Financial Performance - The company generated net losses of $83.7 million from February 6, 2024 (inception) to December 31, 2024, with net cash used for operating activities amounting to $57.8 million[411]. - The company reported total operating expenses of $88.1 million for the period from February 6, 2024, to December 31, 2024, with research and development expenses accounting for $75.1 million[441]. - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future[430]. - The company anticipates needing additional financing in the future to support ongoing research and development efforts[448]. - Interest income for the period was $5.9 million, while interest expense related to a convertible note was $1.5 million[445]. - Net cash used in operating activities from February 6, 2024, to December 31, 2024, was $57.8 million, primarily due to a net loss of $83.7 million[450]. - Net cash used in investing activities during the same period was $330.1 million, mainly attributed to purchases of marketable securities[451]. - Net cash provided by financing activities was $449.5 million, including $228.0 million from Pre-Closing Financing and $188.7 million from PIPE Financing[452]. Cash and Securities - As of December 31, 2024, the company had cash, cash equivalents, and marketable securities totaling $393.7 million, expected to fund operations for at least twelve months[413]. - As of December 31, 2024, the company had $393.7 million in cash, cash equivalents, and marketable securities[446]. Research and Development - The lead program, ORKA-001, targets IL-23p19 for psoriasis treatment and is designed for subcutaneous injection as infrequently as once or twice a year[414][415]. - The company initiated dosing of healthy volunteers in a Phase 1 trial of ORKA-001 in Q4 2024, with interim pharmacokinetic data expected in H2 2025 and initial efficacy data in psoriasis patients anticipated in H2 2026[416]. - ORKA-002, targeting IL-17A/F, is planned to begin dosing healthy volunteers in a Phase 1 trial in Q3 2025, with initial pharmacokinetic data expected in H1 2026[417]. - The company has a third mAb program, ORKA-003, targeting an undisclosed pathway, with potential for indication expansion beyond psoriasis[420]. - The company expects significant increases in both research and development and general and administrative expenses as it expands its operations[438]. - Research and development expenses included $57.7 million for external research and development, primarily related to services rendered by Paragon[442]. - The company recognized $13.5 million in development costs related to ORKA-001 as research and development expenses[459]. - The company is responsible for development costs incurred by Paragon, totaling $3.3 million for ORKA-002, recognized as research and development expenses[460]. - Research and development expenses are expensed as incurred, including costs for salaries, overhead, and contract services, with significant estimates involved in accrued balances[476]. Mergers and Financing - The merger with Pre-Merger Oruka was completed on August 29, 2024, resulting in a name change from ARCA biopharma, Inc. to Oruka Therapeutics, Inc.[421]. - The Pre-Closing Financing raised approximately $275.0 million, with transaction costs of $20.5 million recorded as a reduction to additional paid-in capital[422]. - The merger was accounted for as a reverse recapitalization, with Pre-Merger Oruka deemed the accounting acquirer for financial reporting purposes[426]. - The company raised approximately $188.7 million in net proceeds from a PIPE Financing on September 13, 2024, selling 5,600,000 shares of common stock at $23.00 per share[429]. - The company entered into a Series A Preferred Stock and Convertible Note Purchase Agreement with Fairmount, issuing a Convertible Note with an initial principal amount of $25.0 million, accruing interest at 12.0% per annum[470]. - Prior to the merger, the Convertible Note was converted into 2,722,207 shares of Company Common Stock, based on an aggregate principal amount of $25.0 million plus unpaid accrued interest of $1.5 million[471]. Stock and Compensation - The company executed a 1-for-12 reverse stock split on September 3, 2024, adjusting the share data retrospectively for all periods presented[427]. - Stock-based compensation is measured using the Black-Scholes option-pricing model, with expenses recognized over the requisite service period[477]. - The fair value of Company Common Stock is determined based on the quoted market price following the completion of the merger[478]. - Prior to the merger, common stock valuations were prepared using a hybrid method, including an option pricing method and a probability-weighted expected return method[480]. Contracts and Obligations - The company entered into Option Agreements with Paragon for antibody discovery, with potential milestone payments of up to $12.0 million for clinical development milestones[455][466]. - Total expenses recognized in connection with services provided by Paragon and Paruka under the Option Agreements amounted to $42.0 million[463]. - The company recorded a $1.5 million milestone payment related to the achievement of a development candidate for the ORKA-001 program[459]. - A non-refundable license fee of $150,000 was paid to WuXi Biologics under the Cell Line License Agreement, recognized as a research and development expense[468]. - The company has exclusive licenses for ORKA-001 and ORKA-002, with royalty obligations including a low single-digit percentage for antibody products[465][466]. - The company has contractual obligations for minimum lease payments under its operating lease for headquarters in Menlo Park, California[473]. Miscellaneous - As of December 31, 2024, there is no note payable to a related party[471]. - As of December 31, 2024, the company did not have any off-balance sheet arrangements[483]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[484].
ARCA biopharma(ABIO) - 2024 Q4 - Annual Report