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Pyxis Oncology(PYXS) - 2025 Q1 - Quarterly Report
Pyxis OncologyPyxis Oncology(US:PYXS)2025-05-15 11:41

Summary Risk Factors The company, a clinical-stage oncology firm, faces risks from significant losses, heavy dependence on its primary product candidate, capital needs, third-party reliance, and intellectual property protection - The company identifies as a clinical-stage oncology firm with a history of significant losses, which are expected to continue for the next several years8 - Heavy dependence on the success of its primary product candidate, micvotabart pelidotin, which is in the early stages of clinical development. Failure in clinical trials or regulatory approval would materially harm the business8 - Substantial additional capital will be required to fund operations. Failure to raise capital when needed could force delays, reductions, or elimination of research and development programs8 - The company relies on third parties for manufacturing its product candidates, and any failure by these manufacturers could delay or impair clinical trials and commercialization8 - Significant risks are associated with protecting intellectual property rights, particularly those under license agreements (e.g., with Pfizer), where a breach could lead to the loss of development and commercialization rights8 PART I. FINANCIAL INFORMATION Unaudited condensed consolidated financial statements and MD&A detail Q1 2025 financial performance, including increased R&D, significant net loss, and liquidity position Item 1. Financial Statements (Unaudited) Unaudited financial statements for Q1 2025 reveal a significantly increased net loss, decreased total assets due to cash usage, and an absence of revenue compared to the prior year Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows a decrease in total assets, primarily in cash and marketable securities, with corresponding changes in liabilities and equity Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $12,759 | $19,473 | | Marketable debt securities, short-term | $92,673 | $107,458 | | Total current assets | $111,871 | $132,440 | | Total assets | $135,867 | $157,181 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $14,430 | $17,680 | | Total liabilities | $32,764 | $36,430 | | Total stockholders' equity | $103,103 | $120,751 | | Accumulated deficit | $(384,714) | $(363,556) | Condensed Consolidated Statements of Operations and Comprehensive Loss Q1 2025 operations show a significantly increased net loss, driven by the absence of revenue and higher research and development expenses year-over-year Condensed Consolidated Statements of Operations (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $0 | $16,146 | | Research and development | $17,044 | $13,029 | | General and administrative | $5,870 | $8,247 | | Loss from operations | $(22,914) | $(5,605) | | Net loss | $(21,158) | $(3,256) | | Net loss per common share | $(0.35) | $(0.06) | Condensed Consolidated Statements of Cash Flows Q1 2025 cash flows reflect significant cash usage in operations, offset by investing activities, with no substantial financing activities during the period Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,535) | $(20,710) | | Net cash provided by (used in) investing activities | $15,821 | $(18,498) | | Net cash provided by financing activities | $0 | $57,511 | | Net (decrease) increase in cash | $(6,714) | $18,303 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, oncology focus, liquidity runway, key licensing agreements, and capital raising activities - The company is a clinical-stage oncology company focused on solid tumors, with a specific emphasis on head and neck squamous cell carcinoma (HNSCC)23 - As of March 31, 2025, the company had an accumulated deficit of $384.7 million and expects its existing cash, cash equivalents, and short-term investments of $105.4 million to fund operations for at least the next twelve months2628 - The company has key licensing agreements, including an amended and restated agreement with Pfizer for its ADC product candidates (micvotabart pelidotin and PYX-203) and a license with Biosion for PYX-106, the development of which was paused in December 20244952 - In February 2024, the company raised $50 million through a private placement. In January 2025, all 1,611,215 pre-funded warrants from this placement were exercised for common stock6566 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on its lead ADC candidate, micvotabart pelidotin, detailing Q1 2025 R&D and G&A expenses, and liquidity projections Overview Pyxis Oncology focuses on micvotabart pelidotin for R/M HNSCC, granted Fast Track Designation, with ongoing monotherapy and combination clinical studies - The company's lead product candidate is micvotabart pelidotin, an ADC targeting Extradomain-B Fibronectin (EDB+FN), a component of the tumor extracellular matrix88 - Based on positive preliminary data from a Phase 1 dose escalation study showing a 50% ORR in R/M HNSCC patients, the company is prioritizing this indication94 - The FDA granted Fast Track Designation to micvotabart pelidotin for monotherapy treatment of adult patients with R/M HNSCC who have progressed after platinum-based chemotherapy and an anti-PD-(L)1 antibody103 - Clinical development includes two monotherapy expansion cohorts in R/M HNSCC and a Phase 1/2 combination study (PYX-201-102) with Merck's KEYTRUDA® across various solid tumors104106 Results of Operations Q1 2025 results show zero revenue, increased R&D expenses due to micvotabart pelidotin, and decreased G&A expenses primarily from lower stock-based compensation Comparison of Results of Operations (in thousands) | Account | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total revenues | $0 | $16,146 | $(16,146) | | Research and development | $17,044 | $13,029 | $4,015 | | General and administrative | $5,870 | $8,247 | $(2,377) | | Net loss | $(21,158) | $(3,256) | $(17,902) | - The $4.0 million increase in R&D expenses was driven by a $2.7 million increase in micvotabart pelidotin program costs (manufacturing and clinical trial expenses) and a $2.0 million increase in unallocated costs, including $1 million in severance from a March 2025 workforce reduction121122124 - The $2.4 million decrease in G&A expenses was primarily due to a $1.2 million decrease in stock-based compensation, along with lower professional fees and corporate insurance costs125 Liquidity and Capital Resources As of March 31, 2025, the company had $105.4 million in cash, projected to fund operations into H2 2026, with an available ATM offering program - The company's cash, cash equivalents, and short-term investments totaled $105.4 million as of March 31, 2025127 - Management projects the current cash position will be sufficient to fund operations into the second half of 2026138 Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,535) | $(20,710) | | Net cash provided by (used in) investing activities | $15,821 | $(18,498) | | Net cash provided by financing activities | $0 | $57,511 | - The company has an effective ATM offering program with $106.2 million of remaining capacity as of March 31, 2025128 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," Pyxis Oncology is exempt from providing market risk disclosures - The company is a "smaller reporting company" and is therefore not required to provide quantitative and qualitative disclosures about market risk149 Item 4. Controls and Procedures Management concluded disclosure controls 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 report150 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting151 PART II. OTHER INFORMATION This section covers legal proceedings, extensive risk factors including financial, clinical, regulatory, and IP risks, and details on equity sales and exhibits Item 1. Legal Proceedings The company is not currently involved in any material legal proceedings, nor is it aware of any pending or threatened actions - The company reports that it is not currently a party to any material legal proceedings155 Item 1A. Risk Factors This section outlines significant risks including financial position, product candidate development, regulatory compliance, dependence on third parties, and intellectual property protection Risks Related to Financial Position and Capital Needs The company faces risks from its history of significant losses, ongoing capital needs, and the uncertainty of its cash runway projections - The company has a history of significant operating losses, with a net loss of $21.2 million for Q1 2025 and an accumulated deficit of $384.7 million159 - Substantial additional capital is needed to finance operations. The current cash of $105.4 million is projected to fund operations into the second half of 2026, but this is based on assumptions that could change164 Risks Related to Product Candidate Development Success hinges on its sole clinical candidate, micvotabart pelidotin, facing lengthy, expensive, and uncertain clinical development with significant competition - The company is heavily dependent on the success of its single clinical product candidate, micvotabart pelidotin183 - Clinical testing is a long, expensive process with an uncertain outcome. The company may incur unexpected costs or delays and may ultimately be unable to complete development174 - Interim and preliminary data from clinical trials may change as more patient data becomes available, and should be viewed with caution196 - The company faces significant competition from other oncology-focused companies, including those developing ADCs and immunotherapies for HNSCC, such as Philogen S.p.A., Merus, and Bicara211217 Risks Related to Regulatory and Legal Compliance Regulatory approval is lengthy and unpredictable, with ongoing compliance obligations, pricing challenges, and risks from healthcare fraud and data privacy laws - The regulatory licensure process is lengthy, time-consuming, and inherently unpredictable, and the company may never obtain marketing approval for its product candidate224 - Even if granted, expedited pathways like Fast Track Designation or Accelerated Approval do not guarantee a faster review or ultimate approval and come with rigorous post-marketing requirements231239 - The company's ability to commercialize its products will depend on securing adequate coverage and reimbursement from third-party payors, which is uncertain263 - The company is subject to numerous data protection and privacy laws (e.g., HIPAA, CCPA, GDPR), and failure to comply could result in significant penalties and reputational harm276277282 Risks Related to Dependence on Third Parties Reliance on third parties for manufacturing, clinical trials, and licensing creates risks of disruption, supply chain issues, and loss of intellectual property rights - The company relies on third-party CDMOs for manufacturing and does not have its own capabilities. Any failure by these manufacturers to comply with cGMP or meet supply needs could delay or halt clinical trials324326 - A portion of manufacturing occurs in China, creating risks related to geopolitical tensions, trade restrictions (e.g., the proposed BIOSECURE Act), and supply chain disruptions335 - The company relies on third-party CROs to conduct its clinical trials. Poor performance by these CROs could compromise trial data and delay regulatory submissions340342 - Failure to comply with obligations under license agreements (e.g., with Pfizer) could result in the loss of essential intellectual property rights necessary for developing its product candidates319 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company details the use of $152.3 million net IPO proceeds, now reprioritized to advance micvotabart pelidotin and for general corporate purposes - The company's IPO in October 2021 generated net proceeds of $152.3 million402 - The planned use of IPO proceeds has been updated due to pipeline reprioritizations. The funds are now primarily allocated to advance the clinical development of micvotabart pelidotin and for general corporate purposes403 Item 6. Exhibits This section lists filed exhibits, including a separation agreement and required Sarbanes-Oxley Act certifications from the CEO and CFO - The report includes required certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act407 - A Separation Agreement and General Release for Ken Kobayashi is filed as an exhibit407