Adial Pharmaceuticals, which spent years developing addiction treatments, completed a pivot in June 2026 when it acquired Azora Therapeutics and took on a drug candidate for ulcerative colitis. A September 17 stockholder vote will determine whether 12.9 million shares of Series A convertible preferred stock convert to common — against a current common share count of about 2.6 million — and whether the company's top two executives keep their jobs.
Shares closed 25.38% higher at $4.99 on August 17, from a previous close of $3.98. Dollar volume was $673,937 across 1,561 trades. The free float is about 2.1 million shares; short volume on the session was 23,634 shares, equal to 44.19% of reported volume.
The preferred shares were issued in connection with the Azora acquisition and cannot convert to common without stockholder approval, according to the 10-Q Adial filed with the SEC on August 14. If that approval is not obtained before December 11, 2026, holders may demand cash equal to the fair value of undelivered shares. The 10-Q states that this exposure raises substantial doubt about the company's ability to continue as a going concern.
An 8-K filed August 13 states that CEO Cary Claiborne and CFO Vinay Shah are each expected to be terminated promptly after the annual meeting, provided the stockholder proposals pass. Matthew Davidson, currently chief development officer and a board member, is named in that filing as the expected replacement for the chief executive role. No replacement CFO has been named.
Funding for the Azora deal came partly through a private placement. The company closed a $32 million initial tranche — including the conversion of $5.5 million in notes — of a financing that could total up to $64 million, according to the company's second-quarter press release. Cash stood at $28.7 million as of June 30, 2026, compared with $4.6 million three months earlier. The company says in its press release that this is enough to fund operations into the second half of 2027, not counting the second tranche.
AT177, the drug brought in through the acquisition, is described in company materials as an oral treatment designed to release its active compound in the colon. The company says in its press release that an investigational new drug application — a required step before human trials begin — is planned for the first half of 2027.