Pyxis Oncology Inc

Previous wording

Our lead ADC product candidate is PYX-201, an investigational, novel ADC consisting of human Immunoglobulin G1, or IgG1, site-specifically conjugated with a next generation auristatin derivative via proteases-cleavable linker. PYX-201 is an ADC that uniquely targets Extradomain-B Fibronectin, or EDB+FN, in the tumor stroma. EDB+FN regulates blood vessel morphogenesis, which provides the tumor access to nutrition and oxygen, a means to remove waste and a pathway for metastasizing cells.

Current wording

Our lead ADC product candidate is PYX-201, an investigational, novel ADC consisting of human Immunoglobulin G1, or IgG1, site-specifically conjugated with a next generation auristatin derivative via proteases-cleavable linker. PYX-201 is an ADC with an inhibitor of microtubule polymerization payload that uniquely targets Extradomain-B Fibronectin, or EDB+FN, a non-cellular structural component of the tumor extracellular matrix. EDB+FN regulates blood vessel morphogenesis, which provides the tumor access to nutrition and oxygen, a means to remove waste and a pathway for metastasizing cells.

Previous wording

We believe EDB+FN within the tumor stroma may be an ideal target to address in many cancers with high unmet need. The stroma plays a major role in the initiation, growth, survival, invasion and drug-resistance of solid tumors, yet few therapeutics specifically target tumor-associated stroma. By targeting EDB+FN and specifically attacking the stroma, our goal is to destabilize the barrier that protects, feeds and provides structure to the tumor in addition to killing tumor cells directly. EDB+FN is overexpressed in many malignancies and is minimally expressed in most normal adult tissues, making it a potentially attractive means to target tumors while sparing healthy cells.

Current wording

We believe EDB+FN within the tumor extracellular matrix may be an ideal target to address in many cancers with high unmet need. The extracellular matrix plays a major role in the initiation, growth, survival, invasion and drug-resistance of solid tumors, yet few therapeutics specifically target non-cellular structural components of the tumor-associated stroma. By targeting EDB+FN and specifically attacking the non-cellular structural component of the tumor extracellular matrix, our goal is to destabilize the barrier that protects, feeds and provides structure to the tumor in addition to killing tumor cells directly. EDB+FN is overexpressed in many malignancies and is minimally expressed in most normal adult tissues, making it a potentially attractive means to target tumors while sparing healthy cells.

Previous wording

In preclinical models of patient-derived xenograft, or PDX models, we observed tumor regression with single agent PYX-201 in a dose-dependent manner. In addition, we observed that the treatment of preclinical syngeneic tumor models with PYX-201 resulted in enhanced T-cell infiltration into the tumor microenvironment, or TME, suggesting that PYX-201 may have caused immunogenic cell death, or ICD, and could potentially trigger downstream anti-tumor immune response. Recently, we shared our latest preclinical data at the 2024 American Association for Cancer Research, or AACR, Annual Meeting in San Diego, California. The preclinical data supports that PYX-201 is designed to have improved plasma stability, better potency, and tumor permeability due to optimized auristatin payload, or Aur-0101, and improved linker stability through site-specific conjugation to engineered cysteine residues for a target drug-to-antibody ratio, or DAR, of 4. Across a panel of approximately 100 preclinical PDX models representing ten tumor types, PYX-201 demonstrated broad, deep and durable anti-tumor activity. The recent preclinical data provides insights into the mechanism associated with this novel agent observed across multiple solid tumors. PYX-201 has potential applications in both monotherapy and combination therapy and maintains a well-tolerated safety profile based on the lack of EDB+FN expression in healthy cells.

Current wording

In preclinical models of patient-derived xenograft, or PDX models, we observed tumor regression with single agent PYX-201 in a dose-dependent manner. In addition, we observed that the treatment of preclinical syngeneic tumor models with PYX-201 resulted in enhanced T-cell infiltration into the tumor microenvironment, or TME, suggesting that PYX-201 may have caused immunogenic cell death, or ICD, and could potentially trigger downstream anti-tumor immune response. We shared our latest preclinical data at the 2024 American Association for Cancer Research, or AACR, Annual Meeting in San Diego, California. The preclinical data supports that PYX-201 is designed to have improved plasma stability, better potency, and tumor permeability due to optimized auristatin payload, or Aur-0101, and improved linker stability through site-specific conjugation to engineered cysteine residues for a target drug-to-antibody ratio, or DAR, of 4. Across a panel of approximately 100 preclinical PDX models representing ten tumor types, PYX-201 demonstrated broad, deep and durable anti-tumor activity. The preclinical data provides insights into the mechanism associated with this novel agent observed across multiple solid tumors. PYX-201 has potential applications in both monotherapy and combination therapy and maintains a well-tolerated safety profile based on the lack of EDB+FN expression in healthy cells.

Previous wording

To date, 72 subjects have been dosed in the PYX-201 dose escalation study with a continued focus on HNSCC, NSCLC, ovarian cancer, soft tissue sarcoma, and PDAC based on an assessment of factors including immunohistochemistry target expression, stromal volume, unmet medical need, and clinical investigator judgment. PYX-201 safety data continues to support go-forward monotherapy and potential combination clinical development strategies, which we believe could have the potential to provide additional treatment options to patients with difficult-to-treat cancers.

Current wording

To date, 80 subjects have been dosed in the PYX-201 dose escalation study with a continued focus on HNSCC, NSCLC, ovarian cancer, soft tissue sarcoma, and PDAC based on an assessment of factors including immunohistochemistry target expression, stromal volume, unmet medical need, and clinical investigator judgment. PYX-201 safety data continues to support go-forward monotherapy and potential combination clinical development strategies, which we believe could have the potential to provide additional treatment options to patients with difficult-to-treat cancers.

Previous wording

As we continue to analyze the data generated, we anticipate that the data from the dose finding studies will guide the selection for the RP2D for subsequent multi-dosing and potential combination studies. As previously reported, we are on track to announce preliminary data from the Phase 1 trial of PYX-201, including efficacy, safety, pharmacokinetics (PK), and provide an update on future development plans in the fall of 2024.

Current wording

As we continue to analyze the data generated, we anticipate that the data from the dose finding studies will guide the selection for the RP2D for subsequent multi-dosing and potential combination studies. We anticipate announcing preliminary data from the Phase 1 trial of PYX-201, including efficacy, safety, pharmacokinetics (PK), and provide an update on future development plans during the second half of November 2024.

Previous wording

In the Phase 1 portion of the trial, the starting dose of PYX-106 was 0.5 mg/kg. The DESC approved escalating the dose after each cohort. To date, 33 subjects have been dosed with PYX-106 in the Phase 1 trial. PYX-106 is administered once every two weeks. Dose escalation will follow the BOIN design until the RP2D is determined.

Current wording

In the Phase 1 portion of the trial, the starting dose of PYX-106 was 0.5 mg/kg. The DESC approved escalating the dose after each cohort. To date, 45 subjects have been dosed with PYX-106 in the Phase 1 trial. PYX-106 is administered once every two weeks. Dose escalation will follow the BOIN design until the RP2D is determined.

Previous wording

Since our inception, we have focused substantially all of our resources on conducting research and development activities, undertaking preclinical studies and clinical trials, organizing and staffing our company, business planning, raising capital, establishing and maintaining our intellectual property portfolio and identifying potential product candidates. We do not have any products approved for sale and have not generated any revenues from product sales. We have incurred significant operating losses since our inception. We reported net losses of $20.6 million and $35.1 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $306.8 million, net equity of $169.8 million, and cash, cash equivalents and short-term investments of $155.7 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We expect that our expenses and capital expenditures will increase substantially in connection with our ongoing activities. Our operations to date have been financed primarily through sales of convertible preferred stock and sale of equity securities and additional funding may be necessary to fund future clinical and preclinical activities.

Current wording

Since our inception, we have focused substantially all of our resources on conducting research and development activities, undertaking preclinical studies and clinical trials, organizing and staffing our company, business planning, raising capital, establishing and maintaining our intellectual property portfolio and identifying potential product candidates. We do not have any products approved for sale and have not generated any revenues from product sales. We have incurred significant operating losses since our inception. We reported net losses of $41.8 million and $58.2 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $328.0 million, net equity of $153.7 million, and cash, cash equivalents and short-term investments of $144.8 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We expect that our expenses and capital expenditures will increase substantially in connection with our ongoing activities. Our operations to date have been financed primarily through sales of convertible preferred stock and sale of equity securities and additional funding may be necessary to fund future clinical and preclinical activities.

Previous wording

Research and development expenses increased by $2.6 million, from $11.4 million for the three months ended June 30, 2023 to $14.0 million for the three months ended June 30, 2024.

Current wording

Research and development expenses increased by $3.0 million, from $14.7 million for the three months ended September 30, 2023, to $17.7 million for the three months ended September 30, 2024.

Previous wording

PYX-201 program-specific research and development costs increased by $6.7 million, primarily due to a $1.6 million increase in clinical trial related expenses for our ongoing Phase 1 clinical trial for PYX-201-101 and a $4.7 million increase in contract manufacturing costs due to timing of manufacturing runs for PYX-201.

Current wording

PYX-201 program-specific research and development costs increased by $5.9 million, primarily due to a $1.6 million increase in clinical trial related expenses for our ongoing Phase 1 clinical trial for PYX-201-101, a $2.9 million increase in contract manufacturing costs due to timing of manufacturing runs for PYX-201 and a $0.8 million increase in pre-clinical and translation work related to our ongoing Phase 1 clinical trial for PYX-201-101.

Previous wording

PYX-106 program-specific research and development costs increased by $0.5 million, primarily due to clinical trial related expenses for our ongoing Phase 1 clinical trial for PYX-106-101.

Current wording

PYX-106 program-specific research and development costs increased by $0.9 million, primarily due to a $0.6 million increase in clinical trial related expenses and $0.3 million increase in contract manufacturing costs for our ongoing Phase 1 clinical trial for PYX-106-101.

Previous wording

Unallocated research and development costs decreased by $1.7 million from $8.2 million for the three months ended June 30, 2023 to $6.5 million for the three months ended June 30, 2024. This decrease was primarily due to lower personnel-related expenses as a result of the reduction in workforce completed in the fourth quarter of 2023.

Current wording

Unallocated research and development costs decreased by $4.0 million from $10.6 million for the three months ended September 30, 2023, to $6.6 million for the three months ended September 30, 2024. This decrease was primarily due to lower personnel-related expenses as a result of the reduction in workforce completed in the fourth quarter of 2023.

Previous wording

General and administrative expenses decreased by $0.7 million, from $6.7 million for the three months ended June 30, 2023 to $6.0 million for the three months ended June 30, 2024. The decrease was primarily related to higher professional and consultant fees and stock-based compensation during the prior comparable period, partially offset by higher facilities costs in the current period.

Current wording

General and administrative expenses decreased by $4.7 million, from $10.7 million for the three months ended September 30, 2023, to $6.0 million for the three months ended September 30, 2024. The decrease was primarily related to higher severance costs of $1.6 million, professional and consultant fees of $0.9 million and stock-based compensation of $2.1 million during the prior comparable period, partially offset by higher depreciation on leasehold improvements of $0.3 million in the current period.

Previous wording

Other income, net for the three months ended June 30, 2024 and 2023 was $2.7 million and $2.2 million, respectively. The increase was primarily due to higher interest and investment income due to higher short-term investment balances.

Current wording

Other income, net for the three months ended September 30, 2024 and 2023 was $2.6 million and $2.3 million, respectively. The increase was primarily due to higher interest and investment income due to higher investment balances and higher interest rates.

Previous wording

Revenues for the six months ended June 30, 2024 was $16.1 million, compared to $0 for the six months ended June 30, 2023. During the first quarter of fiscal 2024, we entered into the Settlement Agreement with Novartis, pursuant to which we transferred our rights to future royalties on the net sales of Beovu® to Novartis for a one-time amount of $8.0 million and Novartis also agreed to forgo its right to reclaim royalties previously paid of $8.1 million to us and Apexigen. Both of these amounts were recognized as revenues upon execution of the Settlement Agreement during the six months ended June 30, 2024.

Current wording

Revenues for the nine months ended September 30, 2024, was $16.1 million, compared to $0 for the nine months ended September 30, 2023. During the first quarter of fiscal 2024, we entered into the Settlement Agreement with Novartis, pursuant to which we transferred our rights to future royalties on the net sales of Beovu® to Novartis for a one-time amount of $8.0 million and Novartis also agreed to forgo its right to reclaim royalties previously paid of $8.1 million to us and Apexigen. Both of these amounts were recognized as revenues upon execution of the Settlement Agreement during the nine months ended September 30, 2024.

Previous wording

The following table summarizes our research and development expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our research and development expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Research and development expenses increased by $3.7 million, from $23.3 million for the six months ended June 30, 2023 to $27.0 million for the six months ended June 30, 2024.

Current wording

Research and development expenses increased by $6.7 million, from $38.0 million for the nine months ended September 30, 2023, to $44.7 million for the nine months ended September 30, 2024.

Previous wording

PYX-201 program-specific research and development costs increased by $4.1 million, primarily due to a $0.7 million increase in clinical trial related expenses for our ongoing Phase 1 clinical trial for PYX-201-101 and a $2.8 million increase in contract manufacturing costs due to timing of manufacturing runs for PYX-201.

Current wording

PYX-201 program-specific research and development costs increased by $12.6 million, primarily due to a $3.2 million increase in clinical trial related expenses for our ongoing Phase 1 clinical trial for PYX-201-101, a $7.6 million increase in contract manufacturing costs due to timing of manufacturing runs for PYX-201 and a $1.2 million increase in pre-clinical and translation work related to our ongoing clinical trial for PYX-201-101.

Previous wording

PYX-106 program-specific research and development costs increased by $1.3 million, primarily due to clinical trial related expenses for our ongoing Phase 1 clinical trial for PYX-106-101.

Current wording

PYX-106 program-specific research and development costs increased by $2.3 million, primarily due to a $1.8 million increase in clinical trial related expenses and $0.2 million increase in contract manufacturing costs for our ongoing Phase 1 clinical trial for PYX-106-101.

Previous wording

Unallocated research and development costs decreased by $3.8 million from $16.8 million for the six months ended June 30, 2023 to $13.0 million for the six months ended June 30, 2024. This decrease was primarily due to lower personnel-related expenses as a result of the reduction in workforce completed in the fourth quarter of 2023.

Current wording

Unallocated research and development costs decreased by $8.6 million from $28.2 million for the nine months ended September 30, 2023, to $19.6 million for the nine months ended September 30, 2024. This decrease was primarily due to lower personnel-related expenses as a result of the reduction in workforce completed in the fourth quarter of 2023.

Previous wording

The following table summarizes our general and administrative expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

General and administrative expenses decreased by $1.5 million, from $15.8 million for the six months ended June 30, 2023 to $14.3 million for the six months ended June 30, 2024. The decrease was primarily related to higher professional and consultant fees during the prior comparable period, partially offset by higher facilities costs in the current period.

Current wording

General and administrative expenses decreased by $6.1 million, from $26.5 million for the nine months ended September 30, 2023, to $20.3 million for the nine months ended September 30, 2024. The decrease was primarily related to higher professional and consultant fees of $2.7 million, stock-based compensation of $1.9 million and severance costs of $1.4 million during the prior comparable period, partially offset by higher depreciation on leasehold improvements of $0.9 million in the current period.

Previous wording

Other income, net for the six months ended June 30, 2024 and 2023 was $5.1 million and $3.9 million, respectively. The increase was primarily due to higher sublease income due to a full period of sublease income for 2024 as compared to a partial period for 2023.

Current wording

Other income, net for the nine months ended September 30, 2024 and 2023 was $7.6 million and $6.2 million, respectively. The increase was primarily due to higher sublease income due to a full period of sublease income for 2024 as compared to a partial period for 2023.

Previous wording

We had cash, cash equivalents and short-term investments of $155.7 million as of June 30, 2024. For the three and six months ended June 30, 2024, we had net losses of $17.3 million and $20.6 million, respectively, as compared to $15.9 million and $35.1 million for the corresponding prior year periods. As of June 30, 2024, we had an accumulated deficit of $306.8 million.

Current wording

We had cash, cash equivalents and short-term investments of $144.8 million as of September 30, 2024. For the three and nine months ended September 30, 2024, we had net losses of $21.2 million and $41.8 million, respectively, as compared to $23.0 million and $58.2 million for the corresponding prior year periods. As of September 30, 2024, we had an accumulated deficit of $328.0 million.

Previous wording

During the six months ended June 30, 2024, net cash used in operating activities was $23.7 million, which consisted of our net loss of $20.6 million and a net change in our operating assets and liabilities of $9.5 million, partially offset by non-cash charges of $6.3 million. The non-cash charges of $6.3 million was primarily due to $7.2 million of stock-based compensation, $1.7 million of depreciation and amortization expense, offset by $2.9 million of accretion of discounts on marketable debt securities. The net change in our operating assets and liabilities was primarily due to a decrease in deferred revenues of $7.7 million related to the Settlement Agreement with Novartis and reductions in accrued expenses and other current liabilities driven primarily by the timing of payments and services performed related to our ongoing clinical trials.

Current wording

During the nine months ended September 30, 2024, net cash used in operating activities was $38.4 million, which consisted of our net loss of $41.8 million and a net change in our operating assets and liabilities of $5.2 million, partially offset by non-cash charges of $8.5 million. The non-cash charges of $8.5 million was primarily due to $10.2 million of stock-based compensation, $2.4 million of depreciation and amortization expense, offset by $4.6 million of accretion of discounts on marketable debt securities. The net change in our operating assets and liabilities was primarily due to a decrease in deferred revenues of $7.7 million related to the Settlement Agreement with Novartis and reductions in accrued expenses and other current liabilities driven primarily by the timing of payments and services performed related to our ongoing clinical trials.

Previous wording

During the six months ended June 30, 2023, net cash used in operating activities was $37.9 million, which consisted of our net loss of $35.1 million and a net change in our operating assets and liabilities of $10.4 million, partially offset by non-cash charges of $7.7 million. The non-cash charges of $7.7 million was primarily due to $8.6 million in stock-based compensation and $1.9 million of accretion of discounts on marketable debt securities as well as $0.7 million of depreciation expense. The net change in our operating assets and liabilities was primarily due to a decrease of $11.1 million in accrued expenses, which relates to a one-time payment of $8.0 million made to Pfizer in January 2023 pursuant to the Pfizer A&R License Agreement, in addition to routine changes in working capital resulting from the timing of payments to our service providers. This decrease is partially offset by a $2.3 million increase to operating lease liabilities driven by tenant improvement allowance deposits.

Current wording

During the nine months ended September 30, 2023, net cash used in operating activities was $55.5 million, which consisted of our net loss of $58.2 million and a net change in our operating assets and liabilities of $9.4 million, partially offset by non-cash charges of $12.1 million. The non-cash charges of $12.1 million was primarily due to $13.7 million in stock-based compensation and $3.3 million of accretion of discounts on marketable debt securities as well as $1.2 million of depreciation expense. The net change in our operating assets and liabilities was primarily due to a decrease of $10.4 million in accrued expenses, which relates to a one-time payment of $8.0 million made to Pfizer in January 2023 pursuant to the Pfizer A&R License Agreement, and reduction in accounts payable by $3.9 million resulting from the timing of payments to our service providers. This decrease is partially offset by a $2.7 million increase to operating lease liabilities driven by tenant improvement allowance deposits.

Previous wording

During the six months ended June 30, 2024, net cash used in investing activities was $18.5 million, which consisted primarily of purchases of marketable debt securities of $132.1 million, partially offset by redemption of marketable debt securities of $113.8 million.

Current wording

During the nine months ended September 30, 2024, net cash used in investing activities was $18.5 million, which consisted primarily of purchases of marketable debt securities of $155.7 million, partially offset by redemption of marketable debt securities of $137.5 million.

Previous wording

During the six months ended June 30, 2023, net cash used in investing activities was $121.7 million, which consisted primarily of purchases of marketable debt securities of $130.2 million and leasehold improvements of $6.7 million, partially offset by redemption of marketable debt securities of $15.2 million.

Current wording

During the nine months ended September 30, 2023, net cash used in investing activities was $115.1 million, which consisted primarily of purchases of marketable debt securities of $186.7 million and leasehold improvements and purchases of property and equipment for our corporate headquarters of $6.7 million, partially offset by redemption of marketable debt securities of $71.6 million and cash acquired as part of the acquisition of Apexigen of $6.7 million.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities was $57.6 million, which consists primarily of net proceeds of $46.9 million from the Private Placement which closed in February 2024 and net proceeds of $10.6 million from our ATM program.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $59.3 million, which consists primarily of net proceeds of $46.9 million from the Private Placement which closed in February 2024 and net proceeds of $12.2 million from our ATM program.

Previous wording

During the six months ended June 30, 2023, net cash provided by financing activities was $6.1 million, which consists primarily of net proceeds from our ATM program of $6.1 million.

Current wording

During the nine months ended September 30, 2023, net cash provided by financing activities was $6.0 million, which consists primarily of net proceeds from our ATM program.

Previous wording

As of June 30, 2024, we had approximately $155.7 million in cash, cash equivalents, and short-term investments. Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our operations into the second half of 2026, including our current projections for PYX-201’s next phase of clinical development. However, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. In addition, we could utilize our available capital resources sooner than we expect.

Current wording

As of September 30, 2024, we had approximately $144.8 million in cash, cash equivalents, and short-term investments. Based on our current operating plan, we believe that our existing cash, cash equivalents and short-term investments will be sufficient to fund our operations into the second half of 2026, including our current projections for PYX-201’s next phase of clinical development. However, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us. In addition, we could utilize our available capital resources sooner than we expect.

Previous wording

We lease an office and laboratory space in Boston, Massachusetts with lease payments that continue through December 31, 2032, and have scheduled rent increases each year of 3%. Additionally, we sublease 17,729 square feet of office and laboratory space in the building located at 321 Harrison Avenue, Boston, Massachusetts. The remaining contractual fixed lease payments, net of sublease payments and tenant improvement allowance, over the term of the lease aggregate to $27.4 million. The operating lease obligation is discussed in Note 10. Leases to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

We lease an office and laboratory space in Boston, Massachusetts with lease payments that continue through December 31, 2032, and have scheduled rent increases each year of 3%. Additionally, we sublease 17,729 square feet of office and laboratory space in the building located at 321 Harrison Avenue, Boston, Massachusetts. The remaining contractual fixed lease payments, net of sublease payments and tenant improvement allowance, over the term of the lease aggregate to $27.1 million. The operating lease obligation is discussed in Note 10. Leases to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.