Mr. Don Cilla reports

APPILI THERAPEUTICS AND ITS PARTNER VITALEX BIOSCIENCES AWARDED CONTRACT FROM NIAID VALUED AT UP TO US$40 MILLION TO DEVELOP FUNGAL VACCINE VXV-01

Appili Therapeutics Inc. and its partner, Vitalex Biosciences, have received from the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, an award of up to $40-million (U.S.) in funding to support the development of VXV-01, a vaccine aimed at protecting against invasive fungal infections.

The five-year contract (No. 75N93025C00033) consists of a 22-month base period of performance totalling $3.6-million (U.S.), with 12 additional option periods valued at approximately $36.3-million (U.S.) for a total contract value of approximately $40-million (U.S.). Under the terms of the contract, Appili will partner with Vitalex to oversee a comprehensive development program for a Vitalex vaccine, VXV-01, that includes manufacturing, non-clinical studies, clinical and regulatory activities. The NIAID funds are expected to support the development of VXV-01 through investigational new drug (IND) submission and completion of phase 1 clinical trials.

"VXV-01 has the potential to significantly reduce serious invasive infections caused by Candida albicans, Candida auris and other related health-care-associated infections," said Don Cilla, PharmD, MBA, president and chief executive officer of Appili. "We are excited to bring Appili's expertise in vaccine development and government contracting to our collaboration with the Vitalex team who have deep knowledge in this field of research to move their promising vaccine candidate forward."

"Vitalex's second generation VXV-01 vaccine shows impressive protection against lethal invasive and mucosal Candida infections," said Dr. Ashraf S. Ibrahim, PhD, chief executive officer of Vitalex. "The vaccine is expected to reduce mortality rates of lethal multidrug Candida infections and reduce occurrence of mucosal Candida infections such as recurrent yeast infections."

Recent global estimates indicate that invasive fungal infections affect nearly 6.5 million people annually and are associated with approximately 3.8 million deaths, with Candida species being a major cause of these infections. Despite this significant health burden, there are currently no fungal vaccines approved for use in humans. VXV-01 is a novel dual-antigen vaccine designed to target antigens present on the surface of broad-spectrum pathogenic fungi. This innovative approach has the potential to provide robust immunity against these challenging pathogens, representing a major advance in the prevention of serious fungal diseases.

"Invasive Candida infections are life threatening, and the current standard of care drug treatments are not highly effective," said Dr. Gary Nabors, PhD, chief development officer at Appili and principal investigator on the contract. "The VXV-01 vaccine has the potential to reduce the suffering and death that is often seen in those vulnerable people who are at risk of acquiring severe Candida fungal infections."

Vitalex is the current owner of VXV-01, and as a condition to advancing the program, Appili and Vitalex expect to enter into an agreement for the development of VXV-01.

About NIAID contract

Under the terms of the agreement, Appili will serve as the prime contractor and will manage an array of subcontractors performing technical tasks associated with product development. Appili will be responsible for generating the data necessary to file an IND with FDA which allows for the performance of phase 1 clinical trials.

Update on United States federal government funding proposals

Not including the awarded NIAID contract described above, Appili has submitted four other funding proposals to the U.S. government representing a combined potential award value of up to $97-million (U.S.). If awarded, these funds would support the advanced development of critical infectious disease products aligned with public health and biodefense priorities.

"Having successfully raised $34.9-million (U.S.) in prior government funds, Appili has built a strong track record in government contracting and we are well positioned to execute on innovative programs aligned with public health agencies," said Don Cilla, PharmD, MBA, president and chief executive officer of Appili. "Securing additional non-dilutive funding remains key to Appili's strategy, enabling us to advance high-priority infectious disease products while maximizing shareholder value."

About Appili Therapeutics Inc.

Appili Therapeutics is a biopharmaceutical company that is purposefully built, portfolio driven and people focused to fulfill its mission of solving life-threatening infections. By systematically identifying urgent infections with unmet needs, Appili's goal is 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 a Food and Drug Administration-approved ready-made suspension of metronidazole for the treatment of antimicrobial resistant infections, a vaccine candidate to prevent tularemia, a serious biological weapon threat and a topical antiparasitic for the treatment of cutaneous leishmaniasis, a disfiguring disease. Led by a proven management team, Appili is at the centre of the global fight against infection.

About Vitalex Biosciences

Vitalex is a start-up company created to further the development of technologies discovered in the laboratory of its founder, Dr. Ashraf S. Ibrahim, a senior investigator at The Lundquist Institute at Harbor-University of California at Los Angeles (UCLA) Medical Center and a professor at the David Geffen School of Medicine at UCLA. Vitalex has obtained greater than $10-million in non-dilutive funding from the NIAID to further the development of a dual antigen vaccine that targets hospital-acquired infections caused by multidrug resistant Candida albicans, Candida auris and Gram-negative bacteria including those caused by Pseudomonas aeruginosa, Acinetobacter baumannii and Klebsiella pneumoniae. Vitalex is also developing a humanized monoclonal antibody against the lethal and rare fungal infection, mucormycosis.

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