Full Press Release Details
Aadi Reports Third Quarter 2021 Financial Results
and Provides Business Update
November 10, 2021 Aadi Bioscience, Inc. ( Aadi ) (Nasdaq: AADI), a clinical-stage biopharmaceutical company focusing on precision therapies for genetically-defined cancers with alterations in mTOR pathway genes, today reported
financial results for the three and nine months ended September 30, 2021 and provided a general business update.
Neil Desai, Ph.D., Founder, Chief
Executive Officer and President of Aadi, commented, Following the successful merger completed in the third quarter, we are now fortified on all fronts with a strengthened balance sheet and expanded management team ahead of our November 26
Prescription Drug User Fee Action ( PDUFA ) target date for FYARRO. With a sizeable PIPE financing that closed in connection with our merger with Aerpio, we can effectively deploy capital toward the commercialization of FYARRO in advanced
malignant PEComa and for our planned tumor-agnostic registrational trial in patients with solid tumors harboring inactivating alterations of TSC1 and TSC2 genes in the mTOR pathway. In addition, we are also planning for new
studies to investigate ABI-009 in combination with other targeted agents in different cancers.
Business Updates for the Third Quarter:
Merger and PIPE Financing
Key Leadership Appointments
Recent Updates Following the Close of the Quarter:
Third Quarter 2021 Financial Highlights
As of September 30, 2021, cash and cash equivalents totaled $161.4 million, an increase from $4.5 million as of December 31, 2020,
resulting primarily from the consolidated capital and proceeds received from the PIPE financing. Based on our current plans, we expect cash and cash equivalents to fund operations into 2024.
For the three months ended September 30, 2021, operating expenses totaled $87.3 million, an increase of $84.4 million compared
to $2.9 million for the same period in 2020. For the nine months ended September 30, 2021, operating expenses totaled $95.4 million, an increase of $84.0 million compared to $11.4 million for the same period in 2020.
The increase in operating expenses for the three- and nine-month periods ended September 30, 2021, is due primarily to a non-cash impairment charge related to an acquired contract intangible asset of
$74.2 million incurred in conjunction with the merger compared to the same period in 2020.
Research and development expenses for the three months
ended September 30, 2021, increased approximately $3.4 million, to $5.8 million compared to $2.4 million for the same period in 2020. Research and development expenses for the nine months ended September 30,
2021, increased approximately $2.7 million, to $12.4 million compared to $9.7 million for the same period in 2020. This increase was primarily the result of increased expenses associated with our clinical drug
manufacturing process in the three and nine-month periods ended September 30, 2021, compared to the same periods in 2020.
General and administrative
expenses for the three months ended September 30, 2021, increased approximately $6.9 million to $7.4 million compared to $0.5 million for the same period in 2020. General and administrative expenses for the nine
months ended September 30, 2021, increased approximately $7.1 million, to $8.8 million from $1.7 million, in the nine months ended September 30, 2020. This increase was primarily the result of increased
personnel expenses, including approximately $2.0 million of compensation expense related to former Aerpio executives as a result of the merger.
loss attributable to common stockholders for the three and nine months ended September 30, 2021, was $87.2 million and $94.7 million, respectively, primarily driven by the non-cash
impairment charge of $74.2 million discussed above.
About Aadi Bioscience and FYARRO
Aadi is a clinical-stage biopharmaceutical company developing precision therapies for genetically-defined cancers. Aadi s primary goal is to
bring transformational therapies to cancer patients with mTOR pathway driver alterations such as alterations in TSC1 or TSC2 genes, where other mTOR inhibitors have not or cannot be effectively exploited due to problems of
pharmacology, effective drug delivery, safety, or effective targeting to the disease site. Aadi s lead product candidate is FYARROTM (sirolimus
albumin-bound nanoparticles for injectable suspension; nab-sirolimus; ABI-009), an mTOR inhibitor bound to human albumin that has demonstrated
significantly higher tumor accumulation, greater mTOR target suppression, and increased tumor growth inhibition over other mTOR inhibitors in preclinical models.
Aadi s registration trial of FYARRO in advanced malignant PEComa (the AMPECT trial ) demonstrated meaningful clinical efficacy in malignant
PEComa, a type of cancer with the highest known alteration rate of TSC1 or TSC2 genes. FYARRO has received Breakthrough Therapy, Fast-Track and Orphan Designations from the U.S. Food and Drug Administration (FDA). A rolling New Drug
Application (NDA) submission was completed in May 2021 for this indication and the FDA accepted the NDA in July 2021 and granted Aadi Priority Review status with a Prescription Drug User Fee Act ( PDUFA ) target action date of November 26,
Based on the AMPECT trial and emerging data for FYARRO in other solid tumors with TSC1 or TSC2 inactivating alterations, and
following discussions with the FDA, Aadi plans to initiate a tumor-agnostic registrational trial in mTOR inhibitor-na ve solid tumors harboring TSC1 or TSC2 inactivating alterations by the
end of 2021 or early 2022. Aadi also has ongoing studies to evaluate dosing of FYARRO in combination regimens. FYARRO is an investigational drug that has not been approved by the FDA for commercial distribution in the United States. More information
is available on the Aadi website at www.aadibio.com.
Forward-Looking Statements
Aadi Bioscience, Inc. ( Aadi , The Company ) cautions you that certain statements included in this press release that are not a
description of historical facts are forward-looking statements. These statements are based on Aadi s current beliefs and expectations. Forward-looking statements include statements regarding: FYARRO, including expectations regarding the
clinical responses and safety profile, regulatory approval and commercialization, and the timing of additional clinical trials, including the registrational trial in patients harboring TSC1 and TSC2 inactivating alterations whose
initiation is expected by the end of 2021 or early 2022; and the expectation that Aadi s cash and cash equivalents will last into 2024. Actual results could differ materially from those anticipated in such forward-looking statements as a result
of these risks and uncertainties, which include, without limitation: risks related to Aadi s ability to obtain, or the timeline to obtain, regulatory approval from the FDA and other regulatory authorities for FYARRO in advanced malignant
PEComa; risks related to Aadi s ability to successfully commercialize, including the timing of a commercial launch of FYARRO in advanced malignant PEComa; uncertainties associated with the clinical development and regulatory approval of FYARRO,
including potential delays in the commencement, enrollment and completion of clinical trials; the risk that interim results of clinical trials may not be reproduced and do not necessarily predict final results; the risk that one or more of the
clinical outcomes may materially change as patient enrollment continues, following more comprehensive reviews of the data, and as more patient data become available; the risk that unforeseen adverse reactions or side effects may occur in the
course of developing and testing FYARRO; risks associated with the failure to realize any value from FYARRO in light of inherent risks and difficulties involved in successfully bringing product
candidates to market; risks related to Aadi s estimates regarding future expenses, capital requirements and need for additional financing; and risks related to the impact of the COVID-19 outbreak on
Aadi s operations, the biotechnology industry and the economy generally.
Additional risks and uncertainties that could cause actual outcomes and
results to differ materially from those contemplated by the forward-looking statements are included under the caption Risk Factors and elsewhere in Aadi s reports and other documents that Aadi has filed, or will file, with the SEC
from time to time and available at www.sec.gov.
All forward-looking statements in this press release are current only as of the date hereof and,
except as required by applicable law, Aadi undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. All
forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
FYARRO is a trademark of Aadi Bioscience, Inc.
LifeSci Advisors LLC
AADI BIOSCIENCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 161,375 | $ | 4,455 | ||||
| Accounts receivable | 14,149 | |||||||
| Prepaid expenses and other current assets | 643 | 81 | ||||||
| Total current assets | 162,018 | 18,685 | ||||||
| Property and equipment, net | 14 | 21 | ||||||
| Operating lease right-of-use assets | 597 | 119 | ||||||
| Intangible asset, net | 3,880 | |||||||
| Other assets | 2,263 | |||||||
| Total assets | $ | 168,772 | $ | 18,825 | ||||
| Liabilities and shareholders equity (deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,205 | $ | 2,392 | ||||
| Accrued liabilities | 6,250 | 4,099 | ||||||
| Payable to related party | 22 | 14,314 | ||||||
| Convertible related party promissory notes payable at fair value | 9,029 | |||||||
| Operating lease liabilities, current portion | 90 | 125 | ||||||
| Other current liabilities | 99 | |||||||
| Total current liabilities | 11,567 | 30,058 | ||||||
| Convertible promissory notes payable at fair value | 1,102 | |||||||
| Payable to related party | 5,757 | |||||||
| Operating lease liabilities, net of current portion | 523 | |||||||
| Other liabilities | 97 | |||||||
| Total liabilities | 17,847 | 31,257 | ||||||
| Stockholders equity (deficit): | ||||||||
| Series A preferred stock | 1 | |||||||
| Common stock | 2 | 1 | ||||||
| Additional paid-in capital | 277,618 | 20,161 | ||||||
| Accumulated deficit | (126,695 | ) | (32,595 | ) | ||||
| Total stockholders equity (deficit) | 150,925 | (12,432 | ) | |||||
| Total liabilities and stockholders equity (deficit) | $ | 168,772 | $ | 18,825 |
AADI BIOSCIENCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except shares and earnings per share amounts)
| Three months ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Grant revenue | $ | $ | 231 | $ | 120 | $ | 431 | |||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 5,754 | 2,395 | 12,443 | 9,684 | ||||||||||||
| General and administrative | 7,401 | 499 | 8,793 | 1,700 | ||||||||||||
| Impairment of intangible asset | 74,156 | 74,156 | ||||||||||||||
| Total operating expenses | 87,311 | 2,894 | 95,392 | 11,384 | ||||||||||||
| Loss from operations | (87,311 | ) | (2,663 | ) | (95,272 | ) | (10,953 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Change in fair value of convertible promissory note | 380 | 1,585 | ||||||||||||||
| Gain upon extinguishment of debt | 196 | |||||||||||||||
| Interest income | 1 | 1 | 41 | |||||||||||||
| Interest expense | (157 | ) | (229 | ) | (608 | ) | (585 | ) | ||||||||
| Total other income (expense), net | 223 | (228 | ) | 1,174 | (544 | ) | ||||||||||
| Loss before income taxes | (87,088 | ) | (2,891 | ) | (94,098 | ) | (11,497 | ) | ||||||||
| Income tax expense | (1 | ) | (2 | ) | (1 | ) | ||||||||||
| Net and comprehensive loss | (87,088 | ) | (2,892 | ) | (94,100 | ) | (11,498 | ) | ||||||||
| Cumulative dividends on convertible preferred stock | (154 | ) | (247 | ) | (647 | ) | (740 | ) | ||||||||
| Net and comprehensive loss attributable to common stockholders | $ | (87,242 | ) | $ | (3,139 | ) | $ | (94,747 | ) | $ | (12,238 | ) | ||||
| Net and comprehensive loss per share attributable to common stockholders, basic and diluted | $ | (9.17 | ) | $ | (1.23 | ) | $ | (19.37 | ) | $ | (4.81 | ) | ||||
| Weighted average number of common shares outstanding used in computing net and comprehensive loss per share attributable to common stockholders, basic and diluted | 9,510,379 | 2,542,358 | 4,890,556 | 2,542,358 |