Anebulo Pharmaceuticals – ANEB

10/24/2022
By Hei-Hang Lui
Email: hhglui@gmail.com
Twitter: @InvestorZlu

Share Price: $1.85

Shares outstanding: 25,633
Market cap: $47,421
Cash: $21,149
Debt: $0
Enterprise value: $26,272
Share price and financial data as of 10/24/2022 at close.
All numbers are in thousands except per unit data; the currency is USD.

EXECUTIVE SUMMARY

▪ Anebulo Pharmaceuticals (Anebulo or the Company) is uniquely positioned in the treatment of cannabinoid
intoxication which is a growing indication thanks to political decisions favorable to cannabinoid consumption
and for which there are no adequate treatments.

▪ Clinical data have been supportive about the efficacy of Anebulo’s drug candidate ANEB-001, which is a
cannabinoid-1 receptor antagonist, in the treatment of acute cannabinoid intoxication (ACI) by achieving
convincing statistically significant (p<0.01) reduction of THC-induced effects despite the inherent
underpowering of phase 2 trial design.

▪ ANEB-001 may potentially be the first-to-market in the oral treatment for ACI, which potentially amounts to
$600M per year growing at 15% CAGR and benefits from favorable tailwinds such as the legalization of
cannabis in the United States and the need expressed by emergency room physicians to have a potent,
quick-acting treatment for ACI.

▪ Based on historical rate of cash burn and given the recent private placement, the company is adequately
funded until end of 2023.

▪ Enterprise value is $26M as of 10/24/2022, with no financing overhang in the immediate future and coming
clinical data read-out provide a good risk-to-reward ratio: the undervaluation and the opportunity for
investors stem from the lack of coverage of the stock and the absence of historical precedent that may serve
as a reference for ANEB-001’s path to approval.

▪ Anebulo is a single-asset, clinical-stage biotech company which stock is very illiquid: that implies a high level
of risk and volatility and its clinical results may be biased because of the small patient populations used so
far.

▪ Price target: $6 by end of 2023/early 2024.

This document only reflects the Author’s opinion and does not constitute an investment advice or recommendation
to buy the stock.
The author owns shares of Anebulo.
TABLE OF CONTENTS

EXECUTIVE SUMMARY ......................................................................................................................................... 1

COMPANY OVERVIEW .......................................................................................................................................... 3
PRODUCTS AND PIPELINE OVERVIEW ................................................................................................................... 3
ANEB-001 ............................................................................................................................................................ 3
Overview and Mechanism of Action ............................................................................................................................. 3
Acute Cannabinoid Intoxication .................................................................................................................................... 4
Standard of Care for Acute Cannabinoid Intoxication .................................................................................................. 6
Findings on ANEB-001 ................................................................................................................................................... 6
▪ Preclinical Studies (1) ........................................................................................................................................ 7
▪ 1st Vernalis Phase 1 Study V24343-1Ob-01 (1, 2) ............................................................................................. 7
▪ 2nd Vernalis Phase 1 Study V-24343-1Ob-02 (1) ............................................................................................... 9
▪ Anebulo Phase 2 THC Challenge Study in Healthy Volunteers Part A (3, 4) ..................................................... 9
▪ Anebulo Phase 2 THC Challenge Study in Healthy Volunteers Part B (3, 4) ................................................... 11
Market for Acute Cannabinoid Intoxication ............................................................................................................... 14
Comparison with OPNT004/Drinabant ....................................................................................................................... 15
Comparison with AEF0117/Pregnenolone-Derivative ................................................................................................ 17
FINANCIALS AND CAPITAL STRUCTURE ............................................................................................................... 18
VALUATION ....................................................................................................................................................... 20
RISK FACTORS .................................................................................................................................................... 20
MISCELLANEOUS ................................................................................................................................................ 20
COMPANY OVERVIEW

Anebulo Pharmaceuticals is a clinical-stage biotechnological company that engaged in the development and
commercialization of treatments for people suffering from acute cannabinoid intoxication and substance addiction.
Its lead drug candidate is ANEB-001, a small molecule cannabinoid receptor antagonist to treat cannabinoid
intoxication and overdose. The Company was incorporated in 2020 and is based in Lakeway, Texas. It currently employs
four full-time employees.

PRODUCTS AND PIPELINE OVERVIEW

ANEB-001

Overview and Mechanism of Action

ANEB-001 is a single-dose, orally bioavailable small molecule treatment that acts as a cannabinoid receptor antagonist.
It is rapidly absorbed by the body and is able to reverse in most cases the effects of acute cannabinoid intoxication (1)
(ACI). In December 2021, the Company conducted a phase 2 proof-of-concept trial for ANEB-001 that began in the
Netherlands and ended in September 2022 with reports of positive top line data (2, 3).

The drug candidate was originally developed by Vernalis Development and licensed to Anebulo on 26 May 2020. Under
the terms of the agreement, Anebulo has exclusive rights to develop and commercialize ANEB-001 worldwide. In
exchange, Anebulo agreed to pay Vernalis $150,000 as a non-refundable signature fee, up to $29.85M in
developmental milestone payments and up to $35M in sales milestone payments plus low to mid-single digit royalties
on net sales (1).

Developmental Milestone Payment Summary (4)

In May 2021, Vernalis received $1.35M in stocks at Anebulo’s IPO in lieu of milestone payments. Assuming an
authorization for the USA and for one indication, Vernalis will be entitled milestone payments amounting to $6.5M.
 Sales Milestone Payment Summary (4)

Royalties Tiers Summary (4)

Sources:
1: Anebulo Pharmaceuticals. FY 2022 10K.
https://www.sec.gov/ix?doc=/Archives/edgar/data/1815974/000149315222025448/form10-k.htm
2: Anebulo Pharmaceuticals. July 5, 2022 Press Release.
https://d1io3yog0oux5.cloudfront.net/_5a22646479c6a1a1a19ac65a645e3dba/anebulo/news/2022-07-
05_Anebulo_Pharmaceuticals_Announces_Positive_59.pdf
3: Anebulo Pharmaceuticals. September 26, 2022 Press Release.
https://d1io3yog0oux5.cloudfront.net/_5a22646479c6a1a1a19ac65a645e3dba/anebulo/news/2022-09-
26_Anebulo_Pharmaceuticals_Announces_Positive_64.pdf
4: Anebulo Pharmaceuticals. Vernalis License Agreement.
https://www.sec.gov/Archives/edgar/data/1815974/000149315221007758/ex10-4.htm

Acute Cannabinoid Intoxication

Cannabinoids are a collective group of compounds that act on cannabinoid receptors. They include plant-derived
phytocannabinoids, synthetic cannabinoids and endogenously-derived endocannabinoids. The main source of
cannabinoid toxicity is from plant-derived cannabinoids and synthetic cannabinoids. The main psychoactive compound
found in these sources is delta-9- tetrahydrocannabinol (THC) which acts as cannabinoid receptor agonist.

Two main modes of administration are the most commonly associated with cannabinoid toxicity: inhalation and
ingestion. Toxicity occurs due to overuse, notably with cannabinoid edibles that take a longer time to reach peak
concentration, leading users to inadvertently overconsume them.

Marijuana and examples of cannabis edibles

The endocannabinoid system is complex and research is still ongoing. Current findings reveal that cannabinoids –
whether endogenous or exogeneous – act on specific cannabinoid binding (CB) receptors, which are G-protein linked
receptors that inhibit adenylyl cyclase and cyclic adenosine monophosphate (cAMP). When CB receptors are
stimulated, it affects calcium and potassium channels, leading to an overall decrease in intracellular calcium and
extracellular potassium concentrations.

CB1 receptor agonist signaling pathway (2)

CB receptors are grouped into two types: cannabinoid binding receptor 1 (CB1) and cannabinoid binding receptor 2
(CB2). CB1 receptors are predominantly centrally located but is also present in the periphery while CB2 is
predominantly peripherally located with a presence in the central system. CB1 receptors are mainly involved in the
central effects of cannabinoids with consequences on learning, memory, cognition, emotion, movement, sensory
perception, nausea and psychoactive properties. CB2 receptors are hypothesized to affect inflammation and immune
system regulation.

Locations of CB1 and CB2 receptors in the human body

Stimulation of CB1 receptors may result in the inhibitory modulation of various neurotransmitters including
acetylcholine, glutamate, γ-aminobutyric acid (GABA), dopamine, norepinephrine and 5-hydoxytryptamine
(serotonin). This neurotransmitter modulation may contribute to the central and peripheral effects observed in
cannabinoid toxicity.

An immoderate stimulation of the endocannabinoid system leads to erratic neurotransmitter modulation that can
lead to toxicity. Generally, inhalation has the fastest absorption time with THC reaching peak serum concentration in
less than thirty minutes. For ingestion, THC concentration peaks at around 2 to 4 hours after consumption. Duration
of toxicity after inhalation and ingestion lasts approximately 2 to 6 hours and 8 to 12 hours, respectively. THC is mainly
metabolized by the hepatic cytochrome P450 into many mostly inactive metabolites.

Acute physiologic effects of cannabinoid use include decreased systemic vascular resistance, elevated heart rate,
decreased intraocular pressure, nystagmus, conjunctival injection, lethargy, decreased concentration and generalized
psychomotor impairment. In synthetic cannabinoid use, sympathomimetic toxicity, acute psychosis, agitation, seizure
and sedation may occur. The additional effects may be explained by the fact that synthetic cannabinoids are full
agonists (THC is a partial agonist) and other substances may be included due to adulteration. In severe cases,
hyperthermia, rhabdomyolysis, renal failure and hyperemesis may occur.

Source:
1: Kelly et al. Cannabinoid Toxicity. Treasure Island (FL): StatPearls Publishing; 2022 Jan-.
2: Kendall et al. Cannabinoid Receptors in the Central Nervous System: Their Signaling and Roles in Disease. Front. Cell.
Neurosci (2017). 10: 294.

Standard of Care for Acute Cannabinoid Intoxication

Most adult patients with cannabinoid intoxication improve on their own with little to no intervention. However,
pediatric patients and patients intoxicated with synthetic cannabinoids may require longer observation and support.
Toxicity resulting in agitation, acute psychosis and tachycardia is commonly treated with benzodiazepines.

Benzodiazepines are a class of psychoactive drugs that act as brain depressants. The main effects are sedation,
hypnosis, decreased anxiety, anterograde amnesia, centrally mediated muscle relation and anti-convulsant activity.
They may also have a dose-dependent ventilatory depressant effect and cause a modest reduction in arterial blood
pressure and an increase in heart rate. Benzodiazepines’ mechanism of action is to bind to gamma-aminobutyric acid
receptors A (GABAA) and then act as a positive allosteric modulator. GABAA receptors are mainly responsible for
inhibitory neurotransmission in the central nervous system. The activation of GABAA receptors opens ion channels
which allows chloride cations to enter into the neuron, causing a hyperpolarization of the membrane potential. This
puts the resting potential further away from the threshold potential, making the neuron firing less likely and thus,
causing an inhibitory effect on neurons. The binding of benzodiazepines to activated GABAA receptors allows more
chloride cations to enter into the neurons, which exacerbates the inhibitory effects of activated GABAA receptors.

Benzodiazepines are classified as Schedule IV controlled substances by the DEA (2) as they carry risk of abuse, misuse,
addiction, physical dependence and withdrawal reactions (3). Adverse effects due to abuse include depression and
suicide ideation. Discontinuation of benzodiazepines may cause a rebound (return and aggravation of the symptoms
for which the patient was treated) and withdrawal symptoms (including insomnia, gastric problems, tremors, agitation,
fearfulness and muscle spasms). These symptoms may happen even after a relatively short period of treatment (two
to four weeks) (4).

Sources:
1: Olkkola et al. Midazolam and Other Benzodiazepines. Handb Exp Pharmacol. 2008; (182): 335-60.
2: Drug Enforcement Administration. BENZODIAZEPINES. December 2019.
https://www.deadiversion.usdoj.gov/drug_chem_info/benzo.pdf (last accessed on 09/30/2022)
3: Food and Drug Administration. FDA requiring Boxed Warning updated to improve safe use of benzodiazepine drug
class. 09/23/2020. https://www.fda.gov/media/142368/download
4: Chouinard G. Issues in the Clinical Use of Benzodiazepines: Potency, Withdrawal, and Rebound. J Clin Psychiatry
2004; 65[suppl 5]: 7-12.

Findings on ANEB-001
 ▪ Preclinical Studies (1)

Originally, ANEB-001 was developed by Vernalis in the United-Kingdom under the name V24343 as potential treatment
for obesity and other metabolic indications. Between 2003 and 2006, Vernalis conducted a series of preclinical trials.
It was established that ANEB-001 was able to competitively displace the antagonist radioligand, [3H]-SR141716A from
the human CB1 receptor with high affinity (0.55 µM). It was also shown that ANEB-001 has 1000 times more affinity
with human CB1 receptors than with all other receptors.

In a preclinical study, C57 mice were administered 3 mg/kg THC 10 minutes before test. They exhibited reduced
locomotor activity when placed in automated locomotor activity cages for 15 minutes. An oral administration of ANEB-
001 at 30 mg/kg 30 minutes before test significantly reversed the action of THC on the total activity time parameter
(p<0.01).

▪ 1st Vernalis Phase 1 Study V24343-1Ob-01 (1, 2)

In 2006 and 2007, Vernalis conducted the V24343-1Ob-01 and V24343-1Ob-02 studies that were both phase 1 studies
for the treatment of obesity.

The V24343-1Ob-01 study administered single (Part A) and multiple (Part B) ascending doses of ANEB-001 for up to 14
days in healthy overweight and mildly obese subjects.

In Part A, 18 healthy volunteers randomly received either a placebo or two single oral doses of ANEB-001 with doses
ranging from 1 mg to 200 mg.

Pharmacokinetics of ANEB-001 in healthy volunteers

Pharmacokinetics were measured and it showed ANEB-001 was rapidly absorbed by the body following oral
administration and achieved blood concentration anticipated to be sufficient to block the CB1 receptor in under 30
minutes, which makes it suitable for an acute treatment of cannabinoid intoxication. ANEB-001 concentrations in
plasma were generally dose-dependent with 25 mg being the minimal dose to reach therapeutic effect.

No severe adverse events were observed in either group and no difference between treatment groups in overall
incidence, number of or severity of adverse events. Probably drug-related events in the treatment arm were nausea
(22%), dizziness (11%), hiccups (8%) and decreased appetite (8%).

In Part B, 32 obese volunteers randomly received either a placebo (n=8) or four different doses of ANEB-001 for 14
days (n=24).
 *
**

* p<0.05 ** p<0.01
Pharmacodynamics of ANEB-001 as measured by test meal energy intake

Related to pharmacodynamics measures, a reduction in test meal energy intake was observed even at the lowest dose
level. The reduction reached statistical significance for the 100 mg on Day 14 (p<0.01) and Day 7 (p<0.05).

*
*

***

* p<0.05 *** p<0.001

Pharmacodynamics as measured by body weight loss

In another pharmacodynamics measure, statistically significant decrease in body weight was observed on Day 14 for
100 mg (p<0.001), 50/5 mg (p<0.05) and 200/50 mg (p<0.05); trend in weight reduction was observed for 75/15 mg.

No severe adverse events were observed in either group but an increased number of mild and moderate adverse
events was observed in the obese volunteers who received the two higher dose arms (200/50 mg and 100 mg). The
observed adverse events included nausea, vomiting, diarrhea, dizziness, hiccups, decreased appetite, hyperhidrosis
and feeling hot. The effects were considered on-target as they reflect CB1 receptor antagonism. ANEB-001’s impact
on anxiety was measured using the Spielberger state score. No significant impact was found except for one single
subject in the 200/50 mg arm that may be explained by somatic adverse events. Impact on depression was measured
using HAMD21 and small increases were noted in the 75/14 mg and 200/50 mg dose which were also believed to be
driven by somatic symptoms.

In conclusion of the V24343-1Ob-01 study, ANEB-001 doses between 1 mg and 150 mg were found to be very well
tolerated in both single and multiple doses with an adverse events profile similar to placebo. There was no observed
effect on the cardiovascular system, ECGs, labs or physical exams and no significant effects on anxiety or depression
scores. ANEB-001 demonstrated its potential to cross the blood brain barrier and antagonize the CB1 receptors.

▪ 2nd Vernalis Phase 1 Study V-24343-1Ob-02 (1)

Vernalis conducted a second phase 1 study in which the pharmacokinetics of a single oral dose (1 to 200 mg) of ANEB-
001 is compared between fed and fasted states in 8 subjects that were lean and in 8 subjects that were overweight.
There were no apparent differences in the tolerability of ANEB-001 between the subjects that were in fed and fasted
states or between subjects that were lean and overweight. Total area under curve was approximately 30% higher in
subjects in the fed state compared to the subjects in the fasted state, with similar systemic exposure for the lean and
overweight subjects.

▪ Anebulo Phase 2 THC Challenge Study in Healthy Volunteers Part A (3, 4)

Anebulo initiated a phase 2 proof-of-concept study in December 2021 at the Center for Human Drug Research (CHDR)
in the Netherlands to evaluate the safety, tolerability, pharmacokinetics and effectiveness of a single dose of ANEB-
001 in treating healthy subjects challenged with THC. The study was divided into parts A and B.

In Part A, 60 healthy adults with occasional consumption of cannabis underwent a randomized, double-blind, placebo-
controlled trial organized into 3 arms with a 1:1:1 ratio (placebo, 50 mg ANEB-001 or 100 mg ANEB-001). All subjects
were challenged with a single oral dose of 10.5 mg THC and then treated with single oral dose of 50 mg ANEB-001,
100 mg ANEB-001 or placebo. Subjects were then monitored for 24 hours and underwent a 7-to-14-day follow-up.
Besides safety, tolerability and pharmacokinetics, measures of central nervous system symptoms were also carried
out including visual analog scale (VAS) assessments and objective measures of intoxication. Part A was completed in
June 2022 and results were announced in a press release on July 5, 2022.

* Visual Analog Scale

24-hour follow-up
Anebulo Phase 2 Challenge Study Part A design and endpoints
 ▪ The administration of 10 mg oral THC in the
placebo group produced a substantial increase
in the VAS “Feeling High” score.

▪ Both doses of ANEB-001 led to a statistically

significant reduction in feeling high compared
to placebo (p<0.0001).

▪ The reduction in feeling high was measured at

the first hour of the follow-up.

▪ The effect of ANEB-001 was sustained for the

duration of the THC effect.

▪ The 50 mg dose of ANEB-001 was as effective

Anebulo Phase 2 Challenge Study Part A – Time course of as the 100 mg dose.
VAS “Feeling High”

▪ Participants who scored above 20 mm were

considered “feeling high” after absorption of
75% 10% 30% oral THC.

▪ 75% (15/20) of subjects in the placebo group

reported feeling high.

▪ 10% (2/20) of subjects in the 50 mg ANEB-001

group reported feeling high.

▪ 30% (6/20) of subjects in the 100 mg ANEB-001

group reported feeling high.

▪ ANEB-001 seems to provide an “all-or-nothing”

inhibition of feeling high.

▪ The effect is maximum at 50 mg dose.

Anebulo Phase 2 Challenge Study Part A – Maximum VAS

“Feeling High” scores (mm)
 ▪ An administration of oral 10.5 mg THC
produced an increase in body sway over 8
hours.

▪ Both doses of ANEB-001 showed a statistically

significant reduction in the maximum change
from baseline for body sway.

▪ The 50 mg dose of ANEB-001 produced a

similar effect to the 100 mg dose.

Anebulo Phase 2 Challenge Study Part A – Maximum

Change from Baseline in Body Sway

▪ An administration of oral 10.5 mg THC

produced an increase in heart rate.

▪ Both doses of ANEB-001 showed a statistically

significant reduction in the maximum change
from baseline for heart rate.

▪ The 50 mg dose of ANEB-001 produced a

similar effect to the 100 mg dose.

Anebulo Phase 2 Challenge Study Part A – Maximum

Change from Baseline in Heart Rate

Anebulo’s phase 2 study Part A generally demonstrated convincing efficacy in inhibiting the effects of an oral THC
administration. Adverse events observed during the trial were mild and transient in nature, except in the case of one
subject in the 50 mg ANEB-001 group who experienced nausea and vomiting.

▪ Anebulo Phase 2 THC Challenge Study in Healthy Volunteers Part B (3, 4)

Part B of the phase 2 study aims at evaluating the effect of lower doses of ANEB-001. There will be a total of 6 cohorts
each testing a specific dose and possibly different timing in the dosing. Each cohort will be comprised of no more than
15 participants and randomized, double-blinded and placebo-controlled in a 2:1 ratio. Results on Cohorts 1 and 2 have
been disclosed and trial for Cohort 3 is underway (date of writing: 10/11/2022).
 * Visual Analog Scale
24-hour follow-up
Anebulo Phase 2 Challenge Study Part B design and endpoints for cohorts 1 and 2

Anebulo Phase 2 Challenge Study Part B – Aggregate Time Courses of VAS “Feeling High”, VAS “Alertness”, Body
Sway and Heart Rate of Cohorts 1 and 2

Administration of 21 mg THC generally led to more potent THC effect than 10.5 mg as observed in part A. On all
measures except heart rate, administration of 10 mg and 30 mg ANEB-001 led to statistically significant reduction of
THC effects (all p-values were lower than 0.01). In the Heart Rate measure, the trial design and the small effect size
made detecting statistically significant change challenging; nevertheless, a trend in reduction was observed in both 10
mg and 30 mg ANEB-001 groups. In all tests, the effect size of 10 mg ANEB-001 was equivalent to 30 mg ANEB-001.
 ▪ The plot displays data from Parts A and B as
well as data from another study on the effects
of THC at lower doses (5).

▪ Subjects demonstrated a dose-dependent

response to THC exposure.

▪ At 21 mg THC, only one subject in each of the

10 mg ANEB-001 and 30 mg ANEB-001 groups
was feeling high, compared to 100% in the
placebo group.

Anebulo Phase 2 Challenge Study Parts A and B – ▪ All ANEB-001 doses showed efficacy in
Aggregate Maximum VAS Feeling High Score vs. THC reducing THC effects on feeling high and 10 mg
Dose ANEB-001 was as effective as the higher doses,
even when the THC dose was 21 mg.

▪ ANEB-001 is rapidly absorbed and its

pharmacodynamics is comparable to the one
of THC.

▪ Both ANEB-001 and THC demonstrate a dose-

related exposure.

▪ Given the potency of ANEB-001 and its long

half-life, it is a suitable candidate for a once-
daily dosing.

Anebulo Phase 2 Challenge Study Parts A and B

Pharmacokinetics of ANEB-001 and THC in Plasma

The findings on ANEB-001 so far indicate a promising drug-candidate for the treatment of acute cannabinoid
intoxication. Questions remain about the THC dose ANEB-001 would need to be tested against to properly simulate
clinical cases of cannabinoid intoxication. Besides, as a noticeable number of patients are children, it remains to be
seen if ANEB-001 can be successfully used in pediatric patients.

Sources:
1: Anebulo Pharmaceuticals. Fiscal Year 2022 10K.
2: Anebulo Pharmaceuticals. Initial public offering S1.
3: Anebulo Pharmaceuticals. Press Release 07/05/2022.
4: Clinicaltrials.gov. https://clinicaltrials.gov/ct2/show/NCT05282797?term=ANEB&draw=2&rank=1 (last accessed on
10/07/2022)
5: Klumpers et al. Novel Δ9-tetrahydrocannabinol formulation Namisol® has beneficial pharmacokinetics and
promising pharmacodynamic effects. Br J Clin Pharmacol. 2012 Jul; 74 (1): 42-53.

Market for Acute Cannabinoid Intoxication

It is estimated that there are approximately 147 million cannabis users in the world (1). The number is assumed to
grow due to the wave of legalization as observed in Western countries. For example, in the United States, recreational
marijuana has gone from legal in no states to legal in 19 states during the 2012/2021 period, while its medical use is
legal in 37 states (2).

Acute cannabinoid intoxication (ACI) often occurs due to the ingestion if edibles which can contain relatively large
amount of THC and consumptions of synthetic THC. Symptoms include psychosis, panic and anxiety, feelings of
paranoia, agitation, hallucinations, nausea, vomiting, cardiac arrhythmias, seizure and death. These symptoms may
require emergency medical attention and can take hours to days to resolve. It is estimated that there were over 1.7
million of emergency department visits related to ACI In 2018. This number has been growing annually by 15% since
2012 and is expected to accelerate (2).

In a company-sponsored survey of 27 emergency room physicians in the United States in November 2020, the surveyed
physicians saw on average 10.5 ACI patients per month. On a scale of 1 (extremely unlikely) to 10 (extremely likely),
physicians expressed an average score of 7.48 on the need for a CB1 receptor antagonist for the treatment of ACI, on
their likelihood to prescribe a CB1 receptor antagonist for the treatment of ACI and the likelihood of a CB1 receptor
antagonist to reduce the need for supportive medication to manage ACI symptoms (3).

It is recommended that ACI patients be observed for 6 hours for resolution of symptoms and be admitted for
monitoring when there is central nervous system depression, altered mental status, multiple seizures or persistently
abnormal vital signs (4). In a study (5), it was observed that the average cost per patient bed-hour was $58.20 for the
emergency department in 2017. According to Monte et al (2017) (6), 37% of ACI patients were prescribed
benzodiazepines which cost an average less than $20 (7). Based on this data, the market for the treatment of ACI may
potentially amount to more than $600M per year.

A potent, rapid acting oral solution to ACI have the potential to disrupt this market by drastically decreasing the
observation time of ACI patients, by alleviating the workload of the physicians and freeing up the resources of
hospitals.

Sources:
1: World Health Organization. Alcohol, Drugs and Addictive Behaviours Unit – Cannabis.
https://www.who.int/teams/mental-health-and-substance-use/alcohol-drugs-and-addictive-behaviours/drugs-
psychoactive/cannabis (last accessed on 10/12/2022).
2: Anebulo Pharmaceuticals. Inaugural R&D Day Presentation September 26, 2022.
3: Anebulo Pharmaceuticals. Fiscal Year 2022 10K.
4: Kelly et al. Cannabinoid Toxicity. StatPearls [Internet]. Treasure Island (FL): StatPearls Publishing; 2022 Jan-.
5: Schreyer et al. The Economics of an Admission Holding Unit. West J Emerg Med. 2017 Jun; 18 (4): 553-558.
6: Monte et al. Characteristics and Treatment of Patients with Clinical Illness Due to Synthetic Cannabinoid Inhalation
Reported by Medical Toxicologists: A ToxIC Database Study. J. Med. Toxicol. (2017) 13: 146-152.
7: https://www.singlecare.com/drug-classes/benzodiazepines (last accessed on 10/13/2022)

Comparison with OPNT004/Drinabant

Opiant Pharmaceuticals licensed drinabant from Sanofi-Aventis in 2018 (1). Drinabant is a selective, high affinity CB1
receptor antagonist. Sanofi tested drinabant’s oral form (AVE1625) on 700 patients in phase 1 and phase 2 studies for
up to 24 weeks.

In a proof-of-concept study, the compound was tested on 36 patients and showed it blocked subjectively and
objectively psychological effects of inhaled THC. The main findings of AVE1625 are summarized below (2):

Proof-of-Concept Study of AVE1625 – Study Design

 Proof-of-Concept Study of AVE1625 – Inhibition Ratios of AVE1625 on THC-induced Effects

AVE1625 demonstrated dose-dependent effects on VAS “Alertness” and Body Sway scores. Expressed as inhibition
ratios, 20 mg, 60 mg and 120 mg AVE1625 inhibited THC-induced effects on VAS “Alertness” by 61%, 76% and 94%;
the effects on Body Sway were respectively 61%, 73% and 74%.

On safety profile, it was reported that adverse event occurrence was comparable to placebo group with the most
commonly reported events being fatigue, headache and somnolence.

Opiant is developing an injectable formulation of drinabant called OPNT004 because of the slow absorption rate of
the oral form of drinabant which is unsuitable to produce a rapid reversal of ACI symptoms. In January 2020, Opiant
signed a letter of intent with the National center for Advancing Translational Sciences to collaborate on the
development of OPNT004 with the objective to generate enough material to support the filing of an Investigational
New Drug application (1).

The findings on drinabant suggest it may be a promising drug-candidate for the treatment of ACI. However, Opiant’s
rapid-acting formulation is still in preclinical development and being an injection may make it less competitive than
Anebulo’s oral solution as it may require qualified medical personnel for its administration and pose additional in the
logistics. What is interesting here is CB1 receptors appear to be the right target in the treatment of ACI as AVE1625
demonstrated same efficacy profile (“all-or-nothing”) in the inhibition of CB1 receptors.

Sources:
1: Opiant Pharmaceuticals. Fiscal Year 2021 10K.
2 : Zuurman et al. Inhibition of THC-induced effects on the central nervous system and heart rate by a novel CB1
receptor antagonist AVE1625. J Psychopharmacol. 2010 Mar; 24 (3): 363-71.

Comparison with AEF0117/Pregnenolone-Derivative

Aelis Farma develops AEF0117 which is an orally available pregnenolone-derivative and a specific signaling inhibitor of
CB1 receptors (CB1-SSi). AEF0117 has the potential to selectively and partially inhibit the stimulation of CB1 receptors
without causing adverse events such as depression.

On June 1, 2022, Aelis started a phase 2b study in the United States involving 330 participants presenting cannabis
usage disorder for a duration 12 weeks. Subjects are administered either a single daily dose of AEF0117 (0.1 mg, 0.3
mg or 1 mg) or placebo. The primary endpoint is the reduction of the number of cannabis consumption days to less
than 1 per week. The study is registered under the ClinicalTrials.gov number NCT05322941.

In a double-blind, placebo-controlled phase 2a study (Clinicaltrials.gov number NCT03717272), 29 healthy subjects

with cannabis use disorder were administered either 0.02 mg to 1.2 mg once daily AEF0117 or placebo for 5 days.
Subject would then be asked to rate the positive effects of cannabis consumption using a visual analog scale.
 AEF0117 Phase 2a mean VAS score “Positive Effect Strength” and “Positive Effect Rating”

Without data on the delay of cannabis consumption after AEF0117 administration,

For VAS “Positive Effect Strength”, 0.06 mg and 1 mg AEF0117 reduce the subjective effects of cannabis by
respectively 13% and 25% at 20 minutes after cannabis consumption; 21% and 32% at 60 minutes; 25% and 37% at
105 minutes. AEF0117 appears to accelerate the trending toward baseline.

For VAS “Positive Effect Rating”, 0.06 mg and 1 mg AEF0117 reduce the subjective effects of cannabis by respectively
15% and 22% at 20 minutes; 20% and 34% at 60 minutes; 15% and 34% at 105 minutes. The VAS “Positive Effect
Rating” does not seem to be linear decrease over time. Maximum reduction was achieved at 60 minutes and 90
minutes respectively for 0.06 mg and 1 mg.

It appears AEF0117’s pharmacokinetics and pharmacodynamics are not comparable to those of ANEB-001 as the
reduction of THC-effects is not as potent and the peak concentration happens after 1 hour. It can be concluded that
AEF0117 is not a direct competitor of ANEB-001 as it aims at reducing the chronic consumption of cannabis instead of
an acute use like in an emergency room setting.

Sources:
1: Aelis Farma. IPO Roadshow Presentation February 4, 2022.

FINANCIALS AND CAPITAL STRUCTURE

Anebulo incurred $6.8M of net loss in fiscal year 2022 ending on 30 June 2022, up from $3.6M in fiscal year 2021. For
the quarter ending on 30 June 2022, losses were $2.3M.

Cash flow from operations were negative $5.4M for the fiscal year 2022, up from negative $4.9M in fiscal year 2021;
cash flow from operations for the last three quarters ending on 31 December 2021, 31 March 2022 and 30 June 2022
were respectively -$1.2M, -$2.2M and -$2M.

Cash balance on 30 June 2022 was $14.6M; on 26 September 2022, the management closed a private placement
financing amounting to $6.6M, putting the cash balance at $21.2M, which provides a cash runway of 10 quarters given
current quarterly cash burn rate.

Insider Ownership: 65.01%

Institution Ownership: 17.4%
Free Float (of shares outstanding: 13.75%

Sources:
https://www.marketbeat.com/stocks/NASDAQ/ANEB/institutional-ownership/
Tikr.com

Joseph F. Lawler is the founder and chairman of Anebulo. Aron R. English is an Anebulo director and the founder of
22NW, LP, an investment fund specialized in small and microcap investments. Daniel Schneeberger is the founder and
CEO of ADAR1 Capital Management and has served as the CEO of Anebulo from July 2020 to February 2022. Insiders
hold 65.01% of the shares. Ownership of Insiders and insider-related organization (Aron R. English and 22NW) hold
78.14% of the shares. The free float being traded on the NASDAQ CM exchange amounts to 13.75% of the shares
outstanding.

There are currently 4,160,182 options outstanding with an average exercise price of $4.41.

VALUATION

Assuming what I believe would be conservative assumptions:

- 10% market penetration rate ($600M market growing at 15% CAGR)
- 3x EV/Sales multiple (industry average)
- Final share count of 30M
- ANEB-001 approval date end of 2023/early 2024

Anebulo can reach an enterprise value of $180M end of 2023, which translate into $6/share end of 2023.

RISK FACTORS

▪ Anebulo is a single-asset company: any headwind in ANEB-001 development might drop the share price to the
cash value ($0.825/share).

▪ As the first treatment for acute cannabinoid intoxication, the path to approval is unknown and no historical
precedent can be relied upon.

▪ Stock is highly illiquid (average 3-month daily trading volume is 9,720 shares exchanged according to Yahoo
Finance) and the free float is small, which makes the stock very prone to manipulation and volatile.

MISCELLANEOUS

Anebulo recently executed a private placement by issuing 2,264,650 shares at $2.914/share, which amounted to
$6.6M of proceeds for the company. There is a high probability that the underwriter saw and analyzed the blinded
data before agreeing to the deal, suggesting the underwrite should consider current valuation as undervalued.

In the episode 93 of Dr Nick Jikomes’s podcast with Amir Englund, a research fellow at King’s College in London, it was
mentioned that 10 mg inhaled THC and 5 mg intravenously administered THC were enough to cause psychosis among
healthy non-chronic THC users. The findings were translatable to chronic THC users by increasing the THC doses (but
it wasn’t tested as they all display different levels of adaptation to THC and it would be hard to manage in a clinical
trial environment). This suggests that the doses used by Anebulo (10.5 mg and 21 mg, ingested) were adequate in
simulating the effect of ACI. Besides, in practice, it is reasonable to assume that those who would experience ACI are
those who are not used to THC (inability to administer safe dose of THC by themselves).
Link to the podcast: https://www.nickjikomes.com/post/marijuana-cognition-psychosis-addiction-cannabinoids-thc-
cbd-thcv-amir-englund-93 (last accessed 10/26/2022).