Topical formulation of paromomycin ATI-1801 already shown to be safe and effective against the disfiguring disease in Phase 3 study

ATI-1801 may be eligible for tropical disease priority review voucher if approved by FDA

Appili Therapeutics Inc. (TSX: APLI; OTCQX: APLIF) (the “Company” or “Appili”), a biopharmaceutical company focused on drug development for infectious diseases, today announced the addition of ATI-1801, a clinical stage topical paromomycin product to treat cutaneous leishmaniasis, to its development pipeline. Licensed from the US Department of Defense (“DOD”) via the US Army Medical Materiel Development Activity (“USAMMDA”), ATI-1801 is a novel topical product with demonstrated safety and efficacy in a Phase 3 study. Appili will be working with international partners to complete the remaining development activities to enable registration with global regulatory authorities, including the US Food and Drug Administration (“FDA”).

Cutaneous leishmaniasis is a disfiguring infection of the skin that affects hundreds of thousands of people around the world annually, characterized by the formation of lesions and ulcers that often lead to scarring, disfigurement, disability, and stigmatization of the infected. The disease is a serious impediment to socioeconomic development, especially for women, and a priority for governments and non-governmental organizations ("NGOs") around the world. Current treatments are often invasive, toxic and/or require hospitalization, limiting access.

ATI-1801 has the potential to significantly reduce the burden of the disease by providing patients with a safe and effective topical therapy that can be used in the outpatient setting. Appili holds the full clinical dossier for ATI-1801, including the results of a randomized, double-blind, vehicle-controlled Phase 3 study which evaluated the safety and efficacy of ATI-1801 for the treatment of cutaneous leishmaniasis in Tunisia. The study met its primary endpoint, with ATI-1801 administered topically once daily for 20 days demonstrating a significant improvement in the rate of clinical cure of the index lesion compared to vehicle (82% vs 58%; p-value < 0.001).

Appili plans to meet with the FDA later this year to discuss the previously generated Phase 3 data and agree on the necessary registration package to support a new drug application (“NDA”) submission, which the Company expects will include available nonclinical, manufacturing, and clinical data generated to date. Appili expects to pursue non-dilutive funding and partnership opportunities with NGOs and government agencies which share the Company’s focus on tropical diseases to help complete remaining development work.

“We are excited to be working with our partners at the US DOD to complete the development of and ultimately make available a product urgently needed to address the disability and inequity caused by cutaneous leishmaniasis,” said Dr. Armand Balboni, CEO of Appili Therapeutics. “This is a unique opportunity to build on an extensive data set and bring a treatment that has already demonstrated Phase 3 efficacy to patients around the world. This is exactly the type of mission that Appili was built to take on and I look forward to applying our expertise, capabilities, and partner network to this effort.”

Appili believes that ATI-1801 may be eligible for a priority review voucher (“PRV”), if approved by the FDA. The PRV program was developed to incentivize drug development in US government priority areas including medical countermeasures and tropical diseases such as leishmaniasis. Once issued, a PRV can be used by its holder to accelerate the review of a subsequent drug submission. PRVs are transferrable and the secondary market for PRVs is well established with over 20 transactions reported publicly and recent transactions often exceeding US$100 million. The Company is actively evaluating the eligibility of ATI-1801 for a PRV which, if confirmed, would make ATI-1801 the third PRV eligible program at Appili, joining ATI-1701, a leading and potential first-in-class vaccine to prevent infection by top priority biothreat Francisella tularensis, and ATI-2307, Appili’s novel clinical stage antifungal candidate.

About ATI-1801

Appili’s ATI-1801 is a novel topical paromomycin product already evaluated in Phase 3 study for the treatment of cutaneous leishmaniasis, a disfiguring infection of the skin that affects hundreds of thousands of people around the world annually and is characterized by the formation of lesions and ulcers that often lead to scarring, disfigurement, and stigmatization for those infected. The disease is a serious impediment to socioeconomic development, especially for women, and a priority for governments and non-governmental organizations around the world. Appili intends to work with these various stakeholders to help complete remaining development activities, secure regulatory approvals, and ultimately make the product available worldwide.

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”, including with respect to the proposed development plans with respect to ATI-1801, the potential for ATI-1801 to treat cutaneous leishmaniasis, expected non-dilutive funding and partnership opportunities and the potential PRV eligibility of ATI-1801. 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. Forward looking statements contained in this press release are provided in reliance on certain assumptions. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company cannot give assurance that these expectations will prove to have been correct.

Forward looking statements involve significant known and unknown risks, uncertainties and assumptions, including, without limitation, the risk that ATI-1801 may prove to be ineffective for the treatment of cutaneous leishmaniasis, the risk that the Company may never secure all requisite regulatory to develop and commercialize ATI-1801, the risk that ATI-1801 may ultimately be determined not to be PRV eligible, and the other risk factors 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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