Aprea Therapeutics(APRE) - 2021 Q3 - Quarterly Report

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]