Aprea Therapeutics(US:APRE)2020-11-06 21:45Financial 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].