PART I Financial Statements (Unaudited) Oruka Therapeutics reported a $21.0 million net loss for Q1 2025, holding $373.0 million in liquidity, reflecting its clinical-stage status and R&D focus Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $83,572 | $61,575 | | Marketable securities | $289,475 | $332,142 | | Total current assets | $352,083 | $376,869 | | Total assets | $377,112 | $396,019 | | Total current liabilities | $11,723 | $13,043 | | Total liabilities | $12,387 | $13,798 | | Total stockholders' equity | $364,725 | $382,221 | Condensed Consolidated Statements of Operations (in thousands) | Account | Three Months Ended March 31, 2025 | Period from Feb 6, 2024 to Mar 31, 2024 | | :--- | :--- | :--- | | Research and development | $19,925 | $5,193 | | General and administrative | $5,161 | $1,670 | | Total operating expenses | $25,086 | $6,863 | | Loss from operations | ($25,086) | ($6,863) | | Interest income | $4,092 | $0 | | Net loss | ($20,999) | ($7,077) | | Net loss per share | ($0.40) | ($2.21) | Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | Period from Feb 6, 2024 to Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($20,869) | ($168) | | Net cash provided by investing activities | $42,866 | $0 | | Net cash provided by financing activities | $0 | $27,911 | | Net increase in cash | $21,997 | $27,743 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail company formation, financing, accounting policies, and license agreements, confirming sufficient liquidity for 12 months - The company was formed through a reverse recapitalization with ARCA biopharma, Inc. in August 2024, focusing on biologics for psoriasis and inflammatory indications182225 - As of March 31, 2025, the company held $373.0 million in cash, cash equivalents, and marketable securities, expected to fund operations for at least the next twelve months30 - License agreements for ORKA-001 and ORKA-002 with Paragon Therapeutics involve up to $22.0 million in development and regulatory milestones per program, plus royalties757779 Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 | Period from Feb 6, 2024 to Mar 31, 2024 | | :--- | :--- | :--- | | Research and development | $3,003 | $70 | | General and administrative | $1,880 | $15 | | Total | $4,883 | $85 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses novel antibody therapeutics, noting increased operating expenses from clinical trials and headcount, while maintaining strong liquidity Overview and Pipeline Oruka is a clinical-stage biopharmaceutical company developing monoclonal antibodies for psoriasis, with lead programs ORKA-001 and ORKA-002 advancing into Phase 1 trials - ORKA-001 (IL-23p19): A Phase 1 trial in healthy volunteers was initiated in Q4 2024, with interim pharmacokinetic data expected in Q3 2025 and a Phase 2a trial planned for H2 2025108 - ORKA-002 (IL-17A/F): A Phase 1 trial in healthy volunteers is planned to start in Q2 2025, with initial pharmacokinetic data expected around year-end 2025109 - The company's strategy is to apply antibody engineering to validated targets to improve efficacy and dosing regimens over existing standard-of-care medicines101 Results of Operations Total operating expenses increased by 266% to $25.1 million for Q1 2025, driven by higher R&D and G&A costs, resulting in a $21.0 million net loss Comparison of Operating Results (in thousands) | Account | Three Months Ended March 31, 2025 | Period from Feb 6, 2024 to Mar 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Research and development | $19,925 | $5,193 | $14,732 | 284% | | General and administrative | $5,161 | $1,670 | $3,491 | 209% | | Total operating expenses | $25,086 | $6,863 | $18,223 | 266% | | Net loss | ($20,999) | ($7,077) | ($13,922) | 197% | - R&D expenses increased by $14.7 million, primarily due to an $8.7 million increase in external CRO/CMO costs for product development and manufacturing, a $2.3 million increase in personnel costs from hiring, and a $2.9 million increase in stock-based compensation136137138 - G&A expenses increased by $3.5 million, mainly due to a $2.8 million rise in personnel-related costs (including $1.9 million in stock compensation) and a $0.7 million increase in professional fees for legal, audit, and consulting services140 Liquidity and Capital Resources The company held $373.0 million in cash and securities as of March 31, 2025, funded by stock issuances, and expects this to cover operations for at least the next twelve months - The company had cash, cash equivalents, and marketable securities of $373.0 million as of March 31, 2025143 - Management expects that existing cash and securities are sufficient to fund operating plans for at least twelve months from the filing date of this report145 Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash used in operating activities | ($20,869) | | Net cash provided by investing activities | $42,866 | | Net cash provided by financing activities | $0 | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Oruka Therapeutics is not required to provide market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk156 Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by the report158 - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls159 PART II Legal Proceedings The company is not currently a party to any material legal proceedings, and pending claims are not expected to have a material adverse effect - The company is not currently party to any material legal proceedings161 Risk Factors The company faces substantial risks related to its limited operating history, ongoing losses, capital requirements, and the uncertain development and regulatory approval of its lead programs Risks Related to Our Financial Condition and Capital Requirements The company has a limited operating history, incurred significant losses, expects continued losses, and requires substantial additional capital which may cause dilution - The company is a clinical-stage entity with a limited operating history, a history of losses, and no products approved for sale168173 - Substantial additional capital will be needed to fund future operations, and current market conditions may make it difficult to raise funds174175 - Raising additional capital may cause significant dilution to existing stockholders and could involve restrictive covenants180 Risks Related to Clinical Development, Regulatory Approval and Commercialization Success depends on lead programs ORKA-001 and ORKA-002, facing long, expensive, and uncertain clinical development with risks of trial failure, competition, and unproven technology - The company is substantially dependent on the success of its two most advanced programs, ORKA-001 and ORKA-002189 - The company faces significant competition from established biopharmaceutical companies with greater financial and technical resources182 - Clinical trials may fail, be delayed, or produce inconclusive results, and early-stage results are not predictive of later-stage success185196 - The company's half-life extension technology is unproven in its target indications, and may not translate from preclinical models to humans or could lead to prolonged side effects193204 Risks Related to Government Regulations The company faces lengthy, unpredictable, and expensive regulatory approval processes, with risks from legislative changes, drug pricing controls, agency disruptions, and biosimilar competition - The FDA and foreign regulatory approval processes are lengthy, time-consuming, and unpredictable, and there is no guarantee of approval for product candidates213214 - Even if approved, products will be subject to extensive ongoing regulatory obligations, and failure to comply can result in significant penalties219 - Disruptions at the FDA and other government agencies due to funding shortages, political changes, or health crises could hinder the review and approval of new products221222 - Legislative reforms, particularly around drug pricing and reimbursement, could adversely affect the company's ability to generate revenue226 Risks Related to Our Intellectual Property Success depends on obtaining and maintaining patent protection, facing risks of invalidation, infringement claims, and challenges from evolving patent law, particularly for antibody-based therapies - The company's ability to obtain and protect its patents is uncertain, and pending applications may not result in issued patents that provide meaningful competitive advantage233234 - The company may be subject to costly patent infringement claims or may need to initiate litigation to protect its own IP241 - Recent changes in patent law and court rulings, particularly regarding antibody patents, have created uncertainty and could weaken the company's patent protection248249 - The company relies on in-licensed technology from Paragon and other third parties, and the failure of these parties to maintain or defend the IP could harm the business237238 Risks Related to Our Reliance on Third Parties Heavy reliance on third parties, including licensors, CROs, and CMOs, poses risks of performance failure, regulatory non-compliance, and geopolitical impacts, especially with sole-source foreign manufacturers like WuXi Biologics - The company relies on licensing arrangements with Paragon and collaborations with other third parties; failure of these arrangements could negatively impact the business259260 - Reliance on third-party CROs for preclinical and clinical trials means the company has less direct control, and any failure by these CROs to perform could delay or compromise trial results263 - The company depends on third-party CMOs for manufacturing and has a sole-source relationship for its lead programs, where any disruption could halt clinical development266 - Reliance on foreign CMOs, including WuXi Biologics, exposes the company to geopolitical risks, trade restrictions, and potential impacts from legislation like the proposed BIOSECURE Act268 Risks Related to Employee Matters, Managing Growth, Other Risks Related to Our Business, and Risks Related to Owning Our Common Stock The company faces risks related to managing growth, retaining key personnel, IT security, stock price volatility, insider control, anti-takeover provisions, and no anticipated dividends - The company is highly dependent on key personnel and faces intense competition for talent; failure to attract and retain qualified individuals could harm the business271272 - Internal IT systems are vulnerable to security breaches, which could result in significant liabilities and disruption of operations278 - The market price of the company's common stock has been and may continue to be highly volatile296 - Executive officers, directors, and principal stockholders hold significant voting power, enabling them to control matters submitted for stockholder approval309 - The company does not anticipate paying cash dividends in the foreseeable future307 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the period - None311 Defaults Upon Senior Securities No defaults upon senior securities occurred during the period - None312 Mine Safety Disclosures This item is not applicable to the company - Not applicable313 Other Information No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter314 Exhibits This section lists all exhibits filed or furnished as part of the Quarterly Report - This section provides a list of all exhibits filed with the Form 10-Q315
Oruka Therapeutics, Inc.(ORKA) - 2025 Q1 - Quarterly Report