AJNA BioSciences

AJNA BioSciences

Growth Stage

Transforming the $678B pharmaceutical industry with plant medicine

Transforming the $678B pharmaceutical industry with plant medicine

Overview

Raised this Round: Raised: $253,901

Total Commitments ($USD)

Platform

Wefunder

Start Date

06/20/2024

Close Date

10/21/2024

Min. Goal
$50,000
Max. Goal
$1,235,000
Min. Investment

$250

Security Type

Equity - Preferred

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$1.73

Early Bird Valuation

$31,582,371

Pre-Money Valuation

$40,000,801

Year Founded

2021

Industry

Healthcare & Pharmaceuticals

Tech Sector

HealthTech

Distribution Model

B2C

Margin

Low

Capital Intensity

High

Location

Littleton, Colorado

Business Type

Growth

AJNA BioSciences, with a valuation of $40 million, is raising funds on Wefunder. The company is revolutionizing the pharmaceutical industry with its botanical drugs. AJNA BioSciences is on its way to develop FDA-approved drugs from plant medicine and treat conditions, including Autism Spectrum Disorder and Generalized Anxiety Disorder. The company is led by world-class scientists from John Hopkins, NYU, and Harvard Medical and has two botanical drugs in clinical trials. Joel Stanley founded AJNA BioSciences in April 2021. The current crowdfunding campaign has a minimum target of $50,000 and a maximum target of $1.24 million. The campaign proceeds will be used for continued improvement in two new drugs, laboratory capacity expansion, and general corporate expenses.

Summary Profit and Loss Statement

FY 2023 FY 2022

Revenue

$4,558,657

$415,364

COGS

$4,558,657

$415,364

Tax

$30,000

$0

 

 

Net Income

$9,380,650

$-4,066,700

Summary Balance Sheet

FY 2023 FY 2022

Cash

$984,298

$532,128

Accounts Receivable

$0

$415,364

Total Assets

$13,476,027

$3,003,351

Short-Term Debt

$9,611,654

$1,176,130

Long-Term Debt

$715,011

$8,180,430

Total Liabilities

$10,326,665

$9,356,560

Financials as of: 06/20/2024
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Synopsis

AJNA BioSciences, is a company dedicated to advancing the field of plant-based pharmaceuticals. AJNA BioSciences focuses on developing FDA-approved botanical drugs aimed at treating conditions such as Autism Spectrum Disorder (ASD) and Generalized Anxiety Disorder (GAD). The company is led by a team of scientists from prestigious institutions like Johns Hopkins, NYU, and Harvard Medical, and has two botanical drugs currently in clinical trials. AJNA BioSciences primarily serves patients suffering from ASD and GAD, as well as healthcare providers looking for alternative treatment options.

AJNA BioSciences addresses the limited availability of effective and safe medications for conditions like Autism Spectrum Disorder and Generalized Anxiety Disorder. Traditional pharmaceutical treatments for these conditions often come with significant side effects and may not be effective for all patients. For instance, existing drugs for ASD can cause intense side effects, and many antidepressants prescribed for GAD have adverse long-term impacts, including sexual dysfunction, weight gain, and sleep disturbances.

AJNA BioSciences offers a solution through its development of botanical drugs derived from plant medicine. The company's first drug candidate, AJA001, is a full-spectrum cannabis-derived medication designed to alleviate symptoms of irritability and aggression in patients with Autism Spectrum Disorder. This drug utilizes patented hemp genetics to optimize bioavailability and is currently progressing towards Phase 2 clinical trials. The second drug candidate, AJAO02, is a psilocybin-based antidepressant intended as a natural alternative to traditional antidepressants for treating Generalized Anxiety Disorder. This drug is also advancing through clinical trials, with Phase 2 expected to commence in 2025.

Families and caregivers of individuals with Autism Spectrum Disorder and Generalized Anxiety Disorder often struggle to find medications that effectively manage symptoms without causing severe side effects. AJNA BioSciences' approach of using plant-based medicine offers a more natural treatment alternative, potentially reducing the burden of side effects and improving the quality of life for patients. This concept is akin to the growing preference for natural and holistic remedies in everyday health and wellness, where people seek treatments that are both effective and gentle on the body.

Next Section: Price

Price

AJNA BioSciences is offering Preferred Equity in its current funding round. The pre-money valuation for this round is set at $40 million, with shares priced at $1.73 each. This valuation reflects the fact that the company already raised $25 million, and made significant progress in developing its two drugs.

Investing in Preferred Equity offers certain advantages over Common Equity, including priority in dividend payments and liquidation preferences. Specifically, AJNA BioSciences has a 1x liquidation preference, meaning that in the event of a liquidation, preferred shareholders are entitled to receive their initial investment before any distributions are made to common shareholders. This provides a level of downside protection for investors. However, it is important to note that Preferred Equity may also come with restrictions on voting rights, which could limit investors' influence on company decisions.

Analyzing the exit potential for AJNA BioSciences involves considering the broader market for plant-based pharmaceuticals and the company's ability to scale its operations. Startups in this sector have seen significant interest due to the growing demand for natural and holistic treatment options. To achieve a 10x return on investment, AJNA BioSciences would need to reach a post-exit valuation of approximately $400 million, not accounting for dilution.

For AJNA BioSciences to reach such a valuation, several factors must align. The company would need to successfully navigate its clinical trials and secure FDA approvals for its drug candidates. Additionally, scaling production and distribution, as well as achieving significant market penetration, would be crucial. Given the current revenue multiple of 8.77x, the company would need to substantially increase its revenue and market share to meet these targets.

In summary, while investing in AJNA BioSciences through Preferred Equity offers certain protections and potential for high returns, it also comes with risks typical of the pharmaceutical industry, including regulatory hurdles and the need for substantial market adoption. Investors should weigh these factors carefully when considering participation in this funding round.

Next Section: Market

Market

The market for plant-based Active Pharmaceutical Ingredients (APIs) is experiencing significant growth, driven by several key factors. One of the primary drivers is the increasing awareness and interest in plant-based medicines. With nearly half of all pharmaceuticals derived from natural sources, there is a growing trend towards leveraging medicinal compounds found in nature. This trend is further propelled by advancements in genomics and biotechnology, which have enhanced the extraction, characterization, and utilization of bioactive molecules from plants.

The prevalence of chronic diseases such as Autism Spectrum Disorder and Generalized Anxiety Disorder is another critical market driver. These conditions affect millions of individuals globally, creating a substantial demand for effective and safe treatment options. AJNA BioSciences' focus on developing botanical drugs for these conditions positions the company well to tap into this growing need.

Additionally, the COVID-19 pandemic has sparked interest in developing drugs on platforms other than mammalian cells. Plant-based medications have gained popularity during this period, as evidenced by the approval of a plant-based COVID-19 vaccine, COVIFENZ, by Health Canada in February 2022. This trend underscores the potential for botanical drugs to address emerging healthcare challenges.

However, the market for plant-based APIs is not without its challenges. The regulatory framework associated with these drugs is still evolving, and there is a need for robust scientific evidence to establish their safety and efficacy. Meeting statutory criteria for herbal medication research can be challenging, and the quality of trial medicines must be consistent across batches to gain regulatory approval. These regulatory uncertainties could impact the growth trajectory of companies like AJNA BioSciences.

In terms of market size, the US plant-based API market is valued at approximately $9.3 billion, with a growth rate of 6.2% annually. This market size indicates substantial opportunities for AJNA BioSciences, although the company currently targets a niche within this broader market. Specifically, AJNA BioSciences' products cater to individuals suffering from Autism Spectrum Disorder and Generalized Anxiety Disorder, which together represent a significant portion of the addressable market.

Next Section: Team

Team

The team at AJNA BioSciences comprises individuals with extensive experience and expertise in botanical drug development and the broader pharmaceutical industry. The leadership team is particularly notable for its background in both scientific research and business operations, which is crucial for the company's success in developing and commercializing plant-based pharmaceuticals.

Joel Stanley serves as the CEO and Co-Founder of AJNA BioSciences. He is a recognized leader in botanical drug innovation and has a proven track record in the CBD industry. Notably, Stanley scaled Charlotte's Web, a leading CBD category company, from inception to an IPO, achieving $75 million in annual revenue. His experience in scaling operations and navigating regulatory landscapes is directly relevant to AJNA BioSciences' goals of developing FDA-approved drugs.

Orrin Devinsky, the Chief Medical Advisor, brings a wealth of medical expertise to the team. Devinsky is a distinguished neurologist specializing in epilepsy and behavioral disorders. He holds positions as a Professor of Neurology, Neurosurgery, and Psychiatry at NYU School of Medicine and serves on the Board of Directors of the Epilepsy Foundation. His medical insights and experience with clinical trials are invaluable for guiding AJNA BioSciences through the rigorous process of drug development and approval.

Scott Hansen, the Vice President of Lab Operations & Quality, is an expert in pharmaceutical operations with a focus on quality systems. Hansen has held leadership roles in quality and regulatory affairs at companies like Agricor/Botanacor and Charlotte's Web. His background ensures that AJNA BioSciences maintains high standards in its laboratory operations and meets regulatory requirements, which is essential for the company's credibility and success.

Bob Judge, the Vice President of Finance, has extensive experience in financial management and private equity. He has served as CFO and COO at Timberline Industries and CEO at Lane Industries and Lane Pursuits. His expertise in overseeing financial operations and securing venture capital investments is critical for AJNA BioSciences as it seeks to manage its burn rate and secure additional funding for ongoing projects.

The team's collective experience aligns well with AJNA BioSciences' goals of developing and commercializing botanical drugs. Their backgrounds in scientific research, clinical trials, regulatory affairs, and financial management provide a strong foundation for the company's ambitious objectives. 

Next Section: Differentiation

Differentiation

AJNA BioSciences differentiates itself in the highly competitive pharmaceutical industry through its focus on developing FDA-approved botanical drugs for conditions such as Autism Spectrum Disorder (ASD) and Generalized Anxiety Disorder (GAD). This differentiation is particularly relevant when compared to industry competitors like Risperdal, Abilify, and Lexapro, which are established pharmaceutical treatments for similar conditions.

Risperdal and Abilify are commonly prescribed for ASD, while Lexapro is a widely used antidepressant for GAD. These drugs are produced by large pharmaceutical companies with extensive resources and market reach. In terms of company size, AJNA BioSciences is significantly smaller and in an earlier stage of development compared to these established players. However, AJNA BioSciences aims to offer a unique value proposition through its plant-based drug formulations, which are perceived as more natural alternatives with potentially fewer side effects.

When evaluating product quality, AJNA BioSciences leverages its team of world-class scientists from institutions like Johns Hopkins, NYU, and Harvard Medical to ensure rigorous research and development processes. The company's botanical drugs are designed to meet FDA approval standards, which is a critical quality benchmark in the pharmaceutical industry. In contrast, traditional pharmaceutical drugs like Risperdal, Abilify, and Lexapro have well-documented efficacy but are also associated with significant side effects, which AJNA BioSciences aims to mitigate with its plant-based approach.

In terms of pricing, AJNA BioSciences' products are still in the clinical trial phase, so specific pricing details are not yet available. However, the company’s focus on optimizing bioavailability and leveraging patented hemp genetics suggests a potential for competitive pricing once the products reach the market. Traditional pharmaceuticals, on the other hand, often come with high costs due to extensive R&D and marketing expenses.

The customer demographics for AJNA BioSciences' products primarily include individuals suffering from Autism Spectrum Disorder and Generalized Anxiety Disorder. These demographics span a wide age range, from children and adolescents with ASD to adults experiencing GAD. Additionally, caregivers and healthcare providers seeking alternative treatment options that offer a more natural profile are key target customers. The company’s botanical drugs appeal to those who are looking for effective treatments with potentially fewer side effects compared to conventional pharmaceuticals.

In summary, AJNA BioSciences differentiates itself through its focus on plant-based drug formulations, leveraging scientific expertise, and targeting specific conditions with significant unmet needs. While the company faces competition from established pharmaceutical giants, its unique approach and commitment to high-quality botanical drugs position it uniquely within the market.

Next Section: Performance

Performance

AJNA BioSciences has demonstrated significant financial growth, reporting an annual revenue of $4.6 million for the most recent fiscal year, a substantial increase from $415k in the prior year. This represents an impressive year-over-year growth rate of approximately 910%. This growth is indicative of the increasing market acceptance and demand for the company's botanical drug offerings. However, investors must note that the company's revenues have equaled its cost of goods sold in the last two years. Additionally, the company's profit last year was exactly equal to its earnings. Therefore, there's a possibility that the company's revenues and profits aren't coming from customers, and aren't proving product-market-fit, but are coming from other sources. Investors should investigate on this matter before investing.

The company's most recent monthly burn rate is approximately $66.4k, while its most recent cash on hand is about $728k. This indicates that AJNA BioSciences has a comfortable ten months runway.

AJNA BioSciences has also raised a total of $25 million in prior funding rounds, including $15 million from British American Tobacco and $10.1 million from a private round involving PhiFund Ventures. This substantial capital infusion has enabled the company to advance its drug development programs and expand its laboratory capacity. However, the need for continuous investment remains, given the capital-intensive nature of pharmaceutical development.

On the profitability front, AJNA BioSciences reported a net income of $9.4 million for the most recent fiscal year, a significant turnaround from a net loss of $4.1 million in the prior year. This positive net income is noteworthy, but it is essential to understand the underlying factors contributing to this profitability, especially given the high burn rate and the need for ongoing investment in research and development. As nothing proves that the profit is coming from customers, investors should be cautious when analyzing this data point.

Next Section: Risk

Risk

Investing in AJNA BioSciences presents several specific risks that potential investors should consider. While the company's mission to develop plant-based pharmaceuticals offers promising opportunities, there are unique challenges associated with this venture.

One of the key risk factors for AJNA BioSciences is the regulatory environment. Developing FDA-approved drugs from plant medicine involves navigating complex and stringent regulatory pathways. Any delays or obstacles in obtaining FDA approval for their drug candidates could significantly impact the company’s timeline and financial projections. This regulatory risk is compounded by the fact that the company is dealing with Schedule 1 substances, which have additional layers of regulatory scrutiny.

The company’s reliance on a niche market also introduces adoption risk. While there is growing interest in plant-based medicines, the acceptance and integration of botanical drugs into mainstream medical practices may take time. This early-to-market risk means that AJNA BioSciences must invest heavily in education and marketing to gain traction among healthcare providers and patients.

AJNA BioSciences operates in a highly competitive landscape with established pharmaceutical companies offering traditional treatments for Autism Spectrum Disorder and Generalized Anxiety Disorder. Competing against well-funded and recognized brands such as Risperdal, Abilify, and Lexapro poses a significant challenge. The company must demonstrate superior efficacy and safety profiles for its botanical drugs to convince prescribers and patients to switch from conventional medications.

Next Section: Bullish Outlook

Bullish Outlook

The bullish outlook for AJNA BioSciences is underpinned by several key factors contributing to its potential for significant growth and market success.

Firstly, the market opportunities and growth potential for plant-based Active Pharmaceutical Ingredients (APIs) are substantial. The US market for plant-based APIs is valued at approximately $9.3 billion, with an annual growth rate of 6.2%. This growing demand for natural and holistic treatment options presents a favorable environment for AJNA BioSciences to expand its market share. The increasing prevalence of conditions like Autism Spectrum Disorder (ASD) and Generalized Anxiety Disorder (GAD) further underscores the need for effective and safe treatment alternatives, which AJNA BioSciences aims to provide with its botanical drugs.

AJNA BioSciences has several unique strengths and competitive advantages. The company is led by a team of world-class scientists from institutions such as Johns Hopkins, NYU, and Harvard Medical. This scientific expertise is crucial for the rigorous development and testing of their botanical drugs. Additionally, the company’s ability to develop FDA-approved drugs from plant medicine sets it apart from many competitors in the pharmaceutical industry. The use of patented hemp genetics for optimized bioavailability in its drug candidates further enhances the company's competitive positioning.

Another positive factor is the company's strong leadership and notable achievements. CEO Joel Stanley has a proven track record of scaling operations, having previously led Charlotte's Web from inception to an IPO. The involvement of distinguished medical professionals like Orrin Devinsky, who brings extensive clinical trial and neurological expertise, adds credibility to AJNA BioSciences' drug development efforts. Their state-of-the-art laboratory, equipped with advanced tools for botanical analysis, positions the company well to continue its innovative work.

AJNA BioSciences has also secured significant partnerships and funding. The company has raised $25 million in prior rounds, including $15 million from British American Tobacco, which invested in their lead drug AJA001. This substantial financial backing provides a solid foundation for ongoing research, development, and commercial activities. Additionally, the company's ability to maintain a positive net income of $9.4 million in the most recent fiscal year demonstrates financial stability and prudent management.

Several growth drivers could lead to significant expansion for AJNA BioSciences. The company is leveraging emerging trends in plant-based medicine and biotechnology, which are gaining traction globally. Innovations such as their solventless extraction methods and the development of multiple drug candidates in the pipeline position AJNA BioSciences to capitalize on these trends. The company’s expansion plans include increasing laboratory capacity and targeting new markets, which could further enhance its growth trajectory.

Next Section: Bearish Outlook

Bearish Outlook

The bearish outlook for AJNA BioSciences is influenced by several key factors that present potential challenges to the company's growth and financial sustainability.

Firstly, the regulatory environment for developing FDA-approved botanical drugs is highly complex and stringent. AJNA BioSciences must navigate multiple layers of regulatory scrutiny, especially since its products involve Schedule 1 substances. Any delays or obstacles in obtaining FDA approval can significantly impact the company’s timeline and financial projections. This regulatory hurdle is a significant growth inhibitor, as it requires substantial time and financial resources to overcome.

In terms of market challenges, AJNA BioSciences operates in a highly competitive landscape. The pharmaceutical market for conditions such as Autism Spectrum Disorder and Generalized Anxiety Disorder is dominated by established companies with well-known brands like Risperdal, Abilify, and Lexapro. These competitors have extensive resources for research, development, and marketing, which can overshadow AJNA’s efforts. Additionally, traditional pharmaceuticals have a long history of proven efficacy, making it difficult for new entrants to gain market share, especially in a market that is slow to adopt new, unproven treatments.

Additionally, AJNA BioSciences faces adoption risks. The company is early to market with its botanical drug formulations, and there is uncertainty regarding the acceptance and integration of these drugs into mainstream medical practices. The company's reliance on a niche market for plant-based medicines means that extensive education and marketing efforts are needed to drive adoption, which can be both time-consuming and costly.

Next Section: Executive Summary

Executive Summary

AJNA BioSciences is a company focused on developing FDA-approved botanical drugs to treat conditions such as Autism Spectrum Disorder (ASD) and Generalized Anxiety Disorder (GAD). The primary customers include individuals suffering from these conditions and healthcare providers seeking alternative treatment options.

The market for plant-based Active Pharmaceutical Ingredients (APIs) is valued at approximately $9.3 billion, growing at an annual rate of 6.2%. Key drivers include the rising awareness and interest in plant-based medicines, the prevalence of chronic diseases, and advancements in genomics and biotechnology. While these trends present growth opportunities, regulatory uncertainties and market adoption risks could impact the company's trajectory.

Investing in AJNA BioSciences presents several unique risks, including regulatory challenges, early market adoption risks, and high competition from established pharmaceutical companies. The company's high burn rate and limited runway also pose financial risks that need to be managed effectively.

On the bullish side, AJNA BioSciences benefits from a growing market for plant-based medicines, a strong scientific team, and significant prior funding. The company's innovative approach to botanical drug development positions it well to capture market share in the pharmaceutical industry.

Conversely, the bearish outlook highlights regulatory uncertainties, financial sustainability concerns, and the competitive landscape. The company's high valuation and need for continuous funding add layers of risk that investors must consider.

In conclusion, AJNA BioSciences presents a compelling investment opportunity with significant potential upside, driven by market trends and the company's unique approach to botanical drugs. However, investors should weigh the substantial risks and challenges associated with regulatory approvals, financial management, and market competition before making an investment decision.

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AJNA BioSciences on Wefunder 2024
Platform: Wefunder
Security Type: Equity - Preferred
Valuation: $40,000,801
Price per Share: $1.73

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