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 | ( ...