Whitehawk Therapeutics, Inc. Q4 FY2024 Earnings Call

Ladies and gentlemen, thank you for standing by. Welcome to Whitehawk Therapeutics Fourth Quarter and Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Audrey Gross, Head of Corporate Communications for Whitehawk Therapeutics. Ms. Gross, please go ahead.

Thank you. Good morning, and welcome to the Whitehawk Therapeutics conference call. We will be presenting slides as part of the live webcast of this call. Such slides will be posted on the Investor News page of the Whitehawk Therapeutics website at whitehawktx.com following the conference call. A reminder that statements made on the call today will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our annual and quarterly filings with the Securities and Exchange Commission, which can be found at www.sec.gov or on our website at whitehawktx.com. In addition, any forward-looking statements made on this call represent our views only as of today, March 19, 2025, and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. On the call today is Dr. Dave Lennon, our President and CEO; Scott Giacobello, our CFO; and Dr. David Dornan, our newly appointed CSO. Today, we will introduce Whitehawk Therapeutics and provide an overview of Q4 and full year 2024 financial results before turning the line open for questions. I'll now turn the call over to Dave. Dave?

Thank you, Audrey. Hello, everyone. Good morning, and thank you for being here. I'm Dave Lennon, the President and CEO of the newly launched Whitehawk Therapeutics. We are very excited about our transition from Aadi Biosciences to Whitehawk. I am eager to share our vision, strategy, and the opportunities we have to make a significant impact for patients through our advanced ADC portfolio. In December, we announced several strategic transactions, including the in-licensing of three ADCs from Wuxi Biologics, the divestiture of FYARRO to Kaken Pharmaceuticals, and a $100 million private investment that received approval in a special meeting of stockholders last month. As we move forward, Aadi Biosciences is now reorganized into two entities. After Kaken's acquisition of Aadi's subsidiary, they will now own the Aadi name, trademark, and the FYARRO business. Today, the Aadi Parent Company rebrands as Whitehawk Therapeutics, solidifying our focus on ADC development. While we remain grounded in our roots of using technology to enhance precision oncology therapies, Whitehawk presents several new distinctions. Aadi was previously centered on mTOR inhibition within rare cancer settings and was based on the foundation of a single commercial product. In contrast, Whitehawk is dedicated to rapidly advancing a multi-asset portfolio of cutting-edge ADC therapies designed to deliver meaningful improvements across various cancer populations. As Whitehawk, we have established a framework that outlines a compelling value proposition and investment rationale as an ADC-focused company. First, we are building on established tumor biology, carefully identifying promising tumor targets that are both clinically validated and have broad overexpression. This clinical validation gives us confidence in our ability to target these tumors effectively, reaching high-potential cancer indications that have significant patient populations and unaddressed needs. While first-generation ADCs made substantial progress, they were often limited by a lack of therapeutic index. To address these limitations, we utilize an advanced ADC platform designed to minimize off-target toxicity, increase stability, and enhance therapeutic index compared to earlier generations. We are also focused on speed and efficiency in reaching critical data milestones, with plans to advance all three of our candidates through the clinic with INDs expected in the next 15 months. Our portfolio comprises three assets targeting validated tumor markers. HWK-007 targets protein tyrosine kinase 7 (PTK7), which is minimally present in adult tissues while being significantly overexpressed in a variety of tumors. Although there are no approved PTK7 ADCs currently, it is becoming a prominent target in cancer research due to its overexpression in multiple cancers. HWK-016 is the only ADC known to target the membrane-bound portion of MUC16, a glycoprotein found at low levels in normal tissues but often overexpressed and released from tumors such as those of the ovaries, cervix, and endometrium. Shed MUC16, recognized as CA125, serves as a biomarker for cancer monitoring, particularly in ovarian cancer. MUC16 is a well-established target for ovarian cancer, having been studied as an ADC target by Genentech, which developed two different ADCs against it. Our third asset, HWK-206, focuses on the neuronal target seizure protein 6 (SEZ6), which is primarily expressed in neuroendocrine tumors, such as small cell lung cancer. Small cell lung cancer is an aggressive neuroendocrine carcinoma with limited treatment options. To our knowledge, the only SEZ6 ADC currently in development is from AbbVie. All of these programs leverage the advanced ADC technology developed by HANGZHOU DAC, known as CPT113. This advanced architecture is built around a novel TOPO1 payload along with highly stable linker chemistry. Notably, HANGZHOU DAC also has two internally developed programs using this platform, which are undergoing successful Phase 1 clinical trials in China. We are planning to rapidly file INDs for our candidates, aiming to submit all three within the next 15 months. These assets are designed to target broadly expressed proteins across multiple tumor types with significant unmet medical needs. This slide showcases established clinical data for these targets and highlights the substantial market potential of our portfolio. HWK-007 could represent one of the first ADCs in clinical development for high-expressing PTK7 cancers and is currently undergoing IND-enabling studies. The Phase 1 trial is anticipated for non-small cell lung cancer and platinum-resistant ovarian cancer, with the possibility of expanding into gastrointestinal and gynecological cancers. HWK-016 is under evaluation in IND-enabling studies for ovarian cancer, with potential expansions into endometrial, cervical, and pancreatic cancers. HWK-206, targeting SEZ6, is in candidate selection with a Phase 1 trial planned for small cell lung cancer and neuroendocrine neoplasias, where options are currently limited. The next slide details our platform: first-generation ADCs faced challenges due to high free payload release, limiting their therapeutic window and causing off-target side effects. Today’s advanced ADC platforms, including our CPT113, improve upon these limitations by optimizing three key components: payload, linker design, and pharmacokinetics. We use a proprietary TOPO1 inhibitor payload that minimizes off-target effects, alongside a highly stable cleavable linker to reduce free payload release, and our enhanced pharmacokinetics facilitate optimal dosing. The right side of the slide illustrates the expected improvements in therapeutic index from using this advanced ADC platform compared to first-generation ADCs. By advancing the lower limit of the effective dose and raising the upper limit of the maximally tolerated dose through optimized payloads, we are increasing the potential treatment intensity and efficacy for patients. Moving to the next slide, we can see real-world data supporting the efficacy gains from switching to an advanced ADC platform. While I won't go through all the specifics, the trends show that transitioning from older platforms to our advanced ADC technology led to significant improvements in objective response rates across various cancer targets and indications. On average, a 30-point improvement can be expected, alongside improvements in response durability, suggesting these platforms can potentially transform standard care options and improve patient outcomes. Now, as we apply this example to our own portfolio, starting with PTK7, there is precedent from Pfizer’s first-generation MMAE-based ADC, cofetuzumab pelidotin, which showed promising response rates across various tumor types, including ovarian and lung. Despite these signals, cofetuzumab's effectiveness was limited by dose intensity issues related to the first-generation payload. If we apply our advanced ADC platform to this validated tumor target, we could anticipate increased efficacy rates by 15% to 30% over cofetuzumab. Such an improvement would represent a significant advancement over existing first-generation ADC treatments for lung and ovarian cancer, providing meaningful clinical benefits to patients. This example applies specifically to HWK-007 and PTK7, and we expect similar advancements across our other two programs as well, taking advantage of tumor targeting innovations and our advanced ADC platform. We are enthusiastic about our portfolio's potential and are eager to move quickly into the clinic. I will now hand it over to Scott for updates on our financial progress.

Thanks, Dave. Moving to Slide 14. We ended 2024 with $47.2 million in cash, cash equivalents and short-term investments. Following the close of our recent strategic transactions, we expect to have cash and cash equivalents in the range of $170 million to $180 million, including the payment of the upfront and early milestones under the ADC license agreement. We anticipate that cash will fund operations into 2028 based on current plans. FYARRO net product sales were $7.2 million for the fourth quarter, representing 14% growth over the prior year quarter. Full year FYARRO sales were $26 million, an increase of 7% over 2023. Research and development expenses for the quarter increased to $14.3 million compared to $12.8 million in the prior year quarter. For the year, R&D expense amounted to $51 million compared to $48.9 million last year. This increase is driven mainly by in-process R&D expenses of $6 million related to the recently acquired ADC programs, offset in part by reductions in clinical expenses, personnel, and other expenses. Selling, general and administrative expenses for the fourth quarter were $11.1 million compared to $10.3 million in the same period in 2023. This increase was due mainly to increased legal and consulting expenses offset in part by lower commercial expenses. For the year, SG&A expenses decreased to $36.7 million compared to $44.5 million in the prior year, driven primarily by reductions in commercial and personnel expenses. Operating expenses for the year included $2.6 million of restructuring costs. Net loss for the fourth quarter was $18.3 million compared to $16.3 million in the fourth quarter of 2023. Net loss for the year was $63.7 million compared to $65.8 million in the prior year. I'll now hand the call back over to Dave for his closing comments. Dave?

Thanks, Scott. Looking to Slide 16. We are enormously excited about the potential of Whitehawk to make a transformative impact on patients with our portfolio. We're advancing three clinically validated tumor targets using next-generation ADC technology with the goal of outperforming first-generation predecessors. With a focus on high potential indications, we aim to file three U.S. INDs within 15 months. And we're well positioned to fund operations, as Scott said, into 2028, covering anticipated clinical inflections. Importantly, Whitehawk is backed by an outstanding veteran team. I'm also pleased to say this includes our recent addition of David Dornan, who joined us as Chief Scientific Officer. Many of you will know David, as the former CSO of Elevation Oncology. David contributes more than 2 decades of experience in oncology drug discovery and development with deep expertise in ADCs and other targeted cancer therapies. He has a successful track record of advancing drugs from discovery stage through the clinic for advanced modalities, including ADCs, encompassing numerous INDs, NDAs, and BLAs. His experience at Elevation is particularly relevant as the spearhead of the company's strategic pivot towards a portfolio of ADCs. We welcome David and are glad he is able to join us on the call today. With that, I'll open the call for questions.

Thank you. The first question will come from Tara Bancroft with TD Securities.

Hi, this is Greg Weasner on for Tara Bancroft. So considering that Regeneron is developing a Mucin 16 targeted bispecific antibody for ovarian, how do you anticipate that the clinical activity and safety profile of your ADC might compare to the bispecific approach within this indication? Thank you.

Super. Thanks, Greg, for stepping in for Tara, and thanks for the question. I'll start a little bit and then turn it over to David for his comments since he is an expert in this target. I mean the first concept is, obviously, ADCs and bispecific TCEs are very different modalities in terms of their mechanism. Certainly, there's commonality in the tumor targeting. And we're encouraged by the fact that Regeneron uses the same targeting approach to the membrane-bound type MUC16. But obviously, as a TCE that is targeting an immune modulating response, that will be very different from our ADC chemo-based response. We think both are complementary and important options for patient treatment regardless of the tumor target here. So we don't necessarily have a direct comparison we would highlight for this indication, but we do, obviously, pay close attention to that program. But David, do you want to say a little more about MUC16?

Yeah, sure. I think it is fair to say with respect to targeting, obviously, the membrane portion that we're targeting MUC16 certainly helps avoid antigen sink, as Dave has mentioned in the presentation. And with respect to the different modalities of targeting, I think you specifically asked about the CD3 redirection approach. I think it's fair to say that like a CD3 redirection approach sometimes faces challenges with cytokine release syndrome. So obviously, as a cytotoxic ADC, we don't have the same AE problems in that realm. But obviously, with our ADC, cytotoxic ADCs have their own profiles, but the promise of our technology using our stable linker technology really will mitigate that potential risk. And so that's how we feel that positioning-wise that this ADC will certainly be differentiated from a CD3 redirected approach, but largely would have significant gains in efficacy, as Dave already mentioned.

Thanks, Greg. Operator, next question?

And our next question will come from Roger Song with Jefferies. Your line is open.

Good morning, thanks for taking our question. This is Liang Cheng on for Roger. First, congrats on the new chapter. So I guess, question from us. One is on the three targets. So understanding the prevalence there. So maybe could you help us understand about the distribution of the high, medium, low expression levels for each of these three targets? And the second question is about the financials. So understanding about the 2028 runway. So does that cover all the three Phase 1 studies? Thank you.

Thanks for joining the call, Liang. It's great to hear from you again, and I appreciate your questions. Regarding your first question about prevalence, there's quite a bit of data to consider. Starting with PTK7, it's one of the most widely overexpressed tumor targets currently in development, affecting a large number of cancer patients across various tumor types. We find that when PTK7 is expressed in patients, it's usually at a moderate to high level, which means that most patients who express PTK7 do so across multiple cancers. This higher expression is linked to better response rates in patients, which is encouraging. As for MUC16, it tells a similar story, but it has the added benefit of increasing expression as the disease advances. This higher expression often correlates with more severe disease, allowing us to effectively target patients who require urgent care. Additionally, by using circulating CA125 as a biomarker, we have an alternative way to assess expression levels across patients without relying on IHC-based methods. This gives us a strong handle on the expression patterns, especially in gynecological cancers, and the ability to track that through circulating biomarkers. For SEZ6, we see high expression across all small cell lung cancer cases. AbbVie's program has illustrated this by not specifically selecting patients, yet still achieving significant response rates across non-selected small cell lung cancer patients. Overall, these targets are compelling not only due to their significance in their respective indications but also because they are broadly and deeply expressed in the majority of patients. They remain less competitive than others like TROP2 or Claudin18.2, which we see as potential first or second-to-market opportunities for these targets. Regarding your second question about data availability, our aim is to gather meaningful clinical Phase 1 data for each of the three programs within the current funding framework. There will be varying amounts of data for each program as they are staggered by a few months, but our overarching goal with establishing Whitehawk and securing capital was to ensure we generate significant clinical data before seeking additional market financing. Thank you for your question. Operator, what's the next question?

I show no further questions at this time in the queue. I would like to turn the call back to Dave for closing remarks.

Thank you, operator, and thank you to the team and everyone who joined us on the call today. We are really excited about the launch of Whitehawk Therapeutics, a new ADC company out of the transformation we've just performed with Aadi Biosciences. We reiterate these three clinically validated broadly overexpressed tumor targets are leveraging an advanced ADC linker payload architecture with key features that we believe will allow us to outperform first-generation ADCs. We're moving quickly, targeting filing of three U.S. INDs in the next 15 months, including HWK-007 in the second half of 2025 and HWK-016 by the end of this year. With our experienced team and collaborative partners, we are singularly focused on executing to ensure these goals are met. Lastly, upon closing, we expect we will capitalize. And as I mentioned, we have cash to fund our operations into 2028 with anticipated key clinical data. So thank you for joining us for this introduction of Whitehawk Therapeutics, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.