Whitehawk Therapeutics - Earnings Call - Q4 2024

Executive Summary

• Q4 2024 revenue was $7.24M, essentially flat sequentially (+0.4% QoQ) and up 14.4% YoY; GAAP net loss was $18.27M and GAAP EPS was -$0.67, reflecting higher R&D and SG&A as the company pivoted to ADCs.
• The company relaunched as Whitehawk Therapeutics, in-licensed three ADC assets (PTK7, MUC16, SEZ6), and executed a $100M PIPE; cash and investments at 12/31/24 were $47.24M, with post-close cash expected to be $170–$180M and runway guided to 2028, a material extension from prior quarters.
• FYARRO Q4 sales were $7.2M; momentum in the FYARRO business continued through Q3, but management executed a strategic divestiture to Kaken, consistent with the ADC-focused transformation, pending close in 1H25.
• Guidance pivoted to ADC IND timelines: management aims to file three U.S. INDs within 15 months (HWK-007 2H25; HWK-016 by YE25), with a stated goal to reach meaningful Phase 1 data for all three programs under current funding, a key stock catalyst path for 2025–2026.
• Consensus estimates from S&P Global were unavailable for AADI; beat/miss assessment vs Street cannot be determined. We attempted to retrieve EPS and revenue consensus, but SPGI mapping for AADI was missing [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

• Transformation executed: name change to Whitehawk Therapeutics, ADC in-licensing (PTK7, MUC16, SEZ6), and $100M PIPE financing — “a transformative moment as we reintroduce ourselves as Whitehawk… swiftly advance our portfolio of promising ADC assets”.
• Cash runway materially extended: post-transactions cash guided to $170–$180M and runway into 2028, enabling INDs and Phase 1 data inflections; “we expect to have cash and cash equivalents in the range of $170–$180 million… cash will fund operations into 2028”.
• FYARRO commercial execution through Q3: net product sales of $7.2M (+17% QoQ, +21% YoY) and ~90% reorder rate; Q4 FYARRO sales were $7.24M (+14.4% YoY), sustaining revenue while executing the strategic pivot.

What Went Wrong

• Operating leverage deteriorated in Q4: SG&A rose to $11.05M and R&D to $14.35M, driving a wider net loss of $18.27M and EPS -$0.67, vs Q3 net loss $12.55M; increased costs reflect ADC in-process R&D and legal/consulting expenses.
• Clinical program shifts and wind-down: PRECISION1 was wound down, with patients transitioned to expanded access; while strategic, it removes a nearer-term data catalyst from legacy programs.
• Estimates visibility lacking: S&P Global consensus mapping for AADI was unavailable, limiting ability to benchmark results vs Street and complicating external expectations tracking [GetEstimates error].

Transcript

Speaker 2

Ladies and gentlemen, thank you for standing by. Welcome to Whitehawk Therapeutics' fourth quarter and full year 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Audrey Gross, Head of Corporate Communications for Whitehawk Therapeutics. Ms. Gross, please go ahead.

Speaker 1

Thank you. Good morning and welcome to the Whitehawk Therapeutics conference call. We will be presenting slides as part of a live webcast of this call. Such slides will be posted on the investor news page of the Whitehawk Therapeutics website at whitehawktx.com following the conference call. A reminder that statements made on the call today will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors, including those set forth in the risk factor section of our annual and quarterly filings with the Securities and Exchange Commission, which can be found at www.sec.gov or on our website at whitehawktx.com.

In addition, any forward-looking statements made on this call represent our views only as of today, March 19th, 2025, and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. On the call today is Dr. Dave Lennon, our President and CEO, Scott Jacobello, our CFO, and Dr. David Dornan, our newly appointed CSO. Today, we will introduce Whitehawk Therapeutics and provide an overview of Q4 and full year 2024 financial results before turning the line open for questions. I'll now turn the call over to Dave. Dave?

Speaker 0

Thanks, Audrey. Hello, everyone. Good morning. Thank you for joining. I'm Dave Lennon, the President and CEO of the newly launched Whitehawk Therapeutics. We are extremely excited about the transformation from Aadi Bioscience to Whitehawk. I look forward to walking you through our vision, strategy, and opportunity, and the opportunity we have to deliver a meaningful impact for patients with our advanced ADC portfolio. As a reminder, in December, we announced a series of strategic transactions, including the in-licensing of three ADCs from WuXi Biologics, the divestiture of FYARRO to Kaken Pharmaceuticals, and a $100 million PIPE financing that were subsequently approved during a special meeting of stockholders last month. As a next step in our evolution, Aadi Bioscience is now divided into two organizations. Upon the divestiture of Aadi's subsidiary to Kaken, Kaken will assume ownership of the Aadi name, trademark, and the FYARRO business.

Today, Aadi parent company relaunches as Whitehawk Therapeutics, formalizing our transition into an ADC-focused company. While we remain rooted in our legacy, that is, to make bold choices in applying technology to deliver improved precision oncology therapies, Whitehawk carries several important distinctions. As Aadi, we were focused on mTOR inhibition in rare cancer settings and were built on the foundation of a single commercial product. Conversely, Whitehawk is focused on rapidly progressing a multi-asset portfolio of advanced ADC therapies, all with the broad potential to make a meaningful difference in a large number of different cancer populations. Turning to slide six, as Whitehawk, we developed a framework that establishes a clear value proposition and investment thesis as an ADC company. Firstly, we are building on the foundation of established tumor biology. We are deliberate in identifying promising tumor targets that are both clinically validated and broadly overexpressed.

By leveraging clinical validation, we know we have druggable tumor targets. And because these targets are broadly overexpressed, we can apply them to high-potential cancer indications with significant patient populations and unmet needs. While first-generation ADCs offered significant advances for patients, we know they were hindered by limitations largely driven by lack of therapeutic index. To overcome these challenges, we are applying an advanced ADC platform technology that is engineered for minimal off-target toxicity, greater stability, and higher therapeutic index compared to first-generation predecessors. Lastly, we are hyper-focused on speed and efficiency to major data inflections. We are rapidly advancing our portfolio to the clinic with INDs for all three candidates anticipated in the next 15 months. So what are these candidates? Looking at slide seven, our portfolio consists of three assets focused on validated tumor targets. HOC007 targets protein tyrosine kinase 7, or PTK7.

PTK7 is an oncofetal pseudokinase that drives early embryonic development. Subsequently, it is minimally expressed in adult tissues but becomes highly overexpressed in a broad range of tumors as they arise. There are no approved PTK7 ADCs, though it is becoming a popular target for research given its broad and deep overexpression in multiple cancers. HOC016 is the only known ADC that targets the membrane-bound portion of MUC16, a glycoprotein with a low level of expression in normal adult tissues but often overexpressed and even shed from tumors of female origin, including ovarian, cervical, and endometrial cancers. Shed MUC16, better known as CA125, is a biomarker for cancer screening and disease monitoring, especially in ovarian cancer. MUC16 is a widely utilized and clinically validated target for ovarian cancer and was previously studied as an ADC target by Genentech, who had two different ADCs against MUC16.

We have HOC206, which is designed to address the neuronal target seizure protein 6, or SEZ6. SEZ6 is a CNS-limited protein overexpressed in tumors of neuroendocrine origin. The most prominent example includes small cell lung cancer. Small cell lung cancer is an aggressive high-grade neuroendocrine carcinoma for which limited targeted treatment options exist and class competition is limited. To our knowledge, AbbVie is the only SEZ6 ADC currently in development. Underlying each of these programs is the advanced ADC technology platform developed by Hangzhou DAC, known as CPT113. This advanced ADC architecture is based on the novel Topo 1 payload and a highly stable linker chemistry. Though not part of this portfolio, it is important to note that Hangzhou DAC has two internally developed programs utilizing the exact same platform, DXC006 and DXC1002. These have had successful INDs and are currently in dose-escalating phase one clinical trials in China.

Turning to slide eight, as you can see, we're working toward rapidly filing INDs with a plan to submit all three INDs in 15 months, as I said. To reiterate, these assets are designed to target proteins that are broadly expressed across multiple tumor types with significant unmet needs. This slide highlights the cancer indications where these targets have established clinical data from previous ADCs and also shows the numerous expansion opportunities showcasing the substantial market potential of the entire portfolio. Starting with HOC007, this candidate represents a different opportunity, or sorry, differentiated opportunity to potentially be among the first wave ADCs in clinical development for high-expressing PTK7 cancers. HOC007 is currently being evaluated in IND enabling studies. The phase one trial is planned for non-small cell lung cancer and platinum-resistant ovarian cancer with the potential to expand into novel indications, including the full range of gastrointestinal and gynecological cancers.

HOC016, targeting membrane-bound MUC16, is currently being evaluated in IND enabling studies. The phase I trial is planned in ovarian cancer with the potential to expand in additional indications such as endometrial, cervical, and pancreatic cancers. HOC206, targeting SEZ6, is currently in candidate selection. The phase I trial is planned in small cell lung cancer and neuroendocrine neoplasias where there are limited treatment options today. Turning now to more detail on the platform on slide nine, first-generation ADCs were challenged by the high-free payload release in circulation, limiting their therapeutic window as high-free payload can generate significant off-target side effects. Advanced ADC platforms that are in development today, including the CPT113 platform we utilize across our portfolio, are improving on the limitations of first-generation platforms by engineering three critical components. One, payload. We use a proprietary Topo 1 inhibitor payload that minimizes off-target effects and supports higher therapeutic index.

Two, linker design. We use a highly stable, cleavable linker that supports low-free payload release in circulation. Three, pharmacokinetics profile. The ability to support higher DAR with an enhanced PK profile enables optimal dosing. The right-hand side of this slide highlights the generalized concept of therapeutic index improvements that you can expect by implementing an advanced ADC platform as compared to first-generation ADCs. With advanced ADC platforms, we're expanding the lower bound of the minimally effective dose with more potent targeting and increasing the upper bound of the maximally tolerated dose with optimized payloads. We thereby are increasing the potential dose intensity for which we can treat patients and improve efficacy. To further illustrate this point, let's turn to the next slide. On slide 10, you can see that we are looking at examples of how a switch from first-generation ADC platform delivers substantial efficacy gains in real-world examples.

I won't go through all of these, but as you can see, agnostic to target or indication, switching from an older platform to an advanced ADC technology platform generated notable objective response rate gains ranging from 16-45 ORR point improvements. On average, we see a 30-point improvement in the typical switch. This is alongside coinciding with notable improvements in durability of response. Advanced ADC platforms have the potential to disrupt the standard of care for treatment options today and have demonstrated the ability to help many more patients by increasing response rates and time on therapy. Now, if we move to slide 11, we can apply this example to our own portfolio, starting with PTK7 and share why specifically we're so excited about the potential of our assets.

We want to start with the fact that PTK7 has precedented data from Pfizer's first-generation MME-based ADC, COVID-2Zomab paludatin. Response rates seen in phase one trials were across a range of tumor types tested, including ovarian, lung, which are shown here. Response rates were particularly robust in moderate and high-expressing groups with ORR up to 46%. Despite these encouraging signals, COVID-P was limited by the reduced dose intensity and neurotherapeutic index driven by toxicities consistent with class effects from the first-generation payload MME. What happens if we apply an advanced ADC platform to this validated tumor target? On slide 12, what these graphs represent is first, placement of the phase one COVID-P data in the context of currently approved late-stage ADC benchmarks for efficacy in lung and ovarian cancer. HOC007 is a PTK7 switch to an advanced platform.

Therefore, if we extrapolate from prior examples, we may expect to generate efficacy gains of 15-30 percentage points more in objective response rate over COVID-P. This level of improvement will be disruptive to first-generation ADC standard of care in lung and ovarian cancer. In both indications, we believe they have the opportunity to significantly surpass the established ADC efficacy bar, representing a meaningful clinical benefit to patients. This is just the example for HOC007 and PTK7. We expect similar improvements with our other two programs, which also take advantage of tumor targeting advances in addition to the advanced ADC platform switch, like we show here. We are enthusiastic about the potential of our portfolio and look forward to getting into the clinic quickly. With that, I'll now turn it over to Scott for updates on our financial progress. Scott. Thanks, Dave. Moving to slide 14.

We ended 2024 with $47.2 million in cash, cash equivalents, and short-term investments. Following the close of our recent strategic transactions, we expect to have cash and cash equivalents in the range of $170-$180 million, including the payment of the upfront and early milestones under the ADC license agreement. We anticipate that cash will fund operations into 2028 based on current plans. FYARRO net product sales were $7.2 million for the fourth quarter, representing 14% growth over the prior year quarter. Full-year FYARRO sales were $26 million, an increase of 7% over 2023. Research and development expenses for the quarter increased to $14.3 million compared to $12.8 million in the prior year quarter. For the year, R&D expense amounted to $51 million compared to $48.9 million last year.

This increase is driven mainly by in-process R&D expenses of $6 million related to the recently acquired ADC programs, offset in part by reductions in clinical expenses, personnel, and other expenses. Selling general and administrative expenses for the fourth quarter were $11.1 million compared to $10.3 million in the same period in 2023. This increase was due mainly to increased legal and consulting expenses, offset in part by lower commercial expenses. For the year, SG&A expenses decreased to $36.7 million compared to $44.5 million in the prior year, driven primarily by reductions in commercial and personnel expenses. Operating expenses for the year included $2.6 million of restructuring costs. Net loss for the fourth quarter was $18.3 million compared to $16.3 million in the fourth quarter of 2023. Net loss for the year was $63.7 million compared to $65.8 million in the prior year.

I'll now hand the call back over to Dave for his closing comments. Dave. Thanks, Scott. Looking at slide 16, we are enormously excited about the potential of Whitehawk to make a transformative impact on patients with our portfolio. We're advancing three clinically validated tumor targets using next-generation ADC technology with the goal of outperforming first-generation predecessors. With a focus on high potential indications, we aim to file three US INDs within 15 months. We are well-positioned to fund operations, as Scott said, into 2028, covering anticipated clinical inflections. Importantly, Whitehawk is backed by an outstanding veteran team. I'm also pleased to say this includes our recent addition of David Dornan, who joined us as Chief Scientific Officer. Many of you will know David as a former CSO of Elevation Oncology.

David contributes more than two decades of experience in oncology drug discovery and development with deep expertise in ADCs and other targeted cancer therapies. He has a successful track record of shepherding drugs from discovery stage through the clinic for advanced modalities, including ADCs, and conferencing numerous INDs, NDAs, and VLAs. His experience at Elevation is particularly relevant as he spearheaded the company's strategic pivot towards a portfolio of ADCs. We welcome David and are glad he is able to join us on the call today. With that, I'll open the call for questions. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. The first question will come from Tara Bancroft with TD Securities. Your line is open. Hi, good morning.

This is Greg Weisner on for Tara Bancroft. Considering that Regeneron is developing a MUC16-targeted bispecific antibody for ovarian, how do you anticipate that the clinical activity and safety profile of your ADC might compare to the bispecific approach within this indication? Thank you. Super. Thanks, Greg, for stepping in for Tara. Thanks for the question. I'll start a little bit and then turn it over to David for his comments since he is an expert in this target. I mean, the first concept is obviously ADCs and bispecific TCs are very different modalities in terms of their mechanism. Certainly, there's commonality in the tumor targeting. We're encouraged by the fact that Regeneron uses the same targeting approach to the membrane-bound MUC16.

Obviously, as a TCE, that is targeting an immune-modulating response, which will be very different from an ADC chemo-based response that we're developing here. We think both are complementary and important options for patient treatment regardless of the tumor target here. We do not necessarily have a direct comparison we would highlight for this indication, but we do obviously pay close attention to that program. David, do you want to say a little more about MUC16? Yeah, sure. I think this is what is fair to say with respect to targeting. Obviously, the membrane portion that we're targeting on MUC16 certainly makes it help avoid the antigen sink, as David mentioned in the presentation. With respect to the different modalities of targeting, I think you specifically asked about the CD3 redirection approach.

I think it's fair to say the CD3 redirection approach, sometimes we have challenges with a cytokine release-like syndrome. Obviously, as a cytotoxic ADC, we don't have the same AE problems in that realm. Obviously, with our ADC, cytotoxic ADCs, they certainly have their own AE profiles. The promise of our technology using our stable linker technology really will mitigate that potential risk. That is how we feel that position and why this ADC will certainly be differentiated from a CD3 redirected, but largely would have significant chemo gains and efficacy, as Dave already mentioned. Thanks, David. Offer your next question. Our next question will come from Roger Song with Jefferies. Your line is open. Hey, good morning. Thanks for taking our questions. This is Liang Chenga from Roger. First, congrats on the new chapter.

I guess questions from us, one is on the three targets. Understanding the prevalence there, could you help us understanding about the distribution of the high, medium, low expression levels for each of those three targets? The second question is about the financials. Understanding about the 2028 runway, does that cover all the three phase one studies? Thank you. Liang, thanks again. Thanks for joining the call. Good to hear from you again. Thanks for the questions. On the first question, in terms of the prevalence, obviously, there is a lot of data to cover in context. What we would say is that first, on PTK7, it is one of the most broadly overexpressed tumor targets in development today. It impacts a large portion of patients who develop cancer overall. Very highly expressed target across a broad range of tumors.

What we really like about this target is that when it is expressed in patients, it's often expressed at a moderate to high level. We generally find that the majority of patients who experience PTK7 do so at a moderate to high level across different enhancement modulations, which we know correlates with potential for improved responses as patients who have higher expression generally respond to ADCs better. We are really encouraged by both of those, the broad expression of PTK7, but also the relatively deep expression that we see in individual patients that have a high proportion of patients that potentially could respond very well to therapy. On MUC16, it's a similar story, but I think in MUC16 case, we really have an advantage that MUC16 is a tumor target that tends to increase as the disease progresses. Higher expression is often associated with worse disease.

That allows us to really target the patients who are in most immediate care. Secondly, with the circulating CA125, we have a proxy for expression across patients. Rather than looking at IHC-based expression, we can also screen patients using the circulating CA125 biomarker. We think in this case, we really have both this high-level expression, particularly across gynecological cancers, deep expression overall, and ability to monitor that. At SEZ6, SEZ6 is highly expressed across a broad range of, well, across the full range of small cell lung cancer. This has already been typified by AbbVie's program, where they're actually not selecting patients with extremely high response rates for non-selected small cell lung cancer patients on that SEZ6.

Overall, we think these are not only really interesting targets for the fact that they have key roles in each of these indications, but they are highly and deeply expressed across the vast majority of patients in each of these indications. As well, as we mentioned before, they are not yet so competitive like the TRP2 area or CLOT19.2 or other areas that we believe we could be first or second to market on each of these indications or each of these targets. Your second question on data availability, our goal is to get meaningful clinical phase one data for all three programs under the current funding. That will obviously be slightly different amounts of data for each program, just given that they are staggered by a few months each.

Ultimately, our goal in establishing Whitehawk, as we did and capitalized as well as it is, was to ensure that we would generate that meaningful clinical data before our next go back to the market for additional financing. Thanks for the questions, Liang. Operator, next questions? I show no further questions at this time in the queue. I would like to turn the call back to Dave for closing remarks. Thank you, Operator. Thanks to the team and everyone who joined us on the call today. We are really excited about the launch of Whitehawk Therapeutics, a new ADC company out of the transformation we have just performed with Aadi Bioscience. We reiterate these three clinically validated, broadly overexpressed tumor targets are leveraging an advanced ADC linker payload architecture with key features that we believe will allow us to outperform first-generation ADCs.

We're moving quickly, targeting filing of three US INDs in the next 15 months, including HWK-007 in the second half of 2025 and HWK-016 by the end of this year. With our experienced team and collaborative partners, we are singularly focused on executing to ensure these goals are met. Lastly, upon closing, we expect to be well capitalized. As I mentioned, we have cash to fund our operations into 2028 and with anticipated key clinical data. Thank you for joining us for this introduction of Whitehawk Therapeutics. Have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.