Aprea Therapeutics(US:APRE)2023-08-09 16:00Company Overview - Aprea Therapeutics is focused on precision oncology through synthetic lethality, aiming to establish a pipeline of clinical and preclinical programs for cancer treatment [79]. - Aprea completed the acquisition of Atrin Pharmaceuticals on May 16, 2022, which is now a wholly owned subsidiary [80]. - The company has shifted its focus from reactivating mutant p53 tumor suppressor proteins to developing molecules targeting DNA damage response pathways [85]. - Aprea has assembled a team with extensive experience in oncology drug development to support its mission [85]. Product Development - The most advanced product candidate, ATRN-119, is currently in a Phase 1/2a clinical trial, with tolerability and pharmacokinetic data expected in Q1 2024 [82]. - Aprea plans to file an IND for its lead WEE1 inhibitor, ATRN-1051, by the end of 2023 [83]. Financial Performance - The company has not generated any revenue from product sales and relies primarily on grant revenue from government organizations [92][93]. - Grant revenue for the three months ended June 30, 2023, was approximately $0.25 million, compared to no grant revenue for the same period in 2022 [120]. - Grant revenue for the six months ended June 30, 2023, was approximately $0.2 million, compared to no grant revenue for the same period in 2022 [129]. - Total operating expenses for the six months ended June 30, 2023, were $8.5 million, a decrease of $98.0 million from $106.5 million in the same period of 2022 [128]. - Research and development expenses for the three months ended June 30, 2023, were approximately $2.2 million, a decrease of $4.6 million from approximately $6.8 million in the same period of 2022 [122]. - Research and development expenses decreased to $3.5 million for the six months ended June 30, 2023, from $10.9 million in the same period of 2022, a reduction of $7.4 million [131]. - General and administrative expenses for the three months ended June 30, 2023, were approximately $1.7 million, down $13.9 million from approximately $15.6 million in the same period of 2022 [126]. - General and administrative expenses were approximately $5.1 million for the six months ended June 30, 2023, down from $19.6 million in the same period of 2022, a decrease of $14.6 million [132]. - The loss from operations for the three months ended June 30, 2023, was $(3.65) million, an improvement of $94.8 million compared to a loss of $(98.47) million in the same period of 2022 [120]. - Net loss for the six months ended June 30, 2023, was $7.6 million, compared to a net loss of $106.2 million for the same period in 2022 [137]. Cash Flow and Financing - Cash and cash equivalents as of June 30, 2023, were $27.7 million, expected to fund operations into the fourth quarter of 2024 [143]. - Net cash used in operating activities was $6.2 million for the six months ended June 30, 2023, compared to $14.4 million for the same period in 2022, a decrease of $8.2 million [138]. - Net cash provided by financing activities was $5.1 million for the six months ended June 30, 2023, from the sale of common stock [141]. - The company issued and sold 1,050,000 shares of common stock at a public offering price of $5.25 per share, resulting in net proceeds of approximately $4.9 million after deducting underwriting discounts and offering expenses of approximately $0.6 million [152]. - During the six months ended June 30, 2023, the company issued and sold 26,302 shares of common stock under the ATM offering program, resulting in net proceeds of approximately $0.3 million after deducting approximately $8,000 in issuance costs [151]. Stock and Market Information - As of June 30, 2023, 2,893,403 shares of Series A Non-Voting Convertible Preferred Stock were converted into 1,446,701 shares of common stock [89]. - A reverse stock split was approved at a ratio of one-for-20, effective February 10, 2023 [91]. - The company is currently subject to a limitation on raising funds through primary public offerings, restricted to one-third of the aggregate market value of non-affiliate common equity, until the public float exceeds $75 million [151]. - The company filed a universal shelf registration statement with the SEC for the issuance of securities up to an aggregate of $350 million, which was declared effective on November 30, 2020 [151]. Expenses and Taxation - The company expects general and administrative expenses to increase in the future due to headcount growth and commercialization activities [101]. - The company has not recorded any U.S. federal, state, or foreign income tax expense due to uncertainty in realizing benefits from net losses [105]. - Acquired in-process research and development expense from the Atrin Acquisition in May 2022 was recorded as an expense at the acquisition date, with no additional IPR&D expense expected in future periods [102]. Currency and Inflation - Foreign currency gain for the three months ended June 30, 2023, was $56,363, compared to a gain of $154,566 in the same period of 2022, reflecting a change due to currency fluctuations [127]. - Foreign currency gain for the six months ended June 30, 2023, was $42,566, compared to a gain of $290,777 for the same period in 2022 [135]. - The company does not believe that inflation has had a material effect on its business, financial condition, or results of operations during the three months ended June 30, 2023 [157]. - The company has not used any derivative financial instruments to hedge exposure to foreign currency exchange rate risk, as it does not currently have significant direct foreign exchange risk [156]. Accounting and Reporting - The company remains classified as an emerging growth company and a smaller reporting company, allowing it to benefit from certain exemptions in disclosure requirements [115][117]. - The company does not anticipate any material impact from recently issued accounting pronouncements on its financial statements [153]. - The company has no off-balance sheet arrangements during the periods presented [154]. - The company’s subsidiary Aprea AB's financial position is measured using its local currency, and cash accounts holding U.S. dollars are remeasured based on the exchange rate at the date of remeasurement [156].