Oruka Therapeutics, Inc.(ORKA) - 2024 Q4 - Annual Report

Financial Performance - The company generated net losses of $83.7 million from February 6, 2024 (inception) to December 31, 2024, with net cash used for operating activities amounting to$57.8 million[411]. - The company reported total operating expenses of $88.1 million for the period from February 6, 2024, to December 31, 2024, with research and development expenses accounting for$75.1 million[441]. - The company incurred a net loss of $83.7 million for the period from February 6, 2024, to December 31, 2024[441]. - Interest income for the period was$5.9 million, while interest expense related to a convertible note was $1.5 million[445]. - The company has not generated any revenue from product sales and does not expect to do so in the near future[430]. - The company anticipates needing additional financing in the future to support ongoing research and development efforts[448]. Cash and Financing - As of December 31, 2024, the company had cash, cash equivalents, and marketable securities totaling$393.7 million, expected to fund operations for at least twelve months[413]. - Net cash used in investing activities during the same period was $330.1 million, mainly attributed to purchases of marketable securities[451]. - Net cash provided by financing activities was$449.5 million, including $228.0 million from Pre-Closing Financing and$188.7 million from PIPE Financing[452]. - The company raised approximately $188.7 million in net proceeds from a PIPE Financing on September 13, 2024, selling 5,600,000 shares of common stock at$23.00 per share[429]. - The Pre-Closing Financing raised approximately $275.0 million, with transaction costs of$20.5 million recorded as a reduction to additional paid-in capital[422]. Research and Development - The lead program, ORKA-001, targets IL-23p19 for psoriasis treatment and is designed for subcutaneous injection as infrequently as once or twice a year[414][415]. - The company initiated dosing of healthy volunteers in a Phase 1 trial of ORKA-001 in Q4 2024, with interim pharmacokinetic data expected in H2 2025 and initial efficacy data in psoriasis patients anticipated in H2 2026[416]. - ORKA-002, targeting IL-17A/F, is planned to begin dosing healthy volunteers in a Phase 1 trial in Q3 2025, with initial pharmacokinetic data expected in H1 2026[417]. - Research and development expenses included $57.7 million for external research and development, primarily related to services rendered by Paragon[442]. - The company has initiated research programs focusing on antibodies targeting IL-23 and IL-17A/F as part of its collaboration with Paragon[455]. - The company recorded a total of$13.5 million in development costs related to ORKA-001 during the reporting period[459]. - The company is obligated to pay non-refundable milestone payments of up to $12.0 million under each of the ORKA-001 and ORKA-002 License Agreements upon achieving certain clinical development milestones[466]. - The company recorded a$1.5 million milestone payment related to the achievement of a development candidate for ORKA-001 and a $2.5 million milestone payment for the first dosing of a human subject in a Phase 1 trial[459]. Corporate Actions - The merger with Pre-Merger Oruka was completed on August 29, 2024, resulting in a name change from ARCA biopharma, Inc. to Oruka Therapeutics, Inc.[421]. - The merger was accounted for as a reverse recapitalization, with Pre-Merger Oruka deemed the accounting acquirer for financial reporting purposes[426]. - The company executed a 1-for-12 reverse stock split on September 3, 2024, adjusting the share data retrospectively for all periods presented[427]. - The company entered into a Cell Line License Agreement with WuXi Biologics, agreeing to pay a non-refundable license fee of$150,000 recognized as a research and development expense[468]. - The company entered into a Series A Preferred Stock and Convertible Note Purchase Agreement, issuing a Convertible Note with an initial principal amount of $25.0 million, accruing interest at 12.0$25.0 million plus unpaid accrued interest of $1.5 million[471]. Stock and Valuation - Stock options granted are measured based on estimated fair values using the Black-Scholes model, with expenses recognized over the requisite service period[477]. - The fair value of Company Common Stock is determined based on the quoted market price following the completion of the merger[478]. - Prior to the merger, common stock valuations were prepared using a hybrid method, including an option pricing method and a probability-weighted expected return method[480]. - As of December 31, 2024, the company did not have any off-balance sheet arrangements[483]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[484].