Aptose Reports Results for the Second Quarter 2024

Rhea-AI Summary

Aptose Biosciences Inc. (NASDAQ: APTO, TSX: APS) reported financial results for Q2 2024 and provided a corporate update. Key highlights include:

1. FDA approval for tuspetinib triplet therapy protocol with venetoclax and azacitidine for newly diagnosed AML patients

2. Abstract submission to ASH 2024 for TUS+VEN+AZA triplet therapy

3. Nasdaq deficiency notice received for minimum bid price requirement

4. Q2 2024 net loss of $7.3 million, down from $14.1 million in Q2 2023

5. Cash position of $8.3 million as of June 30, 2024, expected to fund operations through August 2024

6. Research and development expenses decreased to $4.4 million in Q2 2024 from $10.6 million in Q2 2023

Positive

• FDA approval for tuspetinib triplet therapy protocol in newly diagnosed AML
• Abstract submission to ASH 2024 for TUS+VEN+AZA triplet therapy
• Net loss decreased by $6.9 million to $7.3 million in Q2 2024 compared to Q2 2023
• Research and development expenses decreased by $6.2 million to $4.4 million in Q2 2024

Negative

• Nasdaq deficiency notice received for minimum bid price requirement
• Cash position of $8.3 million only expected to fund operations through August 2024
• Working capital deficit of $2.55 million as of June 30, 2024
• Stockholders' equity deficit of $2.18 million as of June 30, 2024

Insights

Financial Analyst

Aptose's Q2 2024 results reveal a significant reduction in net loss to $7.3 million, down from $14.1 million in Q2 2023. This improvement is primarily driven by a substantial decrease in research and development expenses, which fell from $10.6 million to $4.4 million. While this cost-cutting is positive for cash preservation, it also indicates a slowdown in clinical development activities, particularly for their lead drug tuspetinib.

The company's cash position of $8.3 million as of June 30, 2024, is critically low, with only enough runway until August 2024. This severe cash crunch puts Aptose in a precarious financial position, likely necessitating immediate fundraising efforts. The Nasdaq listing deficiency further complicates their financial outlook, potentially impacting their ability to raise capital efficiently.

Oncology Research Analyst

The FDA's allowance for Aptose to proceed with the TUS+VEN+AZA triplet protocol in frontline AML therapy is a positive development. This combination, targeting newly diagnosed AML patients unfit for chemotherapy, could potentially address an unmet medical need. The planned study focusing on VEN-naïve, FLT3i-naïve and HMA-naïve patients is strategically sound, as this population is likely to be highly responsive to the treatment.

However, the delay in initiating the triplet pilot dose to 2H 2024 and the extended timeline for potential pivotal program initiation in 2H 2025 suggest a slower-than-ideal development pace. This extended timeline, coupled with the company's financial constraints, raises concerns about Aptose's ability to fully capitalize on tuspetinib's potential in the competitive AML landscape.

Market Research Analyst

Aptose's market position is precarious. The company's focus on tuspetinib as a differentiated treatment for AML, particularly its potential in FLT3-unmutated patients, could be a significant market opportunity. However, the slow progression of clinical development and financial constraints pose substantial risks to realizing this potential.

The Nasdaq listing deficiency is a red flag for investors, potentially limiting access to capital markets and impacting stock liquidity. The company's ability to regain compliance by January 2025 is uncertain, given the current financial situation. This, combined with the need for immediate financing to continue operations beyond August 2024, puts Aptose in a challenging position for attracting investors and maintaining market confidence in their long-term viability.

• TUS+VEN+HMA Triplet Protocol in Frontline Therapy for Newly Diagnosed AML was Reviewed by the FDA and Allowed to Proceed

• Abstract Supporting Exploration of the TUS+VEN+AZA Triplet in Frontline Therapy for Newly Diagnosed AML has been Submitted to the 2025 Annual Meeting of the American Society of Hematology (ASH)
  

SAN DIEGO and TORONTO, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Aptose Biosciences Inc. (“Aptose” or the “Company”) (NASDAQ: APTO, TSX: APS), a clinical-stage precision oncology company developing highly differentiated oral targeted agents to treat hematologic malignancies, today announced financial results for the three months ended June 30, 2024, and provided a corporate update.

“We are pleased that our triplet protocol of tuspetinib with venetoclax and azacitidine (TUS+VEN+AZA) has been allowed to proceed at the 40 mg dose of tuspetinib, a dose that as a single agent and in doublet therapy has been shown to be safe and active,” said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer of Aptose. “We – along with our board and outside scientific advisors – strongly believe tuspetinib is an ideal drug for frontline triplet therapy and we remain committed to securing financing to pursue its development for the newly diagnosed AML patient population in desperate need of an improved frontline therapy.”

Key Corporate Highlights

• Tuspetinib Protocol Now Ready for Triplet Therapy Study – Aptose’s company-sponsored phase 1/2 TUS+VEN+AZA triplet study is designed to test tuspetinib in combination with standard of care dosing of azacitidine and venetoclax as frontline therapy in newly diagnosed AML patients unfit for chemotherapy. The planned study will dose VEN-naïve, FLT3i-naïve, and HMA-naïve patients, a group expected to be highly responsive to the TUS+VEN+HZA triplet regimen. Current triplet therapies containing kinase inhibitors can be limited by toxicities often requiring dose reductions of all three agents and may not be effective in the larger FLT3-unmutated AML population. The U.S. Food and Drug Administration (FDA) has allowed TUS to be administered as part of the triplet at 40 mg daily, at an initial dose shown active as a single agent in relapsed or refractory AML patients.

• ASH Abstract – On July 31, 2024, Aptose submitted an abstract for presentation at the 2025 Annual Meeting of the American Society of Hematology (ASH) in December 2024. Lead author Navel Daver, MD, University of Texas MD Anderson Cancer Center, Houston, TX and research team explore the safety and efficacy results that support the upcoming combination study of TUS+VEN+AZA as a triplet drug combination frontline therapy in newly diagnosed AML patients ineligible for intensive chemotherapy, independent of FLT3 mutation status, which is an important differentiator for tuspetinib.

• Nasdaq – On July 19, 2024, Aptose announced that it had received a deficiency letter (the “Deficiency Letter”) from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last thirty (30) consecutive business days, the closing bid price for the Company's common shares had been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The Deficiency Letter has no immediate effect on the listing of the Company's common shares, and its common shares will continue to trade on The Nasdaq Capital Market under the symbol “APTO” at this time. The Company's common shares continue to trade on the Toronto Stock Exchange (“TSX”) under the symbol “APS”. The Company's listing on the TSX is independent and will not be affected by the Nasdaq listing status.
  

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given one hundred and eighty (180) calendar days, or until January 10, 2025, to regain compliance with the Minimum Bid Price Requirement. If at any time before January 10, 2025, the bid price of the Company's common shares closes at $1.00 per share or more for a minimum of ten (10) consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance. If the Company does not regain compliance with the Minimum Bid Price Requirement by January 10, 2025, the Company may be afforded a second one hundred and eighty (180) calendar day period to regain compliance. The Company intends to monitor the closing bid price of its common shares and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement. However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq Listing Rules.

Multiple Planned Value-creating Milestones Ahead

• Frontline therapy triplet pilot dose initiation planned in newly diagnosed (ND) AML: 2H 2024
• Triplet pilot dose escalation planned with early data in ND AML: ASH 2024
• Triplet pilot completed with CR/MRD data and dose selection: EHA 2025
• Triplet Ph2/Ph3 pivotal program planned initiation: 2H 2025

FINANCIAL RESULTS OF OPERATIONS Aptose Biosciences Inc. Statements of Operations Data (unaudited) ($ in thousands, except per share data)
	Three months ended  June 30,								Six months ended June 30,
	2024				2023				2024				2023
Expenses:
Research and development	$	4,413			$	10,582			$	10,858			$	19,393
General and administrative		2,932				3,870				6,247				9,155
Operating expenses		7,345				14,452				17,105				28,548
Other income, net		93				323				213				743
Net loss	$	(7,252	)		$	(14,129	)		$	(16,892	)		$	(27,805	)
Net Loss per share, Basic and diluted	$	(0.43	)		$	(2.27	)		$	(1.13	)		$	(4.47	)
Weighted average number of common shares outstanding used in computing net loss per share, basic and diluted (in thousands)		16,755				6,234				14,944				6,219

Net loss for the three-month period ended June 30, 2024 decreased by $6.9 million to $7.3 million, as compared to $14.1 million for the comparable period in 2023. Net loss for the six-month period ended June 30, 2024 decreased by $10.9 million to $16.9 million, as compared to $27.8 million for the comparable period in 2023. Components of net loss are presented below:

Aptose Biosciences Inc. Balance Sheet Data (unaudited) ($ in thousands)
	June 30, 2024				December 31, 2023
Cash, cash equivalents and short-term investments	$	8,330			$	9,252
Working capital		(2,552	)			(3,375	)
Total assets		10,949				12,989
Long-term liabilities		414				621
Accumulated deficit		(532,429	)			(515,537	)
Stockholders’ equity		(2,176	)			(2,901	)

• Total cash and cash equivalents and investments as of June 30, 2024, were $8.3 million. Based on current operations, the Company expects that cash on hand and available capital provides the Company with sufficient resources to fund planned Company operations including research and development through August of 2024.

• As of August 8, 2024, we had 18,109,393 Common Shares issued and outstanding. In addition, there were 1,347,002 Common Shares issuable upon the exercise of outstanding stock options and there were 18,341,491 Common Shares issuable upon the exercise of the outstanding warrants.
  

RESEARCH AND DEVELOPMENT EXPENSES

The research and development expenses for the three months and six months ended June 30, 2024, and 2023 were as follows:

	Three months ended June 30,								Six months ended June 30,
(in thousands)	2024				2023				2024				2023
Program costs – Tuspetinib	$	2,666			$	8,070			$	6,589			$	12,845
Program costs – Luxeptinib		304				706				512				1,995
Program costs – APTO-253		(9	)			19				13				26
Personnel related expenses		1,379				1,506				3,333				3,584
Stock-based compensation		70				271				398				924
Depreciation of equipment		3				10				13				19
Total	$	4,413			$	10,582			$	10,858			$	19,393

Research and development expenses decreased by $6.2 million to $4.4 million for the three-month period ended June 30, 2024, as compared to $10.6 million for the comparative period in 2023. Changes to the components of our research and development expenses presented in the table above are primarily as a result of the following events:

• Program costs for tuspetinib were $2.7 million for the three-month period ended June 30, 2024, compared with $8.1 million for the comparative period in 2023. The lower program costs for tuspetinib in the current period represent the reduction of activity in our APTIVATE clinical trial, reduced manufacturing costs, and related expenses. In the comparative period in 2023, tuspetinib program costs included the healthy volunteer study, which was completed in 2023.

• Program costs for luxeptinib decreased by approximately $402 thousand, primarily due to lower clinical trial and manufacturing activities.

• Program costs for APTO-253 decreased by approximately $28 thousand. The Company discontinued further clinical development of APTO-253.

• Personnel-related expenses decreased by $127 thousand, related to fewer employees in the current three-month period, partially offset by salary increases.

• Stock-based compensation decreased by approximately $201 thousand in the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to stock options granted with lower grant date fair values in the current period.
  

Research and development expenses decreased by $8.5 million to $10.9 million for the six-month period ended June 30, 2024, as compared to $19.4 million for the comparative period in 2023. Changes to the components of our research and development expenses presented in the table above are primarily as a result of the following events:

• Program costs for tuspetinib were $6.6 million for the six-month period ended June 30, 2024, a decrease of $6.3 million compared with $12.8 million for the comparative period in 2023. The lower program costs for tuspetinib in the current period represent the reduction of activity in our APTIVATE clinical trial, reduced manufacturing costs, and related expenses. In the comparative period in 2023, tuspetinib program costs included the healthy volunteer study, which was completed in 2023.

• Program costs for luxeptinib decreased by approximately $1.5 million to $512 thousand for the six months ended June 30, 2024, as compared to $2.0 million in the comparative period, primarily due to lower clinical trial and manufacturing activities.

• Program costs for APTO-253 decreased by approximately $13 thousand, due to the Company’s decision on December 20, 2021 to discontinue further clinical development of APTO-253.

• Personnel-related expenses decreased by $251 thousand, related to fewer employees in the current six-month period and partially offset by salary increases.

• Stock-based compensation decreased by approximately $526 thousand in the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to stock options granted with lower grant date fair values, in the current period.
  

About Aptose

Aptose Biosciences is a clinical-stage biotechnology company committed to developing precision medicines addressing unmet medical needs in oncology, with an initial focus on hematology. The Company's small molecule cancer therapeutics pipeline includes products designed to provide single agent efficacy and to enhance the efficacy of other anti-cancer therapies and regimens without overlapping toxicities. The Company’s lead clinical-stage compound tuspetinib (TUS), is an oral kinase inhibitor that has demonstrated activity as a monotherapy and in combination therapy in patients with relapsed or refractory acute myeloid leukemia (AML) and is being developed as a frontline triplet therapy in newly diagnosed AML. For more information, please visit www.aptose.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Canadian and U.S. securities laws, including, but not limited to, statements regarding the Company’s clinical development plans, the clinical potential, anti-cancer activity, therapeutic potential and applications and safety profile of tuspetinib, clinical trials, the enrollment in clinical trials and the data therefrom, the submission of a compliance plan to Nasdaq and available options to regain compliance, upcoming milestones, financing activities, expectations regarding capital available to the Company to fund planned Company operations, maintenance of the Nasdaq and TSX listings and statements relating to the Company’s plans, objectives, expectations and intentions and other statements including words such as “continue”, “expect”, “intend”, “will”, “hope” “should”, “would”, “may”, “potential” and other similar expressions. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements described in this press release. Such factors could include, among others: our ability to obtain the capital required for research and operations; the inherent risks in early stage drug development including demonstrating efficacy; development time/cost and the regulatory approval process; the progress of our clinical trials; our ability to find and enter into agreements with potential partners; our ability to attract and retain key personnel; changing market and economic conditions; unexpected manufacturing defects and other risks detailed from time-to-time in our ongoing current reports, quarterly filings, annual information forms, annual reports and annual filings with Canadian securities regulators and the United States Securities and Exchange Commission.

Should one or more of these risks or uncertainties materialize, or should the assumptions set out in the section entitled “Risk Factors” in our filings with Canadian securities regulators and the United States Securities and Exchange Commission underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this press release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. We cannot assure you that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

For further information, please contact:

Aptose Biosciences Inc.
Susan Pietropaolo
Corporate Communications & Investor Relations
201-923-2049
spietropaolo@aptose.com

FAQ

What was Aptose's net loss for Q2 2024?

Aptose reported a net loss of $7.3 million for Q2 2024, down from $14.1 million in Q2 2023.

What is the status of Aptose's tuspetinib triplet therapy for AML?

The FDA has approved Aptose's protocol for tuspetinib triplet therapy with venetoclax and azacitidine for newly diagnosed AML patients.

How much cash does Aptose (APTO) have as of June 30, 2024?

Aptose reported a cash position of $8.3 million as of June 30, 2024, expected to fund operations through August 2024.

What is Aptose's (APTO) current Nasdaq listing status?

Aptose received a Nasdaq deficiency notice for not meeting the minimum bid price requirement of $1.00 per share. The company has until January 10, 2025, to regain compliance.