PART I. FINANCIAL INFORMATION Item 1. Condensed Financial Statements This section presents unaudited condensed financial statements for June 30, 2025, reflecting the company's strategic pivot to ADCs Condensed Balance Sheets Total assets increased to $180.8 million by June 30, 2025, driven by cash from a private placement and FYARRO sale Condensed Balance Sheet Highlights | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $144,936 | $28,670 | | Total current assets | $178,671 | $61,287 | | Total assets | $180,822 | $70,319 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $8,756 | $17,074 | | Total liabilities | $8,756 | $17,841 | | Total stockholders' equity | $172,066 | $52,478 | | Total liabilities and stockholders' equity | $180,822 | $70,319 | Condensed Statements of Operations and Comprehensive (Loss) Income Q2 2025 saw a $52.6 million net loss due to increased R&D, while the six-month period achieved $20.4 million net income from the FYARRO sale Statement of Operations Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $0 | $6,179 | $7,145 | $11,532 | | Research and development | $48,809 | $13,093 | $57,597 | $26,686 | | Selling, general and administrative | $5,940 | $7,892 | $18,755 | $18,512 | | Gain on sale of business | $0 | $0 | $87,443 | $0 | | Net (loss) income | $(52,615) | $(14,583) | $20,401 | $(32,872) | | Basic EPS | $(0.76) | $(0.54) | $0.37 | $(1.22) | Condensed Statements of Stockholders' Equity Stockholders' equity grew to $172.1 million by June 30, 2025, driven by a $94.5 million private placement and net income from the FYARRO sale - A private placement in Q1 2025 resulted in the issuance of 21,592,000 shares of common stock, providing net proceeds of $94.5 million16 - The accumulated deficit was reduced by a net income of $73.0 million in Q1 2025, but increased by a net loss of $52.6 million in Q2 2025, resulting in a net decrease of the deficit for the six-month period16 Condensed Statements of Cash Flows Cash increased by $116.2 million for the six months ended June 30, 2025, driven by financing and investing activities Six-Month Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(64,821) | $(28,810) | | Net cash provided by investing activities | $86,672 | $6,984 | | Net cash provided by financing activities | $94,351 | $77 | | Net increase (decrease) in cash | $116,202 | $(21,749) | Notes to Condensed Financial Statements Notes detail the company's name change, $102.4 million FYARRO divestiture, in-licensing of three preclinical ADCs, and related financing activities - On March 25, 2025, the company completed the divestiture of its FYARRO Business for a cash payment of $102.4 million, resulting in a recorded net gain of $87.4 million26145146 - The company entered into a license agreement with WuXi Biologics for a portfolio of three ADC therapies, making upfront payments totaling $44.0 million ($6.0 million in Dec 2024 and $38.0 million in Apr 2025)24140 - The company raised aggregate net proceeds of $94.4 million from a private investment in public equity (PIPE) financing, which closed on March 4, 2025105 - Following the FYARRO divestiture, the company is now a preclinical-stage biopharmaceutical company with three preclinical products in development and expects to continue to incur net losses3138 Management's Discussion and Analysis of Financial Condition and Results of Operations This section details the strategic pivot to developing three preclinical ADCs, cessation of product revenue post-FYARRO divestiture, increased R&D, and a strong $177.2 million liquidity - The company has shifted its focus to developing a portfolio of three next-generation ADCs licensed from WuXi Biologics after divesting its legacy FYARRO business for $102.4 million160165 - The company anticipates submitting three Investigational New Drug (IND) applications to the FDA by mid-2026 for its new ADC therapies162 Research and Development Expense Comparison | Expense Category | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Personnel expenses | $2,301 | $5,519 | $6,102 | $11,816 | | External clinical development | $41,737 | $4,872 | $44,126 | $9,303 | | Clinical drug product manufacturing | $4,280 | $2,189 | $6,365 | $4,366 | | Total R&D Expenses | $48,809 | $13,093 | $57,597 | $26,686 | - The significant increase in R&D expenses for Q2 and the first six months of 2025 was primarily driven by the $38.0 million up-front license fee and a $2.3 million VAT tax paid to WuXi Biologics192193 - As of June 30, 2025, the company had $177.2 million in cash, cash equivalents, and short-term investments, which is believed to be sufficient to fund planned operations into 2028176197 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Whitehawk Therapeutics, Inc. is exempt from providing market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk224 Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025227 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls228 PART II. OTHER INFORMATION Legal Proceedings As of June 30, 2025, the company reports no ongoing legal proceedings or claims with recorded liabilities - As of June 30, 2025, the company has no ongoing legal proceedings where a liability has been recorded136232 Risk Factors This section details risks including preclinical stage status, dependence on new ADCs, net losses, capital needs, regulatory hurdles, and reliance on Chinese manufacturers - The company is a preclinical-stage biopharmaceutical company with a limited operating history, and its success is highly dependent on the development of its three new ADC therapies235252 - The company relies on WuXi Biologics and Hangzhou DAC, both located in China, for manufacturing, exposing it to geopolitical risks, trade policy changes, and potential impacts from the proposed BIOSECURE Act, which identifies WuXi Biologics as a 'company of concern'530531533 - The company has a history of significant net losses and will require additional capital to finance its operations; failure to raise capital could force delays or elimination of its development programs240246 - The company faces substantial competition in the oncology and ADC fields from larger, more established companies with greater financial and technical resources314316 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None568 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None569 Mine Safety Disclosures This item is not applicable to the company - Not applicable570 Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the last fiscal quarter571 Exhibits This section lists exhibits filed as part of the Quarterly Report, including corporate documents, agreement amendments, and officer certifications - The report includes exhibits such as amendments to the Intellectual Property License Agreement with WuXi Biologics and the Sales Agreement with TD Securities, along with required officer certifications573574
Aerpio Pharmaceuticals(AADI) - 2025 Q2 - Quarterly Report