FILANA THERAPEUTICS, INC.

Filana Therapeutics, Inc. is a clinical-stage biotechnology company focused on developing transformative medicines for central nervous system (CNS) disorders, specifically Tuberous Sclerosis Complex (TSC)-related epilepsy and other diseases associated with dysregulation or overexpression of filamin A. The company's science is based on modulating the activity of the filamin A scaffolding protein in the brain. TSC is a genetic disorder estimated to affect around 1 in 6,000 live births, with approximately 50,000 people affected in the United States and more than one million worldwide. Epilepsy occurs in 84% of patients registered in the TSC Alliance Natural History Database, and approximately 60 percent of TSC patients suffer from treatment-resistant seizures despite use of multiple anti-seizure medications.

The company's lead product candidate, simufilam, is a potential first-in-class filamin A-modulating agent. Key competitive factors affecting its success, if approved, are likely to be efficacy, safety, convenience, price, level of generic competition, patient and physician acceptance, and availability of reimbursement. With respect to TSC-related epilepsy, two pharmacological treatment categories are approved: Traditional Anti-seizure Medications (ASMs), including the standard of care Vigabatrin, and Disease-Specific ASMs. Currently, there are two approved treatments for seizures associated with TSC: Afinitor Disperz (everolimus tablets for oral suspension) and Epidiolex (cannabidiol). Many competitors have significantly greater financial resources, an established presence in the market, and expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement, and marketing approved products.

The company generates revenue through the development of proprietary pharmaceutical product candidates, though it has yet to generate any revenues from product sales. It relies on third-party contractors to conduct all clinical and non-clinical trials and to make drug supply. The company outsources formulation, manufacturing, and related activities to third parties, including a drug supply agreement with Evonik Industries AG for simufilam. The company's strategy includes building a lean company focused on CNS disorders, publishing scientific data, applying development capabilities through clinical proof-of-concept studies, and continuing to outsource preclinical studies, clinical studies, and formulation development activities.

The company's lead therapeutic drug candidate, simufilam, is a proprietary small molecule oral treatment drug being studied for the treatment of TSC-related epilepsy. Simufilam was discovered and designed in-house and characterized by academic collaborators. The company also had a product candidate called SavaDx, an early-stage program focused on detecting Alzheimer's disease from a blood sample, but discontinued its development as of mid-2025. Development activity related to SavaDx accounted for less than 1% of the company's research budget in all periods presented. The company owns or exclusively controls a portfolio of issued patents and pending patent applications directed to simufilam and related diagnostic assets, including patents covering composition of matter for simufilam in the United States, Europe, Australia, Israel, and Canada, as well as patents covering certain methods of use in the United States, Europe, and Japan. In the United States, patent protection relating to simufilam consists of nine issued U.S. patents, with expiration dates ranging from 2029 to 2040.

On February 26, 2025, the company entered into a License Agreement with Yale University, granting exclusive worldwide rights to Yale's interest in certain patent and other intellectual property rights for the development and commercialization of simufilam for the treatment of TSC-related epilepsy and other potential indications. The company agreed to pay Yale payments upon the achievement of specified clinical, regulatory and commercial milestones, totaling up to $4.5 million ¹. The company also agreed to pay Yale tiered royalties, ranging from a low- to mid- single digit percentage, on aggregate net sales of licensed products. On January 7, 2025, the company announced a reduction in its workforce by 10 employees ², a reduction of 33% ³. The company paid a civil monetary penalty of $40 million ⁴ in November 2024 as part of a settlement with the SEC. The company has recently agreed to pay $31.25 million ⁵ to settle certain securities litigation. On November 12, 2025, the company entered into an at-the-market offering program (ATM) to sell shares of its common stock having an aggregate offering price of up to $50 million ⁶ in common stock. As of December 31, 2025, $50 million ⁷ of capacity remained under the ATM program.

The company has incurred significant net losses in each period since its inception, including a net loss of $91.0 million ⁸ for the year ended December 31, 2025. As of December 31, 2025, the company had an accumulated deficit of $496.1 million ⁹. Research and development expenses decreased to $26.6 million ¹⁰ in 2025 from $69.6 million ¹¹ in 2024, representing a 62% decrease. General and administrative expense decreased to $68.8 million ¹² in 2025 from $71.8 million ¹³ in 2024. Interest income was $4.6 million ¹⁴ in 2025 compared to $8.5 million ¹⁵ in 2024. The gain from change in fair value of warrant liabilities was $108.2 million ¹⁶ for the year ended December 31, 2024. As of December 31, 2025, cash and cash equivalents totaled $95.5 million ¹⁷.

The primary growth vector is the development of simufilam for the treatment of TSC-related epilepsy. The company filed an Investigational New Drug (IND) application with the FDA to initiate a proof-of-concept clinical trial. On December 15, 2025, the company received a formal letter from FDA confirming that the proposed clinical trial is on full clinical hold. The company no longer expects to initiate a proof-of-concept clinical trial for simufilam in TSC-related epilepsy in the first half of 2026. The updated timing for initiation of a clinical trial will depend on the company's ability to provide the requested information and on satisfactory completion of FDA's review. The company also continues to explore other potential indications for simufilam, both CNS related and otherwise, where pre-clinical experiments suggest simufilam may provide a benefit. The company is exploring and incorporating artificial intelligence (AI) capabilities and related data analytics to target improvements in productivity and efficiency in its business, enhancements to research and development activities, and advancements in statistical analysis capabilities.

The company expects research and development expense to decrease in future periods as the phase out of the Alzheimer's disease development program was completed in Q2 2025, and expenses for the TSC-related epilepsy program are expected to be significantly lower compared to those for the Alzheimer's disease program. The company expects general and administrative expense will decrease significantly in future periods as it entered into a binding term sheet to resolve its most significant, legacy litigation in 2025. However, the company expects general and administrative expense to remain high compared to historic levels due to ongoing professional fees and legal expense related to other ongoing litigation. Stock-based compensation expense is expected to be higher than historic levels due to new awards granted in 2024 and 2025.

The company relies on third-party contractors to conduct all of its clinical and non-clinical trials and to make drug supply. The company has a drug supply agreement with Evonik Industries AG for simufilam. Other vendors supply excipients, the finished dosage form (i.e., simufilam tablets), drug packaging, package labeling and other critical components of the supply chain. The company does not own or lease any manufacturing facilities and outsources formulation, manufacturing and related activities to third parties. As of December 31, 2025, the company had 17 full-time employees ¹⁸ and 3 employees ¹⁹ who devote a portion of their professional time to the company. The company also engages numerous consultants to perform services on retainer, per diem or an hourly basis.

Research and development expenses were $26.6 million ²⁰ for the year ended December 31, 2025. The company does not provide specific capital expenditure plans for the upcoming period in the filing. On November 12, 2025, the company entered into an at-the-market offering program (ATM) to sell shares of its common stock having an aggregate offering price of up to $50 million ²¹ in common stock. The company is obligated to pay a commission of up to 3.0% ²² of the gross proceeds from the sale of shares of common stock in the offering. The company currently expects to retain future earnings, if any, for use in the operation and expansion of its business and does not anticipate paying any cash dividends in the foreseeable future.

The company faces a full clinical hold from the FDA on its planned proof-of-concept clinical trial for simufilam in TSC-related epilepsy, which may delay drug development efforts. The company is subject to lawsuits and governmental investigations and inquiries, including securities class action and shareholder derivative actions. The company has incurred significant net losses in each period since its inception and anticipates that it will continue to incur net losses for the foreseeable future. The company has no product revenues and may never achieve revenues or profitability based on product revenues. The company may require additional capital to fund its operations and to complete the development of its product candidates, and a failure to obtain this necessary capital on acceptable terms could force the company to delay, limit, reduce, or terminate its commercialization efforts, product development, or other operations.

The most material risk is the full clinical hold placed by the FDA on the company's planned proof-of-concept clinical trial for simufilam in TSC-related epilepsy, which may delay or prevent drug development. The company is heavily dependent on the success of simufilam, and if it is unsuccessful in clinical development or does not receive regulatory approval, the company will be unable to generate product revenue. The company faces significant financial risk from ongoing litigation, having paid a $40 million ²³ civil monetary penalty to the SEC in November 2024 and recently agreeing to pay $31.25 million ²⁴ to settle certain securities litigation, with additional litigation contingencies of $4 million ²⁵ recorded in 2025. The company has incurred significant net losses, including a net loss of $91.0 million ²⁶ for 2025, and has an accumulated deficit of $496.1 million ²⁷ as of December 31, 2025, with no product revenues and may never achieve profitability. The company relies on single source suppliers for its drug substance and drug product, and any failure by these suppliers could materially adversely affect its ability to manufacture product candidates.

Management's message emphasizes the company's mission to develop transformative medicines for CNS disorders, specifically TSC-related epilepsy, following the discontinuation of its Alzheimer's disease program. Key strategic priorities include building a lean company narrowly focused on developing innovative product candidates for CNS disorders such as TSC-related epilepsy, publishing scientific data in peer-reviewed journals, applying development capabilities to advance product candidates through clinical proof-of-concept studies and beyond, and continuing to outsource preclinical studies, clinical studies and formulation development activities. Management highlights the appointment of Dr. Joseph Hulihan as Chief Medical Officer in August 2025 and the positive preclinical results of a study evaluating simufilam in a mouse model of TSC-related epilepsy announced in August 2025. Management also notes the company is working expeditiously to address the items identified in the FDA's clinical hold letter, but no longer expects to initiate a proof-of-concept clinical trial for simufilam in TSC-related epilepsy in the first half of 2026.