Adial Pharmaceuticals acquires Azora Therapeutics in US$64M IBD pipeline pivot

USA—Adial Pharmaceuticals, Inc. has acquired Azora Therapeutics, Inc., a biopharmaceutical company focused on inflammatory diseases, adding its lead asset, AT177, a colon-targeted aryl hydrocarbon receptor (AhR) agonist, to Adial’s pipeline for ulcerative colitis.

The deal combines acquisition with a concurrent private placement of up to US$64 million in gross proceeds before expenses, strengthening development funding.

AT177 is designed to activate AhR locally in the colon while limiting systemic exposure, thereby improving safety and tolerability in inflammatory bowel disease.

Financing and investor participation

Under the financing structure, Adial secured an initial tranche of about US$32 million, including conversion of outstanding notes, in exchange for pre-funded warrants linked to common shares.

The remaining potential US$32 million will be released upon initiation of Phase 1 clinical studies, with additional pre-funded and common warrants issued at milestone-based closings.

Coastlands Capital led the private placement, joined by Boxer Capital Management, Stonepine Capital Management, AuGC BioFund, other institutional investors, as well as company insiders and management.

Clinical development strategy

The combined company plans to deploy proceeds primarily toward IND-enabling work and early-stage Phase 1a and Phase 1b trials of AT177 in ulcerative colitis.

Management said the program targets a pathway central to gut immune regulation, in which systemic activation may pose safety risks, reinforcing the rationale for a colon-targeted approach.

The company expects the asset to progress through key regulatory milestones as it expands its inflammatory disease portfolio.

Leadership commentary and scientific rationale

Adial Chief Executive Officer Cary Claiborne said the investor support underscores confidence in Azora’s approach and the potential of AT177 in ulcerative colitis.

He added that the capital position should allow the combined company to advance through upcoming clinical stages while addressing unmet patient needs.

Azora co-founder Matt Davidson, PhD, who will serve as chief development officer and director at Adial, said AT177 was engineered to concentrate activity in the colon and reduce systemic exposure.

He emphasized that the molecule was designed as a fully synthetic, patented compound intended to improve safety in long-term use.

Board appointment and governance

Adial also appointed Wendy Young, Ph.D., to its Board of Directors, bringing more than three decades of drug discovery and pharmaceutical leadership experience.

 She previously held senior roles at Genentech, including senior vice president of small molecule drug discovery, and now serves as a senior advisor to GV (Google Ventures).

The company expects her expertise in R&D strategy and small-molecule discovery to support its next phase of growth.