SCHEDULE 13D/A: Avoro Entities and Behzad Aghazadeh Boost Stake in Aadi Bioscience to 19.99% Following PIPE Financing

Avoro Capital Advisors, Avoro Ventures, and Behzad Aghazadeh have increased their beneficial ownership in Aadi Bioscience, Inc. to 19.99% of outstanding common stock following the closing of the 2024 PIPE Financing.

Summary

• Avoro Capital Advisors LLC, Avoro Ventures LLC, and Behzad Aghazadeh have collectively increased their beneficial ownership in Aadi Bioscience, Inc. through the acquisition of Pre-Funded Warrants.
• The aggregate beneficial ownership for Behzad Aghazadeh, including holdings through Avoro entities, is 11,914,961 shares, representing 19.99% of the common stock, after giving effect to the 19.99% Blocker.
• This increase stems from the closing of the 2024 PIPE Financing on March 4, 2025, where Avoro Life Sciences acquired Pre-Funded Warrants to purchase 6,666,400 shares and Avoro Ventures Fund acquired Pre-Funded Warrants to purchase 1,666,600 shares.
• The Pre-Funded Warrants were acquired for approximately $15,998,693 by Avoro Life Sciences and approximately $3,999,673 by Avoro Ventures Fund, utilizing working capital.
• The beneficial ownership calculation is based on a total of 46,288,568 shares of Common Stock outstanding, which includes 24,696,568 shares as of January 30, 2025, and 21,592,000 shares issued in the 2024 PIPE Financing.
• A 19.99% beneficial ownership blocker prevents the reporting persons from exercising any Pre-Funded Warrants to the extent it would cause their beneficial ownership to exceed this threshold.

Sentiment

Score: 7

Explanation: The filing reports the completion of a significant PIPE financing, where existing major investors increased their stake in Aadi Bioscience. This indicates continued financial support and confidence from these key stakeholders, which is generally a positive signal for the company. The 19.99% blocker is a standard protective measure and does not detract from the positive nature of the capital infusion.

Positives

• Significant investment by existing major shareholders (Avoro entities and Behzad Aghazadeh) through the 2024 PIPE Financing, indicating continued confidence in Aadi Bioscience.
• The company successfully closed the 2024 PIPE Financing, securing additional capital to support its operations and strategic initiatives.

Negatives

• The 19.99% Blocker on Pre-Funded Warrants means the reporting persons cannot immediately exercise all their warrants if it pushes their beneficial ownership above this threshold, potentially limiting their immediate voting power or full conversion.

Risks

• The 19.99% Blocker on Pre-Funded Warrants could limit the flexibility of the reporting persons to fully convert their warrants into common stock if their beneficial ownership exceeds the threshold, potentially impacting their liquidity or strategic options related to their stake.

Future Outlook

The document primarily reports on a completed transaction and current ownership structure. It does not provide explicit forward-looking statements or guidance regarding the company's future performance, strategy, or financial projections.

Industry Context

This filing reflects a significant equity investment in a publicly traded biotechnology company (Aadi Bioscience, Inc.) by institutional investors and an individual associated with them. Such PIPE (Private Investment in Public Equity) financings are common in the biotech sector for capital raising, especially for companies in clinical development or commercialization phases, as they provide direct funding from strategic investors.

Comparison to Industry Standards

• The 19.99% beneficial ownership blocker is a common provision in PIPE financings to avoid triggering certain change-of-control provisions or shareholder rights plan (poison pill) thresholds, which often activate at 20% ownership. This is standard practice to facilitate investment without immediate hostile takeover implications or burdensome regulatory filings.
• The use of Pre-Funded Warrants is also a standard mechanism in PIPE deals, allowing investors to commit capital while deferring full share issuance, often for tax or regulatory reasons, or to manage beneficial ownership thresholds.

Related Party Transactions

• The acquisition of Pre-Funded Warrants by Avoro Life Sciences and Avoro Ventures Fund, entities associated with Behzad Aghazadeh (who is also a director, as indicated by his director stock options), as part of the 2024 PIPE Financing, constitutes a related party transaction.

Stakeholder Impact

• Shareholders: The PIPE financing increases the total number of outstanding shares, leading to dilution for existing shareholders. However, it also provides capital to the company, which can support operations and strategic initiatives. The increased stake by a significant investor might be viewed positively as a vote of confidence.
• Company (Aadi Bioscience, Inc.): Receives capital infusion from the PIPE financing, strengthening its financial position.

Key Dates

Recommendation

Keywords

Aadi Bioscience, SEC filing, Schedule 13D, beneficial ownership, PIPE financing, Pre-Funded Warrants, Avoro Capital Advisors, Avoro Ventures, Behzad Aghazadeh, common stock, equity investment, institutional investor