UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

AERPIO PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT DATED JUNE 21, 2021—SUBJECT TO COMPLETION

Dear Aerpio Stockholders:

You are cordially invited to attend the special meeting of the stockholders of Aerpio Pharmaceuticals, Inc. a Delaware corporation (referred to as “Aerpio”) which will be held at [●], Eastern Time, on [●], 2021 (referred to as the “special meeting”). The special meeting will be a virtual stockholder meeting, conducted solely through remote audio access via a webcast at [URL]. In order to attend the virtual special meeting and vote online, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. This is an important special meeting that affects your investment in Aerpio.

On May 16, 2021, Aerpio and Aadi Bioscience, Inc. (referred to as “Aadi”) entered into an Agreement and Plan of Merger (referred to as the “merger agreement”), pursuant to which a wholly-owned subsidiary of Aerpio will merge with and into Aadi with Aadi surviving as a wholly-owned subsidiary of Aerpio (referred to as the “merger”). At the effective time of the merger, each share of Aadi’s common stock, par value $0.0001 per share, (referred to as “Aadi common stock”), outstanding immediately prior to the effective time of the merger will be converted into the right to receive approximately [●] shares of Aerpio’s common stock, par value $0.0001 per share (referred to as “Aerpio’s common stock”), subject to adjustment to account for the effect of a reverse stock split of Aerpio’s common stock, at a ratio mutually agreed to by Aerpio and Aadi in the range of one new share for every [●] to [●] shares outstanding (or any whole number in between), to be implemented immediately prior to and contingent upon the consummation of the merger as discussed in this proxy statement, and further adjusted based on Aerpio’s net cash immediately prior to the closing of the merger. In addition, as more fully discussed in this proxy statement, each holder of Aerpio common stock as of immediately prior to the effective time of the merger shall be entitled to one contractual contingent value right issued by Aerpio, subject to and in accordance with the terms and conditions of the contingent value rights agreement to be entered into at or prior to the effective time of the merger, for each share of Aerpio common stock held by such holder. Following the merger, Aerpio will change its name to “Aadi Bioscience, Inc.” (referred to as the “combined company”).

Under the terms of the merger agreement, the number of shares of Aerpio common stock to be issued to Aadi’s stockholders, at the closing of the merger will be determined based on an exchange ratio, which will be calculated based on the total number of outstanding shares of Aerpio common stock and Aadi common stock, each on a fully-diluted basis, and the respective valuations of Aadi and Aerpio, as of immediately prior to the closing of the merger. As of the effective date of the merger agreement, the closing date valuation of Aadi (referred to as the “Aadi valuation”) is anticipated to be $82,500,000, and the closing date valuation of Aerpio (referred to as the “Aerpio valuation”) is anticipated to be $41,000,000 but is subject to adjustment as described below. Accordingly, if the closing of the merger occurs on or prior to July 26, 2021 and there is no adjustment to the Aerpio valuation as described below, then immediately following the effective time of the merger, Aadi’s stockholders will own or hold rights to acquire 66.8% of the combined company, on a fully-diluted basis, and Aerpio’s stockholders will own or hold rights to acquire 33.2% of the combined company, on a fully-diluted basis. Without giving effect to the proposed reverse stock split of Aerpio common stock or the PIPE financing described elsewhere in this proxy statement, and based on the foregoing percentages as of a July 26, 2021 closing, the exchange ratio for the Aadi common stock would be approximately 4.9152 shares of Aerpio common stock for each share of Aadi common stock (approximately 96,118,961 total shares of Aerpio common stock would be issued to Aadi’s stockholders, on a fully diluted basis). There will be no adjustment to the number of shares of Aerpio common stock to be issued to Aadi’s stockholders based on the market value of Aerpio common stock, and the market value of Aerpio’s common stock as of the date of the closing of the merger may vary significantly from the market value as of the date of this proxy statement.

The Aerpio target net cash and lower target net cash and upper target net cash amounts will be reduced by $21,667 per day beginning on July 26, 2021 through the closing date of the merger, potentially resulting in a corresponding adjustment to the exchange ratio and to the ownership percentage of Aadi’s current stockholders in the combined company. For a complete description of how the ownership percentages and exchange ratio will be determined at the effective time of the merger, please see the section entitled “The Merger Agreement—Merger Consideration and Exchange Ratio” beginning on page [●] of this proxy statement.

In addition, on May 16, 2021, Aerpio entered into subscription agreements (referred to as the “subscription agreements”) with the purchasers named therein (referred to as the “PIPE investors”), pursuant to which Aerpio agreed to sell shares of Aerpio common stock and pre-funded warrants to acquire Aerpio common stock (referred to as “Aerpio pre-funded warrants”) for an aggregate purchase price of approximately $155,000,000 (collectively, referred to as the “PIPE financing”). The closing of the PIPE financing is expected to occur concurrently with, and is conditioned upon, the closing of the merger. Following the closing of the PIPE financing, the former Aadi stockholders are expected to own approximately 29.6% of the outstanding shares of Aerpio common stock on a fully-diluted basis, the stockholders of Aerpio as of immediately prior to the effective time of the merger are expected to own approximately 14.7% of the outstanding shares of Aerpio common stock on a fully-diluted basis, and the PIPE investors are expected to own approximately 55.7% of the outstanding shares of Aerpio common stock on a fully-diluted basis.

At the special meeting:

After careful consideration, the Aerpio Board has unanimously (other than abstentions) approved the merger agreement and the proposals referred to above, and has determined that they are advisable, fair and in the best interests of Aerpio’s stockholders. Accordingly, the Aerpio Board unanimously (other than abstentions)

recommends that stockholders vote “FOR” the share issuance proposal, “FOR” the charter proposal, “FOR” the equity incentive plan proposal, “FOR” the ESPP proposal, and “FOR” the adjournment proposal.

Shares of Aerpio common stock are currently listed on Nasdaq under the symbol “ARPO.” After completion of the merger, it is expected that Aerpio common stock will trade on Nasdaq under the symbol “AADI.”

More information about Aerpio, Aadi and the proposed transactions are contained in the accompanying proxy statement. Aerpio urges you to read the proxy statement carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE [●].

Your vote is important. Whether or not you expect to attend the virtual special meeting, please complete, date, sign and promptly return the accompanying proxy card in the enclosed postage paid envelope to ensure that your shares will be represented and voted at the special meeting. You can also vote your shares via the internet or by telephone as provided in the instructions set forth in the enclosed proxy card. If you hold your shares in “street name” through a broker, you should follow the procedures provided by your broker.

Aerpio is excited about the opportunities the merger brings to its stockholders, and we thank you for your consideration and continued support.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the merger described in this proxy statement or the Aerpio common stock to be issued in connection with the merger or determined if this proxy statement is accurate or adequate. Any representation to the contrary is a criminal offense.

This proxy statement is dated [●], 2021 and is first being mailed to stockholders on or about [●], 2021.

PRELIMINARY PROXY STATEMENT DATED JUNE 21, 2021—SUBJECT TO COMPLETION

9987 CARVER ROAD

CINCINNATI, OHIO 45242

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON [●], 2021.

To the Stockholders of Aerpio Pharmaceuticals, Inc.:

Notice is hereby given that a special meeting of stockholders of Aerpio Pharmaceuticals, Inc. (referred to as “Aerpio”) will be held virtually, conducted via live audio webcast at [●] AM, Eastern Time, on [●], 2021, at [URL], to consider and act upon the following matters:

If Aerpio is to complete the merger with Aadi, stockholders must approve Proposals 1 and 2. The approval of Proposals 3, 4 or 5 is not a condition to the completion of the merger with Aadi; however, pursuant to the merger agreement, Aerpio and Aadi have each agreed that they will use commercially reasonable efforts to cause Aerpio’s stockholders to approve Proposals 3 and 4.

Aerpio common stock is the only type of security entitled to vote at the special meeting. Aerpio’s board of directors has fixed [●], 2021 as the record date for the determination of stockholders entitled to notice of, and to vote at, the special meeting and any adjournment or postponement thereof. Only holders of record of shares of Aerpio common stock at the close of business on the record date are entitled to notice of, and to vote at, the special meeting. At the close of business on the record date, Aerpio had [●] shares of common stock outstanding and entitled to vote at the special meeting. Each holder of record of shares of common stock on the record date will be entitled to one vote for each share held on all matters to be voted upon at the special meeting.

Your vote is important. The affirmative vote of the holders of at least 66 2/3% of the outstanding shares of Aerpio common stock is required for approval of Proposals 1 and 2. The affirmative vote of the holders of a

majority of the votes properly cast for or against such matter at the special meeting is required for approval of Proposals 3, 4 and 5. Whether or not you plan to attend the virtual special meeting virtually, please submit your proxy promptly by telephone or via the internet in accordance with the instructions on the enclosed proxy card or complete, date, sign and promptly return the accompanying proxy card in the enclosed postage paid envelope to ensure that your shares will be represented and voted at the special meeting. If you date, sign and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of Proposals 1 through 5.

THE AERPIO BOARD HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS ADVISABLE, FAIR AND IN THE BEST INTERESTS OF AERPIO AND ITS STOCKHOLDERS AND HAS UNANIMOUSLY (OTHER THAN ABSTENTIONS) APPROVED EACH SUCH PROPOSAL. THE AERPIO BOARD RECOMMENDS THAT AERPIO’S STOCKHOLDERS VOTE “FOR” PROPOSALS 1, 2, 3, 4 AND 5.

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (referred to as the “Exchange Act”), and the rules thereunder, contains a notice of meeting with respect to the special meeting of stockholders at which Aerpio’s stockholders will consider and vote on the proposals to approve the issuance of Aerpio common stock issuable to the holders of Aadi’s common stock pursuant to the merger agreement described in this proxy statement, the issuance of Aerpio common stock and Aerpio pre-funded warrants issuable to the PIPE investors and the resulting “change of control” of Aerpio under the Nasdaq rules, the amendment and restatement of Aerpio’s certificate of incorporation, including to effect a reverse stock split of Aerpio common stock to maintain the listing of Aerpio common stock on Nasdaq and consummate the merger and the PIPE financing, the adoption of an incentive award plan and an employee stock purchase plan and an adjournment or postponement of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposals 1 and/or 2.

Additional business and financial information about Aerpio can be found in documents previously filed by Aerpio with the U.S. Securities and Exchange Commission (referred to as the “SEC”). This information is available to you without charge on the SEC’s website (www.sec.gov). Aerpio stockholders will also be able to obtain the proxy statement, free of charge, from Aerpio by requesting copies in writing using the following contact information:

Aerpio Pharmaceuticals, Inc.

Attn: Secretary

9987 Carver Road

Cincinnati, OH 45242

Tel: (513) 985-11920

You may also request additional copies from Aerpio’s proxy solicitor, The Proxy Advisory Group, LLC, using the following contact information:

18 East 41st Street, 20th Floor

New York, NY 10017-6219

Stockholders Call: (212) 616-2181

To ensure timely delivery of these documents, any request should be made no later than [●], 2021 to receive them before the special meeting. See “Where You Can Find Additional Information” beginning on page [●].

TABLE OF CONTENTS

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ANNEX A—MERGER AGREEMENT

ANNEX B—PROPOSED AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF AERPIO

ANNEX C—SUBSCRIPTION AGREEMENT

ANNEX D—OPINION OF LADENBURG THALMANN & CO. INC.

ANNEX E—EQUITY INCENTIVE AWARD PLAN

ANNEX F—EMPLOYEE STOCK PURCHASE PLAN

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

Except as specifically indicated, the following information and all other information contained in this proxy statement does not give effect to the PIPE financing described in Proposal 1 or the reverse stock split described in Proposal 2.

The following section provides answers to frequently asked questions about the special meeting of stockholders and the merger. This section, however, only provides summary information. These questions and answers may not address all issues that may be important to you as a stockholder. For a more complete response to these questions and for additional information, please refer to the cross-referenced pages below. You should carefully read this entire proxy statement, including each of the annexes.

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The closing of the PIPE financing is expected to occur concurrently with, and is conditioned upon, the closing of the merger. Following the closing of the PIPE financing, the former Aadi stockholders are expected to own approximately 29.6% of the outstanding shares of Aerpio common stock on a fully-diluted basis, the stockholders of Aerpio as of immediately prior to the effective time of the merger are expected to own approximately 14.7% of the outstanding shares of Aerpio common stock on a fully-diluted basis and the PIPE investors are expected to own approximately 55.7% of the outstanding shares of Aerpio common stock on a fully-diluted basis.

For a more complete discussion of the exchange ratio at the effective time of the merger, please see the section entitled “The Merger Agreement—Merger Consideration” beginning on page [●] of this proxy statement.

In addition, the merger agreement contemplates that at or prior to completion of the merger, Aerpio, the Holder Representative (as defined in the CVR agreement) and the Rights Agent (as defined in the CVR agreement) will execute and deliver a contingent value rights agreement (referred to as the “CVR agreement”), pursuant to which each holder of Aerpio common stock as of immediately prior to the completion of the merger (for the avoidance of doubt, not including the PIPE investors) shall be entitled to one contractual contingent value right (referred to as a “CVR”) issued by Aerpio, subject to and in accordance with the terms and conditions of the CVR agreement, for each share of Aerpio common stock held by such holder. Each CVR shall entitle the holder thereof to 90% of the net proceeds, if any, received by Aerpio pursuant to the license agreement, dated June 24, 2018, entered into by and between Aerpio and Gossamer Bio, Inc., as amended by the Amendment No. 1 thereto and any agreement related to the Aspen Legacy Assets (as defined in the merger agreement) entered into prior to the closing of the merger. The contingent value rights are not transferable, except in certain limited circumstances as will be provided in the CVR agreement, will not be certificated or evidenced by any instrument and will not be registered with the SEC or listed for trading on any exchange.

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For a more complete description of the material U.S. federal income tax consequences of the reverse stock split, receipt of the CVRs, and merger, including possible alternative treatments of the CVRs, please see the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Reverse Stock Split, Receipt of the CVRs, and Merger” beginning on page [●] of this proxy statement.

In the case of the merger, Aerpio will be issuing approximately [●] shares of Aerpio common stock on a fully diluted basis, and Aerpio common stock to be issued pursuant to the merger agreement will represent greater than 20% of its voting stock. In the case of the PIPE financing, Aerpio will be issuing approximately [●] shares of Aerpio common stock on a fully diluted basis, and the Aerpio common stock to be issued pursuant to the subscription agreements will represent greater than 20% of Aerpio’s voting stock. Accordingly, Aerpio is seeking stockholder of approval of the issuance pursuant to the merger agreement and the issuance pursuant to the subscription agreements under the Nasdaq rules.

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If a quorum is not present, the only business that can be transacted at the special meeting is the adjournment or postponement of the meeting to another date or time.

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The approval of the equity incentive plan proposal, the ESPP proposal and the adjournment proposal each require the affirmative vote of the holders of a majority in voting power of the shares of Aerpio common stock properly cast for or against such proposal. Accordingly, shares deemed not in attendance and/or not voted at the special meeting, whether due to a record holder’s failure to vote or a “street name” holder’s failure to provide any voting instructions to such holder’s bank, broker or other nominee or failure to vote at the special meeting, and broker non-votes will have no effect on the outcome of the equity incentive plan proposal, the ESPP proposal or the adjournment proposal. Abstentions will have no effect on the outcome of the equity incentive plan proposal, the ESPP proposal or the adjournment proposal.

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In order to attend the virtual special meeting and vote online, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. The control number is designed to verify your identity and allow you to vote your shares of common stock at the special meeting or to vote by proxy prior to the special meeting. If you attend the special meeting and vote via the Internet, your vote will revoke any proxy that you have previously submitted.

Please note that even if you plan to attend the special meeting, we recommend that you vote in advance, to ensure that your shares will be represented.

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For a more complete discussion of the exchange ratio at the effective time of the merger, please see the section entitled “The Merger Agreement—Merger Consideration” beginning on page [●] of this proxy statement.

The closing of the PIPE financing is expected to occur concurrently with, and is conditioned upon, the closing of the merger. Following the closing of the PIPE financing, the former Aadi stockholders are expected to own approximately 29.6% of the outstanding shares of Aerpio common stock on a fully-diluted basis, the stockholders of Aerpio as of immediately prior to the effective time of the merger are expected to

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own approximately 14.7% of the outstanding shares of Aerpio common stock on a fully-diluted basis and the PIPE investors are expected to own approximately 55.7% of the outstanding shares of Aerpio common stock on a fully-diluted basis.

At the closing of the PIPE financing, in connection with the subscription agreements, Aerpio intends to enter into a registration rights agreement (referred to as the “registration rights agreement”) with the PIPE investors. Pursuant to the registration rights agreement, Aerpio will prepare and file a resale registration statement with the SEC within 30 calendar days following the closing of the PIPE financing (referred to as the “filing deadline”). Aerpio will use its reasonable best efforts to cause this registration statement to be declared effective by the SEC within 60 calendar days of the closing of the PIPE financing (or within 90 calendar days if the SEC reviews the registration statement).

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MARKET PRICE AND DIVIDEND INFORMATION

Aerpio common stock began trading on the OTC Markets—OTCQB Tier on August 8, 2017 and subsequently uplisted to the Nasdaq Capital Market on June 26, 2018 under the symbol “ARPO.”

Aadi is a private company and its common stock is not publicly traded. As of June 16, 2021, there were approximately 3 holders of record of Aadi common stock.

On May 14, 2021, just prior to the public announcement of the proposed merger on May 17, 2021, the closing price per share of Aerpio common stock as reported on Nasdaq was $1.16 per share. On [●], 2021, the last practicable date before the printing of this proxy statement, the closing price per share of Aerpio common stock as reported on Nasdaq was $[●], per share.

Following the consummation of the merger, and subject to successful application for initial listing with Nasdaq, Aerpio common stock will continue to be listed on Nasdaq, but will trade under the symbol “AADI” and under the combined company name of “Aadi Bioscience, Inc.”

As of the record date, Aerpio had approximately [●] stockholders of record.

Aerpio has never declared or paid cash dividends on Aerpio common stock. Aerpio currently anticipates that all of its earnings in the foreseeable future will be used for the operation and growth of its business, and does not expect to pay any cash dividends to Aerpio stockholders. Payment of future dividends, if any, will be at the discretion of the Aerpio Board.

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RISK FACTORS

You should consider the following factors in evaluating whether to approve the issuance of shares of Aerpio common stock in the merger, the issuance of Aerpio common stock and pre-funded warrants in the PIPE financing and the resulting “change of control” of Aerpio under the Nasdaq rules and the amended and restated certificate of incorporation, including to effect a reverse stock split of Aerpio common stock. These factors should be considered in conjunction with the other information included or incorporated by reference by Aerpio in this proxy statement.

Risks Related to the Merger

If the proposed merger with Aadi is not consummated, Aerpio’s business could suffer materially and Aerpio’s stock price could decline.

The consummation of the proposed merger with Aadi is subject to a number of closing conditions, including the approval by Aerpio’s stockholders, approval by Nasdaq of Aerpio’s application for initial listing of Aerpio common stock in connection with the merger, and other customary closing conditions. Aerpio is targeting a closing of the transaction in the third quarter of 2021.

If the proposed merger is not consummated, Aerpio may be subject to a number of material risks, and its business and stock price could be adversely affected, as follows:

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In addition, if the merger agreement is terminated and the Aerpio Board determines to seek another business combination, it may not be able to find a third party willing to provide equivalent or more attractive consideration than the consideration to be provided by each party in the merger. In such circumstances, the Aerpio Board may elect to, among other things, divest all or a portion of Aerpio’s business, or take the steps necessary to liquidate all of Aerpio’s business and assets, and in either such case, the consideration that Aerpio receives may be less attractive than the consideration to be received by Aerpio pursuant to the merger agreement.

If Aerpio does not successfully consummate the merger or another strategic transaction, the Aerpio Board may decide to pursue a dissolution and liquidation of Aerpio. In such an event, the amount of cash available for distribution to Aerpio’s stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that the merger will be completed. If the merger is not completed, the Aerpio Board may decide to pursue a dissolution and liquidation of Aerpio. In such an event, the amount of cash available for distribution to Aerpio’s stockholders will depend heavily on the timing of such decision and, as with the passage of time the amount of cash available for distribution will be reduced as Aerpio continues to fund its operations. In addition, if the Aerpio Board were to approve and recommend, and Aerpio’s stockholders were to approve, a dissolution and liquidation of Aerpio, Aerpio would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to Aerpio’s stockholders. As a result of this requirement, a portion of Aerpio’s assets may need to be reserved pending the resolution of such obligations, and the timing of any such resolution is uncertain. In addition, Aerpio may be subject to litigation or other claims related to a dissolution and liquidation of Aerpio. If a dissolution and liquidation were pursued, the Aerpio Board, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Aerpio common stock could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up of Aerpio.

The amount of merger consideration may vary depending on the amount of net cash of Aerpio as of a certain determination date prior to closing and the date on which the closing occurs, which could result in Aerpio’s stockholders owning a smaller percentage of the combined company than expected.

Under the terms of the merger agreement, the number of shares of Aerpio common stock to be issued to Aadi’s stockholders at the closing of the merger will be determined based on an exchange ratio, which will be calculated based on the total number of outstanding shares of Aerpio common stock and Aadi common stock, each on a fully-diluted basis, and the respective valuations of Aadi and Aerpio, as of immediately prior to the closing of the merger. If the closing occurs on or before July 26, 2021 and there is no adjustment to the closing valuation of Aerpio (as described below), then immediately following the effective time of the merger, Aadi’s stockholders will own, or hold rights to acquire, 66.8% of the common stock of the combined company, on a fully-diluted basis, and Aerpio’s existing stockholders will own or hold rights to acquire 33.2% of the common stock of the combined company, on a fully-diluted basis. If Aerpio’s net cash is less than $26,000,000 and the closing of the merger occurs prior to July 26, 2021, then Aerpio’s valuation will be equal to the amount of Aerpio’s net cash plus an additional $15,000,000 of enterprise value. The respective valuations of Aadi and Aerpio, and the corresponding ownership percentages of Aadi’s stockholders and existing Aerpio stockholders, may be adjusted upward or downward based on the date the closing occurs and the net cash balance (defined in the merger agreement as cash, cash equivalents and marketable securities minus certain outstanding liabilities) of Aerpio as of a determination date prior to the closing of the merger, and as a result, either Aerpio’s stockholders could own less of the combined company than expected. There can be no assurances as to Aerpio’s level of net cash between now and closing or as to the date the closing will occur.

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Aerpio’s net cash may be less than $10,000,000 at the closing of the merger, which would cause a condition to Aadi’s obligation to consummate the merger to fail to be satisfied and may result in the termination of the merger agreement.

Aerpio is required to have a net cash balance of at least $10,000,000 at the closing of the merger as a condition to Aadi’s obligation to consummate the merger. For purposes of the merger agreement, net cash is subject to certain reductions, including, without limitation, accounts payable, accrued expenses (except those related to the merger), current liabilities payable in cash, unpaid expenses related to the merger and certain other unpaid obligations, including outstanding lease obligations. In the event that Aerpio’s net cash falls below this threshold, a condition to the Aadi’s obligation to consummate the merger will fail to be satisfied and Aadi will have the right to terminate the merger agreement at an outside date of February 16, 2022 (subject to extension as provided in the merger agreement) if Aerpio’s net cash continues to be lower than the $10,000,000 threshold.

Aerpio may not consummate the PIPE financing or may fail to receive, substantially concurrently with the closing of the merger, the minimum required PIPE financing proceeds of $50,000,000, which would cause a condition to both parties’ obligations to consummate the merger to fail to be satisfied and may result in the termination of the merger agreement.

The closing of the PIPE financing is expected to occur concurrently with, and is conditioned upon, the closing of the merger. Aerpio is required to have received, or substantially concurrently with the closing of the merger receive, the minimum required PIPE financing proceeds of $50,000,000 as a condition to both Aadi’s and Aerpio’s obligations to consummate the merger. For purposes of the merger agreement, the PIPE financing proceeds must be at least $50,000,000, but the parties expect the PIPE financing to be comprised of an aggregate purchase price of approximately $155,000,000. In the event that the PIPE financing is not consummated or the amount of the PIPE financing proceeds is below $50,000,000, a condition to Aadi’s and Aerpio’s obligations to consummate the merger will fail to be satisfied and Aadi and Aerpio will each have the right to terminate the merger agreement at an outside date of February 16, 2022 (subject to extension as provided in the merger agreement) if the condition continues to fail to be satisfied.

Some of Aerpio’s officers and directors have conflicts of interest that may influence them to support or approve the merger.

Officers and directors of Aerpio participate in arrangements that provide them with interests in the merger that are different from yours, including, among others, their continued service as a director of the combined company, retention and severance benefits, the acceleration of option vesting and continued indemnification. These interests, among others, may influence the officers and directors of Aerpio to support or approve the merger. For a more detailed discussion see “The Merger—Interests of Aerpio’s Directors and Executive Officers in the Merger” beginning on page [●] of this proxy statement.

The merger may be completed even though material adverse changes may result from the announcement of the merger, industry-wide changes and other causes.

In general, either party can refuse to complete the merger if there is a material adverse change affecting the other party between May 16, 2021, the date of the merger agreement, and the closing. However, some types of changes do not permit either party to refuse to complete the merger, even if such changes would have a material adverse effect on Aerpio or Aadi, to the extent they resulted from the following and do not have a materially disproportionate effect on Aerpio or Aadi, as the case may be:

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If adverse changes occur but Aerpio and Aadi must still complete the merger, the combined company’s stock price may suffer.

The market price of the combined company’s common stock may decline as a result of the merger.

The market price of the combined company’s common stock may decline as a result of the merger for a number of reasons including if:

Aerpio’s stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.

If the combined company is unable to realize the strategic and financial benefits currently anticipated from the merger, Aerpio’s stockholders will have experienced substantial dilution of their ownership interest without receiving any commensurate benefit. Significant management attention and resources will be required to integrate the two companies. Delays in this process could adversely affect the combined company’s business, financial results, financial condition and stock price following the merger.

During the pendency of the merger, Aerpio may not be able to enter into a business combination with another party and will be subject to contractual limitations on certain actions because of restrictions in the merger agreement.

Covenants in the merger agreement impede the ability of Aerpio or Aadi to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the merger. As a result, if the merger is not completed, the parties may be at a disadvantage to their competitors. In addition, while the merger agreement is in effect and subject to limited exceptions, each party is prohibited from soliciting, initiating, encouraging or taking actions designed to facilitate any inquiries or the making of any proposal or offer that could lead to the entering into certain extraordinary transactions with any third party, such as a sale of assets, an acquisition of Aerpio common stock, a tender offer for Aerpio common stock, a merger or other business combination outside the ordinary course of business. Any such transactions could be favorable to such party’s stockholders.

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Because the lack of a public market for Aadi common stock makes it difficult to evaluate the fairness of the merger, Aadi’s stockholders may receive consideration in the merger that is greater than or less than the fair market value of Aadi common stock.

The outstanding share capital of Aadi is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of Aadi. Since the percentage of Aerpio’s equity to be issued to Aadi’s stockholders was determined based on negotiations between the parties, it is possible that the value of the Aerpio common stock to be issued in connection with the merger will be greater than the fair market value of Aadi. Alternatively, it is possible that the value of the shares of Aerpio common stock to be issued in connection with the merger will be less than the fair market value of Aadi.

The combined company will incur significant transaction costs as a result of the merger, including investment banking, legal and accounting fees. In addition, the combined company will incur significant consolidation and integration expenses which cannot be accurately estimated at this time. These costs could include the possible relocation of certain operations from Massachusetts to other offices of the combined company as well as costs associated with terminating existing office leases and the loss of benefits of certain favorable office leases. Actual transaction costs may substantially exceed Aadi’s estimates and may have an adverse effect on the combined company’s financial condition and operating results.

Failure of the merger to qualify as a reorganization within the meaning of Section 368(a) of the Code could harm the combined company.

The parties intend for the merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, as amended. For a full description of the tax consequences of the merger, see “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” beginning on page [●] of this proxy statement. To comply with the requirements for a Section 368(a) reorganization, certain requirements for the transaction must be met; if such requirements are not satisfied, Aadi’s stockholders could be subject to tax liability.

The merger is expected to result in a limitation on Aerpio’s ability to utilize its net operating loss carryforward.

Under Section 382 of the Code, use of Aerpio’s net operating loss carryforwards (referred to as “NOLs”) will be limited if Aerpio experiences an “ownership change.” For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases by more than 50 percentage points over its lowest ownership percentage within a specified testing period. Aerpio is expected to experience an ownership change as a result of the merger and therefore its ability to utilize its NOLs and certain credit carryforwards remaining at the effective time will be limited. The limitation will be determined by the fair market value of Aerpio common stock outstanding prior to the ownership change, multiplied by the applicable federal rate. Limitations imposed on Aerpio’s ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs.

Certain stockholders could attempt to influence changes within Aerpio which could adversely affect Aerpio’s operations, financial condition and the value of Aerpio common stock.

Aerpio’s stockholders may from time-to-time seek to acquire a controlling stake in Aerpio, engage in proxy solicitations, advance stockholder proposals or otherwise attempt to effect changes. Campaigns by stockholders to effect changes at publicly-traded companies are sometimes led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales of assets or the entire company. Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, and could disrupt Aerpio’s operations and divert the attention of

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the Aerpio Board and senior management from the pursuit of the proposed merger transaction. These actions could adversely affect Aerpio’s operations, financial condition, Aerpio’s ability to consummate the merger and the value of Aerpio common stock.

Aerpio and Aadi may become involved in securities litigation or stockholder derivative litigation in connection with the merger, and this could divert the attention of Aerpio and Aadi management and harm the combined company’s business, and insurance coverage may not be sufficient to cover all related costs and damages.

Securities litigation or stockholder derivative litigation frequently follows the announcement of certain significant business transactions, such as the sale of a business division or announcement of a business combination transaction. Aerpio and Aadi may become involved in this type of litigation in connection with the merger, and the combined company may become involved in this type of litigation in the future. Litigation often is expensive and diverts management’s attention and resources, which could adversely affect the business of Aerpio, Aadi and the combined company.

Failure to complete the merger may result in Aerpio paying a termination fee or expenses to the other party and could harm the price of Aerpio common stock and the future business and operations of each company.

If the merger is not completed and the merger agreement is terminated under certain circumstances, Aerpio may be required to pay Aadi a termination fee of $2,000,000 and/or an expense reimbursement of up to $750,000. Even if a termination fee or expense reimbursement is not payable in connection with a termination of the merger agreement, Aerpio will have incurred significant fees and expenses, which must be paid whether or not the merger is completed. Further, if the merger is not completed, it could significantly harm the market price of Aerpio common stock.

The exchange ratio is not adjustable based on the market price of Aerpio common stock so the merger consideration at the closing may have greater or lesser value than the market price at the time the merger agreement was signed.

The merger agreement has set the exchange ratio for Aadi common stock, and the exchange ratio is based on the outstanding Aadi common stock and the outstanding Aerpio common stock, in each case immediately prior to the closing of the merger as described under the heading “The Merger—Merger Consideration.” Applying the exchange ratio formula in the merger agreement, Aadi’s stockholders immediately before the merger are expected to own 66.8% of the outstanding capital stock of Aerpio immediately following the merger, and the stockholders of Aerpio immediately before the merger are expected to own approximately 33.2% of the outstanding capital stock of Aerpio immediately following merger, subject to certain assumptions and without giving effect to the PIPE financing. Under certain circumstances further described in the merger agreement, however, these ownership percentages may be adjusted upward or downward based on the date the closing occurs and the cash levels of the respective companies at the closing of the merger, and as a result, Aerpio’s stockholders could own less of the combined company than expected.

Any changes in the market price of Aerpio common stock before the completion of the merger will not affect the number of shares of Aerpio common stock issuable to Aadi’s stockholders pursuant to the merger agreement. Therefore, if before the completion of the merger the market price of Aerpio common stock declines from the market price on the date of the merger agreement, then Aadi’s stockholders could receive merger consideration with substantially lower value than the value of such merger consideration on the date of the merger agreement. Similarly, if before the completion of the merger the market price of Aerpio common stock increases from the market price of Aerpio common stock on the date of the merger agreement, then Aadi’s stockholders could receive merger consideration with substantially greater value than the value of such merger consideration on the date of the merger agreement. The merger agreement does not include a price-based termination right. Because the exchange ratio does not adjust as a result of changes in the market price of Aerpio common stock, for each one percentage point change in the market price of Aerpio common stock, there is a

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corresponding one percentage point rise or decline, respectively, in the value of the total merger consideration payable to Aadi’s stockholders pursuant to the merger agreement.

Certain provisions of the merger agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the merger agreement.

The terms of the merger agreement prohibit each of Aerpio and Aadi from soliciting alternative takeover proposals or cooperating with persons making unsolicited takeover proposals, except in limited circumstances when the Aerpio Board determines in good faith that an unsolicited alternative takeover proposal is or is reasonably likely to lead to a superior takeover proposal and that failure to cooperate with the proponent of the proposal would be reasonably likely to be inconsistent with the Aerpio Board’s fiduciary duties.

If the conditions to the merger are not met, the merger may not occur.

Even if the share issuances and amended and restated certificate of incorporation to effect the reverse stock split are approved by Aerpio’s stockholders, specified conditions must be satisfied or waived to complete the merger, including the consummation of the PIPE financing. These conditions are set forth in the merger agreement and described in the section entitled “The Merger Agreement—Conditions to the Completion of the Merger”. Aerpio cannot assure you that all of the conditions will be satisfied or waived. If the conditions are not satisfied or waived, the merger will not occur or will be delayed, and Aerpio and Aadi each may lose some or all of the intended benefits of the merger.

Aerpio stockholders may not receive any payment on the CVRs and the CVRs may otherwise expire valueless.

The merger agreement contemplates that at or prior to completion of the merger, Aerpio, the Holder Representative (as defined in the CVR agreement) and the Rights Agent (as defined in the CVR agreement) will execute and deliver the CVR agreement, pursuant to which each holder of Aerpio common stock as of immediately prior to the effective time of the merger shall be entitled to one contractual CVR issued by Aerpio, subject to and in accordance with the terms and conditions of the CVR agreement, for each share of Aerpio common stock held by such holder. Each CVR shall entitle the holder thereof to receive 90% of the net proceeds (calculated as gross consideration minus certain permitted deductions), if any, under the license agreement, dated June 24, 2018, entered into by and between Aerpio and Gossamer Bio, Inc., as amended by the Amendment No. 1 thereto and any written definitive agreements entered into by Aerpio and a third party prior to the effective time of the merger related to the sale, license, transfer, disposition, divestiture or other monetization transaction (i.e., a royalty transaction) and/or winding down of the Aspen Legacy Business or any Aspen Legacy Assets (each as defined in the merger agreement) (referred to as the “CVR covered agreements”). The CVRs are not transferable, except in certain limited circumstances as will be provided in the CVR agreement, will not be certificated or evidenced by any instrument and will not be registered with the SEC or listed for trading on any exchange or quotation system. The CVRs will not represent any equity or ownership interest in Aerpio or in any constituent company to the merger and will not have any voting or dividend rights, and interest will not accrue on any amounts payable in respect of the CVRs to any holder.

The combined company will be under no contractual obligation to sell, license, or otherwise monetize the Aspen Legacy Business or any Aspen Legacy Assets. If Aerpio is unable to sell, license, or otherwise monetize the Aspen Legacy Business or any Aspen Legacy Assets before the closing of the merger, or does enter into any CVR covered agreements, there may not be any proceeds relating to the CVR covered agreements, no payments will be made under the CVRs, and the CVRs will expire valueless.

Finally, the U.S. federal income tax treatment of the CVRs is unclear. There is no legal authority directly addressing the U.S. federal income tax treatment of the receipt of, and payments on, the CVRs, and there can be no assurance that the IRS would not assert, or that a court would not sustain, a position different than what is

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reported by Aerpio and that could result in adverse U.S. federal income tax consequences to holders of the CVRs. The CVR agreement is discussed in greater detail in the section entitled “Agreements Related to the Merger—Contingent Value Rights Agreement” on page [●] of this proxy statement.

Risks Related to the Reverse Stock Split

The reverse stock split may not increase Aerpio’s stock price over the long-term.

The principal purpose of the reverse stock split is to increase the per-share market price of Aerpio common stock above the minimum bid price requirement under the Nasdaq rules so that the listing on Nasdaq of the combined company and the shares of Aerpio common stock being issued in the merger will be approved. It cannot be assured, however, that the reverse stock split will accomplish this objective for any meaningful period of time. While it is expected that the reduction in the number of outstanding shares of common stock will proportionally increase the market price of Aerpio common stock, it cannot be assured that the reverse stock split will increase the market price of its common stock by a multiple of the reverse stock split ratio chosen by the Aerpio Board, or result in any permanent or sustained increase in the market price of Aerpio common stock, which is dependent upon many factors, including Aerpio’s business and financial performance, general market conditions, and prospects for future success. Thus, while the stock price of the combined company might meet the continued listing requirements for Nasdaq initially, it cannot be assured that it will continue to do so.

The reverse stock split may decrease the liquidity of Aerpio common stock.

Although the Aerpio Board believes that the anticipated increase in the market price of Aerpio common stock could encourage interest in its common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the reverse stock split. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for Aerpio common stock.

The reverse stock split may lead to a decrease in Aerpio’s overall market capitalization.

Should the market price of Aerpio common stock decline after the reverse stock split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the reverse stock split. A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in Aerpio’s overall market capitalization. If the per share market price does not increase in proportion to the reverse stock split ratio, then the value of the combined company, as measured by its stock capitalization, will be reduced. In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of Aerpio common stock will remain the same after the reverse stock split is effected, or that the reverse stock split will not have an adverse effect on Aerpio’s stock price due to the reduced number of shares outstanding after the reverse stock split.

Risks Related to Aerpio

For risks related to the business of Aerpio, please refer to the section entitled “Item 1A. Risk Factors” set forth in Aerpio’s Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on March 11, 2021, as updated by the subsequent quarterly reports on Form 10-Q.

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Risks Related to Aadi

Risks Related to Aadi’s Business, Financial Condition and Capital Requirements

Aadi is a clinical stage biopharmaceutical company, has a limited operating history, has not initiated or completed any large-scale clinical trials, and has no products approved for commercial sale, which may make it difficult for you to evaluate its current business and likelihood of success and viability.

Aadi is a clinical-stage biopharmaceutical company with a limited operating history upon which you can evaluate its business and prospects. Aadi has no products approved for commercial sale and has not generated any revenue. Drug development is a highly uncertain undertaking and involves a substantial degree of risk. Aadi’s Phase 2 registrational study of its drug FYARRO (ABI-009, nab-sirolimus) (referred to as the “AMPECT trial”) for advanced (metastatic or locally advanced) malignant perivascular epithelioid sarcoma (referred to as “PEComa”) has been completed. A rolling New Drug Application (referred to as an “NDA”) submission for its lead product candidate, ABI-009, was completed in May 2021. Based on the AMPECT trial and emerging data for ABI-009 in other solid tumors with tumor-agnostic Tuberous Sclerosis Complex 1 and 2 (referred to as “TSC1 & TSC2”) alterations, and following discussions with the U.S. Food and Drug Administration (referred to as the “FDA”), Aadi plans to initiate a tumor-agnostic registrational trial in cancers harboring TSC1 & TSC2 inactivating alterations by the end of 2021. Its other programs are in early clinical research stages. To date, Aadi has devoted substantially all of its resources to research and development activities, business planning, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital and providing general and administrative support for these operations.

Aadi has not yet demonstrated its ability to successfully obtain regulatory approvals, manufacture a commercial-scale product or arrange for a third party to do so on its behalf, or conduct sales and marketing activities necessary for successful product commercialization. As a result, it may be more difficult for you to accurately predict Aadi’s likelihood of success and viability than it could be if it had a longer operating history.

In addition, Aadi may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by clinical-stage biopharmaceutical companies in rapidly evolving fields. Aadi may also need to transition from a company with a research and development focus to a company capable of supporting commercial activities. Aadi has not yet demonstrated an ability to successfully overcome such risks and difficulties, or to make such a transition. If Aadi does not adequately address these risks and difficulties or successfully make such a transition, its business will suffer.

Aadi has incurred significant net losses since its inception, and it expects to continue to incur significant net losses for the foreseeable future.

Aadi has incurred significant net losses since its inception, has not generated any revenue from product sales to date and has financed its operations principally through private placements of its convertible preferred stock, federal grants and proceeds from licenses. Aadi’s net losses were $5.5 million for the three months ended March 31, 2021 and $3.5 million for the year ended December 31, 2020. Aadi had an accumulated deficit of $38.1 million as of March 31, 2021 and $32.6 million as of December 31, 2020. These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with Aadi’s operations. Aadi does not expect to generate meaningful revenue from product sales for the foreseeable future, and it expects to continue to incur significant operating expenses for the foreseeable future due to the cost of research and development, including identifying and designing additional product candidates and conducting preclinical studies and clinical trials, and the regulatory approval process for its product candidates. Aadi expects its expenses, and the potential for losses, to increase substantially as it conducts clinical trials of its lead product candidates and seeks to expand its pipeline. The amount of Aadi’s future expenses and potential losses is uncertain.

Even if Aadi succeeds in receiving regulatory approval for and commercializing one or more of its current and future product candidates, Aadi expects to continue to incur significant expenses and increasing operating

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losses over the next several years and for the foreseeable future. The net losses Aadi incurs may fluctuate significantly from quarter to quarter such that a period-to-period comparison of its results of operations may not be a good indication of its future performance. The size of its future net losses will depend, in part, on the rate of future growth of its expenses and its ability to generate revenue. Aadi’s prior losses and expected future losses have had, and will continue to have, an adverse effect on its working capital, its ability to fund the development of its product candidates, its ability to achieve and maintain profitability and the performance of its stock.

Aadi’s ability to generate revenue and achieve profitability depends significantly on its ability to achieve several objectives relating to the discovery, development and commercialization of its product candidates.

Aadi’s ability to generate product revenue sufficient to achieve profitability depends on the successful discovery, development and eventual commercialization of one or more of its current and future product candidates. To date, Aadi has no products approved for commercial sale and does not anticipate generating any revenue from product sales until after Aadi has received regulatory approval for the commercial sale of a product candidate, if ever. Its ability to generate revenue and achieve profitability depends significantly on its ability, or any current or future collaborator’s ability, to achieve several objectives, including, but not limited to:

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Aadi may never be successful in achieving its objectives and, even if it does, may never generate revenue that is significant or large enough to achieve profitability. If Aadi does achieve profitability, it may not be able to sustain or increase profitability on a quarterly or annual basis. Aadi’s failure to become and remain profitable would decrease its value and could impair its ability to maintain or further its research and development efforts, raise additional necessary capital, grow its business or continue its operations and could cause a decline in the value of its common stock.

Even following the merger and PIPE financing, Aadi will require additional capital to finance its operations. If it is unable to raise such capital when needed, or on acceptable terms, it may be forced to delay, reduce and/or eliminate one or more of its research and drug development programs or future commercialization efforts.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a very time-consuming, expensive and uncertain process that takes years to complete. Aadi’s operations have consumed substantial amounts of cash since inception, and Aadi expects its expenses to increase in connection with its ongoing and planned activities, particularly as it seeks regulatory approval for, and the potential commercialization of, ABI-009. Aadi’s expenses could increase beyond its current expectations if it is required by the FDA, the European Medicines Agency (referred to as the “EMA”) or other regulatory agencies to perform clinical trials or preclinical studies in addition to those that it currently anticipates, or if there are any delays in any of its clinical trials or the development of any of its product candidates. Other unanticipated costs may also arise. In addition, even if Aadi obtains regulatory approval for any of its product candidates, including ABI-009, Aadi expects to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution activities and ongoing compliance activities. Because the outcome of Aadi’s rolling NDA submission for the PEComa indication and the design and outcome of Aadi’s planned and anticipated clinical trials is uncertain, it cannot reasonably estimate the actual amount of resources and funding that will be necessary to successfully complete the development and commercialization of ABI-009 for the PEComa indication, if approved, or any other product candidates or other indications it develops. Aadi is not permitted to market or promote ABI-009, or any other product candidate, in the United States before it receives regulatory approval from the FDA. In addition, upon the completion of the merger, Aadi expects to incur additional costs associated with operating as a public company. Accordingly, Aadi will need to obtain substantial additional funding in order to continue its operations.

As of March 31, 2021, Aadi had $15 million in cash and cash equivalents. Based on Aadi’s current operating plan, it believes that the cash and cash equivalents of the combined company following the close of the merger, including the proceeds from the PIPE financing, will enable it to fund its planned operating expenses and capital expenditures into the third quarter of 2021. Aadi’s estimate as to how long it expects the cash and cash equivalents of the combined company to be able to continue to fund its operations is based on assumptions that may prove to be wrong, and it could exhaust its available capital resources sooner than it currently expects. Changing circumstances, some of which may be beyond its control, could cause Aadi to consume capital significantly faster than it currently anticipates, and it may need to seek additional funds sooner than planned.

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Aadi plans to use the cash and cash equivalents of the combined company to fund the commercialization of ABI-009 for the PEComa indication, if approved, ongoing and planned clinical trials of ABI-009 for other indications such as the TSC1 & TSC2 indications, for manufacturing operations and to fund its other research for other product candidates and development activities, as well as for working capital and other general corporate purposes. Advancing the development of ABI-009 and any other product candidate will require a significant amount of capital. The existing cash and cash equivalents of the combined company will not be sufficient to fund all of the activities that are necessary to complete the development of ABI-009.

Aadi will be required to obtain further funding to support its continuing operations through public or private equity offerings, debt financings, third-party funding, marketing and distribution arrangements, collaborations with third parties and licensing arrangements or other sources or a combination of these approaches, which may dilute its stockholders or restrict its operating activities. Any additional fundraising efforts may divert its management from their day-to-day activities, which may adversely affect its ability to develop and, if approved, commercialize its product candidates. Adequate additional financing may not be available to Aadi in sufficient amounts or on acceptable terms, or at all. To the extent that Aadi raises additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder and the possibility of such issuance may cause the market price of Aadi’s shares to decline. Debt financing may result in imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect the conduct of Aadi’s business. If Aadi raises additional funds through up-front payments or milestone payments pursuant to strategic collaborations with third parties, it may have to relinquish valuable rights to certain of its technologies or its product candidates, or grant licenses on terms that are not favorable to it, which may have a material adverse effect on its business, operating results and prospects. Aadi’s ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond its control. In addition, Aadi may seek additional capital due to favorable market conditions or strategic considerations even if it believes it has sufficient funds for its current or future operating plans.

Aadi’s failure to raise capital as and when needed or on acceptable terms would have a negative impact on its financial condition and its ability to pursue its business strategy, and Aadi may have to significantly delay, reduce the scope of, suspend or eliminate one or more of its research or development programs, clinical trials or future commercialization efforts.

Risks Related to the Discovery, Development and Commercialization of Aadi’s Product Candidates

Aadi is substantially dependent on the success of its lead product candidate, ABI-009, which requires significant clinical testing before submitting a new drug application for regulatory approval and potentially launching commercial sales if approval is granted. If Aadi is unable to complete development of, obtain approval for and commercialize ABI-009 for one or more indications in a timely manner, its business will be harmed.

Aadi’s future success is dependent on its ability to timely and successfully obtain regulatory approval for, and then successfully commercialize, ABI-009, its lead product candidate. Aadi is investing the majority of its efforts and financial resources in the research and development of ABI-009 for multiple indications. ABI-009 is an injectable, albumin-bound nanoparticle form of sirolimus bound to albumin, for the treatment of malignant PEComas, as well as other cancer types with mTOR pathway alterations in the TSC1 & TSC2 genes that are most likely to respond to mTOR treatment.

In May 2021, Aadi completed the filing of a rolling NDA for ABI-009 to the FDA for approval to treat patients with advanced malignant PEComa. Aadi’s NDA is based on results from its AMPECT trial, involving patients for whom there are currently no approved therapies in the United States. In November 2019, Aadi announced top-line results from the AMPECT trial, including that the study achieved its primary endpoint of objective response rate (referred to as the “ORR”) as determined by blinded independent central radiologic review using modified Response

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Evaluation Criteria in Solid Tumors (referred to as “RECIST”). ABI-009 will require additional clinical development, expansion of manufacturing capabilities, regulatory approval from the FDA and other regulatory authorities in jurisdictions where Aadi plans to market ABI-009, substantial investment and significant marketing efforts before Aadi can generate any revenues from product sales. Aadi is not permitted to market or promote ABI-009, or any other product candidate, before it receives regulatory approval from the FDA and comparable foreign regulatory authorities, and Aadi may never receive such regulatory approvals.

The success of ABI-009 will depend on several factors, including the following:

In addition to advanced malignant PEComa, based on data from the completed AMPECT trial and Aadi’s ongoing expanded access program, Aadi is planning a registrational Phase 2 study, PRECISION 1, of ABI-009 in TSC1 & TSC2 alterations. Aadi completed a Type B meeting with the FDA in which it discussed the initial trial design with the FDA. Aadi plans to file the IND for ABI-009 in tumor-agnostic TSC1 & TSC2 alterations and initiate a registrational clinical trial by the end of 2021. Aadi’s product development costs could increase if it experiences delays. Significant trial delays also could shorten any periods during which Aadi may have the exclusive right to commercialize ABI-009 or allow Aadi’s competitors to bring products to market before Aadi does, which would impair Aadi’s ability to successfully capitalize on ABI-009 and may harm its business, results of operations and prospects. Events that may result in a delay or unsuccessful completion of clinical development of ABI-009 include, among other things:

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An inability by Aadi to timely complete clinical development could result in additional costs to Aadi or impair its ability to generate product revenues or development, regulatory, commercialization and sales milestone payments and royalties on product sales.

Aadi does not have complete control over many of these factors, including certain aspects of clinical development and the regulatory submission process, potential threats to its intellectual property rights and the manufacturing, marketing, distribution and sales efforts of its current or any future collaborators. If Aadi is not successful with respect to one or more of these factors in a timely manner or at all, it could experience significant delays or an inability to successfully commercialize ABI-009, which would materially harm its business. If Aadi does not receive regulatory approvals for ABI-009 or other product candidates, Aadi may not be able to continue its operations.

In addition to ABI-009, Aadi’s prospects depend in part upon discovering, developing and commercializing additional product candidates, which may fail in development or suffer delays that adversely affect their commercial viability.

Aadi’s future operating results are dependent on its ability to successfully discover, develop, obtain regulatory approval for and commercialize product candidates other than ABI-009. All of Aadi’s current product candidates other than ABI-009 are in research or preclinical development. Prior to initiating clinical trials with its other product candidates, Aadi will need to file an IND or similar application to the FDA or regulatory authorities in other jurisdictions. Aadi may not be able to file future INDs for its product candidates on the timelines it expects. For example, Aadi may experience manufacturing delays or other delays with IND-enabling studies. Moreover, Aadi cannot be sure that submission of an IND will result in the FDA allowing further clinical trials to begin, or that, once begun, issues will not arise that result in the suspension or termination of clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND, Aadi cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials Aadi may submit as amendments to existing INDs or to a new IND. Any failure to file INDs on the timelines Aadi expects or to

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obtain regulatory clearance for its trials may prevent Aadi from developing its product candidates on a timely basis, if at all. A product candidate can unexpectedly fail at any stage of preclinical and clinical development. The historical failure rate for product candidates is high due to risks relating to safety, efficacy, clinical execution, changing standards of medical care and other unpredictable variables. The results from preclinical studies or early clinical trials of a product candidate may not be predictive of the results that will be obtained in later stage clinical trials of the product candidate.

The success of other product candidates Aadi may develop will depend on many factors, including the following:

Even if Aadi successfully advances any other product candidates into clinical development, their success will be subject to all of the clinical, regulatory and commercial risks described elsewhere in this “Risk Factors” section. Accordingly, Aadi cannot assure you that it will ever be able to discover, develop, obtain regulatory approval of, commercialize or generate significant revenue from any product candidates.

The preclinical studies and clinical trials of Aadi’s product candidates may not demonstrate safety and efficacy to the satisfaction of the FDA, EMA or other comparable foreign regulatory authorities or otherwise produce positive results, which would prevent, delay, or limit the scope of development, regulatory approval and commercialization.

Before obtaining regulatory approval from the FDA, EMA or other comparable foreign regulatory authorities for the sale of its product candidates, Aadi, among other requirements, must complete preclinical development and extensive clinical trials to demonstrate with substantial evidence the safety and efficacy of such product candidates. Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use. Clinical testing is expensive, difficult to design and implement, can take many years to complete and its ultimate outcome is inherently uncertain. A failure of one or more preclinical studies or clinical trials can occur at any stage of the process. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials. In addition, initial success in clinical trials may not be indicative of results obtained when such trials are completed. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies in the biopharmaceutical industry that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain regulatory approval of their products. Aadi’s current or future clinical trials may not ultimately be successful or support further clinical development of any of its product candidates.

Aadi may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent its ability to receive regulatory approval or its ability to commercialize its product candidates, including:

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For instance, Aadi does not know whether ABI-009 will perform in current or future clinical trials as it has performed in preclinical studies or prior clinical trials. Product candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA, EMA and other comparable foreign regulatory authorities despite having progressed through preclinical studies and early-stage clinical trials. Additionally, while Aadi is aware of several other approved and clinical-stage mTOR inhibitors being developed by multiple other companies, to Aadi’s knowledge, there are no mTOR inhibitors approved specifically for the treatment of advanced malignant PEComa. As such, the development of ABI-009 and Aadi’s stock price may be impacted by inferences, whether correct or not, that are drawn between the success of its product candidate and those of other companies’ mTOR inhibitors. Regulatory authorities may also limit the scope of later-stage trials until Aadi has demonstrated satisfactory safety, which could delay regulatory approval, limit the size of the patient population to which it may market its product candidates, or prevent regulatory approval.

In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to the dose and dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. Patients treated with Aadi’s product candidates may also be undergoing surgical, radiation and chemotherapy treatments and may be using other approved products or investigational new drugs, which can cause side effects or adverse events that are unrelated to its product candidates. As a result, assessments of efficacy can vary widely for a particular patient, and from patient to patient and site to site within a clinical trial. This subjectivity can increase the uncertainty of, and adversely impact, Aadi’s clinical trial outcomes.

Aadi does not know whether any clinical trials it may conduct will demonstrate consistent or adequate efficacy and safety sufficient to obtain approval to market any of its product candidates. If Aadi is required to conduct additional clinical trials or other testing of its product candidates beyond those that it currently contemplates, if it is unable to successfully complete clinical trials of its product candidates or other testing in a timely manner, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, it may (i) incur unplanned costs, (ii) be delayed in seeking and obtaining regulatory approval, if it receives such approval at all, (iii) receive more limited or restrictive regulatory approval, (iv) be subject to additional post-marketing testing requirements or (v) have the drug removed from the market after obtaining regulatory approval. Even if regulatory approval is secured for any of its product candidates, the terms of such approval may limit the scope and use of its product candidates, which may also limit their commercial potential.

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Aadi’s product candidates may cause significant adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that could delay or prevent regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences.

If Aadi’s product candidates are associated with serious adverse events or other undesirable side effects or have unexpected characteristics in preclinical studies or clinical trials when used alone or in combination with other approved products or investigational new drugs, it may need to conduct additional studies to further evaluate the product candidates’ safety, interrupt, delay or abandon their development or halt clinical trials or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the trial or result in a more restrictive label, delay or denial of regulatory approval or potential product liability claims. Any of these occurrences may prevent Aadi from achieving or maintaining market acceptance of the affected product candidate, could substantially increase the costs of commercializing its product candidates and significantly impact its ability to successfully commercialize its product candidates and generate revenues, and may harm its business, financial condition and prospects significantly. For example, in Aadi’s AMPECT trial of ABI-009, most treatment-related adverse events were mild or moderate, with the most commonly reported adverse events being anemia, edema, infections, mucositis, pain, nail changes, vomiting, thrombocytopenia, hypertension and nausea. Treatment-related adverse events in our other oncology and PAH trials of ABI-009 included thrombocytopenia, diarrhea, fatigue, mucosal inflammation, nausea, anemia, and rash. Additionally, in our first-in-human study of ABI-009 in solid tumors, one patient died of dyspnea which was deemed possibly related to ABI-009.

Patients in Aadi’s completed and planned clinical trials may in the future suffer other significant adverse events or other side effects not observed or anticipated based on its preclinical studies or previous clinical trials. ABI-009 or other product candidates may be used in populations for which safety concerns may be particularly scrutinized by regulatory agencies. In addition, ABI-009 is being studied in combination with other therapies, which may exacerbate adverse events associated with the therapy. Patients treated with ABI-009 or Aadi’s other product candidates may also be undergoing surgical, radiation and/or chemotherapy treatments, which can cause side effects or adverse events that are unrelated to Aadi’s product candidate but may still impact the success of its clinical trials. The inclusion of critically ill patients in Aadi’s clinical trials may result in deaths or other adverse medical events due to other therapies or medications that such patients may be using or due to the gravity of such patients’ illnesses. For example, it is expected that some of the patients enrolled in its ABI-009 clinical trials will die or experience major adverse clinical events either during the course of Aadi’s clinical trials or after such trials, which has occurred in the past.

If further significant adverse events or other side effects are observed in any of Aadi’s current or future clinical trials, Aadi may have difficulty recruiting patients to the clinical trials, patients may drop out of its trials, or it may be required to abandon the trials or its development efforts of that product candidate altogether. Aadi, the FDA, EMA, other comparable regulatory authorities or an institutional review board may suspend or terminate clinical research at any time for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks or adverse side effects. Some potential therapeutics developed in the biotechnology industry that initially showed therapeutic promise in early-stage trials have later been found to cause side effects that prevented their further development. Even if the side effects do not preclude the product candidate from obtaining or maintaining regulatory approval, undesirable side effects may inhibit market acceptance due to its tolerability versus other therapies. Any of these developments could materially harm Aadi’s business, financial condition and prospects.

Further, if any of Aadi’s product candidates obtains regulatory approval, toxicities associated with such product candidates and not seen during clinical testing may also develop after such approval and lead to a requirement to (i) conduct additional clinical safety trials, (ii) add additional contraindications, warnings and

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precautions to the drug label, (iii) significantly restrict the use of the product, (iv) change the way the product is distributed or administered, (v) implement a risk evaluation and mitigation strategy, or create a medication guide outlining the risks of such side effects for distribution to patients, or (vi) suspend or withdraw the product from the market. Aadi cannot predict whether its product candidates will cause toxicities in humans that would preclude or lead to the revocation of regulatory approval based on preclinical studies or early stage clinical trials.

Results from early preclinical studies and clinical trials of Aadi’s product candidates are not necessarily predictive of the results of later preclinical studies and clinical trials of its product candidates. If Aadi cannot replicate the results from its earlier preclinical studies and clinical trials of its product candidates in its later preclinical studies and clinical trials, Aadi may be unable to successfully develop, obtain regulatory approval for and commercialize its product candidates.

Any results from early preclinical studies and clinical trials of Aadi’s product candidates may not necessarily be predictive of the results from later preclinical studies and clinical trials. Similarly, even if Aadi is able to complete its planned preclinical studies and clinical trials of its product candidates according to its current development timeline, the results from such preclinical studies and clinical trials of its product candidates may not be replicated in subsequent preclinical studies or clinical trial results.

Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development and Aadi cannot be certain that it will not face similar setbacks. These setbacks have been caused by, among other things, preclinical and other nonclinical findings made while clinical trials were underway, or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events. Moreover, preclinical, nonclinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA or EMA approval.

Additionally, some of Aadi’s ongoing, planned and future clinical trials utilize an open-label study design and may be conducted at a limited number of clinical sites on a limited number of patients. An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients in open-label clinical trials are aware when they are receiving treatment. Open-label clinical trials may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. Moreover, patients selected for early clinical studies often include the most severe sufferers and their symptoms may have been bound to improve notwithstanding the new treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge. The results from an open-label trial may not be predictive of future clinical trial results with any of its product candidates when studied in a controlled environment with a placebo or active control.

Interim, topline and preliminary data from Aadi’s clinical trials that it announces or publishes from time to time may change as more patient data become available or as additional analyses are conducted, and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, Aadi may publicly disclose preliminary, interim or topline data from its clinical trials, such as the preliminary data from its completed AMPECT trial of ABI-009 in patients with malignant PEComas. The preliminary data is based on a preliminary analysis of then available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. For example, Aadi may report tumor responses in certain patients that are unconfirmed at

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the time and which do not ultimately result in confirmed responses to treatment after follow-up evaluations. Aadi also makes assumptions, estimations, calculations and conclusions as part of its analyses of data, and it may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the topline results that Aadi reports may differ from future results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data Aadi previously published. As a result, topline data should be viewed with caution until the final data are available. In addition, Aadi may report interim analyses of only certain endpoints rather than all endpoints. Interim data from clinical trials that Aadi may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse changes between interim data and final data could significantly harm Aadi’s business and prospects. Further, additional disclosure of interim data by Aadi or by its competitors in the future could result in volatility in the price of Aadi’s common stock.

In addition, the information Aadi chooses to publicly disclose regarding a particular clinical trial is typically selected from a more extensive amount of available information. You or others may not agree with what Aadi determines is the material or otherwise appropriate information to include in its disclosure, and any information it determines not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or its business. If the preliminary or topline data that Aadi reports differ from late, final or actual results, or if others, including regulatory authorities, disagree with the conclusions reached, Aadi’s ability to obtain approval for, and commercialize, ABI-009 or any other product candidates may be harmed, which could harm its business, financial condition, results of operations and prospects.

Adverse results of clinical trials conducted by third parties investigating the same product candidates as Aadi in different territories could adversely affect its development of such product candidate.

Lack of efficacy, adverse events, undesirable side effects or other adverse results may emerge in clinical trials conducted by third parties investigating the same product candidates as Aadi in different territories for the same or different indications. For example, pursuant to the exclusive license agreement (referred to as the “EOC License Agreement”) with EOC Pharma (Hong Kong) Limited (referred to as “EOC”) for the development and commercialization of ABI-009 in Greater China, including the Republic of China, Hong Kong, Macau and Taiwan (collectively, referred to as the “EOC Territory”), EOC has been granted the right to develop and commercialize the same compounds licensed to Aadi, as specified in the EOC License Agreement, including ABI-009, in the EOC Territory and, subject to certain restrictions, to collaborate with others for such development and commercialization. Aadi does not have control over EOC’s clinical trials or development program, and adverse findings from or EOC’s conduct of clinical trials could adversely affect Aadi’s development of ABI-009 or the viability of ABI-009 as a product candidate. Aadi may be required to report EOC’s adverse events or unexpected side effects to the FDA or comparable foreign regulatory authorities, which could, among other things, order Aadi to cease further development of ABI-009.

If Aadi experiences delays or difficulties in the enrollment and/or maintenance of patients in clinical trials, its regulatory submissions or receipt of necessary regulatory approvals could be delayed or prevented.

Aadi may not be able to initiate or continue clinical trials for its product candidates if it is unable to locate and enroll a sufficient number of eligible patients to participate in these trials to such trial’s conclusion as required by the FDA, EMA or other comparable foreign regulatory authorities. Orphan indications, in particular, have small populations, and it may be difficult for Aadi to locate and enroll sufficient patients in trials for orphan-designated indications. Patient enrollment is a significant factor in the timing of clinical trials. Aadi’s ability to identify and enroll eligible patients for clinical trials may be limited or may result in slower enrollment than it anticipates. For instance, patients for Aadi’s trials for the TSC1 & TSC2 study are screened using genomic information to identify alterations in the TSC1 & TSC2 genes and utilizing such criteria and/or certain highly

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specific criteria related to the cancer sub-types may limit patient populations eligible for Aadi’s clinical trials. In particular, because Aadi is focused on patients with specific genetic mutations for certain of its development programs, its ability to enroll eligible patients may be limited or may result in slower enrollment than anticipated. For example, with respect to ABI-009, Aadi cannot be certain how many patients will harbor the TSC1 & TSC2 mutations that ABI-009 is designed to target or that the number of patients enrolled for each mutation will suffice for regulatory approval and inclusion of each such mutation in the approved label. Aadi may also engage third parties to develop companion diagnostics for use in its clinical trials, but such third parties may not be successful in developing such companion diagnostics, furthering the difficulty in identifying patients with the targeted genetic mutations for its clinical trials. If Aadi’s strategies for patient identification prove unsuccessful, it may have difficulty enrolling or maintaining patients appropriate for ABI-009.

Patient enrollment may be affected if Aadi’s competitors have ongoing clinical trials for product candidates that are under development for the same indications as Aadi’s product candidates, and patients who would otherwise be eligible for Aadi’s clinical trials instead enroll in clinical trials of Aadi’s competitors’ product candidates. Also, marketing authorization of competitors in this same class of drugs may impair Aadi’s ability to enroll patients into its clinical trials, delaying or potentially preventing Aadi from completing recruitment for one or more of its trials. Patient enrollment and retention for Aadi’s current or any future clinical trials may be affected by other factors, including:

Aadi’s inability to enroll a sufficient number of patients for its clinical trials could result in significant delays or may require it to abandon one or more clinical trials altogether. Furthermore, any negative results Aadi may report in clinical trials of its product candidates may make it difficult or impossible to recruit and retain patients in other clinical trials it is conducting. Similarly, negative results reported by Aadi’s competitors about their drug candidates may negatively affect patient recruitment in Aadi’s clinical trials. Enrollment delays in Aadi’s clinical trials may result in increased development costs for its product candidates and jeopardize its ability to obtain regulatory approval for the sale of its product candidates. Furthermore, even if Aadi is able to

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enroll a sufficient number of patients for its clinical trials, there is a risk that patients enrolled in clinical trials will drop out of the trials before completion or, because they may be late-stage cancer patients, will not survive the full terms of the clinical trials. As a result, Aadi may have difficulty maintaining participation in its clinical trials through the treatment and any follow-up periods. In addition, Aadi relies on clinical trial sites to ensure timely conduct of its clinical trials and, while it has entered into agreements governing their services, Aadi is limited in its ability to compel their actual performance.

Aadi expects to develop ABI-009 and potentially other product candidates in combination with other therapies, which exposes Aadi to additional risks.

Aadi intends to develop ABI-009 and potentially other product candidates, in combination with one or more currently approved or unapproved therapies to treat cancer or other diseases. Patients may not be able to tolerate ABI-009 or any of Aadi’s other product candidates in combination with other therapies or dosing of ABI-009 in combination with other therapies may have unexpected consequences. Even if any of Aadi’s product candidates were to receive regulatory approval or be commercialized for use in combination with other existing therapies, Aadi would continue to be subject to the risks that the FDA, EMA or other comparable foreign regulatory authorities could revoke approval of the therapy used in combination with any of Aadi’s product candidates, or safety, efficacy, manufacturing or supply issues could arise with these existing therapies. In addition, it is possible that existing therapies with which Aadi’s product candidates are approved for use could themselves fall out of favor or be relegated to later lines of treatment. This could result in the need to identify other combination therapies for Aadi’s product candidates, the FDA, EMA or comparable foreign regulatory authorities in other jurisdictions requiring additional clinical trials, or Aadi’s own products being removed from the market or being less successful commercially.

Aadi may also evaluate its product candidates in combination with one or more other cancer therapies that have not yet been approved for marketing by the FDA, EMA or comparable foreign regulatory authorities. Aadi will not be able to market and sell any product candidate in combination with any such unapproved cancer therapies that do not ultimately obtain regulatory approval.

If the FDA, EMA or other comparable foreign regulatory authorities do not approve or revoke their approval of these other therapies, or if safety, efficacy, commercial adoption, manufacturing or supply issues arise with the therapies Aadi chooses to evaluate in combination with ABI-009 or any other product candidate, Aadi may be unable to obtain approval of or successfully market any one or all of the product candidates it develops. These unapproved therapies face the same risks described with respect to Aadi’s product candidates currently in development, including serious adverse effects and delays in their clinical trials. In addition, other companies may also develop their products or product candidates in combination with the unapproved therapies with which Aadi is developing its product candidates for use in combination. Any setbacks in these companies’ clinical trials, including the emergence of serious adverse effects, may delay or prevent the development and approval of Aadi’s product candidates.

Additionally, if the third-party providers of therapies or therapies in development used in combination with Aadi’s product candidates are unable to produce sufficient quantities for clinical trials or for commercialization of Aadi’s product candidates, or if the cost of combination therapies are prohibitive, Aadi’s development and commercialization efforts would be impaired, which would have an adverse effect on Aadi’s business, financial condition, results of operations and growth prospects.

Aadi has limited resources and is currently focusing its efforts on developing ABI-009 for particular indications. As a result, Aadi may fail to capitalize on other indications or product candidates that may ultimately prove to be more profitable or to have a greater likelihood of success.

Aadi is currently focusing its resources and efforts on developing ABI-009 for particular indications and advancing its preclinical programs for certain other product candidates. As a result, because Aadi has limited

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financial and managerial resources, it may forgo or delay pursuit of opportunities for other indications or with other product candidates that may later prove to have greater commercial potential. Aadi’s resource allocation decisions may cause it to fail to capitalize on viable commercial drugs or profitable market opportunities. Failure to properly assess potential product candidates could result in Aadi’s focus on product candidates with low market potential, which would harm its business, financial condition, results of operations and prospects. Aadi’s spending on current and future research and development activities for ABI-009 and other programs may not yield any commercially viable drugs. If Aadi does not accurately evaluate the likelihood of clinical trial success, commercial potential or target markets for ABI-009 or any of its other product candidates, it may relinquish valuable rights to that product candidate or program through collaboration, licensing or other strategic or royalty arrangements in cases in which it would have been more advantageous for it to retain sole development and commercialization rights to such product candidate or program.

Aadi faces significant competition, and if its competitors develop and market technologies or products more rapidly than it does, or achieve regulatory approval before it does or that are more effective, safer or less expensive than the products it develops, Aadi’s commercial opportunities will be negatively impacted.

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary and novel products and product candidates. Aadi’s competitors have developed, are developing or may develop products, product candidates and processes competitive with Aadi’s product candidates and products, if approved. Any product candidates that Aadi successfully develops and commercializes will compete with existing therapies and new therapies that may become available in the future. Aadi believes that a significant number of products are currently under development, and may become commercially available in the future, for the treatment of conditions for which Aadi may attempt to develop product candidates. In addition, Aadi’s products may need to compete with drugs that physicians currently use to treat the indications for which Aadi seeks approval. This may make it difficult for Aadi to replace existing therapies with its products.

In particular, there is intense competition in the field of oncology. Aadi has competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, emerging and start-up companies, government agencies, universities and other research institutions. Aadi also competes with these organizations to recruit and retain management, scientists and clinical development personnel, which could negatively affect its level of expertise and its ability to execute its business plan. Aadi will also face competition in establishing clinical trial sites, enrolling subjects for clinical trials and in identifying and in-licensing new product candidates.

Aadi is not aware of any FDA- or EMA -approved products indicated specifically for the treatment of advanced malignant PEComa. Patients with malignant PEComa commonly receive chemotherapy regimens and currently mTOR inhibitors including sirolimus, everolimus, and temsirolimus are recommended in the National Comprehensive Cancer Network (referred to as the “NCCN”) guidelines for treatment of advanced malignant PEComa based on published retrospective data. For tumor agnostic TSC1 & TSC2 inactivating alterations, there are no existing FDA- or EMA-approved products indicated for such use. If ABI-009 receives regulatory approval, it may face competition from other drug candidates in clinical trials that target the mTOR pathway. These may include dual mTORC1/2 inhibitors in clinical trials or next generation mTOR inhibitors in development. Any potential competitors may have significantly greater financial, manufacturing, marketing, drug development, technical and human resources, and commercial expertise than Aadi. Large pharmaceutical and biotechnology companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and manufacturing biotechnology products. These companies also have significantly greater research and marketing capabilities than Aadi does and may also have products that have been approved or are in late stages of development, and collaborative arrangements in Aadi’s target markets with leading companies and research institutions. Established pharmaceutical and biotechnology companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product candidates that Aadi develops obsolete. Mergers and acquisitions in the

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pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of its competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies, as well as in acquiring technologies complementary to, or necessary for, Aadi’s programs. As a result of all of these factors, Aadi’s competitors may succeed in obtaining approval from the FDA, EMA or other comparable foreign regulatory authorities or in discovering, developing and commercializing products in the field before Aadi.

Aadi’s commercial opportunity could be reduced or eliminated if its competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, have a broader label, are marketed more effectively, are more widely reimbursed or are less expensive than any products that Aadi may develop. Aadi’s competitors also may obtain regulatory approval from the FDA, EMA or other comparable foreign regulatory authorities for their products more rapidly than Aadi may obtain approval for its products, which could result in its competitors establishing a strong market position before Aadi is able to enter the market. Even if the product candidates Aadi develops achieve regulatory approval, they may be priced at a significant premium over competitive products if any have been approved by then, resulting in reduced competitiveness. Technological advances or products developed by Aadi’s competitors may render its technologies or product candidates obsolete, less competitive or not economical. If Aadi is unable to compete effectively, its opportunity to generate revenue from the sale of any products it may develop, if approved, could be adversely affected.

Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.

As product candidates progress through preclinical studies and clinical trials to regulatory approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize yield and manufacturing batch size, minimize costs and achieve consistent quality and results. For example, Aadi may introduce alternative formulations or dosage forms of ABI-009 into the planned PRECISION 1 trial. Such material changes will require regulatory approval before implementation and carry the risk that they will not achieve these intended objectives. Any of these changes could cause Aadi’s product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials conducted with the altered materials. This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of Aadi’s product candidates and jeopardize Aadi’s ability to commercialize its product candidates, if approved, and generate revenue.

Aadi’s product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success, which would limit the revenue that Aadi generates from its sales.

Even if Aadi’s product candidates receive regulatory approval, the approved product candidates may not gain adequate market acceptance among physicians, patients, third-party payors and others in the medical community. The degree of market acceptance of any of Aadi’s approved product candidates will depend on a number of factors, including, among others:

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If any of Aadi’s product candidates is approved but does not achieve an adequate level of acceptance by physicians, hospitals, healthcare payors and patients, Aadi may not generate or derive sufficient revenue from that product candidate and its financial results could be negatively impacted. Before granting reimbursement approval, healthcare payors may require Aadi to demonstrate that its product candidates, in addition to treating target indications, also provide incremental health benefits to patients. Aadi’s efforts to educate the medical community and third-party payors about the benefits of its product candidates may require significant resources and may never be successful.

The market opportunities for ABI-009 and other product candidates Aadi develops, if approved, may be limited to certain smaller patient subsets.

Cancer therapies are sometimes characterized by line of therapy (first-line, second-line, third-line, etc.) and the FDA often approves new therapies initially only for a particular line or lines of use. When cancer is detected early enough, first-line therapy, such as chemotherapy, hormone therapy, surgery, radiation therapy or a combination of these, is sometimes adequate to cure the cancer or prolong life without a cure. Second line therapies often consist of more chemotherapy, radiation, antibody drugs, tumor-targeted small molecules, or a combination of these. Third line therapies can include chemotherapy, antibody drugs and small molecule tumor-targeted therapies, more invasive forms of surgery and new technologies. Aadi’s completed and planned clinical trials for ABI-009 are with patients who may have received one or more prior treatments. There is no guarantee that product candidates that Aadi develops, even if approved, would be approved for first-line or second-line therapy, including FYARRO for the treatment of advanced malignant PEComa, and, prior to any such approvals, Aadi may have to conduct additional clinical trials that may be costly, time-consuming and subject to risk.

The number of patients who have the cancers Aadi is targeting may turn out to be lower than expected. Aadi’s projections of addressable patient populations that may benefit from treatment with its product candidates are based on its estimates, which may prove to be incorrect. Additionally, the potentially addressable patient population for ABI-009 and other product candidates may be limited or may not be amenable to treatment with Aadi’s product candidates. Regulatory approval may limit the market of a product candidate to target patient populations when such biomarker-driven identification and/or highly specific criteria related to the stage of disease progression are utilized. If any of Aadi’s estimates prove to be inaccurate, the market opportunity for any product candidate that it or its strategic partners develop could be significantly diminished and have an adverse material impact on its business.

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Even if Aadi obtains significant market share for any approved product, if the potential target populations are small, Aadi may never achieve profitability without obtaining regulatory approval for additional indications.

Aadi may not be successful in growing its product pipeline through acquisitions and in-licenses.

Aadi believes that accessing external innovation and expertise is important to its success; and while Aadi plans to leverage its leadership team’s prior business development experience as it evaluates potential in-licensing and acquisition opportunities to further expand its portfolio, it may not be able to identify suitable licensing or acquisition opportunities, and even if it does, it may not be able to successfully secure such licensing and acquisition opportunities. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that Aadi may consider attractive or necessary. These companies may have a competitive advantage over Aadi due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive Aadi to be a competitor may be unwilling to assign or license rights to Aadi. Aadi may also be unable to license or acquire third-party intellectual property rights on terms that would allow it to make an appropriate return on its investment, or at all. If Aadi is unable to successfully license or acquire additional product candidates to expand its portfolio, its pipeline, competitive position, business, financial condition, results of operations, and prospects may be materially harmed.

Any product candidates Aadi develops may become subject to unfavorable third-party coverage and reimbursement practices, as well as pricing regulations.

The availability and extent of coverage and adequate reimbursement by third-party payors, including government health administration authorities, private health coverage insurers, managed care organizations and other third-party payors is essential for most patients to be able to afford expensive treatments. Sales of any of Aadi’s product candidates that receive regulatory approval will depend substantially, both in the United States and internationally, on the extent to which the costs of such product candidates will be covered and reimbursed by third-party payors. If reimbursement is not available, or is available only to limited levels, Aadi may not be able to successfully commercialize its product candidates. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow Aadi to establish or maintain pricing sufficient to realize an adequate return on its investment. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which Aadi obtains regulatory approval. If coverage and reimbursement are not available or reimbursement is available only to limited levels, Aadi may not successfully commercialize any product candidate for which it obtains regulatory approval.

There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products, which would include any product candidates for which Aadi may obtain regulatory approval. Market acceptance and sales of its product candidates will depend on reimbursement policies and may be affected by healthcare reform measures. Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the United States, and commercial payors are critical to new product acceptance. Third-party payors decide which drugs they will pay for and establish reimbursement levels. In the United States, for example, principal decisions about reimbursement for new products are typically made by the Centers for Medicare & Medicaid Services (referred to as “CMS”), an agency within the U.S. Department of Health and Human Services (referred to as “HHS”). CMS decides whether and to what extent a new product will be covered and reimbursed under Medicare, and private third-party payors often follow CMS’s decisions regarding coverage and reimbursement to a substantial degree. However, one third-party payor’s determination to provide coverage for a product candidate does not assure that other payors will also provide coverage for the product candidate. As a result, the coverage determination process is often time-consuming and costly. Factors that payors consider in determining reimbursement are based on whether the product is: (i) a covered benefit under its health plan; (ii) safe, effective and medically necessary; (iii) appropriate for the specific patient; (iv) cost-effective; and (v) neither experimental nor investigational. This process will require Aadi to provide scientific and clinical support for the use of its products to each third-party payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

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Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Further, such payors are increasingly challenging the price, examining the medical necessity and reviewing the cost effectiveness of medical product candidates. There may be especially significant delays in obtaining coverage and reimbursement for newly approved drugs. Third-party payors may limit coverage to specific product candidates on an approved list, known as a formulary, which might not include all FDA-approved drugs for a particular indication. In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price (referred to as an “ASP”) and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs. Aadi may need to conduct expensive pharmaco-economic studies to demonstrate the medical necessity and cost effectiveness of its products. Nonetheless, Aadi’s product candidates may not be considered medically necessary or cost effective. Aadi cannot be sure that coverage and reimbursement will be available for any product that it commercializes and, if reimbursement is available, what the level of reimbursement will be.

Outside the United States, the commercialization of therapeutics is generally subject to extensive governmental price controls and other market regulations, and Aadi believes the increasing emphasis on cost containment initiatives in Europe, Canada and other countries has and will continue to put pressure on the pricing and usage of therapeutics such as Aadi’s product candidates. In many countries, particularly the countries of the European Union, medical product prices are subject to varying price control mechanisms as part of national health systems. In these countries, pricing negotiations with governmental authorities can take considerable time after a product receives regulatory approval. To obtain favorable reimbursement or pricing approval in some countries, Aadi may be required to conduct a clinical trial that compares the cost-effectiveness of its product candidate to other available therapies. In general, product prices under such systems are substantially lower than in the United States. Other countries allow companies to fix their own prices for products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that Aadi is able to charge for its product candidates. Accordingly, in markets outside the United States, the reimbursement for its products may be unavailable or reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits. If reimbursement is conditioned upon Aadi’s completion of additional clinical trials, or if pricing is set at unsatisfactory levels, Aadi’s operating results could be materially adversely affected.

If Aadi is unable to establish or sustain coverage and adequate reimbursement for any product candidates from third-party payors, the adoption of those products, the prices of those products and sales revenue will be adversely affected, which, in turn, could adversely affect the ability to market or sell those product candidates, if approved. Coverage policies and third-party payor reimbursement rates may change at any time. Further, due to the COVID-19 pandemic, millions of individuals have lost/will be losing employer-based insurance coverage, which may adversely affect our ability to commercialize our products. It is unclear what effect, if any, the American Rescue Plan will have on the number of covered individuals. Even if favorable coverage and reimbursement status is attained for one or more products for which Aadi receives regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Aadi’s business entails a significant risk of product liability and if it is unable to obtain sufficient insurance coverage such inability could have a material adverse effect on its business and financial condition.

Aadi’s business exposes it to significant product liability risks inherent in the development, testing, manufacturing and marketing of therapeutic treatments. Product liability claims might be brought against Aadi by patients, healthcare providers, or others selling or otherwise coming into contact with its product candidates. For example, Aadi may be sued if any product Aadi develops allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and a breach of warranties. Claims could also be asserted under state

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consumer protection acts. If Aadi becomes subject to product liability claims and cannot successfully defend itself against them, Aadi could incur substantial liabilities. Product liability claims could delay or prevent completion of Aadi’s development programs. If Aadi succeeds in marketing products, such claims could result in an FDA, EMA or other regulatory authority investigation of the safety and effectiveness of its products, its (or third-party) manufacturing processes and facilities or its marketing programs. FDA, EMA or other regulatory authority investigations could potentially lead to a recall of Aadi’s products or more serious enforcement action, limitations on the approved indications for which they may be used or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for Aadi’s products, injury to its reputation, costs to defend the related litigation, a diversion of management’s time and its resources and substantial monetary awards to trial participants or patients. Aadi currently has product liability insurance that it believes is appropriate for its stage of development and may need to obtain higher levels prior to marketing any of its product candidates, if approved. Any insurance Aadi has or may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, Aadi may be unable to obtain or maintain sufficient insurance at a reasonable cost to protect it against losses caused by product liability claims that could have an adverse effect on its business and financial condition. Large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. The cost of any product liability litigation or other proceedings, even if resolved in its favor, could be substantial, particularly in light of the size of its business and financial resources. A product liability claim or series of claims brought against Aadi could cause its stock price to decline.

The recent global COVID-19 outbreak has affected and is expected to continue to affect Aadi’s business and operations.

Broad-based business or economic disruptions could adversely affect Aadi’s ongoing or planned research and development activities. To date, the COVID-19 pandemic has caused significant disruptions to the United States and global economy. Further, infections and deaths related to COVID-19 are disrupting certain healthcare and healthcare regulatory systems globally. Such disruptions could divert healthcare resources away from, or materially delay review by, the FDA and comparable foreign regulatory agencies. It is unknown how long these disruptions could continue, were they to occur. Any elongation or de-prioritization of Aadi’s clinical trials or delay in regulatory review resulting from such disruptions could materially adversely affect the development and study of its product candidates. The COVID-19 pandemic caused Aadi to modify business practices (including but not limited to curtailing or modifying employee travel, curtailing or modifying Aadi’s clinical trials, moving to full remote work, and cancelling physical participation in meetings, events, and conferences). For example, Aadi has experienced some clinical development disruptions due to the pandemic, including closures at certain lab facilities, which led to longer than anticipated clinical development times.

As a result of the evolving COVID-19 pandemic, Aadi has experienced and expects to continue to experience disruptions that could severely impact its business, preclinical studies and clinical trials, including:

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The extent of the impact of the COVID-19 pandemic on Aadi’s future liquidity and operational performance will depend on certain developments, including the duration and spread of the outbreak, the availability and effectiveness of vaccines, the impact on its clinical trials, patients, and collaboration partners, and the effect on its suppliers.

Risks Related to Regulatory Approval and Other Legal Compliance Matters

Aadi submitted an NDA to the FDA for FYARRO for the treatment of advanced malignant PEComa under the 505(b)(2) regulatory pathway. The FDA may refuse to file its NDA, or conclude that its NDA no longer qualifies for the Section 505(b)(2) regulatory pathway, which may delay or prevent the approval of FYARRO) for commercial use.

Aadi submitted a Section 505(b)(2) NDA to the FDA in May 2021 for FYARRO for the treatment of advanced malignant PEComa. Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act (referred to as the “FDCA”) was enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984 (referred to as the “Hatch-Waxman Amendments”), and permits the submission of an NDA where at least some of the information required for approval comes from preclinical studies or clinical trials not conducted by or for the applicant and for which the applicant has not obtained a right of reference. The FDA interprets Section 505(b)(2) of the FDCA to permit the applicant to rely upon the FDA’s previous findings of safety and efficacy for an approved product. The FDA requires submission of information needed to support any changes to a previously approved drug, such as published data or new studies conducted by the applicant or clinical trials demonstrating safety and efficacy. The FDA could require additional information to sufficiently demonstrate safety and efficacy to support approval. If the FDA determines FYARRO does not meet the requirements of Section 505(b)(2), or that additional information is needed to support a marketing application for FYARRO, Aadi could experience delays in obtaining marketing approval. Moreover, even if FYARRO is approved under the Section 505(b)(2) regulatory pathway, the approval may be subject to limitations on the indicated uses for which it may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product.

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Additionally, the FDA must inform Aadi within 60 days of submission if it has accepted its NDA submission and filed it for regulatory review. If the FDA determines that its NDA submission is incomplete or insufficient for filing, the FDA may refuse to file the NDA. The FDA may refuse to file Aadi’s NDA for ABI-009, which may delay or prevent the approval of ABI-009. Any such refusal by the FDA could require Aadi to expend additional time and resources to revise and resubmit its NDA or harm its business and reputation. Furthermore, there is no guarantee that any revised or resubmitted NDA filing Aadi makes will be accepted by the FDA.

Aadi may be unable to obtain United States or foreign regulatory approval for ABI-009 or its other product candidates and, as a result, may be unable to commercialize ABI-009 or its product candidates and its business will be substantially harmed.

Aadi’s product candidates are and will continue to be subject to extensive governmental regulations relating to, among other things, research, testing, development, manufacturing, safety, efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing, marketing and distribution of drugs. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process must be successfully completed in the United States and in many foreign jurisdictions before a new drug can be approved for marketing. Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays. Aadi cannot provide any assurance that any product candidate it may develop will progress through required clinical testing and obtain the regulatory approvals necessary for it to begin selling them.

Aadi submitted an NDA under Section 505(b)(2) to the FDA in May 2021 for FYARRO for the treatment of advanced malignant PEComa. Aadi has not previously submitted an NDA or similar application for approval to the FDA or any other regulatory authority and it cannot assure that any of its product candidates will receive marketing approval. The time required to obtain approvals from the FDA and other regulatory authorities is unpredictable and requires successful completion of extensive clinical trials which typically takes many years, depending upon numerous factors, including the type, complexity and novelty of the product candidate. The standards that the FDA and its foreign counterparts use when evaluating clinical trial data can, and often does, change during drug development, which makes it difficult to predict with any certainty how they will be applied. Aadi may also encounter unexpected delays or increased costs due to new government regulations, including future legislation or administrative action, or changes in FDA policy during the period of drug development, clinical trials and FDA regulatory review. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that its data are insufficient for approval and require additional preclinical, clinical or other studies. It is possible that none of Aadi’s existing product candidates or any product candidates Aadi may seek to develop in the future will ever obtain regulatory approval.

Additionally, as of March 18, 2021, the FDA noted it is continuing to ensure timely reviews of applications for medical products during the COVID-19 pandemic in line with its user fee performance goals and conducting mission critical domestic and foreign inspections to ensure compliance of manufacturing facilities with FDA quality standards. However, the FDA may not be able to continue its current pace and approval timelines could be extended, including where a pre-approval inspection or an inspection of clinical sites is required and due to the COVID-19 pandemic and travel restrictions the FDA is unable to complete such required inspections during the review period. In 2020 and 2021, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications.

Any delay or failure in seeking or obtaining required approvals would have a material and adverse effect on Aadi’s ability to generate revenue from any particular product candidates it is developing and for which it is seeking approval. Furthermore, any regulatory approval to market a drug may be subject to significant limitations on the approved uses or indications for which Aadi may market, promote and advertise the drug or the labeling or other restrictions. In addition, the FDA has the authority to require a Risk Evaluation and Mitigation Strategy (referred to as “REMS”) plan as part of approving an NDA, or after approval, which may impose further requirements or restrictions on the distribution or use of an approved drug. These requirements or restrictions might include limiting prescribing to certain physicians or medical centers that have undergone specialized

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training, limiting treatment to patients who meet certain safe-use criteria and requiring treated patients to enroll in a registry. These limitations and restrictions may significantly limit the size of the market for the drug and affect reimbursement by third-party payors.

Aadi is also subject to numerous foreign regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization, pricing and third-party reimbursement. The foreign regulatory approval process varies among countries, and generally includes all of the risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions. Moreover, the time required to obtain approval may differ from that required to obtain FDA approval.

The regulatory approval processes of the FDA, EMA and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. If Aadi is ultimately unable to obtain regulatory approval for its product candidates, Aadi will be unable to generate product revenue, and its business will be substantially harmed.

Obtaining approval by the FDA, EMA and other comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the type, complexity and novelty of the product candidates involved. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that Aadi’s data are insufficient for approval and require additional preclinical, clinical or other studies. Even if Aadi eventually completes clinical testing and receives approval for its product candidates, the FDA, EMA and other comparable foreign regulatory authorities may approve its product candidates for a more limited indication or a narrower patient population than it originally requested or may impose other prescribing limitations or warnings that limit the product’s commercial potential. Aadi has not obtained regulatory approval for any product candidate, and it is possible that none of its product candidates will ever obtain regulatory approval.

Further, regulatory approval may be delayed for reasons beyond Aadi’s control. For example, a United States federal government shutdown or budget sequestration, such as ones that occurred during 2013, 2018 and 2019, or the current diversion of resources to handle the COVID-19 public health emergency and pandemic may result in significant reductions to the FDA’s budget, employees and operations, which may lead to slower response times and longer review periods, potentially affecting Aadi’s ability to obtain regulatory approval for its product candidates. In addition, the impact of COVID-19 may cause the FDA to allocate additional resources to product candidates focused on treating related illnesses, which could lead to longer approval processes for Aadi’s product candidates. Finally, Aadi’s competitors may file citizens’ petitions with the FDA in an attempt to persuade the FDA that Aadi’s product candidates, or the clinical trials that support their approval, contain deficiencies. Such actions by Aadi’s competitors could delay or even prevent the FDA from approving any of Aadi’s NDAs.

Applications for Aadi’s product candidates could fail to receive regulatory approval for many reasons, including the following:

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This lengthy approval process, as well as the unpredictability of the results of clinical trials, may result in Aadi failing to obtain regulatory approval to market any of its product candidates, which would significantly harm its business, results of operations and prospects.

The FDA, EMA and other comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction.

Aadi’s clinical trials have been and may in the future be undertaken in the United States. Aadi may choose to conduct additional clinical trials internationally as well. For example, Aadi may conduct its PRECISION 1 trial of ABI-009 in the United States, Europe and other countries. The acceptance of study data by the FDA, EMA or other comparable foreign regulatory authority from clinical trials conducted outside of their respective jurisdictions may be subject to certain conditions. In cases where data from United States clinical trials are intended to serve as the basis for regulatory approval in foreign countries outside the United States, the standards for clinical trials and approval may be different. There can be no assurance that any United States or foreign regulatory authority would accept data from trials conducted outside of its applicable jurisdiction. If the FDA, EMA or any applicable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which would be costly and time-consuming and delay aspects of Aadi’s business plan, and which may result in its product candidates not receiving approval or clearance for commercialization in the applicable jurisdiction.

Brexit and uncertainty in the regulatory framework as well as future legislation in the United Kingdom (referred to as the “UK”), European Union, and other jurisdictions can lead to disruption in the execution of international multi-center clinical trials, the monitoring of adverse events through pharmacovigilance programs, the evaluation of the benefit-risk profiles of new medicinal products, and determination of marketing authorization across different jurisdictions. Uncertainty in the regulatory framework could also result in disruption to the supply and distribution as well as the import/export both of active pharmaceutical ingredients and finished product. Such a disruption could create supply difficulties for ongoing clinical trials. The cumulative effects of the disruption to the regulatory framework, uncertainty in future regulation, and changes to existing regulations may increase Aadi’s development lead time to marketing authorization and commercialization of products in the European Union and/or the UK and increase its costs. Aadi cannot predict the impact of such changes and future regulation on its business or the results of its operations.

Obtaining and maintaining regulatory approval of Aadi’s product candidates in one jurisdiction does not mean that Aadi will be successful in obtaining regulatory approval of its product candidates in other jurisdictions.

Obtaining and maintaining regulatory approval of Aadi’s product candidates in one jurisdiction does not guarantee that Aadi will be able to obtain or maintain regulatory approval in any other jurisdiction. For example,

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even if the FDA or EMA grants regulatory approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion and reimbursement of the product candidate in those countries. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. The regulatory approval processes in other countries may implicate all of the risks detailed above regarding FDA approval in the United States, as well as other risks. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that Aadi intends to charge for its products is also subject to approval.

Obtaining foreign regulatory approvals and establishing and maintaining compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for Aadi and could delay or prevent the introduction of its products in certain countries. If Aadi or any future collaborator fail to comply with the regulatory requirements in international markets or fail to receive applicable regulatory approvals, Aadi’s target market will be reduced and its ability to realize the full market potential of its product candidates will be harmed.

Following Brexit, to the extent Aadi conducts any operations in the UK, Aadi will be subject to applicable regulatory requirements in the UK. Although the UK is no longer a member of the European Union, European Union law remains applicable in Northern Ireland. There are a number of new marketing authorization routes available in the UK, Great Britain (England, Scotland and Wales) or Northern Ireland, in addition to the national procedure. As with the European Union position, a company can only start to market a medicine in the UK once it has received a marketing authorization. The main legislation that applies to clinical trials in the UK is the UK Medicines for Human Use (Clinical Trials) Regulations 2004, which transposes the Clinical Trials Directive into domestic law. Consequently, the requirements and obligations that relate to the conduct of clinical trials in the UK currently remain largely aligned with the European Union position. It is unclear how future regulatory regime in the UK will impact regulations of products, manufacturers, and approval of product candidates in the UK. In the immediately foreseeable future, the UK regulatory approval process is likely to remain similar to that applicable in the European Union, albeit that the processes for applications will be separate. Longer term, the UK is likely to develop its own legislation that diverges from that in the European Union.

Even if Aadi’s product candidates receive regulatory approval, they will be subject to significant ongoing post-marketing regulatory requirements and oversight.

Even if Aadi receives regulatory approval for its product candidates, they will be subject to ongoing regulatory obligations and continued review by regulatory authorities, which may include imposing significant restrictions on its product candidates, indicated uses or marketing, or imposing ongoing requirements for potentially costly post-approval studies. Any regulatory approvals that Aadi may receive for its product candidates will require the submission of reports to regulatory authorities and on-going surveillance to monitor the safety and efficacy of the product candidate, may contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and may include burdensome post-approval study or risk management requirements and regulatory inspection. The FDA has significant post-marketing authority, including, for example, the authority to require labeling changes based on new safety information and to require post-marketing studies or clinical trials to evaluate serious safety risks related to the use of a drug. For example, the FDA may require the submission of a REMS in order to approve Aadi’s product candidates, which could entail requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any REMS required by the FDA may lead to increased costs to assure compliance with new post-approval regulatory requirements and potential requirements or restrictions on the sale of approved products, all of which could lead to lower sales volume and revenue. In addition, if the FDA or foreign regulatory authorities approve Aadi’s product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event

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reporting, storage, advertising, promotion, import, export and recordkeeping for its product candidates will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as on-going compliance with current good manufacturing practices (referred to as “cGMPs”), good laboratory practices (referred to as “GLPs”) and good clinical practices (referred to as “GCPs”) for any clinical trials that Aadi conducts post-approval. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic, unannounced inspections by the FDA and other regulatory authorities for compliance with cGMP regulations and standards. Accordingly, Aadi and others with whom Aadi works must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control.

Aadi will be required to report certain adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities. If Aadi or a regulatory agency discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facilities where the product is manufactured, a regulatory agency may impose restrictions on that product, the manufacturing facility or Aadi, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. Any new legislation addressing drug safety issues could result in delays in product development or commercialization, or increased costs to assure compliance. In addition, failure to comply with FDA, EMA and other comparable foreign regulatory requirements may subject Aadi to administrative or judicially imposed sanctions, including:

The holder of an approved NDA or comparable regulatory approval must submit new or supplemental applications and obtain approval for certain changes to the approved product, product labeling, or manufacturing process and the FDA or comparable foreign regulatory authority may refuse to approve pending applications or supplements to approved applications filed by Aadi.

The occurrence of any event or penalty described above may inhibit Aadi’s ability to commercialize its product candidates, if approved, and generate revenue. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of the company and its operating results will be adversely affected.

The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

If any of Aadi’s product candidates are approved and Aadi is found to have improperly promoted off-label uses of those products, it may become subject to significant liability. The FDA and other regulatory agencies,

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including the U.S. Department of Justice, strictly regulate the post-approval marketing and promotional claims that may be made about prescription products, such as Aadi’s product candidates, if approved. In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product’s approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant civil, criminal and administrative penalties. As such, Aadi may not promote its products for indications or uses for which they do not have approval. For example, if Aadi receives regulatory approval for ABI-009 as a treatment for advanced malignant PEComa, physicians may, in their practice of medicine, use drug products for their patients in a manner that is inconsistent with the approved label. If Aadi, or any of its contractors or agents acting on behalf of Aadi, is found to have promoted such off-label uses, Aadi may become subject to significant liability. The United States federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If Aadi cannot successfully manage the promotion of its product candidates, if approved, Aadi could become subject to significant liability, which would materially adversely affect its business and financial condition.

If Aadi is required by the FDA to obtain approval of a companion diagnostic product in connection with approval of any future product in candidates or new indication that it may develop, and if Aadi fails to obtain or faces delays in obtaining FDA approval of such companion diagnostic product, Aadi will not be able to commercialize such product candidate intended for use with such companion diagnostic product and its ability to generate revenue form such product candidate will be materially impaired.

In connection with the development of any future product candidates or new indication Aadi may develop or work with collaborators to develop or obtain access to companion diagnostic tests to identify patient subsets within a disease category who may derive selective and meaningful benefit from Aadi’s programs. Such companion diagnostics would be used during Aadi’s clinical trials as well as in connection with the commercialization of any future product candidates or new indication it may develop. To be successful in developing and commercializing such product candidate in combination with these companion diagnostics, Aadi or its collaborators will need to address a number of scientific, technical, regulatory and logistical challenges. According to FDA guidance, if the FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic is not also approved or cleared at the same time the product candidate is approved. To date, the FDA has required marketing approval of all companion diagnostic tests for cancer therapies. Various foreign regulatory authorities also regulate in vitro companion diagnostics as medical devices and, under those regulatory frameworks, will likely require the conduct of clinical trials to demonstrate the safety and effectiveness of Aadi’s current diagnostics and any future diagnostics Aadi may develop, which it expects will require separate regulatory clearance or approval prior to commercialization.

The approval of a companion diagnostic as part of the therapeutic product’s labeling limits the use of the therapeutic product to only those patients who express certain biomarkers or the specific genetic alteration that the companion diagnostic was developed to detect. If the FDA, EMA or a comparable regulatory authority requires approval of a companion diagnostic for any future product candidate or new indication that Aadi may develop, whether before or concurrently with approval of such product candidate, Aadi, and/or future collaborators, may encounter difficulties in developing and obtaining approval for these companion diagnostics. Any delay or failure by Aadi or third-party collaborators to develop or obtain regulatory approval of a companion diagnostic could delay or prevent approval or continued marketing of such product candidate. Further, in April 2020, the FDA issued new guidance on developing and labeling companion diagnostics for a specific group of oncology therapeutic products, including recommendations to support a broader labeling claim rather than individual therapeutic products. Aadi will continue to evaluate the impact of this guidance on its companion diagnostic development and strategy. This guidance and future issuances from the FDA and other regulatory

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authorities may impact Aadi’s development of a companion diagnostic for its product candidates and result in delays in regulatory approval. Aadi may be required to conduct additional studies to support a broader claim. Also, to the extent other approved diagnostics are able to broaden their labeling claims to include Aadi’s approved drug products, Aadi may be forced to abandon its companion diagnostic development plans or it may not be able to compete effectively upon approval, which could adversely impact Aadi’s ability to generate revenue from the sale of its approved products and its business operations.

Additionally, Aadi may rely on third parties for the design, development and manufacture of companion diagnostic tests for its product candidates that may require such tests. If Aadi enters into such collaborative agreements, it will be dependent on the sustained cooperation and effort of its future collaborators in developing and obtaining approval for these companion diagnostics. It may be necessary to resolve issues such as selectivity/specificity, analytical validation, reproducibility, or clinical validation of companion diagnostics during the development and regulatory approval processes. Moreover, even if data from preclinical studies and early clinical trials appear to support development of a companion diagnostic for a product candidate, data generated in later clinical trials may fail to support the analytical and clinical validation of the companion diagnostic. Aadi and its future collaborators may encounter difficulties in developing, obtaining regulatory approval for, manufacturing and commercializing companion diagnostics similar to those Aadi faces with respect to its product candidates, including issues with achieving regulatory clearance or approval, production of sufficient quantities at commercial scale and with appropriate quality standards, and in gaining market acceptance. If Aadi is unable to successfully develop companion diagnostics for any future product candidate or new indication, or experience delays in doing so, the development of such product candidate may be adversely affected, the product candidate may not obtain marketing approval, and Aadi may not realize the full commercial potential of such product candidate after obtaining marketing approval. As a result, Aadi’s business, results of operations and financial condition could be materially harmed. In addition, a diagnostic company with whom Aadi contracts may decide to discontinue selling or manufacturing the companion diagnostic test that it anticipates using in connection with development and commercialization of any such future product candidate or its relationship with such diagnostic company may otherwise terminate. Aadi may not be able to enter into arrangements with another diagnostic company to obtain supplies of an alternative diagnostic test for use in connection with the development and commercialization of any such future product or new indication. or do so on commercially reasonable terms, which could adversely affect and/or delay the development or commercialization of any such future product candidate Aadi may develop.

A Fast Track or Breakthrough Therapy designation for ABI-009 may not lead to a faster development or review process, or Aadi may be unable to maintain or effectively utilize such a designation. Aadi may also seek additional Fast Track designations from the FDA for ABI-009 or any of its other product candidates. Even if one or more of Aadi’s product candidates receive Fast Track designation, Aadi may be unable to obtain or maintain the benefits associated with the Fast Track designation.

In October 2018, Aadi announced that the FDA granted Fast Track designation for ABI-009 for the investigation of the treatment of patients with advanced malignant PEComa. This Fast Track designation does not guarantee that Aadi will qualify for or be able to take advantage of the expedited review procedures or that it will ultimately obtain regulatory approval of ABI-009. Even though Aadi received this Fast Track designation, it may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw the Fast Track designation if it believes that the Fast Track designation is no longer supported by data from Aadi’s clinical development program. Aadi may also seek Fast Track designation for additional cancer indications or other diseases, and it may not be successful in securing such additional designation or in expediting development if such designations were received.

Fast Track designation is designed to facilitate the development and expedite the review of therapies intended for the treatment of a serious or life-threatening condition which demonstrate the potential to address unmet medical needs for the condition. Programs with Fast Track designation may benefit from early and frequent communications with the FDA, potential priority review and the ability to submit a rolling application

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for regulatory review. Fast Track designation applies to both the product candidate and the specific indication for which it is being studied. If any of Aadi’s product candidates receive Fast Track designation but do not continue to meet the criteria for Fast Track designation, or if Aadi’s clinical trials are delayed, suspended or terminated, or put on clinical hold due to unexpected adverse events or issues with clinical supply, Aadi will not receive the benefits associated with the Fast Track program. The FDA may withdraw any Fast Track Designation at any time. Furthermore, Fast Track designation does not change the standards for approval. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures and Aadi may not experience a faster development process, review or approval compared to conventional FDA procedures.

In December 2018, Aadi announced that the FDA granted Breakthrough Therapy designation for ABI-009 for the treatment of patients with advanced malignant PEComa. Aadi may also seek a Breakthrough Therapy designation for ABI-009 for various cancer indications or other diseases. Breakthrough Therapy designation is for a product candidate that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product candidate may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. A sponsor may request the FDA to designate its product candidate as a Breakthrough Therapy at the time of, or any time after, the submission of an IND for the product candidate. For product candidates that have been designated as a Breakthrough Therapy, the FDA may take actions appropriate to expedite the development and review of the application, which may include holding meetings with the sponsor and the review team throughout the development of the product candidate; providing timely advice to, and interactive communication with, the sponsor regarding the development of the product candidate to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable; involving senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review; assigning a cross-disciplinary project lead for the FDA review team to facilitate an efficient review of the development program and to serve as a scientific liaison between the review team and the sponsor; and taking steps to ensure that the design of the clinical trials is as efficient as practicable, when scientifically appropriate, such as by minimizing the number of patients exposed to a potentially less efficacious treatment.

The FDA has broad discretion in determining whether to grant a Fast Track or Breakthrough Therapy designation for a drug. Obtaining a Fast Track or Breakthrough Therapy designation does not change the standards for product approval, but may expedite the development or approval process. There is no assurance that the FDA will grant either such designation for any other indication or product candidate that Aadi may pursue. Even if the FDA does grant either such designation, it may not actually result in faster clinical development or regulatory review or approval. Furthermore, such a designation does not increase the likelihood that ABI-009 will receive regulatory approval in the United States.

Aadi may not be able to obtain or maintain orphan drug designation or obtain or maintain orphan drug exclusivity for its product candidates and, even if it does, such exclusivity may not prevent the FDA, EMA or other comparable foreign regulatory authorities, from approving competing products.

Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. Aadi’s target indications may include diseases with large patient populations or may include orphan indications. However, there can be no assurances that Aadi will be able to obtain orphan designations for its product candidates.

In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. In addition, if a product that has

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orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusivity. Orphan drug exclusivity in the United States provides that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same indication for seven years, except in limited circumstances. The applicable exclusivity period is ten years in Europe. The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified.

Even if orphan drug designation is granted for a product candidate, Aadi may not be able to obtain or maintain orphan drug exclusivity for that product candidate. Aadi may not be the first to obtain regulatory approval of any product candidate for which it has obtained orphan drug designation for the orphan-designated indication due to the uncertainties associated with developing pharmaceutical products. In addition, exclusive marketing rights in the United States may be limited if Aadi seeks approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective or if Aadi is unable to ensure that it will be able to manufacture sufficient quantities of the product to meet the needs of patients with the rare disease or condition. Further, that the orphan drug exclusivity may not effectively protect an approved product from competition because different drugs with different active moieties may be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve the same drug with the same active moiety for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the product candidate any advantage in the regulatory review or approval process or entitles the product candidate to priority review.

Aadi received orphan drug designation from the FDA for ABI-009 for the treatment of advanced malignant PEComa. Aadi may be unable to obtain regulatory approval for ABI-009 for this orphan population or any other orphan population, or Aadi may be unable to successfully commercialize ABI-009 for such orphan population due to risks that include:

If Aadi is unable to obtain regulatory approval for ABI-009 for advanced malignant PEComa or any orphan population for which it obtains orphan drug designation or is unable to successfully commercialize ABI-009 for such orphan population, it could harm Aadi’s business prospects, financial condition and results of operations.

Aadi may not be able to obtain orphan drug exclusivity for ABI-009 or for one or more of its product candidates that it may develop in the future, and even if Aadi does, that exclusivity may not prevent the FDA from approving other competing products.

Under the Orphan Drug Act, the FDA may designate a product candidate as an orphan drug if it is a drug or biologic intended to treat a rare disease or condition. A similar regulatory scheme governs approval of orphan

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product candidates by the EMA in the European Union. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA from approving another marketing application for another similar product candidate for the same orphan therapeutic indication for that time period. The applicable period is seven years in the United States and ten years in the European Union. The exclusivity period in the European Union can be reduced to six years if a product no longer meets the criteria for orphan drug designation, in particular if the product is sufficiently profitable so that market exclusivity is no longer justified.

In order for the FDA to grant orphan drug exclusivity to one of our product candidates, the agency must find that the product candidate is indicated for the treatment of a condition or disease that affects fewer than 200,000 individuals in the United States or that affects 200,000 or more individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product candidate available for the disease or condition will be recovered from sales of the product in the United States. The FDA may conclude that the condition or disease for which Aadi seeks orphan drug exclusivity does not meet this standard. Even if Aadi obtains orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product candidate from competition because different product candidates can be approved for the same condition. In addition, even after an orphan drug is approved, the FDA can subsequently approve the same product candidate for the same condition if the FDA concludes that the later product candidate is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care compared with the product that has orphan exclusivity. Orphan drug exclusivity may also be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the product to meet the needs of the patients with the rare disease or condition.

Where appropriate, Aadi plans to secure approval from the FDA or comparable foreign regulatory authorities through the use of accelerated registration pathways. If Aadi is unable to obtain such approval, it may be required to conduct additional preclinical studies or clinical trials beyond those that it contemplates, which could increase the expense of obtaining, and delay the receipt of, necessary regulatory approvals. Even if Aadi receives accelerated approval from the FDA, if its confirmatory trials do not verify clinical benefit, or if it does not comply with rigorous post-marketing requirements, the FDA may seek to withdraw accelerated approval.

Where possible, Aadi plans to pursue accelerated development strategies in areas of high unmet need. Aadi may seek an accelerated approval pathway for one or more of its product candidates. Under the accelerated approval provisions in the FFDA, and the FDA’s implementing regulations, the FDA may grant accelerated approval to a product candidate designed to treat a serious or life-threatening condition that generally provides a meaningful therapeutic benefit over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective. If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. If such post-approval studies fail to confirm the drug’s clinical benefit, the FDA may withdraw its approval of the drug. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

Prior to seeking such accelerated approval, Aadi will seek feedback from the FDA and will otherwise evaluate its ability to seek and receive such accelerated approval. There can be no assurance that after Aadi’s

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