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Aerpio Pharmaceuticals(AADI) - 2021 Q4 - Annual Report
AADIAerpio Pharmaceuticals(AADI)2022-03-16 16:00

Financial Performance - For the fiscal year ended December 31, 2021, Aadi Bioscience recorded revenue of 1.1millionandanetlossof1.1 million and a net loss of 110.1 million[283]. - Total revenue for the year ended December 31, 2021, was 1.1million,adecreaseof92.31.1 million, a decrease of 92.3% compared to 14.6 million in 2020[305]. - The net loss for the year ended December 31, 2021, was 110.1million,comparedtoanetlossof110.1 million, compared to a net loss of 3.5 million in 2020[313]. - Cash used in operating activities for the year ended December 31, 2021, was 22.4million,anincreasefrom22.4 million, an increase from 12.7 million in 2020[314]. - The net and comprehensive loss for 2021 was 110,090,000,comparedtoalossof110,090,000, compared to a loss of 3,478,000 in 2020, reflecting an increase in loss of approximately 3061.5%[347]. - The net loss per share attributable to common stockholders for 2021 was (12.41),asignificantincreasefrom(12.41), a significant increase from (1.76) in 2020[347]. Revenue Sources - The company recognized 14.0millioninrevenuefromtheEOCLicenseAgreementinDecember2020,withpotentialadditionalpaymentsofupto14.0 million in revenue from the EOC License Agreement in December 2020, with potential additional payments of up to 257.0 million upon achieving certain milestones[296]. - License revenue for the year ended December 31, 2021, was 1.0million,asignificantdecreasefrom1.0 million, a significant decrease from 14.0 million in 2020, attributed to the timing of FDA approval milestones[306]. - The company recognized 1.0millioninlicenserevenuefromEOCforachievingtheFDAapprovalmilestoneonNovember22,2021[363].−Thecompanyiseligibleforanadditional1.0 million in license revenue from EOC for achieving the FDA approval milestone on November 22, 2021[363]. - The company is eligible for an additional 257.0 million in milestone and royalty payments upon achieving specific development, regulatory, and sales milestones[421]. Expenses and Liabilities - Research and development expenses increased to 19.7millionin2021,up31.319.7 million in 2021, up 31.3% from 15.0 million in 2020, primarily due to increased clinical drug manufacturing costs and external clinical development expenses[309]. - General and administrative expenses rose significantly to 18.5millionin2021,anincreaseof777.418.5 million in 2021, an increase of 777.4% compared to 2.1 million in 2020, driven by increased headcount and costs associated with being a public company[309]. - Total operating expenses for 2021 were 112.34million,upfrom112.34 million, up from 17.13 million in 2020, primarily due to a 74.16millionimpairmentofacquiredcontractintangibleassets[347].−Totalliabilitiesdecreasedfrom74.16 million impairment of acquired contract intangible assets[347]. - Total liabilities decreased from 31.3 million in 2020 to 21.5millionin2021,withcurrentliabilitiesdroppingfrom21.5 million in 2021, with current liabilities dropping from 30.1 million to 15.3million[344].CashandLiquidity−AsofDecember31,2021,AadiBiosciencehadcashandcashequivalentsof15.3 million[344]. Cash and Liquidity - As of December 31, 2021, Aadi Bioscience had cash and cash equivalents of 149.0 million, which are expected to support operations into 2024[292]. - Cash and cash equivalents at the end of 2021 were 148,989,000,upfrom148,989,000, up from 4,455,000 at the end of 2020, marking an increase of approximately 3341.5%[353]. - The company raised 155millionfromPIPEinvestors,resultinginnetproceedsof155 million from PIPE investors, resulting in net proceeds of 145.4 million after deducting expenses[356]. - Cash acquired in connection with the merger was 29,700,000,contributingpositivelytothecashflow[353].MergerandCorporateStructure−ThemergerwithAerpioPharmaceuticalswascompletedonAugust26,2021,withareversestocksplitof15:1occurringpriortothemerger[356].−Thecompanyaccountedforthemergerasareverseassetacquisition,resultinginnogoodwillrecognizedonthebalancesheet[322].−Atotalof5,776,660sharesofcommonstockwereissuedtoholdersofPrivateAadicommonstockattheclosingofthemerger[356].−TheCompanyenteredintoaContingentValueRightsAgreement,allowingCVRHolderstoreceiverightstocertainnetproceedsfromalicenseagreementwithGossamerBio,Inc.[356].ImpairmentsandValuation−AadiBioscienceincurredanon−cashimpairmentchargeof29,700,000, contributing positively to the cash flow[353]. Merger and Corporate Structure - The merger with Aerpio Pharmaceuticals was completed on August 26, 2021, with a reverse stock split of 15:1 occurring prior to the merger[356]. - The company accounted for the merger as a reverse asset acquisition, resulting in no goodwill recognized on the balance sheet[322]. - A total of 5,776,660 shares of common stock were issued to holders of Private Aadi common stock at the closing of the merger[356]. - The Company entered into a Contingent Value Rights Agreement, allowing CVR Holders to receive rights to certain net proceeds from a license agreement with Gossamer Bio, Inc.[356]. Impairments and Valuation - Aadi Bioscience incurred a non-cash impairment charge of 74.2 million in 2021 to adjust the carrying amount of a contract intangible asset to its estimated fair value of 3.9million[291].−Thecompanyrecognizedanimpairmentof3.9 million[291]. - The company recognized an impairment of 74.2 million on the acquired contract intangible asset, adjusting its carrying amount to an estimated fair value of 3.9million[322].−TheestimatedfairvalueoftotalconsiderationgivenintheMergerwas3.9 million[322]. - The estimated fair value of total consideration given in the Merger was 110.4 million, based on 3,208,718 shares of common stock at a fair value of 33.00pershare[408].ResearchandDevelopmentFocus−Aadi′sleaddrugproduct,FYARRO,isfocusedonprecisiontherapiesfordiseasesdrivenbythemTORpathwayactivation[355].−Thecompanyexpectsresearchanddevelopmentcoststoincreasein2022duetoanticipatedexpensesrelatedtothePRECISION1trial[291].−ResearchanddevelopmentexpensesfortheyearendedDecember31,2021,amountedto33.00 per share[408]. Research and Development Focus - Aadi's lead drug product, FYARRO, is focused on precision therapies for diseases driven by the mTOR pathway activation[355]. - The company expects research and development costs to increase in 2022 due to anticipated expenses related to the PRECISION 1 trial[291]. - Research and development expenses for the year ended December 31, 2021, amounted to 657,000, while general and administrative expenses were 1.449million,totaling1.449 million, totaling 2.106 million[330]. Stock and Equity - The company issued and sold 11,852,862 shares of common stock to PIPE Investors for total gross proceeds of 155millionduringthemerger[286].−Theweightedaveragenumberofcommonsharesoutstandingincreasedto8,923,369in2021from2,542,358in2020,reflectingtheimpactofstockissuances[347].−TheCompanyhasatotaloperatingleaseliabilityof155 million during the merger[286]. - The weighted average number of common shares outstanding increased to 8,923,369 in 2021 from 2,542,358 in 2020, reflecting the impact of stock issuances[347]. - The Company has a total operating lease liability of 605,000 as of December 31, 2021, up from 125,000in2020[417].TaxandRegulatoryMatters−ThecompanydidnotrecordacurrentordeferredincometaxexpensefortheyearsendedDecember31,2021,and2020,duetonetandcomprehensivelosses[444].−TheCompanyhasaccruedexpensesof125,000 in 2020[417]. Tax and Regulatory Matters - The company did not record a current or deferred income tax expense for the years ended December 31, 2021, and 2020, due to net and comprehensive losses[444]. - The Company has accrued expenses of 4.8 million and 3.3millionforclinicalandcontractmanufacturingvendorsasofDecember31,2021and2020,respectively[452].−Thebalanceofgrossunrecognizedtaxbenefitsincreasedfrom3.3 million for clinical and contract manufacturing vendors as of December 31, 2021 and 2020, respectively[452]. - The balance of gross unrecognized tax benefits increased from 2.4 million in 2020 to $2.7 million in 2021[448].