Core Viewpoint - Aadi Bioscience, Inc. has successfully closed a private placement, raising approximately $100 million to support its oncology therapeutics initiatives and operational funding [1][3]. Group 1: Private Placement Details - Aadi sold a total of 21,592,000 shares of common stock at a price of $2.40 per share and issued pre-funded warrants for 20,076,500 shares at a price of $2.3999 per share [2]. - The private placement was led by Ally Bridge Group, with participation from new investors such as OrbiMed, Invus, and Kalehua Capital, as well as existing investors including Avoro Capital, KVP Capital, and Acuta Capital Partners [1][2]. Group 2: Use of Proceeds - The net proceeds from the private placement will be utilized for upfront payments under a license agreement with WuXi Biologics and for general working capital [3]. - The combined proceeds from this private placement and the sale of Aadi's FYARRO® business, along with existing cash and marketable securities, are expected to fund operations into 2028, including anticipated clinical data readouts for its ADC portfolio [3]. Group 3: Regulatory Information - The shares sold in the private placement have not been registered under the Securities Act and may not be offered or sold in the U.S. without registration or an applicable exemption [4]. - Aadi has entered into a registration rights agreement to file a registration statement with the SEC for the resale of the shares sold in the private placement [4].

Core Points - Aadi Bioscience, Inc. has received approval from stockholders for all proposals voted on during the Special Meeting held on February 28, 2025 [1][2][3][4] Group 1: Divestiture Proposal - The stockholders approved the sale of 100% of the outstanding shares of Aadi Subsidiary, Inc. to KAKEN INVESTMENTS INC., which includes all or substantially all assets related to the FYARRO® program [1] Group 2: PIPE Financing Proposal - The approval was granted for the issuance of 21,592,000 shares of common stock at a price of $2.40 per share, along with pre-funded warrants to purchase up to 20,076,500 shares at a price of $2.3999 per warrant [2] Group 3: Equity Plan Increase Proposal - An amendment to the 2021 Equity Incentive Plan was approved, increasing the shares available for issuance by 6,300,000 shares, raising the total from 2,000,284 to 8,300,284 shares, and increasing the annual automatic share reserve increase from 4% to 5% [3] Group 4: Non-Binding Advisory Vote - A non-binding advisory vote was approved regarding certain compensation that may be payable to named executive officers in connection with the divestiture [4]

Core Viewpoint - Aadi Bioscience, Inc. (AADI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements [4][6]. - Aadi Bioscience's earnings estimates for the fiscal year ending December 2024 are projected at -$1.92 per share, reflecting a 21.3% change from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Aadi Bioscience has increased by 40.1%, indicating a positive outlook for the company's earnings [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) [7]. - The system has a strong track record, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [7]. - Aadi Bioscience's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Insights - Aadi Bioscience has appointed David Dornan, PhD, as Chief Scientific Officer, bringing over 20 years of oncology drug discovery and development experience, particularly in antibody-drug conjugates (ADCs) [1][2][3] - The company is implementing a new strategic plan that includes the sale of FYARRO® to Kaken Pharmaceuticals for $100 million, in-licensing a portfolio of ADCs from WuXi Biologics, and a $100 million private placement financing [2][3] - Aadi's pipeline targets specific cancer markers such as PTK7, MUC16, and SEZ6, aiming to innovate cancer treatment through a next-generation linker-payload platform [3] Company Developments - The strategic plan was first announced in December 2024 and includes a definitive proxy statement filed on January 31, 2025, for a Special Meeting of Stockholders scheduled for February 28, 2025 [2] - Dr. Dornan's previous roles include CSO at Elevation Oncology and Bolt Biotherapeutics, where he led ADC development and clinical trials [3] - Aadi aims to leverage its ADC expertise and innovative strategies to enhance patient outcomes in oncology [3] Industry Context - The ADC field is experiencing significant transformation, and Aadi is positioned to contribute with its advanced tumor-targeting strategies [3] - The company emphasizes a commitment to translating scientific innovation into impactful therapies for patients with difficult-to-treat cancers [4]

Core Viewpoint - Aadi Bioscience is undergoing a significant business transformation involving the sale of FYARRO to Kaken Pharmaceuticals for $100 million, the in-licensing of a portfolio of antibody drug conjugates (ADCs) from WuXi Biologics, and a $100 million PIPE financing to support these initiatives [1][2][3][16]. Group 1: Strategic Transactions - The strategic plan includes three main transactions: the sale of FYARRO for $100 million, in-licensing of ADCs, and a $100 million PIPE financing [2][16]. - The sale of FYARRO is expected to close in the first quarter of 2025, pending stockholder approval [3][21]. - The Board recommends stockholders vote "FOR" all proposals to support the company's transformation and long-term value creation [3][19]. Group 2: Financial Performance and Market Response - FYARRO generated approximately $58 million in sales as of September 30, 2024, but faced setbacks leading to a strategic review [5][6]. - The sale price of $100 million for FYARRO is approximately four times the revenue generated over the last four quarters [8]. - Following the announcement of these transactions, Aadi's stock price rose by 46% on the first trading day and has remained significantly above pre-announcement levels [18]. Group 3: ADC Portfolio and Development Plans - Aadi plans to in-license three pre-clinical ADCs from WuXi Biologics, which are expected to enhance the company's product pipeline [9][11]. - The ADC market is projected to grow to over $50 billion by 2030, indicating significant investment potential [9]. - The selected ADC assets leverage advanced technology for improved anti-tumor responses while minimizing toxicity [10]. Group 4: Investor Support and Governance - Aadi has engaged approximately 50 potential investors for the PIPE financing, with a sophisticated investor syndicate being formed [12][13]. - Baiteng Zhao, PhD, has been appointed to the Board to enhance ADC expertise and oversee the new portfolio [17]. - Key stockholders holding approximately 39.1% of outstanding shares have entered into agreements to support the transaction with Kaken Pharmaceuticals [27].

Core Viewpoint - Aadi Bioscience, Inc. has entered into an exclusive license agreement for the development and commercialization of three preclinical antibody-drug conjugates (ADCs) in collaboration with WuXi Biologics and Hangzhou DAC Biotechnology Co., Ltd. [2] Group 1: License Agreement Details - Aadi is granted exclusive rights to certain patents and know-how related to three preclinical ADC programs utilizing Hangzhou DAC's CPT113 linker payload technology [1] - Aadi will make aggregate upfront payments of $44 million for in-licensing these ADC programs [6] - The agreement includes cumulative development milestone payments of up to $265 million and cumulative commercial milestone payments of up to $540 million, along with single-digit sales royalties [6] Group 2: Financial Aspects - To support the transaction, Aadi has entered into a subscription agreement for a private investment in public equity financing of approximately $100 million [4] - The company is selling 21.59 million shares at a price of $2.40 per share [5] Group 3: Market Reaction - AADI stock experienced a price increase of 24.1%, reaching $2.87 during the premarket session [7] Group 4: Clinical Trial Update - Aadi announced the halt of the registration-intended PRECISION1 trial of nabsirolimus in patients with solid tumors due to an analysis indicating the study was unlikely to meet the efficacy threshold for accelerated approval [5]

Core Insights - Aadi Bioscience has entered into an exclusive license agreement for a three-asset antibody-drug conjugate (ADC) portfolio developed in collaboration with WuXi Biologics and HANGZHOU DAC [1][2] - The company is selling its FYARRO product and associated infrastructure to KAKEN Pharmaceutical for $100 million, with the transaction expected to close in the first half of 2025 [11][12] - Aadi has announced a PIPE financing of $100 million to support its operations and fund clinical data for the ADC portfolio [3][14] License Agreement Details - Aadi is granted exclusive rights to patents and know-how for three preclinical ADC programs targeting PTK7, MUC16, and SEZ6, with an upfront payment of $44 million [2] - Cumulative development milestone payments could reach up to $265 million, and commercial milestone payments could total up to $540 million, along with single-digit royalties on sales [2] PIPE Financing - Aadi's PIPE financing is expected to yield gross proceeds of approximately $100 million, selling 21,592,000 shares at $2.40 per share, representing a 3.4% premium to the closing price on December 19, 2024 [3][4] - The financing is led by Ally Bridge Group and includes participation from new and existing investors [4] ADC Portfolio Overview - The ADC assets utilize HANGZHOU DAC's CPT113 platform, which features a stable yet cleavable linker delivering a Topoisomerase I inhibitor payload [6] - The selected tumor targets are associated with high-potential cancer indications, with clinical efficacy demonstrated by first-generation ADCs [7] FYARRO Sale - KAKEN Pharmaceutical will acquire Aadi's subsidiary and assets related to FYARRO, which has generated $25.2 million in revenue over the past four quarters [11][12] - The sale is expected to provide Aadi with necessary capital to fund operations into late 2028 [14] Board Appointment - Baiteng Zhao, co-founder of ProfoundBio, has been appointed to Aadi's Board of Directors, bringing significant ADC expertise [15][16] - Zhao's experience includes a successful track record in ADC development, which will be instrumental for Aadi's future initiatives [17]

Financial Performance - FYARRO recognized net product sales of $7.2 million and $18.7 million for the three and nine months ended September 30, 2024, respectively[95]. - Product sales for the three months ended September 30, 2024, were $7.2 million, an increase of 20.9% compared to $6.0 million for the same period in 2023[114]. - Total revenue for the nine months ended September 30, 2024, was $18.7 million, compared to $18.0 million for the same period in 2023, reflecting strong demand for FYARRO[114]. - The accumulated deficit as of September 30, 2024, was $314.4 million, with net losses of $12.5 million for the three months ended September 30, 2024[123]. Operational Changes - The company halted the PRECISION1 trial based on interim analysis results, indicating it was unlikely to meet the efficacy threshold for accelerated approval[97]. - A workforce reduction of 22 employees, representing approximately 32% of the workforce, was approved by the Board of Directors[98]. - The company expects to decrease investment in research and development due to the halt of the PRECISION1 study and paused enrollment in two Phase 2 trials[103]. - Restructuring charges for the three and nine months ended September 30, 2024, were $2.6 million, resulting from a workforce reduction of 32%[120]. Cash and Investments - The company had $62.6 million in cash, cash equivalents, and short-term investments as of September 30, 2024, expected to fund operations into the second half of 2026[104]. - For the nine months ended September 30, 2024, cash used in operating activities was $44.5 million, resulting from a net loss of $45.4 million[125]. - Cash provided by investing activities for the nine months ended September 30, 2024 was $12.1 million, related to maturities of short-term investments of $50.0 million[128]. - The company received funding of $72.2 million from a private investment in public equity financing on September 22, 2022[124]. Strategic Initiatives - The company is conducting a comprehensive strategic review to maximize shareholder value[97]. - The company has a shelf registration statement allowing it to sell up to $150.0 million of various securities, providing flexibility for future capital needs[124]. - The company has sufficient supply of FYARRO for at least the next two years based on estimated demand and is seeking to enter into a new agreement for its manufacture[131]. Expenses - Selling, general and administrative expenses decreased by $4.0 million to $7.2 million for the three months ended September 30, 2024, compared to $11.2 million for the same period in 2023[115]. - Research and development expenses for the three months ended September 30, 2024, were $10.0 million, a decrease of $1.9 million from $11.9 million in 2023[119]. - Other income for the three months ended September 30, 2024, was $0.9 million, down from $1.5 million in 2023, primarily due to a decrease in short-term investments[122]. Legal and Compliance - The arbitration panel found that the company did not breach the EOC License Agreement, resulting in no liability for damages to EOC[98]. - The commercial sale of FYARRO was launched on February 22, 2022, marking a significant milestone in the company's operations[103].

Financial Performance - Aadi Bioscience reported a quarterly loss of $0.46 per share, which aligns with the Zacks Consensus Estimate, an improvement from a loss of $0.60 per share a year ago [1] - The company posted revenues of $7.21 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 10.11%, compared to $5.96 million in the same quarter last year [2] - The current consensus EPS estimate for the upcoming quarter is -$0.24 on revenues of $6.77 million, and for the current fiscal year, it is -$2.02 on revenues of $24.86 million [7] Market Performance - Aadi Bioscience shares have declined approximately 1.5% since the beginning of the year, contrasting with the S&P 500's gain of 21.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Industry Outlook - The Medical - Biomedical and Genetics industry, to which Aadi Bioscience belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Sales Performance - FYARRO® sales reached $7.2 million in Q3 2024, reflecting a 21% year-over-year growth[1] - The net product sales of FYARRO increased by 17% from Q2 2024, driven by strong demand and a nearly 90% reorder rate[2] - Total revenue for the quarter ended September 30, 2024, was $7.2 million, resulting solely from FYARRO sales[5] Financial Position - Cash, cash equivalents, and short-term investments as of September 30, 2024, were $62.6 million, down from $108.8 million as of December 31, 2023[5] - Operating expenses for Q3 2024 were $20.6 million, a decrease from $23.8 million in the prior year quarter[6] - The net loss for Q3 2024 was $12.5 million, compared to a net loss of $16.3 million for the same period in 2023[6] - Aadi expects to fund operations into at least the second half of 2026 based on current plans[8] Strategic Initiatives - Aadi is conducting a comprehensive strategic review to maximize shareholder value, with no specific timeline provided for completion[4] - The Phase 2 trials of nab-sirolimus for advanced endometrial cancer and neuroendocrine tumors have enrolled 24 and 12 patients, respectively[4] - The company has transitioned patients from the halted PRECISION1 trial to an expanded access protocol, with a report expected in 2025[3]