Financial Performance - The company has incurred significant operating losses of $80.5 million and $69.3 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of $238.3 million as of December 31, 2024[286]. - The company has not generated any revenue since its inception and may never achieve significant revenue if firmonertinib is not successfully developed, approved, and commercialized[286]. - The company expects to incur substantial additional capital expenses as it continues the development of firmonertinib and other product candidates[291]. - The company may need to seek additional funding sooner than planned due to uncertainties in its operating plans and cash resource demands[292]. - Future capital requirements will depend on various factors, including the costs and timing of clinical trials, manufacturing, and regulatory approvals for firmonertinib[295]. - The company may face challenges in raising additional capital due to potential adverse global economic conditions, which could impact its ability to finance operations[294]. - If the company raises additional funds through equity or convertible debt, it may cause dilution to stockholders and impose restrictions on operations[299]. - The company is currently not generating any committed external source of funds, which increases its reliance on market conditions for financing[298]. Product Development and Regulatory Approval - Firmonertinib has received Breakthrough Therapy Designation and Fast Track Designation from the FDA, which may not guarantee a faster development or approval process[284]. - The company has a limited operating history, having commenced operations in April 2021, and has not completed any pivotal clinical trials or obtained regulatory approvals[290]. - The company must demonstrate the safety and efficacy of firmonertinib to regulatory authorities, which is critical for obtaining marketing approvals[304]. - The regulatory approval process for product candidates is lengthy and unpredictable, with a small percentage of drugs successfully completing the FDA approval process[350]. - The company may need to conduct additional clinical trials or post-marketing studies based on findings from ongoing trials or competitors' trials[331][348]. - The FDA may require additional clinical trials or studies before granting marketing approval, impacting the commercialization timeline[363]. - The company may seek to utilize the FDA's accelerated approval pathway for certain firmonertinib indications, but there is no assurance of timely approval[363]. - The acceptance of clinical trial data from foreign trials by the FDA is subject to strict conditions, which may necessitate additional trials and increase costs[340]. Clinical Trials and Patient Safety - Firmonertinib is in Phase 3 clinical development, and the company relies on additional financing to achieve its business objectives, as it does not expect to generate substantial product revenue for many years[302][297]. - Adverse side effects associated with firmonertinib have been observed, with 10 out of 178 patients in the FURLONG trial experiencing treatment-related serious adverse events (TRSAEs)[329]. - In the FAVOUR trial, as of June 15, 2023, 6 out of 86 treated patients reported TRSAEs, with common issues including diarrhea and liver enzyme elevation[329]. - The discontinuation rate due to TRAEs across the FURLONG, FAVOUR, and FURTHER trials was 3.7%, affecting 14 out of 318 patients[329]. - The company may encounter difficulties in patient enrollment due to limited patient pools and competition from other clinical trials[320]. - The integrity of clinical trial data may be compromised if patients drop out or fail to follow protocols, which could hinder regulatory approval[324]. - The company relies on contract research organizations (CROs) for clinical trial management, and any failures in their performance could adversely affect trial outcomes[324]. Manufacturing and Supply Chain Risks - The company relies on a Chinese third party for the manufacture of firmonertinib and other product candidates, increasing the risk of supply issues[284]. - The company does not own or operate manufacturing facilities and has no plans to develop its own manufacturing capabilities, relying entirely on third-party manufacturers[385]. - The company relies on two third-party contract manufacturers in China, Raybow and WuXi STA, for the supply of drug substance for firmonertinib and ARR-217, which poses risks of supply disruption due to potential political unrest or regulatory changes[391]. - The company’s clinical trials and regulatory approvals may be delayed if third-party manufacturers fail to comply with cGMP requirements[386]. - The company has no long-term commitments or supply agreements with third-party manufacturers, increasing the risk of failing to obtain sufficient quantities of firmonertinib[387]. Competition and Market Dynamics - The company faces significant competition in the biopharmaceutical industry, which could adversely affect its ability to commercialize products[287]. - The company faces significant competition from larger pharmaceutical companies and emerging therapies targeting EGFRm-positive NSCLC, which could impact market share[439]. - The approval of firmonertinib does not guarantee commercial success, as market acceptance among healthcare providers and patients is uncertain[418]. - The total addressable market for firmonertinib is uncertain and may be smaller than anticipated, affecting revenue projections[444]. Compliance and Regulatory Challenges - The company is subject to various healthcare laws and regulations, which could increase compliance costs and expose it to penalties[287]. - Regulatory approvals for firmonertinib will require ongoing compliance and could lead to significant additional expenses, including post-marketing studies and risk management requirements[401]. - Failure to comply with regulatory requirements could result in penalties, including product recalls or withdrawal from the market, adversely affecting the company's financial condition[402]. - The FDA strictly regulates the marketing and promotional claims for prescription drugs, limiting the company's ability to promote off-label uses[409]. - The company could face significant liability for improper promotion of off-label uses, which would materially adversely affect its business and financial condition[410]. Strategic Partnerships and Collaborations - The company is collaborating with Allist on firmonertinib and Lepu Biopharma on ARR-217, but faces risks in establishing and maintaining these collaborations, which could affect product development and commercialization[395]. - The company is evaluating firmonertinib in combination with ICP-189, a SHP2 inhibitor, in collaboration with InnoCare[334]. Human Resources and Organizational Challenges - The company had 52 full-time employees as of December 31, 2024, and relies heavily on retaining qualified personnel for its growth strategy[456]. - The company competes with various organizations for resources and talent, which could affect its ability to execute its business plan effectively[438]. - Significant investment will be required to establish a marketing and sales organization or to collaborate with third parties for commercialization[443]. Pricing and Reimbursement Issues - The company must establish adequate reimbursement strategies to ensure that patients can afford firmonertinib, as coverage by third-party payors is critical[423]. - Pricing pressures are expected due to managed healthcare trends and governmental price controls, which may affect revenue generation[434]. - The company may face challenges in obtaining and maintaining reimbursement status, which is often a time-consuming and costly process[430]. - The Medicare and Medicaid programs influence private payors' coverage and reimbursement policies, adding complexity to the reimbursement landscape[429].

Core Viewpoint - ArriVent BioPharma, Inc. has reported significant progress in its clinical programs, particularly with firmonertinib, and has expanded its antibody-drug conjugate (ADC) portfolio, indicating a strong commitment to developing innovative cancer therapies [2][5][11]. Recent and Full Year 2024 Highlights - Firmonertinib demonstrated robust anti-tumor activity in NSCLC patients with EGFR PACC mutations, with clinical data presented at major conferences [5][6]. - The global pivotal Phase 3 study for firmonertinib in first-line NSCLC with EGFR exon 20 insertion mutations achieved its target enrollment of 375 patients [5][6]. - The company has selected ARR-002 as its next-generation ADC candidate for IND-enabling studies [5][6]. - As of December 31, 2024, ArriVent had cash and cash equivalents of $266.5 million, expected to fund operations into 2026 [5][8]. Financial Results - For the year ended December 31, 2024, research and development expenses increased to $79.0 million from $64.9 million in 2023, primarily due to increased headcount and clinical expenses related to firmonertinib [8][21]. - General and administrative expenses rose to $15.3 million from $9.7 million in 2023, reflecting the costs associated with operating as a public company [8][21]. - The net loss for 2024 was $80.5 million, compared to a net loss of $69.3 million in 2023 [8][21]. Pipeline Developments - Firmonertinib is being studied in multiple clinical trials, including a global Phase 3 trial for first-line NSCLC patients with EGFR exon 20 insertion mutations and a Phase 1b study for patients with EGFR PACC mutations [14][15]. - The company has entered into collaborations to enhance its ADC portfolio, including a partnership with Lepu Biopharma for ARR-217 and a collaboration with Alphamab for novel ADCs [11][12]. Upcoming Milestones - ArriVent plans to provide updates on its investigations of firmonertinib in first-line NSCLC patients with EGFR PACC mutations in the first half of 2025 [7][11]. - The company anticipates top-line data from the pivotal Phase 3 study of firmonertinib in 2025 and plans to file the first IND for ARR-217 in the first half of 2025 [7][11].

Core Insights - ArriVent BioPharma has entered into an exclusive license agreement with Lepu Biopharma for MRG007, an antibody-drug conjugate targeting gastrointestinal cancers, granting ArriVent rights to develop and commercialize MRG007 outside Greater China [1][3] - MRG007 is considered a potential best-in-class ADC for GI malignancies, with plans for the first IND submission in the first half of 2025, focusing on colorectal cancer, pancreatic cancer, and other GI cancers [2][6] - The agreement includes a one-time upfront payment and milestone payments totaling $47 million, with potential additional payments of up to $1.16 billion based on development and sales milestones [3] Company Overview - ArriVent is a clinical-stage biopharmaceutical company focused on developing innovative medicines for cancer, leveraging deep drug development experience to advance its pipeline, including next-generation ADCs [4] - Lepu Biopharma is an innovation-driven company specializing in oncology therapeutics, particularly ADCs, with a strong focus on R&D and commercialization capabilities [5]

Clinical Trials and Product Development - Firmonertinib is currently being evaluated in multiple clinical trials for non-small cell lung cancer (NSCLC), with a pivotal Phase 3 trial for treatment-naïve patients showing 79% of patients experiencing a tumor size reduction of at least 30%[70] - In the FAVOUR trial, 79% of patients with EGFRm NSCLC experienced a median duration of response of 15.2 months[72] - The company has entered into a Global Technology Transfer and License Agreement with Allist for the development and commercialization of firmonertinib, which is currently only approved in China[70] - The company anticipates significant increases in research and development expenses as it continues to develop firmonertinib and identify new product candidates[83] Financial Performance - The company reported net losses of $59.9 million and $48.1 million for the nine months ended September 30, 2024, and 2023, respectively, with an accumulated deficit of $217.7 million as of September 30, 2024[77] - The company has not generated any revenue from product sales and expects to continue incurring losses as it advances firmonertinib through clinical trials and seeks regulatory approval[79] - Total operating expenses for the three months ended September 30, 2024, were $24.2 million, an increase of $7.5 million from $16.7 million in 2023[87] - For the nine months ended September 30, 2024, total operating expenses were $70.6 million, up from $51.5 million in 2023, an increase of $19.1 million[92] - Net loss for the nine months ended September 30, 2024, was $59.9 million, compared to a net loss of $48.1 million in 2023, an increase of $11.7 million[92] Research and Development Expenses - Research and development expenses increased to $20.1 million for the three months ended September 30, 2024, up from $14.3 million in 2023, reflecting a rise of $5.8 million[88] - Research and development expenses for the nine months ended September 30, 2024, totaled $58.8 million, an increase of $14.0 million from $44.9 million in 2023[93] Initial Public Offering and Financing - The initial public offering in January 2024 raised net proceeds of $183.2 million from the sale of 9,722,222 shares at $18.00 per share[76] - The company plans to finance its operations through public or private equity offerings, debt financings, and collaborations, as it does not expect to generate revenue until product candidates are approved[79] - Net cash provided by financing activities was $186.5 million for the nine months ended September 30, 2024, primarily due to the initial public offering[106] Operating Losses and Cash Flow - The company has incurred significant operating losses since inception, with research and development expenses primarily related to firmonertinib and other clinical activities[80] - Net cash used in operating activities was $54.1 million for the nine months ended September 30, 2024, compared to $41.0 million in 2023[103] - Cash and cash equivalents as of September 30, 2024, were $282.9 million, following gross proceeds of $183.2 million from the initial public offering[96] Commitments and Obligations - The Allist License Agreement obligates the company to pay up to $765 million in milestone payments upon achieving certain development and regulatory milestones, with no milestones met as of the nine months ended September 30, 2024[74] - The company has commitments for milestone payments under agreements with Allist, Jiangsu Alphamab Biopharmaceuticals Co., Ltd., and Aarvik, contingent upon successful completion of certain milestones[109] Company Classification and Regulatory Compliance - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay compliance with certain accounting standards[112] - The company will remain an emerging growth company until it meets specific revenue or market value thresholds, including total annual gross revenue of at least $1.235 billion[113] - The company is also a smaller reporting company, which allows it to take advantage of scaled disclosures as long as certain revenue and market value conditions are met[114] Risk Factors - The company believes its exposure to interest rate risk is not significant, with a hypothetical 1.0% change in market interest rates not materially impacting its portfolio[116] - The company does not regularly incur material expenses in foreign currencies, and exchange rate fluctuations have not materially affected its results of operations to date[117] - Inflation has not had a material effect on the company's results of operations during the periods presented and is not anticipated to have a significant impact going forward[118]

Financial Position - As of September 30, 2024, ArriVent BioPharma had cash and cash equivalents of $282.9 million, expected to fund operations into 2026[1][8] - Net cash used in operations for the nine months ended September 30, 2024, was $54.1 million, compared to $40.9 million for the same period in 2023, reflecting a 32% increase[8][10] Expenses - Research and development expenses increased to $58.9 million for the nine months ended September 30, 2024, from $44.9 million in 2023, marking a 31% rise primarily due to increased headcount and clinical expenses related to firmonertinib[8][9] - General and administrative expenses rose to $11.8 million for the nine months ended September 30, 2024, compared to $6.6 million in 2023, indicating a 79% increase due to infrastructure expansion for public company operations[8][10] - Research and development expenses for the three months ended September 30, 2024, were $20,088,000, an increase of 40.0% compared to $14,280,000 for the same period in 2023[23] - General and administrative expenses for the three months ended September 30, 2024, were $4,144,000, up 70.5% from $2,436,000 in the prior year[23] - Total operating expenses for the three months ended September 30, 2024, reached $24,232,000, a 45.0% increase from $16,716,000 in the same quarter of 2023[23] - Total operating expenses for the nine months ended September 30, 2024, were $70,603,000, a 37.1% increase from $51,472,000 in the same period of 2023[23] Losses - The net loss for the nine months ended September 30, 2024, was $59.9 million, up from $48.1 million in 2023, representing a 24% increase[8][10] - The operating loss for the three months ended September 30, 2024, was $(24,232,000), compared to $(16,716,000) for the same period in 2023[23] - Net loss for the three months ended September 30, 2024, was $(20,564,000), an increase from $(14,401,000) in the prior year[24] - Net loss for the nine months ended September 30, 2024, was $(59,855,000), compared to $(48,140,000) for the same period in 2023[24] Research and Development - Firmonertinib demonstrated robust systemic and CNS anti-tumor activity in patients with EGFR PACC mutant NSCLC, with positive proof-of-concept data presented in September 2024[2][3] - The company plans to initiate a dose expansion cohort for the combination study of firmonertinib and SHP2 inhibitor ICP-189 in the fourth quarter of 2024[4] - Top-line pivotal data from the global Phase 3 FURVENT trial for firmonertinib in front-line NSCLC with EGFR exon 20 insertion mutations is expected in 2025[1][7] - ArriVent is advancing a next-generation antibody drug conjugate (ADC) candidate for solid tumors, with selection expected to be completed in late 2024 or early 2025[6] - The company anticipates providing an update on the EGFR PACC pivotal study plan in the first half of 2025[5] Shares and Income - Interest income for the three months ended September 30, 2024, was $3,668,000, up from $2,315,000 in the same quarter of 2023[23] - Weighted-average shares of common stock outstanding for the three months ended September 30, 2024, were 33,581,810, compared to 2,607,192 in the prior year[24] - Net loss per share attributable to common stockholders for the three months ended September 30, 2024, was $(0.61), compared to $(5.52) for the same period in 2023[24]

Industry Overview - Biotech and pharmaceutical companies have become increasingly significant in the IPO market, accounting for approximately 24% of IPOs from 2001 to 2023, and 35% from 2019 to 2023, indicating a growing relevance in the market [1] Company Highlights - CG Oncology (NASDAQ: CGON) had its IPO on January 24, with an initial price of $19 per share, which surged to $29 due to strong institutional demand, closing at over $37 on January 25, marking a 96% increase in just two days [3][4] - CG Oncology's leading drug candidate, CG0070, is in two Phase 3 FDA trials and one Phase 2 trial, with a current average price target suggesting a 73% upside [4] - Arrivent BioPharma (NASDAQ: AVBP) went public on January 25, with its stock rising 78% from its IPO price, primarily due to similar institutional demand dynamics as CG Oncology [5][6] - Arrivent's key drug, firmonertinib, is in a Phase 3 trial for non-small cell lung cancer and has been approved in China, generating approximately $624 million since 2021, although Arrivent has not received any revenue from this [6][7] - Upstream Bio (NASDAQ: UPB) had its IPO on October 10, with shares increasing by 49%, driven by pre-retail trading, and its leading drug program, UPB-101, is in three Phase 2 trials targeting severe asthma and other conditions [7][8]

Group 1 - ArriVent BioPharma, Inc. (AVBP) shares have increased by 29.8% over the past four weeks, closing at $24.36, with a mean price target of $31 indicating a potential upside of 27.3% [1] - The average price targets from analysts range from a low of $25 to a high of $35, with a standard deviation of $4.69, suggesting a relatively tight clustering of estimates [2] - Analysts show strong agreement on AVBP's ability to report better earnings than previously predicted, which supports the potential for stock upside [4][9] Group 2 - The Zacks Consensus Estimate for AVBP's current year earnings has increased by 3.8% over the last 30 days, with no negative revisions [10] - AVBP holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [11] - The correlation between earnings estimate revisions and near-term stock price movements suggests that the positive trend in earnings estimates could lead to stock price increases [9]

Drug Development and Clinical Trials - Firmonertinib received Breakthrough Therapy Designation from the FDA for treatment of EGFRm NSCLC in October 2023[58] - In the FAVOUR trial, 79% of patients (22 out of 28) experienced a reduction in tumor size of at least 30%[60] - The median duration of response for patients in the FAVOUR trial was 15.2 months[62] - The Allist License Agreement includes milestone payments up to $765 million upon achieving certain development and regulatory milestones[63] - The company plans to increase research and development expenses significantly as it advances firmonertinib and identifies new product candidates[72] Financial Performance - The company incurred a net loss of $39.3 million for the six months ended June 30, 2024, compared to $33.7 million for the same period in 2023[66] - Total operating expenses for the three months ended June 30, 2024, were $25.7 million, an increase of $3.1 million from $22.6 million in 2023[76] - Research and development expenses for the three months ended June 30, 2024, were $21.8 million, up from $20.4 million in 2023[76] - Total operating expenses for the six months ended June 30, 2024, were $46.4 million, up $11.6 million from $34.8 million in 2023[80] - Total research and development expenses for the six months ended June 30, 2024, were $38.8 million, an increase of $8.2 million from $30.6 million in 2023[81] - General and administrative expenses for the six months ended June 30, 2024, were $7.6 million, an increase of $3.5 million from $4.2 million in 2023[82] Cash Flow and Financing - The company completed its initial public offering on January 30, 2024, raising net proceeds of $183.2 million[65] - The company raised gross proceeds of $305.0 million from the issuance of convertible preferred stock and $183.2 million from its initial public offering in the first quarter of 2024[85] - Cash and cash equivalents as of June 30, 2024, totaled $298.7 million, expected to meet cash requirements into 2026[87] - Net cash used in operating activities was $37.7 million for the six months ended June 30, 2024, reflecting a net loss of $39.3 million[91] - Net cash provided by financing activities was $186.0 million for the six months ended June 30, 2024, primarily from the initial public offering[93] Company Classification and Accounting - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay the adoption of certain accounting standards until they apply to private companies[98] - The company will remain an emerging growth company until it achieves total annual gross revenue of at least $1.235 billion or the market value of its common stock held by non-affiliates exceeds $700 million[99] - The company is also a smaller reporting company, which allows it to take advantage of scaled disclosures as long as its voting and non-voting common stock held by non-affiliates is less than $250 million[100] - There have been no changes to the company's critical accounting policies from those described in the Annual Report[97] Risk Factors - The company believes its exposure to interest rate risk is not significant, with a hypothetical 1.0% change in market interest rates not materially impacting its portfolio[103] - The company does not regularly incur material expenses in foreign currencies, and exchange rate fluctuations have not materially affected its results of operations to date[104] - Inflation has generally increased the company's labor and clinical trial costs, but it does not anticipate a material impact on its results of operations going forward[105] - The company evaluates its estimates and judgments related to accrued research and development and stock-based compensation expenses based on historical experience and known trends[96]

Exhibit 99.1 ArriVent BioPharma Reports Second Quarter 2024 Financial Results Clinical proof-of-concept monotherapy data for once daily, first-line firmonertinib in EGFR PACC mutant non-small cell lung cancer (NSCLC) to be presented as a presidential symposium presentation at the 2024 World Conference on Lung Cancer (WCLC) ArriVent to host virtual webinar on these interim analyses of Phase 1b data for firmonertinib in EGFR PACC mutant NSCLC in conjunction with 2024 WCLC on September 9, 2024 at 4:30pm ET Ent ...

Clinical proof-of-concept monotherapy data for once daily, first-line firmonertinib in EGFR PACC mutant nonsmall cell lung cancer (NSCLC) to be presented as a presidential symposium presentation at the 2024 World Conference on Lung Cancer (WCLC) ArriVent to host virtual webinar on these interim analyses of Phase 1b data for firmonertinib in EGFR PACC mutant NSCLC in conjunction with 2024 WCLC on September 9, 2024 at 4:30pm ET Entered into a multi-target antibody drug conjugate (ADC) collaboration agreement ...