Executive Summary / Key Takeaways

• Akari Therapeutics has undergone a significant strategic transformation, pivoting from its legacy complement-focused programs to become an oncology company centered on a novel Antibody-Drug Conjugate (ADC) platform acquired through the Peak Bio merger.
• The core of Akari's new strategy is its differentiated ADC technology, featuring novel payloads like PH1 designed to not only kill cancer cells but also stimulate an immune response, potentially overcoming limitations of traditional ADC payloads.
• The lead preclinical candidate, AKTX-101, targets Trop2 and has shown promising preclinical data, including significant activity and prolonged survival compared to ADCs with traditional payloads, suggesting potential for a best-in-class profile.
• Financially, Akari faces significant challenges, operating at a loss with an accumulated deficit of $251 million as of March 31, 2025, and a cash runway extending only into September 2025 with recent funding, necessitating substantial additional capital raises.
• The investment thesis hinges on the successful preclinical and clinical advancement of the novel ADC pipeline and the ability to secure necessary financing and strategic partnerships amidst intense competition in the growing ADC market.

A Strategic Metamorphosis: Akari's High-Stakes Pivot to Oncology

Akari Therapeutics, Plc has embarked on a dramatic strategic shift, transforming from a company primarily focused on complement-mediated diseases to one squarely aimed at the burgeoning field of oncology through next-generation Antibody-Drug Conjugates (ADCs). This pivot, catalyzed by the business combination with Peak Bio in November 2024, represents a high-stakes endeavor to leverage a differentiated technological platform in a competitive, high-value market. The company's history, marked by research and development efforts and capital raising, saw an earlier focus on programs like nomacopan for conditions such as PNH and HSCT-TMA. While these programs showed promise, including positive Phase 2 data for Coversin (nomacopan) in PNH in early 2018, the strategic review in May 2024 led to the suspension of internal development for nomacopan and PAS-nomacopan, alongside a significant workforce reduction. This restructuring paved the way for the acquisition of Peak Bio's assets, fundamentally redefining Akari's mission.

The new Akari is built around the acquired ADC technology platform, featuring novel payloads and linker technologies. The company's stated goal is to establish a pipeline of ADC candidates designed to target and kill cancer cells while simultaneously stimulating the immune system, aiming to overcome limitations inherent in existing ADC therapies. Legacy programs and the acquired PHP-303 program are now earmarked for potential external partnership, underscoring the complete internal focus on the ADC pipeline. This strategic redirection positions Akari in direct competition with established pharmaceutical giants and innovative biotechs vying for market share in the rapidly evolving oncology landscape.

The Technological Edge: Novel Payloads in the ADC Arms Race

At the heart of Akari's new identity is its differentiated ADC discovery and development platform, particularly its focus on novel payloads. The lead payload, PH1, is described as a spliceosome inhibitor designed to disrupt RNA splicing within cancer cells. This mechanism is intended to induce tumor-specific cell death and, critically, generate immunostimulatory effects that activate immune cells. This approach contrasts with the majority of currently approved ADCs and those in late-stage development, which predominantly rely on traditional payloads like microtubule inhibitors or DNA-damaging agents such as topoisomerase I inhibitors.

Akari highlights several potential advantages of its novel payload approach. Preclinical studies with the lead candidate, AKTX-101, a Trop2-targeting ADC utilizing the PH1 payload, have reportedly shown significant tumor-killing activity and robust activation of the immune system. The company claims AKTX-101 has demonstrated significant activity and prolonged survival relative to ADCs with traditional payloads in preclinical models. Furthermore, AKTX-101 has shown prolonged survival both as a single agent and in combination with checkpoint inhibitors in preclinical settings, suggesting potential for synergistic efficacy. The platform also includes other payloads like PH5 (inhibiting DNA mismatch repair and DNA damage response to generate neoepitopes) and PH6 (inhibiting DNA transcription). The development of a novel bispecific ADC (AKTX-102) utilizing PH1 further illustrates the platform's versatility.

For investors, this technological differentiation represents Akari's primary potential competitive moat. If the preclinical advantages translate into clinical success, the novel payload mechanism could offer improved efficacy, reduced resistance, and potentially better tolerability compared to existing ADCs. This could support a best-in-class profile for candidates like AKTX-101 and potentially command premium pricing or capture significant market share in targeted solid tumors such as lung, breast, colon, and prostate cancers where Trop2 is expressed. Bolstering this potential, Akari has been actively strengthening its intellectual property estate for the PH1 payload and related technology, securing patent grants in key territories like the US, China, Israel, and most recently, India.

Pipeline Focus and Operational Realities

Akari's pipeline is now spearheaded by the preclinical AKTX-101 program. The company is investing in additional ADC-related preclinical research and discovery activities, indicating a commitment to building out the pipeline based on its novel payload platform. The strategic decision to seek external partners for the legacy nomacopan and PAS-nomacopan programs, as well as the acquired PHP-303 program, underscores the focused allocation of internal resources towards the ADC platform.

Recent operational changes reflect this strategic shift. The appointment of Abizer Gaslightwala as President and CEO, effective April 21, 2025, brings leadership with extensive experience in oncology development and commercialization from companies like Jazz Pharmaceuticals (JAZZ), Amgen (AMGN), Pfizer (PFE), and Johnson & Johnson (JNJ). This is complemented by the appointment of Mark F. Kubik as Head of Business Development - Oncology, specifically tasked with leading collaboration and partnership activities for the ADC platform and AKTX-101, with a focus on generating non-dilutive capital. These leadership changes signal a clear intent to advance the ADC pipeline and explore strategic alliances.

Financially, Akari's recent performance reflects the costs associated with its R&D activities and the impact of the merger and restructuring. For the three months ended March 31, 2025, the company reported a net loss of $3.71 million, an improvement from the $5.57 million net loss in the same period of 2024. The loss from operations decreased by 41% to $3.53 million, primarily driven by a 64% reduction in research and development expenses (down $1.47 million to $0.81 million) following the suspension of the HSCT-TMA program, and a 27% decrease in general and administrative expenses (down $1.00 million to $2.71 million) due to lower merger-related legal and professional fees and reduced insurance costs.

However, the company's financial position remains precarious. As of March 31, 2025, Akari held cash of $2.58 million and had an accumulated deficit of $251 million. The management explicitly states that this cash balance is not sufficient to fund operations for the one-year period after the financial statements were issued (May 14, 2025), raising substantial doubt about the company's ability to continue as a going concern. While the company received an additional $4.0 million in cash proceeds from the March 2025 private placement in April 2025, extending the cash runway into September 2025, this is a short timeframe given the capital-intensive nature of preclinical and clinical development. The company assumed approximately $1.6 million in principal payments related to convertible notes and notes payable from the Peak Bio merger as of March 31, 2025, adding to its obligations. Potential future payments under the Bayer (BAYRY) Acquisition Agreement for PHP-303, including development and regulatory milestones up to $23.5 million and high single-digit royalties, represent additional contingent liabilities, although no expenses have been incurred under this agreement to date.

Competitive Landscape and Financial Standing

The ADC market is highly competitive, featuring large pharmaceutical companies and numerous biotechnology firms. Akari's direct competitors include companies with approved ADCs or those developing next-generation approaches. Established players like AstraZeneca (AZN), through its Alexion subsidiary, dominate the complement inhibition space with products like Soliris and Ultomiris, and also have significant oncology portfolios. Apellis Pharmaceuticals (APLS) has gained market share in complement inhibition with pegcetacoplan. Regeneron Pharmaceuticals (REGN) is another major player in immunology and oncology biologics.

While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Akari's current market presence is negligible as a preclinical-stage company. In contrast, companies like APLS reported significant revenue growth (around 150% in 2024) and improving profitability (positive operating margins), while large cap players like AZN and REGN exhibit robust revenue growth (7-20%) and strong profitability (operating margins of 30-40%). Akari's financial metrics, including zero revenue, negative margins, and negative cash flow, starkly contrast with these established competitors. Akari's TTM Gross Profit Margin, Operating Profit Margin, Net Profit Margin, and EBITDA Margin are all 0.00%, reflecting its pre-revenue status, while competitors boast high gross margins (80-90%) and significant positive operating and net margins. Akari's Debt/Equity ratio of 0.08 is relatively low, but this is less meaningful given its limited assets and significant accumulated deficit compared to competitors with established revenue streams and access to diverse financing.

Akari's competitive strategy hinges on its technological differentiation – the novel payload platform. The company believes its payloads can offer advantages over the traditional payloads used by many competitors. However, translating this preclinical promise into clinical success and commercial viability requires substantial funding and flawless execution, areas where larger, better-capitalized competitors like AZN and REGN, and even more advanced biotechs like APLS, hold significant advantages in terms of scale, resources, and established infrastructure. Akari's identified material weaknesses in internal control over financial reporting as of December 31, 2024, with remediation efforts not yet commenced as of March 31, 2025, also highlight operational challenges that could impact execution speed and efficiency compared to more mature competitors.

The company's ability to compete will depend on demonstrating clear clinical superiority or differentiation for its ADC candidates, securing the necessary capital to fund lengthy and expensive clinical trials, and successfully navigating the complex regulatory landscape. Strategic partnerships, which the company is actively pursuing under its new leadership, could provide crucial non-dilutive funding, access to expertise, and broader market reach, helping to mitigate some of the scale disadvantages compared to larger competitors.

Risks and Forward Outlook

The most significant risk facing Akari is its liquidity position and the substantial doubt about its ability to continue as a going concern without securing additional financing. The current cash runway into September 2025 necessitates raising significant capital in the very near term. Failure to do so would severely impact the company's ability to fund its preclinical and planned clinical development activities, potentially forcing further program delays, reductions, or even the cessation of operations. Any future equity financing would likely result in significant dilution to existing shareholders, particularly given the company's low share price and high capital needs.

Other key risks include the inherent uncertainties of preclinical and clinical development, the potential for unforeseen challenges in manufacturing, the ability to protect its intellectual property in a competitive landscape, and the intense competition from companies developing both traditional and novel cancer therapies, including other ADC approaches and alternative modalities like gene therapies. The identified material weaknesses in internal controls also pose a risk to financial reporting reliability and operational efficiency.

Despite these substantial risks, the outlook for Akari is tied to the potential of its novel ADC platform. The company expects to incur material additional costs related to the ADC program as it advances preclinical activities. The strategic focus is clear: validate the novel payload technology, advance AKTX-101 towards clinical trials, and leverage the platform to generate additional pipeline candidates, while simultaneously seeking strategic partnerships to support these efforts and potentially monetize legacy assets. The success of the March 2025 private placement, albeit providing a limited runway, demonstrates some level of investor confidence, particularly from insiders, in the new strategic direction. The appointment of experienced oncology leadership and a dedicated Head of Business Development further signals the company's commitment to executing this strategy.

Conclusion

Akari Therapeutics is undergoing a fundamental transformation, pivoting towards the high-potential, yet highly competitive, field of oncology ADCs. The investment narrative is one of significant potential upside driven by a seemingly differentiated novel payload technology that could offer advantages over existing therapies, balanced against the stark reality of the company's precarious financial position and the substantial risks inherent in preclinical and clinical development. The success of this pivot hinges entirely on the company's ability to demonstrate the clinical value of its novel ADC candidates, starting with AKTX-101, and, most critically, to secure the substantial funding required to advance these programs through regulatory approval. While the strategic focus and technological premise are compelling, the path forward is fraught with financial and execution challenges that demand close monitoring by investors. The coming months, particularly regarding financing efforts and initial preclinical data readouts for the ADC pipeline, will be crucial in determining the viability of Akari's new direction.