Summary Risk Factors Summary of Key Risks The company identifies several material risks, including its history of significant losses, the need for substantial additional capital, heavy dependence on its primary product candidate, micvotabart pelidotin, and the inherent uncertainties of clinical development and regulatory approval - The company is a clinical-stage entity with a history of significant losses and anticipates continued losses for the next several years, with no guarantee of achieving profitability7 - Operations are heavily dependent on the success of a single product candidate, micvotabart pelidotin, which is in the early stages of clinical development; failure in clinical trials or regulatory approval would materially harm the business7 - The company relies on third parties for manufacturing its product candidate and for critical intellectual property through licensing agreements, such as the one with Pfizer; failure to comply with these agreements could result in the loss of necessary IP rights7 PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show a decrease in cash and marketable securities, an accumulated deficit of $403.1 million, and a net loss of $39.5 million for the first six months of 2025, reflecting the company's financial position as a clinical-stage entity with no product revenue and significant ongoing research and development expenses Condensed Consolidated Balance Sheets As of June 30, 2025, the company's total assets were $123.2 million, a decrease from $157.2 million at year-end 2024, primarily due to a reduction in cash and marketable securities, while total liabilities remained relatively stable at $35.6 million and the accumulated deficit grew to $403.1 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $10,733 | $19,473 | | Marketable debt securities, short-term | $78,211 | $107,458 | | Total current assets | $99,956 | $132,440 | | Total assets | $123,215 | $157,181 | | Total liabilities | $35,572 | $36,430 | | Accumulated deficit | $(403,068) | $(363,556) | | Total stockholders' equity | $87,643 | $120,751 | Condensed Consolidated Statements of Operations and Comprehensive Loss For the six months ended June 30, 2025, the company reported a net loss of $39.5 million, compared to a net loss of $20.6 million for the same period in 2024, with the increase driven by higher R&D expenses and lower total revenues, as the prior year period included significant revenue from a sale of royalty rights, while Q2 2025 included a one-time milestone revenue of $2.8 million Statement of Operations Summary (in thousands, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $2,820 | $16,146 | | Research and development | $34,177 | $26,982 | | General and administrative | $11,307 | $14,326 | | Loss from operations | $(42,664) | $(25,637) | | Net loss | $(39,512) | $(20,557) | | Net loss per share | $(0.64) | $(0.37) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was $39.8 million, a significant increase from $23.7 million in the prior year period, reflecting higher net loss and changes in working capital, while investing activities provided $31.1 million and financing activities used a nominal amount, resulting in a total cash, cash equivalents, and restricted cash decrease of $8.7 million during the period Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(39,798) | $(23,717) | | Net cash provided by (used in) investing activities | $31,125 | $(18,494) | | Net cash (used in) provided by financing activities | $(67) | $57,621 | | Net (decrease) increase in cash | $(8,740) | $15,410 | Notes to Financial Statements Key notes to the financial statements detail the company's liquidity position, licensing agreements, and stock-based compensation, with existing cash of $88.9 million believed to fund operations for at least the next twelve months, and a significant event being the recognition of $2.8 million in milestone revenue from the Simcere agreement following regulatory approval of Suvemcitug in China, while stock-based compensation expense for the first six months of 2025 was $6.6 million - The company had an accumulated deficit of $403.1 million as of June 30, 2025, and expects its existing cash, cash equivalents, and short-term investments of $88.9 million to fund operations and capital requirements for at least the next twelve months2527 - On June 30, 2025, the company became entitled to a $3 million regulatory approval milestone under its Simcere Agreement, recognizing $2.8 million in milestone revenue (net of withholding tax) in the second quarter57 - Total stock-based compensation expense was $6.6 million for the six months ended June 30, 2025, compared to $7.2 million for the same period in 202477 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion focuses on the clinical development strategy for its lead product candidate, micvotabart pelidotin, particularly in head and neck squamous cell carcinoma (HNSCC), with the analysis of financial results highlighting a significant year-over-year increase in net loss for the first six months of 2025, driven by higher R&D spending on micvotabart pelidotin and a decrease in revenue compared to 2024, which benefited from a one-time royalty sale, and the company confirms its cash runway is expected to last into the second half of 2026 Overview and Clinical Pipeline Pyxis Oncology is a clinical-stage company focused on solid tumors, with its lead candidate, micvotabart pelidotin, an ADC targeting EDB+FN, prioritizing development in R/M HNSCC based on promising Phase 1 data, and in February 2025, the FDA granted Fast Track Designation for this indication, with preliminary data from several cohorts expected in the second half of 2025 and first half of 2026 - The company's lead product candidate is micvotabart pelidotin, an ADC targeting Extradomain-B Fibronectin (EDB+FN), with a primary development focus on head and neck squamous cell carcinoma (HNSCC)9293 - The FDA granted Fast Track Designation to micvotabart pelidotin in February 2025 for treating adult patients with R/M HNSCC who have progressed after platinum-based chemotherapy and an anti-PD-(L)1 antibody107 - Key upcoming milestones include preliminary data from the monotherapy expansion cohort (N=20) in 2H 2025 and from the combination therapy with KEYTRUDA® in 2H 2025108 Results of Operations For the six months ended June 30, 2025, revenue was $2.8 million from a single milestone, compared to $16.1 million in the prior year which included an $8.0 million sale of royalty rights and $8.1 million in royalty revenues, while R&D expenses increased by $7.2 million to $34.2 million, primarily due to higher manufacturing and clinical trial costs for micvotabart pelidotin, and G&A expenses decreased by $3.0 million to $11.3 million due to lower stock-based compensation and professional fees, consequently, net loss widened to $39.5 million from $20.6 million in the prior year period Comparison of Results for the Six Months Ended June 30 (in thousands) | Account | 2025 | 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $2,820 | $16,146 | $(13,326) | -82.5% | | R&D Expenses | $34,177 | $26,982 | $7,195 | 26.7% | | G&A Expenses | $11,307 | $14,326 | $(3,019) | -21.1% | | Net Loss | $(39,512) | $(20,557) | $(18,955) | 92.2% | - The $7.0 million increase in program-specific costs for micvotabart pelidotin in the first half of 2025 was driven by a $3.9 million increase in manufacturing costs and a $1.8 million increase in clinical trial expenses135 - Revenue in the first six months of 2024 included an $8.0 million one-time payment from Novartis for the transfer of future royalty rights to Beovu® and the recognition of $8.1 million in previously paid royalties132 Liquidity and Capital Resources As of June 30, 2025, the company had $90.4 million in cash, cash equivalents, restricted cash, and short-term investments, which management believes are sufficient to finance operations into the second half of 2026, with net cash used in operating activities for the first six months of 2025 being $39.8 million, and the company having an effective shelf registration statement with $106.2 million of remaining capacity available under its ATM facility - The company's cash, cash equivalents, restricted cash, and short-term investments totaled $90.4 million as of June 30, 2025140 - Management projects the current cash position is sufficient to fund operations into the second half of 2026152 - Net cash used in operating activities was $39.8 million for the six months ended June 30, 2025, up from $23.7 million in the prior-year period144145 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," Pyxis Oncology is not required to provide the information for this item - The company is a "smaller reporting company" and is exempt from providing quantitative and qualitative disclosures about market risk162 Item 4. Controls and Procedures Management, including the CEO and Principal Financial and Accounting Officer, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The company's management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period163 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls164 PART II. OTHER INFORMATION Item 1. Legal Proceedings 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 proceedings168 Item 1A. Risk Factors This section details the significant risks facing the company, with key areas including its financial position, marked by a history of losses and the need for future capital; the inherent uncertainties and high costs of clinical development, with heavy reliance on the success of its lead candidate, micvotabart pelidotin; the complex and lengthy regulatory approval process; dependence on third parties for manufacturing and clinical trials; challenges in protecting intellectual property; and risks associated with its common stock, including price volatility Risks Related to Financial Position and Capital Needs The company has a limited operating history, has incurred significant losses since inception ($403.1 million accumulated deficit as of June 30, 2025), and expects to continue incurring losses, with substantial additional capital required to fund operations, and the current cash runway estimated to last into the second half of 2026, an estimate based on assumptions that may prove wrong - The company has incurred significant operating losses, with a net loss of $39.5 million for the six months ended June 30, 2025, and an accumulated deficit of $403.1 million171 - Substantial additional capital will be needed to finance operations; the current cash of approximately $90.4 million is expected to fund operations into the second half of 2026, but this estimate is subject to change176 Risks Related to Product Candidate Development The company's success is heavily dependent on its lead candidate, micvotabart pelidotin, as clinical development is a lengthy, expensive, and uncertain process with a high risk of failure, including potential for undesirable side effects, negative trial results, difficulties in patient enrollment, and intense competition from other biotechnology and pharmaceutical companies developing similar therapies - The company is heavily dependent on the success of its single clinical-stage product candidate, micvotabart pelidotin192 - The company faces significant competition in HNSCC from other agents, including Merus's petosemtamab and Bicara's ficerafusp alfa (BCA101), which are targeting similar patient populations226 Risks Related to Regulatory and Legal Compliance The regulatory approval process for new drugs is long, unpredictable, and subject to the discretion of authorities like the FDA, and even if approved, the company will face ongoing regulatory obligations, potential pricing pressures from healthcare legislation like the Inflation Reduction Act, and must comply with complex data privacy laws (e.g., GDPR, CCPA) - The regulatory licensure and approval processes of the FDA and other authorities are lengthy, time-consuming, and inherently unpredictable, and there is no guarantee of approval for the company's product candidate232 - Enacted and future healthcare legislation, such as the Inflation Reduction Act (IRA), may increase costs, affect pricing, and create additional hurdles for commercialization273 Risks Related to Dependence on Third Parties The company relies on third parties for critical functions, including manufacturing (with some operations in China), conducting clinical trials (CROs), and intellectual property through in-licensing agreements (e.g., Pfizer), and any failure by these third parties to perform, comply with regulations (like cGMP), or maintain agreements could significantly delay or impair development and commercialization - The company relies on third-party manufacturers and does not have its own manufacturing capabilities; a portion of this manufacturing occurs in China, which is subject to geopolitical and regulatory risks, including potential impacts from the BIOSECURE Act321331 - The company relies on third-party CROs to conduct its clinical trials and is responsible for ensuring their compliance with GCP standards339340 Risks Related to Intellectual Property The company's ability to compete depends on protecting its intellectual property through patents and trade secrets, but the patent process is uncertain, and issued patents may be challenged or circumvented, and the company also faces risks of infringing on third-party patents and must maintain compliance with its in-licensing agreements to retain rights to its product candidates - The company's success depends on its ability to obtain and maintain patent protection for its product candidates, a process that is expensive, time-consuming, and uncertain343 - Failure to comply with obligations under its license agreement with Pfizer could result in the loss of intellectual property rights necessary for the development of micvotabart pelidotin358 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section addresses the use of proceeds from the company's October 2021 Initial Public Offering (IPO), noting that its planned use of the $152.3 million in net proceeds has changed due to pipeline reprioritizations and will now be used to advance the clinical development of micvotabart pelidotin and for general corporate purposes - The company raised net proceeds of $152.3 million from its IPO in October 2021400 - The planned use of IPO proceeds has been updated to prioritize the clinical development of micvotabart pelidotin following portfolio reprioritizations401 Item 5. Other Information During the quarter, the company's President and CEO, Lara Sullivan, M.D., terminated a Rule 10b5-1 trading arrangement on June 24, 2025, and adopted a new one on the same day for the sale of up to 411,845 shares - On June 24, 2025, CEO Lara Sullivan, M.D., terminated an existing Rule 10b5-1 trading plan and adopted a new plan for the sale of up to 411,845 shares of common stock404 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including a separation agreement and various officer certifications required by the Sarbanes-Oxley Act
Pyxis Oncology(PYXS) - 2025 Q2 - Quarterly Report