What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-06 · 159 added, 150 removed, 138 unchanged (69% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes to those statements thereto appearing elsewhere in this Quarterly Report and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ending December 31, 2023 filed with the SEC on March 13, 2024.

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto appearing elsewhere in this Quarterly Report and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ending December 31, 2024 filed with the SEC on March 28, 2025.

Some of the information contained in this discussion and analysis including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions.

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Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

References in the following discussion to “ we, ” “ our, ” “ us, ” or “ Aadi ” refer to Aadi Bioscience, Inc.

and its subsidiaries.

Throughout this document we refer to FYARRO (nab-sirolimus, sirolimus protein-bound particles for injectable suspension (albumin-bound)) as FYARRO in the context of commercialization for the treatment of advanced malignant perivascular epithelioid cell tumor (PEComa), investigational use, our clinical trials, regulatory matters such as orphan drug designation, our license agreement with Bristol Myers Squibb Company and our former agreements with Mirati Therapeutics, Inc.

and EOC Pharma (Hong Kong) Limited, all further discussed throughout this document.

We are a biopharmaceutical company focused on developing and commercializing precision therapies for cancers with alterations in the mTOR pathway, a key regulator of cell growth and cancer progression.

Our lead drug product, FYARRO ® (sirolimus protein-bound particles for injectable suspension (albumin-bound);

nab -sirolimus), combines two established technologies - nanoparticle albumin-bound ( nab ) technology and the anti-cancer agent, sirolimus.

Nab -sirolimus is a potent inhibitor of the mTOR biological pathway with demonstrated anti-cancer activity in our lead indication, advanced malignant perivascular epithelioid cell tumor (“PEComa”), a rare cancer.

We exclusively license FYARRO, previously called ABI-009, nab -sirolimus, from Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene Corporation, which is a wholly owned subsidiary of Bristol-Myers Squibb Company (“BMS”).

In November 2021, the U.S.

Food and Drug Administration (the “FDA”) approved FYARRO sirolimus protein-bound particles for injectable suspension (albumin-bound) for the treatment of adult patients with locally advanced unresectable or metastatic malignant perivascular epithelioid cell tumor (“PEComa”).

On February 22, 2022, we launched FYARRO in the United States for treatment of advanced malignant PEComa and recognized net product sales of $7.2 million and $18.7 million for the three and nine months ended September 30, 2024, respectively.

References in the following discussion to “ we, ” “ our, ” “ us, ” or “ Whitehawk ” refer to Whitehawk Therapeutics, Inc.

Throughout this document we refer to FYARRO (nab-sirolimus, sirolimus protein-bound particles for injectable suspension (albumin-bound)) as FYARRO in the context of commercialization for the treatment of advanced malignant perivascular epithelioid cell tumor (PEComa), investigational use, our clinical trials, regulatory matters such as orphan drug designation, and our former agreements with Bristol-Myers Squibb Company and Mirati Therapeutics, Inc., all further discussed throughout this document.

We are an oncology therapeutics company applying advanced technologies to established tumor biology that are intended to efficiently deliver improved cancer treatments.

We have deep experience in chemistry, formulation, and drug delivery, as well as research, clinical, and commercial pharmaceutical development, successfully taking product candidates from the clinic to approval, launch, and commercialization.

License Agreement and ADC Therapies

We recently entered into an intellectual property license agreement (the “License Agreement”) with WuXi Biologics (Shanghai FX) Co., Ltd.

(“WuXi Biologics”) for the development and global commercialization of a portfolio of three next generation antibody drug conjugates (“ADCs”) targeting clinically validated, broadly overexpressed tumor antigens in high potential cancer indications with significant unmet need.

These ADCs are constructed utilizing an advanced linker-payload platform called CPT113 that has been shown to provide high stability in blood circulation and deliver targeted release of a Topoisomerase I (“TOPO1”) inhibitor payload into cancer cells.

These in-licensed assets originated through the collaborative efforts of WuXi Biologics, a leading global contract research, development and manufacturing organization (“CRDMO”), and Hangzhou DAC Biotechnology (“Hangzhou DAC”), a global leader in ADC innovation, where Hangzhou DAC’s CPT113 linker-payload has been conjugated to novel antibodies developed by WuXi Biologics against three tumor targets:

Protein Tyrosine Kinase 7 (“PTK7”), Mucin 16 (“MUC16”) and Seizure-related Protein 6 (“SEZ6”).

We believe the resulting ADCs will be able to target cancers expressing these respective tumor markers precisely and deliver the potent, cytotoxic TOPO1 inhibitor at the site of cancer.

Each of these ADCs have demonstrated tumor cell binding, tumor cell line cytotoxicity, and in vivo antitumor activity in preclinical models mimicking tumor progression.

We refer to these in-licensed ADC assets as the "ADC Therapies" herein.

We anticipate submitting three investigational new drug (“IND”) applications with the U.S.

Food and Drug Administration (“FDA”) by mid-2026, starting with HWK-007 for the treatment of solid tumors, including non-small cell lung cancer (“NSCLC”) and ovarian cancer, in the fourth quarter of 2025;

HWK-016 for the treatment of cancers of female origin in the fourth quarter of 2025;

and HWK-206 for the treatment of cancers of neuroendocrine origin in mid-2026.

With these three assets, we believe we have the ability to pursue multiple cancer indications with high potential in large addressable patient populations, including and beyond those indications currently expected to be targeted in the upcoming Phase 1 trials.

Our track record of strong execution of novel drug formulation, research, clinical development, and commercialization in oncology, combined with our deep understanding of ADCs positions us to unlock the high potential of this differentiated ADC portfolio.

Our management team has extensive experience in the discovery, development, and commercialization of cancer therapeutics, including in senior roles at leading oncology companies.

We are supported by our board of directors

and specialized scientific advisors, who contribute their deep understanding of drug discovery and development.

Furthermore, our investor base includes top life science investors.

We believe that our team is well positioned to execute on our strategy to develop and, if approved, commercialize the ADC Therapies and future pipeline assets to ultimately bring broad benefit to cancer patients worldwide.

Legacy FYARRO Business .

For the periods presented and through the FYARRO Divestiture (as defined below), our lead drug product was FYARRO ® .

Nab-sirolimus is a potent inhibitor of the mTOR biological pathway with demonstrated anti-cancer activity in advanced malignant perivascular epithelioid cell tumor (“PEComa”), a rare cancer.

We exclusively licensed FYARRO, previously called ABI-009, nab-sirolimus, from Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene Corporation, which is a wholly owned subsidiary of Bristol-Myers Squibb Company (“BMS”).

We refer to the development, production and commercial sale of FYARRO herein as the “FYARRO Business”.

On February 22, 2022, we launched FYARRO in the United States for treatment of advanced malignant PEComa and recognized net product sales of $7.1 million and $5.4 million for the three months ended March 31, 2025 and 2024, respectively.

See “Results of Consolidated Operations” for further discussion of our results.

On December 19, 2024, we entered into a Stock Purchase Agreement (the “Divestiture Agreement”) with KAKEN INVESTMENTS INC., a Delaware corporation (“KAKEN”), KAKEN PHARMACEUTICAL CO., LTD (“Guarantor”), and Aadi Subsidiary, Inc., a Delaware corporation and our former wholly owned subsidiary and the operating company for the FYARRO Business (“Aadi Subsidiary”).

Under the Divestiture Agreement, KAKEN acquired 100% of the outstanding shares of capital stock of Aadi Subsidiary from us at the closing for a cash payment of $102.4 million (following applicable purchase price adjustments under the Divestiture Agreement) (the "FYARRO Divestiture").

The divestiture transaction closed on March 25, 2025 and, as a result, we no longer operate the FYARRO Business.

Recent Developments

• Clinical Trials Updates.

On August 20, 2024, we halted the PRECISION1 trial, a registration-directed tumor-agnostic Phase 2 study of FYARRO in patients with Tuberous Sclerosis Complex 1 (" TSC1 ") and Tuberous Sclerosis Complex 2 (" TSC2 ") alterations, based on efficacy results from a planned interim analysis of efficacy results from two-thirds of participants in the trial.

An analysis by the Independent Data Monitoring Committee demonstrated that the study was unlikely to exceed an efficacy threshold necessary to support an accelerated approval, the key goal of this Phase 2 study.

We are completing the wind-down of the PRECISION1 trial and all patients who were still receiving benefit at the time the study was halted were transitioned to an expanded access protocol.

We expect to report out the PRECISION1 trial results in 2025.

To further preserve cash runway, we paused new enrollment, but continue dosing previously enrolled patients, in two, ongoing Phase 2 trials of FYARRO for advanced or recurrent endometrioid-type endometrial cancer (EEC) and neuroendocrine tumors (NETs).

Both studies have enrolled sufficient patients (n=24 and n=12 for EEC and NETs, respectively) to assess initial efficacy signals in the fourth quarter of 2024.

• Strategic Review.

On August 20, 2024, we announced our commencement of a comprehensive strategic review to maximize shareholder value.

Such strategic review is ongoing.

• License Agreement .

On December 19, 2024, we entered into the License Agreement with WuXi Biologics for exclusive rights to certain patents and know-how pertaining to WuXi Biologics’ preclinical ADC Therapies leveraging Hangzhou DAC linker-payload technology targeting each of MUC16, PTK7 and SEZ6.

Under the License Agreement, we paid WuXi Biologics a non-refundable, partial upfront payment of $6.0 million on December 19, 2024 and we paid an additional non-refundable, upfront payment of $38.0 million on April 16, 2025, in each case, for the rights and licenses granted to us by WuXi Biologics.

• PIPE Financing .

On December 19, 2024, we entered into subscription agreements for a private investment in public equity financing (the "2024 PIPE Financing") with certain investors (the "2024 PIPE Investors") for the sale of (i) 21,592,000 shares of our common stock, par value $0.0001 per share, at a purchase price of $2.40 per share, and (ii) 20,076,500 pre-funded warrants, at a purchase price of $2.3999 per pre-funded Warrant, for aggregate net proceeds of $94.5 million.

The 2024 PIPE Financing was approved by our stockholders on February 28, 2025 and closed on March 4, 2025.

• Divestiture of FYARRO .

On December 19, 2024, we entered into the Divestiture Agreement with KAKEN for the sale to KAKEN of 100% of the outstanding shares of capital stock of Aadi Subsidiary and thereby all of our assets related to the FYARRO Business.

Per the terms and subject to the conditions of the Divestiture Agreement, we received $102.4 million (following applicable purchase price adjustments under the Divestiture Agreement) from KAKEN in cash at the closing of the FYARRO Divestiture on March 25, 2025.

As part of the FYARRO Divestiture, KAKEN acquired the rights to the Aadi Bioscience, Inc.

name and any related trademark rights.

• Company Name Change .

On March 18, 2025, in connection with the FYARRO Divestiture, we changed our name from "Aadi Bioscience, Inc." to "Whitehawk Therapeutics, Inc." and the ticker symbol for our common stock on the Nasdaq Capital Markets was changed to "WHWK".

• Employee Matters .

On August 16, 2024, our Board of Directors (the “Board”) approved a plan of termination that resulted in a workforce reduction of 22 employees, representing approximately 32% of our workforce.

In addition, as of October 1, 2024, Neil Desai, Ph.D., our former Executive Chairman, and Loretta Itri, our former Chief Medical Officer, ceased their respective employments with the company.

Desai will continue to serve as a member of our Board.

Itri will provide consulting services to the company for up to ten hours per month for an initial three-month term.

• Arbitration Win .

On September 26, 2024, we received the arbitration panel's Final Award in our arbitration against EOC Pharma (Hong Kong) Limited ("EOC").

EOC had claimed that we breached certain provisions of our license agreement with EOC, dated December 8, 2020 (the “EOC License Agreement”), including failing to provide certain manufacturing information to EOC and, as a result, EOC sought monetary damages against us.

In the arbitration panel's Final Award, it found and concluded, among other things, that we did not breach the EOC License Agreement and accordingly we are not liable for any damages to EOC.

See Notes 7 and 12 to the condensed consolidated financial statements and "EOC License Agreement" below for more information about the EOC License Agreement, its termination and the arbitration proceedings.

BMS License Agreement

We have exclusive rights for certain patents and a non-exclusive license for certain technology and know-how pertaining to ABI-009 (which we refer to as FYARRO) pursuant to an amended and restated license agreement, dated November 15, 2019, as amended August 31, 2021 (the “BMS License Agreement”) with Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene Corporation, which is a wholly owned subsidiary of BMS.

In connection with the FYARRO Divestiture, 16 employees remained with Aadi Subsidiary, Inc.

and transferred to KAKEN.

Following the FYARRO Divestiture, we have 18 full-time or part-time employees.

On February 18, 2025, we appointed David Dornan, PhD, as our Chief Scientific Officer.

Dornan brings more than two decades of experience in oncology drug discovery and development, with deep expertise in ADCs and other targeted cancer therapies.

Prior to joining us, Dr.

Dornan served as Chief Scientific Officer at Elevation Oncology and Bolt Biotherapeutics.

• 2021 Equity Incentive Plan .

On February 28, 2025 our stockholders approved the amendment and restatement of the 2021 Plan to (i) increase the number of shares available for future grant under the 2021 Plan from 2,000,284 shares to 8,300,284 shares and (ii) increase the 2021 Plan’s default annual automatic share reserve increase

occurring on January 1 of each year from 4% of outstanding shares on the last day of the immediately preceding fiscal year to 5%.

Upon stockholder approval, such amendment and restatement of the 2021 Plan became effective.

WuXi Biologics License Agreement

In accordance with the License Agreement, WuXi Biologics is eligible to receive from us (a) up to an aggregate of $265.0 million upon the achievement of certain development milestones, and (b) up to an aggregate of $540.0 million upon the achievement of certain commercial milestones, across all ADC Therapies programs.

WuXi Biologics is also entitled to running royalties ranging from low-single-digit to upper-single-digit percentages of annual net sales of licensed products in the territory on a product-by product and region-by-region basis from the first commercial sale of the applicable licensed product in a particular region until the date which is the later of (i) expiration of the last to expire valid claim of a license patent in such region covering the sale of such licensed product in such region or (ii) ten years after the first commercial sale of such licensed product in such region.

Each party may terminate the License Agreement in its entirety, or on a program-by-program basis, as applicable, if the other party remains in material breach of the License Agreement following a cure period to remedy the material breach or if the other party is declared insolvent or in similar financial distress.

In addition, WuXi Biologics may terminate the License Agreement on a program-by-program basis if we do not meet certain development due diligence milestones.

We may terminate the License Agreement in its entirety, or on a program-by-program basis, as applicable, with or without cause.

Legacy FYARRO Business Agreements

Former BMS License Agreement.

We had exclusive rights for certain patents and a non-exclusive license for certain technology and know-how pertaining to ABI-009 (which we refer to as FYARRO) pursuant to an amended and restated license agreement, dated November 15, 2019, as amended August 31, 2021 (the “BMS License Agreement”) with Abraxis BioScience, LLC, a wholly owned subsidiary of Celgene Corporation, which is a wholly owned subsidiary of BMS.

Under the BMS License Agreement, BMS is entitled to receive certain development milestone payments, royalties on net sales from licensed products under the agreement and any sublicense fees.

During the three months ended September 30, 2024 and 2023, royalties on net product sales were $0.5 million and $0.4 million, respectively under the terms of this agreement.

During the nine months ended September 30, 2024 and 2023, royalties on net product sales were $1.4 million and $1.3 million, respectively under the terms of this agreement.

No development payments related to milestones under this agreement were paid during the three and nine months ended September 30, 2024.

We recorded royalties on net product sales of $0.5 million and $0.4 million during the three months ended March 31, 2025 and 2024, respectively, under the terms of this agreement.

No development payments related to milestones under this agreement were paid during the three months ended March 31, 2025.

See Note 7 to the condensed consolidated financial statements for more information about the BMS License Agreement.

On August 30, 2021, the Company and BMS entered into Amendment No.

On August 30, 2021, we and BMS entered into Amendment No.

1 (the “Amendment”) to the BMS License Agreement.

Under the terms of the Amendment, we paid BMS $5.8 million, representing 50% of the previously outstanding payment obligation under the agreement, following the effective time of our 2021 private investment in public equity (PIPE) financing ("2021 PIPE Financing") that occurred in connection with the closing of the reverse merger of Aerpio Pharmaceuticals, Inc.

whereby Aspen Merger Subsidiary, Inc., our wholly-owned subsidiary (“Merger Sub”), merged with and into Aadi Subsidiary, Inc.

(formerly known as Aadi Bioscience, Inc.

(“Private Aadi”)), with Private Aadi surviving as our wholly-owned subsidiary (the “Merger”).

whereby Aspen Merger Subsidiary, Inc., our wholly-owned subsidiary (“Merger Sub”), merged with and into Aadi Subsidiary (formerly known as Aadi Bioscience, Inc., with Aadi Subsidiary surviving as our wholly-owned subsidiary (the “Reverse Merger”).

Pursuant to the terms of the amendment, the remaining portion of the previously outstanding payment obligation ($5.8 million), was paid by the third anniversary of the effective time of the 2021 PIPE Financing (i.e., August 26, 2024).

EOC License Agreement

In December 2020, we entered into the license agreement ("EOC License Agreement") with EOC Pharma (Hong Kong) Limited ("EOC") under which we received $14.0 million in January 2021 in non-refundable upfront consideration as partial payment for the rights and licenses granted to EOC by us for the further development and commercialization of FYARRO in the People’s Republic of China, Hong Kong Special Administration Region, Macao Special Administrative Region and Taiwan (the “Licensed Territory”).

In accordance with the BMS License Agreement, we are required to pay 20% of all sublicense fees to BMS.

As such, we recognized $2.8 million of license expense in the fourth quarter of 2020 and had a corresponding $2.8 million sublicense payable to BMS as of December 31, 2020, which was paid in 2021.

During the fourth quarter of 2021, we recognized license revenue and received $1.0 million from EOC for achieving the FDA approval milestone in November 2021.

In accordance with the BMS License Agreement, we recognized $0.2 million of license expense in the fourth quarter of 2021 and had a corresponding $0.2 million sublicense payable to BMS as of December 31, 2021, which was paid in 2022.

On June 27, 2022, we received written notice from EOC that EOC elected to terminate the EOC License Agreement, effective immediately.

On June 27, 2022, EOC filed a Request for Arbitration with the International Chamber of Commerce’s International Court of Arbitration against us.

On September 26, 2024, the arbitration panel issued a Final Award which, among other things, found and concluded that we did not breach the EOC License Agreement and

accordingly we are not liable for any damages to EOC .

See Notes 7 and 12 to the condensed consolidated financial statements for more information about the EOC License Agreement, its termination and the arbitration proceedings.

As part of its purchase of the FYARRO Business, KAKEN acquired Aadi Subsidiary and our rights and responsibilities under the BMS License Agreement.

Former Mirati Collaboration.

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Under the terms of the agreement, Mirati was responsible for sponsoring and operating the Phase 1/2 study and we supplied study drug and jointly shared the cost of the study, which will continue during the winding down process.

Key Trends and Factors Affecting Comparability Between Periods

• Commercial sale of FYARRO was launched on February 22, 2022, for the treatment of patients with advanced malignant PEComa.

We recorded net product sales of $7.2 million and $18.7 million during the three and nine months ended September 30, 2024, respectively.

• We had built a cross-functional commercial team consisting of marketing, market access and commercial operations.

Expenses related to our commercialization of FYARRO, in cluding personnel expenses, sales support, and marketing are included in selling, general and administrative expenses for the three and nine months ended September 30, 2024.

We expect these expenses to decrease, as compared to prior periods, due to our workforce reductions in 2024.

• We expect to decrease our investment in research and development as a result of our halt and subsequent wind-down of the PRECISION1 study following interim data results and the pause of enrollment of our two Phase 2 trials of FYARRO in patients with EEC and NETs, respectively.

• Under the BMS License Agreement, as described above, we made a payment of $5.8 million to BMS on August 26, 2024 .

• Our future expenses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on our strategic review and the ultimate outcome of that process.

Liquidity and Capital Resources

As of September 30, 2024, we had $62.6 million of cash, cash equivalents and short-term investments.

Based on our current plans, we believe our existing cash, cash equivalents and short-term investments will enable us to conduct our planned operations into the second half of 2026.

We have incurred net losses in each year since inception and as of September 30, 2024, we had an accumulated deficit of $314.4 million .

These losses have resulted principally from costs incurred in connection with research and development activities, selling, general and administrative costs associated with our operations, and costs associated with the Merger.

We expect to continue to incur significant expenses and operating losses for the foreseeable future due to the cost of research and development, including conducting preclinical and clinical trials and identifying and designing product candidates, the regulatory approval process for FYARRO outside the United States and in additional indications and any other product candidates we may develop in the future and the continued commercialization of FYARRO.

Impact of Negative Global or National Events

Businesses have been and will continue to be impacted by a number of challenging global and national events and circumstances that continue to evolve, including the recent turmoil in the global banking system, public health epidemics, such as the COVID-19 pandemic, extreme weather conditions, increased economic uncertainty, inflation, rising interest rates, and geopolitical instability, including the conflicts in Ukraine, the Middle East and in other countries.

Businesses have been and will continue to be impacted by a number of challenging global and national events and circumstances that continue to evolve, including the implementation of tariffs (and, as applicable, their subsequent modification or removal), recent turmoil in the global banking system, public health epidemics, such as the COVID-19

pandemic, extreme weather conditions, increased economic and regulatory uncertainty, inflation, rising interest rates, and geopolitical instability, including trade disputes and negotiations and the military conflicts in Ukraine, the Middle East and in other countries.

The extent of the impact of these events and circumstances on our business, operations and development timelines and plans remains uncertain, and will depend on certain developments, including the duration and scope of the events and their impact on our development activities, third-party manufacturers, and other third parties with whom we do business, as well as its impact on regulatory authorities and our key scientific and management personnel.

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For example, as the COVID-19 pandemic developed, we took numerous steps to help ensure the health and safety of our employees.

While we have resumed normal operations, any resurgence of the COVID-19 pandemic may cause us to

reinstitute certain measures to protect employee safety, including staggered work hours or reduced in-person staffing, that could result in additional disruption and/or delays in our ability to conduct development activities.

We have been and continue to actively monitor our supply chain in light of these challenging global and national events and circumstances, including our third-party materials suppliers.

We experienced some supply disruptions due to the COVID-19 pandemic, including closures at certain chip manufacturers, which led to extended lead times for FYARRO and diversion of certain lab materials needed to support COVID-19 relief efforts.

While these disruptions have been resolved, we are continuing to monitor our supply chain and contingency planning is ongoing with our partners to reduce the possibility of an interruption to our development activities or the availability of necessary materials.

The ultimate impact of these global and national events and circumstances, either individually or in aggregate, is highly uncertain and subject to change.

To the extent possible, we are conducting business as usual, with necessary or advisable modifications to mitigate potentially negative impacts to our business.

For example, during the COVID-19 pandemic, our clinical trials were affected by the closure of offices, lack of resources and closure of borders, among other measures being put in place around the world and we made certain modifications to employee travel, with masking and vaccination requirements in our offices, and with our employees working remotely fully or intermittently.

Any inability to travel and conduct face-to-face meetings, as well as constraints surrounding hospital infrastructure and staff, can also make it more difficult to enroll and maintain patients in clinical trials.

We will continue to actively monitor the rapidly evolving situation related to these global and national events, and may take further actions to mitigate potential negative impacts to our business, and that may alter our operations, including those that may be required by federal, state or local authorities, or that we determine are in the best interests of our employees and other third parties with whom we do business.

At this point, the extent to which these global or national events and circumstances may affect our future business, operations and development timelines and plans, including the resulting impact on our expenditures and capital needs, remains uncertain.

We will continue to evaluate the impact that these events could have on our operations, financial position, results of operations and cash flows in fiscal year 2025.

Key Trends and Factors Affecting Comparability Between Periods

• We had built a cross-functional commercial team consisting of marketing, market access and commercial operations.

We expect these expenses to decrease, as compared to prior periods, due to the divestiture of FYARRO which closed on March 25, 2025.

• We expect to increase our investment in research and development related to the ADC Therapies.

W e will continue to incur significant research and development and other expenses related to such ongoing operations .

Under the License Agreement, we paid upfront non-refundable license fees of $6.0 million and $38.0 million to WuXi Biologics in the fourth quarter of 2024 and the second quarter of 2025, respectively .

• Commercial sale of FYARRO was launched on February 22, 2022, for the treatment of patients with advanced malignant PEComa.

We recorded net product sales of $7.1 million and $5.4 million for the three months ended March 31, 2025 and 2024, respectively.

As a result of the FYARRO Divestiture, we no longer commercialize FYARRO as of March 25, 2025.

As the commercial sale of FYARRO constituted our sole source of revenue, we do not expect to generate further revenue for the foreseeable future.

Liquidity and Capital Resources

As of March 31, 2025, we had $231.1 million of cash, cash equivalents and short-term investments.

Based on our current plans, we believe our existing cash, cash equivalents and short-term investments will enable us to conduct our planned operations into 2028.

We recorded net income for the three months ended March 31, 2025 primarily due to the gain on sale related to the divestiture of FYARRO.

Prior to the sale, w e have incurred net losses in each year since inception and as of March 31, 2025, we had an accumulated deficit of $259.6 million.

We expect to continue to incur significant expenses and operating losses for the foreseeable future due to the cost of research and development, including conducting preclinical and clinical trials of the ADC Therapies and identifying and designing product candidates and the regulatory approval process for any product candidates we may develop.

Basis of Presentation

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Chargebacks are discounts and fees that relate to contracts with government and other entities purchasing from the SDs and SP at a discounted price.

The SDs and SP charge back to us the difference between

the price initially paid by the SDs and SP and the discounted price paid to the SDs and SP by these entities.

The SDs and SP charge back to us the difference between the price initially paid by the SDs and SP and the discounted price paid to the SDs and SP by these entities.

If actual future chargebacks vary from these estimates, we may need to adjust prior period accruals, which would affect product sales in the period of adjustment.

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(ii) third-party contract costs relating to research, formulation, manufacturing, nonclinical studies and clinical trial activities;

(iii) external costs of outside consultants who assist with technology development, regulatory affairs, clinical development and quality assurance;

(iii) external costs of outside consultants who assist with technology

development, regulatory affairs, clinical development and quality assurance;

(iv) payments made under our third-party licensing agreements;

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Research and development activities are central to our business.

We expect to decrease our investment in research and development as a result of our halt and subsequent wind-down of the PRECISION1 study following interim data results and the pause of our two Phase 2 trials of FYARRO in patients with EEC and NETs, respectively.

As a result, we expect that our research and development expenses will decrease in the foreseeable future.

We expect to increase our investment in research and development related to the ADC Therapies.

W e will continue to incur significant research and development and other expenses related to such ongoing operations .

Cost of Goods Sold

Cost of goods sold consist primarily of royalties paid to BMS, costs incurred on sales of FYARRO and costs to manufacture and prepare the product for sales subsequent to the FDA approval in November 2021.

Costs incurred prior to the FDA approval were expensed when incurred.

Cost of goods sold consist primarily of royalties paid to BMS, costs incurred on sales of FYARRO and costs to manufacture and prepare the product for sales.

Other Income (Expense), Net

Other income, net consists of interest income earned on cash, cash equivalents and short-term investments, partially offset by interest expense related to the convertible promissory notes.

During the three months ended March 31, 2025 o ther income, net consists of gain on sale of a business and interest income earned on cash, cash equivalents and short-term investments.

During the three months ended March 31, 2024 o ther income, net consists of interest income earned on cash, cash equivalents and short-term investments.

Income Tax Expense

During the three and nine months ended September 30, 2024 and 2023, we recognized no income tax expense on the condensed consolidated statements of operations and comprehensive loss.

During the three months ended March 31, 2025, and 2024, we recognized no income tax expense on the condensed consolidated statements of operations and comprehensive loss.

Since our formation in 2011, we have not recorded any U.S.

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The following table presents the results of operations for the periods indicated (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Product sales, net $ 7,145 $ 5,353

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Research and development 8,788 13,593

Restructuring charges 2,638 — 2,638 —

Cost of goods sold 760 652

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Other income (expense), net 88,234 1,223

Loss before income tax expense (12,546) (16,302) (45,418) (49,496)

Net loss $ (12,546) $ (16,302) $ (45,418) $ (49,496)

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Income (loss) before income tax expense 73,016 (18,289)

Income tax expense — —

Net income (loss) $ 73,016 $ (18,289)

Comparison of the Three Months Ended March 31, 2025 and 2024

Product Sales, Net

Our product sales, net consist of sales of FYARRO since its launch in the United States on February 22, 2022.

Product sales, net for the three and nine months ended September 30, 2024 were $7.2 million and $18.7 million, respectively.

For the three and nine months ended September 30, 2023, product sales, net were $6.0 million and $18.0 million, respectively.

The increase in the three and nine months ended September 30, 2024 compared to the same period in the prior year was primarily due to strong demand.

Product sales, net for the three months ended March 31, 2025 and 2024 were $7.1 million and $5.4 million, respectively.

The increase in product sales, net of $1.7 million compared to the same period in the prior year was primarily driven by stronger demand.

Operating Expenses

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2024 and 2023 were $7.2 million and $11.2 million, respectively.

The $4.0 million decrease was primarily driven by a reduction of $2.3 million in personnel expenses, $1.5 million in commercial and marketing expenses, and $0.3 million of legal and other expenses, offset by an increase of $0.1 million related to consulting expenses.

Selling, general and administrative expenses for the nine months ended September 30, 2024 and 2023 were $25.7 million and $34.2 million, respectively.

The $8.5 million decrease was driven b y a reduction of $4.0 million in commercial and marketing expenses, $2.3 million in legal and other expenses, $2.1 million in personnel expenses, and $0.1 million of consulting and insurance expenses.

Selling, general and administrative expenses for the three months ended March 31, 2025 and 2024, were $12.8 million and $10.6 million, respectively.

The increase of $2.2 million was primarily driven by an increase of $3.8 million in consulting and insurance expenses related to the divestiture of FYARRO, an increase of $2.2 million in legal and other expenses,

offset by a decrease of $3.5 million of personnel expenses primarily related to severance expense incurred in 2024 due to the restructuring of our commercial, medical affairs, and corporate support functions, and a $0.3 million decrease in commercial and marketing expenses.

Research and Development Expenses

The following table presents our research and development expenses for the periods indicated (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Personnel expenses $ 3,800 $ 6,297

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Total research and development expenses $ 8,788 $ 13,593

Research and development expenses for the three months ended September 30, 2024 and 2023 were $10.0 million a nd $11.9 million, respectively.

The $1.9 million decrease was primarily driven by a $2.8 million decrease in personnel expense, consulting expense, and other expenses, offset by an increase of $0.9 million of clinical drug product manufacturing.

Research and development expenses for the nine months ended September 30, 2024 and 2023 wer e $36.7 million and $36.2 million , respectively.

The $0.5 million increase was primarily driven by a $2.9 million increase in clinical development expenses related to the EEC, NET, and PRECISION1 trials, and $2.7 million in clinical drug product manufacturing, offset by a decrease of $5.1 million in personnel expense, consulting expense, and other expenses.

Restructuring Charges

Restructuring charges for the three and nine months ended September 30, 2024 were $2.6 million.

The increase in restructuring expense was due to a restructuring plan to reduce the Company's workforce by 32% in response to our announcement on August 20, 2024 that we will halt the registration-intended PRECISION1 trial of nab-sirolimus in patients with solid tumors harboring TSC1 or TSC2 inactivating alterations.

Research and development expenses for the three months ended March 31, 2025 and 2024 were $8.8 million and $13.6 million, respectively.

The decrease of $4.8 million was driven by a $2.7 million decrease in personnel expense, consulting expense, and other expenses, a $2.0 million decrease in clinical development expenses primarily related to the PRECISION1 trial, and a $0.1 million decrease in clinical drug product manufacturing.

Cost of Goods Sold

Cost of goods sold for the three months ended September 30, 2024 and 2023 was $0.8 million and $0.7 million, respectively.

Cost of goods sold for the nine months ended September 30, 2024 and 2023 was $2.2 million and $1.9 million, respectively.

The increase of cost of goods sold of $0.1 million and $0.3 million for the three and nine months ended September 30, 2024 compared to the same period in 2023 was primarily driven by an increase of costs incurred on sales of FYARRO and costs to manufacture and prepare the product for sale.

Cost of goods sold was $0.8 million and $0.7 million for the three months ended March 31, 2025, and 2024, respectively, primarily reflecting royalties incurred on product sold.

Other Income (Expense), Net

Other income, net for the three months ended September 30, 2024 was $0.9 million, compared to other income, net of $1.5 million for the three months ended September 30, 2023 .

The change was primarily driven by a decrease in short-term investments held during the three months ended September 30, 2024, compared to the three months ended September 30, 2023 .

Other income, net for the nine months ended September 30, 2024 was $3.1 million, compared to other income, net of $4.7 million for the nine months ended September 30, 2023 .

The change was primarily driven by a decrease in short-term investments held during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 .

Other income, net for the three months ended March 31, 2025 was $88.2 million, compared to other income, net of $1.2 million for the three months ended March 31, 2024 .

The change was primarily driven by a gain on sale of a business related to the divestiture of FYARRO during the three months ended March 31, 2025 .

Liquidity and Capital Resources

As of September 30, 2024 we had $62.6 million of cash, cash equivalents and short-term investments.

Based on our current plans, we believe our existing cash, cash equivalents and short-term investments will enable us to conduct our planned operations into the second half of 2026.

We have incurred net losses in each year since inception and as of September 30, 2024, we had an accumulated deficit of $314.4 million.

Our net losses were $12.5 million and $16.3 million for the three months ended September 30, 2024 and 2023, respectively, and $45.4 million and $49.5 million for the nine months ended September 30, 2024 and 2023, respectively.

As of March 31, 2025 we had $231.1 million of cash, cash equivalents and short-term investments.

Based on our current plans, we believe our existing cash, cash equivalents and short-term investments will enable us to conduct our planned operations into 2028.

We have incurred net losses in each year since inception except for the three months ended March 31, 2025 as we incurred net income due to the sale of a business.

As of March 31, 2025, we had an accumulated deficit of $259.6 million.

Our net income was $73.0 million and our net loss was $18.3 million for the three months ended March 31, 2025 and 2024, respectively.

These losses have resulted principally from costs incurred in connection with research and development activities and selling, general and administrative costs associated with our operations.

We expect to continue to incur

significant expenses and operating losses for the foreseeable future due to the cost of research and development, including conducting preclinical studies and clinical trials, identifying and designing product candidates, the regulatory approval process for FYARRO outside the United States and any other product candidates we may develop in the future, and the continued commercialization of FYARRO.

We expect our expenses to decrease given the recent headcount reductions, the halting and wind-down of the PRECISION1 trial and the pausing of the trials in EEC and NETs.

We expect to continue to incur significant expenses and operating losses for the foreseeable future due to the cost of research and development, including conducting preclinical and clinical trials of the ADC Therapies and identifying and designing product candidates and the regulatory approval process for any product candidates we may develop.

On September 22, 2022, we received funding of $72.2 million, net from a private investment in public equity financing (the “2022 PIPE Financing”) with certain investors (the “2022 PIPE Investors”) .

On March 17, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), with respect to an “at the market offering” pursuant to which we may offer and sell, from time to time at our sole discretion, subject to limitations under applicable securities laws, shares of our common stock having aggregate gross proceeds of up to $75.0 million through Cowen as our sales agent.

On March 17, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), with respect to an “at the market offering” pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock having aggregate gross proceeds of up to $75.0 million through Cowen as our sales agent.

Under the Sales Agreement, we will set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitations on the number or dollar value of shares that may be sold in any one trading day and any minimum price below which sales may not be made.

We will pay Cowen 3.0% of the aggregate gross proceeds from each sale of shares of common stock under the Sales Agreement.

As of September 30, 2024, no shares of common stock had been sold under the Sales Agreement.

As of March 31, 2025, no shares of common stock had been sold under the Sales Agreement.

The shares of our common stock to be offered and sold under the Sales Agreement will be issued and sold pursuant to our shelf registration statement on the Form S-3 (File No.

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No securities have yet been sold under the Shelf Registration Statement.

We filed a prospectus supplement with the SEC on May 3, 2024 in connection with the offer and sale of the shares pursuant to the Sales Agreement.

The prospectus supplement offers up to an aggregate of $13.5 million in shares of our common stock.

We will be required to file another prospectus supplement in the event we want to offer more than $13.5 million in shares of our common stock in accordance with the Sales Agreement.

We filed a prospectus supplement with the SEC on April 25, 2025 in connection with the offer and sale of the shares pursuant to the Sales Agreement.

The Shelf Registration Statement allows us to sell from time to time up to $150.0 million of common stock, preferred stock, debt securities, warrants, or units comprised of any combination of these securities, for our own account in one or more offerings and is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions and our future capital needs.

The terms of any offering thereunder will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

On September 22, 2022, the Company entered into the Purchase Agreement for the 2022 PIPE Financing with the 2022 PIPE Investors for the sale of 3,373,526 shares of our common stock for a price of $12.50 per share and Pre-Funded Warrants to purchase an aggregate of 2,426,493 shares of our common stock, at a purchase price of $12.4999 per Pre-Funded Warrant.

On September 22, 2022, we entered into the purchase agreement for the 2022 PIPE Financing with the 2022 PIPE Investors for the sale of 3,373,526 shares of our common stock for a price of $12.50 per share and Pre-Funded Warrants to purchase an aggregate of 2,426,493 shares of our common stock, at a purchase price of $12.4999 per Pre-Funded Warrant.

The Pre-Funded Warrants are exercisable at an exercise price of $0.0001 and will be exercisable until exercised in full.

The 2022 PIPE Financing closed on September 26, 2022.

Aggregate net proceeds, after deducting certain expenses incurred of $0.3 million related to the issuance of the shares, were $72.2 million.

The following table presents our cash flows for the periods indicated (in thousands):

Nine Months Ended September 30,

Aggregated net proceeds, after deducting certain expenses incurred of $0.3 million related to the issuance of the shares were $72.2 million.

On December 19, 2024, we entered into the Subscription Agreement with certain investors (the "2024 PIPE Investors"), pursuant to which we agreed to sell to the 2024 PIPE Investors (i) 21,592,000 shares of the our common stock, par value $0.0001 per share, at a purchase price of $2.40 per share, and (ii) 20,076,500 Pre-Funded Warrants, at a purchase price of $2.3999 per Pre-Funded Warrant, for aggregate net proceeds of $94.5 million, after deducting certain expenses incurred of $5.5 million related to the issuance of shares.

The Pre-Funded Warrants have an exercise price of $0.0001 per share of the Company's common stock and are exercisable and will remain exercisable until exercised in full.

The holders of Pre-Funded Warrants may not exercise a Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 4.99% or 9.99%, at the election of the holder, of the number of shares of the Company's common stock outstanding immediately after giving effect to such exercise.

The holders of Pre-Funded Warrants may increase or decrease such percentages not in excess of 19.99% by providing at least 61 days’ prior notice.

The 2024 PIPE Financing closed on March 4, 2025.

The following table summarizes our cash flows for the periods indicated (in thousands):

Three Months Ended March 31,

Net cash used in operating activities $ (11,864) $ (19,653)

Net cash provided by investing activities 115,498 10,555

Net cash provided by financing activities 77 246

Net (decrease) increase in cash, cash equivalents and restricted cash $ (32,351) $ 29,784

Net cash provided by (used in) financing activities 95,201 (10)

Net decrease in cash, cash equivalents and restricted cash $ 198,835 $ (9,108)

Operating Activities

Our cash used in operating activities primarily results from our net loss adjusted for non-cash expenses, changes in working capital components, amounts due to contract research organizations to conduct our clinical programs and employee-related expenditures for research and development and general and administrative activities.

Our cash flows from operating activities will continue to be affected by spending to advance and support FYARRO and other operating and general administrative activities, including operating as a public company, and may fluctuate significantly from quarter-to-quarter and year-to-year, depending on our strategic review and the ultimate outcome of that process.

For the nine months ended September 30, 2024 , cash used in operating activities was $44.5 million and resulted from (i) our net loss of $45.4 million, (ii) $7.5 million net increase in our operating assets and liabilities, primarily driven by a decrease in accounts payable and accrued liabilities and a decrease in prepaid expenses and other current assets and

inventory, and (iii) $8.4 million in non-cash adjustments, which were primarily related to share based compensation, discount amortization on short-term investments, lease expense, and depreciation.

For the nine months ended September 30, 2023 , cash used in operating activities was $50.0 million and resulted from (i) our net loss of $49.5 million, (ii) $7.2 million net increase in our operating assets and liabilities, primarily driven by a decrease in accounts payable and accrued liabilities and a decrease in prepaid expenses and other current asset, and (iii) non-cash adjustments totaling $6.7 million, which was primarily related share based compensation, discount amortization on short-term investments, lease expense, and depreciation.

Our cash flows from operating activities will continue to be affected by spending to advance and support FYARRO in additional indications in the clinic and other operating and general administrative activities, including operating as a public company.

For the three months ended March 31, 2025 , cash used in operating activities was $11.9 million and resulted from (i) our net income of $73.0 million, (ii) a $0.8 million net decrease in cash used to fund changes in net operating assets and liabilities, and (iii) $85.6 million non-cash adjustments, which were primarily related gain on sale of business, share based compensation, lease expense, depreciation, and discount amortization on short-term investments.

For the three months ended March 31, 2024 , cash used in operating activities was $19.7 million and resulted from (i) our net loss of $18.3 million, and (ii) a $4.8 million net increase in our operating assets and liabilities, and (iii) $3.4 million non-cash adjustments, which were primarily related to share based compensation, discount amortization on short-term investments, lease expense, and depreciation.

Investing Activities

Cash provided by investing a ctivities for the nine months ended September 30, 2024 was $12.1 million related to maturities of short-term investments of $50.0 million, offset by purchases of short-term investments of $36.5 million, and fixed assets of $1.5 million.

Cash provided by investing activities for the nine months ended September 30, 2023 was $79.6 million related to maturities of short-term investments of $133.3 million, offset by purchases of short-term investments of $50.5 million, and fixed assets of $3.2 million .

Cash provided by investing activities for the three months ended March 31, 2025 related to proceeds from the sale of business, maturities of short-term investments of $14.7 million, offset by purchases of fixed assets of $0.6 million.

Cash provided by investing activities for the three months ended March 31, 2024 related to maturities of short-term investments of $18.9 million, offset by purchases of short-term investments of $7.6 million and fixed assets of $0.7 million.

Financing Activities

Cash provided by financi ng activities for the nine months ended September 30, 2024 was $0.1 million related to the purchase of common stock under the employee stock purchase plan offset by financing costs related to the Sales Agreement.

Cash provided by financing activities for the nine months ended September 30, 2023 was $0.2 million related to the issuance of common stock under the employee stock purchase plan and exercise of stock options offset by financing costs related to the Sales Agreement .

Cash provided by in financing activities for the three months ended March 31, 2025 related to $100.0 million proceeds received from the sale of common stock and pre-funded warrants to the 2024 PIPE Investors, offset by payment of 2024 PIPE Financing related transaction costs.

Cash provided by financing activities for the three months ended March 31, 2024 related to deferred offering costs paid for financing.

Contractual Obligations and Commitments

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The term of the lease is seventy-three months unless terminated sooner.

In connection with the FYARRO Divestiture, KAKEN assumed our sublease for the NJ office space, but we agreed to co-inhabit the office with KAKEN for six months, paying $13,000 per month.

In August 2021, we entered into an amendment to extend the lease of our 2,760 square feet of office space in Pacific Palisades, California.

We exercised an option, under our prior lease agreement, to extend the term for an additional period of three (3) years and six (6) months, until February 28, 2025, with an option to renew for an additional three (3) years in accordance with the terms of the Pacific Palisades Lease.

Included in the renewal were nine months of rent abatement and a rent escalation clause.

We exercised an option, under our prior lease agreement, to extend the term of the lease for an additional three-year period.

Included in the renewal were nine months of rent abatement a nd a rent escalation clause.

The Pacific Palisades lease expired on February 28, 2025.

Rent expense is being recorded on a straight-line basis.

Rent expense related to the Pacific Palisades and Morristown leases for the nine months ended September 30, 2024 and 2023 was $0.3 million .

Rent expense related to the Pacific Palisades and Morristown leases was $0.1 million and $0.1 million for the three months ended March 31, 2025 and 2024 , respectively .

See Note 6 to the condensed consolidated financial statements for details related to future lease payments.

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Under the Fresenius Agreement, which was effective through September 30, 2024, we purchased FYARRO for either clinical or commercial purposes for use in the United States and Canada.

Although we believe we presently have sufficient supply of FYARRO for at least the next two years based on our estimated demand and are seeking to enter into a new agreement with Fresenius Kabi for the manufacture of FYARRO, if we are unable to enter into a new agreement on favorable terms or at all, our business could be materially adversely affected.

We also have contracts with various organizations to conduct research and development activities, including clinical trial organizations to manage clinical trial activities and manufacturing companies to manufacture the drug product used in the clinical trials.

As a result of the FYARRO Divestiture, all of our rights and obligations under the Fresenius Agreement transferred to KAKEN.

We also have contracts with various organizations to conduct research and development activities, including clinical trial organizations to manage clinical trial activities.

The scope of the services under these research and development contracts can be modified and the contracts cancelled by us upon written notice.

In the event of cancellation, we would be liable for the cost and expenses incurred to date as well as any close out costs of the service arrangement.

Under the License Agreement, we paid $6.0 million and $38.0 million to WuXi Biologics in the fourth quarter of 2024 and the second quarter of 2025, respectively, in each case, for the rights and licenses granted to us by WuXi Biologics.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP.

These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods

Our condensed consolidated financial statements are prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

We believe that the estimates, judgments and assumptions are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis