Aadi Bioscience, Inc. ("Aadi") (Nasdaq: AADI), a clinical-stage biopharmaceutical company focusing on precision therapies for genetically-defined cancers with alterations in mTOR pathway genes, today announced the closing of its previously announced merger with Aerpio Pharmaceuticals, Inc. (previously traded on the Nasdaq Capital Market under "ARPO").
The combined, publicly traded company will focus on the advancement, expansion and commercialization of Aadi's clinical stage pipeline, including Aadi's lead program for its nanoparticle albumin-bound mTOR inhibitor, FYARRO™ (sirolimus albumin-bound nanoparticles for injectable suspension, nab-sirolimus ABI-009), an mTOR inhibitor bound to human albumin. Shares of the combined company, which is operating under the name Aadi Bioscience, Inc. will commence trading on the Nasdaq Global Select Market under the ticker symbol "AADI" on August 27, 2021.
Neil Desai, Ph.D., Chief Executive Officer of the new combined company, stated, "Today's news represents an important inflection point for Aadi and the development of FYARRO. The completion of the merger, and now becoming a public entity, allows us to take the next step toward commercialization of our pipeline. As we approach our PDUFA date for FYARRO for the treatment of patients with PEComa and prepare to initiate a registrational trial in patients with tumors harboring TSC1 and TSC2inactivating alterations by year-end, we believe that we are optimally positioned, and look forward to advancing FYARRO to help patients with genetically-driven cancers."
Aadi's registration trial of FYARRO in advanced malignant PEComa (the AMPECT trial) demonstrated meaningful clinical efficacy in malignant PEComa1, a type of cancer with the highest known alteration rate of TSC1 or TSC2 genes. FYARRO has received Breakthrough Therapy, Fast-Track and Orphan Designations from the U.S. Food and Drug Administration (FDA). A rolling New Drug Application (NDA) submission was completed in May 2021 for this indication and the FDA accepted the NDA in July 2021 and granted Aadi Priority Review status with a Prescription Drug User Fee Act (PDUFA) target action date of November 26, 2021.
About the Merger and Concurrent PIPE Financing
Concurrent to the closing of the merger, the combined company also closed the previously announced $155 million Private Investment in Public Equity (PIPE) financing of its common stock. The PIPE Financing was led by Acuta Capital Partners and KVP Capital and included Avoro Capital Advisors; Avoro Ventures; Venrock Healthcare Capital Partners; BVF Partners, L.P.; Vivo Capital; Alta Bioequities, L.P.; Rock Springs Capital; RTW Investments, LP; Acorn Bioventures; and Serrado Capital LLC as well as other undisclosed institutional investors. Proceeds from the PIPE financing are expected to be used for the commercialization of FYARRO in advanced malignant PEComa, a planned tumor-agnostic registrational trial in solid tumors harboring inactivating alterations in the mTOR pathway genes TSC1 and TSC2 expected to be initiated by the end of 2021 and ongoing studies and general operating expenses.
Effective as of the merger close, Aadi has approximately $170 million in cash and cash equivalents and an expected runway into 2024.
On August 26, 2021, and in connection with the closing of the merger, Aerpio effected a 1-for-15 reverse stock split. All issued and outstanding shares of common stock of Aerpio were subject to the reverse stock split. Upon completion of the merger, taking into consideration the reverse stock split and the exchange ratio, the combined company has approximately 20.8 million shares of common stock outstanding with pre-merger Aadi stockholders collectively owning or holding rights to acquire approximately 29.2% of the combined company, on a fully-diluted basis, pre-merger Aerpio stockholders collectively owning or holding rights to acquire approximately 15.2% of the combined company, on a fully-diluted basis, and the PIPE Investors collectively owning approximately 55.6% of the combined company, on a fully-diluted basis.
Immediately prior to the effective time of the merger, Aerpio distributed a non-transferable contingent value right (a "CVR") to Aerpio shareholders that b...
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