Exhibit 99.1 Pyxis Oncology Provides Corporate Update and Reports Financial Results for Fourth Quarter and Full Year 2023 March 21, 2024 PYX-201 Phase 1 Part 1 trial progressing with initial data expected in the fall of 2024 PYX-106 Phase 1 trial progressing with initial data expected 2H 2024 Completed $50 million private placement Expected cash runway into 2H 2026 BOSTON, March 21, 2024 (GLOBE NEWSWIRE) -- Pyxis Oncology, Inc. (Nasdaq: PYXS), a clinical stage company focused on developing next generation t ...

[Summary Risk Factors](index=3&type=section&id=SUMMARY%20RISK%20FACTORS) [Summary Risk Factors](index=3&type=section&id=Summary%20Risk%20Factors) The company is a clinical-stage biopharmaceutical company with a limited operating history, significant accumulated losses, and a heavy dependence on its early-stage product candidates - The company is a clinical-stage biopharmaceutical firm with a limited operating history, has incurred **significant losses since inception**, and may never achieve profitability[11](index=11&type=chunk) - Substantial additional capital is required, and an inability to raise funds could force delays or elimination of R&D programs[11](index=11&type=chunk) - The business is **heavily dependent on the success of early-stage product candidates** PYX-201, PYX-106, and PYX-107, and failure would materially and adversely affect the business[11](index=11&type=chunk) - Product candidates may fail in development or suffer delays due to lengthy, expensive, and uncertain clinical testing and regulatory approval processes[11](index=11&type=chunk) - The company relies on third parties for manufacturing product candidates, and any failure could delay clinical trials, regulatory approval, or commercialization[11](index=11&type=chunk) - An inability to obtain and maintain patent protection or adequate protection for proprietary know-how could hinder competitive effectiveness[11](index=11&type=chunk) - The company is subject to stringent data privacy and security obligations, and failure to comply could lead to investigations, litigation, and business disruption[12](index=12&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 and detailed notes explaining the company's business, accounting policies, and financial instruments [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $186.7 million at September 30, 2023, driven by a reduction in cash, partially offset by new marketable securities and intangible assets Condensed Consolidated Balance Sheets (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $14,715 | $179,293 | | Marketable debt securities, short-term | $118,252 | — | | Total current assets | $139,094 | $186,612 | | Intangible assets, net | $22,294 | — | | Total assets | $186,692 | $211,379 | | Total current liabilities | $28,332 | $31,634 | | Total liabilities | $48,746 | $50,555 | | Total stockholders' equity | $137,946 | $160,824 | | Accumulated deficit | $(270,628) | $(212,435) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the nine months ended September 30, 2023, the net loss improved to $58.2 million from $84.6 million in the prior year, due to lower R&D expenses and higher other income Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $14,687 | $19,034 | $37,979 | $56,275 | | General and administrative | $10,667 | $9,359 | $26,450 | $29,233 | | Total operating expenses | $25,354 | $28,393 | $64,429 | $85,508 | | Loss from operations | $(25,354) | $(28,393) | $(64,429) | $(85,508) | | Interest and investment income | $1,707 | $719 | $5,036 | $892 | | Sublease income | $598 | — | $1,200 | — | | Total other income, net | $2,305 | $719 | $6,236 | $892 | | Net loss | $(23,049) | $(27,674) | $(58,193) | $(84,616) | | Net loss per common share - basic and diluted | $(0.56) | $(0.85) | $(1.52) | $(2.61) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity decreased to $137.9 million at September 30, 2023, primarily due to the net loss, partially offset by increases from acquisitions and stock issuances Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share amounts) | Metric | Dec 31, 2022 | Sep 30, 2023 | | :--- | :--- | :--- | | Common Stock (shares) | 34,958,730 | 44,294,092 | | Common Stock (amount) | $34 | $44 | | Additional paid-in capital | $373,225 | $408,635 | | Accumulated other comprehensive loss | — | $(105) | | Accumulated deficit | $(212,435) | $(270,628) | | Total stockholders' equity | $160,824 | $137,946 | - The acquisition of Apexigen, Inc contributed **$10.7 million** to total stockholders' equity[22](index=22&type=chunk) - Issuance of common stock to Pfizer Inc added **$5.0 million**[22](index=22&type=chunk) - Shares issued under the ATM program, net of commission, generated **$6.1 million**[22](index=22&type=chunk) - Stock-based compensation increased additional paid-in capital by **$13.7 million** for the nine months ended September 30, 2023[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, cash decreased by $164.6 million, driven by cash used in investing and operating activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(55,455) | $(71,948) | | Net cash used in investing activities | $(115,077) | $(4,541) | | Net cash provided by financing activities | $5,954 | $183 | | Net decrease in cash, cash equivalents, and restricted cash | $(164,578) | $(76,306) | | Cash, cash equivalents and restricted cash at end of period | $16,187 | $200,010 | - Cash used in investing activities **significantly increased in 2023** due to purchases of marketable debt securities ($186.6 million), partially offset by redemptions ($71.6 million) and cash acquired from Apexigen ($6.7 million)[25](index=25&type=chunk) - Financing activities provided **$6.0 million in 2023**, primarily from the ATM program, compared to $0.2 million in 2022[25](index=25&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, financial instruments, and significant transactions, including the Apexigen acquisition, licensing agreements, and a subsequent reorganization [1. Description of Business](index=9&type=section&id=1.%20Description%20of%20Business) Pyxis Oncology, Inc is a clinical-stage biopharmaceutical company focused on developing next-generation therapeutics for difficult-to-treat cancers - The company is a clinical-stage biopharmaceutical firm focused on defeating **difficult-to-treat cancers**[27](index=27&type=chunk) - Therapeutic candidates include **antibody-drug conjugates (ADCs)** and **immuno-oncology (IO)** programs targeting solid tumors[27](index=27&type=chunk) - The company operates as **one segment**, managed on a consolidated basis by the CEO[28](index=28&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared per U.S. GAAP, reflecting significant losses and an accumulated deficit of $270.6 million, with existing capital expected to fund operations into early 2026 - The unaudited condensed consolidated financial statements are prepared in accordance with **U.S. GAAP** for interim reporting[29](index=29&type=chunk) - The company has an accumulated deficit of **$270.6 million** as of September 30, 2023, with net losses of $58.2 million (9M 2023) and $84.6 million (9M 2022)[31](index=31&type=chunk) - Existing cash, cash equivalents, and short-term investments of **$133.0 million** are expected to fund operations into **early 2026** following a corporate reorganization[33](index=33&type=chunk)[131](index=131&type=chunk) - The adoption of new accounting standards for credit losses and business combinations on January 1, 2023, **did not materially affect** the financial statements[53](index=53&type=chunk)[54](index=54&type=chunk) - Investments are classified as **available-for-sale marketable debt securities**, recorded at fair value[39](index=39&type=chunk) [3. Acquisition of Apexigen](index=13&type=section&id=3.%20Acquisition%20of%20Apexigen) Pyxis Oncology acquired Apexigen, Inc for a provisional purchase price of $10.7 million, expanding its pipeline with sotigalimab (PYX-107) and the APXiMAB platform - The acquisition of Apexigen, Inc was completed on August 23, 2023, for a provisional purchase price of **$10.7 million**[58](index=58&type=chunk)[62](index=62&type=chunk) - Consideration included **4,344,435 shares of common stock** issued to Apexigen stockholders, plus replacement options, RSUs, and warrants[58](index=58&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - The acquisition expanded the pipeline with **sotigalimab (PYX-107)**, a CD40 agonist, and enhanced ADC capabilities with the **APXiMAB platform**[58](index=58&type=chunk) - Acquired intangible assets (in-process R&D) were valued at **$22.3 million**[64](index=64&type=chunk)[65](index=65&type=chunk) - The company incurred **$1.3 million** in transaction-related costs, recognized in general and administrative expenses[67](index=67&type=chunk) [4. Fair Value Measurements](index=15&type=section&id=4.%20Fair%20Value%20Measurements) The company's financial instruments subject to recurring fair value measurements consist primarily of Level 1 assets valued using quoted market prices Fair Value of Financial Instruments (in thousands) | Asset Category | September 30, 2023 (Level 1) | December 31, 2022 (Level 1) | | :--- | :--- | :--- | | Cash equivalents (Money market funds) | $10,086 | $177,279 | | Marketable debt securities (U.S. Treasury securities) | $118,252 | — | | Restricted cash (Money market funds) | — | $1,472 | | Total | $128,338 | $178,751 | - Money market funds and U.S. Treasury securities are classified as **Level 1**, valued using quoted prices in active markets[70](index=70&type=chunk) [5. Marketable Debt Securities](index=15&type=section&id=5.%20Marketable%20Debt%20Securities) As of September 30, 2023, the company held $118.3 million in U.S. Treasury securities classified as available-for-sale, with unrealized losses of $0.1 million Marketable Debt Securities (in thousands) as of September 30, 2023 | Security Type | Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate Fair Value | | :--- | :--- | :--- | :--- | :--- | | U.S. Treasury securities | $118,357 | $8 | $(113) | $118,252 | - All marketable debt securities are classified as **available-for-sale**, with remaining contractual terms of less than 12 months[71](index=71&type=chunk)[72](index=72&type=chunk) Interest and Investment Income (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Interest income | $227 | $719 | $1,689 | $892 | | Accretion of discount, net | $1,480 | — | $3,347 | — | | Total interest and investment income | $1,707 | $719 | $5,036 | $892 | [6. Joint Venture](index=16&type=section&id=6.%20Joint%20Venture) The company's share of losses from its Voxall Therapeutics joint venture was $0.1 million for the three and nine months ended September 30, 2023 - The company formed Voxall Therapeutics, LLC, a joint venture with Alloy Therapeutics, Inc, in March 2021[74](index=74&type=chunk) - The investment in Voxall is accounted for under the **equity method**[75](index=75&type=chunk) - The company's share of Voxall losses was **$0.1 million** for both the three and nine months ended September 30, 2023[75](index=75&type=chunk) [7. Licensing Agreements](index=16&type=section&id=7.%20Licensing%20Agreements) The company holds key licensing agreements with Pfizer, LegoChem, and Biosion for its product candidates, involving potential future milestone and royalty payments - A license agreement with the University of Chicago provides global rights to develop and commercialize products covered by licensed patents/know-how[76](index=76&type=chunk) - The Pfizer License Agreement grants exclusive worldwide rights to develop and commercialize ADC product candidates like **PYX-201** and **PYX-203**[78](index=78&type=chunk)[79](index=79&type=chunk) - The LegoChem License Agreement provides worldwide (ex-Korea) rights for LCB67, a DLK-1 targeting ADC[81](index=81&type=chunk) - The Biosion License Agreement grants exclusive worldwide (ex-Greater China) rights for **PYX-106**, a Siglec-15 targeting antibody, with a **$10.0 million upfront fee** paid in March 2022[83](index=83&type=chunk)[84](index=84&type=chunk) - All agreements include potential future contingent payments, but **no such amounts were required** as of September 30, 2023[77](index=77&type=chunk)[80](index=80&type=chunk)[82](index=82&type=chunk)[85](index=85&type=chunk) [8. Deferred Revenue](index=17&type=section&id=8.%20Deferred%20Revenue) Due to a dispute with Novartis over royalty obligations for Beovu®, the company has fully constrained royalty revenue and recorded $7.2 million received as deferred revenue - The company assumed Apexigen's out-licensing agreements, including Novartis' Beovu® product royalties, following the acquisition[86](index=86&type=chunk)[87](index=87&type=chunk) - Novartis has disputed its royalty obligation for Beovu® sales, leading to **full constraint of sales-based royalty revenue**[87](index=87&type=chunk) Deferred Revenue (in thousands) | Metric | September 30, 2023 | | :--- | :--- | | Deferred revenue | $7,189 | [9. Common Stock Warrants](index=18&type=section&id=9.%20Common%20Stock%20Warrants) Following the Apexigen acquisition, the company replaced approximately 5.8 million Apexigen warrants with 1.0 million Pyxis Oncology warrants valued at $0.6 million - The company replaced 5,815,613 Apexigen warrants with **1,003,191 Pyxis Oncology warrants** due to the Merger Agreement[89](index=89&type=chunk) - The acquisition date fair value of the Replacement Warrants was **$0.6 million**, determined using the Black-Scholes option-pricing model[89](index=89&type=chunk) Outstanding Warrants as of September 30, 2023 | Exercise Price | Number of Warrants | Expiration | | :--- | :--- | :--- | | $8.12 per share | 344,259 | July 30, 2028 | | $10.14 per share | 17,212 | Callable by Company | | $66.67 per share | 641,720 | July 29, 2027 | [10. Stockholders' Equity](index=18&type=section&id=10.%20Stockholders'%20Equity) As of September 30, 2023, the company had 44.3 million shares outstanding and an ATM program under which it sold 1.0 million shares for $6.3 million gross proceeds in 2023 - As of November 6, 2023, **44,323,046 shares** of common stock were outstanding[4](index=4&type=chunk) - The company filed a shelf registration statement for up to **$250.0 million** and an ATM offering program for up to **$125.0 million**[92](index=92&type=chunk) - The company sold **1,001,208 shares** of common stock under the ATM program for gross proceeds of **$6.3 million** during the nine months ended September 30, 2023[94](index=94&type=chunk) Reserved Shares of Common Stock for Issuance | Category | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Stock options outstanding | 6,022,413 | 5,720,415 | | Unvested restricted stock awards and units | 3,822,944 | 3,015,387 | | Common stock warrants | 1,003,191 | — | | Total reserved shares | 12,781,480 | 10,967,643 | [11. Stock-Based Compensation](index=19&type=section&id=11.%20Stock-Based%20Compensation) A stock option repricing in March 2023 resulted in $1.1 million of incremental compensation expense, with total stock-based compensation for the nine months ended September 30, 2023, at $13.7 million - The company operates under multiple equity incentive plans for employees and non-employees[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - A stock option repricing on March 24, 2023, reduced the exercise price of certain options to **$2.21 per share**, resulting in **$1.1 million** of incremental stock-based compensation[103](index=103&type=chunk)[104](index=104&type=chunk) - The company issued **712,181 Replacement Options** and **34,500 Replacement RSU Awards** to Apexigen grantholders[106](index=106&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Stock options (Total) | $2,443 | $3,157 | $8,613 | $9,324 | | Restricted stock awards | $2,700 | $1,300 | $5,100 | $2,500 | - Unrecognized stock-based compensation expense totaled **$22.5 million** as of September 30, 2023[109](index=109&type=chunk)[116](index=116&type=chunk) [12. Operating Leases](index=23&type=section&id=12.%20Operating%20Leases) The company paid $1.7 million for operating lease liabilities and generated $1.2 million in sublease income for the nine months ended September 30, 2023 - Cash paid for operating lease liabilities was **$1.7 million** for the nine months ended September 30, 2023[117](index=117&type=chunk) - The company entered into a sublease agreement for office and laboratory space in Boston, commencing March 2023[118](index=118&type=chunk) Sublease Income (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Sublease income | $598 | — | $1,200 | — | Lease Cost Components (in thousands) | Lease Cost Type | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $678 | $660 | $1,997 | $1,392 | | Variable lease cost | $230 | $12 | $518 | $116 | | Short-term lease cost | — | $482 | $488 | $1,058 | | Total lease cost | $908 | $1,154 | $3,003 | $2,566 | - The weighted-average remaining lease term is **9.10 years**, and the weighted-average discount rate is **9.40%** as of September 30, 2023[120](index=120&type=chunk) [13. Income Taxes](index=24&type=section&id=13.%20Income%20Taxes) The company's effective tax rate was 0% for the reported periods, with a full valuation allowance maintained for its deferred tax assets - The effective tax rate was **0%** for the three and nine months ended September 30, 2023 and 2022[121](index=121&type=chunk) - The company maintains a **full valuation allowance** for its U.S. federal and state deferred tax assets[122](index=122&type=chunk) [14. Net Loss per Common Share](index=24&type=section&id=14.%20Net%20Loss%20per%20Common%20Share) Basic and diluted net loss per common share improved to $(1.52) for the nine months ended September 30, 2023, from $(2.61) in the prior year Net Loss per Common Share (in thousands, except share and per share amounts) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(23,049) | $(27,674) | $(58,193) | $(84,616) | | Weighted-average common shares outstanding | 41,331,806 | 32,561,228 | 38,379,401 | 32,444,072 | | Net loss per share, basic and diluted | $(0.56) | $(0.85) | $(1.52) | $(2.61) | - Potentially dilutive securities were **excluded** from the diluted EPS calculation due to their anti-dilutive effect[124](index=124&type=chunk) [15. Related Parties](index=24&type=section&id=15.%20Related%20Parties) The company has related party relationships with the University of Chicago, Pfizer Inc, and Alloy Therapeutics/Voxall Therapeutics, with no related expenses incurred during the reported periods - The company has a license agreement with the University of Chicago, where it was founded[125](index=125&type=chunk) - Pfizer Inc is considered a principal owner, holding **over 10%** of the company, and has a license agreement[126](index=126&type=chunk) - The company formed a joint venture, Voxall Therapeutics, LLC, with Alloy Therapeutics, LLC[127](index=127&type=chunk) - **No expenses** related to these related party agreements were incurred during the three and nine months ended September 30, 2023 and 2022[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [16. Commitments and Contingencies](index=25&type=section&id=16.%20Commitments%20and%20Contingencies) The company is not involved in any material legal proceedings but has future contingent payment obligations for milestones and royalties under its licensing agreements - The company is **not a party to any material legal proceedings** and is unaware of any pending or threatened legal proceedings[128](index=128&type=chunk)[224](index=224&type=chunk) - The company enters into cancellable agreements for clinical trials, preclinical research, testing, manufacturing, and other services[129](index=129&type=chunk) - The company has future contingent payment obligations under license agreements for milestones and royalties, totaling up to **$900 million** plus tiered royalties[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - These contingent payments are **not included in contractual obligations** due to their dependence on future events[193](index=193&type=chunk) [17. Subsequent Event](index=25&type=section&id=17.%20Subsequent%20Event) On November 7, 2023, the company announced a corporate reorganization, including a 40% workforce reduction, to extend its cash runway into early 2026 - A corporate reorganization was announced on November 7, 2023, to refocus on **PYX-201 and PYX-106 clinical trials**[130](index=130&type=chunk) - Initiatives include a **~40% workforce reduction** and pausing funding for certain early-stage research programs[130](index=130&type=chunk) - The estimated cost of the reorganization is **$1.4 million**, primarily for severance payments, to be recognized in Q4 2023[130](index=130&type=chunk) - The company expects existing cash, cash equivalents, and investments to fund operations into **early 2026** as a result of the reorganization[131](index=131&type=chunk) - The company is seeking additional **non-dilutive funding** through monetization of acquired royalty streams and partnerships[131](index=131&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and results of operations, including recent developments, pipeline updates, and analysis of expenses and liquidity [Overview](index=26&type=section&id=Overview) Pyxis Oncology is a clinical-stage company developing a multi-modality portfolio of next-generation therapeutics, including ADCs and IO product candidates, to treat difficult cancers - The company is a clinical-stage oncology firm developing multi-modality therapeutics (**ADCs, IO, mAbs**) for difficult-to-treat cancers[136](index=136&type=chunk) - The company has in-licensed two ADC programs from Pfizer and one IO program from Biosion[138](index=138&type=chunk) - INDs for **PYX-201** and **PYX-106** were cleared by the FDA in December 2022, transitioning the company to the clinical stage[138](index=138&type=chunk) - The company retains **full worldwide development and commercialization rights** to all product candidates, except PYX-106 in Greater China[138](index=138&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) The company announced a corporate reorganization to extend its cash runway into early 2026 and completed the acquisition of Apexigen, adding sotigalimab (PYX-107) to its pipeline - A corporate reorganization was announced on November 7, 2023, to refocus on **PYX-201 and PYX-106 clinical trials**[139](index=139&type=chunk) - The reorganization includes a **~40% workforce reduction** and pausing early-stage research programs, with an estimated cost of **$1.4 million** in Q4 2023[139](index=139&type=chunk) - The company expects existing cash to fund operations into **early 2026** due to the reorganization[140](index=140&type=chunk) - The acquisition of Apexigen, Inc was completed on August 23, 2023, for a **$10.7 million** provisional purchase price[141](index=141&type=chunk) - The acquisition added **sotigalimab (PYX-107)**, a CD40 agonist, to the pipeline and enhanced ADC capabilities with the **APXiMAB platform**[142](index=142&type=chunk)[143](index=143&type=chunk) - The company acquired Apexigen's royalty stream, including **$7.2 million in deferred revenue** from Novartis' Beovu® product, which is currently constrained due to a dispute[144](index=144&type=chunk) [Pipeline](index=28&type=section&id=Pipeline) The pipeline includes lead candidates PYX-201 (ADC) and PYX-106 (IO) in Phase 1 trials, and the recently acquired PYX-107 (CD40 agonist) from Phase II trials - **PYX-201**, a lead ADC candidate, is in a Phase 1 clinical trial for relapsed/refractory solid tumors[146](index=146&type=chunk)[149](index=149&type=chunk) - PYX-201 received **Orphan Drug Designation** for pancreatic cancer in May 2023[149](index=149&type=chunk) - PYX-201 dose escalation is progressing, with preliminary data expected in **H1 2024**[150](index=150&type=chunk)[151](index=151&type=chunk) - **PYX-106**, a lead IO candidate, is in a Phase 1 clinical trial for relapsed/refractory solid tumors[152](index=152&type=chunk)[153](index=153&type=chunk) - The PYX-106 trial is repositioned to focus on specific tumor types like NSCLC, with preliminary data expected in **H2 2024**[154](index=154&type=chunk)[155](index=155&type=chunk) - **PYX-107 (sotigalimab)**, a CD40 agonist acquired from Apexigen, demonstrated anti-cancer activity in Phase II trials, with future development to be assessed after PYX-201 data[142](index=142&type=chunk) [Components of Our Results of Operations](index=30&type=section&id=Components%20of%20Our%20Results%20of%20Operations) Results are driven by R&D and G&A expenses, which are expected to increase with clinical development, and other income from interest and subleases - Operating expenses are categorized into **Research and Development (R&D)** and **General and Administrative (G&A)**[159](index=159&type=chunk)[161](index=161&type=chunk) - R&D expenses include program-specific costs and unallocated costs like personnel and facilities[159](index=159&type=chunk) - R&D expenses are expensed as incurred and are **expected to increase substantially** with ongoing clinical development[159](index=159&type=chunk)[160](index=160&type=chunk) - G&A expenses primarily cover personnel, stock-based compensation, professional fees, and administrative functions[161](index=161&type=chunk) - Other income, net, consists mainly of interest and investment income, and sublease income[162](index=162&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section details financial performance, highlighting a decrease in net loss driven by reduced operating expenses, particularly in R&D, and increased other income [Comparison of the Three Months Ended September 30, 2023 and 2022](index=31&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20and%202022) For Q3 2023, the net loss decreased by $4.6 million to $23.0 million, driven by a $4.3 million decrease in R&D expenses and a $1.6 million increase in other income Net Loss (in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Net loss | $(23,049) | $(27,674) | $4,625 | Operating Expenses (in thousands) | Expense Category | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $14,687 | $19,034 | $(4,347) | | General and administrative | $10,667 | $9,359 | $1,308 | | Total operating expenses | $25,354 | $28,393 | $(3,039) | - **R&D expenses decreased by $4.3 million**, mainly due to lower costs for the PYX-201 program and other paused preclinical programs[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - **G&A expenses increased by $1.3 million**, primarily due to higher personnel-related expenses[168](index=168&type=chunk) - **Other income, net, increased by $1.6 million**, driven by higher interest rates, accretion of discounts, and sublease income[169](index=169&type=chunk) [Comparison of the Nine Months Ended September 30, 2023 and 2022](index=32&type=section&id=Comparison%20of%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) For the nine months ended September 30, 2023, the net loss decreased by $26.4 million to $58.2 million, due to a $21.1 million reduction in operating expenses and a $5.3 million increase in other income Net Loss (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Net loss | $(58,193) | $(84,616) | $26,423 | Operating Expenses (in thousands) | Expense Category | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $37,979 | $56,275 | $(18,296) | | General and administrative | $26,450 | $29,233 | $(2,783) | | Total operating expenses | $64,429 | $85,508 | $(21,079) | - **R&D expenses decreased by $18.3 million**, primarily due to lower costs for the PYX-201 and PYX-106 programs and other paused preclinical programs[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) - **G&A expenses decreased by $2.8 million**, mainly due to a reduction in professional and consultant fees[176](index=176&type=chunk) - **Other income, net, increased by $5.3 million**, driven by higher interest rates, accretion of discounts, and sublease income[177](index=177&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had $133.0 million in cash and investments, which is expected to fund operations into early 2026 - Cash, cash equivalents, and short-term investments totaled **$133.0 million** as of September 30, 2023[178](index=178&type=chunk) - The accumulated deficit was **$270.6 million** as of September 30, 2023[178](index=178&type=chunk) - Existing capital is expected to fund operating expenses and capital requirements into **early 2026**, following the corporate reorganization[189](index=189&type=chunk) - Future funding requirements are **highly uncertain** and depend on factors like clinical trial costs, manufacturing, and regulatory approvals[180](index=180&type=chunk)[182](index=182&type=chunk) - The company plans to finance future operations through equity offerings, debt financings, collaborations, or licensing arrangements[180](index=180&type=chunk) Cash Flow Summary (in thousands) | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(55,455) | $(71,948) | | Net cash used in investing activities | $(115,077) | $(4,541) | | Net cash provided by financing activities | $5,954 | $183 | | Net decrease in cash, cash equivalents and restricted cash | $(164,578) | $(76,306) | - **Operating cash outflow decreased** due to a lower net loss and non-cash charges[184](index=184&type=chunk) - **Investing cash outflow significantly increased** due to $186.7 million in marketable debt securities purchases[186](index=186&type=chunk) - **Financing cash inflow** was primarily from the ATM program ($6.0 million) in 2023[188](index=188&type=chunk) [Contractual Obligations and Commitments](index=37&type=section&id=Contractual%20Obligations%20and%20Commitments) The company has lease obligations of $28.6 million and significant contingent payment obligations under licensing agreements for milestones and royalties - Lease obligations for office and laboratory space total **$28.6 million** (net of sublease payments) through December 31, 2032[192](index=192&type=chunk) - Contingent payment obligations under the Pfizer A&R License Agreement include up to **$665 million** for milestones for the first four licensed ADCs, plus tiered royalties[194](index=194&type=chunk) - The University License Agreement includes potential milestones up to **$7.7 million**, plus running royalties[195](index=195&type=chunk) - The Biosion License Agreement includes potential milestones up to **$222.5 million**, plus tiered royalties[196](index=196&type=chunk) - These contingent payments are **not included in contractual obligations** due to their dependence on future events[193](index=193&type=chunk) - Contracts with CDMOs, CROs, and other third parties are generally cancellable[197](index=197&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=Off-Balance%20Sheet%20Arrangements) Pyxis Oncology did not have any off-balance sheet arrangements during the reported periods - There were **no off-balance sheet arrangements** as defined by SEC rules and regulations[198](index=198&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) The preparation of financial statements requires management to make estimates, particularly regarding investments, business combinations, intangible assets, and revenue recognition - Financial statements require management estimates and assumptions for assets, liabilities, expenses, and disclosures[200](index=200&type=chunk) - Investments are classified as **available-for-sale marketable debt securities**, recorded at fair value[202](index=202&type=chunk) - Business combinations are accounted for using the **acquisition method**, recognizing identifiable assets and liabilities at fair value[205](index=205&type=chunk) - Indefinite-lived intangible assets (IPR&D) are acquired in business combinations and evaluated for impairment annually[210](index=210&type=chunk)[211](index=211&type=chunk) - Warrants are classified as equity or liability based on specific terms and accounting guidance[212](index=212&type=chunk) - Revenue is recognized when the customer obtains control of promised goods/services[214](index=214&type=chunk)[215](index=215&type=chunk) [Recently Issued Accounting Pronouncements](index=39&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Recent accounting pronouncements are not expected to have a material impact on the company's financial statements and related disclosures - Recent accounting pronouncements are **not expected to have a material impact** on the financial statements[55](index=55&type=chunk)[216](index=216&type=chunk) [Jumpstart Our Business Startups Act](index=39&type=section&id=Jumpstart%20Our%20Business%20Startups%20Act) As an "emerging growth company," Pyxis Oncology is eligible for reduced disclosure requirements but has elected to adopt new accounting standards on the regular timeline - The company is an **"emerging growth company"** and **"smaller reporting company"** under the JOBS Act[217](index=217&type=chunk)[218](index=218&type=chunk) - The company elects to take advantage of reduced reporting requirements available to emerging growth companies[462](index=462&type=chunk) - The company has **irrevocably elected not to use the extended transition period** for new or revised financial accounting standards[4](index=4&type=chunk)[217](index=217&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," Pyxis Oncology is not required to provide quantitative and qualitative disclosures about market risk - As a **"smaller reporting company,"** the company is not required to provide quantitative and qualitative disclosures about market risk[219](index=219&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated as **effective** at the reasonable assurance level as of September 30, 2023[220](index=220&type=chunk) - There were **no material changes** in internal control over financial reporting during the period[221](index=221&type=chunk) - Management acknowledges **inherent limitations** in the effectiveness of control systems, which can only provide reasonable, not absolute, assurance[222](index=222&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Pyxis Oncology is not currently a party to any material legal proceedings and is unaware of any pending or threatened legal actions - The company is **not currently a party to any material legal proceedings**[224](index=224&type=chunk) - The company is unaware of any pending or threatened legal proceedings that could have an adverse effect on its business, operating results, or financial condition[128](index=128&type=chunk)[224](index=224&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The company's business involves a high degree of risk related to its financial position, product development, regulatory approvals, and dependence on third parties - The business involves a **high degree of risk**, requiring careful consideration of all described risks and uncertainties[225](index=225&type=chunk) - Risks include financial position, merger integration, product development, regulatory hurdles, operational management, third-party reliance, and intellectual property[225](index=225&type=chunk) - The occurrence of any risk could **materially and adversely affect** the business, financial condition, or results of operations, potentially causing a stock price decline[225](index=225&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=41&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company has a limited operating history, significant accumulated losses, and requires substantial additional capital to fund operations, which are projected to last into early 2026 - The company is a clinical-stage biopharmaceutical firm with a limited operating history and significant operating losses, with a **$270.7 million accumulated deficit** as of Sep 30, 2023[227](index=227&type=chunk) - The company expects to incur significant expenses and operating losses for the foreseeable future and **may never achieve profitability**[227](index=227&type=chunk)[228](index=228&type=chunk)[230](index=230&type=chunk) - **Substantial additional capital** is required to finance operations, obtain regulatory approval, and commercialize product candidates[232](index=232&type=chunk) - Existing cash and investments of **$133.0 million** are estimated to fund operations into **early 2026**, but this estimate is based on assumptions that may prove wrong[233](index=233&type=chunk) - Future funding may involve equity offerings (dilution), debt financings (restrictive covenants), or collaborations (relinquishing rights)[180](index=180&type=chunk)[236](index=236&type=chunk) - Adverse developments in the financial services industry could **impair access to funding and liquidity**[239](index=239&type=chunk)[240](index=240&type=chunk) - An inability to complete or successfully integrate future strategic acquisitions could adversely affect the business and financial condition[241](index=241&type=chunk) [Risks Relating to the Merger](index=45&type=section&id=Risks%20Relating%20to%20the%20Merger) The company may fail to realize the expected benefits from the Apexigen merger due to integration challenges, which could adversely affect financial results and stock price - The company **may fail to realize anticipated benefits and synergies** from the Apexigen Merger, adversely affecting its stock price[244](index=244&type=chunk) - Integration challenges include combining technologies, managing supplier bases, coordinating R&D teams, and integrating administrative functions[246](index=246&type=chunk) - The acquisition may result in **significant cash expenses**, non-cash accounting charges, or unexpected liabilities[247](index=247&type=chunk) - Expanded operations post-Merger pose **substantial management challenges**, potentially hindering the realization of economies of scale and synergies[248](index=248&type=chunk) [Risks Related to the Discovery and Development of our Product Candidates](index=46&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20our%20Product%20Candidates) The company's success depends on early-stage candidates facing a high risk of failure in the lengthy, expensive, and uncertain clinical testing and regulatory approval process - The company is **heavily dependent on the success of PYX-201, PYX-106, and PYX-107**, which are in early clinical stages and face a high risk of failure[250](index=250&type=chunk)[251](index=251&type=chunk) - Preclinical testing and clinical trials are **lengthy, expensive, and have uncertain outcomes**; product candidates may fail to demonstrate adequate safety, purity, and potency[255](index=255&type=chunk)[260](index=260&type=chunk)[268](index=268&type=chunk) - PYX-107's early clinical trial results may not predict later success, and **serious adverse events (SAEs)** have been reported in studies with sotigalimab (PYX-107)[252](index=252&type=chunk)[253](index=253&type=chunk) - **Delays in clinical trials** can arise from various factors, including regulatory disagreements, insufficient supply, slow patient enrollment, or undesirable side effects[256](index=256&type=chunk)[268](index=268&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk) - **Undesirable side effects** or safety issues could halt clinical development, delay regulatory approval, or limit commercial potential[295](index=295&type=chunk) - The company faces **intense competition** from other biopharmaceutical companies developing cancer treatments[300](index=300&type=chunk)[301](index=301&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) - Failures or setbacks involving the **FACT Platform or APXiMAB Platform** could detrimentally impact the research pipeline[275](index=275&type=chunk) - The company may expend resources on less profitable candidates, failing to capitalize on more successful opportunities[282](index=282&type=chunk) - Market opportunities for product candidates may be **smaller than believed**, adversely affecting revenue[283](index=283&type=chunk)[284](index=284&type=chunk) - The market may not be receptive to novel therapeutic modalities like the FACT Platform, making commercialization difficult[285](index=285&type=chunk)[287](index=287&type=chunk) [Risks Related to Regulatory Licensure or Approval and Other Legal Compliance Matters](index=59&type=section&id=Risks%20Related%20to%20Regulatory%20Licensure%20or%20Approval%20and%20Other%20Legal%20Compliance%20Matters) Obtaining regulatory licensure is a lengthy, unpredictable, and expensive process with no guarantee of success, and approved products face ongoing regulatory obligations and review - Regulatory licensure and approval processes are **lengthy, time-consuming, and inherently unpredictable**; failure to obtain approval would substantially harm the business[310](index=310&type=chunk)[311](index=311&type=chunk) - Even if approved, products are subject to **ongoing regulatory obligations**, which may result in significant additional expense or penalties for non-compliance[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) - **Breakthrough Therapy or Fast Track designations do not guarantee faster development**, review, or approval[325](index=325&type=chunk)[327](index=327&type=chunk) - **Orphan Drug Designation**, if obtained, may not guarantee market exclusivity or be maintained[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk) - **Accelerated approval**, if granted, requires confirmatory post-marketing trials; failure to verify clinical benefit could lead to withdrawal of approval[334](index=334&type=chunk)[338](index=338&type=chunk) - **Biosimilar competition** or lack of appropriate data/market exclusivity in foreign markets could adversely affect sales[347](index=347&type=chunk) - Failure to obtain regulatory clearances for **companion diagnostic tests** could delay or prevent approval of product candidates[348](index=348&type=chunk)[349](index=349&type=chunk) - Relationships with healthcare professionals are subject to **fraud and abuse laws**; non-compliance could lead to substantial penalties[350](index=350&type=chunk)[351](index=351&type=chunk) - Commercial success depends on **third-party payor coverage and adequate reimbursement**; failure to obtain these could limit market access and revenue[353](index=353&type=chunk)[354](index=354&type=chunk)[355](index=355&type=chunk)[356](index=356&type=chunk) - Enacted and future healthcare legislation like the **Inflation Reduction Act** may increase costs and affect pricing[358](index=358&type=chunk) - Failures to comply with **data protection, privacy, and security laws** could adversely affect business, operations, and financial condition[362](index=362&type=chunk)[363](index=363&type=chunk)[365](index=365&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) - Failure to comply with **environmental, health, and safety laws** could result in fines, penalties, or costly clean-up[372](index=372&type=chunk) - The company is subject to U.S. and foreign **export/import controls, sanctions, and anti-corruption laws**; violations can lead to serious consequences[374](index=374&type=chunk) [Risks Related to Employee Matters, Managing Our Growth and Other Risks Related to Our Business](index=72&type=section&id=Risks%20Related%20to%20Employee%20Matters%2C%20Managing%20Our%20Growth%20and%20Other%20Risks%20Related%20to%20Our%20Business) Success depends on retaining key personnel, managing growth, and establishing a sales infrastructure, while also mitigating risks from cybersecurity threats and potential operational disruptions - Success depends on **attracting and retaining qualified senior management and key scientific personnel** amid intense competition for talent[375](index=375&type=chunk)[376](index=376&type=chunk) - The company may experience difficulties **managing growth and expanding operations**, especially integrating products and technology from the Apexigen Merger[377](index=377&type=chunk) - The company **lacks marketing, sales, or distribution infrastructure**; establishing one or outsourcing carries substantial risks[378](index=378&type=chunk) - Internal computer systems are vulnerable to **cybersecurity attacks and data breaches**, which could result in significant costs, liabilities, and operational disruption[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[385](index=385&type=chunk) - The company may be adversely affected by **natural disasters**, potentially disrupting operations and incurring substantial expenses not fully covered by insurance[387](index=387&type=chunk) - Conducting business internationally exposes the company to **economic, political, and regulatory risks**[388](index=388&type=chunk) - **Disruptions at government agencies** like the FDA could hinder timely review and approval of products[390](index=390&type=chunk)[391](index=391&type=chunk)[392](index=392&type=chunk) [Risks Related to Our Dependence on Third Parties](index=76&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) The company relies heavily on third parties for manufacturing and clinical trials, and any failure by these partners could delay or impair development and commercialization - Failure to comply with obligations under license agreements could result in damages or **loss of necessary intellectual property rights**[395](index=395&type=chunk) - The company relies on **third-party contract manufacturers** for product supplies; any failure or disruption could limit supply, quality, or timely availability[400](index=400&type=chunk) - Manufacturing processes are subject to **FDA and foreign regulatory review (cGMP)**; non-compliance by manufacturers could lead to sanctions or delays[401](index=401&type=chunk)[402](index=402&type=chunk)[404](index=404&type=chunk)[405](index=405&type=chunk) - Dependence on third-party CDMOs for manufacturing entails risks like **breach of agreement** and **misappropriation of proprietary information**[403](index=403&type=chunk) - A portion of manufacturing takes place in **China**, exposing the company to supply disruption and increased costs due to geopolitical or economic changes[409](index=409&type=chunk) - CDMOs may be unable to **successfully scale-up manufacturing**, delaying development and commercialization[410](index=410&type=chunk) - Reliance on **sole suppliers** for raw and intermediate materials could lead to supply interruptions[411](index=411&type=chunk) - The company relies on **third-party CROs** to conduct clinical trials; their unsatisfactory performance could delay or prevent marketing licenses[412](index=412&type=chunk)[414](index=414&type=chunk) [Risks Related to Our Intellectual Property](index=80&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's ability to compete depends on obtaining and maintaining broad patent protection, which is an expensive and uncertain process with numerous risks - Success depends on **obtaining and maintaining patent protection** for product candidates and proprietary know-how[416](index=416&type=chunk)[417](index=417&type=chunk) - Patent applications may fail to issue, or issued patents may be **successfully challenged, narrowed, or designed around**[419](index=419&type=chunk)[420](index=420&type=chunk)[421](index=421&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk) - **Patent terms may be inadequate** to protect the competitive position due to lengthy development and regulatory review[428](index=428&type=chunk) - Intellectual property rights have limitations and may not address all potential threats to the business[429](index=429&type=chunk) - The company may face legal proceedings alleging **infringement of third-party intellectual property rights**, leading to substantial litigation expense or inability to commercialize[430](index=430&type=chunk)[431](index=431&type=chunk)[432](index=432&type=chunk) - The company may be subject to claims that employees have **wrongfully used or disclosed trade secrets** of former employers[433](index=433&type=chunk)[434](index=434&type=chunk) - Breach of license agreements could lead to **loss of intellectual property rights** and inability to develop related product candidates[435](index=435&type=chunk)[437](index=437&type=chunk) - Lawsuits to protect or enforce patents are **expensive, time-consuming, and may be unsuccessful**[438](index=438&type=chunk)[439](index=439&type=chunk)[441](index=441&type=chunk) - **Changes in U.S. or foreign patent law** could diminish the value of patents and impair protection ability[442](index=442&type=chunk) - An inability to protect the **confidentiality of trade secrets** would harm the business and competitive position[444](index=444&type=chunk)[445](index=445&type=chunk)[447](index=447&type=chunk)[448](index=448&type=chunk) - Trademarks may be infringed or challenged, requiring rebranding or leading to loss of brand recognition[449](index=449&type=chunk)[450](index=450&type=chunk) [Risks Related to Our Common Stock](index=87&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) The company's stock price is highly volatile, and future equity issuances will dilute existing shareholders, while principal stockholders exert significant control - Operating results are subject to **significant annual and quarterly fluctuations**, potentially causing a stock price decline[451](index=451&type=chunk) - The **stock price is highly volatile**, influenced by clinical trial results, regulatory developments, competition, and market conditions[452](index=452&type=chunk)[457](index=457&type=chunk) - Future issuance of equity or convertible debt securities will **dilute existing share capital** and may adversely affect the trading price[455](index=455&type=chunk) - Principal stockholders and management own **35.4% of stock**, exerting significant control over corporate actions[458](index=458&type=chunk) - Sales of a substantial number of shares in the public market could cause the **stock price to fall**[459](index=459&type=chunk) - As an "emerging growth company," **reduced disclosure requirements** may make common stock less attractive to investors[461](index=461&type=chunk)[462](index=462&type=chunk)[463](index=463&type=chunk) - **Anti-takeover provisions** in charter documents and Delaware law could make an acquisition more difficult[464](index=464&type=chunk)[465](index=465&type=chunk) - The company incurs **increased costs and management time** for compliance as a public company; failure to maintain effective internal controls could impair financial reporting[467](index=467&type=chunk)[468](index=468&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk) - The company **does not anticipate paying cash dividends**; return on investment depends on stock price appreciation[473](index=473&type=chunk) - The company may be subject to **securities litigation**, which is expensive and could divert management's attention[474](index=474&type=chunk) - The designated forum for certain actions could **limit stockholders' ability to obtain a favorable judicial forum**[475](index=475&type=chunk) - The ability to use **net operating loss carryforwards** may be subject to limitations due to ownership changes[476](index=476&type=chunk)[477](index=477&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=89&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's 2021 IPO generated $152.3 million in net proceeds, the planned use of which has been updated to focus on advancing PYX-201 and PYX-106 - The IPO in October 2021 generated **$152.3 million in net proceeds** from 10.5 million shares at $16.00/share[478](index=478&type=chunk) - The planned use of IPO proceeds has changed due to pipeline reprioritization, now focusing on **PYX-201 and PYX-106 clinical development** and general corporate purposes[479](index=479&type=chunk) [Item 3. Defaults Upon Senior Securities](index=93&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were **no defaults** upon senior securities[480](index=480&type=chunk) [Item 4. Mine Safety Disclosures](index=93&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is **not applicable**[480](index=480&type=chunk) [Item 5. Other Information](index=93&type=section&id=Item%205.%20Other%20Information) On November 7, 2023, the company announced a corporate reorganization to refocus on key clinical trials and extend its cash runway into early 2026 - A corporate reorganization was announced on November 7, 2023, to refocus on **PYX-201 and PYX-106 clinical trials**[480](index=480&type=chunk) - Initiatives include a **~40% workforce reduction** and pausing funding for certain early-stage research programs, with an estimated cost of **$1.4 million** in Q4 2023[480](index=480&type=chunk) - The company expects existing cash, cash equivalents, and investments to fund operations into **early 2026** as a result of the reorganization[481](index=481&type=chunk) - The company is seeking additional **non-dilutive funding** through monetization of acquired royalty streams and partnerships[481](index=481&type=chunk) [Item 6. Exhibits](index=94&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL documents - This section lists exhibits filed with the Quarterly Report on Form 10-Q[483](index=483&type=chunk) - Exhibits include **certifications of the Principal Executive Officer and Principal Financial Officer**[483](index=483&type=chunk) - Exhibits include the **Inline XBRL Instance Document** and Taxonomy Extension Documents[483](index=483&type=chunk) [SIGNATURES](index=95&type=section&id=SIGNATURES) [SIGNATURES](index=95&type=section&id=SIGNATURES) The report was signed on November 7, 2023, by the President and Chief Executive Officer and the Chief Financial Officer and Chief Operating Officer - The report was signed by **Lara Sullivan, M.D., President and CEO**, and **Pamela Connealy, CFO and COO**[488](index=488&type=chunk) - The date of signature was **November 7, 2023**[488](index=488&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 June 30, 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 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)