Benzinga | Jan 31, 2022 08:09AM EST

180 Life Sciences Corp. CEO James Woody, MD, PhD Issues Letter To Shareholders

180 Life Sciences Corp. (NASDAQ: ATNF, "180 Life Sciences" or the "Company"), a clinical-stage biotechnology company focused on the development of novel drugs that fulfill unmet needs in inflammatory diseases, fibrosis and pain, today released the following letter to shareholders from its Chief Executive Officer, Dr. James Woody.

Dear Fellow Shareholders,

As you may recall, I previously authored a letter to you at the end of August 2021. I continue to believe ongoing communications with our shareholders is a foundational responsibility of being a public company. This belief, along with recent market turmoil, has encouraged me to write to you today.

To begin, I would like to comment on our current share price. On a macro basis, and in general, we are not an anomaly as both the market and the biotech sector have been declining precipitously. The factors contributing to the general decline over the last month appear to be systematic and hence, not unique to any particular company. The Company's fundamentals have not changed since our release of positive clinical data in early December 2021, as discussed below. According to a biopharmaceutical sector report released on January 23, 2022, by Torreya, a global life sciences investment banking boutique, a confluence of factors is at play, contributing to a 28% decline in biotech value for the last month. Torreya further notes that underlying sector fundamentals are certainly not the source of the biotech carnage. They posit that four factors could explain the market decline, some more impactful than others while some only serving as the initial catalysts. The four factors include: 1) hedge fund redemptions and forced liquidations, 2) mean-reversion, with people who achieved capital gains in the pandemic now taking out their gains, 3) fear of the Fed tightening monetary policy and rising inflation and 4) rampant short-selling. Although we cannot influence these factors, we continue to push forward with our mission: to bring much-needed therapies to patients. Moreover, as previously disclosed in our SEC filings, certain executives and board members of the Company have purchased shares in the open market at a price per share higher than our current trading price and such executives remain excited about the future potential of the Company. While we are not pleased with the recent drop, we have an unfaltering belief in the Company and remain focused on creating fundamental value that we expect will ultimately be reflected over time.

Turning your attention to our clinical programs, I would like to recap that in December 2021, we had announced top line results for our Phase 2b trial in early Dupuytren's Contracture, the Company's most advanced clinical program. The asset is a reformulated and repurposed anti-tumor necrosis factor (TNF) (adalimumab) with a comprehensive new method of use intellectual property (IP) portfolio, which includes patents both owned by 180LS and exclusively licensed from Oxford University. As previously reported, the study met both primary and secondary endpoints with statistical significance by diminishing the hardness and size of the Dupuytren's nodules, respectively. To our knowledge, this is the first rigorous randomized, placebo-controlled, double-blinded trial for preventing the progression of this condition. Further, enrolled patients exhibited a high compliance rate, almost all of whom returned for all injections and experienced no related serious adverse events.

We look forward to the anticipated publication of these results in a peer-reviewed journal, expected over the next months, which we believe will lend credence to the work and represent significant progress in the field of Dupuytren's Contracture. Professor Nanchahal submitted the manuscript to a preeminent clinical journal shortly in advance of his December 2021 presentation at the International Dupuytren Symposium.

We believe there is a tremendous market opportunity for treating early-stage Dupuytren's, as we are not aware of any competitors developing such targeted therapies. Based on independent market research (both primary and secondary) conducted by Red Sky Partners on behalf of the Company, the US patient population for Dupuytren's stands at approximately 16 million, of which approximately 3 million have sufficiently bent fingers to need treatment. Red Sky Partners also estimates that initial sales for the US alone range from $300-350M and potential expansion to add another $500-800M. We believe that there are several factors that could make this $800M number substantially greater: 1) the Phase 2b study's high compliance rate of over 85% despite the COVID outbreak suggests that patients potentially favor prevention over disability (seeking treatment before the fingers contract) and 2) the projected sales only account for the US market, not the UK/EU and the rest of the world.

In an effort to bring this therapy to market, we have engaged regulatory consultants to assist in discussions with the US Food and Drug Administration (FDA) and the UK equivalent, the Medicines and Healthcare products Regulatory Agency (MHRA), to help determine the optimal path forward to a potential regulatory approval. Initial meetings with these regulatory bodies are currently planned for late March or early April of 2022.

Our other clinical programs in frozen shoulder and post-operative cognitive delirium (POCD) are expected to be primarily funded through non-dilutive grants. We currently plan to start the trial for frozen shoulder in Q1/Q2 2022 and for POCD in Q3/Q4 2022.

On the business development front, we are exploring strategic opportunities for our lead indication in Dupuytren's. We are in multiple conversations with potential partners to advance our Phase 2b data and we look forward to these potential collaborations.

On the operational front, while we worked through the SPAC-related challenges in the last year, we ensured that we maintained financial discipline while striving to achieve our clinical goals. In light of the depressed share price and unanticipated macro-economic headwinds, we have looked inward to establish tighter budgets and ensure strict adherence in order to extend our cash runway as far as feasible. We believe the extension will afford us a longer window of opportunity to capitalize on various potential sources of non-dilutive funding, including grants or upfront payments from potential business development initiatives highlighted above.

Moreover, we are looking for opportunities to deploy our capital in the most value-additive endeavors outside of our development programs. As a first step, we will be expanding our PR and IR efforts, instituting a more integrated and mutually reinforcing strategy going forward. We will pursue both "push" and "pull" marketing efforts, exploring various avenues to optimize messaging, dissemination and amplification, with a focus on those that will best reach our targeted audience of patients, investors, advocacy groups and key opinion leaders.

Now more than ever, we are looking forward and focused on execution. Our goal for 180 Life Sciences is to execute on a model we all know well, building upon past successes, experiences and relationships to bring our pipeline candidates to market. Thank you again for your invaluable support.

Sincerely,

James Woody MD, PhD

CEO, 180 Life Sciences