Clinical Development - The company is focused on developing eprenetapopt, a small molecule p53 reactivator, for hematologic malignancies, including MDS and AML, with orphan drug and fast track designations from the FDA[65] - The Phase 3 trial of eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS enrolled 154 patients but failed to meet its primary endpoint of complete remission (CR) rate, achieving a 53% higher CR rate compared to the control arm without statistical significance[71] - In a Phase 2 trial for post-transplant maintenance therapy, eprenetapopt showed a 1-year relapse-free survival (RFS) rate of 58% and overall survival (OS) rate of 79% in 33 patients, significantly higher than historical data[72] - The Phase 1/2 AML trial reported a CR rate of 37% and a composite response rate of 53% in 30 evaluable patients, meeting the primary efficacy endpoint[73] - The FDA placed a partial clinical hold on trials of eprenetapopt in combination with azacitidine due to safety and efficacy concerns, affecting ongoing patient enrollment[66][68] - The company plans to share data with the FDA to resolve the partial clinical hold and continue its clinical trials[72][74] - The company is currently conducting multiple clinical trials for eprenetapopt, including a Phase 3 trial in the U.S. for TP53 mutant MDS with azacitidine[99] - The FDA has placed a partial clinical hold on the company's trials of eprenetapopt in combination with azacitidine, which the company intends to resolve[99] Financial Performance - As of September 30, 2021, the company had incurred net losses of $9.5 million and $29.4 million for the three and nine months ended September 30, 2021, respectively, with an accumulated deficit of $173.4 million[81] - The company has not generated any revenue from product sales and does not expect to do so in the near future[92] - The net loss for Q3 2021 was $9.5 million, an improvement of $2.9 million compared to a net loss of $12.3 million in Q3 2020[119] - For the nine months ended September 30, 2021, total operating expenses were $29.6 million, down from $38.6 million in the same period of 2020, a decrease of $8.9 million[125] - Research and development expenses for Q3 2021 were $6.0 million, down from $8.7 million in Q3 2020, a decrease of $2.7 million[119] - Research and development expenses for the nine months ended September 30, 2021, totaled $19.4 million, down from $28.5 million in 2020, a decrease of $9.1 million[125] - The company incurred a foreign currency loss of $21,907 in Q3 2021, significantly reduced from a loss of $74,565 in Q3 2020, an improvement of $52,658[124] - General and administrative expenses for Q3 2021 were $3.4 million, slightly down from $3.5 million in Q3 2020, a decrease of $0.1 million[123] Cash and Funding - The company had cash and cash equivalents of $61.4 million as of September 30, 2021, expected to fund operations into 2023[86] - The company has financed operations through approximately $224.0 million in net proceeds from preferred and common stock sales as of September 30, 2021[80] - Cash and cash equivalents as of September 30, 2021, were $61.4 million, following net proceeds of $224.0 million from stock sales since inception[131] - The company anticipates significant increases in expenses related to ongoing and future clinical trials, requiring additional financing to support operations[82] - Future capital requirements will depend on various factors, including the scope and costs of clinical trials and drug discovery for eprenetapopt and other candidates[140] - The company has filed a universal shelf registration statement for the issuance of securities up to an aggregate of $350.0 million, with an at-the-market offering program for up to $50.0 million of common stock[145] - The company does not currently have any committed external sources of funds and may face dilution of ownership interests if additional capital is raised through equity or convertible debt securities[142] Operational Risks - The company is closely monitoring the impact of the COVID-19 pandemic on its business operations, although it did not materially affect financial results for the three and nine months ended September 30, 2021[89] - The company has assessed its clinical supply chain and observed no disruptions to date, continuing to monitor the potential impact of the pandemic[88] - The company expects to incur increased expenses associated with being a public company, including costs related to compliance and investor relations[102] - The company is exposed to market risks related to interest rate changes, with cash equivalents primarily in bank deposits and money market accounts[148] - The company faces foreign currency exchange rate risks, particularly with its subsidiary Aprea AB, but does not currently have significant direct foreign exchange risk[149] - The company has not experienced any significant historical fluctuations in interest income[148] Corporate Governance - The company has not recorded any income tax expense or benefits due to uncertainty in realizing a benefit from net losses incurred[105] - There have been no changes in internal control over financial reporting that materially affected the company's controls[153] - The company is not currently subject to any material legal proceedings[154] - The company may remain classified as an emerging growth company (EGC) until the end of the fiscal year in which the fifth anniversary of its IPO occurs, unless certain revenue or market value thresholds are met[117]

Financial Performance - As of June 30, 2021, the company reported net losses of $10.3 million and $19.9 million for the three and six months ended June 30, 2021, respectively, with an accumulated deficit of $163.9 million[79]. - The net loss for Q2 2021 was $10.3 million, compared to a net loss of $16.4 million in Q2 2020, representing an improvement of 37.3%[116]. - Total operating expenses for the six months ended June 30, 2021 were $20.2 million, down from $26.4 million in the same period of 2020, a decrease of 23.4%[121]. - Research and development expenses for Q2 2021 were $6.7 million, down from $10.7 million in Q2 2020, a decrease of 37.8%[117]. - Research and development expenses for the six months ended June 30, 2021 totaled $13.4 million, down 32.2% from $19.8 million in the same period of 2020[122]. - General and administrative expenses for Q2 2021 were $3.4 million, a decrease of 10.8% from $3.8 million in Q2 2020[119]. - The company experienced a net cash used in operating activities of $19.3 million for the six months ended June 30, 2021, compared to $17.2 million in the same period of 2020, an increase of 12.3%[129]. - The company has not generated any revenue from product sales and does not expect to do so in the near future[87]. - Interest income has decreased as cash balances decline and interest rates fall[100]. - The company reported a foreign currency loss of $0.3 million in Q2 2021, significantly improved from a loss of $1.9 million in Q2 2020, a decrease of 84.2%[120]. Clinical Trials and Research - The company is focused on developing eprenetapopt, a small molecule p53 reactivator, for hematologic malignancies, with FDA designations including orphan drug and breakthrough therapy for MDS and AML[65]. - The pivotal Phase 3 trial of eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS completed enrollment of 154 patients but failed to meet its primary endpoint of complete remission rate[67][70]. - In a Phase 2 trial for post-transplant maintenance therapy, the 1-year relapse-free survival rate was 58% and overall survival rate was 79% in 33 patients[71]. - The Phase 1/2 AML trial showed a complete remission rate of 37% and a composite response rate of 53% in 30 evaluable patients[72]. - The company is currently conducting multiple clinical trials for eprenetapopt, including a Phase 3 trial in the U.S. for TP53 mutant MDS[95]. - A partial clinical hold has been placed by the FDA on the company's clinical trials of eprenetapopt in combination with azacitidine, which the company intends to resolve[95]. - The company plans to expand its clinical trials and continue research on additional product candidates, which will increase expenses significantly[80]. - Research and development expenses are expected to continue increasing as the company initiates additional clinical trials and develops new product candidates[90]. Financial Position and Funding - The company had cash and cash equivalents of $69.8 million as of June 30, 2021, expected to fund operations into 2023[83]. - Cash and cash equivalents as of June 30, 2021 were $69.8 million, following net proceeds of $223.9 million from stock sales since inception[127]. - The company has received approximately $223.9 million in net proceeds from sales of preferred and common stock through June 30, 2021[78]. - The company anticipates substantial increases in expenses related to ongoing development activities for eprenetapopt and other product candidates[136]. - Future capital requirements will depend on the scope and costs of clinical trials, drug discovery, and regulatory reviews[138]. - The company has filed a universal shelf registration statement for the issuance of securities up to an aggregate of $350.0 million, including an at-the-market offering program for $50.0 million of common stock[143]. - The company does not currently have any committed external sources of funds and may face dilution if additional capital is raised through equity sales[140]. - The company may need to relinquish valuable rights or grant licenses on unfavorable terms if additional funds are raised through collaborations or licensing arrangements[141]. Operational Risks and Challenges - The company is currently facing partial clinical holds on multiple trials and is working with the FDA to resolve these issues[66][67]. - The COVID-19 pandemic has not materially affected the company's financial results for the three and six months ended June 30, 2021, but uncertainties remain regarding its future impact[86]. - The company is classified as an emerging growth company and a smaller reporting company, allowing it to delay adopting certain accounting standards[112][114]. - The company tracks outsourced development costs by product candidate but does not allocate internal personnel costs to specific programs[89]. - The company recognizes research and development costs as incurred, with expenses related to clinical trials based on evaluations of progress[89]. - The company has incurred additional costs associated with operating as a public company, which are expected to increase as development activities expand[136]. - The company is exposed to interest rate risk, with cash equivalents primarily in bank deposits and money market accounts[146]. - The company faces foreign currency exchange rate risk related to its non-U.S. dollar functional currency foreign subsidiaries[147]. - The company has no off-balance sheet arrangements during the periods presented[145].

Revenue Generation - The company has not generated any revenue from product sales and does not expect to do so in the near future[87]. - The company does not expect to generate revenue from product sales for several years, if at all[120]. Clinical Trials and Product Development - The lead product candidate, eprenetapopt, is in clinical development for hematologic malignancies, with a pivotal Phase 3 trial involving 154 patients[67]. - In the Phase 3 trial, eprenetapopt with azacitidine showed a 53% higher complete remission (CR) rate compared to the control arm, although it did not reach statistical significance[67]. - The Phase 2 trial for post-transplant maintenance therapy showed a 62% rate of relapse-free survival (RFS) at 12 months, exceeding the benchmark of ~30%[68]. - The Phase 1/2 AML trial reported a 63% composite response rate and a 31% complete response rate among evaluable patients[72]. - The company is conducting multiple clinical trials for eprenetapopt, including a Phase 3 trial in the U.S. for TP53 mutant MDS[93]. - Eprenetapopt has received multiple designations from the FDA, including orphan drug and breakthrough therapy designations for MDS and AML[67]. - Future research and development expenses are expected to increase as the company initiates additional clinical trials and develops new product candidates[91]. Financial Performance - The company incurred net losses of $9.7 million for the three months ended March 31, 2021, and an accumulated deficit of $153.7 million[77]. - The net loss for Q1 2021 was $(9,668,755), compared to a net loss of $(9,400,257) in Q1 2020, an increase in loss of $268,498[114]. - Net cash used in operating activities was $11.5 million for Q1 2021, compared to $7.5 million in Q1 2020, an increase of $4.0 million[122]. Expenses - The company anticipates significant increases in expenses related to ongoing and future clinical trials, research, and commercialization efforts[79]. - Research and development expenses for Q1 2021 were $6,763,848, a decrease of $2,332,274 from $9,096,122 in Q1 2020[114]. - General and administrative expenses increased to $3,425,833 in Q1 2021 from $2,776,468 in Q1 2020, reflecting an increase of $649,365[114]. - Total operating expenses decreased to $10,189,681 in Q1 2021 from $11,872,590 in Q1 2020, a reduction of $1,682,909[114]. - The decrease in R&D expenses was primarily due to a $3.1 million reduction related to the Phase 3 clinical trial of eprenetapopt, which completed enrollment in Q2 2020[115]. - General and administrative expenses are anticipated to rise as the company increases headcount to support research and development activities[97]. Cash Position - As of March 31, 2021, the company had cash and cash equivalents of $77.6 million, expected to fund operations into 2023[81]. - As of March 31, 2021, the company's cash equivalents consisted of bank deposits and money market accounts, indicating a focus on liquidity management[135]. - The company has received net proceeds of $223.9 million from sales of preferred and common stock since inception[120]. Foreign Currency and Interest Rate Risks - The company is exposed to interest rate risk, with interest income sensitivity affected by changes in the general level of U.S. interest rates, although historical fluctuations have not been significant[135]. - The company faces foreign currency exchange rate risk related to its non-U.S. dollar functional currency foreign subsidiaries, impacting revenues, expenses, assets, and liabilities[136]. - The financial position of subsidiaries Aprea AB and Aprea Personal AB is measured using their local currency as the functional currency, with cash accounts holding U.S. dollars remeasured based on the exchange rate at the date of remeasurement[136]. - The company does not currently have any significant direct foreign exchange risk and has not used derivative financial instruments to hedge against such risk[136]. COVID-19 Impact - The company plans to continue monitoring the impact of the COVID-19 pandemic on its clinical trials and operations[86].

Financial Performance and Losses - The company has incurred significant losses since inception and expects to continue incurring losses for the foreseeable future, with no revenues generated to date[175]. - The company incurred significant net losses of $53.5 million, $28.1 million, and $15.5 million for the years ended December 31, 2020, 2019, and 2018, respectively, with an accumulated deficit of $144.0 million as of December 31, 2020[185]. - The company has not generated any revenue from drug sales to date and has financed operations primarily through private placements and IPO proceeds[185]. - The company expects to incur significant expenses and increasing operating losses for the foreseeable future, with future capital requirements dependent on various factors including clinical trial costs and regulatory reviews[189]. - The company expects substantial increases in expenses related to ongoing development activities for eprenetapopt and other product candidates[362]. Clinical Trials and Product Development - The pivotal Phase 3 MDS trial for the lead product candidate, eprenetapopt, failed to meet its predefined primary endpoint, which may materially harm the business[175]. - The pivotal Phase 3 trial for eprenetapopt failed to meet its predefined primary endpoint of complete remission (CR) rate[195]. - Clinical trials for eprenetapopt include patients with deteriorating health, with common adverse events reported such as nausea, vomiting, and fatigue[197]. - Serious adverse events in trials included febrile neutropenia, pneumonia, and sepsis, with some patient deaths reported possibly related to eprenetapopt[197]. - The company is conducting multiple clinical trials for its product candidates, including eprenetapopt and APR-548, with various phases currently enrolling patients[322]. Regulatory and Approval Challenges - The company has never obtained marketing approval for any product candidate, and the approval process is expensive, time-consuming, and uncertain[181]. - Regulatory authorities may require additional clinical trials or impose restrictions on approved products, affecting commercialization[199]. - The company faces challenges in obtaining marketing approval for p53 reactivators, as this has never been done before[195]. - The company may face significant delays in obtaining reimbursement for newly approved drugs, which could adversely affect its operating results[216]. - The company must comply with extensive regulatory requirements, including safety reporting, quality control, and advertising restrictions for approved drugs[267]. Competition and Market Risks - The company faces substantial competition, which may result in others commercializing products before it does[179]. - The company is dependent on the success of eprenetapopt, and difficulties in patient enrollment for clinical trials could delay necessary marketing approvals[175]. - The company operates in a highly competitive environment with major pharmaceutical and biotechnology companies, which may have greater resources and expertise[208]. - The success of product candidates will depend on market acceptance, efficacy, safety, and competitive pricing compared to existing treatments[206]. Intellectual Property and Patent Risks - The company may not be able to protect its intellectual property rights effectively, which could allow competitors to develop similar products[179]. - The company does not own or license any composition of matter patents for eprenetapopt, which is in the public domain[230]. - The current patent portfolio for eprenetapopt consists of method-of-use and formulation patent claims, which may not prevent competitors from using the same product candidate for other uses[232]. - The company may face challenges in maintaining valid and enforceable patents, which could adversely affect its business and financial condition[234]. - The company’s ability to stop unauthorized third parties from using its product candidates depends on valid and enforceable patents or trade secrets[230]. Funding and Financial Resources - The company may need substantial additional funding, which may not be available on acceptable terms, potentially delaying or eliminating research and development programs[175]. - Existing cash and cash equivalents as of December 31, 2020, are expected to fund operations into 2023, but changing circumstances may require seeking additional funds sooner[187]. - The company may need to transition from a research-focused entity to one capable of supporting commercial activities, which poses additional risks[187]. - If the company fails to raise additional capital when needed, it may have to delay or eliminate research and development programs or commercialization efforts[189]. Compliance and Legal Risks - The company must comply with Good Clinical Practice (GCP) regulations, and failure to do so could result in unreliable clinical data and delays in marketing approvals[222]. - The company is subject to ongoing changes in healthcare regulations that could impact the profitability of its products[273]. - The company faces substantial costs to ensure compliance with healthcare laws and regulations, and violations could lead to significant penalties, damages, and operational restructuring[283]. - The company is exposed to significant risks related to employee misconduct, which could lead to substantial fines or sanctions impacting business operations[285]. Market and Economic Conditions - The company expects that healthcare reform measures may lead to more rigorous coverage criteria and downward pressure on drug prices[275]. - Legislative changes may result in aggregate reductions in Medicare payments to providers of up to 2% per fiscal year through 2030[274]. - The company anticipates that pricing negotiations with governmental authorities outside the United States may delay revenue generation after marketing approval[275]. - The company may face significant costs and management diversion due to potential securities class action litigation following stock price declines, which is common in the pharmaceutical sector[309]. Employee and Operational Growth - The company anticipates significant growth in employee numbers and operational scope, particularly in drug development and clinical operations[294]. - The company may face challenges in managing growth due to limited financial resources and management experience[294]. - The company does not maintain "key person" insurance for its executives, which could impede its objectives if key personnel leave[294]. - General and administrative expenses are anticipated to rise as the company increases its headcount to support research and development activities[333].

Financial Performance - The company has not generated any revenue from product sales and does not expect to do so in the near future [88]. - The company incurred net losses of $12.3 million and $38.1 million for the three and nine months ended September 30, 2020, with an accumulated deficit of $128.6 million [77]. - The net loss for Q3 2020 was $12.3 million, compared to a net loss of $6.2 million in Q3 2019, reflecting an increase of $6.1 million [122]. - Total operating expenses for the nine months ended September 30, 2020, were $38.6 million, compared to $17.6 million for the same period in 2019, an increase of $21.0 million [126]. - Cash used in operating activities for the nine months ended September 30, 2020, was $28.6 million, compared to $12.0 million for the same period in 2019, an increase of $16.6 million [133]. Cash and Funding - As of September 30, 2020, the company had cash and cash equivalents of $101.1 million, expected to fund operations into 2023 [82]. - The company has financed operations through private placements and an IPO, receiving approximately $223.9 million in net proceeds [76]. - Net cash provided by financing activities for the nine months ended September 30, 2020, was $0.1 million, down from $1.4 million in 2019 [137]. - The company is unable to estimate future capital requirements due to uncertainties in clinical trials and product development costs [140]. - The company may need substantial additional funds to achieve business objectives, as commercial revenues from product sales are not expected for many years [141]. - There are no committed external sources of funds currently available to the company, which may lead to dilution of ownership interests if additional capital is raised [142]. Research and Development - The lead product candidate, eprenetapopt, is in late-stage clinical development for hematologic malignancies, with pivotal Phase 3 trial enrollment completed in June 2020 [68]. - The company plans to submit New Drug Application (NDA) and Marketing Authorisation Application (MAA) in 2021 for eprenetapopt [68]. - The company is conducting multiple clinical trials for eprenetapopt, including a Phase 2 trial for post-transplant maintenance therapy in TP53 mutant MDS and AML patients [69]. - The company is conducting multiple clinical trials for eprenetapopt, including a Phase 3 trial in the U.S. for TP53 mutant MDS with azacitidine [96]. - The second product candidate, APR-548, is a pre-clinical p53 reactivator with anticipated Phase 1 clinical trial enrollment beginning in Q1 2021 [74]. - The company expects to incur significant expenses related to clinical trials, research, and commercialization efforts in the coming years [78]. - The company expects expenses to increase substantially due to ongoing development activities related to eprenetapopt and other product candidates [138]. Expenses and Financial Management - General and administrative expenses are expected to increase as the company expands its headcount to support research and development activities [98]. - General and administrative expenses for Q3 2020 were $3.5 million, an increase of $1.2 million from $2.3 million in Q3 2019 [124]. - Research and development expenses for Q3 2020 were $8.8 million, up from $4.9 million in Q3 2019, an increase of $3.9 million [123]. - Research and development expenses for the nine months ended September 30, 2020, were $28.6 million, up from $12.9 million in 2019, an increase of $15.6 million [127]. - Interest income initially increased due to higher cash and cash equivalents from the IPO but is decreasing as cash balances decline [99]. - The company has not recorded any income tax expense due to uncertainty in realizing benefits from net losses [101]. - Stock-based compensation is recognized over the requisite service period, with fair value determined using the Black-Scholes option-pricing model [107]. - Accrued research and development expenses are estimated based on contracts and services performed, with adjustments made as necessary [104]. Market and Operational Risks - The COVID-19 pandemic initially decreased patient screening and enrollment in clinical trials, but levels have returned to expected rates [83]. - The company faces market risks related to interest rate changes, with cash equivalents primarily in bank deposits and money market accounts [149]. - Foreign currency exchange rate risks are present due to operations in non-U.S. dollar functional currency subsidiaries, but no significant direct foreign exchange risk is currently believed to exist [150]. Legal and Compliance - The company is classified as an emerging growth company (EGC) and may remain so until the end of the fiscal year in which the fifth anniversary of its IPO occurs [120]. - The company is also a smaller reporting company, with the market value of its common stock held by non-affiliates being less than $700 million [121]. - The company expects to incur increased expenses related to compliance with public company regulations, including accounting and legal services [98]. - There have been no changes in internal control over financial reporting that materially affected the company's controls [154]. - The company is not currently subject to any material legal proceedings [156]. Other Agreements - A companion diagnostics agreement was entered into with Invivoscribe, Inc. for the development of a diagnostic test for eprenetapopt, with potential payments of up to $13.2 million [145]. - The fair value of common stock was estimated at $10.95 per share as of July 15, 2019, based on third-party valuations [112].

Financial Performance - As of June 30, 2020, the company reported net losses of $16.4 million and $25.8 million for the three and six months ended June 30, 2020, respectively, with an accumulated deficit of $116.3 million [73][75]. - The net loss for Q2 2020 was $16.4 million, compared to a net loss of $5.3 million in Q2 2019, representing an increase in loss of $11.1 million [117]. - The net loss for the six months ended June 30, 2020, was $25.8 million, compared to a net loss of $8.7 million for the same period in 2019, reflecting an increase of $17.0 million [122]. - Cash used in operating activities for the six months ended June 30, 2020, was $17.2 million, an increase of $8.0 million from $9.2 million in the same period of 2019 [127]. - The total operating expenses for the six months ended June 30, 2020, were $26.4 million, compared to $10.3 million for the same period in 2019, reflecting an increase of $16.0 million [122]. Cash and Funding - The company had cash and cash equivalents of $112.9 million as of June 30, 2020, which is expected to fund operations into 2023 [79]. - Net cash provided by financing activities for the six months ended June 30, 2020, was $150,949, compared to $5.6 million for the same period in 2019 [129]. Research and Development - Research and development expenses for Q2 2020 were $10.7 million, up from $4.3 million in Q2 2019, an increase of $6.4 million [117]. - The increase in R&D expenses was primarily due to the advancement of the clinical product candidate APR-246, which is involved in pivotal Phase 3 clinical trials [117]. - Research and development expenses for the six months ended June 30, 2020, were $19.8 million, up $11.8 million from $8.0 million in the prior year, primarily due to advancements in the clinical product candidate APR-246 [123]. - The company expects substantial increases in expenses related to ongoing development activities and operating as a public company [131]. Clinical Trials and Product Development - The company has completed enrollment of 154 patients in its pivotal Phase 3 trial of eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS, expecting top-line data by year-end 2020 [68]. - The second product candidate, APR-548, is in preclinical development and has filed an IND with the FDA, but human clinical trials cannot commence until additional information is provided [70]. - The company has received orphan drug, fast track, and breakthrough therapy designations from the FDA for eprenetapopt in MDS [68]. - The company anticipates significant commercialization expenses if marketing approval is obtained for any product candidates [76]. General and Administrative Expenses - General and administrative expenses for the six months ended June 30, 2020, were $6.5 million, an increase of $4.2 million compared to $2.3 million for the same period in 2019 [124]. - The company expects to incur increased general and administrative expenses as it expands its headcount and operations related to research and development [95]. Foreign Exchange and Taxation - The company did not record any U.S. federal, state, or foreign income tax expense due to uncertainty in realizing benefits from net losses [100]. - A valuation allowance was provided for the full amount of net deferred tax assets, indicating that it is more likely than not that these assets will not be realized in the future [100]. - The company considers investments in foreign subsidiaries with a functional currency other than the U.S. dollar as long-term [144]. - The company does not believe it currently has any significant direct foreign exchange risk [144]. - The company has not used any derivative financial instruments to hedge exposure to foreign exchange risk [144]. COVID-19 Impact - The COVID-19 pandemic initially decreased patient screening and enrollment in clinical trials, but recent activity has returned to expected levels [81].

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents Aprea Therapeutics, Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 31, 2020, including balance sheets, statements of operations and comprehensive loss, statements of convertible preferred stock and stockholders' deficit, and cash flows, along with accompanying notes detailing the company's business, accounting policies, and financial position [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | March 31, 2020 ($) | December 31, 2019 ($) | |:----------------------------|--------------------|-----------------------| | Cash and cash equivalents | 122,513,357 | 130,088,869 | | Total current assets | 124,604,298 | 133,044,747 | | Total assets | 125,125,130 | 133,607,885 | | Total current liabilities | 11,544,228 | 9,061,734 | | Total liabilities | 11,771,516 | 9,364,355 | | Total stockholders' equity | 113,353,614 | 124,243,530 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | Metric | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | Change ($) | Change (%) | |:----------------------------------------------|:--------------------------------------|:--------------------------------------|:-------------|:-----------| | Research and development | 9,096,122 | 3,678,444 | 5,417,678 | 147.29% | | General and administrative | 2,776,468 | 729,326 | 2,047,142 | 280.68% | | Total operating expenses | 11,872,590 | 4,407,770 | 7,464,820 | 169.36% | | Interest income (expense) | 224,442 | (3,348) | 227,790 | -6803.76% | | Foreign currency gain | 2,247,891 | 935,916 | 1,311,975 | 140.18% | | Total other income (expense) | 2,472,333 | 932,568 | 1,539,765 | 165.11% | | Net loss | (9,400,257) | (3,475,202) | (5,925,055) | 170.51% | | Foreign currency translation | (2,424,653) | (2,031,175) | (393,478) | 19.37% | | Total comprehensive loss | (11,824,910) | (5,506,377) | (6,318,533) | 114.75% | | Net loss per share, basic and diluted | (0.45) | (2.97) | 2.52 | -84.85% | | Weighted-average common shares outstanding | 21,052,726 | 1,171,193 | 19,881,533 | 16975.48% | [Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Deficit](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Deficit) - Total stockholders' equity decreased from **$124,243,530** at December 31, 2019, to **$113,353,614** at March 31, 2020, primarily due to a net loss of **$9,400,257** and a foreign currency translation loss of **$2,424,653**[18](index=18&type=chunk) - Additional paid-in capital increased by **$934,962**, reflecting **$29,491** from stock option exercises and **$905,471** from stock-based compensation during the three months ended March 31, 2020[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | |:--------------------------------|:--------------------------------------|:--------------------------------------| | Net cash used in operating | (7,541,625) | (4,197,346) | | Net cash used in investing | (12,165) | — | | Net cash provided by financing | 29,523 | 5,432,654 | | Net increase (decrease) in cash | (7,524,267) | 1,235,308 | | Cash and cash equivalents—end | 122,513,357 | 65,682,547 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Nature of business and basis of presentation](index=10&type=section&id=1.%20Nature%20of%20business%20and%20basis%20of%20presentation) - Aprea Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing cancer therapeutics that reactivate mutant tumor suppressor protein p53, with principal operations starting in 2006[21](index=21&type=chunk) - The Company completed a corporate reorganization in September 2019, making Aprea Therapeutics AB a wholly-owned subsidiary[22](index=22&type=chunk) - The Company believes its cash balance of approximately **$122.5 million** as of March 31, 2020, is sufficient to fund operations into 2023[27](index=27&type=chunk) [2. Summary of significant accounting policies](index=11&type=section&id=2.%20Summary%20of%20significant%20accounting%20policies) - The financial statements are prepared in conformity with U.S. GAAP and on a going concern basis, consolidating the accounts of Aprea Therapeutics, Inc. and its wholly-owned subsidiaries[24](index=24&type=chunk)[29](index=29&type=chunk) - The Company adopted ASU No. 2018-07 (Stock Compensation) and ASU 2016-13 (Credit Losses) on January 1, 2020, with no material impact on financial condition or results of operations[50](index=50&type=chunk)[51](index=51&type=chunk) - Net loss per share is calculated using the weighted-average number of common shares outstanding, with potentially dilutive securities excluded due to anti-dilutive effects from net losses[47](index=47&type=chunk) [3. Leases](index=17&type=section&id=3.%20Leases) - The Company adopted ASC 842 on January 1, 2019, recognizing right-of-use assets and lease liabilities for operating leases, primarily for office and laboratory space in Boston (expiring December 2021) and Solna, Sweden (expiring June 2022)[53](index=53&type=chunk)[54](index=54&type=chunk) | Metric | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | |:--------------------------------------------------------------------|:--------------------------------------|:--------------------------------------| | Operating lease cost | 55,768 | 25,782 | | Operating cash flows paid for amounts included in lease liabilities | 62,909 | 30,409 | | Future Lease Payments | Operating Leases ($) | |:----------------------|:---------------------| | 2020 | 181,068 | | 2021 | 243,719 | | 2022 | 58,747 | | Total Lease Payments | 483,534 | | Less: Imputed Interest| (17,475) | | Total Lease Liabilities | 466,059 | [4. Accrued expenses](index=18&type=section&id=4.%20Accrued%20expenses) | Accrued Expense Category | March 31, 2020 ($) | December 31, 2019 ($) | |:-------------------------|:-------------------|:----------------------| | Professional fees | 103,067 | 207,917 | | Compensation and benefits| 1,109,672 | 961,790 | | Research and development | 6,637,811 | 4,992,311 | | Other | 448,219 | 480,535 | | Total accrued expenses | 8,298,769 | 6,642,553 | [5. Stockholders' equity (deficit)](index=18&type=section&id=5.%20Stockholders'%20equity%20(deficit)) - The Company's authorized capital stock is **440,000,000** shares, comprising **400,000,000** common stock shares (**$0.001** par value) and **40,000,000** preferred stock shares (**$0.001** par value)[58](index=58&type=chunk) - Stock-based compensation expense significantly increased to **$905,471** for the three months ended March 31, 2020, from **$97,946** in the prior year period[60](index=60&type=chunk) [6. Income Taxes](index=18&type=section&id=6.%20Income%20Taxes) - The Company reported no income tax expense due to operating losses and has a full valuation allowance against net deferred tax assets, indicating uncertainty about their future realization[61](index=61&type=chunk) - The CARES Act, enacted March 27, 2020, is not expected to materially impact the Company's income taxes due to its history of operating losses[65](index=65&type=chunk) [7. Commitments and contingencies](index=20&type=section&id=7.%20Commitments%20and%20contingencies) - As of March 31, 2020, the Company has not recorded a provision for any contingent losses, as no material liabilities were deemed probable and reasonably estimable[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Aprea Therapeutics' financial condition and operational results, highlighting its focus on developing APR-246 for cancer, significant operating losses, and the impact of the COVID-19 pandemic. It details the components of operating expenses, critical accounting policies, and liquidity, emphasizing the need for future financing to support ongoing development and potential commercialization [Overview](index=21&type=section&id=Overview) - Aprea Therapeutics is a clinical-stage biopharmaceutical company developing novel cancer therapeutics that reactivate mutant p53 tumor suppressor protein, with lead candidate APR-246 (eprenetapopt) in late-stage clinical development for hematologic malignancies[69](index=69&type=chunk) - APR-246 has received Orphan Drug, Fast Track, and Breakthrough Therapy designations from the FDA for MDS, and Orphan Drug designation from the European Commission for MDS, AML, and ovarian cancer[69](index=69&type=chunk) - The Company incurred net losses of **$9.4 million** for Q1 2020 and **$3.5 million** for Q1 2019, with an accumulated deficit of **$99.9 million** as of March 31, 2020[72](index=72&type=chunk) - The COVID-19 pandemic initially caused a decrease in patient screening and enrollment in clinical trials, but screening activity has recently increased. The Company has not observed disruptions in its clinical supply chain for APR-246 to date[80](index=80&type=chunk)[81](index=81&type=chunk) [Components of our results of operations](index=25&type=section&id=Components%20of%20our%20results%20of%20operations) - The Company has not generated any revenue from product sales and does not expect to in the near future, relying on potential future product sales or collaboration/license agreements[83](index=83&type=chunk) - Research and development expenses are expensed as incurred and include costs for CROs, CMOs, personnel, consultants, laboratory supplies, and regulatory compliance[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - General and administrative expenses primarily cover executive, finance, corporate, business development, and administrative functions, including legal, accounting, insurance, and personnel costs[93](index=93&type=chunk) - Foreign currency gain increased due to the strengthening of the U.S. dollar against the Swedish Krona[96](index=96&type=chunk) [Critical accounting policies and use of estimates](index=28&type=section&id=Critical%20accounting%20policies%20and%20use%20of%20estimates) - Accrued research and development expenses are estimated based on contract terms, service progress, and vendor information, with potential adjustments for variations in actual performance[101](index=101&type=chunk)[102](index=102&type=chunk) - Stock-based compensation expense is measured at fair value on the grant date using the Black-Scholes option pricing model and recognized over the service period[103](index=103&type=chunk)[105](index=105&type=chunk) - The fair value of common stock for private periods was determined by the board, considering third-party valuations and various objective and subjective factors, including R&D progress and market conditions[105](index=105&type=chunk)[106](index=106&type=chunk) [Emerging growth company and smaller reporting company status](index=33&type=section&id=Emerging%20growth%20company%20and%20smaller%20reporting%20company%20status) - The Company is an 'emerging growth company' (EGC) and 'smaller reporting company,' allowing for reduced disclosure requirements, but has irrevocably opted out of the extended transition period for new accounting standards[111](index=111&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk)[441](index=441&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk) [Results of operations](index=35&type=section&id=Results%20of%20operations) | Metric | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | Change ($) | |:--------------------------------------|:--------------------------------------|:--------------------------------------|:-------------| | Research and development | 9,096,122 | 3,678,444 | 5,417,678 | | General and administrative | 2,776,468 | 729,326 | 2,047,142 | | Total operating expenses | 11,872,590 | 4,407,770 | 7,464,820 | | Interest income (expense) | 224,442 | (3,348) | 227,790 | | Foreign currency gain | 2,247,891 | 935,916 | 1,311,975 | | Total other income (expense) | 2,472,333 | 932,568 | 1,539,765 | | Net loss | (9,400,257) | (3,475,202) | (5,925,055) | - Research and development expenses increased by **$5.4 million**, primarily due to the advancement of the pivotal Phase 3 clinical trial of APR-246 for TP53 mutant MDS[116](index=116&type=chunk) - General and administrative expenses rose by **$2.1 million**, driven by increases in insurance, non-cash stock-based compensation, legal and accounting fees, and personnel costs, largely due to public company operations[117](index=117&type=chunk) [Liquidity and capital resources](index=36&type=section&id=Liquidity%20and%20capital%20resources) - As of March 31, 2020, the Company had **$122.5 million** in cash and cash equivalents, expected to fund operations into 2023[127](index=127&type=chunk) | Cash Flow Activity | Three Months Ended March 31, 2020 ($) | Three Months Ended March 31, 2019 ($) | |:--------------------------------|:--------------------------------------|:--------------------------------------| | Net cash used in operating | (7,541,625) | (4,197,346) | | Net cash used in investing | (12,165) | — | | Net cash provided by financing | 29,523 | 5,432,654 | - Cash used in operating activities increased by **$3.2 million**, primarily due to a **$5.9 million** increase in net loss, partially offset by changes in operating assets and liabilities and non-cash stock-based compensation[121](index=121&type=chunk) - Future funding requirements are expected to increase substantially due to ongoing development of APR-246 and other product candidates, as well as costs associated with operating as a public company[124](index=124&type=chunk)[126](index=126&type=chunk) [Contractual obligations and commitments](index=39&type=section&id=Contractual%20obligations%20and%20commitments) - Details regarding contractual obligations are provided in Note 3 'Leases' to the condensed consolidated financial statements[133](index=133&type=chunk) [Recent accounting pronouncements](index=39&type=section&id=Recent%20accounting%20pronouncements) - New accounting pronouncements are discussed in Note 2 to the condensed consolidated financial statements[134](index=134&type=chunk) [Off-balance sheet arrangements](index=40&type=section&id=Off-balance%20sheet%20arrangements) - The Company did not have any off-balance sheet arrangements during the periods presented or currently[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to market risks, specifically interest rate risk and foreign currency exchange rate risk, noting that historical fluctuations in interest income have been insignificant and no derivative financial instruments are used to hedge foreign exchange exposure - The Company's primary market risk exposure is interest income sensitivity from cash equivalents (bank deposits and money market accounts), though historical fluctuations have been insignificant[136](index=136&type=chunk) - Foreign currency exchange rate risk arises from non-U.S. dollar functional currency subsidiaries (Aprea AB and Aprea Personal AB), but the Company does not believe it has significant direct foreign exchange risk and does not use derivative instruments to hedge this exposure[137](index=137&type=chunk)[138](index=138&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the Company's disclosure controls and procedures as of March 31, 2020, concluding they were effective at a reasonable assurance level. There have been no material changes in internal control over financial reporting during the most recent fiscal quarter - As of March 31, 2020, the Company's disclosure controls and procedures were evaluated by management and deemed effective at a reasonable level of assurance[139](index=139&type=chunk)[140](index=140&type=chunk) - There have been no material changes in the Company's internal control over financial reporting during the most recent fiscal quarter[141](index=141&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently involved in any material legal proceedings - The Company is not currently subject to any material legal proceedings[142](index=142&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks associated with investing in Aprea Therapeutics, Inc., covering financial stability, product development and commercialization, reliance on third parties, intellectual property protection, regulatory compliance, human resources, and common stock volatility. Key risks include substantial losses, the need for additional funding, the unproven nature of its therapeutic approach, intense competition, and the impact of the COVID-19 pandemic on operations and clinical trials [Risks related to our financial position and need for additional capital](index=41&type=section&id=Risks%20related%20to%20our%20financial%20position%20and%20need%20for%20additional%20capital) - The Company has incurred significant losses since inception, with a net loss of **$9.4 million** for Q1 2020 and an accumulated deficit of **$99.9 million** as of March 31, 2020, and expects to continue incurring losses for the foreseeable future[145](index=145&type=chunk) - The Company will need substantial additional funding to support ongoing operations, clinical trials, and potential commercialization, which may not be available on acceptable terms or at all, potentially forcing delays or termination of programs[153](index=153&type=chunk)[154](index=154&type=chunk) - Raising additional capital through equity or convertible debt could dilute existing stockholders' ownership interests and impose restrictive covenants on operations[157](index=157&type=chunk)[158](index=158&type=chunk) [Risks related to the discovery, development and commercialization of our product candidates](index=45&type=section&id=Risks%20related%20to%20the%20discovery,%20development%20and%20commercialization%20of%20our%20product%20candidates) - The Company's future success is substantially dependent on the timely marketing approval and commercialization of its lead product candidate, APR-246, which is currently in multiple clinical trials[160](index=160&type=chunk) - Enrollment in clinical trials, particularly for indications with small patient populations and exacerbated by COVID-19, may be difficult, leading to delays or prevention of marketing approvals[166](index=166&type=chunk)[167](index=167&type=chunk)[170](index=170&type=chunk) - The reactivation of p53 is a novel and unproven therapeutic approach, and there is no guarantee of demonstrating safety and efficacy in larger-scale clinical trials for APR-246[171](index=171&type=chunk) - Serious adverse events, including deaths, have occurred in APR-246 clinical trials, which could lead to trial suspension, termination, or denial of marketing approval[174](index=174&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - Clinical trials are lengthy, expensive, and uncertain; preclinical and early-stage results may not predict later success, and regulatory authorities may disagree with trial design or data interpretation[178](index=178&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk)[184](index=184&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - The Company faces substantial competition from major pharmaceutical and biotechnology companies with greater resources and expertise in the highly competitive cancer drug sector[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) - IT system failures, cybersecurity attacks, or data breaches could compromise sensitive information, disrupt operations, and expose the Company to liability and reputational harm, especially given the lack of formally implemented policies and procedures[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) [Risks related to our dependence on third parties](index=67&type=section&id=Risks%20related%20to%20our%20dependence%20on%20third%20parties) - The Company relies on third parties (CROs, clinical data management organizations, medical institutions, clinical investigators) to conduct clinical trials and some research, which reduces control and poses risks if they fail to perform satisfactorily or meet deadlines[243](index=243&type=chunk)[244](index=244&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - The Company is dependent on a single third-party manufacturer for the active pharmaceutical ingredient (API) of APR-246, increasing the risk of insufficient supply, delays, or unacceptable costs if the manufacturer cannot perform as agreed[249](index=249&type=chunk)[251](index=251&type=chunk)[257](index=257&type=chunk) - Entering into strategic collaborations for product development and commercialization carries risks, including limited control over collaborator resources, potential non-performance, and disagreements that could delay or terminate programs[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) [Risks related to our intellectual property](index=75&type=section&id=Risks%20related%20to%20our%20intellectual%20property) - The Company's commercial success depends on obtaining and maintaining patent, trademark, and trade secret protection for its technologies and product candidates, including APR-246, for which it does not own composition-of-matter patents[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk)[276](index=276&type=chunk) - Method-of-use and formulation patent claims for APR-246 may not prevent competitors from marketing identical APIs for different uses or with different formulations, and off-label use is difficult to prevent[275](index=275&type=chunk)[277](index=277&type=chunk) - Issued patents covering the Company's product candidates could be narrowed, invalidated, or found unenforceable if challenged in court or before administrative bodies, potentially limiting the ability to prevent competition[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk)[283](index=283&type=chunk) - The Company may be subject to claims challenging inventorship of its intellectual property, which could lead to litigation, loss of rights, and significant costs[284](index=284&type=chunk) - Failure to obtain patent term extension or data exclusivity for product candidates could allow competitors to enter the market sooner, materially harming the business[285](index=285&type=chunk)[286](index=286&type=chunk) - The Company may be unable to acquire or in-license necessary third-party proprietary rights for its product candidates or technologies on reasonable terms, potentially forcing abandonment of development programs[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[291](index=291&type=chunk) - Changes in U.S. patent law, such as the America Invents Act, could increase uncertainties and costs in patent prosecution and enforcement, potentially diminishing the value of patents[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) - Lawsuits to protect or enforce patents are costly, time-consuming, and may be unsuccessful, potentially leading to substantial damages, injunctions, or diversion of management attention[296](index=296&type=chunk)[297](index=297&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk) - Protecting intellectual property rights globally is expensive and challenging, as foreign laws may not offer the same protection as the U.S., and compulsory licensing laws or enforcement difficulties could impair competitive position[306](index=306&type=chunk)[307](index=307&type=chunk) - Non-compliance with procedural requirements by governmental patent agencies could lead to abandonment or lapse of patent rights, allowing competitors to enter the market earlier[308](index=308&type=chunk)[309](index=309&type=chunk) - Claims that employees or consultants have wrongfully used or disclosed trade secrets of former employers, or claims asserting ownership of the Company's IP, could result in litigation, loss of rights, and significant expenses[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - Confidentiality agreements may not prevent unauthorized disclosure of trade secrets, and competitors could independently develop equivalent information, harming the Company's competitive position[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) [Risks related to regulatory and marketing approval and other legal compliance matters](index=93&type=section&id=Risks%20related%20to%20regulatory%20and%20marketing%20approval%20and%20other%20legal%20compliance%20matters) - The Company has never obtained marketing approval for a product candidate, and the approval process is unpredictable, expensive, and time-consuming, with potential delays or denials from regulatory authorities[319](index=319&type=chunk)[320](index=320&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk)[327](index=327&type=chunk) - Failure to obtain marketing approval in foreign jurisdictions, which have varying regulatory requirements and pricing controls, would prevent product candidates from being marketed abroad and could be impacted by events like Brexit[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk) - Even with orphan drug designation for APR-246, exclusivity may not prevent competing products if they demonstrate clinical superiority or if the Company cannot assure sufficient supply[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - Post-approval, products are subject to ongoing regulatory requirements, including safety reporting, manufacturing compliance (cGMPs), and promotional restrictions, with non-compliance leading to severe penalties[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk) - Changes in regulatory policies, such as those from the 21st Century Cures Act or executive actions, could increase the difficulty and cost of obtaining marketing approval and affect product pricing[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk) - Breakthrough therapy, fast track, or priority review designations do not guarantee faster development or approval, and the FDA retains discretion to grant or withdraw such designations[367](index=367&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk)[374](index=374&type=chunk) - Relationships with healthcare providers and payors are subject to anti-kickback, fraud and abuse, and other healthcare laws (e.g., False Claims Act, HIPAA, Sunshine Act), with potential for significant penalties for non-compliance[375](index=375&type=chunk)[376](index=376&type=chunk)[378](index=378&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[384](index=384&type=chunk)[386](index=386&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk) - Employee misconduct, including non-compliance with regulatory standards or fraud, could lead to significant liability, regulatory sanctions, and reputational harm[390](index=390&type=chunk)[391](index=391&type=chunk) - Failure to comply with environmental, health, and safety laws could result in fines, penalties, or substantial costs, impacting research and development efforts[392](index=392&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk)[395](index=395&type=chunk) - International operations are subject to anti-bribery (FCPA), anti-corruption, and trade control laws, with non-compliance risking significant civil and criminal penalties and reputational damage[396](index=396&type=chunk)[397](index=397&type=chunk)[398](index=398&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk) - Security breaches, data loss, or IT system disruptions could compromise sensitive information, leading to legal claims, regulatory penalties (e.g., HIPAA, CCPA), reputational harm, and operational disruptions[403](index=403&type=chunk)[404](index=404&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk)[407](index=407&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk) - Clinical trial programs in the EEA/UK are subject to GDPR, imposing stringent data protection requirements, restrictions on data transfers, and potential for significant fines for non-compliance[411](index=411&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk) [Risks related to employee matters and managing growth](index=121&type=section&id=Risks%20related%20to%20employee%20matters%20and%20managing%20growth) - The Company's future success is highly dependent on retaining key executives and attracting qualified scientific, clinical, manufacturing, and sales/marketing personnel, which is challenging given industry competition[414](index=414&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk) - Anticipated significant growth in employees and operations, particularly in drug development and commercialization, may be difficult to manage effectively due to limited financial resources and management experience[417](index=417&type=chunk)[418](index=418&type=chunk) [Risks related to tax matters](index=121&type=section&id=Risks%20related%20to%20tax%20matters) - The Company has significant deferred tax assets (**$19.7 million** as of December 31, 2019) but has a full valuation allowance, indicating uncertainty about their realization due to insufficient future taxable income, potential corporate tax rate reductions, or ownership changes[419](index=419&type=chunk)[420](index=420&type=chunk)[421](index=421&type=chunk)[422](index=422&type=chunk)[424](index=424&type=chunk) - The Tax Cuts and Jobs Act of 2017 (TCJA) and its GILTI provisions could make financial results difficult to predict, requiring the Company to include foreign subsidiary income in taxable income even without cash distributions[425](index=425&type=chunk)[428](index=428&type=chunk) - Foreign subsidiaries may become subject to U.S. federal income tax and branch profits tax if deemed engaged in a U.S. trade or business, which could reduce after-tax returns[426](index=426&type=chunk)[427](index=427&type=chunk) [Risks related to our common stock](index=125&type=section&id=Risks%20related%20to%20our%20common%20stock) - Executive officers, directors, and principal stockholders collectively own approximately **90%** of common stock, allowing them to exert significant control over corporate decisions and potentially prevent acquisitions[429](index=429&type=chunk)[430](index=430&type=chunk) - Provisions in the corporate charter and Delaware law could make an acquisition more difficult and limit stockholders' ability to influence management, potentially depressing the stock price[431](index=431&type=chunk)[432](index=432&type=chunk)[433](index=433&type=chunk) - The price of the Company's common stock has been and is likely to remain volatile, influenced by clinical trial results, regulatory actions, competition, and general market conditions, including the impact of COVID-19[436](index=436&type=chunk)[437](index=437&type=chunk)[438](index=438&type=chunk) - As an 'emerging growth company' and 'smaller reporting company,' reduced disclosure requirements may make the common stock less attractive to investors, potentially leading to a less active trading market and increased volatility[440](index=440&type=chunk)[441](index=441&type=chunk)[443](index=443&type=chunk) - The Company does not anticipate paying cash dividends, making capital appreciation the sole source of gain for investors in the foreseeable future[448](index=448&type=chunk)[449](index=449&type=chunk) - Sales of a substantial number of common stock shares by existing stockholders in the public market could cause the stock price to fall[450](index=450&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=134&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities during the period. It also details the completion of the Company's IPO on October 7, 2019, which generated approximately $90.9 million in net proceeds, none of which have been used to date, with no material change in the planned use of proceeds - No unregistered sales of equity securities occurred during the reported period[455](index=455&type=chunk) - The Company completed its IPO on October 7, 2019, selling **6,516,667** shares of common stock at **$15.00** per share, generating approximately **$90.9 million** in net proceeds[455](index=455&type=chunk)[456](index=456&type=chunk) - None of the net proceeds from the IPO have been used to date, and there has been no material change in the planned use of proceeds[457](index=457&type=chunk) [Item 3. Defaults Upon Senior Securities](index=135&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company for the reporting period - This item is not applicable[458](index=458&type=chunk) [Item 4. Mine Safety Disclosures](index=135&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company for the reporting period - This item is not applicable[458](index=458&type=chunk) [Item 5. Other Information](index=135&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information is reported under this item[458](index=458&type=chunk) [Item 6. Exhibits](index=136&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL Instance Taxonomy documents | Exhibit Number | Description of Document | |:---------------|:-----------------------------------------------------------------------------------------------------------------------| | 31.1 | Certification of the Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 31.2 | Certification of the Registrant's Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 32.1* | Certification of the Registrant's Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 32.2* | Certification of the Registrant's Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 101.INS | XBRL Instance Taxonomy | | 101.SCH | XBRL Taxonomy Extension Schema Document | | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |---------------------------------------------------------------------------------------------------------------|------------------------------------------------------|------ ...