8-K: ALX Oncology Reports Positive 2024 Financial Results and Corporate Update, Extending Cash Runway into Q4 2026

ALX Oncology announced its fourth quarter and full year 2024 financial results, highlighting clinical trial progress, strategic prioritization, and key leadership additions, with a cash runway extended into Q4 2026.

Summary

• ALX Oncology reported its financial results for the fourth quarter and full year ended December 31, 2024.
• The company presented updated data from the ASPEN-06 Phase 2 trial, showcasing strong responses in HER2-positive gastric cancer patients.
• Phase 1b/2 data demonstrated promising anti-tumor activity of evorpacept in combination with zanidatamab in advanced breast cancer.
• ALX Oncology announced a focused development plan, including trials for breast and colorectal cancers, and a novel EGFR-targeted ADC clinical candidate, ALX2004.
• Strategic prioritization and resource optimization are expected to extend the cash runway into Q4 2026.
• Key additions were made to the leadership team and Board of Directors.
• Cash, cash equivalents, and investments totaled $131.3 million as of December 31, 2024.
• The company believes its current funds are sufficient to support planned operations into Q4 2026.
• R&D expenses for the year ended December 31, 2024, were $116.4 million, compared to $141.8 million for the prior year.
• GAAP net loss for the year ended December 31, 2024, was ($134.9) million, or ($2.58) per share, compared to ($160.8) million, or ($3.74) per share, for the prior year.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook, highlighting promising clinical trial results and an extended cash runway. However, the workforce reduction and ongoing net losses temper the overall sentiment.

Positives

• Evorpacept shows promising results in treating HER2-positive gastric cancer, with a cORR of 48.9% and mDOR of 15.7 months.
• The combination of evorpacept and zanidatamab demonstrates anti-tumor activity in metastatic breast cancer, with a cORR of 55.6% in HER2-positive patients.
• Strategic prioritization and resource optimization are expected to extend the cash runway into Q4 2026.
• The company has a strong cash position of $131.3 million as of December 31, 2024.
• Key additions have been made to the leadership team and Board of Directors, strengthening the company's expertise.

Negatives

• A workforce reduction of approximately 30% was implemented as part of strategic prioritization efforts.
• GAAP net loss for the year ended December 31, 2024, was ($134.9) million.

Risks

• The company's future performance depends on the success of its clinical trials and regulatory approvals.
• The development of new therapies involves inherent risks and uncertainties.
• The company's cash runway is dependent on its ability to manage expenses and achieve key milestones.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Future Outlook

The company expects its cash runway to extend into Q4 2026, excluding the potential impact of near-term catalysts related to ASPEN-03/04 HNSCC readout and FDA interaction on ASPEN-06.

Management Comments

• In 2024, we delivered strong progress and continued momentum for our clinical development program evaluating evorpacept as a potential firstand best-in-class CD47 blocker with the ability to deepen and enhance responses to a variety of important, available therapies across a wide range of cancer types, said Jason Lettmann, Chief Executive Officer of ALX Oncology.
• With multiple important clinical trial readouts, significant momentum for our ongoing clinical studies and key additions to our leadership team, we have positioned ALX Oncology for nearand long-term success.
• Yesterday during our R&D Day webcast, we shared updates on how we are prioritizing operations and capital to support our new and ongoing clinical programs that are expected to extend our cash runway into the fourth quarter of 2026, including taking the difficult decision to streamline our organization aligned to these priorities.

Industry Context

ALX Oncology is focused on developing immuno-oncology therapies, specifically CD47 blockers, which are a growing area of interest in the biotechnology industry. The company's progress in clinical trials and strategic prioritization aligns with the industry's focus on developing targeted therapies and optimizing resources.

Comparison to Industry Standards

• The 48.9% cORR observed in HER2-positive gastric cancer patients treated with Evo-TRP compares favorably to historical response rates achieved with standard therapies in similar patient populations.
• Companies like Forty Seven, Inc. (acquired by Gilead) and Trillium Therapeutics (acquired by Pfizer) have also pursued CD47-targeting therapies, indicating the potential of this approach.
• ALX Oncology's strategic prioritization and workforce reduction are consistent with industry trends of companies optimizing resources to focus on key clinical programs and extend cash runways, similar to actions taken by other biotech companies in response to market conditions.

Management Changes

Stakeholder Impact

• Shareholders may be impacted by the company's financial performance and clinical trial results.
• Employees are affected by the workforce reduction of approximately 30%.
• Patients may benefit from the development of new cancer therapies.
• The company's suppliers and partners may be impacted by changes in its strategic priorities.

Next Steps

• Report topline results from Phase 2 ASPEN-03 and ASPEN-04 trials in head and neck squamous cell carcinoma in Q2 2025.
• Report updated results from Phase 1 ASPEN-07 trial in urothelial cancer in Q2 2025.
• Receive regulatory guidance on the gastric cancer registrational path in Q2 2025.
• Initiate patient dosing for ASPEN-BREAST Phase 2 and ASPEN-CRC Phase 1b clinical trials in mid-year 2025.
• Report topline results from Phase 1b I-SPY clinical trial of evorpacept with ENHERTU in breast cancer in 2H 2025.
• Submit IND for novel EGFR-directed ADC, ALX2004, in March 2025.

Key Dates