Appili Therapeutics Reports Financial and Operational Results for Third Quarter of Fiscal Year 2022

“Over the past few months, we made meaningful progress fortifying partnerships to accelerate and expand our diversified portfolio, including expanding the scope of our commercial partnership with Saptalis to bring our near-market antibiotic product to global markets, and kickstarting an exciting new chapter on our path to become a global biotechnology company and leader in the fight against infectious diseases,” said Armand Balboni, M.D., Ph.D., Chief Executive Officer of Appili Therapeutics. “There is still a lot of work to be done to better protect society from emerging healthcare threats, and that’s why I’m incredibly proud of all that we have accomplished this quarter to enhance our portfolio of critical infectious disease treatments and address unmet needs in healthcare.”

Third quarter and recent operational highlights include:

• Expansion of commercial agreement with Saptalis Pharmaceuticals to add European and Latin American markets and increase global access to ATI-1501, Appili’s proprietary taste-masked liquid suspension reformulation of metronidazole scheduled for submission to the US Food and Drug Administration later this year
• Announced positive one year challenge results for biodefense vaccine candidate ATI-1701, a leading and potential first-in-class option to prevent infection by top priority biothreat Francisella tularensis
• Updated Appili’s funding agreement with The Lind Partners with a voluntary prepayment of $1 million
• Discontinued further investment in development activities related to COVID-19 antiviral candidate Avigan®/Reeqonus™ (favipiravir) and issued notice of termination of strategic alliance and equity transaction to AiPharma following announcement of top-line results for Phase 3 PRESECO trial

Financial Results

The Company prepares its financial statements in accordance with IFRS as issued by the International Accounting Standard Board and Part I of Chartered Professional Accountants of Canada Handbook–Accounting. All figures are stated in Canadian dollars unless otherwise stated.

The net loss and comprehensive loss of $21.7 million or $0.33 loss per share for the nine months ended December 31, 2021 was $12.4 million higher than the net loss and comprehensive loss of $9.3 million or $0.16 loss per share during the nine months ended December 31, 2020. This relates mainly to an increase in research and development costs of $13.4 million, an increase in business development of $0.25 million, an increase in financing costs of $0.37 million and an increase in income tax expense of $0.04 million. These increases were offset by an increase in revenue and interest income of $1.3 million, an increase of government assistance of $0.15 million, and a decrease in general and administration expenses of $0.12 million.

As of December 31, 2021, the Company had cash and short-term investments of $9.4 million, compared to $16.1 million on March 31, 2021. As of February 14, 2022, the Company had 71,266,120 issued and outstanding Common Shares, 9,745,239 stock options, and 21,343,530 warrants outstanding.

This press release should be read in conjunction with the Company’s unaudited interim condensed financial statements for the third quarter of the 2022 fiscal year and the related management discussion and analysis (MD&A), copies of which are available on SEDAR at www.sedar.com.

About Appili Therapeutics

Appili Therapeutics is an infectious disease 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 broad-spectrum antifungal, a vaccine candidate to eliminate a serious biological weapon threat, and two novel antibiotic programs. Led by a proven management team, Appili is at the epicenter of the global fight against infection. For more information, visit www.AppiliTherapeutics.com.

Forward looking statements

This news release contains “forward-looking statements”. Wherever possible, words such as “may,” “would,” “could,” “should,” “will,” “anticipate,” “believe,” “plan,” “expect,” “intend,” “estimate,” “potential for” and similar expressions have been used to identify these forward-looking statements. These forward-looking statements reflect the current expectations of the Company’s management for future growth, results of operations, performance and business prospects and opportunities and involve significant known and unknown risks, uncertainties and assumptions, including, without limitation, those listed in the annual information form of the Company dated June 23, 2021 and the other filings made by the Company with the Canadian securities regulatory authorities (which may be viewed at www.sedar.com). Should one or more of these risks or uncertainties materialize or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking statements contained in this news release. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. The Company disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.

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