Aprea Therapeutics, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Aprea is a clinical-stage biopharmaceutical company developing cancer therapies intended to reactivate mutant p53. It had no product revenue and reported no income tax expense.
Financial performance and liquidity
| Metric | Q1 2021 | Q1 2020 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $6.8 million | $9.1 million |
| General and administrative expense | $3.4 million | $2.8 million |
| Total operating expenses | $10.2 million | $11.9 million |
| Net loss | $9.7 million | $9.4 million |
| Net loss per share, basic and diluted | $0.46 | $0.45 |
| Net cash used in operating activities | $11.5 million | $7.5 million |
- Cash and cash equivalents were $77.6 million at March 31, 2021, down from $89.0 million at December 31, 2020. Management estimated cash would fund operations and capital needs into 2023, subject to assumptions that could prove inaccurate.
- Total assets were $80.4 million and stockholders’ equity was $69.1 million. Total liabilities were $11.2 million, principally accounts payable, accrued expenses and lease liabilities. The filing reports no borrowings or other financial debt.
- Quarterly operating cash use increased by $4.0 million year over year; investing and financing cash flows were each zero in Q1 2021. No gross margin or operating margin is meaningful because the company had no product revenue.
- Accumulated deficit was $153.7 million. The company expects continued significant expenses and operating losses and will need additional financing to support ongoing development.
Changes versus the prior-year quarter
- R&D expense declined $2.3 million, mainly because enrollment in the pivotal Phase 3 eprenetapopt trial had been completed in Q2 2020. Spending rose on other early-stage programs, including solid tumors, CLL and APR-548.
- G&A expense increased $0.6 million, primarily from higher stock-based compensation and insurance costs. Stock-based compensation was $1.8 million versus $0.9 million.
- Net loss widened by $0.3 million despite lower operating expenses, primarily as other income fell $2.0 million. Foreign-currency gain decreased to $0.5 million from $2.2 million, and interest income in Q1 2020 was replaced by lease interest expense in Q1 2021.
- Operating cash use rose from $7.5 million to $11.5 million, reflecting working-capital changes and other cash-flow movements.
Pipeline, outlook and key risks
- Phase 3 frontline MDS: The pivotal eprenetapopt plus azacitidine trial failed to meet its predefined primary endpoint of complete-remission rate, announced in December 2020. The company said the observed higher remission rate versus azacitidine alone was not statistically significant and attributed weaker-than-expected efficacy in part to treatment dose modifications. It planned to continue following patients and discuss data and possible regulatory paths with FDA in the second half of 2021.
- Other studies: An April 2021 interim analysis of the 33-patient post-transplant MDS/AML study reported 62% 12-month relapse-free survival and 77% one-year overall survival; initial primary-endpoint results were expected in Q2 2021. In an AML combination study, 19 evaluable patients had a reported 63% composite CR/CRi rate and 31% CR rate; enrollment completion and preliminary expansion-cohort data were anticipated in Q2 2021. The company was also enrolling eprenetapopt studies in CLL and solid tumors.
- APR-548: The company planned a Phase 1 dose-escalation study with azacitidine in MDS and expected first-patient enrollment in Q2 2021.
- Management said COVID-19 had not materially affected Q1 results or operations and reported no clinical-supply disruption to date, but trial enrollment, follow-up and supply chains remained potential risks.
- Major uncertainties include clinical efficacy and safety, regulatory outcomes, trial timing and enrollment, commercialization prospects, foreign-exchange movements, and the ability to obtain additional funding on acceptable terms. If financing is unavailable, the company may have to delay, scale back or discontinue development programs.
- The company had an effective $350 million shelf registration, including a $50 million at-the-market program; no securities had been sold under the ATM as of March 31, 2021. No material legal proceedings or provision for contingent losses were reported. Uncertain tax-position liabilities were approximately $0.8 million.
Important facts for investors to verify
- Full Phase 3 MDS results, dose-modification analysis and any subsequent FDA feedback or regulatory strategy.
- Whether the reported interim and early response rates hold with longer follow-up and in larger cohorts, and whether expected Q2 2021 milestones were achieved.
- Actual cash burn, changes in clinical-development spending, and whether the cash runway remains consistent with management’s estimate into 2023.
- Any new financing, collaboration, ATM usage or dilution, and the resulting effect on the development plan.
- Whether COVID-19 or other factors affect clinical enrollment, patient follow-up, manufacturing or trial-supply availability.