Aprea Therapeutics, Inc. — Q1 2020 Form 10-Q
Reporting period: Three months ended March 31, 2020. The filing was signed May 15, 2020. Aprea is a clinical-stage biopharmaceutical company developing cancer therapies that reactivate mutant p53; it had no product sales or other revenue.
Financial results and liquidity
| Metric | Q1 2020 | Q1 2019 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $9.10 million | $3.68 million |
| General and administrative expense | $2.78 million | $0.73 million |
| Total operating expenses | $11.87 million | $4.41 million |
| Net loss | $9.40 million | $3.48 million |
| Operating cash used | $7.54 million | $4.20 million |
- R&D expense increased $5.42 million, primarily reflecting advancement of APR-246 clinical development. G&A rose $2.05 million, including higher public-company insurance and professional fees, stock compensation, and personnel costs.
- Other income was $2.47 million, including a $2.25 million foreign-currency gain, mainly attributed to U.S. dollar strengthening against the Swedish krona. Foreign-currency translation loss of $2.42 million contributed to comprehensive loss of $11.82 million.
- Cash and cash equivalents were $122.51 million at March 31, down from $130.09 million at December 31, 2019. Total current assets were $124.60 million and current liabilities $11.54 million. Total liabilities were $11.77 million; these included $466,059 of lease liabilities. The filing reports no borrowings or off-balance-sheet arrangements.
- Management estimated existing cash would fund operating and capital requirements into 2023, while cautioning that the estimate depends on assumptions that may prove incorrect. The company expects additional funding will be needed for continued development.
- Basic and diluted loss per share was $0.45, compared with $2.97 in Q1 2019; weighted-average shares increased from 1.17 million to 21.05 million, so per-share results are not directly comparable.
Clinical progress, outlook, and risks
- The lead candidate, APR-246 (eprenetapopt), was in a pivotal Phase 3 trial with azacitidine for frontline treatment of TP53-mutant MDS. The company reported 140 patients enrolled, planned to close enrollment in Q2 2020, and expected initial/top-line data by year-end 2020. APR-246 also had ongoing trials in MDS and AML, including investigator-initiated and post-transplant studies.
- COVID-19 initially reduced patient screening and enrollment. Screening had recently increased at many sites; the company continued to assess effects on enrollment and trial timing. It reported no disruption to clinical supply at the time of filing and said the pandemic had not materially affected Q1 financial results or operations, but could not predict future effects.
- Management expected expenses and operating losses to rise as clinical trials and other development activities progressed. Aprea had no approved products and said it did not expect product revenue in the near future; future financing could involve equity, debt, collaborations, or licensing, with potential dilution or relinquishment of rights.
- Clinical and regulatory outcomes remain uncertain, including Phase 3 success, patient enrollment, approval, manufacturing and commercialization. The filing describes serious adverse events in APR-246 trials and deaths investigators considered possibly related to APR-246 and/or azacitidine; causality and interpretation require review of the detailed safety disclosures.
- The company relied on a single third-party manufacturer for APR-246 active pharmaceutical ingredient and had no redundant supply arrangement. The filing also highlights intellectual-property limitations: APR-246’s chemical structure is in the public domain, and its patent portfolio is based on method-of-use, formulation, dosing, manufacturing, and related claims rather than composition-of-matter patents.
- No material legal proceedings or contingent-loss provision were reported. Management stated disclosure controls were effective as of March 31, 2020.
Most important facts for investors to verify
- Whether Phase 3 enrollment, trial completion, and the anticipated year-end 2020 data timing proceeded as planned, including any COVID-related delays.
- APR-246’s final efficacy and safety results, including serious adverse events and deaths, against the detailed trial data and investigator assessments.
- Cash burn, development spending, and whether the stated cash runway into 2023 remains supportable under updated assumptions.
- Clinical supply continuity and manufacturing capacity, particularly given reliance on one active-ingredient manufacturer.
- The scope, validity, and remaining term of APR-246 intellectual-property protection, and any future financing or collaboration terms.
- The reported $0.45 loss per share alongside the substantial year-over-year change in weighted-average shares; also verify the filing’s statement that IPO proceeds had not been used as of the report date.