Product Development - The company is developing ABI-009, a precision therapy for genetically defined cancers with mTOR pathway gene alterations [153]. - ABI-009's NDA for treating advanced malignant PEComa was accepted by the FDA with a PDUFA target action date of November 26, 2021 [154]. - The company plans to initiate the PRECISION 1 trial for ABI-009 in tumor-agnostic TSC1 & TSC2 alterations by early 2022 [156]. Financial Performance - Total revenue for the three months ended September 30, 2021, was $0, compared to $0.231 million in 2020, and for the nine months ended September 30, 2021, it was $0.120 million compared to $0.431 million in 2020, indicating a decrease in grant revenue [181]. - Net loss for the three months ended September 30, 2021, was $87.088 million, compared to a net loss of $2.892 million in 2020, and for the nine months ended September 30, 2021, it was $94.100 million compared to $11.498 million in 2020 [191]. - As of September 30, 2021, the company had an accumulated deficit of $126.7 million and expects to continue incurring significant expenses and operating losses due to ongoing research and development activities [191]. Expenses - Research and development expenses for the three months ended September 30, 2021, were $5.754 million, an increase of 142% from $2.395 million in 2020, driven by increased clinical drug manufacturing costs [183]. - General and administrative expenses for the three months ended September 30, 2021, were $7.401 million, a significant increase from $0.499 million in 2020, primarily due to compensation related to the Merger and increased headcount [185]. - Research and development expenses are expected to increase substantially as the company advances its product candidates through clinical trials [175]. - General and administrative expenses are anticipated to rise due to expansion of operating activities and costs associated with being a public company [177]. Cash Flow - Cash and cash equivalents as of September 30, 2021, totaled $161.4 million, which is expected to support operations into 2024 [192]. - Net cash used in operating activities for the nine months ended September 30, 2021, was $9.995 million, compared to $9.426 million in 2020, primarily due to net losses and changes in working capital [193]. - Cash provided by financing activities for the nine months ended September 30, 2021, was $141.716 million, significantly higher than $1.194 million in 2020, driven by PIPE Financing [199]. Mergers and Acquisitions - The company completed a merger with Aadi Subsidiary, Inc. on August 26, 2021, and changed its name to Aadi Bioscience, Inc. [158]. - The merger was accounted for as a reverse asset acquisition, resulting in no goodwill recognized on the balance sheet [209]. - The excess purchase price over the fair value of acquired assets and liabilities was $78.1 million, leading to an impairment of $74.2 million on the contract intangible asset, adjusting its value to $3.9 million [210]. Impairments and Taxation - An impairment of $74.2 million was recognized for an acquired contract intangible asset, reducing its fair value to $3.9 million [178]. - The company has not recorded any U.S. federal or state income tax benefits for net losses incurred since its formation in 2011 [180]. - Deferred tax assets have been fully offset by a valuation allowance, primarily comprised of federal and state tax net operating losses (NOLs) [224]. - The company has not recorded any U.S. federal or state income tax benefits for net losses incurred since its formation in 2011, due to uncertainty in realizing a benefit [224]. Stock-Based Compensation - For the three months ended September 30, 2021, total stock-based compensation expense was $648,000, compared to $34,000 in the same period of 2020 [221]. - As of September 30, 2021, total unamortized stock-based compensation was $13.9 million, expected to be recognized over a weighted average period of 3.15 years [221]. Research and Development Contracts - The company has entered into contracts with various organizations for research and development activities, which can be modified or canceled upon written notice, incurring liabilities for costs incurred to date [202]. - The license agreement with Gossamer Bio includes potential payments based on development milestones and sales-based royalties, with fair value determined using a risk-adjusted discounted cash flow model [211]. - Research and development costs are estimated based on patient enrollment and services provided, with significant estimates made for accrued liabilities and prepaid expenses [213]. Reporting and Compliance - The company is classified as a smaller reporting company and is not required to provide additional market risk information [225].
Aerpio Pharmaceuticals(AADI) - 2021 Q3 - Quarterly Report