Approaching cancer treatment from many angles

136 Pages·2017·6.57 MB·English

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2017 ANNUAL REPORT
Approaching
cancer treatment
from many angles

Attacking tumors on multiple fronts
Aduro’s strategy is anchored on the development of novel immunotherapy agents
from its proprietary STING and B-select monoclonal antibody technology platforms
and personalized, neoantigen-based LADD program. We have a number of product
candidates in our development pipeline to treat an array of cancer indications.
Further, we believe that many of our product candidates are combinable with other
conventional and novel treatment options, leveraging potential synergies between
Aduro’s agents and other therapies with established activity.
STING Pathway ADU-S100 ADU-S100 + ADU-S100 + lpi STING Discovery
Activators Multiple tumors aPD-1 Planned STING-Blok
Activation of a critical Multiple tumors Melanoma Autoimmune
PHASE 1
immune receptor to
PHASE 1b PHASE 1 STING Agonist
induce a patient-specific
Infectious Disease
anti-cancer response
B-select Antibodies Anti-APRIL Anti-CTLA-4 Antibody
Panning technology Multiple Myeloma Oncology Discovery
to yield high-affinity Evaluating other
PHASE 1/2 PRECLINICAL
antibodies targeting unique antibody
functional epitopes targets
Neoantigen-based pLADD
pLADD
MSS Colorectal
Personalized therapy
PHASE 1
using a patient’s own
unique tumor antigens
Out-Licensed ADU-214 Anti-CD27 agonist
Strategic collaborations Planned Oncology
to advance agents
Lung PHASE 1
developed at Aduro
PHASE 1b/2
Propelling Aduro to the
forefront of cancer treatment
Patients are at the center of Aduro’s corporate mission.
We are focused on discovery, development, and
commercialization of cancer immunotherapies. We are
advancing several leading-edge technologies that are
designed to mobilize and sustain a targeted immune
attack on tumors.
TO OUR STOCKHOLDERS, COLLABORATORS AND EMPLOYEES
We made considerable progress in our immuno-oncology programs in 2017.
Aduro remains an important player in the immunotherapy field with a unique
portfolio of assets and a strong financial position to support our continued
success and growth. With this foundation, we will continue to prioritize and
pursue the most promising candidates.
In 2017, we expanded our program for ADU-S100, our lead STING Pathway
Activator. As a leader in the field with the first-in-human, first-in-class therapeutic in
development specifically targeting the STING receptor, we are pleased to pursue
this innovative area in collaboration with our partner Novartis. We now have two
trials underway evaluating ADU-S100 alone and in combination with other
immunotherapy agents, namely checkpoint inhibitors. These Phase 1 trials are evaluating the
safety and tolerability of ADU-S100 in patients with cutaneously accessible tumors, including
melanoma, breast, head and neck, merkel cell and lymphomas.
STING (Stimulator of Interferon Genes) is widely recognized by researchers as a central mediator
of the immune system that is critical for immune surveillance. ADU-S100 is designed to activate
the immune system and recruit immune cells to the tumor, potentially leading to a specialized
systemic immune response against the patient’s specific tumor cells. In preclinical studies,
intratumoral injection with ADU-S100 primed an effective systemic CD8+ T cell immune
response that significantly inhibited the growth of both the treated tumor and distal
uninjected lesions.
Our combination strategies with ADU-S100 are designed to stimulate the immune system by
targeting STING and to leverage synergies with agents that remove the immune suppressive
nature of tumors with various immune modulators. With our current and planned trials evaluating
ADU-S100 across a wide range of tumors, we anticipate making important contributions to
the field and potentially advancing a new and exciting therapeutic alternative for patients
with difficult-to-treat cancers.
In addition to ADU-S100, we are developing our own pipeline of monoclonal antibodies. Our
proprietary B-select technology efficiently identifies highly-specific antibodies with unique
binding properties and function against a broad range of targets. Our lead candidate, BION-1301,
is an anti-APRIL monoclonal antibody that advanced into a Phase 1/2 clinical trial for patients
with relapsed or refractory multiple myeloma in 2017. We are excited to undertake this clinical
program and encouraged by intriguing preclinical observations including the ability of BION-1301
to inhibit tumor growth and enhance the cytotoxic effects of chemotherapy.
We are also developing an anti-CTLA-4 antibody. CTLA-4 is a validated target in immunotherapy.
In 2017, we announced promising preclinical data showing that our proprietary version of
anti-CTLA-4, ADU-1604, binds to a unique epitope on human CTLA-4 and is comparable to
benchmarks in functionality. Results from these preclinical studies demonstrate that ADU-1604
inhibits tumor growth and enhances T cell responses, respectively. Further, the preclinical data
demonstrated strong synergy between anti-CTLA-4 and ADU-S100, creating a unique opportunity
for a combination with two agents within Aduro’s portfolio. We look forward to advancing
ADU-1604 into the clinic in 2018.
While we focus internal efforts on our own development programs, we are also pleased to see
progress by our license partner, Merck, for another of our antibodies, an anti-CD27 agonist,
which potentially has broad therapeutic applicability in oncology. Last year, Merck advanced
this agent through preclinical development, which led to Merck’s initiation of a Phase 1 clinical
trial in March of this year.
Finally, our third product candidate currently in the clinic is a neoantigen-based proprietary
therapy called Personalized LADD (pLADD), designed to utilize the immune-activating
capability of patient specific neoantigens – unique tumor markers expressed in an individual
patient’s tumor cells. pLADD therapies have the potential to mobilize the immune system
in two ways: first, through the immediate recognition of Listeria as a foreign substance, and
subsequently, through a customized immune attack on cells containing the tumor neoantigens
presented by pLADD. In 2017, we initiated a Phase 1 clinical trial with pLADD to evaluate the
safety and tolerability of pLADD immunotherapy in adults with a difficult-to-treat form of
metastatic colorectal cancer (microsatellite stable).
Our LADD technology is being developed in additional indications by our license partner,
Janssen, which has programs in lung and prostate cancers underway.
Given its promise, we are strategically focused on pursuit of technologies activating the STING
Pathway. Our significant accomplishments to date, including our expanded clinical development
for ADU-S100, position us well for key proof of concept data by the end of 2018. And with our
anti-APRIL and other antibody programs underway, as well as pLADD, we maintain a robust
pipeline with the potential for multiple value-creation opportunities over the longer term.
We look forward to keeping you apprised of our progress.
Sincerely,
STEPHEN T. ISAACS
Chairman, President and CEO
April 16, 2018
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2017
OR
(cid:4) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission File Number 001-37345

ADURO BIOTECH, INC.
(Exact name of Registrant as specified in its Charter)

Delaware 94-3348934
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
740 Heinz Avenue
Berkeley, California 94710
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code: [phone]

Securities registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $0.0001 Per Share; Common stock traded on the Nasdaq Stock Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES (cid:4) NO ⌧
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES (cid:4) NO ⌧
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES ⌧ NO (cid:4)
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the Registrant was required to submit and post such files). YES ⌧ NO (cid:4)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained,
to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. ⌧
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
Large accelerated filer (cid:4) Accelerated filer ⌧
Non-accelerated filer (cid:4) (Do not check if a small reporting company) Small reporting company (cid:4)
Emerging growth company ⌧
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ⌧
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES (cid:4) NO ⌧
The aggregate market value of the Registrant’s common stock held by non-affiliates as of June 30, 2017, based on the closing price of the shares of common
stock on the Nasdaq Stock Market for such date, was $546,793,339.
The number of shares of Registrant’s Common Stock outstanding as of February 23, 2018 was 81,006,486.
Portions of the Registrant’s Definitive Proxy Statement relating to the Annual Meeting of Shareholders, which will be filed with the Securities and Exchange
Commission within 120 days after the end of the Registrant’s fiscal year ended December 31, 2017, are incorporated by reference into Part III of this Report.
Table of Contents

Page
PART I
Item 1. Business....................................................................................................................................................................... 4
Item 1A. Risk Factors................................................................................................................................................................. 38
Item 1B. Unresolved Staff Comments........................................................................................................................................ 67
Item 2. Properties..................................................................................................................................................................... 67
Item 3. Legal Proceedings........................................................................................................................................................ 67
Item 4. Mine Safety Disclosures.............................................................................................................................................. 67

PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities..................................................................................................................................................... 68
Item 6. Selected Financial Data............................................................................................................................................... 70
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations..................................... 72
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.................................................................................... 87
Item 8. Financial Statements and Supplementary Data........................................................................................................... 88
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.................................... 119
Item 9A. Controls and Procedures.............................................................................................................................................. 119
Item 9B. Other Information........................................................................................................................................................ 119

PART III
Item 10. Directors, Executive Officers and Corporate Governance.......................................................................................... 120
Item 11. Executive Compensation............................................................................................................................................. 120
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters................... 120
Item 13. Certain Relationships and Related Transactions, and Director Independence............................................................ 120
Item 14. Principal Accounting Fees and Services..................................................................................................................... 120

PART IV
Item 15. Exhibits, Financial Statement Schedules..................................................................................................................... 121
Signatures.................................................................................................................................................................... 127
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements about us and our industry that involve substantial risks
and uncertainties. All statements, other than statements of historical facts contained in this Annual Report on Form 10-K, including
statements regarding our future financial condition, business strategy and plans, and objectives of management for future operations,
are forward-looking statements. In some cases you can identify these statements by forward-looking words such as “believe,” “may,”
“will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” or the negative or plural of these
words or similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
• the potential of our technology platforms;
• our ability to fund our working capital needs through 2020;
• our ability to develop and commercialize our product candidates;
• our ability to use and expand our technology platforms to build a pipeline of product candidates;
• our ability to obtain and maintain regulatory approval of our product candidates;
• the strength and breadth of our patent portfolio;
• the potential for receipt of additional milestone payments;
• our ability to obtain and adequately protect intellectual property rights for our product candidates;
• our continued reliance of third parties for manufacturing our product candidates, conducting our clinical trials and certain
research activities;
• the impact of our decision not to continue to advance development of CRS 207;
• our ability to in-license, acquire, or invest in complementary businesses, technologies, products or assets to further expand
or complement our portfolio of product candidates;
• expected timing of our clinical trials; and
• the timing and availability of results of our clinical trials and those of our collaborators.
These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that
may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those
anticipated by the forward-looking statements. We discuss many of these risks in greater detail under the heading “Risk Factors” and
elsewhere in this Annual Report on Form 10-K. You should not rely upon forward-looking statements as predictions of future events.
New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and
uncertainties.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Except as required by law, after the date of this report, we are under no
duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.
We obtained industry, market and competitive position data in this report from our own internal estimates and research as well
as from industry and general publications and research surveys and studies conducted by third parties. These data involve a number of
assumptions and limitations, and you are cautioned not to give undue weight to such information or estimates.
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PART I
Item 1. Business.
Overview
References herein to “we,” “us,” “Company”, and “Aduro” refer to Aduro Biotech, Inc. and its consolidated subsidiaries unless
the context specifically states otherwise.
We are an immunotherapy company focused on the discovery, development and commercialization of therapies that transform
the treatment of challenging diseases, including cancer. We believe our three technology platforms are uniquely positioned to recruit
and direct the immune system by activating cancer-fighting immune cells and inhibiting immune suppressive cells known to allow
tumor growth. Product candidates from our STING Pathway Activator, B-select monoclonal antibody, and LADD, or Live,
Attenuated, Double-Deleted Listeria monocytogenes platforms are designed to stimulate and/or regulate innate and adaptive immune
responses, either as single agents or in combination with conventional therapies (i.e. chemotherapy and radiation) as well as other
novel immunotherapies. Our diverse technology platforms have led to a strong pipeline of clinical and preclinical candidates, which
are being developed for a number of cancer indications. Additionally, our platforms have the potential to generate product candidates
that address other therapeutic areas, such as autoimmune and infectious diseases.
Immuno-oncology is an emerging field of cancer therapy that aims to activate the immune system in the tumor
microenvironment to create and enhance anti-tumor immune responses, as well as to overcome the immuno-suppressive mechanisms
that cancer cells have developed against the immune system. Recent developments in the field of immuno-oncology, including
checkpoint inhibitors—therapies which work to remove suppression mechanisms that prevent an immune response against cancer
cells—have shown the potential to provide efficacy and extended survival, even in cancers where conventional therapies, such as
surgery, chemotherapy and radiotherapy, have failed. The immunotherapy field is rapidly advancing with new immuno-oncology
combinations that focus on strengthening therapeutic efficacy in a wide range of cancers. We intend to pursue a broad strategy of
combining our technology platforms with conventional and novel therapies, based on their mechanisms of action, safety profiles and
versatility.
Our STING Pathway Activator platform is designed to activate the intracellular Stimulator of Interferon Genes, or STING,
receptor, resulting in a potent tumor-specific immune response. ADU-S100 is the first STING Pathway Activator compound to enter
the clinic and is currently being evaluated in Phase 1 studies both as a monotherapy and in combination with an immune checkpoint
inhibitor in patients with cutaneously accessible metastatic solid tumors or lymphomas. Our B-select monoclonal antibody platform
includes a proprietary ultra-selective functional screening process to identify antibodies with unique binding properties against a broad
range of targets that are being designed to modulate the innate and adaptive arms of the immune system. Our most advanced product
candidate from the B-select platform, BION-1301, is being evaluated in a Phase 1 clinical trial in mulitiple myeloma. In addition, the
B-select platform has delivered a number of immune modulating assets currently in research and preclinical development. Our LADD
technology platform is based on proprietary attenuated strains of Listeria that have been engineered to express tumor-associated
antigens to induce specific and targeted immune responses. Our LADD program is focused on the development of personalized
LADD, or pLADD, therapeutics that encode and express antigens that are based on protein sequences that result from mutations
specific to an individual patient’s tumor (neoantigens). These antigens can be also derived from native protein sequences that are
highly expressed in patients with certain tumor types (self antigens).
We are developing a pipeline of proprietary product candidates on our own and have a number of collaborations with leading
global pharmaceutical companies to expand our products and technology platforms. We are developing STING Activator product
candidates in oncology under our worldwide collaboration with Novartis Pharmaceuticals Corporation, or Novartis, and an anti-CD27
antibody was developed with and is exclusively licensed to, Merck Sharp and Dohme B.V., or Merck. In addition, we have developed
self antigen-based LADD product candidates targeting lung and prostate cancers that are licensed to Janssen Biotech Inc., or Janssen.
We have intellectual property protection on our STING, B-select monoclonal antibody and LADD technology platforms and each of
our product candidates, some of which we believe can be maintained into the 2030s .
Our Proprietary Technology Platforms and Pipeline
We believe our technology platforms – STING Pathway Activators, B-select monoclonal antibodies and LADD - represent
innovative approaches in immuno-oncology. Since our product candidates act by leveraging the patient’s own immune system, we
believe they have the potential to deliver enhanced efficacy and to be safer and more tolerable than existing therapies, such as
chemotherapy and radiotherapy. Based on the mechanisms of action and safety profiles of our technology platforms, we intend to
build a deep pipeline of product candidates that can be readily combinable and synergistic with both conventional and novel therapies,
such as checkpoint inhibitors. Our vision is to utilize our scientific expertise and understanding of the body’s natural defense systems,
including the interplay between the innate and adaptive immune responses, to develop safe and effective therapies for the benefit of
patients.
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