SEC Filing | Pyxis Oncology

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-40881

Pyxis Oncology, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	83-1160910
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
150 Cambridgepark Drive Cambridge, Massachusetts	02140
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 221-9059

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

PYXS

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2022, the registrant had 35,097,256 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
Summary Risk Factors		1
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021	3
	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the three and nine months ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II.	OTHER INFORMATION	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	78
Item 3.	Defaults Upon Senior Securities	78
Item 4.	Mine Safety Disclosures	78
Item 5.	Other Information	78
Item 6.	Exhibits	79
Signatures		80

SUMMARY RISK FACTORS

You should consider carefully the risks described under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. References to “Pyxis Oncology,” the “Company,” “we,” “us,” and “our” in this section titled “Summary Risk Factors” refer to Pyxis Oncology, Inc. and its wholly owned subsidiary. A summary of the risks that could materially and adversely affect our business, financial condition, operating results and prospects include the following:

•

We are an oncology focused biopharmaceutical company with a limited operating history and have incurred significant losses since our inception. We expect to incur losses over at least the next several years and may never achieve or maintain profitability.

•

We will require substantial additional capital to finance our operations, obtain regulatory approval for our product candidates, and commercialize our product candidates. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce or eliminate one or more of our research and product development programs or future commercialization efforts.

•

We are heavily dependent on the success of PYX-201 and PYX-106, which are in the early stages of development, and if PYX-201, and/or PYX-106 are not successful in clinical trials or do not receive regulatory approval or licensure or are not successfully commercialized, our business will be materially and adversely affected.

•

All of our product candidates are currently in preclinical development. Our product candidates may fail in development or suffer delays that materially and adversely affect their commercial viability. If we or our existing or future collaborators are unable to initiate and complete clinical development of, obtain regulatory licensure for or commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.

•

Our preclinical studies and clinical trials may fail to demonstrate adequately the safety, purity and potency of any of our product candidates, which would prevent or delay development, regulatory licensure and commercialization.

•

Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory licensure or commercialize these programs on a timely basis or at all.

•

We face competition from entities that have developed or may develop product candidates for cancer, including companies developing novel treatments and technology platforms. If these companies develop technologies or product candidates more rapidly than we do or their technologies are more effective, our ability to develop and successfully commercialize product candidates may be adversely affected.

•

Clinical testing and product development is a lengthy and expensive process with an uncertain outcome. We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the clinical testing and the development and commercialization of our product candidates.

•

The regulatory licensure and approval processes of the FDA and other comparable regulatory authorities are lengthy, time-consuming and inherently unpredictable and, if we are ultimately unable to obtain marketing licensure or approval for our product candidates, our business will be substantially harmed.

•

If we fail to attract and retain qualified senior management and key scientific personnel, our business may be materially and adversely affected.

•

We face risks related to health epidemics and outbreaks, including the COVID-19 pandemic, which could significantly disrupt our preclinical studies and clinical trials, and therefore our receipt of necessary regulatory licensure or approvals could be delayed or prevented.

•

We rely on third parties to manufacture our product candidates. Any failure by a third-party manufacturer to produce acceptable raw materials or product candidates for us or to obtain authorization from the FDA or comparable foreign regulatory authorities may delay or impair our ability to initiate or complete our clinical trials, obtain regulatory licensure or approvals or commercialize approved products.

•

If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the patent protection obtained is not sufficiently broad, or if our patents are insufficient to protect our product candidates for an adequate amount of time, or if we are unable to obtain adequate protection for our proprietary know-how, we may not be able to compete effectively in our markets.

•

If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our product candidates or we could lose certain rights to grant sublicenses.

•

Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues. If we breach our University of Chicago, Pfizer, LegoChem or Biosion license agreements or any of the other agreements under which we acquired, or will acquire, intellectual property rights covering our product candidates, we could lose the ability to continue the development and commercialization of the related product.

•

If the market opportunities for any product that we develop are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PYXIS ONCOLOGY, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	September 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	198,538		$	274,735
Restricted cash		1,472			1,472
Prepaid expenses and other current assets		2,798			2,466
Total current assets		202,808			278,673
Property and equipment, net		6,391			1,007
Operating lease right-of-use assets		14,696			232
Other assets, noncurrent		—			109
Total assets	$	223,895		$	280,021
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5,509		$	11,951
Accrued expenses and other current liabilities		13,586			6,592
Operating lease liabilities, current portion		—			165
Total current liabilities		19,095			18,708
Operating lease liabilities, net of current portion		16,053			—
Total liabilities		35,148			18,708
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, par value $0.001 per share, 10,000,000 shares authorized as of September 30, 2022 and December 31, 2021, zero shares issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Common stock, $0.001 par value per share; 190,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 32,834,682 and 32,792,867 shares issued as of September 30, 2022 and December 31, 2021, respectively, and 32,588,140 and 32,222,881 shares outstanding as of September 30, 2022 and December 31, 2021, respectively		32			32
Additional paid-in capital		365,049			352,999
Accumulated deficit		(176,334	)		(91,718	)
Total stockholders’ equity		188,747			261,313
Total liabilities and stockholders’ equity	$	223,895		$	280,021

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PYXIS ONCOLOGY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	19,034		$	7,849		$	56,275		$	43,828
General and administrative		9,359			3,772			29,233			9,463
Total operating expenses		28,393			11,621			85,508			53,291
Loss from operations		(28,393	)		(11,621	)		(85,508	)		(53,291	)
Other income (expense):
Interest income		719			6			892			16
Service fee income from related party		—			—			—			181
Change in fair value of derivative liability		—			(2,560	)		—			(5,821	)
Total other income (expense)		719			(2,554	)		892			(5,624	)
Loss from equity method investment in joint venture		—			—			—			(231	)
Net loss and comprehensive loss	$	(27,674	)	$	(14,175	)	$	(84,616	)	$	(59,146	)
Net loss per common share - basic and diluted	$	(0.85	)	$	(8.96	)	$	(2.61	)	$	(40.27	)
Weighted average shares of common stock outstanding - basic and diluted		32,561,228			1,581,610			32,444,072			1,468,777

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PYXIS ONCOLOGY, INC.

Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except shares data)

(Unaudited)


	Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
For the Three Months Ended September 30, 2022 and 2021	Shares		Amount		Shares		Amount		Capital		Deficit			Equity (Deficit)
Balance at July 1, 2022		—	$	—		32,483,883	$	32	$	360,594	$	(148,660	)	$	211,966
Stock options exercised		—		—		9,003		—		6		—			6
Vesting of restricted common stock		—		—		95,254		—		—		—			—
Stock-based compensation		—		—		—		—		4,449		—			4,449
Net loss		—		—		—		—		—		(27,674	)		(27,674	)
Balance at September 30, 2022		—	$	—		32,588,140	$	32	$	365,049	$	(176,334	)	$	188,747
Balance at July 1, 2021		127,537,173	$	194,023		1,519,007	$	2	$	3,124	$	(60,714	)	$	(57,588	)
Stock options exercised		—		—		104,223		—		3		—			3
Vesting of restricted common stock		—		—		16,370		—		14		—			14
Stock-based compensation		—		—		—		—		307		—			307
Net loss		—		—		—		—		—		(14,175	)		(14,175	)
Balance at September 30, 2021		127,537,173	$	194,023		1,639,600	$	2	$	3,448	$	(74,889	)	$	(71,439	)

	Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
For the Nine Months Ended September 30, 2022 and 2021	Shares		Amount		Shares		Amount		Capital		Deficit			Equity (Deficit)
Balance at January 1, 2022		—	$	—		32,222,881	$	32	$	352,999	$	(91,718	)	$	261,313
Stock options exercised		—		—		73,841		—		183		—			183
Vesting of restricted common stock		—		—		291,418		—		1		—			1
Stock-based compensation		—		—		—		—		11,866		—			11,866
Net loss		—		—		—		—		—		(84,616	)		(84,616	)
Balance at September 30, 2022		—	$	—		32,588,140	$	32	$	365,049	$	(176,334	)	$	188,747
Balance at January 1, 2021		22,724,925	$	21,942		1,289,342	$	1	$	97	$	(15,743	)	$	(15,645	)
Issuance of Series B convertible preferred stock to Pfizer, Inc. (Refer to Note 5)		12,152,145		20,000		—		—		—		—			—
Issuance of Series B convertible preferred stock, net of issuance costs of $419		92,660,103		152,081		—		—		—		—			—
Stock options exercised		—		—		16,370		—		14		—			14
Vesting of restricted common stock		—		—		333,888		1		8		—			9
Stock-based compensation		—		—		—		—		3,329		—			3,329
Net loss		—		—		—		—		—		(59,146	)		(59,146	)
Balance at September 30, 2021		127,537,173	$	194,023		1,639,600	$	2	$	3,448	$	(74,889	)	$	(71,439	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PYXIS ONCOLOGY, INC.

Condensed Consolidated Statements of Cash Flows (in thousands)

(Unaudited)


	Nine Months Ended September 30,
	2022			2021
Operating activities
Net loss	$	(84,616	)	$	(59,146	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		517			489
Stock-based compensation		11,866			3,329
Non-cash research and development expenses		—			20,000
Non-cash lease expense		855			448
Non-cash loss from equity method investment in joint venture		—			50
Changes in fair value of derivative liability		—			5,821
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(332	)		(836	)
Accounts payable		(6,443	)		610
Accrued expenses and other current liabilities		5,636			3,164
Operating lease liabilities		569			(455	)
Derivative liability		—			3,369
Net cash used in operating activities		(71,948	)		(23,157	)
Investing activities
Purchase of property and equipment		(4,541	)		(540	)
Investment in joint venture		—			(50	)
Net cash used in investing activities		(4,541	)		(590	)
Financing activities
Proceeds from issuance of Series B convertible preferred stock, net of issuance costs		—			151,581
Deferred offering costs		—			(2,451	)
Proceeds from the exercise of stock options		183			14
Net cash provided by financing activities		183			149,144
Net (decrease) increase in cash, cash equivalents, and restricted cash		(76,306	)		125,397
Cash, cash equivalents and restricted cash at beginning of year		276,316			8,189
Cash, cash equivalents and restricted cash at end of the period	$	200,010		$	133,586
Supplemental cash flow information:
Cash received for interest	$	892		$	16
Noncash investing and financing activities:
Property and equipment in accounts payable and accrued expenses	$	1,360		$	—
Deferred offering costs in accounts payable and accrued expenses	$	—		$	1,050
Operating lease right-of-use asset obtained in exchange for operating lease liabilities	$	15,319		$	—
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	198,538		$	133,477