Aadi Bioscience: FDA Approval Of Fyarro Only The Beginning

Summary:

• Aadi Bioscience receives FDA approval of Fyarro for treatment of patients with PEComa.
• Fyarro (ABI-009) can be expanded upon in two specific gene pathways known as TSC1 and TSC2; this could bring access to thousands of new patients.
• Further expansion of ABI-009 can be achieved with targeting other cancer subpopulations that have the mTOR pathway.
• Aadi Bioscience had $161.4 million in cash and cash equivalents as of September 30, 2021; enough cash to fund operations into 2024.

Aadi Bioscience (NASDAQ:AADI) received FDA approval for its drug Fyarro (ABI-009), which was approved to treat patients with a rare ultra sarcoma known as a PEComa. It is a small population of patients, but Fyarro is the first drug approved for it. However, I believe that this initial approval sets up for greater potential based on a possible expansion of using the mTOR pathway towards other targets. The goal is to file an IND to start two new studies. These two new studies are expected to be tumor-agnostic ones. Meaning, they will use ABI-009 to go after genomic alterations regardless of tumor type. In other words, the main goal is to target TSC1 and TSC2 genomic alterations. This will help Aadi to go after a larger group of patients, not just 300 patients in the United States with PEComa. With proof of concept and FDA approval of Fyarro, there is an opportunity to increase the drug’s reach towards other genomic alteration pathway targets. I believe this could set up the company for increased revenue, should it be able to achieve positive results in these other mTOR gene pathways.

FDA Approval Of Fyarro Finally Brings An Approved Drug For PEComa

The FDA approved the drug Fyarro for the treatment of patients with PEComa, which is an ultra rare sarcoma. These tumors are in soft tissues of several organs in the patient’s body, such as:

• Stomach
• Intestines
• Lungs
• Female Reproductive Organs

They typically occur in children, though, who have a disorder known as tuberous sclerosis, which is also known as perivascular epithelioid cell tumor. This was a great approval for these patients, because, beforehand, there was no FDA approved treatment for this rare type of tumor. The best a patient could hope to achieve is to have a successful surgery to remove as much of the tumor as possible. In addition, chemotherapy might be another option. However, efficacy is not efficient for those that would receive it. Not only that, but the average life expectancy for these patients before Fyarro approval was 12 to 16 months. The main reason for Aadi starting off with this indication is targeting. There was ample evidence that a PEComa used mTOR pathway activation. There are about 100 to 300 patients in the United States each year who gets this ultra rare type of tumor. The FDA approval itself was based on the phase 2 registration trial known as AMPECT, which used Fyarro as a monotherapy to treat patients with advanced malignant PEComa. It was noted that patients who took this drug achieved a 39% confirmed overall response rate (ORR) in this patient population. The drug is expected to be on the market by the 1st half of 2022.

Expansion Opportunity Exists For Tumor-Agnostic Genomic Alterations Of TSC1 & TSC2

It is good that Aadi was able to receive FDA approval of Fyarro for PEComa, but the patient population is small. As I noted above, there are about 100 to 300 patients with PEComa each year in the United States. How will the biotech move forward to enhance shareholder value? This answer lies in still sticking to its use of targeting the mTOR pathway. Specifically, it will go after two pathway genes which are TSC1 and TSC2. Both of these genomic alterations are found in all types of cancers to a varying degree. But I believe that this expansion opportunity is very important to point out. Consider that Aadi could specifically treat patients with many different types of cancers, like lung cancer and others, just by targeting the genomic alteration that is most prevalent in the tumor itself. For instance, one tumor might have a higher genomic alteration of TSC1. In that case, the patient has a higher chance of responding to ABI-009.

The goal is to set up two different single-arm studies, which will use this drug to after each of these genomic alterations. But why expand to these targets? The biggest reason of all is to expand the population of cancer patients that can be treated with ABI-009. In other words, the market opportunity would be much larger. Consider that the group of patients to be targeted by this drug as a 1st-line therapy could increase significantly to possibly 30,000 patients or maybe more. The best explanation to go after these genomic alterations is to expand the patient population. However, there is an even better reason to do so. Aadi has already been able to see an impact that ABI-009 has had on TSC1 or TSC2 genes in the phase 2 registration AMPECT study noted above. This means, it has already established proof of concept of targeting these gene pathways (TSC1/TSC2). It was shown that 5 out of 6 patients who were mTOR inhibitor naive (hadn’t yet received treatment with mTOR inhibitor) achieved a confirmed partial response (PR) when given Fyarro monotherapy. This is a small set of data, but I believe it is worth exploring. That’s because it would be huge news for patients and for Aadi in expanding the use of its drug to additional patients.

As such, an IND filing for ABI-009 going after both genomic alterations of TSC1 and TSC2 is expected soon. Both studies are expected to start before the end of 2021. These are going to be very important studies, because the FDA has already allowed the company to make these single arm phase 2 studies as registration ones. Meaning, if primary endpoint of Best overall response (OR) is met, then it can file accelerated approval of ABI-009 for tumor agnostic patients. This will fulfill the goal of expanding the use of the drug targeting the mTOR pathway. As I described above, the future goal is to use the drug for patients who are likely to respond to Fyarro. This goal will be established with Aadi finding a diagnostic partner that can recruit patients who specifically have TSC1 or TSC2 genomic alterations. This would be really good for the company, because it would be able to treat the cancer patients who are likely to benefit from treatment with ABI-009. With the study starting before the end of 2021, final data won’t be expected for some time. Final results from the phase 2 registrational studies are not expected until the 1st half of 2024. Aadi hopes to expand to other subpopulations in cancer that use the mTOR pathway. This means that there may be a possibility to expand the reach of the drug even further than just those who have TSC1 and TSC2 genomic alterations.

Financials

According to the 10-Q SEC Filing, Aadi Bioscience had $161.4 million in cash and cash equivalents as of September 30, 2021. A big reason for the large influx of cash is because of the merger that occurred. Back on August 26, 2021, Aadi merged with Aerpio Pharmaceuticals, Incorporated. Once the merger was completed, there was a $155 million private investment in public equity (PIPE) financing of its common stock. With the current pipeline and cash on hand, it believes it has enough to fund its operations into 2024.

Risks To Business

The drug Fyarro was just approved, so it remains to be seen how much Aadi will generate in revenue from it. The launch is not expected until the 1st half of 2022, and there is no guarantee that there will be a huge market uptake of the drug. The ability to expand the use of the company’s drug ABI-009 towards the genomic alterations of TSC1 and TSC2 is encouraging. However, the small proof of concept data shown above was only achieved 5 patients. In order to have considerable confirmation of the ability of the drug to target these gene pathways, both single-arm phase 2 registration studies with more patients will be needed. Unfortunately, data from each of these phase 2 registration studies won’t be released until the 1st half of 2024.

Conclusion

Aadi Bioscience has done well to finally get a drug approved for the treatment of patients with PEComa. I believe that the ability to target the mTOR pathway will allow it to expand upon the potential populations that it can go after with Fyarro. This will be proven if it can successfully target the TSC1 and TSC2 gene pathways. As I stated above, it will possibly gain the ability to go after a tumor-agnostic cancer patient population. Meaning, that the drug will be able to target all types of tumors regardless of what they are. The key objective will be to use a diagnostic that will allow clinicians and researchers to know whether or not a patient is likely to respond to Fyarro. In the 2nd half of 2022, the goal is to go after other subpopulations where the mTOR pathway is appropriate. This will further expand the targetable population, even more beyond just those with TSC1 or TSC2 gene pathways. That’s why I believe there is a good opportunity here based on recent FDA approval progress of Fyarro.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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