Mr. Don Cilla reports

APPILI THERAPEUTICS REPORTS FINANCIAL AND OPERATIONAL RESULTS FOR SECOND QUARTER OF FISCAL YEAR 2024

Appili Therapeutics Inc. has released its financial and operational results for the second quarter of its fiscal year 2024, which ended on Sept. 30, 2023.

"Notably, the company's most advanced asset, ATI-1501, received U.S. Food and Drug Administration approval on Sept. 22, 2023, along with its brand name Likmez. The approval of Likmez, shortly after securing patent coverage through 2039, is an important milestone that demonstrates Appili's ability to identify promising opportunities, accelerate their development, and unlock value for the benefit of both patients and shareholders," said Don Cilla, PharmD, MBA, president and chief executive officer of Appili. "Importantly, ATI-1701 recently received an additional funding commitment from [U.S. Air Force Academy], bringing the total program funding awarded to $14-million (U.S.). At Appili, we are proud of our strong government partnerships, which enable us to advance this biodefence program towards an investigational new drug."

Operational highlights

The company has made significant operational progress during this quarter. The company received FDA approval for Likmez (ATI-1501) for the treatment of anaerobic bacterial infections on Sept. 22, 2023. Appili expects to receive additional milestone payments and royalties from its partner, Saptalis Pharmaceuticals, based on this FDA approval and Saptalis's commercialization. Saptalis is preparing for commercial launch in late 2023. On Oct. 13, 2023, the company's recently issued U.S. patent related to Likmez with coverage through 2039, U.S. application No. 18/072,154, was listed in the FDA publication, "Approved Drug Products with Therapeutic Equivalence Evaluations," commonly known as the orange book.

Appili's development program, ATI-1701, for the prevention of F. tularensis, has received awards totalling $14-million (U.S.) from the U.S. Air Force Academy. Under the terms of the recently modified agreement with USAFA governing such awards, Appili will be reimbursed for subcontractor and vendor costs necessary to carry out the technical tasks. Additionally, Appili will be reimbursed for direct labour costs associated with budgeted program activities, including a portion of its overhead costs. During its second fiscal quarter, Appili progressed early-stage development activities and regulatory activities. In addition, Appili completed a knowledge transfer and executed a technology transfer for the ATI-1701 drug substance manufacturing process to the phase 1 contract manufacturing organization.

With respect to Appili's ATI-1801 program, for the treatment of cutaneous leishmaniasis, the company plans to request a meeting with the FDA later this year to discuss the previously generated phase 3 data and agree on the registration package necessary to support a new drug application submission, which the company expects will include available non-clinical, manufacturing and clinical data generated to date. Appili expects to pursue non-dilutive funding and partnership opportunities with non-governmental organizations and government agencies, which share the company's focus on tropical diseases, to help complete remaining development work.

Coming milestones:

• Appili anticipates receiving royalty and milestone payments from its partner Saptalis, based on Likmez NDA approval and commercialization.
• Appili plans to hold a pre-IND meeting with the FDA to discuss ATI-1701's regulatory, CMC, toxicology and phase 1 strategies.
• Appili expects the ATI-1701 CMO to produce engineering batches.
• Appili plans to request a meeting with the FDA later this year to discuss the previously generated ATI-1801 phase 3 data and agree on the necessary registration package to support an NDA submission.

Corporate update

Today, the company announced that it has appointed Prakash Gowd, MBA, BSc pharm, CDir, to its board of directors. Mr. Gowd's career covers a broad range of commercial successes involving corporate development, fundraising, and marketing across multiple business models and therapeutic areas.

"We are very pleased to welcome Prakash to Appili's board. His background in corporate finance, product development and strategic planning will be very valuable as we advance our programs through multiple milestones from ATI-1701's IND submission to the FDA interactions for our ATI-1801 asset," said Dr. Armand Balboni, chair of the Appili board. "We are thrilled to have Prakash as a board member and look forward to his leadership experience as we progress our candidates through these next crucial stages."

Annual financial results

The company prepares its financial statements in accordance with international financial reporting standards as issued by the International Accounting Standard Board and Part I of Chartered Professional Accountants of Canada handbook on accounting.

The net loss and comprehensive loss of $1.0-million or one-cent loss per share for the three months ended Sept. 30, 2023, was $600,000 lower than the net loss and comprehensive loss of $1.6-million or two-cent loss per share during the three months ended Sept. 30, 2022. This relates mainly to an increase in milestone revenue of $300,000, an increase in government assistance of $1.0-million, a decrease in foreign exchange losses of $200,000, and a decrease in general and administrative expenses of $100,000. These decreases were offset by an increase in research and development expenses of $800,000 and an increase in financing costs of $200,000.

As of Sept. 30, 2023, the company had cash of $400,000, compared with $2.5-million on March 31, 2023.

As of Nov. 13, 2023, the company had 121,266,120 issued and outstanding common shares, 7,842,000 stock options and 44,856,874 warrants outstanding.

This press release should be read in conjunction with the company's unaudited interim condensed financial statements for the second quarter of the 2024 fiscal year and the related management's discussion and analysis, copies of which are available under the company's profile on SEDAR+.

About Appili Therapeutics Inc.

Appili is a biopharmaceutical company that is purposefully built, portfolio driven and people focused to fulfill its mission of solving life-threatening infectious diseases. By systematically identifying urgent infections with unmet needs, Appili has a goal to strategically develop a pipeline of novel therapies to prevent deaths and improve lives. The company is currently advancing a diverse range of anti-infectives, including an Food and Drug Administration-approved ready-made suspension of metronidazole for the treatment of anti-microbial infections, a vaccine candidate to eliminate a serious biological weapon threat and a topical antiparasitic for the treatment of a disfiguring disease. Led by a proven management team, Appili is at the epicentre of the global fight against infection.

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