Adial Pharmaceuticals (Nasdaq: ADIL) acquired Azora Therapeutics and secured a concurrent private placement of up to $64 million in gross proceeds. The deal adds Azora’s lead ulcerative colitis candidate AT177, a colon-targeted AhR agonist, to Adial’s pipeline.
The financing includes an initial $32 million via pre-funded warrants and up to an additional $32 million upon Phase 1 trial initiation, expected around mid‑2027. Proceeds are expected to fund IND-enabling work and Phase 1a/1b UC studies. Adial also appointed industry veteran Wendy Young, PhD, to its Board.
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Positive
Acquisition adds AT177 colon-targeted AhR agonist for ulcerative colitis to pipeline
Upfront private placement of approximately $32 million in gross proceeds
Up to $64 million total potential financing tied to AT177 milestones
Milestone-based $32 million tranche upon Phase 1 clinical study initiation
Financing led by specialized biotech investors including Coastlands and Boxer Capital
Proceeds earmarked to fund IND-enabling and Phase 1a/1b UC studies
Appointment of experienced drug developer Wendy Young, PhD, to the Board
Negative
Large issuance of pre-funded and common warrants implies potential shareholder dilution
Second $32 million tranche depends on successful initiation of Phase 1 trial
Lead asset AT177 remains at IND-enabling and early clinical stages, carrying development risk
News Market Reaction – ADIL
+37.96%30.3x vol
28 alerts
+37.96%Session close to close
+107.9%Peak in 50 min
$10.75MMarket Cap
30.3xRel. Volume
In the Jun 11 session, ADIL gained 37.96%, reflecting a significant positive market reaction.
Argus tracked a peak move of +107.9% during that session.
Our momentum scanner triggered 28 alerts that day, indicating elevated trading interest and price volatility.
Trading volume was exceptionally heavy at 30.3x the daily average, suggesting very strong buying interest.
The stock surged +38.0% in the session following this news. A strong positive reaction aligns with t...
Analysis
The stock surged +38.0% in the session following this news. A strong positive reaction aligns with the transformational nature of this acquisition and financing. The deal adds AT177, a colon‑targeted AhR agonist for ulcerative colitis, and up to $64 million in gross proceeds structured around clinical milestones. Historically, ADIL often saw weak or negative moves after positive updates, so any outsized gain could reflect re‑rating risk and potential warrant overhang, especially given registered resale capacity and significant new pre‑funded and common warrant issuance.
Key Figures
Total financing size:up to $64 millionUpfront financing:$32 millionMilestone tranche:$32 million+5 more
8 metrics
Total financing sizeup to $64 millionConcurrent private placement gross proceeds
Upfront financing$32 millionInitial gross proceeds at closing (includes note conversion)
Milestone tranche$32 millionAdditional gross proceeds upon Phase 1 study initiation
Pre-funded warrants tranche11,780,948 sharesPre-funded warrants in initial financing leg
Milestone warrantsup to 11,780,948 pre-funded + 11,780,948 commonWarrants issuable at milestone closings
Warrant purchase price$2.7489Per pre-funded warrant (and accompanying common warrant) sold
Phase 1 timingmid-2027Planned Phase 1 initiation for AT177 in ulcerative colitis
Conference call time1:00 p.m. ET on June 11, 2026Management call to discuss acquisition and financing
Congressional bill supporting access to emerging AUD therapies, relevant to AD04.
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Pattern Detected
Recent positive or strategic updates have often coincided with flat or negative next-day price moves, indicating a pattern of weak follow-through on good news.
Recent Company History
Over recent months, Adial has focused on advancing its AD04 program and strengthening its IP and regulatory positioning. In Q1 2026, it reported a narrowed net loss and cash of $4.6 million, only funding operations into 2H 2026, and highlighted the need for additional financing or partners. The company also pursued patent protection potentially through 2045, manufacturing readiness for a planned Phase 3 trial, and applied to the FDA’s CNPV pilot to accelerate review. Today’s acquisition and financing news marks a shift toward expanding the pipeline beyond AD04.
"key clinical milestones in ulcerative colitis, including Phase 1 initiation"
A long-term inflammatory disease that causes repeated sores and irritation in the large intestine, leading to symptoms such as abdominal pain, urgent diarrhea, and fatigue. For investors, it matters because the condition creates a steady need for effective treatments, influences the size of drug and medical-device markets, and makes clinical trial results, regulatory decisions and treatment approvals material to companies’ revenue prospects—like watching for fixes to a recurring leak in an important building system.
aryl hydrocarbon receptormedical
"a proprietary colon‑targeted aryl hydrocarbon receptor (AhR) agonist"
Aryl hydrocarbon receptor (AHR) is a protein inside cells that detects certain environmental chemicals and helps turn genes on or off in response, like a smoke alarm that triggers specific reactions. It matters to investors because AHR influences how the body handles toxins and can be a target or safety concern in drug development, environmental liability assessment, and biomarker-driven regulatory decisions that affect company value.
ahr agonistmedical
"AT177, a novel, colon‑targeted AhR agonist rationally engineered"
An AHR agonist is a drug or chemical that flips on the aryl hydrocarbon receptor, a protein inside cells that acts like a light switch to change which genes are active and thereby influence immune responses, metabolism and cell growth. For investors, these molecules are important because they can be developed into treatments for cancer, autoimmune and inflammatory diseases but also carry safety and regulatory risks since the same pathway can trigger toxic effects; success hinges on clear clinical benefit and manageable side effects.
ind-enabling studiesregulatory
"use the proceeds ... including IND-enabling studies and the Phase 1a and Phase 1b"
Ind-enabling studies are early research efforts that test whether a new drug or treatment is safe and effective enough to move forward in development. They are like preliminary tests to ensure a product works as intended before investing more resources into large-scale trials. For investors, these studies are important because successful results can signal potential progress toward bringing a new product to market, impacting its future value.
phase 1amedical
"including IND-enabling studies and the Phase 1a and Phase 1b studies in"
Phase 1a is the initial part of a human clinical trial where a new drug or therapy is given to a small group of people for the first time to check safety, how the body handles it, and to identify appropriate dosing. Investors watch phase 1a like a vehicle's first test drive: clear safety and predictable behavior reduce risk and unlock value by allowing larger, more expensive trials to proceed and by increasing the chance of regulatory progress.
phase 1bmedical
"including IND-enabling studies and the Phase 1a and Phase 1b studies in"
"Phase 1b" is an early stage in testing a new medical treatment or vaccine, where it is given to a small group of people to evaluate its safety and determine the right dose. For investors, this phase signals progress in development, indicating the treatment is advancing through initial safety checks, which can influence expectations for future success and potential market impact.
pre-funded warrantsfinancial
"in exchange for pre-funded warrants to purchase 11,780,948 shares of"
Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.
common warrantsfinancial
"common warrants to purchase up to 11,780,948 shares of common stock"
A common warrant is a tradable instrument that gives its holder the right to buy a company’s common shares at a fixed price within a set time period, similar to a coupon that can be redeemed later to purchase stock. Investors care because exercising warrants can boost potential gains if the stock rises, but it can also dilute existing shareholders by increasing the number of shares outstanding, which can lower per-share value.
- Acquisition of Azora and concurrent private placement positions the combined company to advance its pipeline through key clinical milestones in ulcerative colitis, including Phase 1 initiation in mid-2027
- Azora’s oral candidate, AT177, is a novel, colon‑targeted AhR agonist rationally engineered to have minimal systemic exposure and designed to mitigate safety concerns with systemically absorbed AhR agonists
- $32 million in upfront financing with the potential to receive an additional $32 million under additional milestone tranches
- Adial to host a conference call today, June 11, 2026 at 1pm ET
GLEN ALLEN, Va. and LOS ANGELES, June 11, 2026 (GLOBE NEWSWIRE) -- Adial Pharmaceuticals, Inc. (Nasdaq: ADIL) (“Adial” or the “Company”) today announced that it has acquired Azora Therapeutics, Inc. (“Azora”), a biopharmaceutical company developing treatments for serious inflammatory diseases. The acquisition brings Azora’s lead asset AT177, a proprietary colon‑targeted aryl hydrocarbon receptor (AhR) agonist designed to enable localized activation with limited systemic exposure, into Adial’s pipeline.
Concurrent with the acquisition, Adial entered into a definitive agreement for a concurrent private placement of up to $64 million in gross proceeds to Adial, before deducting placement agent and other offering expenses. The private placement is composed of (i) an initial upfront financing of approximately $32 million in gross proceeds (including the conversion of outstanding notes assumed in the acquisition) in exchange for pre-funded warrants to purchase 11,780,948 shares of Adial’s common stock, representing a purchase price of $2.7489 for each pre-funded warrant sold at the initial closing and (ii) the potential for up to an additional $32 million in gross proceeds upon Phase 1 clinical study initiation in exchange for (x) pre-funded warrants to purchase up to 11,780,948 shares of common stock and (y) common warrants to purchase up to 11,780,948 shares of common stock at a combined purchase price of $2.7489 for each pre-funded warrant and accompanying common warrant sold at milestone closings. The financing was led by Coastlands Capital with participation from Boxer Capital Management, Stonepine Capital Management, AuGC BioFund and other biotech specialists and institutional investors along with insiders and management. The combined company expects to use the proceeds from the private placement primarily to advance Azora’s AT177 lead colon‑targeted AhR program through key clinical milestones, including IND-enabling studies and the Phase 1a and Phase 1b studies in ulcerative colitis (“UC”).
“AhR is now a validated target in the treatment of ulcerative colitis. Azora’s data support a uniquely differentiated, colon‑targeted approach that is designed to minimize systemic exposure in ulcerative colitis. The quality of the investor syndicate supporting this transaction reinforces our conviction in Azora’s thesis and the AT177 program,” said Cary Claiborne, president and chief executive officer of Adial. “With these proceeds, we believe the combined company will be well capitalized to execute through key clinical milestones to address a significant unmet need in ulcerative colitis.”
“AhR signaling is a key regulator of gut homeostasis, and clinical experience has helped establish both the therapeutic relevance of this pathway in ulcerative colitis and the importance of controlling systemic exposure. Systemic AhR activation may be associated with immunosuppression, which creates the potential for long-term safety risks. AT177 was engineered to address this challenge directly. It is a rationally-designed, fully-synthetic, patented compound intended to concentrate pharmacologic activity at the site of inflammation in the colon while minimizing systemic exposure," said Matt Davidson, PhD, co-Founder of Azora Therapeutics and incoming chief development officer and newly appointed director of Adial. "By starting from fundamental UC biology and robust clinical data, we built what we believe has the potential to be a best-in-class therapy that avoids the risks associated with systemic AhR circulation. For the many UC patients who still do not achieve durable remission on currently available therapies, AT177 represents a potentially meaningfully differentiated option with a safety profile designed to support long-term use."
In addition, Adial is pleased to announce the appointment of Wendy Young, Ph.D., to its Board of Directors. Dr. Young brings more than 32 years of drug discovery and biopharma leadership experience, including senior leadership roles at Genentech, where she served as senior vice president, small molecule drug discovery. She currently serves as, senior advisor to GV (Google Ventures), and an independent board director and scientific advisor to multiple life sciences companies. The Company believes Dr. Young’s deep expertise in small-molecule drug discovery, company building and strategic R&D leadership will be highly valuable as the Company advances its next phase of growth.
About Adial Pharmaceuticals, Inc.
Adial Pharmaceuticals is a biopharmaceutical company historically focused on the development of treatments for addictions and related disorders. Following the acquisition of Azora Therapeutics, Adial's lead program is AT177, a proprietary colon‑targeted aryl hydrocarbon receptor (AhR) agonist designed to enable localized activation with limited systemic exposure in development for ulcerative colitis. The company’s historical investigational new drug product, AD04, is a genetically targeted, serotonin-3 receptor antagonist, therapeutic agent for the treatment of Alcohol Use Disorder (AUD) in heavy drinking patients. Additional information is available at www.adial.com.
About Azora Therapeutics
Azora Therapeutics Inc. is a biopharmaceutical company focused on developing treatments for serious inflammatory diseases. The company was spun out of Stanford University after being incubated in the translational medicine SPARK program. Azora owns the worldwide royalty-free rights to its technology, which is based on the development of potential best-in-class oral agonists of the aryl hydrocarbon receptor. The company's lead program is AT177, a proprietary colon‑targeted aryl hydrocarbon receptor (AhR) agonist designed to enable localized activation with limited systemic exposure in development for ulcerative colitis. More information on Azora can be found on the company's website at www.AzoraTherapeutics.com.
About AT177
AT177 is a fully synthetic, patented, oral AhR agonist designed to restore mucosal immune homeostasis at the site of disease with minimal systemic exposure. Its active ingredient is a prodrug of indirubin, the most potent AhR agonist within indigo naturalis, a botanical extract with best-in-category clinical efficacy in ulcerative colitis. AT177's colon-targeted formulation delivers therapeutic AhR engagement directly to the colonic mucosa with exquisite gut restriction, minimizing the systemic AhR exposure associated with adverse effects. In preclinical studies, AT177 demonstrated robust local colonic AhR activation with markedly limited systemic exposure and superior colon-to-systemic selectivity compared to other AhR agonists in development. AT177 is currently in IND-enabling studies, with a proof-of-concept clinical trial planned for 2027.
About the Transactions
The acquisition of Azora was structured as an asset acquisition pursuant to which all of Azora’s outstanding equity interests were exchanged, based on a fixed exchange ratio, for a combination of 437,474 shares of Adial common stock and approximately 12,930 shares of Adial Series A non-voting convertible preferred stock (representing 12,930,617 shares on an as-converted-to-common basis), in each case, calculated on a fully-diluted basis (and without giving effect to any beneficial ownership limitations). Concurrently with the acquisition of Azora, Adial entered into a definitive agreement for a private placement financing with new and returning investors to raise up to $64 million in gross proceeds. The private placement is composed of (i) an initial upfront financing of approximately $32 million in gross proceeds (including the conversion of outstanding notes assumed in the acquisition) in exchange for pre-funded warrants to purchase 11,780,948 shares of Adial’s common stock (without giving effect to any beneficial ownership limitations), representing a purchase price of $2.7489 for each pre-funded warrant sold at the initial closing, and (ii) the potential for up to an additional $32 million in gross proceeds in exchange for (x) pre-funded warrants to purchase up to 11,780,948 shares of Adial common stock and (y) common warrants to purchase up to 11,780,948 shares of Adial common stock at a combined purchase price of $2.7489 for each pre-funded warrant and common warrant sold at milestone closings. In addition, following Adial stockholder approval, each share of Series A non-voting convertible preferred stock issued in the acquisition will automatically convert into 1,000 shares of common stock and each pre-funded warrant and common warrant (if issued) sold in the private placement will become exercisable into common stock, subject to certain beneficial ownership limitations set by each holder.
As a result of the transactions, following Adial stockholder approval, and without giving effect to the funding of the milestone tranche of the financing, equity holders of Adial immediately prior to the acquisition will own approximately 7.7% of Adial’s common stock, equity holders of Azora immediately prior to the acquisition will own approximately 51.0% of Adial’s common stock and investors in the private placement financing including the conversion of outstanding notes will own approximately 41.3% of Adial’s common stock, in each case, calculated on a fully-diluted, as-converted-to-common-basis (and without giving effect to any beneficial ownership limitations) using the treasury stock method and based on the implied equity values of Adial and Azora.
The acquisition was approved by the Board of Directors of Adial and the Board of Directors and stockholders of Azora. The closings of the transactions were not subject to the approval of Adial’s stockholders. The approval of Adial’s stockholders is required under the terms of the Series A non-voting convertible preferred stock in order for the Series A non-voting convertible preferred stock to be converted into shares of Adial common stock and for the pre-funded warrants and common warrants issued, and to be issued, in the private placement as well as in the exchange of certain outstanding notes issued by Azora, in each case, to become exercisable into shares of Adial’s common stock, and Adial is required to promptly hold a stockholder meeting for such vote.
Oppenheimer & Co. Inc. is serving as financial advisor to Adial. Blank Rome LLP is serving as legal counsel to Adial. Lucid Capital Markets is serving as the exclusive placement agent for the concurrent financing and financial advisor to Azora. TD Cowen is serving as capital markets advisor to Azora for the concurrent financing. Honigman LLP is serving as legal counsel to Azora.
Conference Call and Webcast Details
The company will host a conference call and webcast today, June 11, 2026, at 1pm ET to discuss the acquisition and financing. To access the call: 1-877-451-6152 (domestic), 1-201-389-0879 (International), Passcode: 13761153, Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1764298&tp_key=1feafa06f8.
This communication contains certain “forward-looking statements” within the meaning of the U.S. federal securities laws. Such statements are based upon various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. The forward-looking statements include, but are not limited to, statements regarding Azora’s lead asset AT177 enabling localized activation with limited systemic exposure; the potential for the Company to receive an additional $32 million upon second tranche milestone; using the private placement proceeds primarily to advance Azora’s AT177 lead colon-targeted AhR program through key clinical milestones, including IND-enabling studies, the Phase 1a and Phase 1b studies in ulcerative colitis; Azora’s colon-targeted approach minimizing systemic exposure in ulcerative colitis; the combined company being well capitalized to execute through key clinical milestones; Systemic AhR activation being associated with immunosuppression creating the potential for long-term safety risks; AT177 addressing systemic AhR activation risk directly; building a best-in-class therapy, that avoids the risks associated with systemic AhR circulation; AT177 representing a meaningfully differentiated option, with a safety profile designed to support long-term use; the expected contribution of Dr. Young; advancing the Company’s next phase of growth; the potential of AD04 to treat other addictive disorders such as opioid use disorder, gambling, and obesity; and plans for a proof-of-concept clinical trial of AT177 for 2027. Any forward-looking statements included herein reflect the Company’s current views, and they involve certain risks and uncertainties, including, among others, the Company’s ability to pursue its regulatory strategy; the Company’s ability to obtain regulatory approvals for commercialization of product candidates or to comply with ongoing regulatory requirements; the Company’s ability to develop strategic partnership opportunities and maintain collaborations; the Company’s ability to obtain or maintain the capital or grants necessary to fund its research and development activities; the Company’s ability to complete clinical trials on time and achieve desired results and benefits as expected; regulatory limitations relating to the Company’s ability to promote or commercialize its product candidates for specific indications; acceptance of the Company’s product candidates in the marketplace and the successful development, marketing or sale of its products; the Company’s ability to maintain its license agreements; the continued maintenance and growth of the Company’s patent estate and its ability to retain its key employees or maintain the Company’s Nasdaq listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, subsequent Quarterly Reports on Form 10-Q and current reports on Form 8-K filed with the Securities and Exchange Commission. These risks should not be construed as exhaustive and should be read together with the other cautionary statements contained in such reports. Any forward-looking statement speaks only as of the date on which it was initially made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
Contact: Crescendo Communications, LLC David Waldman / Alexandra Schilt Tel: 212-671-1020 Email: adil@crescendo-ir.com
What did Adial Pharmaceuticals (ADIL) announce about acquiring Azora Therapeutics?
Adial Pharmaceuticals announced it acquired Azora Therapeutics, adding Azora’s lead ulcerative colitis candidate AT177 to its pipeline. According to Adial, AT177 is a colon-targeted AhR agonist designed for localized activity with limited systemic exposure, aiming to address safety concerns of systemic AhR agonists.
How much financing did Adial Pharmaceuticals (ADIL) secure with the Azora acquisition?
Adial secured up to $64 million in gross proceeds through a concurrent private placement. According to Adial, this includes approximately $32 million upfront and an additional $32 million available upon Phase 1 clinical study initiation, both involving pre-funded warrants and, later, common warrants.
What are the key details of the Adial (ADIL) private placement structure and pricing?
The private placement issues pre-funded warrants priced at $2.7489 each, initially for 11,780,948 shares. According to Adial, a further milestone tranche would offer additional pre-funded warrants and equal-number common warrants at a combined purchase price of $2.7489 per paired security at closing.
How will Adial Pharmaceuticals (ADIL) use the new financing from the Azora deal?
Adial plans to use the proceeds primarily to advance Azora’s AT177 ulcerative colitis program. According to Adial, funds will support IND-enabling studies and Phase 1a and Phase 1b clinical trials, targeting key milestones including Phase 1 initiation around mid‑2027.
What is AT177 in Adial’s (ADIL) pipeline and why is it important for ulcerative colitis?
AT177 is an oral, colon-targeted aryl hydrocarbon receptor agonist for ulcerative colitis. According to Adial and Azora’s co-founder, it is engineered to concentrate activity in the colon with minimal systemic exposure, aiming to reduce potential long-term safety risks from systemic AhR activation.
Who is the new board member appointed by Adial Pharmaceuticals (ADIL) after the Azora acquisition?
Adial appointed Wendy Young, PhD, to its Board of Directors following the Azora acquisition. According to Adial, she brings over 32 years of drug discovery and biopharma leadership, including serving as senior vice president of small molecule drug discovery at Genentech and advisor to multiple life science companies.
