UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-40881 Pyxis Oncology, Inc. (Exact Name of Registrant as Specified in its Charter) | | | (State or other jurisdiction of incorporation or organization) 321 Harrison ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-40881 Pyxis Oncology, Inc. (Exact name of Registrant as specified in its Charter) Delaware 83-1160910 Washington, D.C. 20549 FORM 10-K (State or other jurisdiction of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-40881 Pyxis Oncology, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 83-1160910 (State or other jurisdiction of incorporation or organiza ...

[Summary Risk Factors](index=3&type=section&id=Summary%20Risk%20Factors) The company is a preclinical-stage biopharmaceutical firm with a limited operating history and has incurred significant losses since inception, with an expectation of continued losses for the next several years - The company is a preclinical-stage biopharmaceutical firm with a limited operating history and has incurred **significant losses since inception**, with an expectation of continued losses for the next several years[9](index=9&type=chunk) - Future operations are heavily dependent on the success of its two lead product candidates, **PYX-201 and PYX-106**, which are in the early stages of development and face significant clinical and regulatory risks[9](index=9&type=chunk) - The company will require **substantial additional capital** to finance operations and advance its product candidates; failure to raise capital on acceptable terms could force delays or elimination of development programs[9](index=9&type=chunk) - Key operational risks include reliance on third parties for manufacturing, potential failure to obtain and maintain patent protection for its product candidates, and obligations under various licensing agreements[9](index=9&type=chunk)[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Pyxis Oncology, Inc. as of June 30, 2022, and for the three and six-month periods then ended, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2022, shows a decrease in total assets compared to December 31, 2021, primarily due to a reduction in cash and cash equivalents, while total liabilities increased, leading to a decrease in total stockholders' equity Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $223.4 | $274.7 | | Total current assets | $226.6 | $278.7 | | Total assets | $242.6 | $280.0 | | Total liabilities | $30.6 | $18.7 | | Accumulated deficit | $(148.7) | $(91.7) | | Total stockholders' equity | $212.0 | $261.3 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three and six months ended June 30, 2022, the company reported significantly higher operating expenses and a wider net loss compared to the same periods in 2021, driven by substantial growth in both Research and Development (R&D) and General and Administrative (G&A) expenses Statement of Operations Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $17.2 | $3.2 | $37.2 | $36.0 | | General and administrative | $8.6 | $2.7 | $19.9 | $5.7 | | Loss from operations | $(25.7) | $(5.9) | $(57.1) | $(41.7) | | Net loss | $(25.6) | $(8.1) | $(56.9) | $(45.0) | | Net loss per share | $(0.79) | $(5.54) | $(1.76) | $(31.86) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, the company used significantly more cash in operating activities compared to the prior year period, reflecting the increased net loss and operational spend, resulting in a net decrease in cash for the first half of 2022 Cash Flow Summary for Six Months Ended June 30 (in millions) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(51.4) | $(15.9) | | Net cash used in investing activities | $(0.3) | $(0.6) | | Net cash provided by financing activities | $0.2 | $150.9 | | Net (decrease) increase in cash | $(51.5) | $134.4 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide crucial context to the financial statements, detailing the company's focus on oncology therapeutics, liquidity assessment, specifics on major licensing agreements, stock-based compensation plans, and a new operating lease - The company believes its existing cash and cash equivalents of **$223.4 million** as of June 30, 2022, are sufficient to fund operating expenses and capital requirements for at least **twelve months** from the issuance date of the financial statements[32](index=32&type=chunk) - In March 2022, the company entered into a license agreement with Biosion USA, Inc. for PYX-106, paying an upfront license fee of **$10 million**, which was recorded as R&D expense. The agreement includes potential future milestone payments up to **$222.5 million**[52](index=52&type=chunk)[53](index=53&type=chunk) - The company commenced a new operating lease for office and laboratory space on April 1, 2022, recognizing a right-of-use asset and lease liability of **$15.3 million**. The lease term extends through December 2032[71](index=71&type=chunk)[72](index=72&type=chunk) - As of June 30, 2022, the company had **$31.0 million** of gross unrecognized stock-based compensation expense related to stock options, to be amortized over a weighted average period of **2.77 years**, and **$9.5 million** related to restricted stock, to be amortized over **2.6 years**[65](index=65&type=chunk)[69](index=69&type=chunk) [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) Management provides an analysis of the company's financial performance and condition, highlighting pipeline reprioritization to focus on advancing two lead candidates, PYX-201 and PYX-106, while pausing or ceasing other programs to extend the cash runway, and detailing increased operating expenses due to expanded R&D and G&A costs [Overview and Recent Developments](index=18&type=section&id=Overview%20and%20Recent%20Developments) The company has reprioritized its pipeline to focus resources on its two most advanced programs, PYX-201 and PYX-106, with plans to file Investigational New Drug (IND) applications for both in the second half of 2022, while ceasing development of PYX-202 and pausing preclinical work on PYX-203 and PYX-102 to extend the cash runway through the second half of 2024 - The company has sharpened its focus by reprioritizing development efforts towards its two most advanced programs: **PYX-201 and PYX-106**[91](index=91&type=chunk)[93](index=93&type=chunk) - Development of the anti-DLK1 ADC, **PYX-202**, has been ceased after a review of data from toxicity studies[92](index=92&type=chunk) - Preclinical development of anti-CD123 ADC (PYX-203) and anti-KLRG1 IO program (PYX-102) has been paused to conserve resources[93](index=93&type=chunk) - The company anticipates submitting **INDs for both PYX-201 and PYX-106 in the second half of 2022**[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) The analysis of operating results shows a significant increase in expenses for the three and six months ended June 30, 2022, compared to 2021, with R&D and G&A expenses rising due to contract manufacturing, preclinical toxicity studies, higher headcount, and public company costs Comparison of Operating Expenses for the Three Months Ended June 30 (in millions) | Expense Category | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Research and development | $17.2 | $3.2 | $14.0 | | General and administrative | $8.6 | $2.7 | $5.8 | Comparison of Operating Expenses for the Six Months Ended June 30 (in millions) | Expense Category | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Research and development | $37.2 | $36.0 | $1.3 | | General and administrative | $19.9 | $5.7 | $14.2 | - The Q2 2022 R&D expense increase was primarily due to a **$8.7 million** rise in contract manufacturing costs and a **$1.6 million** increase in preclinical toxicity study costs[121](index=121&type=chunk) - The H1 2022 G&A expense increase was driven by higher personnel-related costs (**+$7.3 million**), professional and consultant fees (**+$4.5 million**), and facilities/insurance costs (**+$2.3 million**)[126](index=126&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2022, the company held $223.4 million in cash and cash equivalents and had an accumulated deficit of $148.7 million, with management projecting current cash to fund operations through the second half of 2024, despite a substantial increase in net cash used in operations for the first six months of 2022 - The company had cash and cash equivalents of **$223.4 million** as of June 30, 2022[128](index=128&type=chunk) - Based on current plans, the company expects its cash to fund operating expenses and capital expenditure requirements through the **second half of 2024**[137](index=137&type=chunk) - Net cash used in operating activities increased to **$51.4 million** in the first six months of 2022 from **$15.9 million** in the same period of 2021, primarily due to a higher net loss and changes in operating assets and liabilities[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - The company has significant future contingent payment obligations under its license agreements, including up to **$660 million to Pfizer** and up to **$222.5 million to Biosion**[140](index=140&type=chunk)[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is classified as a "smaller reporting company" under SEC rules and is therefore not required to provide the information for this item - As a "smaller reporting company," Pyxis Oncology is not required to provide quantitative and qualitative disclosures about market risk[151](index=151&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation conducted by management, including the CEO and CFO, the company's disclosure controls and procedures were concluded to be effective at a reasonable assurance level as of June 30, 2022, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2022[152](index=152&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[153](index=153&type=chunk) [PART II. OTHER INFORMATION](index=30&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings and is not aware of any pending or threatened legal actions that could have a material adverse effect on its business - The company is not currently involved in any **material legal proceedings**[157](index=157&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section provides a comprehensive overview of the risks facing the company, categorized into risks related to its financial position and capital needs, the discovery and development of its product candidates, regulatory and legal compliance, dependence on third parties, intellectual property, and risks associated with its common stock [Risks Related to Financial Position and Need for Additional Capital](index=30&type=section&id=Risks%20Related%20to%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) This subsection highlights the company's financial vulnerabilities, including its limited operating history, history of significant net losses, and the critical need to raise substantial additional capital to fund future operations, with the risk that the company may never achieve profitability or that failure to secure funding could jeopardize its development programs - The company has a limited operating history, has incurred **significant losses since inception** (accumulated deficit of **$148.7 million** as of June 30, 2022), and expects to incur losses for at least the next several years[160](index=160&type=chunk) - **Substantial additional capital is required** to finance operations. The current cash is estimated to last through the **second half of 2024**, but could be depleted sooner than expected[165](index=165&type=chunk)[166](index=166&type=chunk) [Risks Related to the Discovery and Development of our Product Candidates](index=32&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20our%20Product%20Candidates) This subsection details the inherent risks in the company's core business of drug development, including the high risk of failure for all preclinical product candidates, heavy dependence on the success of PYX-201 and PYX-106, potential failure in clinical trials, unexpected safety issues, competition from more established companies, and the possibility that preclinical results will not translate to human trials - The company is heavily dependent on the success of its early-stage product candidates, **PYX-201 and PYX-106**[174](index=174&type=chunk) - All product candidates are in preclinical development, a stage with a **high risk of failure**. The company recently ceased development of **PYX-202** due to unfavorable toxicity data[177](index=177&type=chunk)[182](index=182&type=chunk) - The company faces **intense competition** from well-capitalized biopharmaceutical companies with more experience and resources in developing ADCs and immunotherapies[211](index=211&type=chunk)[212](index=212&type=chunk)[216](index=216&type=chunk) [Risks Related to Regulatory Licensure or Approval and Other Legal Compliance Matters](index=43&type=section&id=Risks%20Related%20to%20Regulatory%20Licensure%20or%20Approval%20and%20Other%20Legal%20Compliance%20Matters) This subsection outlines the significant regulatory hurdles the company faces, including the long, costly, and unpredictable FDA approval process, ongoing regulatory scrutiny even if a product is approved, the dependence of commercial success on securing adequate reimbursement from payors, and the need to comply with complex healthcare fraud, abuse, and data privacy laws - The regulatory approval process for new drugs is **lengthy, expensive, and inherently unpredictable**, with no guarantee that any product candidates will ever be approved[222](index=222&type=chunk) - Even if approved, products will be subject to **extensive ongoing regulatory requirements**, and failure to comply can result in significant penalties or withdrawal of approval[229](index=229&type=chunk) - Commercial success depends on obtaining coverage and **adequate reimbursement** from third-party payors, which is uncertain and subject to pricing pressures from healthcare reform initiatives[271](index=271&type=chunk)[277](index=277&type=chunk) [Risks Related to Our Dependence on Third Parties](index=62&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) This subsection emphasizes the company's significant reliance on external partners, including in-licensing critical intellectual property from Pfizer and Biosion, contracting with third-party manufacturers (CMOs) for all product supply, and depending on contract research organizations (CROs) to conduct clinical trials, with any failure by these third parties to perform their obligations potentially severely disrupting development and commercialization efforts - The company relies on license agreements with Pfizer, LegoChem, Biosion, and others for its product candidates. A breach or termination of these agreements could result in the **loss of necessary intellectual property rights**[324](index=324&type=chunk) - The company depends entirely on **third-party contract manufacturers** for its product supply and does not own any manufacturing facilities. Any failure by these manufacturers to comply with cGMP or meet supply needs could delay or halt clinical trials and commercialization[329](index=329&type=chunk)[330](index=330&type=chunk) - The company plans to rely on **third-party CROs** to conduct its clinical trials. Poor performance by these CROs could jeopardize data integrity and delay regulatory approvals[342](index=342&type=chunk) [Risks Related to Our Intellectual Property](index=65&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This subsection discusses the risks associated with protecting the company's intellectual property, including the dependence of its success on obtaining and maintaining patent protection for its product candidates, the possibility that patents may not be granted, may be challenged and invalidated, or may not provide sufficient protection against competitors, and the risks of infringing third-party patents and of its trade secrets being misappropriated - The company's ability to compete effectively depends on its ability to **obtain and maintain patent protection** for its product candidates, which is an uncertain and costly process[346](index=346&type=chunk)[347](index=347&type=chunk) - The company could face **infringement lawsuits** from third parties, which are expensive and could force it to halt development or pay significant damages or royalties[362](index=362&type=chunk)[363](index=363&type=chunk) - The company relies on **trade secrets and confidentiality agreements**, but these may be breached, and it may not have adequate remedies, potentially harming its competitive position[378](index=378&type=chunk)[383](index=383&type=chunk) [Risks Related to Our Common Stock](index=72&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) This subsection outlines risks for investors in the company's common stock, including high stock price volatility, potential dilution from future equity financings, significant ownership concentration among principal stockholders and management, and reduced public disclosure requirements due to the company's status as an "emerging growth company" and "smaller reporting company" - The company's stock price is expected to be **highly volatile** due to factors such as clinical trial results, regulatory developments, and market conditions[390](index=390&type=chunk) - As of August 15, 2022, executive officers, directors, and 5%+ stockholders beneficially owned approximately **54.2%** of the outstanding common stock, giving them significant influence over corporate actions[394](index=394&type=chunk) - The company is an "emerging growth company" and a "smaller reporting company," which allows for **reduced disclosure requirements** that may make its stock less attractive to some investors[397](index=397&type=chunk)[400](index=400&type=chunk) - The company does not anticipate paying any cash dividends in the foreseeable future; returns will depend on stock price appreciation[412](index=412&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section addresses the use of proceeds from the company's Initial Public Offering (IPO) on October 7, 2021, which generated net proceeds of $152.3 million, stating there has been no material change in the planned use of these funds, which have been invested in a money market fund - The company's IPO on October 7, 2021, raised net proceeds of **$152.3 million** after deducting underwriting discounts and other costs[418](index=418&type=chunk) - There has been no material change in the planned use of the net proceeds from the IPO as described in the final prospectus[418](index=418&type=chunk) [Other Items (Items 3-6)](index=78&type=section&id=Other%20Items) This section covers remaining miscellaneous items, reporting no defaults upon senior securities (Item 3), no mine safety disclosures (Item 4), and no other information to report (Item 5), with Item 6 listing the exhibits filed with the report - The company reported no information for Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information)[419](index=419&type=chunk)

Company Highlights - Pyxis Oncology has a strong balance sheet with approximately $231 million in cash as of May 13, 2022[7] - The company's IO and ADC programs are expected to deliver multiple potential catalysts over the next 12-24 months[7] Pipeline Development - The company plans to submit IND applications for PYX-106 (Anti-Siglec-15) and PYX-201 (Anti-EDB) in the second half of 2022[25] - Pyxis Oncology is targeting IND submission for PYX-102 (Anti-KLRG1) and PYX-203 (Anti-CD123) in the second half of 2023[25] - A program update for PYX-202 (Anti-DLK1) is expected in mid-2022[25] Drug Target and Mechanism - PYX-106 demonstrates 6-fold higher affinity to human Siglec-15 than benchmark in development[27] - EDB mRNA expression is upregulated in tumor over normal tissue in several cancer indications[64] - Anti-DLK1 (PYX-202) is designed to bind a rapidly internalized target with tumor-selective beta-glucuronide linker to mitigate known MMAE toxicities[76] Market and Potential - Pyxis Oncology estimates a potential U S peak sales of over $5 billion across its pipeline[99] - The total incidence of Non-Small Cell Lung Cancer in the U S is 200,000[41] - The total incidence of Head and Neck Cancer in the U S is 60,000[41]

FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-40881 Pyxis Oncology, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 83-1160910 (State or other jurisdiction of incorporation or organization ...

Part I [Business](index=6&type=section&id=Item%201.%20Business.) Pyxis Oncology is a preclinical oncology company developing next-generation ADCs and IO candidates to treat difficult cancers [Overview](index=6&type=section&id=Overview) Pyxis Oncology is a preclinical company developing a multi-modality portfolio of Antibody-Drug Conjugates (ADCs) and Immuno-Oncology (IO) therapeutics - The company is a preclinical oncology firm developing a portfolio of novel **antibody-drug conjugates (ADCs)** and **immuno-oncology (IO)** product candidates[19](index=19&type=chunk) - Pyxis employs a multi-modality strategy to attack key drivers of tumor growth within the tumor microenvironment (TME), including targeting tumor antigens and modulating the immune response[20](index=20&type=chunk) - The company's pipeline development strategy includes leveraging the in-licensed FACT platform, a proprietary target catalog from the University of Chicago, creative business models like the Voxall joint venture, and in-licensing of product candidates such as PYX-202 from LegoChem and PYX-106 from Biosion[21](index=21&type=chunk) [Our Portfolio](index=8&type=section&id=Our%20Portfolio) Pyxis Oncology's pipeline includes both Antibody-Drug Conjugate (ADC) and Immuno-Oncology (IO) candidates targeting solid and hematologic tumors Pyxis Oncology Pipeline Summary (as of Dec 31, 2021) | Program | Proposed Indications | Stage | Key Milestone | | :--- | :--- | :--- | :--- | | **Immuno-Oncology (IO)** | | | | | PYX-106 (Anti-Siglec-15) | Thyroid, Head and Neck, NSCLC | Preclinical | IND Submission: 2H 2022 | | PYX-102 (Anti-KLRG1) | Solid Tumors | Preclinical | IND Submission: 2H 2023 | | **Antibody-Drug Conjugates (ADCs)** | | | | | PYX-201 (Anti-EDB) | NSCLC, Breast | Preclinical | IND Submission: 2H 2022 | | PYX-202 (Anti-DLK1) | SCLC, Soft Tissue Sarcoma | Preclinical | Program Update: Mid 2022 | | PYX-203 (Anti-CD123) | AML, MDS | Preclinical | IND Submission: 2H 2023 | - PYX-202 (Anti-DLK1 ADC) requires additional GLP and non-GLP toxicity studies to determine its viability as a clinical candidate, with an update expected in mid-2022[27](index=27&type=chunk)[37](index=37&type=chunk) [Our Strategy](index=10&type=section&id=Our%20Strategy) The company's core strategy is to build a durable, multi-asset, multi-modality portfolio to address difficult-to-treat cancers - Advance lead candidates PYX-106 and PYX-201 into clinical development, with INDs expected in 2H 2022[40](index=40&type=chunk) - Utilize a multi-modality approach, developing ADCs to target tumor cells and IO mAbs to enhance immune response within the TME[40](index=40&type=chunk) - Continue to leverage the FACT platform and proprietary Target Catalog to expand the pipeline with new product candidates[40](index=40&type=chunk) - Selectively forge alliances to access complementary technologies and expand the product pipeline[40](index=40&type=chunk) [ADC Technology and FACT Platform](index=11&type=section&id=ADC%20Technology%20and%20FACT%20Platform) Pyxis utilizes next-generation Antibody-Drug Conjugate (ADC) technology, centered on the in-licensed FACT platform from Pfizer - The company is developing next-generation ADCs using the FACT platform, licensed from Pfizer, which employs site-specific conjugation techniques to create more stable and predictable ADCs[59](index=59&type=chunk) - Site-specific conjugation allows for a predictable drug-to-antibody ratio (DAR), which is expected to improve pharmacokinetics, minimize premature payload release, and reduce off-target toxicity, thereby enhancing the therapeutic index (TI)[48](index=48&type=chunk)[52](index=52&type=chunk) Comparison of Pyxis Next-Gen ADCs vs. Conventional ADCs | Feature | Pyxis Oncology's Next-Generation ADCs | Conventional ADCs | | :--- | :--- | :--- | | **Potential Therapeutic Index** | 8 – 16 | 1 – 5 | | **Linker** | Site-specific conjugation for target DAR and high TI; Highly stable linkers | Non-site-specific conjugation results in heterogenous DAR; Many linkers are labile | | **Payload** | Extensive array of payloads (e.g., microtubule inhibitors, DNA damaging agents) to match tumor biology and induce ICD | Often built with less potent payloads due to labile linkers | [Licensing and Collaboration Agreements](index=37&type=section&id=Licensing%20and%20Collaboration%20Agreements) Pyxis built its pipeline through key agreements, licensing from Pfizer, LegoChem, Biosion, and the University of Chicago - **Pfizer:** Worldwide rights for PYX-201 and PYX-203 and non-exclusive license to the FACT platform. Incurred a **$25.0 million** license fee (**$5.0M** cash, **$20.0M** in stock) with up to **$660 million** in potential milestones for the first four licensed ADCs[158](index=158&type=chunk)[159](index=159&type=chunk) - **LegoChem:** Worldwide rights (ex-Korea) for PYX-202. Paid **$9.5 million** in upfront fees (**$0.5M** in 2020, **$9.0M** in 2021) with up to **$284.5 million** in potential milestones[172](index=172&type=chunk)[173](index=173&type=chunk) - **Biosion:** Worldwide rights (ex-Greater China) for PYX-106. Agreed to a **$10 million** upfront fee with up to **$222.5 million** in potential milestones[179](index=179&type=chunk)[180](index=180&type=chunk) - **University of Chicago:** Exclusive license to patents and know-how from Dr. Thomas Gajewski's lab. Issued **48,919 shares** of common stock and is obligated for up to **$7.7 million** in potential milestones[163](index=163&type=chunk)[164](index=164&type=chunk) - **Voxall Joint Venture:** A 50:50 JV with Alloy Therapeutics to discover and develop drugs, where Pyxis has an exclusive option to license development candidates[167](index=167&type=chunk) [Intellectual Property](index=40&type=section&id=Intellectual%20Property) The company's intellectual property strategy relies on a combination of in-licensed and owned patents, trade secrets, and know-how - The patent portfolio includes exclusively licensed patents from the University of Chicago, Pfizer, LegoChem, and Biosion, as well as company-owned applications[182](index=182&type=chunk)[188](index=188&type=chunk) Key Product Candidate Patent Expirations | Product Candidate | Patent Family Licensed From | Subject Matter | Expected Expiration (20-year term) | | :--- | :--- | :--- | :--- | | **PYX-201** | Pfizer | Composition of matter, methods of use | October 2037 | | **PYX-202** | LegoChem | Composition of matter, methods of use | March 2040 | | **PYX-203** | Pfizer | Composition of matter, methods of use | October 2038 | | **PYX-106** | Biosion | Composition of matter, methods of use | March 2041 | [Government Regulation](index=43&type=section&id=Government%20Regulation) Pyxis's product candidates are subject to extensive FDA regulation, requiring lengthy preclinical and clinical trials for approval - Product candidates are regulated as biological products requiring a Biologics License Application (BLA) from the FDA, which involves extensive preclinical and clinical trials to demonstrate safety, purity, and potency[203](index=203&type=chunk)[204](index=204&type=chunk)[206](index=206&type=chunk) - The company may seek expedited development and review programs, including Fast Track, Breakthrough Therapy, and Accelerated Approval, to potentially speed up the regulatory process[215](index=215&type=chunk) - The BPCIA creates an abbreviated approval pathway for biosimilars, which could lead to competition for Pyxis's products 12 years after initial licensure[233](index=233&type=chunk)[234](index=234&type=chunk) - The company is subject to various healthcare laws, including the federal Anti-Kickback Statute, the False Claims Act (FCA), and the Physician Payment Sunshine Act, which regulate relationships with healthcare providers and payors[255](index=255&type=chunk)[258](index=258&type=chunk) - Commercial success depends on coverage and reimbursement from third-party payors, and the company faces pricing pressures from healthcare reform initiatives like the ACA and other cost-containment measures[260](index=260&type=chunk)[263](index=263&type=chunk) [Human Capital](index=55&type=section&id=Human%20Capital) As of March 25, 2022, Pyxis employed **56 full-time employees**, with **61% in R&D**, focusing on attracting and retaining talent - As of March 25, 2022, the company had **56 full-time employees**, with **61% in R&D**[272](index=272&type=chunk) - Over **50%** of the workforce and executive leadership is comprised of women[272](index=272&type=chunk) - The company offers competitive compensation, including equity incentive plans, to attract and retain talent[276](index=276&type=chunk) - In response to COVID-19, a hybrid work model was initiated in 2021 to balance in-person and remote work[277](index=277&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks typical of a preclinical-stage biopharmaceutical firm, including financial and development challenges - **Financial Risk:** The company is a preclinical stage biopharma with a limited operating history, significant losses (**$76.0 million** in 2021, **$12.8 million** in 2020), and an accumulated deficit of **$91.7 million** as of Dec 31, 2021. It expects to incur losses for several more years and will require substantial additional capital[283](index=283&type=chunk) - **Development and Commercialization Risk:** The business is heavily dependent on the success of its five preclinical product candidates (PYX-201, PYX-202, PYX-203, PYX-106, PYX-102). Failure in clinical trials, inability to get regulatory approval, or failure to commercialize would materially harm the business[299](index=299&type=chunk)[300](index=300&type=chunk) - **Third-Party Reliance Risk:** The company relies on third parties for manufacturing its product candidates and conducting clinical trials. Any failure by these partners to perform, comply with cGMP/GCP, or maintain supply could significantly delay or impair development and commercialization[464](index=464&type=chunk)[478](index=478&type=chunk) - **Intellectual Property Risk:** Success depends on obtaining and maintaining patent protection for product candidates. The company may be unable to protect its IP, and patents may be challenged, invalidated, or circumvented by competitors[482](index=482&type=chunk)[483](index=483&type=chunk) - **Competition Risk:** The company faces intense competition from major pharmaceutical and biotechnology companies with greater resources and experience. Competitors are developing similar ADC and immunotherapy approaches, and new therapies could render Pyxis's candidates obsolete[344](index=344&type=chunk)[347](index=347&type=chunk)[350](index=350&type=chunk) - **COVID-19 Risk:** The pandemic could significantly disrupt preclinical studies and future clinical trials through delays in enrollment, supply chain interruptions, and operational limitations at CROs and regulatory agencies[449](index=449&type=chunk) [Unresolved Staff Comments](index=108&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments - None[556](index=556&type=chunk) [Properties](index=109&type=section&id=Item%202.%20Properties) The company's headquarters are in Cambridge, MA, with a new **10-year lease** for larger office and lab space in Boston - Current headquarters are at 35 Cambridgepark Drive, Cambridge, MA, in an **8,955 sq. ft.** facility with a lease expiring March 31, 2022[557](index=557&type=chunk) - A new **10-year lease** for a **31,659 sq. ft.** office and lab space at 321 Harrison Avenue, Boston, MA, begins April 1, 2022, and ends December 31, 2032[557](index=557&type=chunk) [Legal Proceedings](index=109&type=section&id=Item%203.%20Legal%20Proceedings) As of the report date, the company was not a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[558](index=558&type=chunk) [Mine Safety Disclosures](index=109&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[559](index=559&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=110&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Pyxis Oncology's common stock began trading on Nasdaq in October 2021, with no plans for cash dividends - The company's common stock began trading on the Nasdaq Global Select Market under the symbol '**PYXS**' on October 8, 2021[562](index=562&type=chunk) - The company has never declared or paid cash dividends and does not intend to in the foreseeable future[564](index=564&type=chunk) - In March 2021, the company issued **92,356,299 shares** of Series B convertible preferred stock for approximately **$151.6 million** in cash proceeds[567](index=567&type=chunk) - In March 2021, the company also issued **12,455,949 shares** of Series B convertible preferred stock to LegoChem and Pfizer as part of licensing and collaboration agreements[567](index=567&type=chunk) [Reserved](index=112&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=112&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Pyxis Oncology, a preclinical company, reported significant losses in 2021, driven by increased R&D and G&A expenses [Results of Operations](index=118&type=section&id=Results%20of%20Operations) For the year ended December 31, 2021, Pyxis reported a net loss of **$76.0 million**, compared to a net loss of **$12.8 million** in 2020 Consolidated Results of Operations (in thousands) | | Year Ended December 31, 2021 | Year Ended December 31, 2020 | Change | | :--- | :--- | :--- | :--- | | **Research and development** | $51,054 | $9,048 | $42,006 | | **General and administrative** | $18,663 | $3,846 | $14,817 | | **Total operating expenses** | $69,717 | $12,894 | $56,823 | | **Loss from operations** | $(69,717) | $(12,894) | $(56,823) | | **Net loss** | **$(75,975)** | **$(12,828)** | **$(63,147)** | - R&D expenses increased by **$42.0 million**, primarily due to a **$25.0 million** license fee for the Pfizer agreement, a **$4.4 million** license fee for the LegoChem agreement, and a **$5.2 million** increase in personnel-related costs[624](index=624&type=chunk) - G&A expenses increased by **$14.8 million**, mainly due to a **$7.2 million** increase in personnel-related costs and a **$6.0 million** increase in professional and consultant fees to support growth and public company operations[625](index=625&type=chunk) - Other expense included a **$6.2 million** charge for the change in fair value of a derivative liability related to the LegoChem Opt-In Agreement[627](index=627&type=chunk) [Liquidity and Capital Resources](index=119&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2021, Pyxis had **$274.7 million** in cash and cash equivalents and an accumulated deficit of **$91.7 million** - As of December 31, 2021, the company had cash and cash equivalents of **$274.7 million** and an accumulated deficit of **$91.7 million**[628](index=628&type=chunk) - In 2021, the company raised approximately **$152.3 million** in net proceeds from its IPO and **$151.6 million** from its Series B financing[629](index=629&type=chunk)[638](index=638&type=chunk) Summary of Cash Flows (in thousands) | | Year Ended December 31, 2021 | Year Ended December 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(35,326) | $(10,084) | | Net cash used in investing activities | $(590) | $(1,483) | | Net cash provided by financing activities | $304,044 | $35 | - The company expects its current cash balance to fund operations and capital expenditures into the third quarter of 2024[639](index=639&type=chunk) [Critical Accounting Policies](index=122&type=section&id=Critical%20Accounting%20Policies) The company's critical accounting policies involve significant judgments and estimates - **Research and Development Expenses:** The company estimates accrued R&D expenses for services performed by third parties (CROs, CMOs) but not yet invoiced, based on progress, contracts, and communication with vendors[652](index=652&type=chunk) - **Stock-Based Compensation:** The company uses the Black-Scholes model to value stock options, requiring estimates for expected volatility, term, and, prior to the IPO, the fair value of its common stock[656](index=656&type=chunk)[657](index=657&type=chunk) - **Fair Value of Common Stock (Pre-IPO):** Prior to the IPO, the board of directors determined the fair value of common stock using third-party valuations (OPM or hybrid method), which involved significant judgment[660](index=660&type=chunk) - **Income Taxes:** The company has recorded a full valuation allowance against its net deferred tax assets due to a history of losses and uncertainty about future profitability[665](index=665&type=chunk)[810](index=810&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=125&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a "smaller reporting company" and is therefore not required to provide this information - As a "smaller reporting company," Pyxis Oncology is not required to provide the information for this item[670](index=670&type=chunk) [Financial Statements and Supplementary Data](index=125&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The required financial statements and supplementary data are included in the report, starting on page F-1 - The required financial information is located beginning on page F-1 of the report[671](index=671&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=125&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[672](index=672&type=chunk) [Controls and Procedures](index=126&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls were effective as of December 31, 2021, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[675](index=675&type=chunk) - As a newly public company, this annual report does not include a management report on internal control over financial reporting or an auditor attestation report[676](index=676&type=chunk)[679](index=679&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended December 31, 2021, that materially affected, or are reasonably likely to materially affect, internal controls[677](index=677&type=chunk) [Other Information](index=126&type=section&id=Item%209B.%20Other%20Information) On March 28, 2022, the company entered a license agreement with Biosion USA, Inc. for PYX-106 - On March 28, 2022, the company entered into a license agreement with Biosion USA, Inc. for the IO product candidate PYX-106[679](index=679&type=chunk) - The agreement includes a **$10 million** upfront fee and potential aggregate milestone payments of up to **$222.5 million**, plus tiered royalties[680](index=680&type=chunk) [Disclosure regarding foreign jurisdictions that prevent inspections](index=126&type=section&id=Item%209C.%20Disclosure%20regarding%20foreign%20jurisdictions%20that%20prevent%20inspections) This item is not applicable - Not applicable[681](index=681&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=127&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting - Information is incorporated by reference from the 2022 proxy statement[682](index=682&type=chunk) [Executive Compensation](index=127&type=section&id=Item%2011.%20Executive%20Compensation) Information is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting - Information is incorporated by reference from the 2022 proxy statement[683](index=683&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=127&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting - Information is incorporated by reference from the 2022 proxy statement[684](index=684&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=127&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting - Information is incorporated by reference from the 2022 proxy statement[685](index=685&type=chunk) [Principal Accounting Fees and Services](index=127&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information is incorporated by reference from the company's definitive proxy statement for its 2022 Annual Meeting - Information is incorporated by reference from the 2022 proxy statement[686](index=686&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=128&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including corporate governance documents and material contracts - This item lists all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and SEC certifications[689](index=689&type=chunk) [Form 10-K Summary](index=129&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports that there is no Form 10-K summary - None[693](index=693&type=chunk) Financial Statements [Consolidated Financial Statements](index=131&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements reflect a net loss of **$76.0 million** in 2021, bolstered by IPO and Series B financings Key Financial Data (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Balance Sheet** | | | | Cash and cash equivalents | $274,735 | $8,080 | | Total assets | $280,021 | $10,151 | | Total liabilities | $18,708 | $3,854 | | Accumulated deficit | $(91,718) | $(15,743) | | Total stockholders' equity (deficit) | $261,313 | $(15,645) | | **Statement of Operations** | | | | Research and development expense | $51,054 | $9,048 | | General and administrative expense | $18,663 | $3,846 | | Net loss | $(75,975) | $(12,828) | - Upon its IPO on October 8, 2021, all outstanding Series A and Series B convertible preferred stock automatically converted into **20,056,145 shares** of common stock[730](index=730&type=chunk) - The company has a full valuation allowance of **$25.7 million** against its deferred tax assets as of December 31, 2021, due to its history of cumulative losses[810](index=810&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-40881 Pyxis Oncology, Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | 83-1160910 | | --- | --- | | (State or other jurisdiction of | ( ...