Aprea Therapeutics(APRE) - 2022 Q2 - Quarterly Report

Company Focus and Acquisitions - The company shifted its primary focus to the assets acquired from Atrin Pharmaceuticals, particularly the ATRN-119 and ATRN-W1051 programs, following the failure of its pivotal Phase 3 trial for APR-246[76]. - The acquisition of Atrin was evaluated as a strategic option to create long-term value for stockholders[76]. - Aprea acquired Atrin on May 16, 2022, with the transaction structured as a merger, resulting in Atrin becoming a wholly owned subsidiary[103]. - At the closing of the merger, Aprea issued 1,117,394 shares of common stock and 2,949,630 shares of Series A Preferred Stock, convertible into 10 shares of common stock[104]. Clinical Development - ATRN-119, an orally bioavailable small molecule inhibitor of ATR, has received FDA IND approval for a first-in-human clinical trial expected to begin in Q3 2022[90]. - ATRN-W1051, a selective WEE1 inhibitor, is currently in preclinical development with IND-enabling studies anticipated to commence in the second half of 2022[92]. - The company is planning to study ATRN-119 as both a monotherapy and in combination with standard care in Phase 1/2 clinical trials for solid tumor malignancies[90]. - The company has no ongoing clinical trials for eprenetapopt but has received clearance from the FDA to proceed with new Phase 1 dose-optimization trials in relapsed/refractory MDS/AML[93]. - Eprenetapopt (APR-246) has received Orphan Drug and Fast Track designations from the FDA for myelodysplastic syndromes (MDS) and acute myeloid leukemia (AML)[93]. - The company believes that the selectivity and toxicology profiles of ATRN-119 may differentiate it from other ATR inhibitors currently in development[90]. Financial Performance - Aprea reported net losses of $98.3 million and $106.2 million for the three and six months ended June 30, 2022, respectively, with an accumulated deficit of $287.3 million as of the same date[105]. - The net loss for Q2 2022 was $(98.3) million, compared to a net loss of $(10.3) million in Q2 2021, reflecting an increase in losses of $(88.0) million[140]. - The net loss for the six months ended June 30, 2022 was $(106.2) million, compared to $(19.9) million in the same period of 2021, indicating an increase in losses of $(86.3) million[145]. - The company incurred a net loss of $86.3 million, primarily due to acquired IPR&D associated with the Atrin acquisition[154]. Expenses and Cash Flow - The company anticipates significant increases in expenses due to planned clinical trials, research and development of product candidates, and establishing a commercialization infrastructure[106]. - General and administrative expenses are expected to increase due to costs associated with the merger and expansion of operations[122]. - Research and development expenses for Q2 2022 were $6.8 million, a slight increase of $0.1 million from $6.7 million in Q2 2021[143]. - General and administrative expenses for Q2 2022 were $15.6 million, up $12.3 million from $3.3 million in Q2 2021, primarily due to a $12.2 million increase in non-cash stock-based compensation[143]. - Total operating expenses for Q2 2022 reached $98.5 million, a significant increase of $88.5 million compared to $10.0 million in Q2 2021[140]. - For the six months ended June 30, 2022, research and development expenses totaled $10.9 million, down $2.5 million from $13.4 million in the same period of 2021[146]. - General and administrative expenses for the six months ended June 30, 2022 were $19.6 million, an increase of $12.8 million from $6.8 million in the same period of 2021[146]. - Total operating expenses for the six months ended June 30, 2022 were $106.5 million, up $86.4 million from $20.2 million in the same period of 2021[145]. - As of June 30, 2022, Aprea had cash and cash equivalents of $39.1 million, projected to fund operations through the end of 2023[110]. - For the six months ended June 30, 2022, net cash used in operating activities was $14.4 million, a decrease of $4.9 million compared to $19.3 million for the same period in 2021[154]. - The company has raised a total of $225.6 million from the sale of preferred and common stock since inception[151]. Future Outlook and Financing - Aprea expects to require additional financing to support operations until significant revenue from product sales is generated[109]. - The company expects expenses to increase significantly as it initiates clinical trials and seeks marketing approvals for product candidates[157]. - The company has no committed external sources of funds and may face dilution if additional capital is raised through equity sales[162]. - The company has filed a universal shelf registration statement for the issuance of securities up to an aggregate of $350 million[165]. Miscellaneous - The COVID-19 pandemic has not materially affected Aprea's financial results for the three and six months ended June 30, 2022, but uncertainties remain regarding its future impact[112]. - The company remains classified as an emerging growth company (EGC) and a smaller reporting company, with market value held by non-affiliates below $700 million and annual revenue below $100 million[138]. - The company does not currently have any significant direct foreign exchange risk and has not used derivative financial instruments to hedge such risk[169]. - There have been no changes in internal control over financial reporting that materially affected the company's financial reporting[172].