Aptose Biosciences(APTO) - 2022 Q1 - Quarterly Report

Financial Performance - Net loss for the three months ended March 31, 2022, was $11,481 thousand, compared to a net loss of $16,227 thousand for the same period in 2021, reflecting an improvement of approximately 29.5%[18] - Basic and diluted loss per common share improved from $(0.18) in Q1 2021 to $(0.12) in Q1 2022[18] - The net loss for the three-month period ended March 31, 2022, decreased by $4.7 million to $11.5 million compared to $16.2 million for the same period in 2021[126] - Cash used in operating activities for the three-month period ended March 31, 2022, was approximately $9.6 million, compared to $10.4 million for the same period in 2021[118] - General and administrative expenses for the three-month period ended March 31, 2022, were $4,107 thousand, compared to $8,024 thousand in the same period in 2021[128] Assets and Liabilities - Total assets decreased from $82,525 thousand on December 31, 2021, to $72,603 thousand on March 31, 2022, representing a decline of approximately 12.3%[14] - Current assets fell from $81,737 thousand to $71,874 thousand, a decrease of about 12.0%[14] - Total liabilities decreased from $8,289 thousand on December 31, 2021, to $7,319 thousand on March 31, 2022, a reduction of about 11.7%[15] - Shareholders' equity decreased from $74,236 thousand to $65,284 thousand, a decline of approximately 12.1%[15] - Cash and cash equivalents decreased from $39,114 thousand at the beginning of the period to $36,991 thousand at the end of the period, a decline of approximately 5.4%[24] Research and Development - The company is advancing two clinical-stage programs and a third program in discovery-stage, focusing on differentiated kinase inhibitors for oncology[28] - Research and development expenses decreased from $8,228 thousand in Q1 2021 to $7,393 thousand in Q1 2022, a reduction of about 10.1%[18] - Research and development expenses for the three-month period ended March 31, 2022, were $7.4 million, a decrease of $835 thousand from $8.2 million in the same period in 2021[132] - The ongoing COVID-19 pandemic may adversely affect the company's research and development activities, including clinical trial enrollment and data collection[29] - The company has ongoing Phase 1 clinical trials for product candidates HM43239 and luxeptinib, with increased costs expected for these trials[129] Stock and Compensation - The Company recorded total share-based payment expense of $2.514 million in Q1 2022, down 62.2% from $6.643 million in Q1 2021[77] - Stock-based compensation decreased by approximately $3.7 million to $1.6 million for the three months ended March 31, 2022, primarily due to lower grant date fair value of options[137] - The Company granted 3,870 thousand stock options in Q1 2022, compared to 2,962 thousand in Q1 2021, reflecting a 30.6% increase[75] - As of March 31, 2022, there was $6.99 million of total unrecognized compensation cost related to non-vested stock options, expected to be recognized over an estimated weighted-average period of 1.67 years[69] Clinical Trials and Product Development - Aptose obtained exclusive worldwide rights to the clinical-stage myeloid kinome inhibitor HM43239 from Hanmi Pharmaceutical on November 4, 2021[88] - An ongoing international Phase 1/2 clinical trial for HM43239 has shown robust clinical activity, including multiple complete remissions (CR) in relapsed or refractory AML patients[89] - The FDA granted orphan drug designation to HM43239 for AML treatment, providing seven additional years of marketing exclusivity and various development incentives[90] - Fast Track Designation was granted to HM43239 for relapsed or refractory AML with FLT3 mutation, facilitating expedited development through early communication with the FDA[91] - Luxeptinib is being developed for relapsed or refractory AML and B-cell malignancies, with ongoing Phase 1a/b trials showing promising safety and efficacy results[94][95] Future Outlook and Capital Needs - The company expects to need to raise additional capital or incur indebtedness to fund operations in the future, with a base shelf prospectus allowing for the distribution of up to $200 million of common shares[111] - The company anticipates that negative cash flows will continue until regulatory approval is received for any of its products under development[119] - The company’s cash needs for the next twelve months will depend on clinical trial enrollment rates and general corporate overhead costs[31] Miscellaneous - The company has not experienced material delays in the enrollment of patients or timelines for clinical trials due to COVID-19[138] - The company has not been party to any off-balance sheet arrangements as of March 31, 2022[144] - There were no material changes to the company's critical accounting policies and estimates during the three months ended March 31, 2022[146] - The report was signed by William G. Rice, Ph.D., President and Chief Executive Officer, on May 9, 2022, in San Diego, California[165].