8-K: ALX Oncology Reports Q1 2025 Financial Results and Provides Corporate Update

ALX Oncology announced its Q1 2025 financial results, a corporate update, and a prioritized development strategy for evorpacept in combination with anti-cancer antibodies.

Summary

• ALX Oncology reported its financial results for the first quarter ended March 31, 2025.
• The company is focusing its development strategy for evorpacept on anti-cancer antibody combinations.
• ALX Oncology received IND clearance for ALX2004, a novel EGFR-targeted antibody-drug conjugate, with clinical program initiation expected mid-year.
• The company will not pursue a U.S. registrational path in gastric cancer due to the evolving standard of care.
• Data milestones are expected across the company's three clinical programs in 2026.
• The company's cash runway has been extended into Q4 2026.
• Cash, cash equivalents, and investments as of March 31, 2025, were $107.0 million.
• R&D expenses for the three months ended March 31, 2025, were $23.9 million, compared to $31.7 million for the prior-year period.
• GAAP net loss was ($30.8) million for the three months ended March 31, 2025, or ($0.58) per basic and diluted share.
• Non-GAAP net loss was ($25.5) million for the three months ended March 31, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company is streamlining its pipeline and extending its cash runway, it has also discontinued some trials and will not pursue a U.S. registrational path in gastric cancer. The progress with ALX2004 and ongoing trials provides some optimism.

Positives

• ALX Oncology received IND clearance for ALX2004, a potential bestand first-in-class ADC.
• The company is progressing with Phase 2 ASPEN-Breast and Phase 1 ASPEN-CRC clinical studies.
• Encouraging final results were announced from the Phase 1 trial evaluating evorpacept with RITUXAN and lenalidomide in patients with B-cell non-Hodgkin Lymphoma, with 83% of patients achieving complete responses.
• The company extended its cash runway into Q4 2026 through strategic reprioritization efforts.

Negatives

• The company will not pursue a U.S. registrational path in gastric cancer following FDA feedback regarding the ASPEN-06 trial.
• Topline results from the ASPEN-03 and ASPEN-04 Phase 2 trials evaluating evorpacept with a checkpoint inhibitor did not meet their primary endpoints.
• The company discontinued its evaluation of evorpacept in combination with PADCEV in urothelial cancer based on the ASPEN-07 trial results.

Risks

• The company faces risks associated with clinical trial outcomes and regulatory approvals.
• The company's forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially.
• The company's decision not to pursue a U.S. registrational path in gastric cancer could impact future revenue potential.

Future Outlook

ALX Oncology expects data milestones across its three clinical programs in 2026 and believes its cash, cash equivalents, and investments are sufficient to fund planned operations into Q4 2026.

Management Comments

• In the first quarter of the year, we focused our development strategy for evorpacept on the anti-cancer antibody combinations, as we now have proof-of-concept for this mechanism in gastric cancer, breast cancer and NHL, said Jason Lettmann, Chief Executive Officer of ALX Oncology.
• In addition to the evorpacept program, we diversified our pipeline by moving our in-house ADC candidate, ALX2004, through IND clearance and look forward to beginning clinical trial enrollment by mid-year for this potentially firstand best-in-class EGFR ADC.
• We also made the difficult but critical decision to streamline the company and, by doing so, extended cash runway into Q4 2026.
• We are now hyper-focused on pursuing the validated mechanism of action for evorpacept in combination with anti-cancer antibodies and delivering data in breast cancer in combination with HERCEPTIN, in colorectal cancer in combination with ERBITUX, as well as from ALX2004, in 2026.

Industry Context

ALX Oncology's focus on immuno-oncology and antibody-drug conjugates aligns with current trends in cancer therapy development. The decision to discontinue certain trials reflects the competitive landscape and evolving standards of care, particularly with the emergence of drugs like ENHERTU.

Comparison to Industry Standards

• The 83% complete response rate in B-NHL patients treated with evorpacept plus R2 compares favorably to the 34% historical CR rate with R2 alone, suggesting a potential improvement over existing treatments.
• The company's decision to not pursue accelerated approval in gastric cancer due to the availability of ENHERTU highlights the increasing competition and higher efficacy benchmarks in the HER2-positive gastric cancer space, where companies like Daiichi Sankyo and AstraZeneca (developers of ENHERTU) are setting new standards.

Stakeholder Impact

• Shareholders: The strategic reprioritization and extended cash runway could be viewed positively, while the discontinued trials and decision not to pursue gastric cancer registration may be concerning.
• Employees: Streamlining efforts may lead to job losses or changes in roles.
• Patients: The focus on specific cancer indications and the development of new therapies could benefit patients in those areas.
• Partners: The company may seek development partnerships to advance the gastric cancer program.

Next Steps

• Initiate Phase 2 ASPEN-Breast and Phase 1 ASPEN-CRC studies in mid-2025.
• Initiate Phase 1 clinical trials of ALX2004 in mid-2025.
• Host a webcast highlighting the ALX2004 research program on May 20, 2025.
• Await interim results from the ASPEN-BREAST Phase 2 clinical trial in 2H 2026.
• Await safety and early efficacy data from the ASPEN-CRC Phase 1b clinical trial in 1H 2026.
• Await safety data from the ALX2004 Phase 1 clinical trials in 1H 2026.
• Await topline results from Phase 1b I-SPY clinical trial of evorpacept with ENHERTU in 2H 2025.

Key Dates

Keywords

ALX Oncology, evorpacept, ALX2004, clinical trials, cancer, oncology, financial results, antibody-drug conjugate, ADC, FDA, IND clearance