Funds to advance ATI-1701 to IND submission

Appili Therapeutics Inc. (TSX: APLI; OTCQX: APLIF) (the “Company” or “Appili”), a biopharmaceutical company focused on drug development for infectious diseases, today announced that the U.S. Department of Defense (“DOD”), via the Joint Science and Technology Office of the Defense Threat Reduction Agency (“DTRA”), has selected for funding an Appili proposal that would provide over US$10 million to advance the Company’s biodefense vaccine candidate ATI-1701, a potential first-in-class vaccine candidate for the prevention of infection with Francisella tularensis, the causative agent of tularemia and a top-priority biothreat.

The new funding is designed to replace and expand upon a prior contract awarded to one of Appili’s development partners. Appili will serve as prime contractor and oversee a comprehensive development program for ATI-1701 that includes nonclinical, manufacturing, and regulatory activities to support an IND submission to the FDA. The expected total funding amount of over US$10 million will fund this expanded scope of work. The award is subject to successful negotiations between the DTRA contracting division and Appili. The total funding amount will be confirmed upon contract execution.

Francisella tularensis has been classified as a Category A pathogen by the U.S. National Institutes of Health due to its high rates of infectiousness and ability to cause lethal pneumonia and systemic infection. As the aerosolized form can be more infectious than anthrax, it is considered to have a high potential for use in a bioterrorist attack.

“We are grateful for the continued support from DTRA to help us further develop ATI-1701 and deliver on our mission to address a variety of urgent unmet needs in infectious disease,” said Dr. Armand Balboni, CEO of Appili Therapeutics. “Advancing ATI-1701 could have a transformative impact on mitigating this high risk to national security and public health. We look forward to continuing to advance this vaccine candidate and further strengthening our partnerships with government agencies around the world to address this urgent bioterrorism threat.”

Last month, the Company announced positive one year results from its preclinical study evaluating the efficacy of biodefense vaccine candidate ATI-1701 in a lethal model of tularemia. A survival rate of 29% (n = 2/7) was reported in the ATI-1701 vaccinated cohort, compared to 0% (n = 0/5) in mock vaccinated controls. The positive one-year data built on previously reported efficacy observed at 28- and 90-day challenge timepoints, including 100% survival of ATI-1701 vaccinated animals at the 90-day challenge timepoint, and well positions ATI-1701 to become the first approved vaccine for the prevention of tularemia. The study was funded by DTRA and conducted by MRIGlobal.

About ATI-1701

Appili is developing ATI-1701 as a vaccine to combat Francisella tularensis, which is classified by the U.S. National Institutes of Health (NIH) as a Category A pathogen, an organism that poses the highest risk to national security and public health. Estimated to be 1,000-fold more infectious than anthrax, experts consider the aerosolized form to have a high potential for use in a bioterrorist attack. Several countries may already have operational weapons programs leveraging this pathogen, making the need for a vaccine to counter this biological weapons threat exceedingly important.

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 expected finalization and execution of a definitive agreement, the anticipated funding amount and the Company’s ongoing development plans with respect to ATI-1701. 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, including with respect to finalizing the definitive funding documentation with DTRA and being in a position to secure the full anticipated funding. 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 final approval for the funding may not be secured on terms satisfactory to the Company or at all, the final funding amount may be different than that communicated herein, 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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