Aerpio Reports First Quarter 2021 Financial Results and Provides Business Update
- Ended first quarter 2021 with
$39.0 millionin cash and cash equivalents
- Subsequent to
March 31, 2021, Aerpio entered into an agreement and plan of merger with Aadi Bioscience, Inc.
Key Business Update:
May 16, 2021, Aerpio entered into an agreement and plan of merger with Aadi Bioscience, Inc., a Delawarecompany (“Aadi"), and Aspen Merger Subsidiary, Inc., a Delawarecorporation and a direct, wholly-owned subsidiary of Aerpio (“Merger Sub”), wherby Merger Sub will merge with and into Aadi with Aadi surviving as a wholly-owned subsidiary of Aerpio. The proposed merger was approved by the members of the board of directors of Aerpio (the “Board”) and the Board resolved to recommend approval of the proposed merger agreement to Aerpio’s shareholders. The closing of the proposed Aadi merger is subject to approval of the Aerpio shareholders and the satisfaction of certain closing conditions, including approval by Aerpio’s shareholders, the completion of the PIPE financing described below and other customary closing conditions.
- Following the proposed merger, Aerpio will change its name to “Aadi Bioscience Inc.” and the combined public company will focus on advancing Aadi’s lead product candidate, FYARROTM (sirolimus albumin-bound nanoparticles for injectable suspension; nab-sirolimus; ABI-009).
- In connection with the execution of the proposed merger with Aadi, Aerpio entered into subscription agreements to raise an aggregate of
$155 millionin a Private Investmentin Public Equity (“PIPE”) financing in shares of common stock and pre-funded warrants to purchase Aerpio common stock. The financing is expected to be consummated concurrently with the closing of the proposed merger, subject to customary closing conditions, and is contingent on the closing of the proposed merger.
- If Aerpio is unable to satisfy the closing conditions in Aadi’s favor or if other applicable closing conditions are not satisfied, Aadi will not be obligated to complete the proposed merger. Under certain circumstances, Aerpio would be required to pay Aadi a termination fee of
- The terms of the merger agreement contemplate that a non-transferable contingent value right (a “CVR”) will be distributed to Aerpio shareholders as of immediately prior to the effective time of the proposed merger, entitling CVR holders to receive net proceeds received by Aerpio, if any, associated with Aerpio’s legacy assets. The terms and conditions of the CVRs will be pursuant to a CVR Agreement Aerpio will enter into prior to the closing of the proposed merger.
Recent Company Events
February 2021, Aerpio discontinued its RESCUE trial for the prevention and treatment of acute respiratory distress syndrome (“ARDS”) in adult patients with moderate to severe COVID-19 sponsored by the Medical Technology Enterprise Organization(“MTEC”) after the first 31 patients based on challenges associated with recruiting and monitoring patients in the current pandemic environment. Based on topline data, there were no apparent safety signals associated with dosing COVID-19 patients with razuprotafib. There was a mechanism-based, dose-dependent reduction of blood pressure which was not associated with other adverse events. There was an apparent dose-dependent decrease in Angiopoeitin 2 (Ang2) that would be consistent with the Tie2 activation mechanism. The efficacy of razuprotafib could not be fully assessed due to the limited number of patients treated in the drug and standard of care arms. At the 28 day study endpoint, there were an equal number of deaths in each group (one per group). Further analysis of the full data set is ongoing.
First Quarter 2021 Financial Highlights
As of March 31, 2021, cash and cash equivalents totaled $39.0 million, compared to
For the three months ended March 31, 2021, operating expenses totaled $5.6 million, an increase of 36.7% compared to $4.1 million for the same period in 2020.
Research and development expenses for the three months ended March 31, 2021, increased approximately $0.4 million, or 21.8%, to $2.2 million from $1.8 million in the three months ended March 31, 2020. This increase was primarily the result of increased expenses associated with our clinical programs in the three months ended
General and administrative expenses for the three months ended March 31, 2021, decreased approximately $0.1 million, or 6.5%, to $2.1 million from $2.3 million, in the three months ended
Restructuring expense for the three months ended March 31, 2021of
Net loss attributable to common stockholders for the three months ended March 31, 2021, was $4.4 million, or $0.09 per common share, compared to
Forward Looking Statements
This communication contains “forward-looking statements” based upon our current expectations. Forward-looking statements involve risks and uncertainties, and include, but are not limited to, statements about the structure, timing and completion of the proposed transaction; the combined company’s listing on Nasdaq after the closing of the proposed transaction; the business of the combined company, including Aadi’s product candidates, the development therefor and the therapeutic potential thereof; the proposed PIPE and its terms; the opportunity for Aerpio shareholders to receive value from its legacy assets through the proposed contingent value rights, and the intended benefits from the Aspen’s collaboration with Gossamer Bio for GB004, including the continued development of GB004 and the milestone and royalty payments related to the collaboration. Actual results and the timing of events may differ materially from those indicated by these forward-looking statements as a result of various important factors, including, without limitation: (i) risks associated with Aerpio’s ability to obtain the stockholder approval required to consummate the proposed transaction or to complete the PIPE financing, and the timing of the closing of the proposed transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the proposed transaction, including the PIPE financing, will not occur (ii) the response of Aerpio’s stockholders to the proposed transaction; (iii) risks related to Aerpio’s ability to manage its operating expenses and its expenses associated with the proposed transaction pending closing; (iv) risks related to the failure or delay in obtaining required approvals from any governmental or quasi-governmental entity necessary to consummate the proposed transaction; (v) the risk that as a result of adjustments to the exchange ratio, Aerpio stockholders and Aadi stockholders could own more or less of the combined company than is currently anticipated; (vi) risks related to the market price of Aerpio’s common stock relative to the exchange ratio; (vii) unexpected costs, charges, expenditures or expenses resulting from the proposed transaction; (viii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; (ix) Aerpio’s ability to retain personnel as a result of the announcement or completion of the proposed transaction; and (x) risks associated with the possible failure to realize certain anticipated benefits of the proposed transaction, including with respect to future financial and operating results and (xi) the risk that any potential payment of proceeds pursuant to the CVR Agreement may not be distributed at all or result in any value to Aerpio stockholders. Actual results and the timing of events may differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. These and other risks and uncertainties are more fully described in periodic filings with the
These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents the Company files with the SEC available at www.sec.gov.
Investors & Media:
|CONDENSED CONSOLIDATED BALANCE SHEETS
|Cash and cash equivalents||$||39,008||$||42,605|
|Prepaid research and development contracts||257||510|
|Other current assets||1,734||1,604|
|Total current assets||40,999||44,719|
|Furniture and equipment, net||105||122|
|Operating lease right-of-use assets, net||37||64|
|Liabilities and shareholders' equity|
|Accounts payable and accrued expenses||$||2,090||$||1,800|
|Current portion of operating lease liability||39||67|
|Total current liabilities||2,129||1,867|
|Total stockholders' equity||39,032||43,058|
|Total liabilities and stockholders' equity||$||41,161||$||44,925|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|(In thousands, except per share amounts)
|Three months ended|
|Research and development||$||2,228||$||1,829|
|General and administrative||2,137||2,286|
|Total operating expenses||5,603||4,115|
|Loss from operations||(5,603||)||(4,115||)|
|Interest and other income||1,161||196|
|Net and comprehensive loss||$||(4,442||)||$||(3,919||)|
|Net loss per common share basic and diluted||$||(0.09||)||$||(0.10||)|
|Weighted average common shares outstanding|
|Basic and diluted||47,282||40,588|
Source: Aerpio Pharmaceuticals, Inc.