Dr. William Rice reports
APTOSE REPORTS RESULTS FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2018
Aptose Biosciences Inc. has released financial results for the year and three months ended Dec. 31, 2018, and reported on corporate developments.
The net loss for the quarter ended Dec. 31, 2018, was $6.3-million (17 cents per share) compared with $3.3-million (12 cents per share) in the quarter ended Dec. 31, 2017. Total cash and cash equivalents and investments as of Dec. 31, 2018, were $15.7-million. Based on current operations, cash on hand and available sources of capital provide the company with sufficient resources to finance research and development and operations into first half of 2020.
As previously disclosed, effective Dec. 31, 2018, Aptose became a domestic issuer under the rules of the U.S. Securities and Exchange Commission. As a result, the Dec. 31, 2018, annual financial statements are prepared in accordance with U.S. generally accepted accounting principles, with such change being applied retrospectively. Accordingly, Aptose will report the year ended Dec. 31, 2018, on Form 10-K (and subsequent quarters on Form 10-Q) and will file a new preliminary base shelf prospectus on Form S-3 to replace the existing shelf previously filed on Form F-10.
"Two thousand eighteen was a year of significant progress for Aptose," said Dr. William G. Rice, PhD, chairman, president and chief executive officer. "One of the key events of the year was the return of APTO-253 to the clinic in patients with relapsed or refractory acute myeloid leukemia (AML) and high-risk myelodysplastic syndromes (MDS). We completed the 28-day treatment cycle for the first patient in the trial; and, not only was the drug well tolerated, but there was clear evidence of MYC inhibition and P21 induction even at the lowest dose level of 20 milligrams per square metre. APTO-253 is the only known clinical-stage molecule that can directly inhibit expression of the MYC oncogene, which is a common driver in many malignancies, including AML and MDS. We are screening now for a second patient, who will receive a higher dose of 40 milligrams per square metre; and, assuming that goes well, we will dose escalate from there. During 2018, we also completed all of the pre-IND [investigational new drug] studies needed to advance our oral, first-in-class pan-FLT3/pan-BTK inhibitor CG-806 into the clinic, and I am pleased to report we recently filed our IND for CG-806. We are eager to begin treating patients with relapsed or refractory chronic lymphocytic leukemia (CLL) and other B-cell malignancies driven by overexpression of wild type or C481S mutated BTK and who failed or are intolerant to standard therapies, as well as for patients with relapsed/refractory acute myeloid leukemia."
Key corporate highlights:
Reinitiation of dosing in phase 1b clinical study of APTO-253: Aptose announced in November, 2018, that dosing had begun in the APTO-253 clinical trial in patients with relapsed or refractory hematologic malignancies. APTO-253 is the only known clinical-stage molecule that can directly inhibit expression of the MYC oncogene, shown to reprogram survival signalling pathways and contribute to drug resistance in many malignancies, including acute AML. APTO-253 is being administered once weekly, over a 28-day cycle, and the study is expected to enroll up to 20 patients with relapsed or refractory AML and high-risk MDS patients. The study is designed to then transition to single-agent expansion cohorts in AML and MDS, followed by combination studies.
CG-806 IND filed: In February, 2019, Aptose submitted an investigational new drug (IND) application for CG-806 to the U.S. Food and Drug Administration (FDA) requesting approval to initiate its phase 1 clinical trial program. CG-806 is an oral, first-in-class small-molecule inhibitor of all known forms of FLT3 and BTK kinases being developed for the treatment of patients with select hematologic malignancies, including CLL/SLL and non-Hodgkin's lymphomas, as well as for patients with relapsed/refractory AML and MDS. In preclinical studies, Aptose and collaborators demonstrated that CG-806 potently inhibits all known forms of FLT3 and BTK and suppresses key oncogenic processes essential for cancer cell survival but with a precision that spares targets and pathways associated with toxicity.
New CG-806 data at ASH: New preclinical data on CG-806 were presented in two separate poster presentations at ASH in December, 2018. Researchers from the University of Texas MD Anderson Cancer Center explored the mechanism by which CG-806 overcomes the emergence of resistance common to other FLT3 inhibitors (FLT3i). The authors concluded that CG-806 may overcome FLT3i-resistance in AML through the simultaneous inhibition of FLT3, BTK and autophagy signalling and that CG-806 represents an agent that may prevent or overcome FLT3 inhibitor resistance in AML patients. Oregon Health & Science University (OHSU) researchers presented data demonstrating that CG-806 exhibited broad ex vivo potency on bone marrow cells from patients with diverse hematologic malignancies, and bioinformatic analyses revealed an unexpected ex vivo potency of CG-806 on bone marrow cells from AML patients with IDH1 mutations or with FLT3-ITD mutations. The OHSU group also demonstrated superior potency of CG-806 relative to the covalent BTKi ibrutinib (the current standard of care) on bone marrow cells from patients with CLL or other B-cell cancers. In addition, CG-806 demonstrated a favourable safety profile in all GLP (good laboratory practice) toxicology and safety studies.
A summary of the results of operations for the years ended Dec. 31, 2018, and Dec. 31, 2017, is presented in the attached table.
(in thousands of dollars) Year ended Dec. 31,
Revenues $ - $ -
Research and development expenses 18,733 6,274
General and administrative expenses 10,374 5,552
Total other income 239 183
Net (loss) (28,868) (11,643)
Other comprehensive (loss) - 18
Total comprehensive (loss) (28,868) (11,661)
Basic and diluted (loss)
per common share $ (0.86) $ (0.52)
The net loss for the year ended Dec. 31, 2018, was $28.9-million, an increase of $17.2-million compared with $11.7-million for the prior year. The increase is primarily a result of $5-million in licence fees paid to CrystalGenomics Inc. for development and commercial rights of CG-806, higher research and development expenses related to the company's CG-806 and APTO-253 programs, higher professional fees related to regulatory filings in support of financing activities, as well as from $4.3-million in non-cash expenses related to stock-based compensation. Excluding the $5-million one-time upfront licence fees payments, the net loss for the year ended Dec. 31, 2018, would have been $23.9-million (71 cents per share).
Research and development
The research and development expenses for the years ended Dec. 31, 2018, and Dec. 31, 2017, are as shown in the attached table.
(in thousands of dollars) Year ended Dec. 31,
Licence fees -- CG-806 $ 5,000 $ -
Program costs -- CG-806 6,119 2,245
Program costs -- APTO-253 4,490 2,328
Personnel expenses 2,063 1,451
Stock-based compensation 1,026 214
Depreciation of equipment 35 36
$18,733 $ 6,274
Research and development expenses for the year ended Dec. 31, 2018, were $18.7-million, an increase of $12.4-million compared with $6.3-million for the prior year. The increase is primarily as a result of the following events:
Licence fees paid in the year ended Dec. 31, 2018, to CrystalGenomics of $2-million for development and commercial rights of CG-806 in all territories outside of Korea and China and a further $3-million paid for development and commercial rights of CG-806 in China; CrystalGenomics is eligible for development, regulatory and commercial-based milestones as well as royalties on future product sales;
An increase in research and development activities related to the company's CG-806 development program; in the year ended Dec. 31, 2018, Aptose completed two dose-range-finding studies and the manufacturing of a batch of the drug substance to be used in toxicity studies, initiated the manufacturing of a GMP (good manufacturing practice) batch of the drug substance for future clinical trials, completed the manufacturing of GMP batch of drug substance, and completed several toxicity studies in rodents and dogs to prepare to bring CG-806 to the clinic; in the comparative periods, activities related to the company's CG-806 program included mostly formulation and pharmacokinetic studies;
An increase in expenditures on the APTO-253 program; in the year ended Dec. 31, 2018, Aptose completed production of a GMP batch of drug product, completed necessary studies required for the FDA, initiated the manufacturing of an additional clinical batch of APTO-253, increased clinical activities in preparation to return APTO-253 to the clinic, manufactured additional API, and initiated three clinical sites and began dosing its first patient; in the comparative periods, the company was conducting root cause analysis to determine the cause of a manufacturing issue that had resulted in the program being on clinical hold;
An increase in staffing expense, mostly related to additional clinical research staff hired to prepare for returning APTO-253 to the clinic and to preparing CG-806 for clinical studies;
An increase in stock-based compensation, mostly related to approximately 462,000 stock options granted to clinical operations and research employees in the three months ended March 31, 2018, of which 100,000 with a grant date fair value of $2.03 per share vested immediately; in addition, stock-based compensation is higher because of 50,000 restricted share units issued in July, 2018, with a three-month vesting term and a grant date fair value of $3.35 per share.
General and administrative
The general and administrative expenses for the years ended Dec. 31, 2018, and Dec. 31, 2017, are as shown in the attached table.
(in thousands of dollars) Year ended Dec. 31,
General and administrative,
excluding non-cash items $ 6,471 $ 4,900
Shares issued pursuant to
Aspire 2018 purchase agreement 600 -
Stock-based compensation 3,250 602
Depreciation of equipment 53 50
$10,374 $ 5,552
General and administrative expenses for the year ended Dec. 31, 2018, were $10.4-million, an increase of $4.8-million compared with $5.6-million for the prior year. The increase is primarily as a result of the following:
General and administrative expenses, excluding non-cash items, increased primarily as a result of higher professional fees related to regulatory filings in support of financing activities, higher investor relations costs, higher patent fees associated with Aptose's expanded IP (intellectual property) portfolio and higher office administrative costs associated with additional employees to support increased operations of the company.
In June, 2018, Aptose issued 170,261 shares to Aspire Capital as a commitment fee for entering into the 2018 purchase agreement. The company recorded $600,000 in general and administrative expenses related to the issuance of these shares.
Stock-based compensation increased in the year ended Dec. 31, 2018, compared with the year ended Dec. 31, 2017, mostly related to approximately 1.6 million stock options granted to directors, executive officers, and general and administrative employees in the three-month period ended March 31, 2018, of which 750,000 with a grant date fair value of $2.03 vested immediately, and also as a result of large forfeitures in the three months ended March 31, 2017. In addition, stock-based compensation is also higher in the current period related to 100,000 restricted share units issued to executive officers in July, 2018, with a three-month vesting term and a grant date fair value of $3.35.
Conference call and
Aptose will host a conference call to discuss results for the year and three months ended Dec. 31, 2018, on Wednesday, March 12, 2019, at 5 p.m. ET. Participants can access the conference call by dialling 844-882-7834 (North American toll-free number) and 574-990-9707 (international) and using conference ID 5080748. The conference call can will also be available through a link on the investor relations section of Aptose's website. An archived version of the webcast, along with a transcript, will be available on the company's website for 30 days. An audio replay of the webcast will be available approximately two hours after the conclusion of the call for seven days by dialling 855-859-2056 and using conference ID 5080748.
The press release, the financial statements, and the management discussion and analysis for the quarter and year ended Dec. 31, 2018, will be available on SEDAR and EDGAR.
About Aptose Biosciences Inc.
Aptose Biosciences is a clinical-stage biotechnology company committed to developing personalized therapies 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. APTO-253, the only clinical-stage agent that directly targets the MYC oncogene and inhibits its expression, is in a phase 1b clinical trial for the treatment of patients with relapsed or refractory acute myeloid leukemia (AML) or high-risk MDS. CG-806 is an oral, first-in-class pan-FLT3/pan-BTK multicluster kinase inhibitor being developed to treat AML and certain B-cell malignancies.
We seek Safe Harbor.
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