Company: WHWK
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023932
Chunk: 439

Company: Whitehawk Therapeutics, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 439
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 from the SDs and SP. In arriving at its estimate, the Company also considers historical product returns, the underlying product demand, and industry data specific to the specialty pharmaceutical distribution industry. Revenue and allowances described above were recorded through the FYARRO divestiture date of March 25, 2025. The total amount deducted from gross product sales for the allowances described above for the three months ended March 31, 2025, and 2024, was $2.1 million and $1.1 million, respectively.

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The following table sets forth the changes in the accrued revenue allowances (in thousands):As of March 31,20252024Balance at beginning of period$1,411$1,065Provision for current period sales2,0851,084Payments(1,686)(1,292)Allowances transferred in sale of Aadi Subsidiary, Inc.(1,810)—Balance at end of period$—$857Cost of Goods SoldCost of goods sold consist primarily of royalties paid to BMS, costs incurred on sales of FYARRO and costs to manufacture and prepare the product for sales subsequent to the FDA approval in November 2021. Costs incurred prior to the FDA approval were expensed when incurred.Research and Development Research and development expenses consist of costs incurred in performing research and development activities, including salaries and benefits, materials and supplies, preclinical expenses, share-based compensation expense, contract services, and other external development expenses. The Company records research and development activities conducted by third-party service providers, which include work related to preclinical studies, clinical trials, and contract manufacturing activities, to research and development expense as incurred. The Company is required to estimate the amount of services provided but not yet invoiced and include these expenses in accrued expenses on the condensed consolidated balance sheets and within research and development expenses in the condensed consolidated statements of operations and comprehensive loss. These expenses are a significant component of the Company’s research and development expenses and require significant estimates and judgments. The Company accrues for these expenses based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. As actual expenses become known, the Company adjusts its accrued expenses.WarrantsThe Company determines the accounting classification of warrants it issues as either liability or equity classified by first assessing whether the warrants meet the liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“ASC 480”), then in accordance with ASC 815