Aprea Therapeutics(APRE) - 2022 Q3 - Quarterly Report

Company Focus and Strategy - 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 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] - The company utilizes integrated discovery technologies, including Repli-Biom, ATRIZE™, and SCET™, to enhance its drug development pipeline[82] - The focus on synthetic lethality in targeting DDR pathways represents an emerging strategy to treat various cancers lacking effective treatments[79] Clinical Development - ATRN-119 is currently undergoing a Phase 1 clinical trial for cancer patients with specific genetic mutations, with plans to open 1-2 additional sites[90] - ATRN-W1051, a selective WEE1 inhibitor, is in preclinical development, with IND-enabling studies anticipated to commence in Q4 2022[92] - Eprenetapopt (APR-246) has received Orphan Drug and Fast Track designations from the FDA for myelodysplastic syndromes and acute myeloid leukemia[93] - The company is planning new Phase 1 dose-optimization clinical trials for eprenetapopt in relapsed/refractory MDS/AML and Richter's transformed NHL[94] Financial Performance - Aprea reported net losses of $4.0 million and $110.2 million for the three and nine months ended September 30, 2022, respectively, compared to $9.5 million and $29.4 million for the same periods in 2021[106] - The accumulated deficit as of September 30, 2022, was $291.4 million, primarily due to research and development costs and general administrative expenses[106] - Total operating expenses for the nine months ended September 30, 2022, were $110.7 million, an increase of $81.1 million from $29.6 million in the same period of 2021[149] - The company incurred a net loss of $80.8 million for the nine months ended September 30, 2022, largely due to acquired IPR&D associated with the Atrin acquisition of $76.0 million[158] Cash and Funding - The company has received net proceeds of approximately $226.2 million from sales of preferred and common stock through September 30, 2022[102] - As of September 30, 2022, Aprea had cash and cash equivalents of $33.1 million, expected to fund operations through the end of 2023[111] - The company has no committed external source of funds and may face challenges in raising additional capital on acceptable terms[165] - Net cash provided by financing activities was $0.6 million for the nine months ended September 30, 2022, compared to $0.1 million for the same period in 2021[159] Expenses and Cost Management - General and administrative expenses for the nine months ended September 30, 2022, were $18.9 million, an increase of $8.7 million from $10.2 million in the same period of 2021[150] - Research and development expenses for Q3 2022 were $1.1 million, down from $6.0 million in Q3 2021, a decrease of $4.9 million[145] - General and administrative expenses for Q3 2022 were $3.1 million, compared to $3.4 million in Q3 2021, a decrease of $0.3 million[146] - Acquired in-process research and development expense from the Atrin acquisition was recorded as an expense at the acquisition date, with no additional IPR&D expense expected in future periods[125] Revenue Expectations - The company has not generated any revenue from product sales and does not expect to do so in the near future[117] - The company does not expect to generate revenue from product sales for several years, if at all, as it has not yet commercialized any product candidates[156] - The company anticipates significant increases in expenses related to ongoing and planned development activities, including clinical trials and establishing a sales and marketing infrastructure[162] Other Financial Metrics - Interest expense for Q3 2022 was $151,123, compared to a negligible amount in Q3 2021, reflecting a significant increase[142] - Foreign currency gain for Q3 2022 was $24,353, compared to a loss of $21,907 in Q3 2021, a change of $46,260[147] - Total other income for the nine months ended September 30, 2022, was $520,715, an increase of $275,160 from $245,555 in the same period of 2021[149] - For the nine months ended September 30, 2022, net cash used in operating activities was $21.0 million, a decrease of $6.5 million compared to $27.5 million for the same period in 2021[158]