ILA’s drug approved for urgent use in the current ongoing major Ebola outbreak. Funded trial to generate rare human data in emergency, real world deadly virus outbreak situation.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 3,794,956 ILA Shares at the time of publishing this article. The Company has been engaged by ILA to share our commentary on the progress of our Investment in ILA over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

Ebola is a rare but severe and often fatal disease caused by a group of viruses.

The world is ~8 weeks into a major new Ebola outbreak in Africa. As of yesterday there are 1,481 cases, 454 deaths, and a rising case fatality rate of 31%.

Currently the third largest outbreak ever on record.

During the last major Ebola outbreak, US government agencies deployed over US$70M in funding to test a drug called Galidesivir against viral diseases.

Including against Ebola.

Galidesivir has Phase 1 safety data (in humans) and effectiveness (in animals) against Ebola, Marburg and 17+ other viral diseases.

Our 2025 Biotech Pick of The Year - Island Pharmaceuticals (ASX:ILA) acquired Galidesiver in 2025

(after the prior owner shifted strategic focus to other diseases).

...and decided to develop it for Marburg first.

(ILA decided to pursue Marburg first because while it does naturally occur, it's also a major bioterror threat. There is no approved treatment and hence no biodefence treatment stockpile, and approval can be fasttracked with the FDA)

ILA’s animal trials for Marburg are due to start any day now with ILA going for accelerated FDA approvals in Q1 2027 (submissions).

(Animal trials because you can't ethically deliberately infect humans with a deadly disease to test a treatment, placebo control groups are unethical and outbreaks to find test patients are rare and unpredictable - so ILA is able to seek FDA approvals from animal data alone - more on that later in today’s note)

Eight weeks ago an Ebola outbreak was first reported, this current outbreak is the third largest in history (and it's still going):

(source)(source)(source)(source)(source)(source)

We wrote about ILA when the Ebola outbreak was first reported because ILA’s drug is effective against Ebola in animals.

And we thought ILA’s drug could suddenly gain a lot of attention given the energy and capital pouring in to contain this major new Ebola outbreak (read our previous commentary here).

It looks like today that has happened.

This morning ILA announced that their drug is going to be used to urgently help in the current major Ebola outbreak in central Africa.

ILA has obtained full government and regulatory approvals to deploy Galidesivir under a WHO emergency-use framework in the current Bundibugyo Ebola outbreak in Uganda.

Creating the first opportunity to collect HUMAN efficacy, safety and virological data in infected patients.

(source - Read the ILA announcement)

And just if a major Ebola outbreak wasn’t bad enough....

Six days ago there was also a reported Ebola death... that actually turned out to be from the even worse Marburg virus.

(source)

So now we have Marburg mixed in with an Ebola outbreak - both with similar early symptoms.

ILA’s Galidisivir drug has already demonstrated effectiveness in treating Ebola AND Marburg.

Yep, both from the same drug.

(remember ILA is weeks away from starting an animal trial for its drug on Marburg virus and is targeting FDA submissions in Q1 2027).

And this morning ILA announced their drug is going to be rolled out into the field in a real world emergency, outbreak situation.

With the only cost to ILA being to supply the drug.

A trial like this would usually cost $10-$20-$30M+ (and would be near impossible to recruit trial participants for - dose of Ebola to see if this drug works? yeah no thanks).

And a rare and precious chance to collect real word HUMAN data on efficacy which is impossible in a non–outbreak scenario.

And hopefully ILA’s drug can help save some lives.

After today - ILA for Ebola is now going down the same path another drug (Ebanga) went through - being used live during an outbreak, receiving FDA approvals and then a US$703M stockpiling contract.

Ebanga works on the Zaire strain of Ebola, on which it was developed - the current outbreak is a different strain.

(more on how ILA’s drug compares to Ebanga in a second)

As mentioned earlier, ILA’s drug is effective against 20+ other viral diseases including Ebola and Marburg.

The drug also has existing phase 1 safety data in humans - and to date it has been deemed safe to use in a clinical trial setting.

(source)

Which was probably a major consideration for the Ugandan authorities when deciding to roll out ILA’s drug to fight the Ebola outbreak.

As we mentioned above, this is in fact the second time ILA’s drug has been used to battle Ebola.

Animal trials were run for ILA’s Ebola drug in 2016 - the same year the biggest outbreak was happening (11,308 deaths in West Africa). (source)

That’s when the US$70M+ of funding came from US government agencies with the work:

“substantially funded with Federal funds from the National Institute of Allergy and Infectious Diseases (NIAID), National Institutes of Health and the Department of Health and Human Services and the Biomedical Advanced Research and Development Authority (BARDA)” (source)

Now with this outbreak looking like it's going to get a lot worse - the Ugandan government is sponsoring its use IN HUMANS.

Just like that, our 2025 Biotech Pick Of The Year ILA is about to run the same playbook that led to US$1BN+ in national defence stockpiling contracts.

IF ILA can show any improvement in survival rates (we hope it can).

ILA’s drug could become a candidate for stockpiling contracts all over the world from governments around the world, the World Health Organisation, U.S. Biomedical Advanced Research and Development Authority (BARDA) and the US Strategic National Stockpile.

(stockpiling ILA’s drug just in case an outbreak happens in any particular country)

At the moment there is animal data showing ILA’s drug was 100% effective against Ebola within the first 48 hours.

(the drug also has positive Phase 1 clinical human safety data)

(source)

There is a precedent for all of this too - during the last Ebola epidemic in 2018-19 in central Africa - “Ebanga” (a drug for treating the Zaire strain of Ebola) was tested in the middle of a live outbreak. (source)

(the same as what will be happening with ILA’s drug in Uganda)

People who took that drug died ~35% of the time, patients who did NOT take it died 49% of the time. (source)

So a ~14% drop in death rate was enough to convince the US government to give the drug FDA approvals in 2020. (source)

And it was enough to hand the company a stockpiling contract worth up to US$704m from the U.S. Biomedical Advanced Research and Development Authority (BARDA).

(stockpiling for the next outbreak).

(source)

Here is where ILA’s drug is relative to the timelines leading up to that US$704M contract for Ebanga:

(sources - Ebanga - (source)(source)(source)(source)(source)
(sources - Galidesivir - (source)(source)

So from human data to FDA approvals it took ~12-18 months for FDA approvals and then ~3 years for a big stockpiling contract.

As mentioned earlier, ILA’s drug is effective against 20 other viral diseases - its most advanced indication being Marburg virus.

Marburg is the only Category A bioterrorism threat (the highest level) with NO current vaccine or FDA-approved treatment - which also makes it the biggest biowarfare risk.

That also means the US has no stockpiles of any Marburg treatments or vaccines.

Making an FDA-approved Marburg drug a strong candidate for US government stockpile contracts.

For Marburg, ILA is weeks away from starting a dose optimisation study before it runs a second animal trial and goes for accelerated FDA approvals under the “Animal Rule” pathway.

🎓 We have covered the Animal Rule process in detail before here: The journey for ILA to get a drug to market in under 12 months

IF successful with the trials this year, ILA is targeting an FDA submission for Marburg in Q1-2027.

IF ILA gets FDA approvals for its drug against Marburg it could be eligible for a priority review voucher (a tradeable asset that could be worth ~US$200M in cash) and US stockpiling deals which can run from US$100M to US$1BN in size.

Interestingly, Ebola was added to the tropical disease “Priority Review Voucher” program in 2014.

(source)

So ILA could have at least two shots at getting that PRV and US stockpiling contracts:

1. An FDA approved Marburg drug - animal trials starting this year and FDA submissions expected in Q1-2027.
   
2. An FDA approved Ebola treatment - Existing animal data, in human use to happen this year.

Or both... Which would make ILA’s drug an extremely valuable (and necessary) anti-viral drug.

Island Pharmaceuticals

ILA’s drug is also being advanced for marburg disease

Until today, ILA’s focus and most advanced indication was marburg disease.

ILA’s drug has shown 100% survival rates against marburg in animals 24-48 hours after infection, relative to placebo, where survival rates are 0%.

Overall, ILA’s drug has shown survival rates of up to 94% versus 0% survival in placebo.

(So we already have some idea of when the best times to dose might be - relevant to the first stage of work ILA has to do for approvals):

(Source)

Marburg is the only Category A bioterrorism threat (the highest level) with NO current vaccine or FDA-approved treatment - which also makes it the biggest biowarfare risk.

That also means the US has no stockpiles of any Marburg treatments or vaccines.

Making an FDA-approved Marburg drug a strong candidate for US government stockpile contracts.

Which range between US$100M to US$1.2BN in lifetime sales (source)

The table below shows existing stockpiling deals the US government has done for other Category A bioterror threats:

(source)

The US tries to maintain stockpiles of treatments against all kinds of nasty diseases that can be weaponised.

But it has nothing to counter Marburg disease.

Marburg disease is the only ‘Category A’ bioterror threat gap that remains unfilled.

We Invested in ILA as we think it has a very good chance of filling this gap, and it can be paid handsomely for it.

The US government has already shown it's willing to spend hundreds of billions on a critical military minerals stockpile.

In these times you can imagine how much they could be willing to spend to protect against biological weapons - the threat its own intelligence says is coming from Iran - the country it's currently at war with.

ILA’s Marburg treatment has qualified for the FDA’s Animal Rule - a special “urgency” approval ruling given by the US FDA to bypass human trials that can cut 10 to 15 years off US FDA approval for a drug.

ILA is also eligible for a Priority Review (PRV) voucher.

These PRVs are a tool the FDA uses to incentivise companies to develop treatments for rare paediatric diseases, tropical diseases, or medical countermeasures...

... and these vouchers are tradeable on the open market.

Here are the three most recent sales ranging from US$180M to US$205M:

(source)(source)(source)

IF the FDA approves ILA’s drug it could receive one of these tradeable vouchers.

Which we think is material on its own given ILA’s current market cap is ~A$104M.

(As mentioned earlier - Ebola actually fits into the same category as the Marburg treatment - also potentially PRV/stockpiling eligible)

(source)

ILA’s Marburg drug is approved for an accelerated FDA approvals process

A big part of the reason why we made ILA our Biotech Pick of The Year back in November was because ILA has received confirmation that it is eligible for the Animal Rule pathway.

Animal Rule approvals are typically only available for treatments on diseases that are too deadly to run Phase 1/2/3 clinical trials in humans on.

(skipping the typical 10-15 year Phase 2 and 3 trial process for drugs trying to get to market).

To get approved under the Animal Rule process, ILA now needs to complete the following two step trial process:

• The first stage is an optimisation study - to work out the optimal dose and when to administer that dose
  
• The second pivotal confirmatory study will follow right after - The pivotal study will be when we see how effective ILA’s Marburg drug really is. Fingers crossed it improves on the previous studies, which had survival rates averaging 94%.

Next we want to see ILA execute the following:

1. ✅ 17th November: ILA confirms Animal Rule eligibility for its Marburg drug
   
2. ✅ 4th February: staged approach for FDA approvals confirmed
   
3. 🔄 NEXT: We want to see ILA start “optimisation studies” ahead of a pivotal study later this year.
   
4. 🔄 Ongoing: We want to see ILA sign more agreements with Biosecurity Level 4 (BSL4) facilities that are able to run animal studies - more sites means the studies can be completed quicker.
   
5. 🔲 THEN, we want to see ILA start animal trials (pivotal trial) for Marburg disease. (this is the big one)

Here are the milestones we will be tracking for the animal study:

• 🔲 Clinical trial design completed
• 🔲 Clinical trial starts
• 🔲 Clinical trial completed
• 🔲 Clinical trial results

Assuming the clinical trial results are positive, ILA will then submit to the FDA for aNew Drug Application (IND) of its drug (typically a 6-month review timeframe).

And all of this happens inside the next 12 months. ILA is targeting regulatory submissions in Q1-2027:

(source)

Again... IF APPROVED...

ILA COULD SECURE a Priority Review Voucher, which is a tradeable asset (which have traded at around ~US$200M of late).

(source)

AND/OR, ILA COULD SECURE commercial stockpiling contracts with the US Department of Defense for protection against bioweapons.

As mentioned earlier, some of these can have lifetime deals >US$500M:

(source - stockpiling deals the US government has done for other Category A bioterror threats)

What's next for ILA?

🔄 Galidesivir Animal Rule approval pathway

Here are the two next major milestones for ILA’s Galidesivir drug:

• Stage 1 - Optimisation study - Working out the optimal dose and the best time to administer it.
• Stage 2 - Pivotal confirmatory study - The big one - this will determine how effective Galidesivir really is. Fingers crossed it improves on that 94% survival rate.
  

Here are the milestones we are tracking for the trials:

Stage 1 - Optimisation study:

• ✅FDA confirmed Animal Rule eligibility
• ✅FDA confirmed staged approach for approvals
• ✅CRADA (Cooperative Research and Development Agreement) signed with USAMRIID (US Army’s premier infectious disease research institute) and Geneva Foundation (highly influential non-profit that manages nearly US$383M in military medical research funding)
• 🔄Optimisation study (commencing soon)
  

Stage 2 - Pivotal study:

• 🔲 Pivotal study design completed
• 🔲 Pivotal study commences
• 🔲 Pivotal study results
• 🔲 FDA submission (NDA)
  

IF the pivotal study results are positive, ILA could then pursue:

• 🔲 FDA approval of Galidesivir for Marburg
• 🔲 Priority Review Voucher (~US$200M based on recent sales)
• 🔲 US Government Strategic National Stockpile contract (potentially worth hundreds of millions in revenue)

Here is an indicative timeline on when to expect all of the above from ILA’s recent presentation:

(source)

What are the risks?

The primary risk for ILA now is “clinical trial risk”.

ILA de-risked its drug from a regulatory perspective, getting approved for the Animal Rule process.

But the company still needs to run clinical trials, which could have significant cost overruns and time delays.

There is no guarantee that the clinical trials will deliver results strong enough for the FDA to approve ILA’s Marburg Drug.

Negative clinical trial results could hurt the ILA share price.

Source: “What could go wrong” - ILA Investment Memo 21 May 2025

Other risks

Like any small-cap biotechnology company, ILA carries significant risk, here we aim to identify a few more risks.

Because Marburg is a highly lethal virus, ILA relies heavily on specialised Biosecurity Level 4 (BSL4) facilities to conduct its animal trials. Any bottlenecks or delays in securing access to these highly restricted laboratories could stall the company's aggressive 2027 regulatory timeline.

The ultimate commercial success of galidesivir hinges almost entirely on securing lucrative biodefense stockpiling contracts with government agencies like BARDA or the US Department of Defense. There is always a risk that government procurement priorities shift or funding is reallocated, which could leave ILA without a major buyer even if the drug achieves regulatory approval.

Running optimization studies and pivotal confirmatory trials simultaneously is a cash-intensive process for a small-cap biotech. If operational costs run over budget before these trials wrap up, ILA may be forced to seek additional funding, resulting in imminent capital raises and shareholder dilution.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our ILA Investment Memo

You can read our ILA Investment Memo here. We use this memo to track the progress of all our Investments over time.

Our ILA Investment Memo covers:

• What does ILA do?
• The macro theme for ILA
• Our ILA Big Bet
• What we want to see ILA achieve
• Why we are Invested in ILA
• The key risks to our Investment Thesis
• Our Investment Plan