Executive Summary / Key Takeaways

• Anebulo Pharmaceuticals is strategically pivoting its lead candidate, selonabant, a potent CB1 antagonist, to an intravenous (IV) formulation for pediatric unintentional cannabis poisoning, anticipating a faster regulatory pathway and addressing a critical unmet medical need.
• The company's technology offers rapid onset of action and a favorable safety profile, with oral selonabant demonstrating significant reduction in "feeling high" and improved alertness in Phase 2 trials, positioning it as a potential first-in-class treatment.
• Financially, Anebulo remains pre-revenue with significant operating losses, but recent capital raises and a NIDA grant provide liquidity for at least 12 months, supporting ongoing R&D, which saw expenses rise to $4.30 million in fiscal year 2025.
• The increasing legalization of cannabis and the associated rise in emergency department visits for cannabis toxicity, particularly among children due to edibles, underscore a growing market opportunity for Anebulo's targeted therapy.
• Investors should monitor the progress of the IV selonabant SAD study, future clinical trial outcomes, and the company's ongoing strategic review, including a proposed reverse stock split and potential delisting, which could impact liquidity and investor access.

A Niche Emerges: Addressing the Growing Crisis of Cannabis Toxicity

Anebulo Pharmaceuticals, Inc. ($ANEB) is a clinical-stage pharmaceutical company carving out a vital niche in the biotechnology landscape: developing treatments for cannabis-induced toxicity. This encompasses acute cannabinoid intoxication (ACI) in adults, unintentional cannabis poisoning in children, and a broader spectrum of acute cannabis-induced conditions. The company's core mission is to provide rapid and effective solutions where currently none exist, positioning itself at the forefront of an escalating public health challenge.

The backdrop for Anebulo's endeavors is a rapidly evolving industry. As of June 30, 2025, cannabis is legal for recreational use in 24 U.S. states and the District of Columbia, and for medical use in 40 states. This widespread legalization has fueled a dramatic increase in cannabis-related emergency department (ED) visits, which surged from an estimated 1.10 million in 2014 to approximately 1.80 million in 2021. This trend is expected to continue its substantial upward trajectory. A significant driver of these visits is the increasing availability and consumption of edible cannabis products, which can be up to eight times more potent than smoked marijuana and often resemble common candies, posing a particular risk for accidental ingestion by children. The U.S. Department of Justice's recent decision to support rescheduling marijuana from Schedule I to Schedule III is anticipated to further increase cannabis product usage, potentially exacerbating the issue of unintentional poisoning in vulnerable populations.

Anebulo's strategic response to this urgent unmet medical need centers on its lead product candidate, selonabant. This small molecule antagonist targets the cannabinoid receptor type-1 (CB1), the primary receptor responsible for the psychoactive effects of THC, the main psychoactive component of cannabis. The company's foundational strength lies in this differentiated technology, which aims to rapidly reverse the symptoms of cannabis toxicity and reduce recovery time.

Selonabant: A Technological Edge in a Critical Market

Anebulo's core technology, selonabant, is a potent, small molecule antagonist of the cannabinoid binding receptor type-1 (CB1). This receptor is critically involved in the psychotropic effects of cannabinoids. By antagonizing CB1, selonabant is designed to counteract the effects of THC and other cannabinoids, offering a specific antidote to cannabis toxicity.

The tangible benefits of selonabant, as demonstrated in preclinical and clinical studies, are compelling. Oral selonabant has shown rapid absorption and was well-tolerated in previous trials. Crucially, in Phase 2 studies, oral selonabant demonstrated a rapid onset of action, reversing signs and symptoms of ACI in as little as one hour. For instance, in Part A of the Netherlands Trial, single oral doses of 50 mg or 100 mg selonabant, co-administered with 10.50 mg THC, led to a highly statistically significant reduction in the VAS "feeling high" score (p < 0.0001) and improved VAS alertness (p < 0.01) compared to placebo. In Part B, a single 10 mg oral dose administered one hour after a 21 mg or 30 mg THC challenge rapidly and statistically significantly reversed key psychotropic effects, including a reduction in VAS "feeling high" (p < 0.0001), improvement in VAS alertness (p < 0.0024), reduced body sway (p < 0.0196), and reduction in heart rate (p < 0.0125) in a pooled analysis. Selonabant also reduced the time required for THC effects to normalize to baseline. Preclinical testing also indicated a low likelihood of drug-to-drug interactions, as selonabant did not inhibit key metabolic enzymes (cytochromes 1A2, 2C9, 2C19, 2D6, and 3A4) at pharmacologically relevant concentrations.

Anebulo's R&D efforts are currently focused on advancing an intravenous (IV) formulation of selonabant. This strategic pivot is driven by the potential for an even more rapid onset of action, which is critical for emergency treatment, especially in the pediatric population. The company has successfully scaled up the IV formulation for initial clinical safety studies and initiated a single ascending dose (SAD) study in healthy adults in the third quarter of calendar 2025. The stated goal for this IV formulation is to provide a faster timeline to approval for pediatric patients with unintentional cannabis poisoning, a population particularly vulnerable to serious and life-threatening outcomes such as CNS depression, respiratory depression, seizures, and coma. The FDA has acknowledged this unmet need and proposed close collaboration, which could expedite the development pathway.

For investors, selonabant's technological differentiation and the company's focused R&D strategy represent a significant competitive moat. The potential for a first-in-class treatment for cannabis-induced toxicity could translate into strong market penetration and pricing power, especially given the lack of approved alternatives. This targeted approach aims to address a growing public health crisis, potentially leading to substantial revenue generation upon successful commercialization. The rapid onset of action and favorable safety profile observed in early trials could be key differentiators in emergency settings, enhancing its commercial appeal.

Financial Performance and Liquidity: Fueling Development Amidst Losses

Anebulo Pharmaceuticals, as a clinical-stage company, has not generated any revenue since its inception. This is a common characteristic of biotechnology firms in the development phase, and it has resulted in significant operating losses. For the fiscal year ended June 30, 2025, the company reported a net loss of $8.48 million, contributing to an accumulated deficit of $73.90 million as of the same date.

Research and development (R&D) expenses are the primary cost driver, reflecting the company's core activities. These expenses increased to $4.30 million for the fiscal year ended June 30, 2025, up from $3.55 million in the prior year. This increase was primarily attributable to heightened activities related to pre-clinical and clinical studies, as well as direct third-party costs incurred with contract research organizations (CROs) and contract manufacturing organizations (CMOs) for selonabant. Management anticipates that R&D expenses will continue to increase as the company progresses its current studies and prepares for further clinical trials, particularly with the advancement of the IV selonabant formulation.

General and administrative (G&A) expenses also saw a modest increase, rising by $0.20 million to $4.92 million in fiscal year 2025 from $4.76 million in the prior year. This was largely due to a $0.70 million increase in stock-based compensation expense from additional option grants, partially offset by a $0.30 million decrease in compensation and related benefits (due to a severance expense recognized in the prior period for a former CEO) and strategic cost reductions in professional and consultant fees. Interest expense increased to $382,014 in fiscal year 2025 from $151,230 in fiscal year 2024, partly due to the amortization of loan commitment fees and an incremental $0.20 million recognized in February 2025 from a proportional write-off of loan commitment fees following a decrease in borrowing capacity. Interest income remained relatively flat at $257,913 in fiscal year 2025, despite an increase in average cash balances from a private placement, due to a decrease in prevailing market interest rates. A notable positive development was the recognition of $0.90 million in grant income during fiscal year 2025 from a National Institute on Drug Abuse (NIDA) research and development grant, which reimburses direct out-of-pocket expenses for grant activities.

From a liquidity standpoint, Anebulo held cash and cash equivalents of approximately $11.63 million as of June 30, 2025. The company's cash used in operations for fiscal year 2025 was $6.30 million. This was offset by cash provided by financing activities, primarily from approximately $14.90 million in net proceeds from a December 2024 private placement. The company projects that its current cash and cash equivalents, combined with available funding under a Loan Agreement (which allows for a maximum advance of $3 million and matures in February 2028), will be sufficient to fund operating expenses and capital expenditure requirements for at least 12 months from the financial statements' issuance date. However, management acknowledges that these estimates are based on assumptions that may prove imprecise, and additional funding will likely be required to achieve development and commercialization objectives. Any future equity financings could lead to substantial dilution for existing stockholders.

Competitive Landscape: Emerging Challenger in a Specialized Arena

Anebulo Pharmaceuticals operates as an emerging challenger in the highly competitive biotechnology industry, specifically targeting the specialized arena of cannabis-induced toxicity. The company currently holds a unique position, as it is not aware of any competing products further along in the development process for specifically reversing the effects of cannabis-induced toxicity. This "first-in-class" potential is a significant differentiator.

However, the broader biotechnology and pharmaceutical sectors are characterized by intense competition from larger, better-funded companies, academic institutions, and research organizations. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Anebulo's early-stage status means it currently lags behind more established players in terms of commercialized products and revenue generation.

Direct competitors, based on their therapeutic focus, include companies like Jazz Pharmaceuticals , Alkermes , and Indivior . Jazz Pharmaceuticals (JAZZ), with its established presence in neuroscience and addiction treatments, benefits from a diversified revenue stream and a history of successful product launches, leading to relatively stable cash flow and profitability. Anebulo's focused approach on cannabinoid receptor antagonists offers greater specificity for acute intoxication, potentially exploiting a gap in Jazz's broader offerings. However, Anebulo's financial health, characterized by pre-revenue status and operating losses, contrasts sharply with Jazz's more robust financial performance.

Alkermes (ALKS), specializing in addiction and CNS disorders, leverages proprietary drug delivery technologies and partnerships for consistent revenue and improving profitability. Anebulo's selonabant could offer a more targeted approach to cannabinoid-specific issues, potentially with qualitative advantages in efficacy for acute cases. While Anebulo's R&D agility in its focused niche is a strength, it trails Alkermes in operational scale and established commercialization, which translates to more stable financial metrics for Alkermes.

Indivior (INVVY), focused on opioid dependence, has specialized expertise and a track record of regulatory approvals, supporting steady cash flow. Anebulo's offerings in cannabinoid intoxication provide a distinct, complementary angle, with potential for more precise treatment options through its receptor-based mechanisms. Anebulo's innovation in emerging addiction subtypes is a strength, but it faces challenges in competing on commercialization speed and financial stability against Indivior's more predictable performance from commercialized products.

Indirect competitors include behavioral therapies, digital health platforms for addiction management, and companies in general pain management or mental health. These alternatives could offer more accessible or easier-to-implement solutions, potentially reducing demand for pharmaceutical interventions and impacting Anebulo's market penetration and profitability.

Anebulo's strategic positioning emphasizes its specialized innovation and R&D agility in addressing a growing, underserved market. Its proprietary position is protected by three issued U.S. patents and rights to six additional patent applications, covering methods of use, aspects of selonabant, and delivery systems, with patent protection extending through 2040 and 2042 for key patents. This intellectual property forms a critical barrier to entry for potential rivals. However, the company's small scale and reliance on third parties for manufacturing and clinical trials represent vulnerabilities that could impact its ability to compete effectively against larger, better-resourced pharmaceutical companies.

Outlook and Risks: A Pivotal Juncture

Anebulo's outlook is fundamentally tied to the successful clinical development and regulatory approval of selonabant, particularly the intravenous formulation for pediatric cannabis poisoning. Management's decision to prioritize the IV formulation for children is a strategic move aimed at a potentially faster approval timeline, driven by the acknowledged unmet medical need and close collaboration with the FDA. The initiation of the SAD study for IV selonabant in healthy adults in Q3 2025 is a critical step in this pathway. The company anticipates that an initial approval in the pediatric population could also facilitate the approval process for an oral adult ACI treatment, creating a broader market opportunity.

However, this forward trajectory is not without significant risks. As a clinical-stage company, Anebulo has not generated revenue and expects to incur future losses, potentially never achieving profitability. The company's reliance on its founder, CEO, and other key personnel is substantial, and the loss of any could disrupt operations. Clinical trials are inherently expensive, time-consuming, and unpredictable, with no guarantee of success. Delays or failures in these trials, or the inability to obtain regulatory approvals, would severely limit the company's ability to commercialize selonabant and generate revenue. Even with approval, market acceptance by physicians, patients, and payors is not assured, and unfavorable pricing regulations or reimbursement practices could harm the business.

Anebulo is entirely dependent on third parties for manufacturing selonabant, and any issues with these partners could halt or delay commercialization. The company also faces intense competition from larger, better-funded entities that could bring competing products to market sooner. Furthermore, the company announced a plan in July 2025 to seek stockholder approval for a reverse stock split as part of a proposed going-private transaction, aiming to delist from Nasdaq and deregister its common stock. While a strategic review is ongoing, if this plan proceeds, it could significantly reduce liquidity and information availability for stockholders, potentially causing the stock value to decrease.

Cybersecurity threats, healthcare reform initiatives (such as the Inflation Reduction Act and the recently enacted One Big Beautiful Bill Act), and broader macroeconomic instability also pose risks to the company's financial condition and operations.

Conclusion

Anebulo Pharmaceuticals stands at a pivotal moment, aiming to address a rapidly expanding public health crisis with its differentiated CB1 antagonist, selonabant. The strategic pivot to an intravenous formulation for pediatric unintentional cannabis poisoning represents a calculated move to accelerate market entry and establish a first-in-class treatment in a high-need segment. The promising Phase 2 clinical data for oral selonabant, demonstrating rapid and significant symptom reversal, underpins the potential of this technology. This technological leadership, coupled with patent protection, forms the bedrock of Anebulo's competitive strategy against larger, more diversified pharmaceutical players.

While the company's financial profile reflects its clinical-stage status with ongoing operating losses and a reliance on external funding, recent capital raises and grant income provide a runway for critical R&D activities. The increasing prevalence of cannabis-induced toxicity, driven by evolving legalization and product forms, highlights a substantial and growing market opportunity. For discerning investors, Anebulo presents a high-risk, high-reward proposition. The successful execution of its clinical development plan for IV selonabant, navigating regulatory pathways, and effectively commercializing its product will be paramount. The outcome of the ongoing strategic review and its implications for the company's public listing will also be a critical factor influencing future investment considerations.