Mr. David Elsley reports

CARDIOL THERAPEUTICS ANNOUNCES YEAR-END 2023 UPDATE ON OPERATIONS

Cardiol Therapeutics Inc. has provided its year-end 2023 update on operations following the filing of its audited financial statements and management's discussion and analysis for the year ended Dec. 31, 2023. Both are available under the company's profile on SEDAR+ and on the company's website.

"Cardiol Therapeutics made important progress in 2023 and early 2024 as we pursued our primary objective of providing new therapeutic options to patients with poorly served heart diseases," said David Elsley, president and chief executive officer of Cardiol Therapeutics. "During 2023, we initiated patient recruitment in our MAvERIC-pilot study in patients with recurrent pericarditis and are very pleased that this important study recently completed full target enrolment, positioning the company to report top-line results in the second quarter of 2024. Completion of patient enrolment in MAvERIC-pilot was achieved shortly after receipt of U.S. FDA orphan drug designation for CardiolRx for the treatment of pericarditis, a larger indication and potential market exclusivity than originally anticipated by the company. Another noteworthy clinical milestone of 2023 culminated with reporting that our global Archer trial, which is evaluating CardiolRx in patients with acute myocarditis, exceeded 50 per cent enrolment, and is now expected to complete full enrolment during the third quarter of 2024 which is ahead of the original timeline. Importantly, CardiolRx is also eligible for orphan drug designations for the treatment of acute myocarditis in both the United States and the European Union. In support of our ongoing clinical programs, we were pleased to have preclinical results presented by our collaborators at a number of cardiology-focused scientific meetings throughout 2023, providing additional insight into the molecular and cellular mechanisms of action and benefits of our drug candidates. Looking forward, with operations funded into 2026, Cardiol is well positioned to achieve significant milestones in the MAvERIC, Archer and CRD-38 programs during 2024 that we believe will underpin business development initiatives aimed at accelerating our goal of delivering important new therapeutic options to people affected by underserved debilitating heart diseases."

Key highlights

Phase II MAvERIC-pilot study in recurrent pericarditis:

• In January, 2023, Cardiol announced the first patient had been enrolled in the company's phase II open-label pilot study (MAvERIC-pilot) investigating the tolerance, safety and efficacy of CardiolRx in patients with recurrent pericarditis. In addition to standard safety assessments, the study is designed to evaluate improvement in objective measures of disease, and during an extension period, assess the feasibility of weaning concomitant background therapy, including corticosteroids, while taking CardiolRx.
• In November, 2023, Cardiol announced that it had exceeded 50 per cent of the patient enrolment target for the MAvERIC-pilot study. Furthermore, in December, Cardiol announced that Massachusetts General Hospital had been initiated and was eligible to enroll patients; adding to a pre-eminent group of medical research centres participating in the study that includes the Cleveland Clinic and the Mayo Clinic.
• In February, 2024, CardiolRx was granted orphan drug designation (ODD) by the United States Food and Drug Administration (FDA) for the treatment of pericarditis, a rare inflammatory heart disease. The FDA grants ODD to a drug or biological product to prevent, diagnose or treat a rare disease or condition that affects fewer than 200,000 people in the United States. ODD provides benefits to sponsors including potential seven-year marketing exclusivity, exemptions from certain FDA fees, and tax credits for qualified clinical trials. Products with ODD may also qualify for accelerated regulatory review via fast-track, breakthrough therapy or priority review designations.
• In February, 2024, Cardiol announced the completion of patient enrolment in MAvERIC-pilot. In addition, the company announced that it expects to report top-line results from MAvERIC-pilot in second quarter 2024.

Phase II Archer trial in acute myocarditis:

• In September, 2023, Cardiol announced that all collaborating research centres had been initiated and were eligible to enroll patients in Archer, the company's phase II, multicentre, international, double-blind, randomized, placebo-controlled trial designed to study the safety and tolerability of CardiolRx, as well as its impact on myocardial recovery, in patients presenting with acute myocarditis. Archer is expected to enroll approximately 100 patients at major cardiac centres in North America, Europe, Latin America and Israel.
• In January, 2024, Cardiol announced that Archer had exceeded 50 per cent patient enrolment and was progressing ahead of the original study timeline. The company anticipates completing full enrolment in Q3 2024. Given there are no FDA-approved therapies for acute myocarditis, Cardiol believes there is a significant opportunity to develop an important new therapy for acute myocarditis that would also be eligible for orphan designation in the United States and the European Union.

Preclinical/clinical developments:

• In March, Cardiol announced study results were presented at the American College of Cardiology's 72nd annual Scientific Session together with World Congress of Cardiology demonstrating that the active pharmaceutical ingredient (API) in CardiolRx and CRD-38 (a novel subcutaneously administered formulation) significantly prevents cardiac dysfunction and the development of fibrosis and cardiomyocyte hypertrophy in a preclinical model of heart failure and reduces expression of key inflammatory and fibrotic markers. This work builds upon existing knowledge by confirming the cardioprotective properties of Cardiol's lead small-molecule drug candidate and, in this model, its ability to reduce inflammation and prevent hypertrophy and fibrosis in heart tissue.
• A second poster presented data related to the role of the API in mitochondrial calcium dynamics in hypertrophic cells. The API was shown to prevent hypertrophy-induced mitochondrial calcium overload and prevent hypertrophy-induced increase of several mitochondrial function markers such as reactive oxygen species and calcium uptake. In addition, this work suggests that the API effects may rely on PPAR-gamma activation, which in turn can inhibit NF-kappaB, a transcription factor that regulates pro-inflammatory and pro-hypertrophic genes. Together, these findings further clarify the API's mode of action in combatting cardiac hypertrophy.
• In October, Cardiol announced study results presented at the Heart Failure Society of America (HFSA) annual scientific meeting 2023 demonstrating that the subcutaneously administered formulation of the API slowed increases in body weight and heart weight and prevented increases in key cardiac inflammatory and remodelling markers in a preclinical model of heart failure with preserved ejection fraction. These findings expand the understanding of the cardioprotective effects of CRD-38 and suggest new therapeutic potential in heart failure, which remains a leading cause of death and hospital admissions in the United States and throughout the developed world, with associated health care costs in the United States exceeding $30-billion (U.S.) annually.
• In November, Cardiol announced results from experiments conducted by its research collaborators at the University of Virginia and Houston Methodist DeBakey Heart & Vascular Center, that in an experimental model of pericarditis, the API induces mesothelial to mesenchymal transition (MMT) and that this process is inhibited by treatment. The results presented were a continuation of a research collaboration between Cardiol and the University of Virginia, which previously reported at the American Heart Association Scientific Sessions 2022 that the API reduces pericardial effusion and thickness in the same experimental model of pericarditis. MMT is a complex and stepwise biological process whereby a mesothelial cell, the main cell type lining internal organs and several of the body's internal cavities, including the pericardium, undergoes molecular reprogramming. This alters its characteristics toward a mesenchymal cell, such as a myofibroblast, which are the primary cells during wound healing and fibrosis. Mounting evidence indicates the transition to mesenchymal cells is involved in adult cardiovascular diseases, such as heart failure. Pericarditis leads to pericardial effusion and thickening that may evolve to fibrosis, and by limiting MMT and the ensuing fibrosis, CardiolRx may also represent a novel strategy to prevent pericarditis complications.

About Cardiol Therapeutics Inc.

Cardiol Therapeutics is a clinical-stage life sciences company focused on the research and clinical development of anti-inflammatory and anti-fibrotic therapies for the treatment of heart disease. The company's lead small-molecule drug candidate, CardiolRx (cannabidiol) oral solution, is pharmaceutically manufactured and in clinical development for use in the treatment of heart disease. It is recognized that cannabidiol inhibits activation of the inflammasome pathway, an intracellular process known to play an important role in the development and progression of inflammation and fibrosis associated with myocarditis, pericarditis and heart failure.

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