ALX Oncology Holdings Inc. (ALXO) is a clinical-stage biotechnology company at the forefront of developing novel therapies that harness the power of the immune system to fight cancer. The company's lead product candidate, evorpacept, is a next-generation CD47 blocker designed to overcome the limitations of previous approaches in this space. With a robust pipeline, strategic partnerships, and a seasoned management team, ALX Oncology is positioning itself as a leader in the rapidly evolving immuno-oncology landscape.
Business Overview and History
ALX Oncology was founded in 2015 with the mission of developing innovative therapies that help patients battle cancer. The company was initially incorporated in Ireland as Alexo Therapeutics Limited and later changed its name to ALX Oncology Limited in 2018. In 2020, the company was incorporated in Delaware as ALX Oncology Holdings Inc.
From its inception, ALX Oncology has focused on developing therapies that block the CD47 immune checkpoint to help patients fight cancer. The company's lead product candidate, evorpacept, is a CD47 blocker designed to have a high affinity for CD47 and avoid the limitations caused by hematologic toxicities inherent in other CD47 blocking approaches.
In July 2020, ALX Oncology successfully completed its initial public offering, raising $169.5 million in net proceeds to advance the development of evorpacept and scale up its manufacturing capabilities. The company's shares began trading on the Nasdaq Global Select Market under the ticker symbol "ALXO." In December 2020, the company raised an additional $194.9 million through a follow-on public offering.
Throughout its history, ALX Oncology has encountered several challenges in the development of evorpacept. The company has had to navigate the complexities of clinical trial design, patient enrollment, and regulatory requirements. Additionally, the company has faced the challenge of manufacturing evorpacept at commercial scale while maintaining quality and consistency.
Despite these challenges, ALX Oncology has made significant progress in the development of evorpacept. The company has conducted multiple Phase 1 and Phase 2 clinical trials evaluating evorpacept in various cancer indications, including head and neck squamous cell carcinoma, gastric/gastroesophageal junction carcinoma, urothelial cancer, and non-Hodgkin lymphoma. These trials have generated promising data, demonstrating the potential of evorpacept to enhance the efficacy of other anti-cancer agents and provide durable clinical benefits to patients.
In addition to evorpacept, ALX Oncology has expanded its portfolio through strategic partnerships and acquisitions. In 2021, the company acquired ScalmiBio, Inc., a move that strengthened its expertise in protein engineering and oncology drug development. This acquisition has enabled the company to advance a novel antibody-drug conjugate (ADC) program, ALX2004, which is expected to enter clinical trials in the first quarter of 2025.
Financial Performance
ALX Oncology's financial performance has been characteristic of a clinical-stage biotechnology company. As the company has focused its efforts on research and development, it has not yet generated any revenue from product sales. For the year ended December 31, 2024, the company reported a net loss of $134.85 million, with no revenue recorded.
The company's research and development expenses for 2024 were $116.4 million, reflecting its ongoing investment in clinical trials and pipeline development. General and administrative expenses for the same period were $26.1 million. The net loss per share for 2024 was $2.58.
In the fourth quarter of 2024, ALX Oncology reported a net loss of $29.16 million. As a clinical-stage company without commercial products, year-over-year growth metrics are not applicable.
Operating cash flow for the full year 2024 was negative $121.91 million, while free cash flow was negative $122.36 million, reflecting the company's continued investment in its research and development programs.
Liquidity
The company's cash, cash equivalents, and investments totaled $131.3 million as of December 31, 2024. This strong liquidity position has been bolstered by several successful financing activities, including a $169.5 million initial public offering in 2020, a $194.9 million follow-on offering in 2020, and a $58.9 million follow-on offering in 2023.
In October 2022, ALX Oncology entered into a $100 million secured term loan facility with Oxford Finance LLC, Oxford Finance Credit Fund II LP, and Silicon Valley Bank. As of December 31, 2024, the company had drawn $10 million under this facility, with an additional $25 million available at the lenders' sole discretion.
The company's financial ratios indicate a strong liquidity position:
- Debt-to-Equity ratio: 0.087
- Current ratio: 7.26
- Quick ratio: 7.26
These ratios suggest that ALX Oncology has a solid financial foundation to support its ongoing operations and research activities. The low debt-to-equity ratio indicates minimal leverage, while the high current and quick ratios demonstrate the company's ability to meet its short-term obligations.
The company's robust cash position, combined with its ability to raise capital, provides a solid foundation to support the ongoing development of its pipeline and pursue its strategic initiatives. However, as a clinical-stage company, ALX Oncology will continue to rely on external financing to fund its operations and research and development activities.
Pipeline and Clinical Progress
The cornerstone of ALX Oncology's pipeline is evorpacept, its lead product candidate. Evorpacept is a novel CD47 blocker that has demonstrated a favorable safety profile and promising anti-tumor activity in various clinical trials.
In the ASPEN-6 Phase 2 trial, evorpacept in combination with standard-of-care therapies (trastuzumab, ramucirumab, and paclitaxel) showed a significantly higher overall response rate (ORR) of 48.9% compared to the control arm's ORR of 24.5% in patients with previously treated HER2-positive gastric or gastroesophageal junction cancer. The median duration of response (mDOR) was also longer in the evorpacept arm at 15.7 months, compared to 9.1 months in the control arm.
These positive results were presented at the 2025 American Society of Clinical Oncology (ASCO) Gastrointestinal Cancers Symposium, highlighting evorpacept as the first CD47 blocker to demonstrate substantial tumor response and a well-tolerated safety profile in a prospective randomized trial.
Beyond the ASPEN-6 trial, evorpacept is being evaluated in several other ongoing clinical studies, including:
1. ASPEN-3 and ASPEN-4: Randomized Phase 2 trials evaluating evorpacept in combination with pembrolizumab, with or without chemotherapy, for the first-line treatment of head and neck squamous cell carcinoma.
2. ASPEN-7: A Phase 1 trial examining evorpacept in combination with the antibody-drug conjugate enfortumab vedotin for the treatment of urothelial cancer.
3. Investigator-sponsored trials: Studies exploring evorpacept in combination with other therapies, such as rituximab and lenalidomide for non-Hodgkin's lymphoma, and liposomal doxorubicin and pembrolizumab for ovarian cancer.
In addition to the clinical advancement of evorpacept, ALX Oncology has also made progress with its ADC program, ALX2004, which was recently declared a development candidate. The company plans to file an Investigational New Drug (IND) application for ALX2004 in the first quarter of 2025, paving the way for the initiation of clinical trials.
ALX Oncology has also entered into several strategic collaborations to further explore the potential of evorpacept. These include partnerships with Jazz Pharmaceuticals for HER2-expressing breast cancer and with Sanofi for relapsed/refractory multiple myeloma. These collaborations extend the reach of evorpacept into additional cancer indications and potentially accelerate its development.
The company is also advancing an early pipeline program called ALTA-2, which is a collaboration with Tallac Therapeutics to develop a novel cancer immunotherapy combining ALX Oncology's SIRPα antibody with Tallac's TLR9 agonist. This program represents the company's efforts to diversify its pipeline and explore innovative combination approaches in immuno-oncology.
Risks and Challenges
As a clinical-stage biotechnology company, ALX Oncology faces several risks and challenges inherent to the industry:
1. Clinical Development Risks: The success of evorpacept and the company's other product candidates is dependent on positive outcomes from ongoing and future clinical trials. Unfavorable results or delays in these trials could significantly impact the company's timeline and prospects.
2. Regulatory Approval Uncertainty: Even if the company's product candidates demonstrate promising results in clinical trials, there is no guarantee that they will obtain regulatory approval from the FDA or other international authorities. The approval process can be lengthy and uncertain.
3. Competitive Landscape: ALX Oncology operates in a highly competitive space, with several other companies developing CD47-targeting therapies and other immuno-oncology approaches. Maintaining a competitive edge will require continuous innovation and strategic execution.
4. Financing and Liquidity Risks: As a clinical-stage company, ALX Oncology will need to secure additional funding to support its ongoing operations and research and development activities. Failure to obtain sufficient financing could hamper the company's ability to advance its pipeline.
5. Reliance on Third-Party Manufacturers and Collaborators: The company's success is partially dependent on the performance and reliability of its third-party manufacturing partners and collaborators. Any disruptions or issues with these relationships could impact the company's operations.
Despite these risks, ALX Oncology has demonstrated its ability to navigate the challenges of the biotechnology industry. The company's experienced management team, diverse pipeline, and strong financial position provide a solid foundation for continued growth and execution of its strategic priorities.
Outlook and Conclusion
ALX Oncology is well-positioned to capitalize on the rapidly evolving immuno-oncology landscape. The promising results from the ASPEN-6 trial, which showcased evorpacept's potential to enhance outcomes for patients with HER2-positive gastric cancer, have generated significant excitement within the industry.
Moreover, the company's expanding pipeline, including the upcoming clinical development of the ADC candidate ALX2004, underscores its commitment to diversifying its portfolio and addressing unmet needs in oncology. The strategic partnerships and collaborations forged by ALX Oncology further strengthen its ability to advance its research and development efforts.
The biotechnology industry, particularly the oncology drug development segment, has seen robust growth with a compound annual growth rate (CAGR) of approximately 10-15% over the past 5 years. This trend bodes well for ALX Oncology as it continues to advance its pipeline and explore new therapeutic approaches.
As ALX Oncology continues to navigate the complexities of the biotechnology industry, the company's focus on innovation, clinical execution, and strategic capital allocation will be key to achieving its long-term objectives. With a talented management team, a robust pipeline, and a strong financial foundation, ALX Oncology is well-positioned to emerge as a leader in the field of immuno-oncology and make a meaningful impact on the lives of cancer patients.
The absence of any reported scandals, short seller reports, or CEO departures speaks to the company's stability and focus on its core mission. As ALX Oncology progresses through its clinical trials and expands its pipeline, investors and industry observers will be closely watching for continued positive results and potential breakthrough therapies in the fight against cancer.