Pyxis Oncology, Inc. — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. The filing was signed March 22, 2023. This is an annual report, not a standalone fourth-quarter report.
Business context
Pyxis is a clinical-stage oncology company with no approved products and no revenue to date. Its lead programs are PYX-201, an antibody-drug conjugate (ADC), and PYX-106, an immuno-oncology antibody. The FDA cleared both programs’ IND applications in December 2022. The company reported that PYX-201’s first Phase 1 subject was dosed in the first quarter of 2023; PYX-106 trial sites were being activated and patients screened.
Financial performance and liquidity
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $86.1 million | $51.1 million |
| General and administrative expense | $37.4 million | $18.7 million |
| Total operating expenses | $123.5 million | $69.7 million |
| Net loss | $120.7 million | $76.0 million |
| Net loss per share, basic and diluted | $3.65 | $8.95 |
| Net cash used in operating activities | $89.3 million | $35.3 million |
| Cash and cash equivalents at year-end | $179.3 million | $274.7 million |
Operating expenses rose 77% year over year, reflecting higher program, manufacturing, preclinical and personnel costs, as well as increased public-company and facility expenses. R&D expense included a $17.3 million charge associated with the amended Pfizer license. Interest income was $2.8 million in 2022 versus $23,000 in 2021. No meaningful revenue or operating margin exists because the company has not commercialized products.
At December 31, 2022, total assets were $211.4 million, total liabilities $50.6 million, and stockholders’ equity $160.8 million. The filing reports no borrowings; liabilities included $18.9 million of non-current operating lease liabilities. Current assets were $186.6 million and current liabilities $31.6 million. Cash, cash equivalents and restricted cash totaled $180.8 million.
Management estimated that year-end cash and cash equivalents would fund operating and capital requirements into the first half of 2025, based on its current operating plan and assumptions. The company cautions that actual cash use may be faster and additional financing may be needed. Net cash used in investing activities was $6.4 million, primarily for property and equipment; financing provided $0.2 million in 2022, compared with $304.0 million in 2021 from the IPO and preferred-stock issuance.
Material changes and notable items
- Net loss increased by $44.7 million and operating cash use by $54.0 million from 2021.
- R&D expense increased $35.1 million, including higher contract manufacturing costs, preclinical work supporting PYX-201 and PYX-106 IND filings, and clinical-trial costs. G&A expense increased $18.7 million.
- In August 2022, Pyxis paused preclinical development of PYX-203 and PYX-102 to concentrate resources on PYX-201 and PYX-106. It also stopped continued development of the DLK1 ADC program, referred to as PYX-202 in the business discussion, after reviewing toxicity data and commercial prospects.
- The October 2022 Pfizer amended license expanded Pyxis’s exclusive worldwide rights under the FACT ADC platform for specified targets. Consideration included an $8 million payment, 2,229,654 common shares and a further $5 million share-or-cash payment subject to an ownership cap. The $8 million was paid in January 2023; the filing reports that 1,811,594 additional shares were issued to Pfizer in March 2023 for $5 million.
- Pyxis has up to $665 million in potential milestone payments for the first four Pfizer-licensed ADCs, plus royalties and potential additional-target payments. The Biosion agreement for PYX-106 includes up to $217.5 million in milestones under normal approval terms, or $222.5 million under accelerated approval terms, plus royalties. These are contingent obligations, not amounts currently due.
- Cash proceeds from the $125 million at-the-market offering program were zero as of the report date. A separate $250 million shelf registration was effective.
Outlook, risks and contingencies
Management expected preliminary Phase 1 data, including biomarker results and early signs of potential clinical activity, from PYX-106 in late 2023 and PYX-201 in early 2024. These are development expectations, not financial guidance. Both programs were early-stage, open-label dose-escalation trials; the filing emphasizes that clinical success, regulatory approval and commercialization are uncertain.
Key risks include continued cash burn and need for future capital; failure, delays or safety issues in clinical development; reliance on third-party manufacturers and clinical research organizations; competition in ADC and immunotherapy; dependence on licensed intellectual property and compliance with license terms; and patent, regulatory, reimbursement, data-security and enrollment risks. The Boston laboratory lease carries substantial long-term commitments: the filing reports $31.8 million of remaining fixed payments net of the tenant improvement allowance, through 2032. A February 2023 sublease is expected to generate approximately $5.2 million in base rent over three years. No material legal proceedings were reported. Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2022; the auditor did not provide an internal-control attestation because of the company’s emerging-growth-company exemption.
Important facts for investors to verify
- Whether clinical enrollment and timelines for PYX-201 and PYX-106 remain on track, and what the trials show on safety, dose, biomarkers and efficacy.
- Whether the stated cash runway into the first half of 2025 remains achievable as clinical and manufacturing spending increases.
- The terms and share-count effects of Pfizer consideration, including the March 2023 issuance, as well as any future milestone, royalty or sublicense obligations.
- The operational and financial implications of pausing or stopping PYX-203, PYX-102 and PYX-202, and whether further pipeline reprioritization is planned.
- Future financing needs and potential dilution, including any use of the ATM or shelf registration.