Full Press Release Details
Aadi Bioscience Transforms with In-Licensing of Novel ADC
Portfolio, $100 Million Sale of FYARRO and $100 Million PIPE Financing
Aadi Enters into Exclusive License for Three-Asset ADC Portfolio Developed through a Collaboration between WuXi Biologics and HANGZHOU DAC
Aadi Enters Agreement to Sell FYARRO and Associated Infrastructure to
KAKEN Pharmaceutical for $100M; Announces PIPE Financing of $100M
Cumulative Capital Expected to Fund Operations into Late 2028,
Including Anticipated Clinical Data for the ADC Portfolio
Co-Founder and Former CEO of
ProfoundBio, Baiteng Zhao, Appointed to Aadi Board of Directors
Aadi to Hold Webcast and Conference Call on December 20 at
LOS ANGELES, CA, December 19, 2024 Aadi Bioscience, Inc. (NASDAQ: AADI) today announced it has entered into an exclusive
license agreement for development and global commercialization of a three-asset portfolio of preclinical, next-wave antibody-drug conjugates (ADCs), in collaboration with WuXi Biologics (2269.HK), a leading global Contract Research, Development and
Manufacturing Organization (CRDMO), and HANGZHOU DAC BIOTECHNOLOGY CO., LTD. (HANGZHOU DAC), a global leader in ADC innovation.
Per the terms of the
license agreement, Aadi is granted exclusive rights to certain patents and know-how pertaining to three preclinical ADC programs leveraging HANGZHOU DAC s CPT113 linker payload technology targeting each
of Protein Tyrosine Kinase 7 (PTK7), Mucin-16 (MUC16) and Seizure Related 6 Homolog (SEZ6). Aadi will pay aggregate upfront payments of $44 million for in-licensing
such ADC programs. Additionally, Aadi is obligated to pay cumulative development milestone payments of up to $265 million, cumulative commercial milestone payments of up to $540 million and single-digit royalties of sales.
To support this transaction, Aadi entered into a subscription agreement with certain qualified institutional buyers and accredited investors for a private
investment in public equity ( PIPE ) financing that is expected to result in gross proceeds of approximately $100 million, before deducting placement agent fees and other offering expenses. The Company is selling an aggregate of
21,592,000 shares of its common stock ( Common Stock ) at a price of $2.40 per share, representing a premium of approximately 3.4% to the closing price on December 19, 2024 on Nasdaq, and pre-funded warrants ( Pre-Funded Warrants ) to purchase up to an aggregate of 20,076,500 shares of Common Stock at a purchase price of $2.3999
per Pre-Funded Warrant share.
The syndicate was led by Ally Bridge Group, with participation from new
investors OrbiMed, Invus, Kalehua Capital and other accredited investors, Tae Han co-founder of ProfoundBio, as well as existing investors, including Avoro Capital, KVP Capital and Acuta Capital Partners. The
PIPE financing is expected to close in the first half of 2025, subject to stockholder vote and satisfaction of customary closing conditions.
I m thrilled to announce our partnership with WuXi Biologics and HANGZHOU DAC to bring forward
this thoughtfully selected ADC portfolio. We were deliberate in identifying broadly expressed tumor targets where first-generation ADCs have already shown proof of concept. With our next wave ADC portfolio, we aim to build upon these earlier
therapies to deliver improved outcomes for people living with cancer, said David Lennon, PhD, President and CEO of Aadi Bioscience. The financing underscores the confidence our investors have in both the potential of this portfolio and
the strength of Aadi s management team.
About the ADC Portfolio
Each of the three ADC assets utilizes HANGZHOU DAC s CPT113 ADC platform, which consists of a highly stable yet cleavable linker that delivers a
Topoisomerase I (TOPO1) inhibitor payload. The CPT113 platform s linker stability and novel payload has the potential to be highly competitive among the next generation ADC platforms.
To effectively leverage the CPT113 platform, Aadi selected tumor targets that are upregulated in high-potential cancer indications and where clinical efficacy
has been demonstrated by first-generation ADCs.
These assets were discovered through the collaborative efforts of WuXi Biologics and HANGZHOU DAC, utilizing the innovative antibody discovery platform
provided by WuXi Biologics and advanced linker-payload technology provided by HANGZHOU DAC.
Leveraging our advanced antibody discovery service,
we re glad to enable Aadi to accelerate the discovery of precision therapies targeting some of the most challenging cancers, said Dr. Chris Chen, CEO of WuXi Biologics. This collaboration underscores our wide recognition as an
industry leader in discovery service solutions, and further validates our ability to provide integrated discovery technology platforms for global partners to develop next-generation modalities. We look forward to partnering with Aadi and HANGZHOU
DAC to expeditiously move these assets forward into clinical development and benefit patients worldwide.
HANGZHOU DAC s CPT-ADC platform is designed to enable next
wave ADC capabilities that surpass first-generation technologies, including two programs already in clinical development in China, said Dr. Robert Y. Zhao, President and CEO of HANGZHOU DAC Biotechnology. As a global leader in
ADC innovation, we are excited to partner with Aadi and WuXi Biologics to deliver this promising portfolio to patients.
Aadi to Sell FYARRO for
$100 Million, Cumulative Capital Expected to Fund Operations into Late 2028
In a separate agreement, KAKEN Pharmaceutical Co., Ltd., an R&D driven
pharmaceutical company in Japan, has entered into a stock purchase agreement under which KAKEN will acquire Aadi Subsidiary, Inc. and all of its assets, including FYARRO (sirolimus
protein-bound particles for injectable suspension) (albumin-bound) and associated infrastructure, including the majority of Aadi employees who support the FYARRO business. FYARRO is
approved by the U.S. Food and Drug Administration (FDA) for the treatment of adult patients with locally advanced unresectable or metastatic malignant perivascular epithelioid cell tumor (PEComa), with cumulative revenue of $25.2 million
reported over the prior four quarters ended September 30, 2024.
Per the terms of the agreement, Kaken will pay Aadi $100 million in cash at
closing, subject to certain adjustments. The transaction is expected to close in the first half of 2025, subject to Aadi stockholder approval and certain closing conditions. Upon the closing of this transaction, KAKEN will also acquire the rights to
the Aadi name and trademark.
We are enormously proud of the impact FYARRO has had for people with PEComa, and Kaken s capabilities, coupled
with the proven track record of the Aadi team, ensures physicians and patients will continue to have access to this critical treatment, said Lennon.
The net proceeds from the PIPE financing and the sale of FYARRO, together with the Company s existing cash, cash equivalents and marketable securities
are expected to fund operations into late-2028, including anticipated clinical data readouts for the ADC portfolio.
Baiteng Zhao Appointed to the
Board of Directors, Brings Significant ADC Expertise
Baiteng Zhao, PhD, joins Aadi s board of directors. Zhao
co-founded ProfoundBio, a clinical stage next-gen ADC developer, in 2018 and served as the Chairman and CEO of the company until it was acquired by Genmab for
$1.8 billion in May 2024. Prior to ProfoundBio, Dr. Zhao worked at Seagen (now part of Pfizer) for more than eight years and was responsible for the modeling and simulation strategies for the development pipeline and supported preclinical
and clinical development of ADC drug candidates.
We are delighted to welcome Baiteng to our Board. His deep expertise and successful track record
in ADC development will be instrumental as we tenaciously move this exciting portfolio forward, said Caley Castelein, MD, Chair of the Board of Directors of Aadi Bioscience.
I am thrilled to join the Board at this pivotal moment for Aadi, said Baiteng Zhao, PhD, Board of
Directors of Aadi Bioscience and co-founder of ProfoundBio. PTK7, MUC16 and SEZ6 represent highly promising targets that are commonly overexpressed in cancers with significant unmet therapeutic needs.
Coupled with an advanced linker-payload platform that has the potential to enable next-gen ADCs, I believe Aadi is uniquely positioned to make a meaningful impact on patient outcomes. I look forward to
collaborating with the leadership team and fellow Board directors to advance these innovative programs and drive transformative progress for patients.
Leerink Partners is serving as financial
advisor to Aadi on the sale of FYARRO and the licensing of the ADC portfolio. Jefferies LLC is acting as exclusive placement agent for the PIPE financing. Wilson Sonsini Goodrich & Rosati, P.C. is serving as legal counsel to Aadi. McDermott
Will & Emery LLP is serving as legal counsel to Kaken. Cooley LLP is serving as legal counsel to Jefferies LLC. Nomura Securities Co., Ltd. is serving as financial advisor to KAKEN.
Conference Call Information
The Aadi management team is
hosting a conference call and webcast tomorrow, Friday, December 20th at 8:00 AM EST (5:00 AM PST) to discuss these updates. Participants may access a live webcast of the call and the associated
slide presentation on these data through the Investors & News page of the Aadi Bioscience website at aadibio.com. To participate via telephone, please register in advance at this link. Upon registration, all telephone
participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A
replay of the conference call and webcast will be archived on the Company s website for at least 30 days.
Additional Information for Stockholders
This communication relates to the proposed sale of FYARRO and the proposed PIPE financing and may be deemed to be solicitation material in respect of
such transactions. In connection with these proposed transactions, Aadi will file a Proxy Statement with the SEC. This communication is not a substitute for the Proxy Statement or any other documents that Aadi may file with the SEC or send to Aadi
stockholders in connection with the proposed transactions. Before making any voting decision, investors and securityholders are urged to read the Proxy Statement and all other relevant documents filed or that will be filed with the SEC in connection
with the proposed transactions as they become available because they will contain important information about the proposed transactions and related matters.
Stockholders may obtain a copy of the Proxy Statement and other documents the Company files with the SEC (when they are available) through the website
maintained by the SEC at www.sec.gov, as well as on the Investor and News section of Aadi s website at www.aadibio.com.
Certain stockholders of Aadi holding approximately 36% of Aadi s outstanding shares, as of the date
hereof, including members of its board of directors and related entities, have entered into voting and support agreements in favor of KAKEN Pharmaceutical and Aadi, pursuant to which such stockholders have agreed to vote in favor of the stock
purchase transaction with KAKEN Pharmaceutical and the other transactions described above.
Participants in the Solicitation
Aadi and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Aadi in
connection with the proposed transactions. Information about Aadi s directors and executive officers is set forth in Aadi s definitive proxy statement filed with the SEC on April 26, 2024, and in subsequent filings made by Aadi with
the SEC. Other information regarding the interests of such individuals, as well as information regarding Aadi s directors and executive officers and other persons who may be deemed participants in the proposed transactions, will be set forth in
the Proxy Statement and other relevant materials to be filed with the SEC when they become available. You may obtain free copies of these documents as described in the preceding paragraph.
No Offer or Solicitation
This press release shall not
constitute an offer to sell or a solicitation of an offer to buy these securities nor a solicitation of any vote or approval with respect to the proposed transactions or otherwise, nor shall there be any sale of these securities in any state or
other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
The offer and sale of securities of Aadi described above are being made in a transaction not involving a public offering and the securities have not been
registered under the Securities Act of 1933, as amended, and may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Concurrently with
the execution of the subscription agreement, the Company and the investors entered into a registration rights agreement pursuant to which the Company has agreed to file, following the closing of the PIPE financing, a registration statement with the
SEC registering the resale of the shares of Common Stock and the shares of Common Stock underlying the Pre-Funded Warrants sold in the PIPE financing.