Business context and reporting period
Aprea Therapeutics, Inc. (Nasdaq: APRE) filed this Form 10-K for the year ended December 31, 2020. It is a clinical-stage biopharmaceutical company developing cancer therapies intended to reactivate mutant p53. It has no approved products and has generated no product revenue.
The lead candidate, eprenetapopt (APR-246), is being tested in hematologic and solid-tumor cancers; APR-548, an oral next-generation candidate, was in preclinical development, with a first Phase 1 patient anticipated in Q2 2021. The company retained worldwide development and commercialization rights.
Financial results and liquidity
| Metric | 2020 | 2019 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $37.9 million | $21.0 million |
| General and administrative expense | $14.9 million | $8.6 million |
| Total operating expenses | $52.8 million | $29.5 million |
| Net loss | $53.5 million | $28.1 million |
| Net cash used in operating activities | $41.8 million | $26.7 million |
| Cash and cash equivalents at year-end | $89.0 million | $130.1 million |
There are no meaningful product gross margins because the company has no product sales. Management estimated that year-end cash would fund operating and capital needs into 2023, subject to assumptions that could prove incorrect. The company reported $15.4 million in total liabilities, including $0.3 million in lease liabilities; the filing reports no debt financing. Operating cash burn increased as development spending expanded. The 2020 net loss also reflected a $0.9 million foreign-currency loss, versus a $1.3 million gain in 2019.
In November 2020, the company made effective a $350 million universal shelf registration, including an at-the-market program for up to $50 million of common stock. No ATM securities had been sold by year-end. The company reported no off-balance-sheet arrangements.
Material changes and clinical developments
- Phase 3 MDS trial missed its primary endpoint. In the 154-patient trial, complete remission was 33.3% with eprenetapopt plus azacitidine versus 22.4% with azacitidine alone; the difference was not statistically significant (P=0.13). Reported secondary-endpoint trends were also not statistically significant at the primary data cut. Further analyses were planned.
- R&D expense rose $16.9 million year over year, mainly from eprenetapopt trials, manufacturing scale-up, regulatory work and preclinical activity. G&A rose $6.3 million, including higher public-company insurance, commercial-development and stock-based compensation costs.
- Cash declined by $41.1 million during 2020. Financing cash flow was only $0.2 million, mostly option exercises, compared with $92.6 million in 2019, which included IPO and preferred-stock proceeds.
- The company completed enrollment of 33 patients in a Phase 2 post-transplant MDS/AML trial and expected initial one-year relapse-free-survival data in Q2 2021. In an AML triplet-regimen cohort, it reported a 63% composite CR/CRi rate and 31% CR rate among 19 patients evaluable for efficacy; preliminary expansion-cohort data were expected in Q2 2021.
- Earlier investigator-initiated MDS/AML trials reported response signals, but were single-arm studies and do not establish comparative efficacy. In the ovarian-cancer PiSARRO Phase 2 trial, eprenetapopt plus chemotherapy did not show a statistically significant advantage over chemotherapy alone on the reported efficacy endpoints.
Outlook, risks and unusual items
Management expected continued significant losses and rising expenses as trials and development programs advanced. The company stated it would need substantial additional funding and had no committed external funding source; if financing is unavailable, it may delay, reduce or discontinue programs. It may raise capital through equity, debt, collaborations or licensing, with potential dilution or relinquishment of rights.
Key risks include the Phase 3 failure and uncertainty around subsequent eprenetapopt results; clinical, regulatory and safety uncertainty; reliance on third parties, including a single API manufacturer for eprenetapopt without a redundant supply arrangement; patient-enrollment and supply-chain disruption from COVID-19; and competition, reimbursement, intellectual-property and commercialization risks. The filing reported fatal adverse events in clinical studies, including some investigators’ assessments of possible treatment relationship in the Phase 3 study; safety and causality require careful review.
The financial statements received an unmodified audit opinion. Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2020; the auditor did not provide an internal-control attestation.
Important facts for investors to verify
- Review the complete Phase 3 dataset and subsequent analyses, including secondary endpoints, subgroups, follow-up and safety findings.
- Track the design, enrollment, response durability and safety of ongoing AML and post-transplant trials, and assess whether results support a viable regulatory path.
- Monitor cash burn, the assumptions underlying the stated runway into 2023, and any use of the shelf or ATM financing capacity.
- Confirm clinical supply continuity and progress toward qualifying additional eprenetapopt API manufacturers.
- Assess APR-548’s actual clinical start and early human safety and activity; the filing’s forward-looking trial timing is not a reported clinical result.