GlobeNewswire Inc | Nov 10, 2021 07:00AM EST

November 10, 2021

-- FYARRO under review with FDA with a November 26, 2021 PDUFA target date -- Three key executive appointments made to the roles of Chief Operating Officer, Chief Medical Officer and Chief Financial Officer -- Appointment of new board member -- Registrational trial in patients harboring TSC1 and TSC2 inactivating alterations expected to be initiated by the end of 2021 or early 2022 -- Ended third quarter 2021 with $161.4 million in cash and cash equivalents with expected cash runway into 2024 following merger with Aerpio Pharmaceuticals, Inc. and concurrent PIPE financing

LOS ANGELES, Nov. 10, 2021 (GLOBE NEWSWIRE) -- Aadi Bioscience, Inc. (Aadi) (Nasdaq: AADI), a clinical-stage biopharmaceutical company focusing on precision therapies for genetically-defined cancers with alterations in mTOR pathway genes, today reported financial results for the three and nine months ended September 30, 2021 and provided a general business update.

Neil Desai, Ph.D., Founder, Chief Executive Officer and President of Aadi, commented, Following the successful merger completed in the third quarter, we are now fortified on all fronts with a strengthened balance sheet and expanded management team ahead of our November 26 Prescription Drug User Fee Action (PDUFA) target date for FYARRO. With a sizeable PIPE financing that closed in connection with our merger with Aerpio, we can effectively deploy capital toward the commercialization of FYARRO in advanced malignant PEComa and for our planned tumor-agnostic registrational trial in patients with solid tumors harboring inactivating alterations of TSC1andTSC2 genes in the mTOR pathway. In addition, we are also planning for new studies to investigate ABI-009 in combination with other targeted agents in different cancers.

Key Business Updates for the Third Quarter:

Merger and PIPE Financing

-- On August 26, 2021, Aadi merged withAerpio Pharmaceuticals, Inc., a publicly traded biotechnology company (previously traded on the Nasdaq Capital Market under ARPO), with Aadi being the surviving entity. As part of the merger, each share of Aadi common stock was converted into the right to receive 0.3172 shares of Aerpio common stock following a 15:1 reverse split of Aerpios common stock. Aadis common stock is traded on the Nasdaq Capital Market (Nasdaq) under the ticker symbol AADI. Concurrent to the closing of the merger, the combined company closed the previously announced$155 millionprivate investmentin public equity (PIPE) financing of its common stock.Immediately following the merger, PIPE financing, and reverse split, Aadi had approximately 20.8 million shares of common stock outstanding, with prior Aadi stockholders collectively owning approximately 29.2% of the combined company, prior Aerpio stockholders owning approximately 15.2% of the combined company, and the PIPE investors collectively owning approximately 55.6% of the combined company, each on a fully-diluted basis.

NDA Acceptance

-- In July, the U.S. Food and Drug Administration (FDA)accepted Aadis New Drug Application (NDA) for its nanoparticle albumin-bound mTOR inhibitor, FYARRO (sirolimus albumin-bound nanoparticles for injectable suspension,nab-sirolimus ABI-009) for the treatment of advanced PEComa, and has granted the company Priority Review status with a PDUFA target action date ofNovember 26, 2021.

Key Leadership Appointments

-- In September, Aadi announced key appointments of an additional independent board member as well as a Chief Operating Officer: Emma Reevewas appointed to Aadis Board of Directors and as chair of the Audit Committee.Ms. Reevebrings over 25 years of value creation in pharmaceutical, medical device and bio-pharma service companies and a successful track record of transitioning companies from private to public.Brendan Delaneywas appointed to the role of Chief Operating Officer. Brendan has had an established career in oncology-focused commercial leadership roles, launching multiple groundbreaking new products and building effective and cohesive commercial teams.

Recent Updates Following the Close of the Quarter:

-- In the fourth quarter, the Company made two more key executive appointments:Loretta M. Itri, M.D., FACP was appointed to the role of Chief Medical Officer. Dr. Itris extensive career spans clinical and regulatory global-leadership roles at both major pharmaceutical and biopharmaceutical companies. Most recently, Dr. Itri was Chief Medical Officer at Immunomedics, Inc., where she oversaw the development program and approval of TRODELVY, the first TROP-2 directed antibody-drug conjugate for the treatment of unresectable locally advanced or metastatic triple-negative breast and urothelial cancers. Immunomedics was subsequently acquired by Gilead Sciences, Inc.Scott M. Giacobello, CPA, was appointed to the role of Chief Financial Officer and Treasurer, effective November 28, 2021. Most recently, Mr. Giacobello was the Chief Financial Officer of GW Pharmaceuticals plc until its $7.2 billion acquisition by Jazz Pharmaceuticals. Mr. Giacobello joinedGW Pharmaceuticals in 2017 andplayed a key role in the buildout of the U.S. operations and commercial readiness for the company. While Chief Financial Officer, Mr. Giacobello was instrumental in devising the financing strategy to support the development, approval and highly successful launch of GWs lead product, EPIDIOLEX, which had sales of over $296 million in its first full year of commercialization. Mr. Giacobello also raised over $620 million via follow-on offerings prior to the companys acquisition by Jazz Pharmaceuticals.

-- Also in October, the Company presented at a medical conference and announced the publication of its registrational study of FYARRO (ABI-009) in a major medical journal:Lead researchers at Aadi presented a poster at theVirtual International Conference on Molecular Targets and Cancer Therapeuticsheld fromOctober 7th-10th. The poster consisted of preclinical data evaluatingnab-sirolimus (ABI-009) inPTEN-deleted andTSC2-deleted cancer models and demonstrated that ABI-009 showed significantly higher tumor accumulation, increased inhibition of downstream mTOR targets S6 and 4EBP1 and greater tumor growth suppression in comparison with other mTOR inhibitors sirolimus and everolimus at equal dose. The Company also announced the publication of nab-Sirolimus for Patients With Malignant Perivascular Epithelioid Cell Tumors in the American Society of Clinical Oncologys Journal of Clinical Oncology based on the results of the AMPECT registrational trial. The authors concluded that investigational nab-sirolimus (ABI-009), if approved, may represent an important new treatment option in malignant PEComa, a rare cancer and aggressive form of sarcoma, with no currently approved treatment.

Third Quarter 2021 Financial Highlights

As ofSeptember 30, 2021, cash and cash equivalents totaled$161.4 million, an increase from $4.5 million as of December 31, 2020, resulting primarily from the consolidated capital and proceeds received from the PIPE financing. Based on our current plans, we expect cash and cash equivalents to fund operations into 2024.

For the three months endedSeptember 30, 2021, operating expenses totaled$87.3 million, an increase of $84.4 million compared to$2.9 millionfor the same period in 2020. For the nine months ended September 30, 2021, operating expenses totaled $95.4 million, an increase of $84.0 million compared to $11.4 million for the same period in 2020. The increase in operating expenses for the three- and nine-month periods ended September 30, 2021, is due primarily to a non-cash impairment charge related to an acquired contract intangible asset of $74.2 million incurred in conjunction with the merger compared to the same period in 2020.

Research and development expenses for the three months endedSeptember 30, 2021, increased approximately$3.4 million, to$5.8 millioncompared to$2.4 millionfor the same period in 2020. Research and development expenses for the nine months endedSeptember 30, 2021, increased approximately$2.7 million, to$12.4 millioncompared to$9.7 millionfor the same period in 2020. This increase was primarily the result of increased expenses associated with our clinical drug manufacturing process in the three and nine-month periods ended September 30, 2021, compared to the same periods in 2020.

General and administrative expenses for the three months endedSeptember 30, 2021,increased approximately$6.9 million to$7.4 millioncompared to $0.5 million for the same period in 2020. General and administrative expenses for the nine months endedSeptember 30, 2021,increased approximately$7.1 million, to$8.8 millionfrom$1.7 million, in the nine months ended September 30, 2020. This increase was primarily the result of increased personnel expenses, including approximately $2.0 million of compensation expense related to former Aerpio executives as a result of the merger.

Net loss attributable to common stockholders for the three and nine months endedSeptember 30, 2021,was$87.2 million and $94.7 million, respectively, primarily driven by the non-cash impairment charge of $74.2 million discussed above.

About Aadi Bioscience and FYARRO

Aadi is a clinical-stage biopharmaceutical company developing precision therapies for genetically-defined cancers. Aadis primary goal is to bring transformational therapies to cancer patients with mTOR pathway driver alterations such as alterations in TSC1orTSC2genes, where other mTOR inhibitors have not or cannot be effectively exploited due to problems of pharmacology, effective drug delivery, safety, or effective targeting to the disease site. Aadis lead product candidate is FYARROTM(sirolimus albumin-bound nanoparticles for injectable suspension;nab-sirolimus; ABI-009), an mTOR inhibitor bound to human albumin that has demonstrated significantly higher tumor accumulation, greater mTOR target suppression, and increased tumor growth inhibition over other mTOR inhibitors in preclinical models.

Aadis registration trial of FYARRO in advanced malignant PEComa (the AMPECT trial) demonstrated meaningful clinical efficacy in malignant PEComa, a type of cancer with the highest known alteration rate ofTSC1orTSC2genes. FYARRO has received Breakthrough Therapy, Fast-Track and Orphan Designations from the U.S. Food and Drug Administration (FDA). A rolling New Drug Application (NDA) submission was completed in May 2021 for this indication and the FDA accepted the NDA in July 2021 and granted Aadi Priority Review status with a Prescription Drug User Fee Act (PDUFA) target action date of November 26, 2021.

Based on the AMPECT trial and emerging data for FYARRO in other solid tumors withTSC1orTSC2inactivating alterations, and following discussions with the FDA, Aadi plans to initiate a tumor-agnostic registrational trial in mTOR inhibitor-nave solid tumors harboringTSC1orTSC2inactivating alterations by the end of 2021 or early 2022. Aadi also has ongoing studies to evaluate dosing of FYARRO in combination regimens. FYARRO is an investigational drug that has not been approved by the FDA for commercial distribution in the United States. More information is available on the Aadi website atwww.aadibio.com.

Forward-Looking Statements

Aadi Bioscience, Inc. (Aadi, The Company) cautions you that certain statements included in this press release that are not a description of historical facts are forward-looking statements. These statements are based on Aadis current beliefs and expectations. Forward-looking statements include statements regarding: FYARRO, including expectations regarding the clinical responses and safety profile, regulatory approval and commercialization, and the timing of additional clinical trials, including the registrational trial in patients harboring TSC1 and TSC2 inactivating alterations whose initiation is expected by the end of 2021 or early 2022; and the expectation that Aadis cash and cash equivalents will last into 2024. Actual results could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation: risks related to Aadis ability to obtain, or the timeline to obtain, regulatory approval from the FDA and other regulatory authorities for FYARRO in advanced malignant PEComa; risks related to Aadis ability to successfully commercialize, including the timing of a commercial launch of FYARRO in advanced malignant PEComa; uncertainties associated with the clinical development and regulatory approval of FYARRO, including potential delays in the commencement, enrollment and completion of clinical trials; the risk that interim results of clinical trials may not be reproduced and do not necessarily predict final results; the risk that one or more of the clinical outcomes may materially change as patient enrollment continues, following more comprehensive reviews of the data, and as more patient data become available; the risk that unforeseen adverse reactions or side effects may occur in the course of developing and testing FYARRO; risks associated with the failure to realize any value from FYARRO in light of inherent risks and difficulties involved in successfully bringing product candidates to market; risks related to Aadis estimates regarding future expenses, capital requirements and need for additional financing; and risks related to the impact of the COVID-19 outbreak on Aadis operations, the biotechnology industry and the economy generally.

Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption "Risk Factors" and elsewhere in Aadis reports and other documents that Aadi has filed, or will file, with the SEC from time to time and available atwww.sec.gov.

All forward-looking statements in this press release are current only as of the date hereof and, except as required by applicable law, Aadi undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

FYARRO is a trademark ofAadi Bioscience, Inc.

Contacts

Investors:Irina KofflerLifeSci Advisors LLCikoffler@lifesciadvisors.com

AADI BIOSCIENCE, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) September 30, December 31, 2021 2020 Assets Current assets: Cash and cash equivalents $ 161,375 $ 4,455 Accounts receivable - 14,149 Prepaid expenses and other current assets 643 81 Total current assets 162,018 18,685 Property and equipment, net 14 21 Operating lease right-of-use assets 597 119 Intangible asset, net 3,880 - Other assets 2,263 - Total assets $ 168,772 $ 18,825 Liabilities and shareholders' equity (deficit) Current liabilities: Accounts payable $ 5,205 $ 2,392 Accrued liabilities 6,250 4,099 Payable to related party 22 14,314 Convertible related party promissory notes - 9,029 payable at fair valueOperating lease liabilities, current portion 90 125 Other current liabilities - 99 Total current liabilities 11,567 30,058 Convertible promissory notes payable at fair - 1,102 valuePayable to related party 5,757 - Operating lease liabilities, net of current 523 - portionOther liabilities - 97 Total liabilities 17,847 31,257 Stockholders' equity (deficit): Series A preferred stock - 1 Common stock 2 1 Additional paid-in capital 277,618 20,161 Accumulated deficit (126,695 ) (32,595 )Total stockholders' equity (deficit) 150,925 (12,432 )Total liabilities and stockholders' equity $ 168,772 $ 18,825 (deficit)

AADI BIOSCIENCE, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except shares and earnings per share amounts) Three months ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Grant revenue $ - $ 231 $ 120 $ 431 Operating expenses:Research and 5,754 2,395 12,443 9,684 developmentGeneral and 7,401 499 8,793 1,700 administrativeImpairment ofintangible 74,156 - 74,156 - assetTotaloperating 87,311 2,894 95,392 11,384 expensesLoss from (87,311 ) (2,663 ) (95,272 ) (10,953 )operationsOther income (expense)Change in fairvalue ofconvertible 380 - 1,585 - promissorynoteGain uponextinguishment - - 196 - of debtInterest - 1 1 41 incomeInterest (157 ) (229 ) (608 ) (585 )expenseTotal otherincome 223 (228 ) 1,174 (544 )(expense), netLoss before (87,088 ) (2,891 ) (94,098 ) (11,497 )income taxesIncome tax - (1 ) (2 ) (1 )expenseNet andcomprehensive (87,088 ) (2,892 ) (94,100 ) (11,498 )lossCumulativedividends onconvertible (154 ) (247 ) (647 ) (740 )preferredstockNet andcomprehensiveloss $ (87,242 ) $ (3,139 ) $ (94,747 ) $ (12,238 )attributableto commonstockholdersNet andcomprehensiveloss per shareattributable $ (9.17 ) $ (1.23 ) $ (19.37 ) $ (4.81 )to commonstockholders,basic anddiluted Weightedaverage numberof commonsharesoutstandingused incomputing netand 9,510,379 2,542,358 4,890,556 2,542,358 comprehensiveloss per shareattributableto commonstockholders,basic anddiluted