Proxy Statement Includes Proposals on Previously
Announced Sale of FYARRO and Associated Infrastructure to Kaken for
$100M, and $100M PIPE Financing to Support In-Licensing of
ADC Portfolio
Aadi's Board Recommends Stockholders Vote "FOR"
All Proposals to Support the Company's Business Transformation
Company Expects to Close Transactions in the
First Quarter of 2025, Subject to Stockholder Approval and Other
Closing Conditions
MORRISTOWN, N.J., Feb. 5, 2025
/PRNewswire/ -- Aadi Bioscience, Inc. (NASDAQ: AADI) ("Aadi"
or the "Company") announced it filed its definitive proxy statement
with the U.S. Securities and Exchange Commission (the "SEC") on
January 31, 2025, and today mailed
its definitive proxy statement and a letter to stockholders, in
connection with the Company's upcoming Special Meeting of
Stockholders (the "Special Meeting") which is scheduled to be held
on February 28, 2025.
The Company's strategic plan, which was first announced in
December 2024, includes three
transactions: the sale of FYARRO® and its associated
infrastructure to Kaken Pharmaceuticals for $100 million in cash; the in-licensing of a
thoughtfully selected, promising portfolio of antibody drug
conjugates (ADCs) from WuXi Biologics; and a $100 million private investment financing to
enable the development of these ADC assets.
The Company expects to close these transactions in the first
quarter of 2025, subject to stockholder approval at the Special
Meeting and the satisfaction of other closing conditions.
In a supporting letter, Aadi's Board recommends stockholders
vote "FOR" all proposals to support the company's business
transformation to maximize the Company's opportunity for long-term
value creation.
The full text of the letter that is being mailed with the
definitive proxy statement follows:
Dear Fellow Aadi Stockholders,
We are writing to encourage you to review the enclosed materials
and to vote in favor of the proposals that are being put to a vote
at the upcoming Special Meeting of Stockholders, which is scheduled
for February 28, 2025 at 10:00 am Pacific Time.
We have recently undertaken bold action to maximize the
Company's potential. Our transformative actions, first announced in
December 2024, entail a series of
transactions that we believe will create significant value for our
stockholders, while remaining rooted in Aadi's legacy of delivering
improved oncology therapies for people with difficult-to-treat
cancers.
Our progress as a company has not always been linear. After
successfully launching FYARRO® in 2022 and generating approximately
$58 million in aggregate sales as a
therapy for PEComa (as of September 30,
2024), we experienced a setback in August 2024 when it became apparent that a Phase
2 trial for an additional indication was unlikely to deliver the
results needed to support accelerated approval and justify our
continued investment. At that time, we made the difficult decision
to discontinue the trial and substantially reduce our workforce to
preserve cash. Management and the Board, with the support of
independent advisors, then determined to formally pursue strategic
options to maximize stockholder value, which management and the
Board had started to consider in March
2024 in light of the risks and uncertainties relating to the
Phase 2 trial of FYARRO.
During its comprehensive review, the Board evaluated many
alternatives, including a sale of the entire Company, acquisitions
of other companies and assets, in-licensing opportunities, mergers
and reverse mergers, and a dissolution of the Company. After
careful analysis and consultation with independent financial and
legal advisors, the Board determined that the best opportunity to
maximize long-term stockholder value on a risk-adjusted basis would
be to divest the FYARRO business and revitalize the Company's
product pipeline with promising assets that we could advance with
our talented team.
Aadi's Value-Creation Opportunity
Executing on this strategic plan involves three initial
steps:
- The sale of FYARRO® and its associated infrastructure to
Kaken Pharmaceuticals for $100
million in cash;
- The in-licensing of a thoughtfully selected, promising
portfolio of cancer treatments known as antibody drug
conjugates ("ADCs") from WuXi Biologics; and
- A $100 million private
investment in public equity ("PIPE") financing to enable the
development of these new assets.
The sale of FYARRO to Kaken Pharmaceuticals is the culmination
of a robust, months-long process during which the Company's
financial advisor engaged with more than 30 interested parties,
eight of whom ultimately submitted a proposal or indication of
interest. With multiple parties vying for the FYARRO assets, there
was significant competitive tension: four parties improved their
initial proposals – some substantially – during several rounds of
negotiations. The Board concluded that the $100 million in gross proceeds we will receive
from the sale – approximately equal to four times the revenue
FYARRO generated over the four quarters ended September 30, 2024 – represents the full and fair
value of this asset.
Following the sale of FYARRO to Kaken Pharmaceuticals, the
Company plans to in-license and develop three pre-clinical ADCs
from WuXi Biologics. ADCs allow for the targeted delivery of cancer
killing molecules directly to tumors, increasing drug potency and
reducing side effects compared to traditional chemotherapy.
ADCs represent a breakthrough in targeted cancer therapy and have
become one of the fastest-growing therapeutic modalities in
oncology, attracting billions of dollars of investment capital –
expected to grow to over $50 billion
by 2030 – from some of the biggest names in healthcare.
In selecting these ADC assets, we evaluated more than 20 ADC
companies and over 40 ADC assets. The ADC assets we chose to
license are attractive for many reasons, but particularly because
they leverage advanced linker-payload technology that we believe
can enable them to deliver a more robust anti-tumor response, while
minimizing toxicity better than so-called "first generation" ADCs.
We also believe that they are well-positioned competitively and
have a relatively short path to human trials.
Licensing the rights to this promising ADC portfolio allows us
to reset and enhance our pipeline. To realize the full potential of
these assets, unlock our opportunity to deliver life-changing
therapies and maximize stockholder value, the Board determined that
the Company would require additional capital beyond the proceeds
from the sale of FYARRO.
To that end, the Board carefully considered the anticipated
capital needs of the Company and worked with its independent
financial advisor to define the optimal financing structure, size
and valuation. Through the Company's financial advisor,
approximately 50 potential investors showed initial interest in the
new ADC portfolio and the potential PIPE financing.
Under the oversight of the Board's PIPE Financing Committee,
consisting solely of directors disinterested with respect to the
PIPE financing, Aadi's management team and independent financial
advisor assembled a sophisticated, high-quality investor syndicate.
Some of these investors – like Avoro Capital, KVP Capital and Acuta
Capital Partners – are longtime partners who have played a critical
role in our progress and growth and have confidence in our team and
these ADC assets. Other PIPE investors are new to Aadi's journey;
after undertaking significant diligence efforts, they decided to
support our revitalized portfolio, our new strategic plan, our
experienced leadership team and our prospects for maximizing
long-term stockholder value.
The Board is grateful for the endorsement of this distinguished
group of investors and for their support and guidance for our
plans.
A New Chapter
Upon closing these three strategic transactions, we believe Aadi
will be well positioned to develop next-generation oncology
therapies and create long-term value for stockholders. We believe
we will have an enhanced pipeline of leading ADC assets, the
capital we need to unlock the potential of our portfolio, the
support of credible investors and an augmented Board with the
skills and experience necessary to oversee our strategic plan.
Baiteng Zhao, PhD, a seasoned biotech executive, has been
appointed to Aadi's Board to strengthen the Board's ADC expertise
and help oversee the development of our new portfolio. Dr. Zhao
co-founded ProfoundBio, a clinical stage next-gen ADC developer, in
2018 and served as the Chairman and CEO of ProfoundBio until it was
acquired by Genmab for $1.8 billion
in May 2024. Prior to ProfoundBio,
Dr. Zhao worked at Seagen, another ADC company, which was acquired
by Pfizer in December 2023 for
$43 billion.
We believe the capital markets recognize the upside of the
opportunity in front of us: upon announcement of these transactions
in December 2024, our stock price
rose 46% in the first day of trading and has remained significantly
above the pre-announcement trading price. Recently, our stock has
been trading at approximately twice the level at which it closed
the day after we announced the PRECISION1 trial
discontinuation.
To support our transformation, we are asking for your support at
our upcoming Special Meeting, which will be held on February 28, 2025. We encourage you to vote for
all proposals on the agenda. Key among those proposals are:
- The Divestiture Proposal, which will enable us to
realize the full and fair value of FYARRO;
- The PIPE Financing Proposal, which will help ensure we
have the resources we need to develop our revitalized ADC pipeline;
and
- The Equity Plan Proposal, which will enable the Company
to align the incentives of our key executives, employees and other
eligible plan participants with those of our stockholders.
These proposals, and the transactions they facilitate, are
critical to Aadi's future. With your support, we can write the next
chapter in Aadi's history and maximize long-term stockholder
value.
Sincerely,
/s/ David Lennon, Ph.D.
David J. Lennon Ph.D.
President & Chief Executive Officer,
On behalf of the Aadi Bioscience Board of Directors
Forward-Looking Statements
This communication contains certain forward-looking statements
regarding the business of Aadi Bioscience that are not a
description of historical facts within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are based on the Company's current beliefs and
expectations and may include, but are not limited to, statements
relating to: the timing and completion of the proposed sale of
FYARRO to Kaken Pharmaceuticals and the anticipated timing of the
closing of the transaction; expectations regarding the timing,
closing and completion of the PIPE financing; Aadi's expected cash
position at the closing and cash runway of the Company following
the sale of FYARRO and PIPE financing; the future operations of
Aadi; the development and potential benefits of any of Aadi's
product candidates, including the preclinical ADC assets proposed
to be licensed from WuXi; anticipated preclinical and clinical
development activities and related timelines, including the
expected timing for announcement of data and other preclinical and
clinical results and potential submission of IND filings for one or
more product candidates; and other statements that are not
historical fact. Actual results could differ materially from those
anticipated in such forward-looking statements as a result of these
risks and uncertainties, which include, without limitation, risks
associated with (i) the risk that the conditions to the closing of
the proposed sale of FYARRO or the PIPE financing are not
satisfied, including the failure to timely obtain stockholder
approval for the transactions, if at all; (ii) uncertainties as to
the timing of the consummation of the proposed transactions and the
ability of each of Kaken and Aadi to consummate the proposed sale
of FYARRO; (iii) risks related to Aadi's ability to manage its
operating expenses and its expenses associated with the proposed
transactions pending the closing; (iv) risks related to the failure
or delay in obtaining required approvals from any governmental or
quasi-governmental entity necessary to consummate the proposed
transactions; (v) unexpected costs, charges or expenses resulting
from the transactions; (vi) potential adverse reactions or changes
to business relationships resulting from the announcement or
completion of the proposed sale of FYARRO or the proposed PIPE
financing; (vii) the uncertainties associated with Aadi's product
candidates, as well as risks associated with the preclinical and
clinical development and regulatory approval of product candidates,
including potential delays in the completion of preclinical studies
and clinical trials; (viii) risks related to the inability of Aadi
to obtain sufficient additional capital to continue to advance
these product candidates; (ix) uncertainties in obtaining
successful preclinical and clinical results for product candidates
and unexpected costs that may result therefrom; (x) risks related
to the failure to realize any value from product candidates being
developed and anticipated to be developed in light of inherent
risks and difficulties involved in successfully bringing product
candidates to market; and (xi) risks associated with the possible
failure to realize certain anticipated benefits of the proposed
sale of FYARRO or the proposed PIPE financing, including with
respect to future financial and operating results.
Additional risks and uncertainties that could cause actual
outcomes and results to differ materially from those contemplated
by the forward-looking statements are included in the Proxy
Statement (as defined below), and elsewhere in Aadi's reports and
other documents that Aadi has filed, or will file, with the SEC
from time to time and available at www.sec.gov.
All forward-looking statements in this communication are current
only as of the date hereof and, except as required by applicable
law, Aadi undertakes no obligation to revise or update any
forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise. All forward-looking statements are qualified in their
entirety by this cautionary statement. This cautionary statement is
made under the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
Additional Information and Where to Find It
This communication relates to the proposed sale of FYARRO and
the proposed PIPE financing and may be deemed to be solicitation
material in respect of such transactions. In connection with these
proposed transactions, Aadi has filed a proxy statement with the
SEC (the "Proxy Statement") which will be mailed to stockholders.
This communication is not a substitute for the Proxy Statement or
any other documents that Aadi may file with the SEC or send to Aadi
stockholders in connection with the proposed transactions. BEFORE
MAKING ANY VOTING DECISION, INVESTORS AND SECURITYHOLDERS ARE URGED
TO READ THE PROXY STATEMENT AND ALL OTHER RELEVANT DOCUMENTS FILED
OR THAT WILL BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED
TRANSACTIONS AS THEY BECOME AVAILABLE CAREFULLY AND IN THEIR
ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTIONS AND RELATED MATTERS.
Stockholders may obtain a copy of the Proxy Statement and other
documents the Company files with the SEC (when they are available)
through the website maintained by the SEC at www.sec.gov, as well
as on the Investor and News section of Aadi's website at
www.aadibio.com.
Certain stockholders of Aadi holding approximately 39.1% of
Aadi's outstanding shares, as of the date hereof, including members
of its board of directors and related entities, have entered into
voting and support agreements in favor of Kaken Pharmaceuticals and
Aadi, pursuant to which such stockholders have agreed to vote in
favor of the stock purchase transaction with Kaken
Pharmaceuticals.
Participants in the Solicitation
This communication does not constitute a solicitation of proxy,
an offer to purchase or a solicitation of an offer to sell any
securities. Aadi and its respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the stockholders of Aadi in connection with the
proposed transactions. Information about Aadi's directors and
executive officers, as well as other persons who may be deemed
participants in the proposed transactions, is set forth in the
Proxy Statement and is supplemented by other relevant materials
filed or to be filed with the SEC. To the extent the holdings of
Aadi securities by Aadi's directors and executive officers have
changed since the amounts set forth in the Proxy Statement, such
changes have been or will be reflected on Statements of Change in
Ownership on Form 4 filed with the SEC. You may obtain free
copies of these documents as described in the preceding
paragraph.
No Offer or Solicitation
This communication shall not constitute an offer to sell or a
solicitation of an offer to buy these securities nor a solicitation
of any vote or approval with respect to the proposed transactions
or otherwise, nor shall there be any sale of these securities in
any state or other jurisdiction in which such offer, solicitation
or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state or other
jurisdiction.
The offer and sale of securities of Aadi described above are
being made in a transaction not involving a public offering and the
securities have not been registered under the Securities Act of
1933, as amended, and may not be reoffered or resold in
the United States except pursuant
to an effective registration statement or an applicable exemption
from the registration requirements. Concurrently with the closing
of the subscription agreement for the PIPE financing, the Company
and the investors will enter into a registration rights agreement
pursuant to which the Company will file, following the closing of
the PIPE financing, a registration statement with the SEC
registering the resale of the shares of Common Stock and the shares
of Common Stock underlying the Pre-Funded Warrants sold in the PIPE
financing.
Contact:
IR@aadibio.com
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SOURCE Aadi Bioscience
