Dr. William Rice reports

APTOSE REPORTS RESULTS FOR THE SECOND QUARTER 2023

Aptose Biosciences Inc. has released its financial results for the three months ended June 30, 2023, and provided a corporate update.

"While still early in our Aptivate dose expansion trial with tuspetinib in combination with venetoclax (TUS/VEN), we are encouraged by what we're seeing in very difficult to treat AML populations," said Dr. William G. Rice, PhD, chairman, president and chief executive officer. "Of particular importance are the tolerability of the TUS/VEN doublet and the breadth of responses in deep relapsed or refractory (R/R) AML patients who failed prior therapy with venetoclax (four of nine evaluable with prior VEN), among which responses were achieved in patients with wildtype FLT3 (two of three evaluable with FLT3-WT) and one of whom harboured a TP53 mutation. Given the paucity of treatment options in this subpopulation that failed prior venetoclax therapy, we're excited to build off of these positive results at future medical meetings later this year and leverage the TUS/VEN doublet data as a springboard to future triplet therapy in the front line setting.

"We are delighted to strengthen our relationship with Hanmi Pharmaceutical, which we believe reflects their recognition of the growing value of tuspetinib as a unique treatment for AML and possibly MDS, of the significant progress that Aptose has made with tuspetinib's clinical development, and of the experienced and thoughtful nature of our team," said Dr. Rice. "We thank the Hanmi team and, in particular, Ms. Juhyun Lim, president of Hanmi Pharmaceutical, for her leadership and commitment to Aptose."

Key corporate highlights

Tuspetinib Aptivate expansion trial

In the Aptivate phase 1/2 clinical trial of tuspetinib, a once-daily oral agent with a unique kinase targeting pattern being developed for the treatment of patients with R/R AML, the tuspetinib and venetoclax (TUS/VEN) doublet combination treatment arm has demonstrated early responses (composite complete response rate (CRc) includes any CR, CRh, CRi and CRp to date) among efficacy evaluable R/R patients who previously failed venetoclax treatment. Among 15 patients dosed with TUS/VEN as of Aug. 1, 2023, 10 patients have reached an efficacy evaluable stage. Among the 10 evaluable patients, five patients have achieved responses (50-per-cent CRc). Nine of the 10 evaluable patients had failed prior venetoclax treatment, with four of the nine achieving responses (44-per-cent CRc). Three responses emerged among seven patients with wildtype FLT3 (43-per-cent CRc), which accounts for approximately 70 per cent of the AML population, yet there are few treatment options and little in development for the wildtype patient population. The TUS/VEN combination continues to be well tolerated.

Aptose has a growing network of United States and international clinical sites recruiting a large spectrum of the R/R AML population, and the Aptivate trial is focused on the rapid enrolment of patients to the TUS/VEN doublet.

Equity investments in Aptose

Today, Aptose announced that it has entered into a binding term sheet with Hanmi Pharmaceutical Inc., of Seoul, South Korea, for an investment of up to $7-million or 19.99-per-cent ownership interest in Aptose, in two tranches. The investment will provide additional financing for Aptose's lead hematology drug, tuspetinib, formerly HM43239, which was licensed from Hanmi Pharmaceutical in November, 2021, and is currently in the Aptivate international phase 1/2 expansion trial in which patients with relapsed or refractory (R/R) acute myeloid leukemia (AML) receive tuspetinib monotherapy or in combination with venetoclax. The company anticipates that the first tranche for $3-million will close by the end of August, subject to the satisfaction of customary closing conditions. The second tranche for up to $4-million or a maximum of 19.99-per-cent ownership interest will be triggered upon Aptose achieving certain manufacturing and data milestones related to tuspetinib, to be described in greater detail in definitive documentation and anticipated to be achieved by year-end.

The investment is conditional upon the company receiving the conditional approval of the Toronto Stock Exchange to list the common shares on the TSX. Listing will be subject to satisfying all of the requirements of the TSX. The investment is also subject to the requirements of the Nasdaq Capital Market.

During the quarter, Aptose also entered into a $25-million committed equity facility with Keystone Capital that provides Aptose the right to issue and sell up to $25-million of its common shares over the course of 24 months to the investor, subject to certain conditions being met, and subject to certain limitations and conditions imposed by the Nasdaq Stock Market, the U.S. Securities and Exchange Commission (SEC) and other regulators.

Completed successful type B EOP1 meeting with the U.S. Food and Drug Administration (FDA)

In June, Aptose held an end-of-phase-1 (EOP1) meeting with the FDA, where all tuspetinib data were reviewed. A monotherapy recommended phase 2 dose of 80 milligrams (mg) daily was selected and all tuspetinib development paths remain open, including the single-arm accelerated path.

Expected milestones:

• European School of Haematology (ESH) meeting -- plan to present expanded tuspetinib clinical data set (October, 2023);
• 65th American Society of Hematology (ASH) annual meeting and exposition -- plan to present more mature clinical data set with tuspetinib (December, 2023);
• Plan to discuss strategies for potential future monotherapy accelerated development, doublet phase 2 development and triplet pilot development (Q4 2023).

Financial results of operations

Net loss for the three-month period ended June 30, 2023, increased by $3.6-million to $14.1-million, as compared with $10.6-million for the comparable period in 2022. Net loss for the six-month period ended June 30, 2023, increased by $5.7-million to $27.8-million, as compared with $22-million for the comparable period in 2022.

Total cash and cash equivalents and investments as of June 30, 2023, were $23.3-million, a decrease of $12.4-million as compared with March 31, 2023, and a decrease of $23.7-million as compared with Dec., 31, 2022. Based on current operations, the company expects that cash on hand and available capital provide the company with sufficient resources to finance planned company operations, including research and development through March of 2024.

The common shares outstanding on Aug. 10, 2023, were 6,519,201.

Research and development expenses

The research and development expenses for the three-month and six-month periods ended June 30, 2023, and 2022, are detailed in the attached table.

Research and development expenses increased by $3.2-million to $10.6-million for the three-month period ended June 30, 2023, as compared with $7.3-million for the comparative period in 2022. Changes to the components of the company's research and development expenses presented in the attached table are primarily as a result of the following events:

• Program costs for tuspetinib were $8.1-million for the three-month period ended June 30, 2023. The higher program costs for tuspetinib in the current period represent the enrolment of patients in the Aptivate clinical trial, the company's healthy volunteer trial, manufacturing activities to support clinical development and related expenses.
• Program costs for luxeptinib decreased by approximately $1.7-million, primarily due to lower clinical trial costs and lower manufacturing costs as a result of the current formulation requiring less API than the prior formulation.
• Program costs for APTO-253 decreased by approximately $169,000, due to the company's decision on Dec. 20, 2021, to discontinue further clinical development of APTO-253.
• Personnel-related expenses decreased by $354,000, related to fewer employees in the current three-month period, partially offset by salary increases.
• Stock-based compensation decreased by approximately $266,000 in the three months ended June 30, 2023, compared with the three months ended June 30, 2022, primarily due to stock options granted with lower grant date fair values, in the current period.

Research and development expenses increased by $4.7-million to $19.4-million for the six-month period ended June 30, 2023, as compared with $14.7-million for the comparative period in 2022. Changes to the components of the company's research and development expenses presented in the attached table are primarily as a result of the following events:

• Program costs for tuspetinib were $12.8-million for the six-month period ended June 30, 2023, an increase of $9.3-million compared with $3.5-million in the corresponding period in 2022. The higher program costs for Tuspetinib in the current period represent the enrolment of patients in the Aptivate clinical trial, the company's healthy volunteer trial, clinical study supplies and related expenses.
• Program costs for luxeptinib decreased by approximately $3.2-million from $5.2-million in the six months ended June 30, 2022, to $2.0-million in the current period, primarily due to lower clinical trial costs and lower manufacturing costs as a result of the current formulation requiring less API than the prior formulation.
• Program costs for APTO-253 decreased by approximately $253,000, due to the company's decision on Dec. 20, 2021, to discontinue further clinical development of APTO-253.
• Personnel-related expenses decreased by $610,000, related to fewer employees in the current six-month period and partially offset by salary increases.
• Stock-based compensation decreased by approximately $559,000 in the six months ended June 30, 2023, compared with the three months ended June 30, 2022, primarily due to stock options granted with lower grant date fair values, in the current period.

Conference call and webcast

Date:  Thursday, Aug. 10, 2023

Time:  5 p.m. ET

Webcast:  An audio webcast will be available.

Question-and-answer participation:  Register on-line to participate.

Analysts interested in participating in the question-and-answer session will preregister for the event on-line to receive the dial-in numbers and a unique PIN (personal identification number), which are required to access the conference call. They also will have the option to take advantage of a "call me" button and the system will automatically dial out to connect to the Q&A session.

The audio webcast also can be accessed through a link on the investor relations section of Aptose's website. A replay of the webcast will be available on the company's website for 30 days.

The news release, the financial statements, and the management's discussion and analysis for the quarter ended June 30, 2023, will be available on SEDAR+ and EDGAR.

About Aptose Biosciences Inc.

Aptose 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 has two clinical-stage oral kinase inhibitors under development for hematologic malignancies: tuspetinib (HM43239), an oral, myeloid kinase inhibitor being studied as monotherapy and in combination therapy in the Aptivate international phase 1/2 expansion trial in patients with relapsed or refractory acute myeloid leukemia (AML); and luxeptinib (CG-806), an oral, dual lymphoid and myeloid kinase inhibitor in phase 1 a/b development for the treatment of patients with relapsed or refractory hematologic malignancies.

We seek Safe Harbor.