ulcerative colitis, an area where many patients continue to experience inadequate outcomes despite a growing number of therapies. AT177 is built on a mechanism with demonstrated clinical benefit, delivered in a form designed to concentrate activity in the colon, where it matters. Our focus is now on advancing AT177 into the clinic in 2027 and building long-term value for patients and shareholders."

During the quarter, the Company strengthened its financial position by closing the first $32 million tranche, including the conversion of $5.5 million of notes, of an up to $64 million private financing led by biotechnology-focused institutional investors. This financing provides the capital needed to advance AT177 through key clinical development milestones. In parallel, the Company enhanced its board and executive leadership team with experienced pharmaceutical industry veterans with expertise in small molecule drug development.

"AhR signaling is a clinically validated pathway with the potential to restore immune homeostasis and epithelial barrier function in ulcerative colitis," said Matt Davidson, Ph.D., Chief Development Officer and Director of Adial Pharmaceuticals. "AT177 is differentiated by design, a fully synthetic, oral prodrug engineered to release the active AhR agonist in the colon, where disease occurs, while minimizing systemic exposure. We believe this targeted delivery strategy addresses an important limitation of earlier AhR agonists and positions AT177 to capture the promise of localized AhR activation with a potentially better safety profile. With strong progress across our preclinical and CMC programs, we remain on track to file an IND in the first half of 2027."

Second Quarter 2026 Financial Results

● Cash and cash equivalents were $28.7 million as of June 30, 2026, compared to $4.6 million as of March 31, 2026. The Company believes that its existing cash and cash equivalents will fund its operating expenses into the second half of 2027. This does not assume receipt of the additional $32 million available under the milestone tranche of the private placement.
● Research and development expenses decreased by approximately $292 thousand to $440 thousand during the three months ended June 30, 2026, compared to $732 thousand for the three months ended June 30, 2025. This was mainly due to decreased research and development activity as the Company was engaged in merger discussions during the three months ended June 30, 2026 as compared to the same period in 2025.
● General and administrative expenses increased by approximately $4.3 million to $5.4 million during the three months ended June 30, 2026 compared to $1.2 million for the three months ended June 30, 2025. The increase was mainly due to merger related costs associated with the acquisition of Azora and severance expenses incurred during the three months ended June 30, 2026 as compared to the same period in 2025.
● Acquired in-process research and development expense was $46.2 million for the three months ended June 30, 2026. This is a non-cash charge representing the fair value of the in-process research and development acquired in the Azora Therapeutics transaction, which was expensed at closing because the acquired in-process research and development has no alternative future use as of the acquisition date. The charge has no effect on the Company's cash position or on the cash runway described above.
● Net loss was $52.0 million for the three months ended June 30, 2026, or $(11.25) per basic and diluted share, compared to a net loss of $2.0 million, or $(4.61) per basic and diluted share, for the three months ended June 30, 2025. The increase in net loss was primarily driven by acquired in-process research and development expense of $46.2 million, together with increased general and administrative expenses in the three months ended June 30, 2026 as compared to the same period in 2025. Net loss per share is calculated on 4,621,735 weighted-average shares outstanding and does not give effect to the conversion of the Series A convertible preferred stock, which remains subject to stockholder approval and which would result in 12,930,617 additional shares on an as-converted basis.
● At June 30, 2026, the Company had a Stockholders' Deficit of ($38.4) million resulting primarily from the addition of a $23.8 million milestone warrant liability and the classification as mezzanine equity of $38.5 million resulting from the issuance of Series A convertible preferred stock in the merger. The $38.5 million attributable to the Series A convertible preferred stock is expected to be reclassified as equity upon obtaining stockholder approval of its conversion to common stock. The milestone warrant liability resulting from the potential issuance of milestone warrants is a non-cash liability that does not require any cash payment and results from the fact that the number of shares underlying the milestone warrants are not fixed and vary based on investors election of their rights to purchase milestone warrants. Upon the issuance of the milestone warrants, the liability is expected to be converted into equity.

About Adial Pharmaceuticals, Inc.

Adial Pharmaceuticals, a clinical-stage biopharmaceutical company, has historically focused on the development of treatments for addictions and related disorders. In June 2026, the Company acquired Azora Therapeutics, a biopharmaceutical company focused on treating autoimmune diseases, including ulcerative colitis ("UC"). Following the acquisition of Azora, the Company's focus has shifted to the treatment of serious inflammatory diseases, and its lead program is AT177, which is being studied for the treatment of UC. AT177 is a fully synthetic, patented, oral AhR agonist designed to restore mucosal immune homeostasis at the site of disease with minimal systemic exposure. Its active ingredient is a prodrug of indirubin, the most potent AhR agonist within indigo naturalis, a botanical extract with best-in-category clinical efficacy in UC. In preclinical studies, AT177 demonstrated robust local colonic AhR activation with markedly limited systemic exposure and superior colon-to-systemic selectivity compared to other AhR agonists in development. AT177 is currently in IND-enabling studies, with an investigational new drug ("IND") filing planned for the first half of 2027, initiation of a Phase 1a single- and multiple-ascending-dose ("SAD/MAD") clinical trial planned to commence in the second half of 2027, followed by a Phase 1b proof-of-concept study in UC patients. Additional information is available at www.adial.com.

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