Acrivon Therapeutics(ACRV) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements This report contains forward-looking statements about future operations, financial conditions, clinical trial timing, regulatory approvals, and market opportunities, subject to risks and uncertainties - This report contains forward-looking statements concerning future operations, financial conditions, clinical trial timing, regulatory approvals, and market opportunities, based on current expectations and subject to risks and uncertainties[8][9] - Key areas covered include clinical trial progress for ACR-368 and ACR-2316, regulatory submission timing, commercialization ability, capital requirements, and intellectual property protection[10] PART I. FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and internal controls Item 1. Financial Statements (Unaudited) The unaudited financial statements for the period ended June 30, 2025, show decreased total assets and stockholders' equity due to an increased net loss, with cash and investments totaling $147.6 million Condensed Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $158.6 million from $196.6 million, primarily due to reduced short-term investments, leading to a decline in stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $41,895 | $39,818 | | Short-term investments | $95,528 | $139,662 | | Total current assets | $138,412 | $181,629 | | Total assets | $158,583 | $196,588 | | Liabilities & Equity | | | | Total current liabilities | $13,431 | $17,214 | | Total liabilities | $15,546 | $19,802 | | Total stockholders' equity | $143,037 | $176,786 | Condensed Consolidated Statements of Operations and Comprehensive Loss Net losses increased for both the three and six months ended June 30, 2025, driven by higher research and development expenses, with the six-month net loss reaching $40.7 million Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $16,182 | $15,025 | $31,596 | $26,498 | | General and administrative | $6,467 | $6,412 | $12,715 | $12,607 | | Loss from operations | $(22,649) | $(21,437) | $(44,311) | $(39,105) | | Net loss | $(21,006) | $(18,798) | $(40,686) | $(35,284) | | Net loss per share | $(0.55) | $(0.52) | $(1.06) | $(1.20) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $36.1 million for the six months ended June 30, 2025, while investing activities provided $38.7 million, a significant shift from the prior year Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(36,145) | $(30,986) | | Net cash provided by (used in) investing activities | $38,665 | $(82,194) | | Net cash (used in) provided by financing activities | $(440) | $123,178 | Notes to the Condensed Consolidated Financial Statements The notes detail the company's oncology focus, cash runway into Q2 2027, $123.8 million PIPE financing, and potential milestone payments up to $168.0 million to Lilly - The company is a clinical-stage biotech focused on oncology, advancing its lead candidates ACR-368 (Phase 2 for endometrial cancer) and ACR-2316 (Phase 1 for solid tumors)[31] - Existing cash, cash equivalents, and investments of $147.6 million as of June 30, 2025, are expected to fund operations into the second quarter of 2027[39][114] - In April 2024, the company closed a PIPE financing, raising aggregate net proceeds of $123.8 million through the sale of common stock and pre-funded warrants[38][64] - The company has potential future milestone payment obligations of up to $168.0 million to Eli Lilly and up to $20.3 million to Akoya Biosciences for its companion diagnostic test[88][92] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's precision oncology focus, clinical updates for ACR-368 and ACR-2316, increased R&D expenses, and a cash runway extending into the second quarter of 2027 Overview Acrivon, a clinical-stage biotech, uses its AP3 platform to develop precision oncology drugs, with lead candidate ACR-368 in Phase 2 for endometrial cancer and ACR-2316 showing initial clinical activity - The company's lead drug, ACR-368, is in a Phase 2 trial for endometrial cancer, with interim data showing a 35% confirmed overall response rate (ORR) and 80% tumor shrinkage in OncoSignature-positive (BM+) patients[100][105] - The second clinical asset, ACR-2316, a WEE1/PKMYT1 inhibitor, has shown initial clinical activity in its Phase 1 trial, including an ongoing confirmed partial response in an endometrial cancer patient[107] - The company's proprietary AP3 platform is used for drug design, identifying rational drug combinations, and creating drug-specific companion diagnostics (OncoSignature tests)[99] Results of Operations Operating expenses increased for both the three and six-month periods ended June 30, 2025, primarily due to a $5.1 million rise in R&D costs, driven by the ACR-2316 program and personnel expenses Research & Development Expenses Breakdown (Six Months Ended June 30, in thousands) | Program | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | ACR-368 | $13,660 | $13,000 | $660 | | ACR-2316 | $2,930 | $— | $2,930 | | Other drug discovery programs | $1,208 | $3,122 | $(1,914) | | Personnel related | $11,152 | $8,520 | $2,632 | | Facilities, supplies and other | $2,646 | $1,856 | $790 | | Total R&D Expenses | $31,596 | $26,498 | $5,098 | - The $5.1 million increase in six-month R&D expenses was primarily due to a $2.9 million increase in costs for the ACR-2316 clinical program and a $2.6 million increase in personnel-related costs from higher headcount[142] Liquidity and Capital Resources As of June 30, 2025, the company held $147.6 million in cash and investments, sufficient to fund operations into the second quarter of 2027, with net cash used in operations at $36.1 million - The company had $147.6 million in cash, cash equivalents, and investments as of June 30, 2025[141][149] - The current cash position is expected to fund operations into the second quarter of 2027[141][149] - Net cash used in operating activities increased to $36.1 million for the six months ended June 30, 2025, from $31.0 million in the prior-year period, reflecting higher net loss[143][144] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," Acrivon Therapeutics is exempt from providing quantitative and qualitative disclosures about market risk - The company is exempt from providing market risk disclosures as it qualifies as a "smaller reporting company" under SEC rules[162] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[163] - No material changes were made to the company's internal control over financial reporting during the second quarter of 2025[165] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, other disclosures, and a list of exhibits filed with the report Item 1. Legal Proceedings As of the filing date, the company is not currently a party to any material legal proceedings - As of the filing date, the company is not involved in any material legal proceedings[168] Item 1A. Risk Factors The company faces risks including a history of significant losses, the need for substantial additional funding, and potential stock price volatility from future sales of restricted shares - The company has a history of significant losses, with an accumulated deficit of $237.7 million as of June 30, 2025, and expects to incur further losses[170] - Substantial additional funding will be required to support operations and pursue business objectives, with failure to raise capital potentially forcing curtailment of plans[175] - A significant portion of outstanding shares are restricted but may be sold in the near future, which could cause the market price of the common stock to drop[178] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the quarter, and the planned use of IPO proceeds remains consistent - The company did not conduct any sales of unregistered securities in the three months ended June 30, 2025[181] - The planned use of proceeds from the company's IPO remains consistent with the description in its final prospectus[182] Item 5. Other Information The company disclosed that its Chief Medical Officer terminated a Rule 10b5-1 trading plan on May 2, 2025 - A Rule 10b5-1 trading plan for the Chief Medical Officer was terminated on May 2, 2025[188] Item 6. Exhibits This section lists the exhibits filed with the Quarterly Report, including CEO and CFO certifications and XBRL data files - Exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002[191]