Aadi Bioscience is a biopharmaceutical company dedicated to developing and commercializing precision therapies for cancers driven by alterations in the mTOR pathway, a critical regulator of cell growth and cancer progression. The company’s lead product, FYARRO, combines nanoparticle albumin-bound (nab) technology with the potent mTOR inhibitor, sirolimus, to deliver better outcomes for patients with mTOR-dependent cancers.
Business Overview Aadi Bioscience was founded in 2011 with the goal of advancing the field of mTOR inhibition through innovative approaches. The company’s initial focus was on research and development activities, business planning, establishing and maintaining its intellectual property portfolio, and raising capital.
In 2014, Aadi Bioscience entered into a license agreement with Bristol-Myers Squibb Company for exclusive rights to certain patents and a non-exclusive license for certain technology and know-how pertaining to its lead drug product, FYARRO (nab-sirolimus). This agreement provided the company with the foundation to further develop FYARRO.
Over the next several years, Aadi Bioscience dedicated substantial resources towards the research and development of FYARRO, including conducting preclinical studies and clinical trials to demonstrate the safety and efficacy of the drug product. This was a challenging and costly process, as is common in the biopharmaceutical industry.
In 2021, Aadi Bioscience completed a business combination with Aerpio Pharmaceuticals, Inc., which provided the company with additional capital and capabilities as it worked towards regulatory approval for FYARRO. This merger was an important milestone that positioned Aadi Bioscience for its next phase of growth.
In November 2021, FYARRO received FDA approval for the treatment of adult patients with locally advanced unresectable or metastatic malignant perivascular epithelioid cell tumor (PEComa), a rare and aggressive soft tissue sarcoma. Aadi Bioscience launched FYARRO in the United States in February 2022 and has since achieved $51.1 million in cumulative sales as of the end of the third quarter of 2024. The company’s high-quality commercial execution has been exemplified by the consistent addition of new accounts ordering FYARRO, with over 200 accounts placing orders since launch and a nearly 90% reorder rate.
While the PEComa indication represents an important initial commercial opportunity, Aadi Bioscience is also exploring the broader potential of nab-sirolimus across a range of mTOR-driven cancers. The company’s most advanced clinical program is the PRECISION1 trial, a registration-intended, tumor-agnostic study evaluating nab-sirolimus in patients with solid tumors harboring TSC1 or TSC2 inactivating alterations. This trial has fully enrolled 120 patients, and Aadi Bioscience expects to report a planned interim analysis of the first 80 patients in the third quarter of 2024.
In addition to PRECISION1, Aadi Bioscience is also evaluating nab-sirolimus in two Phase 2 trials for endometrioid-type endometrial cancer (EEC) and neuroendocrine tumors (NETs). Both of these trials are progressing well, with the company anticipating initial data readouts by the end of 2024.
Financial Overview As of September 30, 2024, Aadi Bioscience reported $62.62 million in cash, cash equivalents, and short-term investments, providing a cash runway into the fourth quarter of 2025 based on the company’s current plans. During the third quarter of 2024, the company generated $7.21 million in FYARRO product sales, representing a 20.8% increase from $5.96 million in the same period of 2023. For the nine months ended September 30, 2024, net product sales reached $18.74 million, up 4.0% from $18.03 million in the prior year period.
For the full year 2023, Aadi Bioscience reported revenue of $24.35 million, with a net loss of $65.77 million. Operating cash flow for 2023 was negative $59.66 million, and free cash flow was negative $63.64 million.
In the third quarter of 2024, the company reported a net loss of $12.55 million, compared to a net loss of $18.0 million in the same period of the prior year. Operating cash flow for Q3 2024 was negative $22.75 million, with free cash flow of negative $20.48 million.
Research and development expenses continue to be a significant portion of the company’s expenditures, primarily related to the continued progress of the PRECISION1 trial and the company’s other clinical programs. Selling, general, and administrative expenses have been managed efficiently, with reductions in commercial, marketing, and personnel expenses compared to previous periods.
Liquidity Aadi Bioscience’s liquidity position remains strong, with $62.62 million in cash, cash equivalents, and short-term investments as of September 30, 2024. This provides the company with sufficient resources to fund its operations and ongoing clinical trials into the second half of 2026, based on current projections. The company’s disciplined approach to capital management and its growing revenue stream from FYARRO sales contribute to its solid financial footing.
As of September 30, 2024, Aadi Bioscience had a debt-to-equity ratio of 0, indicating that the company is debt-free. The current ratio stood at 4.89, and the quick ratio was 4.54, both demonstrating strong liquidity. These metrics underscore the company’s ability to meet its short-term obligations and fund its ongoing operations.
Competitive Landscape and Risks Aadi Bioscience operates in the highly competitive oncology market, where it faces competition from both approved therapies and product candidates in development. The company’s ability to maintain and grow its commercial success with FYARRO, as well as advance its clinical pipeline, will depend on its ability to demonstrate the clinical benefits of its products, navigate the regulatory landscape, and effectively market and distribute its offerings.
Key risks facing Aadi Bioscience include the potential failure of its clinical trials, regulatory challenges, manufacturing or supply chain disruptions, and the ability to secure adequate reimbursement for its products. Additionally, the company’s reliance on third-party manufacturers and the highly competitive nature of the oncology market pose ongoing challenges.
Outlook and Catalysts In the second half of 2024, Aadi Bioscience is poised to deliver several key milestones. The company expects to report the planned interim analysis of the PRECISION1 trial in the third quarter, which will include data from 80 patients who have been followed for a minimum of six months. This analysis will evaluate the primary endpoint of independently assessed overall response rate and could provide important insights into the potential path forward for nab-sirolimus in TSC1 and TSC2 mutated cancers.
Additionally, the company anticipates initial data readouts from its Phase 2 trials in EEC and NETs by the end of 2024, which could further demonstrate the broader applicability of nab-sirolimus in mTOR-driven cancers.
Looking ahead to 2025, Aadi Bioscience expects to complete the PRECISION1 trial and, if the data continue to be positive, plans to submit a regulatory filing with the FDA. The company also remains committed to advancing its commercial efforts for FYARRO in the PEComa indication, where it has already established a strong presence in the market.
In the fourth quarter of 2023, Aadi Bioscience provided top-line results for the planned interim evaluation of the first 40 patients enrolled in the PRECISION1 trial. For the TSC1 arm, the company reported an investigator-assessed overall response rate of 26%, which was within their expectations. The TSC2 arm showed an 11% overall response rate. The company noted that these early interim data were compelling, especially given the heavily pretreated patient population.
Despite the challenges inherent in the biopharmaceutical industry, Aadi Bioscience’s focus on unlocking the full potential of mTOR inhibition, its responsible capital management, and its near-term clinical and commercial catalysts position the company well to deliver value for shareholders in the years to come. The company’s strong financial position, with a cash runway extending into the fourth quarter of 2025, provides a solid foundation for executing its strategic initiatives and advancing its clinical pipeline.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.