Company Overview - Aardvark Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing novel, small-molecule therapeutics for metabolic diseases [4] - The company is developing treatments specifically designed to suppress hunger, targeting conditions such as Prader-Willi Syndrome (PWS) and hypothalamic obesity [4] Recent Developments - On August 28, 2025, Aardvark granted inducement awards consisting of stock options to two new employees, totaling 20,013 shares of common stock [1] - The stock options were granted under the Aardvark Therapeutics, Inc. 2025 Inducement Equity Incentive Plan, in compliance with Nasdaq Listing Rule 5635(c)(4) [2] Stock Option Details - The exercise price for each option is set at $8.49, which is the closing price of Aardvark's common stock on the grant date [3] - The options will vest over four years, with 25% vesting on the one-year anniversary of employment and the remaining shares vesting monthly thereafter [3] Product Pipeline - Aardvark's lead compound, oral ARD-101, is currently in Phase 3 clinical development for treating hyperphagia associated with PWS [4] - The company is also developing ARD-201, a fixed-dose combination of ARD-101 with a DPP-4 inhibitor, aimed at addressing limitations of existing GLP-1 therapies for obesity [4]

Aardvark Therapeutics (AARD) 2025 Conference Summary Company Overview - Aardvark Therapeutics is a San Diego-based biotech company focused on small molecule drug development, specifically targeting gut-brain signaling pathways to mediate appetite regulation [3][4] Core Points and Arguments Drug Mechanism and Development - Aardvark's drug is a gut-restricted small molecule that signals the gut-brain pathway to reduce hunger by affecting enteroendocrine cells, which release gut peptide hormones [3][4][5] - The primary mechanism of action is believed to be through the vagal nerve, which communicates with the brain to regulate appetite [5][6] - The drug targets both hunger and appetite, with recent preclinical data showing effectiveness in general obesity beyond just Prader Willi syndrome [8][9][10] Clinical Trials and Results - Aardvark conducted a placebo-controlled trial with 20 patients for general obesity, showing a 1% greater weight loss in the treatment group compared to placebo [14] - Significant reductions in subjective hunger scores and ghrelin levels were observed, indicating the drug's effectiveness in appetite regulation [15] - In a diet-induced obesity mouse model, the ARD201 formulation resulted in a 19% weight loss over 30 days, comparable to the 20.5% weight loss seen with tirzepatide [22][23] Upcoming Trials - Aardvark is amending its Phase II program to focus on two new studies: the POWER trial (Prevention of Weight Regain) and the STRENGTH trial, both set to start before the end of 2025 [25][27] - The POWER trial will recruit patients who have lost at least 15% of their weight on GLP-1s, while the STRENGTH trial will compare the combination of Aardvark's drug with GLP-1s [27][30] Patient Population and Inclusion Criteria - The company plans to lower the age inclusion criteria for the Prader Willi program to potentially include patients as young as seven years old, aiming for a broader label if successful [42][44] - Recent updates allow for patients on concomitant atypical antipsychotics to participate, addressing previous concerns about trial purity [45][47] Market Position and Competitive Landscape - Aardvark anticipates competition from drugs like VICAD XR but believes its drug's side effect profile and early data will attract patient interest [59][60] - The company is focused on maintaining a strong enrollment rate for its trials despite the competitive landscape [60] Other Important Content - The drug's mechanism is designed to enhance the natural secretion of gut peptide hormones without reaching super-physiological levels, potentially reducing side effects like nausea [18][19] - Aardvark's approach to managing placebo effects includes a second baseline score assessment to ensure accurate measurement of treatment effects [52] - The company plans to share peer-reviewed publications and updates on trial progress over the next 12 to 18 months, with a presence at ObesityWeek in November [66]

Core Viewpoint - Aardvark Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing small-molecule therapeutics aimed at treating metabolic diseases, particularly through the activation of innate homeostatic pathways [1][2]. Company Overview - Aardvark is developing novel therapeutics to suppress hunger, specifically targeting conditions like Prader-Willi Syndrome (PWS) and other metabolic diseases [2]. - The lead compound, ARD-101, is currently in Phase 3 clinical development for hyperphagia associated with PWS and is also being studied for hypothalamic obesity [2]. - Aardvark is also working on ARD-201, a fixed-dose combination of ARD-101 and a DPP-4 inhibitor, aimed at overcoming limitations of existing GLP-1 therapies for obesity and related conditions [2]. Upcoming Events - Aardvark will present at several conferences in September 2025, including: - Cantor Fitzgerald Global Healthcare Conference on September 3 at 11:30 a.m. ET [4]. - Morgan Stanley 23rd Annual Global Healthcare Conference on September 8 at 7:00 a.m. ET [4]. - H.C. Wainwright 27th Annual Global Investment Conference on September 10 at 10:30 a.m. ET [4]. - Live webcasts of these presentations will be available on the company's website, with archived recordings accessible for approximately one month post-event [1].

PART I—FINANCIAL INFORMATION This part details the company's financial statements, management's analysis, and related disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Aardvark Therapeutics' unaudited condensed consolidated financial statements and notes for periods ending June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (unaudited) (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :--------------------------------------- | :------------------------------------ | | **Assets** | | | | Cash and cash equivalents | $25,998 | $61,641 | | Short-term investments | $115,822 | $12,022 | | Total current assets | $144,768 | $74,137 | | Total assets | $147,475 | $77,507 | | **Liabilities & Equity** | | | | Total current liabilities | $10,310 | $4,927 | | Total liabilities | $10,550 | $5,394 | | Convertible preferred stock | $— | $126,756 | | Total stockholders' equity (deficit)| $136,925 | $(54,643) | | Total liabilities, convertible preferred stock and stockholders' equity (deficit) | $147,475 | $77,507 | - Total assets increased significantly from **$77.5 million** at December 31, 2024, to **$147.5 million** at June 30, 2025, primarily driven by an increase in short-term investments[9](index=9&type=chunk) - The company's stockholders' equity shifted from a deficit of **$(54.6) million** at December 31, 2024, to a positive **$136.9 million** at June 30, 2025, largely due to the IPO and conversion of preferred stock[9](index=9&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details the company's revenues, expenses, and net loss for the three and six months ended June 30, 2025 and 2024 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $13,145 | $4,029 | $20,900 | $5,236 | | General and administrative | $2,703 | $2,030 | $5,418 | $2,891 | | Total operating expenses | $15,848 | $6,073 | $26,318 | $8,244 | | Loss from operations | $(15,848) | $(6,073) | $(26,318) | $(8,244) | | Total other income, net | $1,481 | $624 | $2,641 | $617 | | Net loss | $(14,367) | $(5,449) | $(23,677) | $(7,627) | | Net loss per share (basic and diluted) | $(0.66) | $(1.37) | $(1.36) | $(1.92) | - Net loss increased significantly to **$(14.4) million** for the three-month period and **$(23.7) million** for the six-month period ended June 30, 2025, compared to 2024, primarily due to increased R&D and G&A expenses[10](index=10&type=chunk) - Despite higher net losses, net loss per share decreased due to a substantial increase in weighted-average shares outstanding following the IPO[10](index=10&type=chunk) [Unaudited Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Equity%20%28Deficit%29) Outlines changes in convertible preferred stock and stockholders' equity (deficit) for the six months ended June 30, 2025 | Metric (in thousands, except share data) | Balance, Dec 31, 2024 | IPO Issuance (Common Stock) | Conversion of Preferred Stock | Stock-based Compensation | Net Loss | Balance, Jun 30, 2025 | | :--------------------------------------- | :-------------------- | :-------------------------- | :---------------------------- | :----------------------- | :------- | :-------------------- | | Convertible Preferred Stock (Shares) | 96,941,453 | — | (96,941,453) | — | — | — | | Convertible Preferred Stock (Amount) | $126,756 | — | $(126,756) | — | — | $— | | Common Stock (Shares Outstanding) | 4,066,969 | 6,120,661 | 11,439,838 | 4,844 | — | 21,693,016 | | Additional Paid-In Capital | $3,684 | $87,495 | $126,756 | $867 | — | $218,932 | | Accumulated Deficit | $(58,327) | — | — | — | $(23,677) | $(82,004) | | Total Stockholders' Equity (Deficit) | $(54,643) | $87,495 | $126,756 | $867 | $(23,677) | $136,925 | - The company completed its IPO in February 2025, issuing **6,120,661 shares** of common stock for net proceeds of approximately **$87.5 million**[13](index=13&type=chunk)[23](index=23&type=chunk)[62](index=62&type=chunk) - All outstanding convertible preferred stock (**96,941,453 shares**) converted into **11,439,838 shares** of common stock upon the IPO, eliminating preferred stock from the balance sheet[13](index=13&type=chunk)[24](index=24&type=chunk)[63](index=63&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(21,232) | $(6,405) | | Net cash used in investing activities | $(103,215) | $(98) | | Net cash provided by financing activities | $88,804 | $82,941 | | Net (decrease) increase in cash and cash equivalents | $(35,643) | $76,438 | | Cash and cash equivalents at end of year | $25,998 | $86,173 | - Net cash used in operating activities increased significantly to **$21.2 million** for the six months ended June 30, 2025, from **$6.4 million** in the prior year, primarily due to increased R&D activities[17](index=17&type=chunk)[155](index=155&type=chunk) - Investing activities used **$103.2 million** in H1 2025, mainly for purchases of short-term investments, a substantial increase from **$98 thousand** in H1 2024[17](index=17&type=chunk)[156](index=156&type=chunk) - Financing activities provided **$88.8 million** in H1 2025, primarily from IPO proceeds, compared to **$82.9 million** in H1 2024 from Series C preferred stock issuance[17](index=17&type=chunk)[157](index=157&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Organization and Basis of Presentation](index=8&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) Describes the company's business, IPO, and financial position, including accumulated deficit and liquidity outlook - Aardvark Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing small-molecule therapeutics for metabolic diseases, specifically targeting hunger-associated pathways[19](index=19&type=chunk) - The company completed its IPO in February 2025, raising approximately **$87.5 million** in net proceeds and converting all outstanding convertible preferred stock into common stock[23](index=23&type=chunk)[24](index=24&type=chunk) - As of June 30, 2025, the company had an accumulated deficit of **$82.0 million** and expects its cash, cash equivalents, and short-term investments of **$141.8 million** to be sufficient for at least one year[25](index=25&type=chunk)[26](index=26&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines key accounting policies for cash, investments, and research and development expenses - Cash equivalents include money market mutual funds and short-term U.S. Treasury debt obligations, stated at cost approximating fair value[32](index=32&type=chunk) - Short-term investments consist of corporate equity securities and U.S. Treasury obligations, classified as available-for-sale and carried at fair value, with unrealized gains/losses reported in comprehensive loss[34](index=34&type=chunk)[35](index=35&type=chunk) - Research and development expenses are expensed as incurred, including external costs for CROs, manufacturing, and regulatory activities, and internal personnel and facility-related costs[40](index=40&type=chunk)[42](index=42&type=chunk) [3. Net Loss Per Share](index=11&type=section&id=3.%20Net%20Loss%20Per%20Share) Explains the calculation of basic and diluted net loss per share and lists potentially dilutive securities - Basic and diluted net loss per share are calculated by dividing net loss by the weighted-average common shares outstanding. Due to net losses, diluted EPS equals basic EPS[48](index=48&type=chunk)[50](index=50&type=chunk) | Potentially Dilutive Securities | June 30, 2025 | June 30, 2024 | | :------------------------------ | :------------ | :------------ | | Conversion of outstanding convertible preferred stock | — | 11,439,838 | | Options to purchase common stock | 2,982,640 | 447,816 | | Common stock subject to repurchase rights | 3,877 | — | | Employee Stock Purchase Plan shares | 4,663 | — | | Total | 2,991,180 | 11,887,654 | - The number of potentially dilutive securities decreased significantly from **11.9 million** in 2024 to **3.0 million** in 2025, primarily due to the conversion of preferred stock into common stock upon IPO[51](index=51&type=chunk) [4. Fair Value Measurements](index=12&type=section&id=4.%20Fair%20Value%20Measurements) Details the fair value hierarchy and categorization of financial assets as of June 30, 2025 - The company categorizes fair value measurements into a three-tier hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) | Asset Category (in thousands) | June 30, 2025 Total | Level 1 | Level 2 | Level 3 | | :---------------------------- | :------------------ | :------ | :------ | :------ | | Money market mutual funds | $16,960 | $16,960 | $— | $— | | Scilex Holding Company common stock | $14 | $14 | $— | $— | | Sorrento Therapeutics, Inc. common stock | $1 | $1 | $— | $— | | U.S. Treasury obligations | $115,807 | $— | $115,807| $— | | **Total** | **$132,782** | **$16,975** | **$115,807**| **$—** | - As of June 30, 2025, the majority of fair value assets were in Level 2 (U.S. Treasury obligations) and Level 1 (money market funds and equity securities), with no assets in Level 3[55](index=55&type=chunk) [5. Short-Term Investments](index=13&type=section&id=5.%20Short-Term%20Investments) Provides details on the composition and fair value of short-term investments, primarily U.S. Treasury obligations | Metric (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :-------------------- | :------------- | :--------------------- | :---------------------- | :--------- | | U.S. Treasury obligations (June 30, 2025) | $115,810 | $13 | $(16) | $115,807 | | U.S. Treasury obligations (Dec 31, 2024) | $11,985 | $— | $— | $11,985 | - Short-term investments, primarily U.S. Treasury obligations, increased significantly from **$11.985 million** at December 31, 2024, to **$115.807 million** at June 30, 2025[59](index=59&type=chunk) - All available-for-sale debt securities held at June 30, 2025, are due in one year or less[59](index=59&type=chunk) [6. Balance Sheet Details](index=13&type=section&id=6.%20Balance%20Sheet%20Details) Presents a breakdown of accrued liabilities, highlighting increases in R&D and compensation-related expenses | Accrued Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Research and development costs | $3,154 | $1,222 | | Compensation-related expenses | $1,376 | $225 | | Deferred offering costs | $— | $671 | | Other | $307 | $173 | | **Total accrued liabilities** | **$4,837** | **$2,291** | - Total accrued liabilities increased from **$2.291 million** at December 31, 2024, to **$4.837 million** at June 30, 2025, driven by higher R&D and compensation-related expenses[60](index=60&type=chunk) [7. Stockholders' Equity (Deficit)](index=14&type=section&id=7.%20Stockholders%27%20Equity%20%28Deficit%29) Details the impact of the IPO, preferred stock conversion, and stock-based compensation on stockholders' equity - The company completed its IPO in February 2025, selling **6,120,661 shares** of common stock at **$16.00 per share**, generating approximately **$87.5 million** in net proceeds[62](index=62&type=chunk) - All outstanding convertible preferred stock converted into **11,439,838 shares** of common stock upon the IPO, and the certificate of incorporation was amended to authorize **490 million** common shares and **10 million** preferred shares[63](index=63&type=chunk) | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development expense | $333 | $23 | $493 | $56 | | General and administrative expense | $301 | $30 | $374 | $65 | | **Total stock-based compensation expense** | **$634** | **$53** | **$867** | **$121** | [8. Sale of Intellectual Property](index=15&type=section&id=8.%20Sale%20of%20Intellectual%20Property) Describes the sale of patent rights and potential future milestone payments and royalties from intellectual property - In April 2021, the company sold patent rights to Sorrento Therapeutics, Inc. for **616,655 shares** of Sorrento's common stock (fair value ~**$4.7 million**)[71](index=71&type=chunk) - The company is eligible for future development and commercial milestone payments of up to **$23.0 million** and low single-digit royalties on net sales, which are currently considered fully constrained due to high uncertainty[71](index=71&type=chunk) - In January 2023, the company received **86,956 shares** of Scilex Holding Company common stock (fair value ~**$0.9 million**) as a stock dividend from Sorrento, subject to transfer restrictions until April 2025[72](index=72&type=chunk) [9. Commitments and Contingencies](index=15&type=section&id=9.%20Commitments%20and%20Contingencies) Outlines potential future milestone payments, legal proceedings, and indemnification obligations - The company has potential future regulatory and commercial milestone payments totaling approximately **$180.5 million** related to acquired intellectual property in 2023 and 2024[73](index=73&type=chunk) - As of June 30, 2025, management is not aware of any legal proceedings that could materially adversely affect the company's financial position, results of operations, or cash flows[74](index=74&type=chunk) - The company provides indemnification to vendors, lessors, business partners, officers, and directors, with maximum potential future payments often unlimited, but no material costs have been incurred to date[75](index=75&type=chunk) [10. Related Party Transactions](index=16&type=section&id=10.%20Related%20Party%20Transactions) Discloses common stock ownership by CEO's family members and a related party board membership - As of June 30, 2025, family members of the CEO owned **1,975,323 shares** of common stock[77](index=77&type=chunk) - The CEO is a board member of Aardwolf Therapeutics, Inc., a related party[78](index=78&type=chunk) [11. Aardwolf Spinoff](index=16&type=section&id=11.%20Aardwolf%20Spinoff) Details the spinoff of Aardwolf Therapeutics and the write-off of uncollectible receivables and notes - In May 2022, the company spun off Aardwolf Tx, LLC (later Aardwolf Therapeutics, Inc.) by distributing membership interests to Aardvark's stockholders[79](index=79&type=chunk) - Unreimbursed costs of **$1.4 million** from a Transition Services Agreement with Aardwolf were deemed uncollectible and fully written off as of June 30, 2025, due to Aardwolf's inability to repay[80](index=80&type=chunk) - A **$1.0 million** convertible promissory note issued by Aardwolf to the company in August 2022 was also written off as uncollectible in 2022[81](index=81&type=chunk) [12. Segment Reporting](index=17&type=section&id=12.%20Segment%20Reporting) Confirms the company operates as a single segment focused on metabolic disease therapies, with no product revenue - The company operates as one segment, focused on discovering and developing novel therapies for metabolic diseases, with all assets held in the United States[84](index=84&type=chunk)[85](index=85&type=chunk) - Performance is assessed through achievement of pre-clinical and clinical research goals, as no product revenue has been generated to date[86](index=86&type=chunk) | Expense Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research expenses | $10,163 | $2,910 | $15,681 | $3,625 | | Personnel-related R&D | $2,704 | $1,068 | $4,739 | $1,521 | | Facilities-related R&D | $278 | $51 | $480 | $90 | | General and administrative | $2,703 | $2,030 | $5,418 | $2,891 | | Net loss | $14,367 | $5,449 | $23,677 | $7,627 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial condition, results of operations, liquidity, and capital resources, including forward-looking statements [Special Note Regarding Forward-Looking Statements](index=18&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) Highlights that the report contains forward-looking statements subject to risks and uncertainties, with no obligation to update - The report contains forward-looking statements about future events, financial performance, business strategy, product candidates, clinical trials, and regulatory approvals, which involve substantial risks and uncertainties[90](index=90&type=chunk) - Readers are cautioned that actual results may differ materially from these statements due to various factors, including those detailed in the 'Risk Factors' section[88](index=88&type=chunk)[93](index=93&type=chunk) - The company undertakes no obligation to update forward-looking statements to reflect new information or unanticipated events, except as required by law[95](index=95&type=chunk) [Overview](index=20&type=section&id=Overview) Summarizes Aardvark Therapeutics' clinical-stage focus, lead product candidates, and financial position - Aardvark Therapeutics is a clinical-stage biopharmaceutical company developing small-molecule therapeutics to activate innate homeostatic pathways for metabolic diseases, specifically targeting Bitter Taste Receptors (TAS2Rs) to alleviate hunger[98](index=98&type=chunk) - The lead product candidate, ARD-101, is in a Phase 3 clinical trial (HERO trial) for hyperphagia associated with Prader-Willi Syndrome (PWS), with topline data anticipated in Q3 2026, and will also be evaluated in a Phase 2 trial (HONOR trial) for hypothalamic obesity (HO) in H2 2025[99](index=99&type=chunk)[100](index=100&type=chunk) - The ARD-201 program (a fixed-dose combination of ARD-101 and a DPP-4 inhibitor) will be explored in two Phase 2 trials: POWER (prevention of weight regain after GLP-1RA discontinuation, H2 2025) and STRENGTH (additive effect with GLP-1RA therapy, H1 2026)[101](index=101&type=chunk)[102](index=102&type=chunk) - The company has incurred significant net losses (**$14.4 million** for Q2 2025, **$23.7 million** for H1 2025) and negative cash flows, with an accumulated deficit of **$82.0 million** as of June 30, 2025, and expects expenses to increase substantially[113](index=113&type=chunk) - Cash, cash equivalents, and short-term investments totaled **$141.8 million** as of June 30, 2025, projected to fund operations into 2027, but additional funding will be required for long-term plans[116](index=116&type=chunk)[117](index=117&type=chunk) [Components of Our Results of Operations](index=24&type=section&id=Components%20of%20Our%20Results%20of%20Operations) Explains the key components of the company's financial results, including revenue, operating expenses, and other income - The company has not generated any revenue from product sales to date and does not expect to until product candidates receive regulatory approval[122](index=122&type=chunk) - Operating expenses include research and development, general and administrative, and credit losses on related party receivables[123](index=123&type=chunk) - R&D expenses are recognized as incurred and consist of external costs (CROs, manufacturing, regulatory) and internal costs (personnel, facilities)[124](index=124&type=chunk)[128](index=128&type=chunk) - G&A expenses primarily cover personnel, legal, accounting, consulting, and insurance costs[131](index=131&type=chunk) - Credit losses relate to uncollectible receivables and a convertible promissory note from Aardwolf Therapeutics, Inc., which have been fully written off[134](index=134&type=chunk) - Other income (expense), net, primarily includes interest income from invested cash and changes in fair value of equity securities[135](index=135&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance for the three and six months ended June 30, 2025 and 2024 [Comparison of the Three Months ended June 30, 2025 and 2024](index=26&type=section&id=Comparison%20of%20the%20Three%20Months%20ended%20June%2030%2C%202025%20and%202024) Compares financial results for the three-month periods, highlighting changes in expenses and net loss | Metric (in thousands) | 2025 | 2024 | Change | | :-------------------- | :---------- | :---------- | :---------- | | R&D expenses | $13,145 | $4,029 | $9,116 | | G&A expenses | $2,703 | $2,030 | $673 | | Credit loss | $— | $14 | $(14) | | Total operating expenses | $15,848 | $6,073 | $9,775 | | Other income, net | $1,481 | $624 | $857 | | Net loss | $(14,367) | $(5,449) | $(8,918) | - R&D expenses increased by **$9.1 million**, primarily due to **$7.3 million** in external CMC, clinical, and toxicology studies for ARD-101 and a **$1.6 million** increase in personnel costs[137](index=137&type=chunk) - G&A expenses rose by **$0.7 million**, mainly from a **$0.6 million** increase in personnel-related costs and **$0.5 million** in facilities/other costs, partially offset by lower legal fees, reflecting public company operations[138](index=138&type=chunk) - Other income, net, increased by **$0.9 million** due to higher interest income from increased cash balances[140](index=140&type=chunk) [Comparison of the Six Months ended June 30, 2025 and 2024](index=27&type=section&id=Comparison%20of%20the%20Six%20Months%20ended%20June%2030%2C%202025%20and%202024) Compares financial results for the six-month periods, detailing changes in expenses and net loss | Metric (in thousands) | 2025 | 2024 | Change | | :-------------------- | :---------- | :---------- | :---------- | | R&D expenses | $20,900 | $5,236 | $15,664 | | G&A expenses | $5,418 | $2,891 | $2,527 | | Credit loss | $— | $117 | $(117) | | Total operating expenses | $26,318 | $8,244 | $18,074 | | Other income, net | $2,641 | $617 | $2,024 | | Net loss | $(23,677) | $(7,627) | $(16,050) | - R&D expenses increased by **$15.7 million**, driven by **$12.1 million** in external CMC, clinical, and toxicology studies for ARD-101 and a **$3.2 million** increase in personnel costs[143](index=143&type=chunk) - G&A expenses increased by **$2.5 million**, primarily due to **$1.1 million** in facilities/other costs, **$0.9 million** in personnel costs, and **$0.5 million** in legal/professional costs, reflecting public company operations[144](index=144&type=chunk) - Other income, net, increased by **$2.0 million**, primarily from higher interest income due to increased invested cash balances[146](index=146&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's cash position, funding needs, and strategies for financing future operations - The company has incurred significant net losses and negative cash flows since inception and does not expect to generate revenue from product sales for the foreseeable future[147](index=147&type=chunk) - As of June 30, 2025, cash, cash equivalents, and short-term investments totaled **$141.8 million**, expected to fund operations into 2027, but additional substantial funding will be required[148](index=148&type=chunk) - Future capital requirements are difficult to predict and depend on factors like clinical trial progress, manufacturing costs, regulatory approvals, and intellectual property protection[151](index=151&type=chunk)[153](index=153&type=chunk) - The company plans to finance future cash needs through equity offerings, debt financings, or collaborations, with potential risks of dilution or unfavorable terms[151](index=151&type=chunk) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(21,232) | $(6,405) | | Net cash used in investing activities | $(103,215) | $(98) | | Net cash provided by financing activities | $88,804 | $82,941 | | Net (decrease) increase in cash and cash equivalents | $(35,643) | $76,438 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rate risk, foreign currency risk, and inflation risk, and assesses their potential impact on financial statements - The company's primary market risk exposure is interest rate sensitivity, but due to the short-term nature of its cash and cash equivalents, a hypothetical **100 basis point** change in interest rates is not expected to have a material impact[162](index=162&type=chunk) - Foreign currency risk is negligible as all employees and operations are in the U.S., and expenses are primarily U.S. dollar-denominated; no formal hedging program is in place[163](index=163&type=chunk) - Inflation has not had a material effect on the company's results of operations during the periods presented, though it can increase labor and clinical trial costs[164](index=164&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Addresses the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting, including a material weakness - Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to a previously identified material weakness in internal control over financial reporting[166](index=166&type=chunk) - The material weakness stems from a lack of controls in the financial reporting process, including insufficient segregation of duties and inadequate documentation/design of formalized processes and procedures[168](index=168&type=chunk)[169](index=169&type=chunk) - The remediation plan includes hiring additional experienced accounting and financial reporting personnel, formalizing internal control design, and implementing a new enterprise resource planning system[170](index=170&type=chunk) - The material weakness will not be considered fully remediated until remedial controls operate effectively for a sufficient period and are tested by management[171](index=171&type=chunk) PART II—OTHER INFORMATION Presents additional information including legal proceedings, risk factors, and equity security disclosures [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) States the company is not currently involved in material legal proceedings, but litigation risks exist - The company is not currently involved in any legal proceedings that management believes would have a material adverse effect on its business, financial condition, or results of operations[176](index=176&type=chunk) - Litigation, regardless of outcome, can negatively impact the company due to defense and settlement costs, diversion of management resources, and reputational harm[176](index=176&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) Outlines significant risks related to the company's operations, financial condition, product development, and public company status [Risk Factor Summary](index=33&type=section&id=Risk%20Factor%20Summary) Summarizes key risks including limited operating history, financing needs, ARD-101 dependence, and internal control weaknesses - Key risks include the company's limited operating history and lack of approved products, substantial need for additional financing, heavy dependence on ARD-101's success, lengthy and unpredictable regulatory approval processes, and the difficulty of enrolling patients for rare diseases[179](index=179&type=chunk) - Other material risks involve potential clinical trial failures, reliance on third-party manufacturers and CROs, challenges in intellectual property protection, a material weakness in internal control over financial reporting, and intense competition[179](index=179&type=chunk)[180](index=180&type=chunk)[185](index=185&type=chunk) [Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements](index=34&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History%2C%20Financial%20Condition%20and%20Capital%20Requirements) Details risks from limited operating history, significant net losses, and the need for substantial additional financing - The company is a clinical-stage biopharmaceutical company with a limited operating history and no approved products, making it difficult to evaluate future viability and success[181](index=181&type=chunk) - Aardvark has incurred significant net losses since inception (**$82.0 million** accumulated deficit as of June 30, 2025) and expects increasing losses due to R&D and public company expenses, with no guarantee of future profitability[183](index=183&type=chunk)[187](index=187&type=chunk) - Substantial additional financing is required to achieve goals, and failure to obtain it could force delays or termination of product development programs[188](index=188&type=chunk) - As of June 30, 2025, cash, cash equivalents, and short-term investments of **$141.8 million** are expected to fund operations into 2027, but this is an estimate subject to change[189](index=189&type=chunk) - Raising additional capital may dilute stockholders, impose burdensome debt covenants, or require relinquishing rights to technologies or product candidates[194](index=194&type=chunk)[196](index=196&type=chunk) [Risks Related to the Research, Development and Approval of Our Product Candidates](index=37&type=section&id=Risks%20Related%20to%20the%20Research%2C%20Development%20and%20Approval%20of%20Our%20Product%20Candidates) Covers risks associated with product development, regulatory approval, clinical trials, and resource allocation - The business heavily depends on the successful development, regulatory approval, and commercialization of its lead product candidate, ARD-101, and other candidates, which is highly uncertain[197](index=197&type=chunk)[207](index=207&type=chunk) - Regulatory approval processes are lengthy, time-consuming, and unpredictable; failure to obtain approval for any product candidate would substantially harm the business[198](index=198&type=chunk)[204](index=204&type=chunk) - Preclinical and clinical drug development is expensive and uncertain, with no guarantee that earlier positive results will predict success in later trials, potentially leading to delays or abandonment[211](index=211&type=chunk)[212](index=212&type=chunk) - Difficulties in identifying and enrolling sufficient eligible patients, especially for rare disorders like PWS and HO, could delay clinical development activities[218](index=218&type=chunk)[219](index=219&type=chunk) - Interim or preliminary clinical trial results may change with more data, and serious adverse events or side effects could delay or prevent regulatory approval, increase costs, or necessitate abandonment[225](index=225&type=chunk)[228](index=228&type=chunk)[230](index=230&type=chunk) - The company has not previously conducted pivotal clinical trials and may face challenges in successfully executing them, potentially leading to delays or failure to obtain regulatory approvals[235](index=235&type=chunk) - Expending limited resources on a particular product candidate or indication may cause the company to miss more profitable opportunities[236](index=236&type=chunk) - Obtaining regulatory approval in one jurisdiction does not guarantee approval in others, and foreign regulatory authorities may not accept data from trials conducted outside their jurisdiction[238](index=238&type=chunk)[240](index=240&type=chunk) - Approved products are subject to ongoing regulatory obligations and review, which can result in significant additional expense, marketing restrictions, or market withdrawal[241](index=241&type=chunk)[244](index=244&type=chunk) - Disruptions at regulatory agencies due to funding shortages or global health concerns could hinder timely product development and commercialization[250](index=250&type=chunk)[251](index=251&type=chunk) - Changes in manufacturing methods or formulation may lead to additional costs or delays, and the company may not be successful in identifying or discovering additional product candidates[253](index=253&type=chunk)[254](index=254&type=chunk) - While ARD-101 has Orphan Drug Designation for PWS, maintaining exclusivity is not guaranteed, and Breakthrough Therapy or other expedited designations may not lead to faster development or approval[256](index=256&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[262](index=262&type=chunk) [Risks Related to Our Dependence on Third Parties](index=49&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Addresses risks from reliance on third-party CROs, manufacturers, and collaborators for development and supply - The company relies heavily on third-party CROs, clinical investigators, and data management organizations for preclinical studies and clinical trials, reducing control over timing and quality[264](index=264&type=chunk) - Failure of third parties to perform contractually, meet regulatory requirements, or adhere to deadlines could delay or increase costs of development programs, or prevent regulatory approval[268](index=268&type=chunk) - The company completely relies on third parties for manufacturing clinical drug supplies and intends to for commercial supplies, posing risks if these parties fail to obtain regulatory approval, provide sufficient quantities, or meet quality standards[271](index=271&type=chunk) - Replacing manufacturers is extensive and time-consuming, potentially causing delays or interruptions in product candidate supply[272](index=272&type=chunk) - Collaborations with third parties for product development carry risks, including limited control over resources, potential non-performance, and conflicts of interest[277](index=277&type=chunk)[278](index=278&type=chunk)[281](index=281&type=chunk)[287](index=287&type=chunk) - Reliance on third parties necessitates sharing trade secrets, increasing the risk of discovery by competitors or misappropriation[289](index=289&type=chunk) - Suppliers, especially those sourcing raw materials internationally, are subject to additional risks like political unrest, trade restrictions, and regulatory compliance challenges, which could disrupt production[297](index=297&type=chunk)[298](index=298&type=chunk) [Risks Related to Our Intellectual Property](index=54&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Highlights challenges in obtaining, maintaining, and enforcing intellectual property protection against competitors - Inability to obtain, maintain, and enforce intellectual property protection (patents, trademarks, trade secrets) could allow competitors to use similar technologies, harming the company's competitive position[299](index=299&type=chunk)[301](index=301&type=chunk) - The patent application and approval process is expensive, time-consuming, and uncertain, with no guarantee that patents will issue, be broad enough, or withstand legal challenges[302](index=302&type=chunk)[303](index=303&type=chunk) - Third parties may initiate legal proceedings alleging infringement, misappropriation, or violation of their intellectual property rights, leading to costly litigation, development delays, and potential liability[310](index=310&type=chunk)[311](index=311&type=chunk) - Claims challenging inventorship or ownership of patents could result in loss of valuable intellectual property rights[318](index=318&type=chunk) - Failure to comply with procedural requirements for patent maintenance can lead to loss of patent rights[344](index=344&type=chunk) - Patent terms may be inadequate to establish a competitive position, and changes in patent law (e.g., AIA, Loper decision, unitary patent system) could diminish patent value[345](index=345&type=chunk)[350](index=350&type=chunk)[352](index=352&type=chunk) - Inadequate protection of trademarks and trade names could hinder brand recognition and competitive effectiveness[354](index=354&type=chunk)[355](index=355&type=chunk) - Limited geographical patent protection and varying intellectual property laws in foreign countries may impede global commercialization efforts[356](index=356&type=chunk)[359](index=359&type=chunk) [Risks Related to Legal and Regulatory Compliance Matters](index=65&type=section&id=Risks%20Related%20to%20Legal%20and%20Regulatory%20Compliance%20Matters) Discusses risks from healthcare fraud laws, regulatory changes, anti-corruption laws, and environmental compliance - Relationships with healthcare providers and third-party payors are subject to federal and state healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act, HIPAA), non-compliance with which could lead to substantial penalties[365](index=365&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) - Recently enacted legislation (e.g., ACA, IRA) and future healthcare reform measures may increase the difficulty and cost of obtaining marketing approval and commercializing products, potentially affecting pricing and reimbursement[374](index=374&type=chunk)[375](index=375&type=chunk)[377](index=377&type=chunk) - Changing regulatory environments, including increased scrutiny on drug safety and the impact of court decisions like Loper Bright Enterprises v. Raimondo, could negatively affect business operations and approval timelines[379](index=379&type=chunk)[380](index=380&type=chunk)[247](index=247&type=chunk) - Disruptions at the FDA and other government agencies (e.g., funding shortages, workforce reductions, policy changes) could delay product development and approvals[250](index=250&type=chunk)[251](index=251&type=chunk) - The company is subject to U.S. and foreign anti-corruption (e.g., FCPA), anti-money laundering, export control, and sanctions laws, with violations potentially leading to substantial criminal fines, civil penalties, and reputational harm[386](index=386&type=chunk)[387](index=387&type=chunk)[389](index=389&type=chunk)[391](index=391&type=chunk) - Failure to comply with environmental, health, and safety laws could result in fines, penalties, or significant costs, and accidental contamination or injury from hazardous materials is a risk[392](index=392&type=chunk)[394](index=394&type=chunk) - Evolving expectations regarding sustainability (ESG) matters may impose unexpected costs, reputational harm, or influence investor decisions[395](index=395&type=chunk)[397](index=397&type=chunk) [Risks Related to the Operation of Our Business](index=71&type=section&id=Risks%20Related%20to%20the%20Operation%20of%20Our%20Business) Covers risks including material weakness in internal controls, key personnel retention, growth management, and data security - A material weakness in internal control over financial reporting (lack of controls, segregation of duties, formalized processes) was identified, which, if not remediated, could lead to misstatements and adversely affect investor confidence[399](index=399&type=chunk)[401](index=401&type=chunk)[405](index=405&type=chunk) - The company's future success depends on retaining key executives and attracting, retaining, and motivating qualified personnel in a competitive industry with a scarcity of experienced professionals[409](index=409&type=chunk)[410](index=410&type=chunk)[413](index=413&type=chunk) - Future acquisitions, joint ventures, or investments could harm operating results, dilute ownership, increase debt, or incur significant expenses due to integration challenges and unforeseen liabilities[414](index=414&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk) - Expanding clinical development, regulatory, and potential sales/marketing capabilities will require managing significant growth, which could disrupt operations if not handled effectively[418](index=418&type=chunk)[420](index=420&type=chunk) - Employees, contractors, and collaborators may engage in misconduct or improper activities, including non-compliance with regulatory standards, leading to potential sanctions, fines, and reputational harm[423](index=423&type=chunk)[425](index=425&type=chunk) - Indemnification provisions in contracts could lead to substantial liabilities if obligations exceed insurance coverage[426](index=426&type=chunk)[427](index=427&type=chunk) - The ability to use net operating loss (NOL) carryforwards and other tax attributes may be limited by ownership changes (Sections 382 and 383 of the Code) or future tax law changes, potentially increasing future tax obligations[428](index=428&type=chunk) - Concentration of operations in California exposes the company to risks from natural disasters (e.g., wildfires, earthquakes), which could disrupt business continuity and impact financial conditions[430](index=430&type=chunk) - International expansion exposes the company to business, regulatory, political, operational, financial, and economic risks associated with doing business outside the U.S.[431](index=431&type=chunk) - Product liability lawsuits related to clinical testing or commercialized products could result in substantial liabilities, even with insurance coverage[432](index=432&type=chunk)[434](index=434&type=chunk)[435](index=435&type=chunk) - Significant disruptions of information technology systems or data security incidents could lead to financial, legal, regulatory, business, and reputational harm due to reliance on IT and sensitive data handling[436](index=436&type=chunk)[439](index=439&type=chunk) - Failure to comply with evolving U.S. and foreign data privacy and security laws (e.g., HIPAA, CCPA, GDPR, NIS 2 Directive) could result in government enforcement actions, private litigation, and negative publicity[442](index=442&type=chunk)[444](index=444&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk)[452](index=452&type=chunk) [Risks Related to the Commercialization of Our Product Candidates](index=80&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20Product%20Candidates) Examines risks concerning market acceptance, sales capabilities, competition, reimbursement, and market size - Even if approved, product candidates may fail to achieve sufficient market acceptance by physicians, patients, and third-party payors, hindering commercial success and revenue generation[453](index=453&type=chunk)[455](index=455&type=chunk) - The company lacks internal sales, marketing, and distribution capabilities, and building or collaborating for these functions is expensive, time-consuming, and carries significant risks[456](index=456&type=chunk)[457](index=457&type=chunk) - The biotechnology and pharmaceutical industries are highly competitive, with major companies having greater resources, potentially leading to competitors developing and commercializing products more successfully or earlier[458](index=458&type=chunk)[463](index=463&type=chunk)[464](index=464&type=chunk) - The success of product candidates depends significantly on coverage and adequate reimbursement from governmental and private payors, which may be challenging to obtain or may result in inadequate payment rates[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk)[469](index=469&type=chunk) - If market opportunities for product candidates are smaller than estimated (e.g., for rare diseases like PWS), revenue may be adversely affected, and profitability may not be achieved[472](index=472&type=chunk)[473](index=473&type=chunk)[474](index=474&type=chunk) - The increasing use of social media platforms presents risks such as adverse impact on trial enrollment, failure to comply with adverse event reporting, and negative publicity[476](index=476&type=chunk) [Risks Related to Ownership of Our Common Stock and Our Status as a Public Company](index=84&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock%20and%20Our%20Status%20as%20a%20Public%20Company) Details risks related to stock price volatility, lack of dividends, control by principal stockholders, and public company costs - An active and liquid trading market for the common stock may not develop or be maintained, impairing investors' ability to sell shares and the company's ability to raise capital[477](index=477&type=chunk) - The stock price is likely to be volatile due to various factors, including clinical trial results, competitor announcements, and general market conditions, potentially leading to substantial losses for investors[478](index=478&type=chunk)[479](index=479&type=chunk) - Quarterly and annual operating results may fluctuate significantly and fall below expectations, causing stock price decline[481](index=481&type=chunk)[485](index=485&type=chunk) - The company does not anticipate paying dividends in the foreseeable future, making capital appreciation the sole source of gain for investors[486](index=486&type=chunk) - Principal stockholders and management own a significant percentage (**51.9%** as of August 1, 2025) of common stock, enabling them to control matters subject to stockholder approval, potentially conflicting with other investors' interests[489](index=489&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could prevent or delay an acquisition beneficial to stockholders or attempts to replace management[492](index=492&type=chunk)[493](index=493&type=chunk) - The Certificate of Incorporation designates Delaware courts as the exclusive forum for most disputes, potentially limiting stockholders' ability to obtain a favorable judicial forum[494](index=494&type=chunk) - The company will incur significant increased costs and management time due to operating as a public company and complying with reporting requirements (e.g., Sarbanes-Oxley Act, Nasdaq listing)[499](index=499&type=chunk)[500](index=500&type=chunk) - Future issuance of equity or convertible debt securities, including under the 2025 Equity Incentive Plan and 2025 Inducement Equity Incentive Plan, would dilute existing share capital[502](index=502&type=chunk)[503](index=503&type=chunk)[504](index=504&type=chunk) - Sales of a substantial number of shares by existing stockholders (e.g., after lock-up expiration) could cause the stock price to fall[505](index=505&type=chunk)[506](index=506&type=chunk)[508](index=508&type=chunk) - Techniques employed by short sellers, including publishing negative opinions, may drive down the market price of common stock[510](index=510&type=chunk) - As an 'emerging growth company' and 'smaller reporting company,' the company benefits from reduced reporting requirements, which may make its common stock less attractive to some investors[511](index=511&type=chunk)[512](index=512&type=chunk)[513](index=513&type=chunk) - Failure to meet Nasdaq's continued listing requirements could result in delisting of common stock[516](index=516&type=chunk) - Unfavorable global economic or political conditions (e.g., geopolitical conflicts, inflation, banking disruptions, trade wars) could adversely affect the business, financial condition, or results of operations[517](index=517&type=chunk)[518](index=518&type=chunk) [General Risk Factors](index=88&type=section&id=General%20Risk%20Factors) Addresses broader risks such as tax law changes and potential securities litigation - Recent and future changes to tax laws (e.g., Tax Cuts and Jobs Act, IRA, One Big Beautiful Bill Act) could materially adversely affect the company by increasing tax obligations or altering business operations[497](index=497&type=chunk) - The company or its directors/officers may be subject to securities litigation, which is expensive, time-consuming, and could divert management attention and damage reputation[498](index=498&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=91&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Confirms no unregistered equity sales and no material change in IPO proceeds use during the quarter - No unregistered sales of equity securities occurred during the quarter ended June 30, 2025[519](index=519&type=chunk) - There has been no material change in the expected use of net proceeds from the IPO, which was declared effective on February 12, 2025[519](index=519&type=chunk) [Item 3. Defaults Upon Senior Securities](index=91&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States there were no defaults on senior securities during the reporting period - There were no defaults upon senior securities during the quarter ended June 30, 2025[520](index=520&type=chunk) [Item 4. Mine Safety Disclosures](index=92&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to Aardvark Therapeutics, Inc.[522](index=522&type=chunk) [Item 5. Other Information](index=92&type=section&id=Item%205.%20Other%20Information) Notes that no officers or directors adopted or terminated Rule 10b5-1 trading arrangements - No officers or directors adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[523](index=523&type=chunk) [Item 6. Exhibits](index=93&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including corporate governance documents and certifications - Exhibits include the Fourth Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Form of Common Stock Certificate, 2025 Inducement Equity Incentive Plan and related agreements, and certifications from the Principal Executive and Financial Officers[524](index=524&type=chunk) [SIGNATURES](index=94&type=section&id=SIGNATURES) Confirms the report's signing by the Principal Executive and Financial Officers on August 13, 2025 - The report is signed by Tien-Li Lee, M.D., Chief Executive Officer (Principal Executive Officer), and Nelson Sun, Chief Financial Officer (Principal Financial and Accounting Officer), on August 13, 2025[529](index=529&type=chunk)

[Second Quarter 2025 Report Overview](index=1&type=section&id=Second%20Quarter%202025%20Report%20Overview) This report provides an overview of Aardvark Therapeutics' progress in clinical development, corporate updates, and financial performance for the second quarter of 2025 [Company Introduction & CEO Commentary](index=1&type=section&id=Company%20Introduction%20%26%20CEO%20Commentary) Aardvark Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel small molecule therapies to activate innate homeostatic pathways for metabolic diseases, with its CEO highlighting significant progress in ARD-101 and ARD-201 studies and plans to expand ARD-101's HERO Phase III trial - Aardvark Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel small molecule therapies that activate innate homeostatic pathways to treat metabolic diseases[2](index=2&type=chunk) - Dr. Tien Lee, CEO of the company, stated that ARD-101 and ARD-201 have made significant progress in multiple studies, and plans are underway to expand the ARD-101 HERO Phase III trial to include younger PWS patients under 13 years of age[3](index=3&type=chunk) - Recent preclinical data from the ARD-201 obesity program reinforced the company's confidence in targeting hunger signaling pathways as a complementary approach to GLP-1RA therapies[3](index=3&type=chunk) [Key Highlights](index=1&type=section&id=Key%20Highlights) Key highlights include ARD-201 preclinical data supporting an optimized Phase II clinical development strategy for obesity, the planned expansion of ARD-101's HERO Phase III trial to children under 13, and **$141.8 million** in cash, cash equivalents, and short-term investments as of June 30, 2025, expected to fund operations into 2027 - Compelling preclinical data for ARD-201 informed an optimized Phase II clinical development strategy for the obesity program: the POWER Phase II trial will focus on weight regain in patients discontinuing GLP-1RAs, while the STRENGTH Phase II trial will assess sustained weight loss as monotherapy and in combination with GLP-1RAs[6](index=6&type=chunk) - The HERO Phase III trial of ARD-101 for PWS-related hyperphagia is expected to expand to include pediatric patients under 13 years of age[6](index=6&type=chunk) Cash and Short-Term Investments | Metric | Amount (Million USD) | | :--------------------------------- | :-------------- | | Cash, cash equivalents, and short-term investments (as of June 30, 2025) | 141.8 | | Expected operational support duration | 2027 | [Clinical Program Updates](index=1&type=section&id=Clinical%20Program%20Updates) This section details the latest advancements in Aardvark's clinical programs, including trial expansions and updated timelines for ARD-101 and ARD-201 [ARD-101 for Prader-Willi Syndrome (PWS)](index=1&type=section&id=ARD-101%20for%20Prader-Willi%20Syndrome%20%28PWS%29) Aardvark plans to expand the ARD-101 HERO Phase III trial for PWS-related hyperphagia to include younger patients under 13, a move supported by the PWS community and historical data suggesting greater benefit from earlier intervention - Aardvark plans to expand the ARD-101 HERO Phase III trial for PWS-related hyperphagia to include patients under 13 years of age[4](index=4&type=chunk) - This expansion is supported by the PWS community and historical data indicating that younger patients are more likely to benefit from earlier intervention[4](index=4&type=chunk) [ARD-201 for Obesity](index=1&type=section&id=ARD-201%20for%20Obesity) Recent preclinical data for ARD-201, an oral obesity therapy, demonstrated significant weight loss and effective prevention of weight regain after GLP-1RA discontinuation, leading Aardvark to advance two new Phase II trials: POWER and STRENGTH - Preclinical data released on August 12, 2025, showed that the oral obesity therapy ARD-201 not only significantly reduced body weight but also helped prevent weight regain after GLP-1RA discontinuation[5](index=5&type=chunk) - Based on these new preclinical insights, Aardvark is advancing two Phase II trials for ARD-201: the POWER and STRENGTH trials, replacing the previously planned EMPOWER trial[5](index=5&type=chunk) [Updated Milestones](index=2&type=section&id=Updated%20Milestones) The company announced expected timelines for several clinical trials, including ARD-101's HERO Phase III data in **Q3 2026**, ARD-201's POWER Phase II trial initiation in **H2 2025**, STRENGTH Phase II trial in **H1 2026**, and ARD-101's HONOR Phase II trial initiation in **H2 2025** with data in **H2 2026** - Top-line data from the ARD-101 HERO Phase III trial for PWS-related hyperphagia is anticipated in **Q3 2026**[10](index=10&type=chunk) - The ARD-201 POWER Phase II trial, preventing weight regain in patients discontinuing GLP-1RAs, is expected to initiate in **H2 2025**[10](index=10&type=chunk) - The ARD-201 STRENGTH Phase II trial, evaluating weight loss and additive effects in combination with GLP-1RAs, is expected to initiate in **H1 2026**[10](index=10&type=chunk) - The ARD-101 HONOR Phase II trial for acquired hypothalamic obesity-related hyperphagia is expected to initiate in **H2 2025**, with top-line data anticipated in **H2 2026**[10](index=10&type=chunk) [Business & Corporate Updates](index=2&type=section&id=Business%20%26%20Corporate%20Updates) This section covers recent strategic enhancements to the company's leadership team and its participation in key industry conferences [Leadership Team Appointments](index=2&type=section&id=Leadership%20Team%20Appointments) In May 2025, Aardvark strengthened its leadership team through strategic hires, appointing a Chief Scientific Officer, Chief Commercial Officer, Senior Vice President of Regulatory Affairs, and General Counsel - In May 2025, Aardvark strengthened its leadership team across scientific, commercial, regulatory, and legal functions by appointing Dr. Timothy Kieffer as Chief Scientific Officer, Danny Villeneuve as Chief Commercial Officer, Dr. Terrie Kellmeyer as Senior Vice President of Regulatory Affairs, and Christian Zapf as General Counsel[10](index=10&type=chunk) [Conference Presentations](index=2&type=section&id=Conference%20Presentations) In June 2025, Aardvark presented data from the ARD-101 PWS Phase II trial at the 2025 United in Hope conference, with its Chief Medical Officer participating in a discussion about the HERO Phase III trial - In June 2025, Aardvark presented data from the ARD-101 PWS Phase II trial in both poster and oral presentations at the 2025 United in Hope conference[10](index=10&type=chunk) - Aardvark's Chief Medical Officer, Dr. Manasi Jaiman, participated in a clinician panel discussion regarding the details of the company's ongoing HERO Phase III trial[10](index=10&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) This section provides an overview of Aardvark's financial results for the second quarter of 2025, including cash position, operating expenses, and net loss [Select Second Quarter 2025 Financial Highlights](index=2&type=section&id=Select%20Second%20Quarter%202025%20Financial%20Highlights) As of June 30, 2025, Aardvark held **$141.8 million** in cash, cash equivalents, and short-term investments, projected to fund operations into 2027, while significant increases in R&D and G&A expenses led to an expanded net loss of **$14.4 million** Cash Position | Metric | Amount (Million USD) | | :--------------------------------- | :-------------- | | Cash, cash equivalents, and short-term investments (as of June 30, 2025) | 141.8 | | Expected operational support duration | 2027 | Research and Development Expenses (Million USD) | Period | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Change | | :--- | :------------------ | :------------------ | :----- | | R&D Expenses | 13.1 | 4.0 | +9.1 | General and Administrative Expenses (Million USD) | Period | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Change | | :--- | :------------------ | :------------------ | :----- | | G&A Expenses | 2.7 | 2.0 | +0.7 | Net Loss (Million USD) | Period | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Change | | :--- | :------------------ | :------------------ | :----- | | Net Loss | (14.4) | (5.4) | -9.0 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) In Q2 2025, Aardvark experienced substantial increases in both research and development and general and administrative expenses, leading to significantly expanded operating and net losses year-over-year, though net loss per share decreased to **$(0.66)** due to increased weighted average shares outstanding Condensed Consolidated Statements of Operations (Thousands of USD, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Research and development expenses | 13,145 | 4,029 | 20,900 | 5,236 | | General and administrative expenses | 2,703 | 2,030 | 5,418 | 2,891 | | Total operating expenses | 15,848 | 6,073 | 26,318 | 8,244 | | Operating loss | (15,848) | (6,073) | (26,318) | (8,244) | | Other income (expense), net | 1,481 | 624 | 2,641 | 617 | | Net loss | (14,367) | (5,449) | (23,677) | (7,627) | | Net loss per share, basic and diluted | (0.66) | (1.37) | (1.36) | (1.92) | | Weighted-average shares used in net loss per share calculation | 21,690,275 | 3,967,984 | 17,465,965 | 3,967,658 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Aardvark's total assets increased from **$77.507 million** to **$147.475 million**, primarily due to a significant rise in short-term investments, while total liabilities also increased, and stockholders' equity shifted from a deficit to a positive value Condensed Consolidated Balance Sheets (Thousands of USD) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------- | :----------------------- | :------------- | | **ASSETS** | | | | Cash and cash equivalents | 25,998 | 61,641 | | Short-term investments | 115,822 | 12,022 | | Prepaid expenses and other current assets | 2,948 | 474 | | Total current assets | 144,768 | 74,137 | | Operating lease right-of-use assets | 522 | 735 | | Other assets | 2,185 | 2,635 | | **Total assets** | **147,475** | **77,507** | | **LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY** | | | | Accounts payable | 5,056 | 2,298 | | Accrued liabilities | 4,837 | 2,291 | | Current operating lease liabilities | 417 | 338 | | Total current liabilities | 10,310 | 4,927 | | Non-current operating lease liabilities | 228 | 441 | | Other long-term liabilities | 12 | 26 | | **Total liabilities** | **10,550** | **5,394** | | Convertible preferred stock | — | 126,756 | | **Stockholders’ (deficit) equity** | | | | Additional paid-in capital | 218,932 | 3,684 | | Accumulated other comprehensive income | (3) | — | | Accumulated deficit | (82,004) | (58,327) | | **Total stockholders’ (deficit) equity** | **136,925** | **(54,643)** | | **Total liabilities, convertible preferred stock and stockholders’ (deficit) equity** | **147,475** | **77,507** | [About Aardvark Therapeutics, Inc.](index=3&type=section&id=About%20Aardvark%20Therapeutics%2C%20Inc.) Aardvark Therapeutics is a clinical-stage biopharmaceutical company dedicated to developing novel small molecule therapies to suppress hunger for the treatment of PWS and metabolic diseases, differentiating hunger from appetite and exploring its therapies in hunger-related indications and in combination with anti-appetite therapies, with lead compound oral ARD-101 in Phase III clinical development for PWS-related hyperphagia and ARD-201 in development to address GLP-1 therapy limitations - Aardvark is a clinical-stage biopharmaceutical company developing novel small molecule therapies designed to suppress hunger for the treatment of PWS and metabolic diseases[11](index=11&type=chunk) - The company differentiates hunger (discomfort caused by not eating) from appetite (desire to seek food) and explores the potential of its therapies in hunger-related indications and in combination with anti-appetite therapies[11](index=11&type=chunk) - Its lead compound, oral ARD-101, is in Phase III clinical development for PWS-related hyperphagia and is also being investigated for hypothalamic obesity[11](index=11&type=chunk) - Aardvark is also developing ARD-201, a fixed-dose combination of ARD-101 and a DPP-4 inhibitor, designed to address some limitations of current GLP-1 therapies in treating obesity and related conditions[11](index=11&type=chunk) [Forward-Looking Statements & Contact Information](index=3&type=section&id=Forward-Looking%20Statements%20%26%20Contact%20Information) This section outlines the forward-looking nature of statements within the report and provides contact details for further inquiries [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release contains "forward-looking statements" regarding future expectations, plans, and prospects, which are based on management's current expectations and are subject to various important factors that could cause actual results to differ materially, with the company undertaking no obligation to update them - Statements in this press release, such as those concerning future operating results, financial position, business strategy, product candidates, clinical trial timelines, and cash flow projections, constitute "forward-looking statements"[12](index=12&type=chunk) - Forward-looking statements are subject to various important factors that could cause actual results to differ materially from expectations, including risks such as clinical trial delays, insufficient capital resources, reliance on third-party manufacturing, and unfavorable clinical trial results[12](index=12&type=chunk) - The company undertakes no obligation to update any forward-looking statements due to new information, future events, or otherwise[12](index=12&type=chunk) [Contact Information](index=4&type=section&id=Contact%20Information) Investors and media can contact Carolyn Hawley for more information - Contact: Carolyn Hawley, Inizio Evoke Comms, Phone: (619) 849-5382, Email: Carolyn.hawley@inizioevoke.com[13](index=13&type=chunk)

Core Insights - Aardvark Therapeutics, Inc. is advancing its clinical pipeline with significant progress in its lead compounds ARD-101 and ARD-201, targeting metabolic diseases and obesity [2][4][7] Clinical Program Updates - The Phase 3 HERO trial for ARD-101 will expand to include patients under 13 years old, aiming to address hyperphagia associated with Prader-Willi Syndrome (PWS) [3][7] - ARD-201, an oral obesity therapy, has shown promising preclinical results in reducing body weight and preventing weight regain after discontinuation of GLP-1 receptor agonist therapy, leading to its advancement in two Phase 2 trials: POWER and STRENGTH [4][7] Business Highlights - Aardvark has strengthened its leadership team with key appointments in scientific, commercial, regulatory, and legal roles, enhancing its operational capabilities [6] - The company reported a cash position of $141.8 million as of June 30, 2025, which is expected to support operations into 2027 [7][13] Financial Performance - For the second quarter of 2025, Aardvark reported research and development expenses of $13.1 million, a significant increase from $4.0 million in the same quarter of 2024, primarily due to higher development costs for ARD-101 [13] - The net loss for the quarter was $14.4 million, compared to a net loss of $5.4 million in the prior year, reflecting increased operational expenses [13][16]

Core Insights - Aardvark Therapeutics announced positive preclinical data for ARD-201, indicating its potential for treating metabolic obesity and related conditions, particularly in weight maintenance after GLP-1RA therapy withdrawal [1][5][7] Company Overview - Aardvark Therapeutics is a clinical-stage biopharmaceutical company focused on developing small-molecule therapeutics aimed at treating metabolic diseases and hunger-related conditions [9] - The lead compound, ARD-101, is in Phase 3 clinical development for hyperphagia associated with Prader-Willi Syndrome, while ARD-201 is a fixed-dose combination of ARD-101 and a DPP-4 inhibitor [9] Preclinical Study Findings - In a validated diet-induced obesity mouse model, ARD-201 demonstrated a significant weight loss of approximately 19% after 30 days of treatment [2][5] - ARD-201 showed improved weight maintenance compared to negative controls and similar results to high-dose tirzepatide, a benchmark GLP-1RA therapy [2][5] - The combination of ARD-201 with low-dose tirzepatide resulted in continued weight loss compared to high-dose tirzepatide alone [5] Future Clinical Trials - Aardvark plans to initiate two Phase 2 clinical trials: the POWER trial focusing on weight rebound prevention after GLP-1RA therapy discontinuation, and the STRENGTH trial assessing weight loss as a monotherapy and in combination with GLP-1RA [6][10] - The POWER trial is expected to start in the second half of 2025, while the STRENGTH trial is planned for the first half of 2026 [10] Mechanism of Action - ARD-201 combines a DPP-4 inhibitor with ARD-101, targeting taste receptors in the gut to enhance satiety and reduce hunger by stimulating the release of signaling molecules like GLP-1 [7][9]

Company Overview - Aardvark Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing novel, small-molecule therapeutics for metabolic diseases [4] - The company is developing treatments specifically designed to suppress hunger, targeting conditions such as Prader-Willi Syndrome (PWS) and hypothalamic obesity [4] Recent Developments - Between July 8-14, 2025, Aardvark granted inducement awards consisting of stock options to two new employees, totaling 10,372 shares of common stock [1] - The stock options were granted under the Aardvark Therapeutics, Inc. 2025 Inducement Equity Incentive Plan, in accordance with Nasdaq Listing Rule 5635(c)(4) [2] Stock Options Details - The exercise prices for the options were set at $13.04 and $12.11, corresponding to the closing prices of Aardvark's common stock on the grant dates [3] - The options will vest over four years, with 25% vesting on the one-year anniversary of employment and the remaining shares vesting monthly thereafter, contingent on continued employment [3] Product Pipeline - Aardvark's lead compound, oral ARD-101, is currently in Phase 3 clinical development for treating hyperphagia associated with PWS [4] - The company is also developing ARD-201, a fixed-dose combination of ARD-101 with a DPP-4 inhibitor, aimed at addressing limitations of existing GLP-1 therapies for obesity and related conditions [4]

Company Overview - Aardvark Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing novel small-molecule therapeutics aimed at activating innate homeostatic pathways for treating metabolic diseases, particularly Prader-Willi Syndrome (PWS) [1][4] - The lead compound, ARD-101, is currently in Phase 3 clinical development for hyperphagia associated with PWS, a rare disease characterized by insatiable hunger [4] Conference Participation - Aardvark will participate in the 2025 United in Hope Conference, engaging with the PWS community and presenting data from its Phase 2 study of ARD-101 [1][2] - The presentations will include a poster and a five-minute oral presentation titled "Reduction in Hyperphagia in the ARD-101 Phase 2 Clinical Trial Informs Phase 3 HERO Trial in PWS," highlighting ARD-101's favorable safety profile and early evidence for reduced hyperphagia [2][3] Ongoing Studies - The company is currently enrolling patients in the ongoing Phase 3 HERO study, which is informed by the data from the Phase 2 study [2][3] - Aardvark is also developing ARD-201, a fixed-dose combination of ARD-101 with a DPP-4 inhibitor, aimed at addressing limitations of currently marketed GLP-1 therapies for obesity and related conditions [4]

Core Viewpoint - Aardvark Therapeutics, Inc. (AARD) shows significant upside potential with a mean price target of $31.25, indicating an 180.8% increase from the current price of $11.13 [1] Price Targets and Analyst Consensus - The average price targets from analysts range from a low of $20 to a high of $50, with a standard deviation of $13.05, suggesting variability in estimates [2] - The lowest estimate indicates a potential increase of 79.7%, while the highest suggests a 349.2% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about AARD's earnings prospects, as evidenced by a positive trend in earnings estimate revisions [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 4.7%, with two estimates moving higher and no negative revisions [12] - AARD holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13]