Wilson Sonsini Advises Aadi Bioscience on $100 Million Sale of FYARRO®, $100 Million PIPE Financing and License Agreement for ADC Portfolio

Client Highlights

December 20, 2024

On December 19, 2024, Aadi Bioscience announced that it had entered into an agreement to sell its commercial drug product FYARRO® to KAKEN Pharmaceutical for $100 million, an agreement to sell and issue $100 million of equity in a PIPE financing, and an exclusive license agreement for the development and global commercialization of a three-asset portfolio of preclinical, next-wave antibody-drug conjugates (ADCs), in collaboration with WuXi Biologics, a global Contract Research, Development and Manufacturing Organization, and Hangzhou DAC, a global leader in ADC innovation.

KAKEN Pharmaceutical Co., Ltd., an R&D driven pharmaceutical company in Japan, has entered into a stock purchase agreement under which KAKEN will acquire Aadi Subsidiary, Inc. and all of its assets, including FYARRO® (sirolimus protein-bound particles for injectable suspension) (albumin-bound) and associated infrastructure, including the majority of Aadi employees who support the FYARRO® business. FYARRO is approved by the U.S. Food and Drug Administration (FDA) for the treatment of adult patients with locally advanced unresectable or metastatic malignant perivascular epithelioid cell tumor (PEComa), with cumulative revenue of $25.2 million reported over the prior four quarters ended September 30, 2024.

Pursuant to the license agreement with Wuxi, Aadi is granted exclusive rights to certain patents and know-how pertaining to three preclinical ADC programs leveraging Hangzhou DAC’s CPT113 linker payload technology targeting each of Protein Tyrosine Kinase 7 (PTK7), Mucin-16 (MUC16), and Seizure-Related 6 Homolog (SEZ6). Aadi will pay aggregate upfront payments of $44 million for in-licensing these ADC programs. Additionally, Aadi is obligated to pay cumulative development milestone payments of up to $265 million, cumulative commercial milestone payments of up to $540 million, and single-digit royalties on sales.

To support the license transaction, Aadi entered into a subscription agreement with certain qualified institutional buyers and accredited investors for a private investment in public equity (PIPE) financing, which is expected to result in gross proceeds of approximately $100 million, before deducting placement agent fees and other offering expenses.

The syndicate was led by Ally Bridge Group. The PIPE financing is expected to close in the first half of 2025, subject to stockholder vote and satisfaction of customary closing conditions.

The Wilson Sonsini team that advised Aadi on the deal includes:

M&A
Ethan Lutske
Jack Hamilton
Cassie Wetzel
Brian Chan
Ryan Cooper
Blake Kaufmann

Corporate
Dan Koeppen
Rob Wernli
Jen Fang
Michael Brito-Stamm
Bridget Balisy
Dante Matera

Delaware
Brad Sorrels
Ryan Greecher
Jason Schoenberg
Angela Flaherty

Employee Benefits and Compensation
Brandon Gantus
Mike Klippert
Jason Chan

Employment Litigation
Matt Gorman
Erin Wong

Technology Transactions-Bio
Miranda Biven
Lauren Wardle
Adam Kaldor
Isaiah Loya

National Security
Josh Gruenspecht
Anne Seymour

Patents and Innovations
Matt Bresnahan
Sean Reed

Data, Privacy, and Cybersecurity
Matthew Staples
Daniel Chen
Dantam Le

Regulatory
Eva Yin
Jonathan Trinh

Real Estate
Susan Reinstra
Matthew Parsons