Dr. William Rice reports

APTOSE REPORTS RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2023

Aptose Biosciences Inc. today released its financial results for the three months and year ended Dec. 31, 2023, and provided a corporate update.

"The data we have generated from tuspetinib thus far -- as a single agent and in combination therapy with venetoclax in relapsed and refractory AML -- have demonstrated a distinctly favourable safety profile and broad activity for tuspetinib across mutational subtypes. This profile also extends to FLT3 wildtype AML, which represents the majority of AML patients, and in which few agents have shown such broad activity," said William G. Rice, PhD, chairman, president and chief executive officer. "These data have propelled us to initiate a clinical study of tuspetinib in a triplet combination with venetoclax and azacitidine in front-line therapy for newly diagnosed AML, including both FLT3 wild type and FLT3 mutated subtypes."

Key corporate highlights

• Aptose completes public offering -- On Jan. 30, 2024, Aptose closed a public offering of 5,649,122 common shares of the company and warrants at a combined offering price of $1.71 (U.S.) per share. This included 736,842 common shares and warrants pursuant to a full exercise by the underwriter of its overallotment option. Total gross proceeds from the public offering were approximately $9.7-million before deducting underwriting costs, placement agent commissions and other offering-related expenses.
• Private placement -- On Jan. 31, 2024, Aptose closed a $4-million (U.S.) private placement of common shares with strategic partner Hanmi Pharmaceutical. Under the terms of the strategic investment, Hanmi purchased each common share at a price of $1.90 (U.S.), representing an 11-per-cent premium over the price of the common shares issued as part of the public offering. The company also issued Hanmi warrants to purchase common shares at an exercise price of $1.71 (U.S.) per warrant share. Total gross proceeds from the private placement were approximately $4-million, excluding underwriting discounts, placement agent commissions and other offering-related expenses.
• Tuspetinib advancing to triplet therapy pilot study -- Tuspetinib (TUS), a once-daily oral agent with a unique kinase targeting pattern, is being developed for the treatment of patients with acute myeloid leukemia (AML). More than 170 patients to date received TUS alone or in combination with the BCL-2 inhibitor venetoclax (VEN) during the phase 1/2 clinical program in the very ill relapsed or refractory (R/R) AML patient population. At the single agent 80-milligram recommended phase 2 dose, TUS achieved a favourable safety profile and a CR/CRh rate of 36 per cent among patients who were naive to VEN. The safety profile of TUS remained favourable when TUS was combined with VEN in R/R AML patients, and responses were achieved in both patients naive to VEN and those who failed prior therapy with VEN. TUS avoids many typical toxicities observed with other agents and achieves broad activity across AML patients with a diversity of adverse genetics. Tuspetinib is now being advanced to a triplet combination therapy of tuspetinib, venetoclax and a hypomethylating agent (TUS/VEN/HMA) for the front-line treatment of newly diagnosed AML patients ineligible for induction chemotherapy.
• Luxeptinib G3 evaluation completed -- During 2023 and early 2024, clinical evaluation of the new generation 3 (G3) formulation of luxeptinib (LUX) was completed. The G3 formulation was tested in a single-dose bioavailability study in 20 patients, including both B-cell cancer and AML patients, and across five dose levels (10 mg to 200 mg). The G3 formulation then was evaluated in R/R AML patients with continuous dosing using two different dose levels (50 mg BID and 200 mg BID) in a total of 11 patients. Data show the G3 formulation dosed at 200 mg twice daily can achieve 2-3uM steady state plasma levels, with approximately tenfold better absorption, and interestingly even better tolerability, than the original G1 formulation. Thus, the G3 formulation achieved the desired plasma exposure benchmark and can serve as the formulation of choice for future studies with LUX. Aptose is exploring alternative development paths and collaborations to advance LUX as a single agent or in combination with VEN to treat defined R/R patient populations of high unmet need.

Multiple planned value-creating milestones ahead

• TUS/VEN doublet synopsis in R/R AML: EHA 2024;
• TUS/VEN/HMA planned initiation of pilot triplet study in 1L AML: summer 2024;
• Triplet pilot dose escalation planned with early CR/MRD/safety data in 1L AML: ASH 2024;
• Triplet pilot completed with CR/MRD data and dose selection: EHA 2025;
• Triplet initiation of Ph2/Ph3 pivotal program: 2H 2025.

• Cash and cash equivalents, Jan. 31, 2024 (unaudited), was $18.6-million, after gross proceeds from January, 2024, financings (unaudited) of $13.7-million.
• Total cash and cash equivalents and investments as of Dec. 31, 2023, were $9.3-million, a decrease of $37.7-million as compared with $47.0-million at 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 August of 2024.
• Working capital is a non-GAAP (generally accepted accounting principles) measure and represents cash, cash equivalents, investments, prepaid expenses and other current assets less current liabilities.
• Common shares issued and outstanding as at March 26, 2024, were 15,717,701.

Net loss for the year ended Dec. 31, 2023, increased by $9.4-million to $51.2-million, as compared with $41.8-million for the comparable period in 2022.

Research and development expenses

The research and development expenses for years ended Dec. 31, 2023, and 2022 are as shown in the attached table.

R&D expenses increased by $8.7-million to $36.8-million for the year ended Dec. 31, 2023, as compared with $28.1-million for the comparative period in 2022. Changes to the components of the company's R&D expenses presented in the table herein are primarily related to the following activities:

• Program costs for tuspetinib increased by $14.8-million. The higher program costs for tuspetinib in 2023 represent the enrolment of patients in the company's Aptivate clinical trial, its healthy volunteer trial, manufacturing activities to support clinical development, purchase of clinical trial materials and related expenses.
• Program costs for luxeptinib decreased by approximately $4.9-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 $101,000 due to the company's decision on Dec. 20, 2021, to discontinue further development of APTO-253.
• Personnel-related expenses decreased by $300,000 due to lower headcount in 2023.
• Stock-based compensation decreased by approximately $845,000 in the year ended Dec. 31, 2023, compared with the year ended Dec. 31, 2022, primarily due to stock options granted with lower grant date fair values in the current period.

General and administrative expenses

General and administrative expenses consist primarily of salaries, benefits and travel, including stock-based compensation for the company's executive, finance, business development, human resources and support functions. Other general and administrative expenses and professional fees include auditing, and legal services, investor relations and other consultants, insurance, and facility-related expenses.

The company expects that its general and administrative expenses will increase for the foreseeable future as it incurs additional costs associated with being a publicly traded company and to support its pipeline of activities. The company also expects its intellectual property related legal expenses to increase as its intellectual property portfolio expands.

The general and administrative expenses for the years ended Dec. 31, 2023, and 2022 are as shown in the attached table.

General and administrative expenses increased by approximately $1.1-million to $15.6-million for the year ended Dec. 31, 2023, as compared with $14.5-million for the comparative period in 2022. The increase was primarily as a result of higher salaries expenses, higher professional fees and higher travel expenses, partly offset by a decrease in stock-based compensation costs.

Stock-based compensation decreased by $709,000 mostly as a result of options having a lower grant date fair value as compared with the options granted in the comparative period.

Conference call and webcast:

Date:   Tuesday, March 26, 2024

Time:  5 p.m. ET

* Analysts interested in participating in the question-and-answer session will preregister for the event to receive the dial-in numbers and a unique pin, 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 (question and answer) 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 press release, the financial statements and the management's discussion and analysis for the year ended Dec. 31, 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 therapeutic 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; and luxeptinib (CG-806), an oral, dual lymphoid and myeloid kinase inhibitor in phase 1 a/b stage development for the treatment of patients with relapsed or refractory hematologic malignancies.

We seek Safe Harbor.