Aadi Bioscience (AADI) AI Stock Analysis

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Aadi Bioscience

(NASDAQ:AADI)

57Neutral

Aadi Bioscience is experiencing significant financial challenges, reflected in its low profitability and negative cash flows. However, strong technical momentum and recent strategic initiatives, including substantial financing and investments in new technologies, offer potential upside. The overall score reflects the balance between current financial difficulties and positive future strategic prospects.

Positive Factors

Commercial Performance

Fyarro remains the only preferred treatment for PEComa and continues to see sustained sales with incremental growth expected.

Financial Strategy

Company will reduce 80% R&D workforce and extend cash runway into at least the second half of 2026.

Negative Factors

Clinical Trials

Aadi announced the discontinuation of nab-sirolimus' tumor agnostic and registration-directed PRECISION1 study.

Market Risks

Risks include: disappointing market uptake of FYARRO in the PEComa indication, inability to develop FYARRO in other cancers, failure of FYARRO to achieve commercial success due to market size, penetration rate, or competition, and potential medium- to long-term dilution risk.

Regulatory Challenges

IDMC analysis showed the pivotal Ph2 tumor agnostic study of nab-sirolimus in TSC1/TSC2 was unlikely to exceed efficacy threshold for accelerated approval.

Aadi Bioscience (AADI) vs. S&P 500 (SPY)

Market Cap

$50.63M

Dividend YieldN/A

Average Volume (3M)155.86K

Price to Earnings (P/E)―

Beta (1Y)0.14

Revenue Growth7.80%

EPS Growth3.12%

CountryUS

Employees89

SectorHealthcare

Sector Strength66

IndustryBiotechnology

Share Statistics

EPS (TTM)-2.29

Shares Outstanding24,696,568

10 Day Avg. Volume294,833

30 Day Avg. Volume155,861

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.06

Price to Cash Flow (P/CF)-0.80

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Aadi Bioscience Business Overview & Revenue Model

Company DescriptionAerpio Pharmaceuticals Inc. is a biopharmaceutical company, which engages in the research and development of treatments for ocular diseases. Its product candidate is AKB-9778, a small molecule activator of the Tie2 pathway, which completed the Phase 2a clinical trial for the treatment of diabetic retinopathy. It also develops ARP-1536, a humanized monoclonal antibody that is in preclinical development stage for the treatment of diabetic vascular complications; and AKB-4924, a selective stabilizer of hypoxia-inducible factor-1 alpha, which has completed a single ascending dose clinical trial for the treatment of inflammatory bowel disease. The company was founded by Joseph H. Garder on November 17, 2011 and is headquartered in Cincinnati, OH.

How the Company Makes MoneyAadi Bioscience makes money primarily through the development and commercialization of its drug products. The company's revenue model includes the sale of FYARRO, its lead product, which targets mTOR pathway alterations in cancer patients. Aadi may also enter into strategic partnerships or licensing agreements with other pharmaceutical companies to enhance its distribution network and expand its market reach. Additionally, the company could receive milestone payments or royalties from these collaborations, further contributing to its earnings.

Aadi Bioscience Financial Statement Overview

Summary

Aadi Bioscience shows promising revenue growth but is facing significant profitability challenges with high operating losses and negative cash flows. While the balance sheet remains relatively healthy with minimal debt, ongoing losses could pose risks to sustainability. Improvements in operational efficiency and loss reduction are critical for future stability.

Income Statement

Negative

Aadi Bioscience has shown some revenue growth over the years, with the most recent TTM revenue at $25.07 million, up from $24.35 million in 2023. However, the company is struggling with significant net losses, with a net loss of $61.69 million in the TTM period. Gross profit margins are high, indicating efficient production or service delivery, but operating and net profit margins are deeply negative due to high operating expenses, resulting in an EBIT margin of -264.19% and a net profit margin of -246.06%. This indicates ongoing profitability challenges.

Balance Sheet

Neutral

The balance sheet shows a relatively healthy equity position with a stockholders' equity of $68.87 million as of the latest TTM period. The debt-to-equity ratio is low at 0.01, indicating minimal reliance on debt financing. However, the equity ratio is 80.36%, suggesting that while the company relies primarily on equity, the total asset base has been declining. Continued net losses could erode equity further, posing a risk to financial stability.

Cash Flow

Negative

Aadi Bioscience's cash flow statement reveals challenges in generating positive cash flows, with a negative free cash flow of $61.03 million in the TTM period. The operating cash flow to net income ratio is close to 1, indicating that the operating losses are largely reflective of the net losses. Free cash flow has slightly improved as capital expenditures decreased, but the overall cash flow situation remains a concern due to persistent operating losses.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
25.07M	24.35M	15.22M	1.00M	14.00M	749.00K
	Gross Profit
21.91M	21.55M	13.88M	724.00K	13.82M	672.50K
	EBIT
-66.22M	-71.93M	-58.96M	-111.22M	-2.55M	-22.58M
	EBITDA
-61.28M	-65.36M	-60.12M	-109.15M	-2.48M	-24.44M
	Net Income Common Stockholders
-61.69M	-65.77M	-57.01M	-110.09M	-3.48M	-23.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
62.61M	108.84M	172.56M	148.99M	4.46M	38.52M
	Total Assets
64.12M	132.42M	184.24M	157.91M	18.82M	39.94M
	Total Debt
0.00	1.27M	1.66M	605.00K	10.26M	169.99K
	Net Debt
-62.61M	-61.62M	-37.36M	-148.38M	5.80M	-38.35M
	Total Liabilities
5.46M	27.23M	25.86M	21.50M	31.26M	3.40M
	Stockholders Equity
58.67M	105.19M	158.38M	136.41M	-12.43M	36.54M
Cash Flow		Free Cash Flow
-61.03M	-63.63M	-50.08M	-22.47M	-12.70M	-24.09M
	Operating Cash Flow
-61.20M	-59.66M	-49.64M	-22.42M	-12.70M	-23.85M
	Investing Cash Flow
26.44M	83.21M	-132.89M	25.15M	-19.02K	-236.95K
	Financing Cash Flow
157.00K	326.00K	72.62M	141.80M	1.19M	8.07M

Aadi Bioscience Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.02

Price Trends

50DMA

2.55

Negative

100DMA

2.54

Negative

200DMA

2.12

Negative

Market Momentum

MACD

-0.17

Negative

RSI

33.63

Neutral

STOCH

41.86

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AADI, the sentiment is Negative. The current price of 2.02 is below the 20-day moving average (MA) of 2.10, below the 50-day MA of 2.55, and below the 200-day MA of 2.12, indicating a bearish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 33.63 is Neutral, neither overbought nor oversold. The STOCH value of 41.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AADI.

Aadi Bioscience Risk Analysis

Aadi Bioscience disclosed 101 risk factors in its most recent earnings report. Aadi Bioscience reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Aadi Bioscience Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AADI	57 Neutral	$50.63M	―	-65.95%	―	7.80%	3.12%
Sector *	51 Neutral	$5.19B	3.13	-40.94%	2.95%	17.94%	2.00%
SRRK	46 Neutral	$2.92B	―	-82.95%	―	―	-22.34%
BCYC	46 Neutral	$518.65M	―	-29.06%	―	30.27%	44.12%
TCRX	39 Underperform	$81.49M	―	-65.08%	―	-86.62%	―
HOOK	34 Underperform	$9.33M	―	-61.68%	―	118.32%	61.16%
IMRX	24 Underperform	$45.58M	―	-92.51%	―	―	-7.78%

* Healthcare Sector Average

Performance Comparison

AADI

Aadi Bioscience

1.92

0.02

1.05%

SRRK

Scholar Rock Holding

29.81

15.81

112.93%

HOOK

Hookipa Pharma

0.75

-6.32

-89.39%

BCYC

Bicycle Therapeutics

7.51

-15.06

-66.73%

TCRX

TScan Therapeutics

1.53

-5.59

-78.51%

IMRX

Immuneering

1.38

-0.34

-19.77%

Aadi Bioscience Earnings Call Summary

Earnings Call Date: Mar 19, 2025 | % Change Since: -1.46% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment with significant strategic transformations, a promising pipeline of ADC therapies, and strong financial positioning. However, there are concerns about increased R&D expenses and net losses, which are common in early biotech transitions.

Highlights

Transformation and Strategic Transactions

Whitehawk Therapeutics was launched from Aadi Biosciences, including in-licensing 3 ADCs from Wuxi Biologics, divestiture of FYARRO to Kaken Pharmaceuticals, and $100 million pipe financing, approved by stockholders.

Advanced ADC Platform

Whitehawk is rapidly progressing a multi-asset portfolio of advanced ADC therapy, leveraging a platform with minimal off-target toxicity, greater stability, and higher therapeutic index compared to first-generation predecessors.

Financial Position

Ended 2024 with $47.2 million in cash and expect $170-$180 million after transactions, funding operations into 2028.

FYARRO Sales Growth

FYARRO net product sales were $7.2 million for Q4, representing 14% growth over the prior year quarter. Full-year sales were $26 million, an increase of 7% over 2023.

Lowlights

Increased R&D Expenses

Research and development expenses for Q4 increased to $14.3 million compared to $12.8 million in the prior year quarter, primarily due to in-process R&D expenses related to the acquired ADC programs.

Net Loss

Net loss for the fourth quarter was $18.3 million compared to $16.3 million in the fourth quarter of 2023. Net loss for the year was $63.7 million compared to $65.8 million in the prior year.

Company Guidance

In the earnings call for the fourth quarter and full year 2024, Whitehawk Therapeutics provided guidance on their transformative shift from Aadi Biosciences to an ADC-focused company. The key metrics highlighted include a $100 million PIPE financing and the divestiture of FYARRO, which resulted in a financial position of $170 million to $180 million in cash and equivalents, expected to fund operations into 2028. The company reported FYARRO net product sales of $7.2 million for the fourth quarter, marking a 14% increase from the previous year, and $26 million for the full year, a 7% rise from 2023. Research and development expenses increased to $14.3 million for the quarter and $51 million for the year, primarily due to ADC program acquisitions. Whitehawk plans to file three Investigational New Drug (IND) applications within 15 months for their ADC candidates, targeting PTK7, MUC16, and SEZ6, with anticipated Phase 1 trials in several high-potential cancer indications.

Aadi Bioscience Corporate Events

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy

Aadi Bioscience’s Strategic Agreements and Funding Moves

Positive

Dec 20, 2024

Aadi Bioscience has entered into a Stock Purchase Agreement with KAKEN Pharmaceutical, selling its subsidiary, including the FYARRO business, for $100 million, which will fund operations into late 2028. Additionally, Aadi has secured an exclusive license for three novel ADC assets from WuXi Biologics and announced a $100 million PIPE financing to support the development of these assets, indicating a strategic shift towards leveraging advanced ADC technologies to address unmet cancer therapeutic needs.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.