Adial Pharmaceuticals, Inc. (ADIL): Business Model Canvas [Dec-2025 Updated]

You're looking for a clear, no-fluff breakdown of Adial Pharmaceuticals, Inc.'s current business model as of late 2025, and honestly, the picture is classic clinical-stage biotech: a strong, targeted asset with a tight cash position. The entire model hinges on successfully navigating the final regulatory hurdles for AD04 and securing a major commercial partnership. Right now, the company's lifeblood is its cash and cash equivalents of $4.6 million as of September 30, 2025, plus equity financing, because they are defintely pre-revenue from product sales, meaning every strategic move-from the genetically targeted therapy for Alcohol Use Disorder (AUD) to the adaptive Phase 3 trial design-is a direct play for a future licensing deal. It's a high-risk, high-reward bet on their proprietary AG+ biomarker, so let's unpack exactly how they plan to turn a niche genetic test into a blockbuster partnership.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Key Partnerships

The success of a clinical-stage biopharma like Adial Pharmaceuticals hinges on smart, strategic outsourcing-you simply can't build a global drug supply chain and a specialized diagnostic test in-house overnight. Adial has defintely focused its 2025 efforts on locking down these critical partners to de-risk the path to market for AD04, its genetically targeted therapy for Alcohol Use Disorder (AUD).

This network covers everything from manufacturing the pill itself to confirming the patient's eligibility with a cheek swab test, creating a complete, integrated precision medicine solution.

Genomind: Develop precision cheek swab test for the AG+ biomarker

The partnership with Genomind is crucial because AD04 is a precision medicine; it only works for patients who are positive for the AG+ biomarker. This collaboration, which completed its analytical validation in October 2025, developed a simple cheek swab test for both clinical trial use and future commercial sales.

This is a major milestone because the FDA confirmed that using this test in the Phase 3 study is a Non-Significant Risk (NSR), meaning Adial does not need to file an Investigational Device Exemption (IDE) application, which saves significant time and money. The assay showed 100% concordance across all single nucleotide polymorphism (SNP) testing parameters during validation. This precision is vital, as the target population-AG+ biomarker-positive AUD patients-represents approximately 14% of the general population.

• Completed analytical validation of cheek swab test.
• FDA classified test use as Non-Significant Risk (NSR).
• Assay demonstrated 100% concordance for SNP testing.

Thermo Fisher Scientific and Cambrex: U.S.-based manufacturing for drug substance and product supply

Securing a robust, U.S.-based supply chain is non-negotiable for an NDA submission. Adial addressed this in June 2025 by signing strategic agreements with two industry giants. This move mitigates supply chain risk, especially for a planned commercial launch.

Thermo Fisher Scientific is the Contract Development and Manufacturing Organization (CDMO) for the final AD04 drug product, which is a 0.33 mg ondansetron tablet. Cambrex, meanwhile, is the CDMO and supplier for the active pharmaceutical ingredient (API), ondansetron HCL. They have already completed demonstration batches and are now producing the clinical and registration batches needed for the upcoming Phase 3 trial and the Chemistry, Manufacturing, and Controls (CMC) module of the NDA.

Partner	Role in AD04 Supply Chain	Status (as of late 2025)
Thermo Fisher Scientific	Drug Product CDMO (0.33 mg tablets)	Agreements signed (June 2025); Producing clinical and registration batches.
Cambrex	API/Drug Substance CDMO (Ondansetron HCL)	Agreements signed (June 2025); Supplying API under FDA Drug Master File.

Cytel: Collaboration for advanced machine learning and adaptive Phase 3 trial design

To maximize the probability of success and keep costs in check, Adial partnered with Cytel, a leader in advanced clinical trial analytics, in June 2025. Cytel applied machine learning and simulation modeling, using proprietary tools like the East® platform, to optimize the Phase 3 trial design. This collaboration was key to refining the protocol and statistical analysis plan submitted to the FDA for the successful End of Phase 2 (EOP2) meeting.

Here's the quick math: an adaptive design allows for mid-study adjustments, like enriching the patient population based on interim results, which is a huge efficiency gain. This data-driven approach is designed to generate meaningful clinical data while minimizing time and spend, aligning with the company's disciplined capital deployment. For context, Adial's Net Loss was only $1.8 million in Q3 2025, down from $2.2 million in Q3 2024, partly due to a 50% reduction in R&D expenses, showing the focus on cost-effective execution.

Potential future strategic partners for AD04 commercialization and distribution

Adial is currently a clinical-stage company, so commercialization is the next major hurdle. Following the favorable guidance from the FDA's EOP2 meeting in July 2025, the company is now positioned to accelerate strategic partnership discussions. The entire AD04 program-from the validated Genomind test to the secured US manufacturing-is structured to be an attractive commercial opportunity for a larger pharmaceutical partner.

The goal is to secure a partner with the necessary sales and distribution infrastructure to target the AG+ patient subset, which Adial's CEO believes will lead to 'targeted and commercially focused success.' With cash and cash equivalents at $4.6 million as of September 30, 2025, securing a commercialization partner is a critical step to fund the full Phase 3 trial and move toward a potential 2045 patent exclusivity.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Key Activities

The core activities for Adial Pharmaceuticals, Inc. revolve entirely around de-risking and advancing the lead asset, AD04, through the final regulatory and manufacturing hurdles to position it for a high-value commercialization partnership. This means a laser focus on clinical execution, securing intellectual property (IP), and ensuring drug supply.

Advancing AD04 toward registrational Phase 3 clinical trial development.

The primary activity is the final preparation and launch of the registrational Phase 3 clinical trial for AD04, a genetically targeted treatment for Alcohol Use Disorder (AUD). We are looking at the trial initiation in late 2025. This critical step follows the successful End-of-Phase 2 (EOP2) meeting with the U.S. Food and Drug Administration (FDA) on July 29, 2025, which provided the necessary regulatory alignment.

Here's the quick math on the financial burn for this stage: Research and development (R&D) expenses were approximately $511 thousand (50%) lower in the third quarter of 2025 compared to the same period in 2024, reflecting the period between the previous trial and the ramp-up for the new Phase 3. The cash balance of $4.6 million as of September 30, 2025, is projected to fund operations into the second quarter of 2026, so efficient trial launch is defintely key.

Executing on the FDA-guided adaptive Phase 3 study design.

The company's key activity here is translating the FDA's guidance into a high-probability trial protocol. This involves a precision medicine approach, focusing the study only on the patient subset most likely to respond to AD04-those who are biomarker-positive for AG+. This genetically defined group makes up approximately 14% of the general AUD population.

The FDA-supported design includes clear, measurable endpoints and an adaptive element (a statistical technique that allows for mid-trial adjustments to increase efficiency). They are working with Cytel Inc., a leader in advanced statistical methodologies, to optimize this design using machine learning and simulation modeling. The confirmed primary efficacy endpoint is achieving zero heavy drinking days during months 5 and 6 of the observation period.

Manufacturing clinical supplies for the upcoming Phase 3 program in 2025.

Operational readiness is a major activity. Adial Pharmaceuticals has already commenced manufacturing clinical supply materials in 2025, ensuring they have the drug product ready for the late 2025 trial start. This was possible because the FDA confirmed support for the proposed 505(b)(2) regulatory bridging strategy, which allows the company to leverage existing data from prior formulations.

To secure the supply chain and manage risk, the company has established U.S.-based manufacturing agreements with two major contract manufacturing organizations (CMOs):

• Thermo Fisher Scientific for drug product supply.
• Cambrex for drug substance supply.

Protecting and expanding the intellectual property (IP) portfolio.

Protecting the innovation is a continuous, high-priority activity for a biotech. Adial Pharmaceuticals has been very active in 2025 to solidify its intellectual property (IP) around the AD04 drug and its unique companion diagnostic test.

The IP strategy focuses on extending exclusivity and broadening the claims to cover the precision medicine method of use, which is the most valuable part of the asset.

IP Activity (2025)	Date	Scope/Expected Exclusivity
U.S. Patent Granted	April 15, 2025	Covers novel method of treating alcohol-related diseases using AD04 in genetically identified patients (Patent No. 12,274,692).
Provisional Patent Update Filed	July 9, 2025	Expected to protect core assets and extend market exclusivity until at least 2045.
New U.S. Patent Granted	February 11, 2025	Covers methods for identifying patients with certain genetic markers and treating them with AD04 (Patent No. 12,221,654).

Accelerating strategic partnership discussions for commercialization.

The company's ultimate goal is commercialization, and the key activity now is to finalize a strategic partnership to fund the rest of the development and market the drug. The successful EOP2 meeting with the FDA is a major catalyst for these discussions, as regulatory alignment significantly de-risks the asset for potential partners.

The market opportunity is substantial: AD04 is positioned to address the multi-billion-dollar global AUD market. The FDA's validation of the trial design and the 505(b)(2) pathway makes the program a highly attractive, late-stage asset for a large pharmaceutical company looking to enter the addiction therapeutics space, which is estimated at $1.4 billion. The goal is to secure a partner to leverage their commercial infrastructure and maximize the return on the expected market exclusivity until 2045.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Key Resources

When you look at Adial Pharmaceuticals, Inc.'s core assets, the value is clearly tied to its intellectual property (IP) and the regulatory clarity achieved in 2025, which helps de-risk the path forward. These are the critical resources that enable the company to execute its precision medicine strategy for Alcohol Use Disorder (AUD).

The financial runway is tight, which is typical for a clinical-stage biotech, but the regulatory milestones are significant. They have a clear, FDA-aligned plan. That's the real asset right now.

Lead Investigational Drug, AD04 (a serotonin-3 receptor antagonist)

The primary physical and intellectual resource is AD04, a genetically targeted therapeutic agent designed to treat Alcohol Use Disorder (AUD). It functions as a serotonin-3 receptor antagonist (a drug that blocks the action of serotonin at the 5HT3 receptor), which is believed to suppress the craving and pleasure associated with alcohol consumption. The drug is focused on a specific, high-need patient population: individuals with moderate to severe AUD who are also 'heavy drinkers.'

The Phase 3 program is now being implemented following a successful End of Phase 2 (EOP2) meeting with the FDA in July 2025. The proposed primary efficacy endpoint for the registrational trial is zero heavy drinking days during months 5 and 6 of the efficacy observation period. This clear, FDA-confirmed endpoint is a major step toward commercialization. AD04 is also being explored for potential use in other addictive disorders, including Opioid Use Disorder, gambling, and obesity.

Proprietary Genetic Test/Biomarker (AG+) to Identify Eligible Patients

The AG+ biomarker is the foundation of Adial Pharmaceuticals' precision medicine approach and is a key intellectual resource. This proprietary genetic test identifies a subset of the AUD population most likely to respond to AD04 treatment. This focus increases the probability of success in clinical trials and commercial adoption.

Here's the quick math on the target market: the AG+ biomarker is found in approximately 14% of the general population, according to large-scale epidemiological studies and prior clinical data. This is a defined, addressable market subset. Adial Pharmaceuticals, in partnership with Genomind, has completed the analytical validation of a simple cheek swab collection method for the AG+ test, which is a critical step for future commercial use in a physician's office or at home.

Strong IP Portfolio with Patent Protection Expected Until at Least 2045

The company's most valuable non-physical asset is its intellectual property (IP) portfolio, which provides a long period of market exclusivity. In July 2025, Adial Pharmaceuticals filed an update to the provisional patent application for AD04, which is expected to protect the company's core assets until at least 2045. This long patent life-extending over two decades from the expected commercialization window-is a significant financial resource that enhances the drug's net present value (NPV) and strengthens the company's position in ongoing strategic partnership discussions.

• Patent update filed: July 9, 2025
• Expected core asset protection: At least 2045
• Key claims include: Method of treating addiction using AD04 in patients with specific serotonin-related gene variations.

Financial and Regulatory Resources

Financial resources are always the most immediate concern for a clinical-stage biotech. As of the end of the third fiscal quarter of 2025 (September 30, 2025), Adial Pharmaceuticals reported cash and cash equivalents of $4.6 million.

Here is a snapshot of the company's financial and regulatory resources as of late 2025:

Resource Type	Key Metric / Status (Q3 2025)	Value / Detail
Financial Runway	Cash & Cash Equivalents (Sep 30, 2025)	$4.6 million
Financial Projection	Expected Cash Runway	Into the second quarter of 2026
Regulatory Alignment	EOP2 Meeting with FDA	Successful completion on July 29, 2025
Regulatory Pathway	FDA 505(b)(2) Bridging Strategy	Agreed upon by FDA in February 2025

The successful EOP2 meeting provided valuable guidance on the adaptive Phase 3 study design, including the target population and clinical endpoints. Also, the FDA's agreement on the 505(b)(2) regulatory registration pathway is a huge resource; it allows Adial Pharmaceuticals to reference the FDA's prior findings of safety and effectiveness for a previously approved drug, which can significantly reduce the time and cost of the New Drug Application (NDA) process. This regulatory clarity is a defintely a key resource for accelerating the path to market and enhancing partnership appeal.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Value Propositions

The core value proposition for Adial Pharmaceuticals, Inc. (ADIL) is a fundamental shift in how Alcohol Use Disorder (AUD) is treated: moving from a one-size-fits-all approach to a precision medicine model. This is built around the drug AD04, which delivers higher efficacy for a specific, genetically-defined patient group, plus it offers a much-needed reduction in heavy drinking, not just forced abstinence.

Genetically Targeted Therapy: AD04 is positioned as the first genetically targeted therapy for Alcohol Use Disorder (AUD)

AD04 is a serotonin-3 receptor antagonist, but its true value is its positioning as the potential first genetically targeted therapy for AUD. This is a crucial distinction in a market where existing pharmacological treatments are often limited by low efficacy and poor patient compliance. By focusing on a specific genetic biomarker, AD04 aims to deliver a higher probability of therapeutic success for a defined patient population.

The company has also secured its intellectual property, filing an update to the provisional patent application in July 2025, which is expected to protect the core assets until at least 2045.

Precision Medicine: Targets only biomarker-positive (AG+) patients for higher efficacy and reduced side effects

The precision medicine approach targets only patients who are biomarker-positive for the AG+ genotype, which is a subset of the AUD population identified through Adial Pharmaceuticals' proprietary genetic test. This focus is designed to maximize efficacy and minimize the side effects seen in a general population trial.

Here's the quick math on the target market:

• The AG+ biomarker is found in approximately 14% of the general population, according to large-scale epidemiological studies.
• The FDA has confirmed that the companion diagnostic test, a cheek swab developed with Genomind, is a Non-Significant Risk (NSR) device for use in the Phase 3 study, which streamlines the trial logistics.

This stratification is key; it allows the company to target a commercially focused subset of the millions of people in the U.S. alone who suffer from AUD.

Reduced Harm: Clinical data showed AD04 reduced heavy drinking days (HDDs) in heavy drinkers

The clinical data provides the most concrete value proposition for patients and prescribers: a significant reduction in harmful drinking behavior. The focus is on reducing harm, which is a more attainable goal for many patients than complete abstinence, and is now being supported by the U.S. Senate's push for the FDA to consider endpoints beyond abstinence.

The post-hoc analysis from the ONWARD™ Phase 3 trial showed compelling results in the biomarker-positive, heavy-drinking subgroup:

Metric	Result for Biomarker-Positive (AG+) Heavy Drinkers	Significance
Reduction in Heavy Drinking Days (HDDs)	Reduced HDDs by 86%	Substantial reduction in harmful drinking.
Elimination of HDDs (Responder Analysis)	Eliminated HDDs in 48% of subjects	Nearly half of the targeted patients achieved zero heavy drinking days.
Upcoming Phase 3 Primary Endpoint	Zero heavy drinking days during months 5 and 6	FDA-confirmed primary endpoint for registrational trial.

The goal is clear: deliver a transformative solution for patients living with AUD.

Flexible Dosing: Confirmed favorable pharmacokinetics in fed or fasted states, supporting patient compliance

Patient compliance is defintely a major hurdle in addiction treatment, so the flexible dosing regimen is a critical, practical value proposition. The AD04-103 Pharmacokinetics (PK) study, completed in early 2025, confirmed key aspects that simplify the patient experience.

The final results from the PK study showed that AD04 can be taken with or without food, which removes a common barrier to daily medication adherence. The study also validated the near micro-dosing regimen, confirming proportional pharmacokinetic exposure between the 0.33mg and 0.99mg doses, supporting the planned oral daily dosing (currently twice-a-day).

The drug is safe and well-tolerated, which is a massive plus for long-term adherence.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Customer Relationships

High-Touch, Clinical: Direct engagement with key opinion leaders (KOLs) and clinical research organizations (CROs)

For a clinical-stage biopharma company, your primary high-touch relationships aren't with patients yet; they are with the regulators and the scientific community that validates your work. The key relationship in late 2025 was the successful End of Phase 2 (EOP2) meeting with the FDA in July 2025, which provided the blueprint for the adaptive Phase 3 study design for AD04. This level of direct regulatory engagement is the most critical customer relationship right now because it de-risks the entire development pathway.

You also have a critical partnership with Genomind for the companion diagnostic test. The FDA confirmed this cheek-swab test is a Non-Significant Risk (NSR) device, which simplifies the trial logistics immeasurably. Plus, the collaboration with Cytel for advanced machine learning tools shows a commitment to using high-touch, specialized expertise to refine the Phase 3 strategy, targeting the genetically defined subgroups most likely to respond to AD04.

Investor Relations: Active communication of regulatory milestones to maintain shareholder confidence

Investor relations is a constant, high-stakes relationship for a company in the clinical phase. You are defintely selling the future value of AD04 while managing a tight cash position. The recent Q3 2025 financial report, released in November 2025, was a clear communication point.

The core message to shareholders is the regulatory momentum-the FDA alignment on the Phase 3 design-which is a huge win. But you must also be transparent about the burn rate. Here's the quick math on the near-term capital requirement:

Metric (as of Sept 30, 2025)	Amount/Value	Implication
Cash and Cash Equivalents	$4.6 million	The current capital base.
Q3 2025 Net Loss	$1.8 million	A significant improvement from Q3 2024 net loss of $2.2 million.
R&D Expense Reduction (Q3 2025 YoY)	Approximately $511 thousand (50%)	Shows disciplined cost management during the clinical transition.
Cash Runway Expectation	Into Q2 2026	Requires a financing event or partnership within the next two quarters.

The cash runway into Q2 2026 is the hard limit you're communicating, making the next section's B2B relationships an immediate priority for investors.

Future B2B: Strategic relationships with pharmaceutical partners for commercialization and market access

The entire development strategy is structured to make AD04 a compelling B2B asset for a major pharmaceutical partner. The successful FDA EOP2 meeting in 2025 is the catalyst here; it transforms the asset from a high-risk research project into a de-risked, late-stage opportunity with a clear regulatory path.

The company is actively looking to accelerate strategic partnership discussions now that the FDA alignment is in place. You've already built a foundation of operational B2B relationships that reduce future partner risk:

• Secured U.S. Manufacturing: Agreements with Thermo Fisher Scientific and Cambrex for robust drug product and substance supply.
• De-risked Regulatory Pathway: Leveraging the 505(b)(2) regulatory pathway, which can streamline approval by referencing existing data.
• Intellectual Property: A provisional patent update filed in July 2025 is expected to protect core assets out to at least 2045.

A B2B partner gets a genetically targeted therapy for Alcohol Use Disorder (AUD) that's already cleared the major Phase 3 design hurdles with the FDA. That's a strong pitch.

Patient Advocacy: Focus on addressing the significant unmet medical need in the AUD population

While ADIAL Pharmaceuticals is not yet selling a drug, the patient relationship is built on advocacy and addressing a specific, underserved clinical need. The focus is on precision medicine for Alcohol Use Disorder (AUD), targeting patients who are biomarker-positive (AG+). This subset represents approximately 14% of the general population.

This targeted approach is a key differentiator in the market, allowing you to focus advocacy efforts on the value of genetically-guided treatment. Also, the company is aligning with broader policy trends, noting the U.S. Senate's support for expanding clinical trial endpoints beyond just abstinence in addiction treatments. This shift validates AD04's focus on endpoints like zero heavy drinking days, which the FDA confirmed as the proposed primary efficacy endpoint for the Phase 3 trial.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Channels

The channels for Adial Pharmaceuticals' lead asset, AD04, are deliberately segmented to align with its precision medicine strategy, moving from a highly controlled clinical environment to a targeted commercial launch. This approach minimizes upfront commercial risk by focusing on the genetically-defined patient population, which is approximately 14% of the general population.

Clinical Trial Sites: Primary channel for patient recruitment and drug delivery during development.

The primary channel in late 2025 is the clinical trial network, which serves as the logistical backbone for patient recruitment, drug administration, and data collection for the registrational Phase 3 trial. This trial is expected to begin in late 2025 and utilizes a geographically targeted approach to maximize enrollment efficiency and reduce costs.

The trial sites focus on regions with a higher prevalence of the AG+ biomarker (the target genotype), which is estimated to be greater than 50% in those areas, compared to about 33% in the United States.

Key partners ensure a robust supply chain for the clinical channel:

• Clinical Packaging & Distribution: Catalent, which provides clinical packaging and distribution services to support the Phase 3 trial launch.
• Drug Substance & Product Manufacturing: U.S.-based agreements with Thermo Fisher Scientific and Cambrex to secure robust supply for both clinical and future commercial needs.

The initial Phase 3 trial is designed to leverage a multi-national footprint:

Phase 3 Trial (Planned Late 2025)	Details
Countries	Finland, Sweden, Estonia, Latvia, Poland, Bulgaria, Croatia
Initial Sites	26 clinical sites expected to participate initially
Purpose	Patient recruitment and delivery of AD04 for the adaptive, precision-focused trial

Strategic Licensing: Future out-licensing or co-commercialization agreements with large pharmaceutical companies.

The core commercial channel strategy centers on a future out-licensing or co-commercialization deal with a larger pharmaceutical partner. The successful completion of the End of Phase 2 (EOP2) meeting with the FDA in July 2025 is considered a de-risking milestone that is expected to accelerate strategic partnership discussions.

The company is aiming to secure a partner with the resources to fund and execute a large-scale commercial launch, especially given the multi-billion-dollar global Alcohol Use Disorder (AUD) market opportunity.

For context, Adial Pharmaceuticals already has a licensing deal with Adovate, LLC for its Purnovate assets, which provides a financial model for future out-licensing, including eligibility for up to $83 million in total milestones for the first three compounds, plus low single-digit royalties on net sales. [cite: 6 from first search]

Specialty Pharmacy/Distribution: Expected commercial channel post-approval for the niche, genetically-defined patient population.

Post-approval, the distribution channel will be highly targeted, reflecting the precision medicine approach for the AG+ biomarker-positive patient subset. This necessitates a specialty distribution model, although a specific specialty pharmacy partner has not been named as of late 2025.

The commercialization plan is structured in two stages, focusing on a high-touch, specialized sales approach initially:

• Stage 1 Launch: Utilize a Specialty sales force to target high-prescribing physicians.
• U.S. Target Focus: Concentrate sales efforts on the top 10,000 targets in the U.S.
• EU Target Focus: Focus on the top 3,000 targets across the EU5 (France, Germany, Italy, Spain, UK).

This initial, focused approach is designed to efficiently reach the niche patient population before potentially expanding into a broader market with a General Practitioner sales force in Stage 2.

Genetic Testing Providers: Utilizing partners like Genomind for the AG+ biomarker test distribution.

The channel for the companion diagnostic test is a critical component of the overall AD04 value proposition and is managed through a partnership with Genomind.

This channel is designed for maximum accessibility and precision, ensuring only the patients most likely to respond to AD04 are treated. The test identifies the relevant serotonergic single nucleotide polymorphisms (SNPs) in the HTR3A, HTR3B, and SLC6A4 genes.

Here's the quick math: the AG+ biomarker is in about 14% of the general population, so the test is the gatekeeper for the entire commercial market.

The distribution of the test itself is streamlined:

• Collection Method: A simple cheek swab collection method that can be performed easily in a physician's office or even at home.
• Validation: Genomind successfully completed the analytical validation in October 2025, reporting 100% concordance across all SNP testing parameters.
• Regulatory Status: The FDA confirmed the test is a Non-Significant Risk (NSR) for Phase 3 use, meaning an Investigational Device Exemption (IDE) is defintely not required.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Customer Segments

The core of Adial Pharmaceuticals' business model is a precision medicine approach, so their customer segments are sharply defined, moving beyond the general Alcohol Use Disorder (AUD) population to a genetically-guided subset. This focus is what drives the potential for higher efficacy and better commercial outcomes.

Biomarker-Positive AUD Patients: Individuals with Alcohol Use Disorder who test positive for the proprietary AG+ genotype, representing approximately 14% of the general population.

This is the primary, high-value customer segment. The entire AD04 program is built around the proprietary AG+ biomarker, which is present in roughly 14% of the general population, based on large-scale epidemiological studies. This genetic targeting is key because clinical data showed a statistically significant response in reducing heavy drinking days in patients with this genotype. In fact, one study indicated AD04 eliminated heavy drinking days in 48% of subjects who possessed the AG+ genotype. You're not selling to the whole AUD market; you're selling a highly effective solution to a clearly identified subset.

• Targeted Population: Patients with the AG+ genotype.
• Genotype Prevalence: Approximately 14% of the general population.
• Expected Efficacy: Elimination of heavy drinking days in 48% of AG+ subjects in one study.

Heavy Drinking Patients: The specific target population for AD04, as defined in clinical trials.

While the AG+ genotype identifies who is likely to respond, the clinical trials define what their drinking behavior must be. The lead indication for AD04 is the treatment of AUD in heavy drinking patients. The planned adaptive Phase 3 trial, which received favorable FDA guidance in 2025, targets individuals with moderate to severe AUD. The definition of a heavy drinking patient in a recent provisional patent update was fewer than 10 drinks per drinking day. This is a crucial distinction, as it narrows the focus to patients with significant clinical need who are more likely to seek and adhere to treatment.

Here's the quick math: with over 35 million people in the US alone affected by AUD, targeting even 14% of that population represents a substantial market opportunity in a multi-billion dollar global market.

Prescribing Physicians: Psychiatrists and addiction specialists who will utilize the genetic test for patient selection.

The physician is the gatekeeper, and their decision-making process is a customer segment in itself. Adial Pharmaceuticals has partnered with Genomind to develop a precision medicine testing solution-a simple cheek swab-to identify eligible patients. The FDA confirmed this cheek swab test is a Non-Significant Risk (NSR) device for use in the Phase 3 trial, which simplifies the regulatory path for the companion diagnostic. This ease of use and the clear genetic guidance are the value proposition for the physician; it allows them to prescribe with greater confidence in a positive outcome, defintely a selling point.

Physician Segment	Value Proposition from AD04/Test	Key Action
Psychiatrists	Precision treatment for a subset of AUD patients, improving patient compliance and outcomes.	Order the companion diagnostic test (cheek swab) and prescribe AD04.
Addiction Specialists	A genetically-guided therapy to address an unmet need in the AUD market.	Integrate genetic testing into the standard of care for AUD diagnosis.

Payers/Insurance Providers: Entities that will cover the cost of the drug and the companion diagnostic test.

Payers-including government programs and private insurance companies-are a critical customer segment because they control reimbursement. Their primary metric is cost-effectiveness. Adial Pharmaceuticals' strategy is that the precision medicine approach will translate to dramatic cost savings to payors by avoiding ineffective treatments for non-responders. The company views the companion diagnostic test as a multi-billion dollar potential market opportunity, indicating a strong revenue stream is anticipated from these entities. For the payer, the value is a reduced total cost of care for AUD patients, a chronic condition that is expensive to manage.

The company's focus on a streamlined path to a registrational Phase 3 trial, following the successful End of Phase 2 meeting with the FDA in July 2025, is intended to accelerate partnership discussions with commercial entities, including these payers.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Cost Structure

You need to understand exactly where Adial Pharmaceuticals is spending its limited cash, especially as a clinical-stage biopharmaceutical company where the cost structure is dominated by high, fixed-cost R&D. The bottom line is that while Q3 2025 saw a temporary dip in spending due to a lull in clinical activity, the company is positioning itself for a massive cost increase as it commences the registrational Phase 3 trial for AD04.

The company's cost structure is typical for a biotech firm, leaning heavily on Research and Development (R&D) and the associated costs of clinical trials and intellectual property maintenance. The net loss for the three months ended September 30, 2025, was $1.8 million, a slight improvement from the prior year, driven almost entirely by reduced R&D spending. Here is the quick math on the key expense shifts:

Expense Category	Change in Q3 2025 (vs. Q3 2024)	Amount Change	Primary Driver
Research and Development (R&D)	Decrease	Approximately $511 thousand (50%)	Lower clinical activity
General and Administrative (G&A)	Increase	Approximately $63 thousand (5%)	Timing of the annual meeting
Net Loss	Decrease	$0.4 million (from $2.2M to $1.8M)	Reduced R&D spending

Research and Development (R&D)

R&D is the largest and most volatile component of Adial Pharmaceuticals' cost base. This is where the company invests in its core asset, the AD04 drug for Alcohol Use Disorder (AUD). The decrease of approximately $511 thousand, or 50%, in Q3 2025 compared to the same period in 2024 was a direct result of lower clinical activity as the company finalized the adaptive Phase 3 study design with the FDA. This is a temporary cost reduction, defintely not a long-term trend, as the Phase 3 trial will require significant capital.

General and Administrative (G&A)

G&A costs cover the necessary overhead, executive compensation, legal fees, and administrative functions. These costs are generally more fixed than R&D. In Q3 2025, G&A expenses increased by about $63 thousand, or 5%, year-over-year. This modest increase was mainly attributed to the specific timing of the company's annual meeting, which fell into the third quarter in 2025, shifting costs from a later quarter.

Intellectual Property Costs

Protecting the AD04 asset is a critical, ongoing cost. The company must continually spend on patent filings, maintenance, and defense to secure its market exclusivity. This is a non-negotiable fixed cost for a biotech. A key action in 2025 was the filing of an updated provisional patent application for AD04 on July 9, 2025, which is expected to protect the core assets out to at least 2045. This ensures a long runway for potential commercialization.

Manufacturing Costs

Manufacturing costs relate to the Chemistry, Manufacturing, and Controls (CMC) work required to produce the drug substance and finished drug product, AD04, for clinical trials. While R&D was down in Q3, earlier in 2025, R&D expenses actually increased, driven by higher CMC expenses to develop clinical supplies for the upcoming program. The company has secured U.S. manufacturing partnerships with major contract manufacturing organizations like Thermo Fisher Scientific and Cambrex to ensure supply chain security and quality control for the Phase 3 program.

Clinical Trial Operations

The cost of running the adaptive Phase 3 study for AD04 will be the next major expense spike. The current lower clinical activity that drove the Q3 2025 R&D decrease is simply the pause before the next sprint. The costs here include:

• Payments to Contract Research Organizations (CROs) for trial management.
• Clinical site initiation and patient recruitment.
• Drug supply distribution and monitoring.
• Costs associated with the companion diagnostic test, which the FDA has confirmed as Non-Significant Risk (NSR) for Phase 3 use.

This is where the cash burn will accelerate, which is why the company's cash position of $4.6 million as of September 30, 2025, is only expected to fund operations into the second quarter of 2026 based on current plans.

Adial Pharmaceuticals, Inc. (ADIL) - Canvas Business Model: Revenue Streams

Adial Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company, so its revenue streams in late 2025 are not driven by product sales, but by strategic non-dilutive financing and asset monetization. The core revenue model right now is a hybrid of licensing payments and capital raises to fund the development of its lead compound, AD04, for Alcohol Use Disorder (AUD).

Here's the quick math: the company's primary cash inflow in 2025 came from equity financing, which is the necessary, but dilutive, trade-off for a biotech in this development stage. Still, the licensing deals provide a crucial non-dilutive cash runway and validate the value of their intellectual property.

Milestone Payments

Current revenue from licensing agreements provides critical, non-dilutive capital. The most recent concrete example is the May 2025 payment from Adovate, LLC, which acquired Adial's former subsidiary, Purnovate, Inc..

Specifically, Adial received a six-figure development milestone payment from Adovate, LLC on May 13, 2025, following the start of a Phase 1 clinical trial for Adovate's lead compound for asthma, ADO-5030. This payment, while not a blockbuster, validates the monetization strategy for non-core assets.

The total potential value of this licensing structure is substantial, demonstrating significant future revenue potential:

• Total Potential Milestones (First Three Compounds): Up to $83 million.
• Commercial Milestones: Over $50 million.
• Development and Approval Milestones: Up to $11 million per compound.

Equity Financing/Warrant Exercises

The primary source of immediate, working capital funding in 2025 was through equity financing, specifically the exercise of warrants. This is how the company funds its operations and clinical trials, but it comes at the cost of shareholder dilution.

In May 2025, Adial entered a warrant inducement agreement with an institutional investor for the immediate exercise of existing Series B and Series C Warrants. This transaction generated gross cash proceeds of approximately $2.75 million, which the company stated would be used for working capital and general corporate purposes. This capital infusion was essential, as the company's cash and cash equivalents were $2.4 million as of March 31, 2025, and the proceeds were expected to fund operations into the fourth quarter of 2025.

Financing Event (2025)	Gross Proceeds	Purpose
Warrant Inducement Agreement (May 2025)	Approximately $2.75 million	Working Capital, General Corporate Purposes

Future Licensing Fees

The largest anticipated near-term revenue stream is the upfront and milestone payments from a commercialization partner for AD04, their lead drug for Alcohol Use Disorder (AUD). The company has been in active discussions with potential commercial partners to support the Phase 3 trials and eventual commercialization in the US and European markets.

A partnership is expected to follow a similar structure to the Adovate deal, including a significant upfront payment and tiered milestone payments tied to regulatory and commercial success. This is a crucial step to secure the funding needed for the full clinical program, which was previously estimated to cost approximately $25 million to complete the two necessary trials for registration.

Future Product Sales/Royalties

The eventual, long-term revenue stream will come from the sale of AD04 post-FDA approval, but this is highly likely to be through a commercialization partner rather than direct sales by Adial. The model anticipates two components:

• Royalties: A percentage of the net sales from a commercial partner. The Adovate agreement, for instance, entitles Adial to low single-digit royalties on net sales.
• Equity Stake: Adial retains an equity stake in its licensed assets (over 10% in Adovate), allowing them to participate in the long-term upside without the commercialization expense.

The company is defintely pre-revenue from product sales in 2025. The focus remains on achieving the critical regulatory milestones, like the successful End of Phase 2 meeting with the FDA in 2025, which will trigger the next wave of strategic partnership discussions and, ultimately, the future licensing revenue. The net loss for the third quarter of 2025 was $1.8 million, which clearly shows the current financial reality of a development-stage biotech.