Mr. Christopher Moreau reports

ALGERNON TO OPEN THE FIRST BRAIN DEDICATED PET SCANNING CLINIC IN THE U.S. AT THE HCA FLORIDA UNIVERSITY MEDICAL OFFICE BUILDING

Algernon Health Inc. will be opening its inaugural brain PET (positron emission tomography) scanning clinic at the HCA Florida University medical office building in Davie, located on the campus of the HCA Florida University Hospital. Algernon USA LLC, a wholly owned subsidiary, has signed a five-year lease, with a renewal option for an additional five years. The company plans to open multiple clinics throughout the United States.

The clinic will be the first location of its kind in the United States to provide brain dedicated PET scans to aid in the detection of Alzheimer's disease (AD) and other forms of dementia as well as epilepsy, neuro-oncology and movement disorders, including Parkinson's disease. Brain PET scans for beta-amyloid plaque detection (associated with advancing AD) are covered by Medicare, Medicaid and private insurance for patients over 65.

The clinic will feature the U.S. FDA-cleared (U.S. Food and Drug Administration) CareMiBrain system, a groundbreaking, new stand-alone diagnostic PET scanner that does not need an integrated computed tomography (CT) component to produce high-quality images, resulting in 25 per cent less radiation exposure for patients.

There are two recently U.S. FDA-approved monoclonal antibody treatments for AD, which are also covered by Medicare, Medicaid and private insurance, designed to slow the progression of the disease -- Leqembi (Eisai and Biogen) and Kisunla (Eli Lilly) -- and both require a positive beta-amyloid brain scan (or spinal tap) in order for patients to be authorized to receive them. These drugs have helped create a billion-dollar market opportunity for the brain-specific PET scan and AD treatment space.

The nation's current supply of PET/CT scanners -- a hybrid of PET and CT technology -- is vastly insufficient to serve the massive new market emerging for AD diagnostics and treatment. The majority of PET/CT scanners, 45 per cent of which are located in hospitals, are primarily prioritized as cancer diagnostic and theranostic tools and for cardiac imaging, making it challenging to schedule brain-specific scans on a timely basis.

"We are very pleased to be opening our first neuroimaging clinic in a brand new suite at the HCA Florida University medical office building," said Christopher J. Moreau, chief executive officer of Algernon. "We look forward to delivering the highest level of care possible to our patients in Florida, as part of a professional health care community that is dedicated to medical excellence."

Business strategy

Algernon will work in partnership with neurologists, geriatricians, primary care physicians, and other medical professionals and organizations in the local market to generate brain PET scan patient referrals for each clinic. Algernon will also market directly to the over-50 general population to educate them on the benefits of earlier detection and management of AD onset and introduce them to cognitive testing, blood biomarker testing and brain PET scans. Beta-amyloid plaques can begin appearing in the brain 15 to 20 years before the onset of any cognitive symptoms.

In recent findings, the Alzheimer's Association reports that nearly 80 per cent of Americans surveyed would want to know if they had AD before having symptoms or before those symptoms interfered with their activities.

Algernon previously announced that it had signed a definitive equipment order and financing agreement with Catalyst MedTech for the provision of four U.S. FDA-cleared CareMiBrain systems to be installed in its first four planned clinics. This represents a non-dilutive deal valued at over $4-million and includes an agreement to acquire an additional six systems for the establishment of additional U.S. clinics, on an adjusted cost basis.

Flagship location and market size

The flagship Algernon clinic will be located in Davie, Fla., at 7630 SW 34th Manor.

Davie, Fla., is in Broward county and is located about 20 minutes southwest of Fort Lauderdale. With a population of over 6.4 million people within a 60-mile radius of the clinic's location, including 2.5 million people 50 years old and over, Algernon will have ready access to the key target markets for the clinic's brain PET scan services.

The CareMiBrain technology

The Algernon clinics will feature the U.S. FDA-cleared CareMiBrain system developed by Oncovision Inc., a European medical technology company, and will be marketed exclusively in the U.S. by Catalyst MedTech. The PET scanner features an exclusive detector technology platform -- continuous monolithic crystal, silicon photomultiplier arrays, custom electronics and proprietary software -- designed to optimize clarity, quantification and patient compliance.

CareMiBrain PET scan system

Unlike a standard PET/CT scanner, which combines PET with CT for attenuation correction and anatomical localization, the CareMiBrain is a stand-alone PET system without an integrated CT component. This eliminates the additional ionizing radiation from the CT scan, which is a key factor in reducing overall patient radiation exposure by as much as 25 per cent over current PET/CT scanners. As an ultrahigh-resolution, brain-optimized PET scanner, the CareMiBrain system additionally provides:

• Less-than-1.6-millimetre spatial resolution for advanced neurological diagnostics;
• Proven performance in greater than 600 patients, including beta-amyloid and tau imaging (U.S. FDA cleared);
• Ergonomic, reclining chair design with ultrafast acquisition times, enhancing patient comfort and avoiding claustrophobia sensations;
• Standard wall outlet power (115 to 240 volts), low heat generation, small room requirements (approximately eight feet by 13 feet);
• Fully integrated acquisition, quantification and reconstruction software;
• Approximately 660 pounds, allowing for varied placement in conventional space;
• Optional integration with SynterMed NeuroQ4 for quantitative brain analysis.

Algernon will provide an update shortly on its planned official clinic opening date as well as when it will begin accepting referrals and begin PET scanning of patients.

About Algernon Health Inc.

Algernon is a Canadian health care company focused on the provision of brain-specific PET scanning services through a planned network of new neuroimaging clinics in the United States for the early-stage detection of AD and other forms of dementia as well as epilepsy, neuro-oncology and movement disorders, including Parkinson's disease. Algernon has a program for Repirinast, a repurposed drug for CKD (chronic kidney disease) and is also the parent company of Algernon NeuroScience, a wholly owned subsidiary, which has been advancing a psychedelic program investigating a proprietary form of DMT (N,N-dimethyltryptamine) for stroke and traumatic brain injury recovery. The company's chronic cough drug, ifenprodil, which works by stopping cough in the brain, was sold for $2-million (U.S.) cash and a 20-per-cent equity position in Seyltx, a private U.S.-based drug development company that continues to advance research on the drug.

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