aibioBy aibio.space
ALX Oncology has about 23 months of cash on our math, and the date is tight
Our arithmetic gives about 23 months, close to the company's first half of 2028 date. The best response rate comes from a 43-patient subgroup, and the FDA has said the gastric data cannot support accelerated approval.
ALXO Mixed view Spending is falling and the cash is real, but the 2028 date may count a loan and investments we leave out, and rests on wording we cannot check, so we find the bear case slightly stronger.
ALX Oncology is a clinical-stage biotech that develops cancer treatments. Its two drug candidates are evorpacept, a CD47 blocker, and ALX2004, an EGFR-targeted antibody-drug conjugate. It had $138.2 million of cash, cash equivalents and short-term investments at June 30, 2026. Our view is that this buys real time, but the company's date may also count money outside that balance. At the recent burn, the balance covers about 23 months. The company says its cash lasts through the first half of 2028.
What the company does and where it is
The latest annual report describes a pipeline built around those two candidates. Evorpacept is being tested with trastuzumab and chemotherapy in HER2-positive metastatic breast cancer, in the Phase 2 ASPEN-09-Breast trial. ALX2004 entered a Phase 1 trial in August 2025. The latest 10-Q says the company has not commercialized any product candidate and does not expect to generate product revenue for several years, if at all.
Cash and burn
The balance sheet shows $138.2 million of cash, cash equivalents and short-term investments at June 30, 2026. The 10-Q gives a larger total of $153.4 million. The gap is close to the $15.1 million of long-term investments, which we leave out. The chart shows the balance fell to $44.8 million at December 31, 2025. It then rose to $140.3 million at March 31, 2026, after a registered offering closed in February 2026.
Operating cash outflow was $17.1 million, $19.0 million, $18.6 million and $16.1 million in the four quarters to June 2026. The average over the last four quarters is $17.7 million. Our runway arithmetic: $138.2 million divided by $17.7 million a quarter is 7.8 quarters, or about 23 months of cash at the recent rate.
What management says about its cash
The 10-Q says the company believes its existing cash, cash equivalents and investments, plus $140.4 million of net proceeds from the February 2026 offering, will fund operations through the first half of 2028. That date is close to our 23 months, but the company's wording counts more than our arithmetic does. It says "investments", and the 10-Q uses the same words for its $153.4 million total, which includes the $15.1 million of long-term investments we leave out. The same paragraph also counts funds available from a term loan with HSBC. That facility is up to $50.0 million, and XBRL data show $10.2 million of debt at June 30, 2026. Our arithmetic uses only the $138.2 million.
The wording also reads as if the $140.4 million sits on top of existing cash. The offering closed in February, so that money should already be in the June 30 balance. The excerpt does not say whether the company counts it once or twice. The first sentence of the paragraph says existing cash alone is enough, which fits a single count. If it counts it twice, its date would be too long.
The filing is candid. It says the estimate "is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect."
Our own October 2026 story on an 8-K describes an exchange of 13,353,384 shares for pre-funded warrants with investors. The warrants carry an exercise price of $0.001 per share. The 10-Q reports 138,276,997 shares outstanding on July 30, 2026.
Where the money goes
Spending is falling. Research and development was $23.9 million in the March 2025 quarter and $13.1 million in the June 2026 quarter. For the first six months of 2026, the 10-Q says R&D fell by $15.2 million from a year earlier. The largest part, $7.0 million, was clinical and development costs, which the company ties to a change in clinical development strategy that reduced the number of active trials. General and administrative expense fell by $2.9 million over the same six months.
We think the cuts are real, but they are also a choice. Fewer trials mean fewer data points, and the excerpts give no timing for the next ones.
What the trial data show
The gastric cancer trial, ASPEN-06, is the company's best evidence, and the headline number shrank as the trial grew. The 10-K reports a confirmed response rate of 52% for evorpacept with trastuzumab, ramucirumab and paclitaxel against 22% for the control arm at an October 2023 interim look, in 54 patients. The July 2024 topline in 127 patients showed 40.3% against 26.6%, and the January 2025 update showed 41.3% against 26.6%. In April 2025 the FDA told the company that the Phase 2 data could not support accelerated approval because Enhertu is available, and that a Phase 3 against Enhertu would be needed. The company decided not to run that trial and says it will look for a partner. So the program that produced the best data has no registrational path that the company will fund.
The second program is early. ALX2004 entered Phase 1 in August 2025, and the filings we reviewed contain no efficacy or safety results for it. The breast cancer trial, ASPEN-09-Breast, is Phase 2 and also shows no results in those filings.
The bull case
The first point is spending. Operating outflow of $16.1 million in the June 2026 quarter was the lowest of the last four quarters.
The second point is a subgroup. The 10-K describes a pre-planned but exploratory analysis of ASPEN-06. In 43 patients with retained HER2 expression and high CD47, the combination had a 65.0% objective response rate against 26.1% for the comparison arm, and a median duration of response of 25.5 months against 8.4. In the 47 patients with low CD47 the rates were 37.5% against 26.1%. An exploratory subgroup has to be confirmed in a new trial, and the company says it will not run one in gastric cancer on its own. We think it is a reason to keep studying CD47 as a marker, not proof that the drug works.
The bear case
On our arithmetic the cash lasts about 23 months, and the 10-Q itself says "Management recognizes the need to raise additional capital to fully implement its business plan." Apart from the HSBC loan, the filing says the company has no committed external source of funds.
Warrants with an exercise price of $0.001 let their owners take shares for almost nothing. The 138,276,997 shares outstanding are a July 30, 2026 count, before the October swap, so the share count after it may look different. Shares outstanding rose from 54,388,022 at December 31, 2025 to 138,216,247 at June 30, 2026, about 2.5 times, after the February 2026 offering. The October exchange moved 12,885,891 of the 13,353,384 shares from Blackstone-affiliated funds into warrants. It raised no cash. The annual report put the public float at about $18.0 million as of June 30, 2025, a date before the February 2026 offering, so it is a dated measure of size.
Our view
Our view is that the bear case is slightly stronger. We think the cash is real and the spending cuts are real. The problem is the date. Our arithmetic uses the June 30 balance once and the recent burn, and it lands close to the company's date. That makes the date plausible, but it leaves no room. A rise in spending, or a double count in the company's wording, would take it out.
The data point is real but thin. A 43-patient exploratory group does not change the financing math, and the FDA has said the main gastric data cannot support a filing. We think the company will need more money before the cash runs out, and that the terms will matter more to shareholders than the next data point. This is our opinion, not investment advice.
What to watch, and what would change our mind
Watch the quarterly cash outflow. The last four quarters average $17.7 million, and a sustained rise above that rate shortens the runway on our arithmetic. Watch how much of the HSBC loan is drawn, against a facility of up to $50.0 million. Watch the share count and any exercise of the pre-funded warrants.
What would change our mind is a clear statement that the 2028 date counts the June 30 balance once, with burn at or below the recent rate.