Press Release

CEO Letter to Shareholders

From the desk of Nick Kadysh, Founding CEO, PharmAla Biotech

“I just did my MDMA-assisted therapy yesterday. This modality is going to save so many lives. I am so in awe of your generosity to donate this magic medicine for my treatment. I feel that even after this first experience that I have solidified some beautiful realizations and am hopeful that I have regained a part of my humanity. Thank you so much, words cannot express how thankful I am for all you folks.”“
- A Recent Special Access Program Patient Treated with LaNeo MDMA”

”When I wrote the company’s first Shareholder Letter in March 2023, I assumed that we would be sending out letters like this once a year, to provide shareholders with an idea of what strategic direction we intended to take over the next 12 months. Of course, events move fast – especially in our rapidly growing industry. In our last shareholder letter of February 28th, 2023, we indicated we would execute on 3 major priorities:

1) In the first half (H1) of 2023, we will work to develop a distribution network in Australia to serve the new medicinal MDMA and Psilocybin market there, while continuing to support our clinical trial and SAP customers around the world.

2) PharmAla will continue developing our Novel Chemical Entities (NCEs), with the goal of launching a clinical trial into one of our ALA series molecules within 12 months. We will utilize existing data to supercharge our clinical research program, and work with best-in- class researchers to get the best possible data for assessment by regulators.

3) PharmAla will prepare for the next major international regulatory change affecting MDMA, and be ready to capitalize on that change.“

What I didn’t expect was that 6 months later I would need to release another letter - not because of changing circumstances, but because we had completed all the targets listed in that letter. I’m incredibly proud of our team’s achievements, and - having closed the 2022-2023 fiscal year for PharmAla - to be setting new and higher goals for the company.

What have we achieved over the past 6 months?

The past 6 months have been incredibly exciting for PharmAla.

● We executed on our first priority by forming Cortexa, our joint venture with Vitura Health, Australia’s largest medical cannabis company. Not only did we execute on our priority goal of developing a distribution network in Australia, but we found the best possible partners to do it – and executed in a way that allowed us to expand responsibly, rapidly, and efficiently from a cost-of-capital perspective. In the next few weeks, there will be lots of info on Cortexa’s progress in Australia.

● We completed the first Special Access Program treatments under Health Canada permits, and have grown those SAPs to several per month. As of right now, we continue to be the only ones treating patients with MDMA under SAP. More on this below.

● Developed our Novel Chemical Entities business, in line with our second major priority. We not only took the wrapping off of PharmAla-1 (P-1), our latest novel chemical entity (NCE); We also developed our drug pipeline. This will help speed our innovations to market, which will generate real value.

● With the execution of our agreement with Vitura, we’ve got a country launch strategy which we can replicate. We’re not only prepared for the next major regulatory change, we’re already working to drive it forward; In this letter, I’ll explain how.

The Next 6 Months

With the completion of our ‘22/’23 Fiscal Year, we must turn our attention to what we’ll be doing to continue PharmAla’s upward trajectory into 2024. I believe 2024 will be a very exciting time for our molecules of choice (MDMA and its analogues) because we will see very significant catalysts for the sector more broadly.

In the next month, we anticipate the publication of MAPS second Phase 3 study on MDMA-AT for PTSD, and within the next 12 months we anticipate MAPS will file their New Drug Application in the US for MDMA. I’d like to express my admiration for Rick Doblin, and the entire MAPS team for everything they’ve accomplished. We would all do well to remember that the opportunities we enjoy today are in large part the result of their incredible diligence over the past decade and for Rick, a journey stretching back to the 1980s.

For PharmAla, our goals for the next 6 months are to:

1) Establish a pharmaceutical partnership for development of our drug pipeline, as well as helping us to execute our planned Phase 2 trial with ALA-002 in early 2024.

2) Grow our Clinical Trials, Australian sales and Special Access Program practice in Canada to establish significant recurring revenue

3) Leverage the data derived from the treatments we administer to patients to drive regulatory change.

In more detail:

1) We’ve developed some fantastic IP assets. Dr. Harpreet Kaur continues to work with a wonderful cross-functional team of researchers across North America and Australia in order to not only develop our assets, but develop new ones. In the past 6 months, Dr. Kaur and her team have not only executed difficult regulatory operations – receiving a written opinion from MHRA allowing ALA-002 to move into Phase 2 – but are also continuing to develop new assets. We’re incredibly excited about PharmAla-1 (P-1), a molecule that we believe will bring together some of the finest qualities of MDXX-class drugs with the psychoplastogenic qualities of the classical psychedelics.

Just as our COO, Dr. Shane Morris, has grown our manufacturing business from an idea to a fully functional value chain, Dr. Kaur has developed an exceptional research chain. We know our space and our molecules, and we can now take an idea for a new central nervous system (CNS) small molecule from an idea, to computational chemistry (otherwise known as AI Drug discovery), to manufacturing, to proof-of-concept rodent research – all in under 6 months. This type of “rapid prototyping” is what the Pharmaceutical industry wants and needs in its early-stage drug discovery partners.

For PharmAla, that partnership is the next step in our growth. With the recent acquisition of our partners Mindset Pharma by Otsuka, our path is also clear. PharmAla is working diligently to execute a development partnership for our drug discovery business line. I believe this is by far and away the most important item for PharmAla in the next 6 months, and will generate the most value for our business.

2) As most of our investors know, PharmAla has not raised any capital since May 2021. We operate the business based on incoming revenues from our sales of our LaNeo MDMA product, which we’ve now commercialized in 3 countries, with more coming online in the future. This has gone well: I’m happy to report that we are now executing additional batches of LaNeo MDMA 40mg capsules with our GMP encapsulator, Filament Health, and that we intend to manufacture a new batch of LaNeo MDMA Active Pharmaceutical Ingredient.

The commercialization of LaNeo capsules has allowed us to break new ground as well: in May, PharmAla was approved to execute the first-ever MDMA Special Access Program request with our partners at Shaman Pharma. In June, we received authorization from the US Food and Drug Administration (USFDA) to supply a pilot Phase 2 trial at UCLA; This opens up the US clinical trial market to supply by PharmAla.

I’m happy to report that PharmAla has landed numerous deliveries to customers over the past 6 months – including the Orygen Institute, the University of Sydney, and others. In the next 3 months, we have critical deliveries to be made to customers like Emyria, Incannex, and UCLA. However, to continue our growth, PharmAla must continue to grow recurring sales in those areas available to us, such as Special Access Program requests, without ignoring our existing clinical trial business.

3) Our ability to provide treatment to patients directly is a huge advantage for PharmAla – and one that no other company can currently match. It is an incredibly powerful feeling to know that we’re helping people who are often in desperate need. The quote with which I opened this letter is an excellent reminder that our ability to treat patients is the ultimate goal, and one we must never forget.

It also creates an ability for the company to gather incredibly valuable data, which will let us perform operations no other company can. With significant real-world data, PharmAla can make regulatory filings for greater approvals and permissibility of MDMA treatments. We look forward to showing the market how we intend to do this, in more detail, in the near future.

I’d like to remind our shareholders how far we’ve come: we started the year with a share price of $0.03. At the time when I published our last shareholder’s letter, our stock price was $0.13. Six months on, we have seen real, and more importantly durable, growth. To those investors who joined us during the past 6 months, we’re grateful for your commitment and as a company, be rest assured we’re focused on building the business further. The share price will follow.

If we can achieve these goals with the same success as our previous goals – now executed, just 6 months on – then I believe that we will see even more significant growth in the next 12 months than we’ve seen in the past 6.

Sincerely, on behalf of the PharmAla Team,

Nicholas Kadysh
Founding CEO
PharmAla Biotech

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