Mr. Greg Chow reports

APTOSE REPORTS FOURTH QUARTER AND YEAR END 2016 RESULTS

Aptose Biosciences Inc. has released financial results for the three months and fiscal year ended Dec. 31, 2016, and has provided an update on corporate developments.

The net loss for the year ended Dec. 31, 2016, was $18.6-million ($1.46 per share) compared with $14.6-million ($1.23 per share) in the year ended Dec. 31, 2015. Total cash and cash equivalents and investments as of Dec. 31, 2016, were $10.7-million (or $7.9-million (U.S.)).

"We began 2017 by reviewing our corporate strategy and refocusing our resources on CG'806, an oral first-in-class pan-FLT3/BTK inhibitor we are developing for patients with FLT3-driven AML and certain B cell malignancies," said William G. Rice, PhD, chairman, president and chief executive officer. "Preclinical studies with CG-806 have demonstrated a unique activity profile, which warranted the prioritization of resources toward advancing its development. We look forward to reporting on our progress with this molecule."

Corporate highlights:

• In January, 2017, Aptose announced the prioritization of its resources toward the development of CG'806, an oral preclinical compound being developed for patients with FLT3-driven acute myeloid leukemia (AML) and certain BTK-driven B cell malignancies.
• In June, 2016, Aptose entered into an exclusive global option and licence agreement with CrystalGenomics Inc. of South Korea, focused on the development of CG'806. Aptose is currently conducting investigational new drug (IND)-enabling studies and, if it exercises its option under the agreement, expects to initiate a phase 1 clinical trial in early 2018. The potential option exercise would likely occur prior to submission of an IND application in the United States. Upon exercise of the option, Aptose would own global rights to develop and commercialize the program outside of Korea and China.
• Compelling preclinical data have established CG'806 as a potent and well-differentiated pan-FLT3 inhibitor for AML and a non-covalent inhibitor of BTK and other oncogenic kinases that drive certain B cell derived cancer cells. The compound has demonstrated tumour elimination in the absence of toxicity in AML xenograft models.
• Aptose recently developed a new synthetic route to synthesize greater amounts of CG'806, and is using that route to prepare drug substance for various preclinical and animal model studies, and for development of an improved oral formulation. The compound is being developed as a once-daily oral therapeutic.
• The company has submitted research abstracts to present CG'806 data at the coming AACR hematologic malignancies meeting in May, 2017.
• Aptose temporarily delayed clinical activities with APTO-253, a phase 1 stage compound for AML, in an effort to define the root cause of recent manufacturing setbacks related to the intravenous formulation, and to restore the molecule to a state supporting clinical development and potential partnering. Aptose remains hopeful in the viability of APTO-253, which effectively inhibits expression of the c-Myc oncogene, as a potential treatment for AML.

                      FINANCIAL RESULTS
       (amounts in $000s except for per-common-share data)

                                          Three months ended Dec. 31, 
                                                  2016          2015

Revenue                                             $-            $-
Research and development expense                 2,550         2,340
General and administrative expense               1,461         2,364
Operating expenses                               4,011         4,794
Finance expense                                      -             -
Finance income                                     (85)         (273)
Net financing income                               (85)         (273)
Net (loss)                                       3,926        (4,431)
Basic and diluted net (loss) per share           (0.26)        (0.38)

Aptose's net loss for the three months ended Dec. 31, 2016, was $3.9-million (26 cents per share) compared with $4.4-million (38 cents per share) in the same period in the prior year.

Research and development costs increased to $2.6-million in the three months ended Dec. 31, 2016, compared with $2.3-million for the three months ended Dec. 31, 2015. Aptose incurred higher costs for formulation studies and manufacturing costs for the APTO-253 product in the three months ended Dec. 31, 2016, than in the comparable period, and these were offset by lower expenses for the contract research organization costs to manage the study. In addition, in the current period, Aptose was conducting studies related to its CG'806 program following the licensing of the technology in June, 2016.

General and administrative expenses decreased to $1.5-million in the three months ended Dec. 31, 2016, compared with $2.4-million in the three months ended Dec. 31, 2015. The decrease, despite the increased cost of Aptose's U.S.-dollar expenditures due to the devaluation of the Canadian dollar, is related to lower stock option compensation and lower consulting fees related to projects that were active and completed in the fourth quarter in 2015.

                                   FULL-YEAR RESULTS
                 (amounts in $000s except for per-common-share data)

                                                               Year ended          Year ended
                                                            Dec. 31, 2016       Dec. 31, 2015

Revenue                                                                $-                  $-
Expenses
Research and development                                           10,322               6,254
General and administrative                                          8,344               9,845
Operating expenses                                                 18,666              16,099
Finance expense                                                        66                  43
Finance income                                                       (105)             (1,556)
Net financing (income) expense                                        (39)             (1,473)
Net (loss) and comprehensive (loss) for the period                 18,627              14,626
Basic and diluted (loss) per common share                            1.46                1.23

Research and development

Research and development expenses totalled $10.3-million in the year ended Dec. 31, 2016, compared with $6.3-million in the year ended Dec. 31, 2015.

Expenditures for the year ended Dec. 31, 2016, increased significantly over the year ended Dec. 31, 2015, due to the following reasons:

• Research and development activities related to the option fee for CG'806;
• Costs associated with the LALS/Moffitt collaboration developing epigenetic single-molecule inhibitors of multiple targets, including the BET proteins, and other kinases, for which no comparable expenses existed in the prior-year periods;
• Increased research and clinical operations head count and related costs;
• Formulation and manufacturing costs associated with APTO-253 and the root cause analysis of the filter clogging identified in November, 2015;
• Increased contract research organization costs related to consultants and advisers as the company worked toward returning APTO-253 to the clinic.

During the year ended Dec. 31, 2016, Aptose paid $1.0-million (U.S.) ($1,294,000) to CrystalGenomics for an option fee related to the CG'806 technology. Should Aptose elect to exercise the option prior to the filing of an IND application with the Food and Drug Administration, the company would pay an additional $2.0-million (U.S.) in cash or a combination of cash and common shares, and would receive full development and commercial rights for the program in all territories outside of Korea and China. No comparable expense existed in the same period in the prior year.

General and administrative

General and administrative expenses totalled $8.3-million in the year ended Dec. 31, 2016, compared with $9.8-million in the year ended Dec. 31, 2015.

General and administrative expenses, excluding salaries, decreased in the year ended Dec. 31, 2016, compared with the year ended Dec. 31, 2015. The decrease is the result of lower travel, consulting and legal costs in the current year related to transactions completed in the prior year, as well as lower press release and filing costs associated with a lower-cost service provider in the current-year periods.

Salary charges in the year ended Dec. 31, 2016, increased in comparison with the year ended Dec. 31, 2015, due to additional head count in the first half of 2016 compared with the first half of 2015, as well as a higher average Canadian-dollar/U.S.-dollar exchange rate, which increased the cost of Aptose's U.S.-denominated salaries in the first six months of 2016 in comparison with the prior year, and higher bonus expenses recognized in the current period.

Stock-based compensation decreased in the year ended Dec. 31, 2016, compared with the year ended Dec. 31, 2015, due to large option grants in April, June and July, 2014, which vested 50 per cent during the first year and therefore contribute to higher stock-based compensation expense during the first 12-month period captured in the prior-year period.

Finance income

Finance income totalled $105,000 in the year ended Dec. 31, 2016, compared with $1.5-million in the year ended Dec. 31, 2015. Interest income represents interest earned on Aptose's cash and cash equivalent and investment balances. Foreign exchange gains are the result of an increase in the value of U.S.-dollar-denominated cash and cash equivalents balances during such periods due to a depreciation of the Canadian dollar compared with the U.S. dollar.

About Aptose Biosciences Inc.

Aptose Biosciences is a clinical-stage biotechnology company committed to developing personalized therapies addressing unmet medical needs in oncology. Aptose is advancing new therapeutics focused on novel cellular targets on the leading edge of cancer. 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.

We seek Safe Harbor.