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 8:00 AM EST
LOS
ANGELES, Dec. 19, 2024 /PRNewswire/ -- 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.
- PTK7-CPT113 potentially represents a differentiated opportunity
to be among the first next-wave ADCs in clinical development for
high PTK7 expressing cancers, including non-small cell lung cancer
(NSCLC), ovarian cancer and several other major indications.
- mMUC16-CPT113 is the first ADC that targets membrane-bound
portion of MUC16, a glycoprotein often overexpressed in cancers of
female origin.
- biSEZ6-CPT113 is designed to address the neuronal target, SEZ6,
which is often overexpressed in cancers of neuroendocrine origin.
biSEZ6-CPT113 utilizes a dual epitope binding, or biparatopic,
approach which can potentially improve internalization and
effectiveness of the ADC.
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."
Advisors
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.
About Aadi Bioscience
Aadi is a precision oncology company with a vision to make bold
choices in applying technology to efficiently deliver improved
precision oncology therapies for people living with
difficult-to-treat cancers. More information on the Company is
available on the Aadi website at www.aadibio.com and connect with
us on LinkedIn.
Forward-Looking Statements
This press release contains certain forward-looking statements
regarding the business of Aadi Bioscience that are not a
description of historical facts within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are based on the Company's current beliefs and
expectations and may include, but are not limited to, statements
relating to: the timing and completion of the proposed sale of
FYARRO to Kaken Pharmaceuticals and the anticipated timing of the
closing of the transaction; expectations regarding the timing,
closing and completion of the PIPE financing; Aadi's expected cash
position at the closing and cash runway of the company following
the sale of FYARRO and PIPE financing; the future operations of
Aadi; the development and potential benefits of any of Aadi's
product candidates, including the preclinical ADC assets proposed
to be licensed from WuXi; anticipated preclinical and clinical
development activities and related timelines, including the
expected timing for announcement of data and other preclinical and
clinical results and potential submission of IND filings for one or
more product candidates; and other statements that are not
historical fact. 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
associated with (i) the risk that the conditions to the
closing of the proposed sale of FYARRO or the PIPE financing are
not satisfied, including the failure to timely obtain stockholder
approval for the transactions, if at all; (ii) uncertainties
as to the timing of the consummation of the proposed transactions
and the ability of each of Kaken and Aadi to consummate the
proposed sale of FYARRO; (iii) risks related to Aadi's ability
to manage its operating expenses and its expenses associated with
the proposed transactions pending the closing; (iv) risks
related to the failure or delay in obtaining required approvals
from any governmental or quasi-governmental entity necessary to
consummate the proposed transactions; (v) unexpected costs,
charges or expenses resulting from the transactions;
(vii) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed sale of FYARRO or the proposed PIPE financing;
(vii) the uncertainties associated with Aadi's product
candidates, as well as risks associated with the preclinical and
clinical development and regulatory approval of product candidates,
including potential delays in the completion of preclinical studies
and clinical trials; (viii) risks related to the inability of
Aadi to obtain sufficient additional capital to continue to advance
these product candidates; (ix) uncertainties in obtaining
successful preclinical and clinical results for product candidates
and unexpected costs that may result therefrom; (x) risks
related to the failure to realize any value from product candidates
being developed and anticipated to be developed in light of
inherent risks and difficulties involved in successfully bringing
product candidates to market; and (xi) risks associated with
the possible failure to realize certain anticipated benefits of the
proposed sale of FYARRO or the proposed PIPE financing, including
with respect to future financial and operating results.
Additional risks and uncertainties that could cause actual
outcomes and results to differ materially from those contemplated
by the forward-looking statements are included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2023, including under the caption
"Item 1A. Risk Factors," and in Aadi's subsequent Quarterly Reports
on Form 10-Q, 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 cautionary statement is
made under the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
Contact:
IR@aadibio.com
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