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OFFON

APREA THERAPEUTICS, INC.

(APRE)
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APREA THERAPEUTICS, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

11/08/2021 | 04:34pm EST
You should read the following discussion and analysis of our financial condition
and results of operations together with the unaudited financial information and
notes thereto included in this Quarterly Report on Form 10-Q. Some of the
information contained in this discussion and analysis or set forth elsewhere in
this Quarterly Report, including information with respect to our plans and
strategy for our business and related financing, including forward-looking
statements that involve risks and uncertainties. As a result of many factors,
including those factors set forth in the "Risk Factors" section of this
Quarterly Report and in our Annual Report on Form 10-K for the year ended
December 31, 2020, our actual results could differ materially from the results
described in or implied by the forward-looking statements contained in the
following discussion and analysis.

Overview

We are a clinical-stage biopharmaceutical company focused on developing and
commercializing novel cancer therapeutics that reactivate the mutant p53 tumor
suppressor protein. p53 is the protein expressed from the TP53 gene, the most
commonly mutated gene in cancer. We believe that mutant p53 is an attractive
therapeutic target due to the high incidence of p53 mutations across a range of
cancer types and its involvement in key cellular activities such as apoptosis.
Cancer patients with mutant p53 face a significantly inferior prognosis even
when treated with the current standard of care, and a large unmet need for these
patients remains.

Our lead product candidate, APR-246, or eprenetapopt, is a small molecule p53
reactivator that is in clinical development for hematologic malignancies,
including myelodysplastic syndromes, or MDS, and acute myeloid leukemia, or AML.
Eprenetapopt has received orphan drug and fast track designations from the FDA
for MDS, orphan drug and fast track designations from the FDA for AML and orphan
drug designation from the European Commission for MDS and AML, and we believe
eprenetapopt will be a first-in-class therapy if approved by applicable
regulators. We are conducting, supporting and planning multiple clinical trials
of eprenetapopt and APR-548.

On August 4, 2021, the U.S. Food and Drug Administration (FDA) placed a partial
clinical hold on the clinical trials of eprenetapopt in combination with
azacitidine in our myeloid malignancy programs. The FDA's concerns referred to
the safety and efficacy data from the Phase 3 frontline MDS clinical trial. In
particular, the FDA requested more information related to a potential
risk-reward imbalance between the combination of eprenetapopt and azacitidine
versus azacitidine alone as it relates to increased adverse events in our Phase
3 frontline clinical trial in MDS.

There are approximately 9 patients currently receiving eprenetapopt in
combination with azacitidine in our myeloid malignancy programs, which includes
the MDS, AML and post-transplant maintenance trials, all of which have completed
enrollment. Patients who are benefiting from treatment can continue to receive
study treatment. As part of the partial clinical hold, no additional patients
can be enrolled to these clinical trials until the partial clinical hold is
resolved. We intend to work with the FDA to analyze the data, address the
specific questions raised, and seek to resolve the partial clinical hold as soon
as possible.

On August 11, 2021, the FDA placed a clinical hold on our clinical trial
evaluating eprenetapopt with acalabrutinib or with venetoclax and rituximab in
lymphoid malignancies. The FDA's concerns referred to the safety and efficacy
data from the Phase 3 frontline MDS clinical trial. There are no patients
currently receiving study treatment in this trial and no additional patients can
be enrolled until the clinical hold is resolved. We intend to work with the FDA
to address the specific questions raised and seek to resolve the clinical hold
as soon as possible.

Our current clinical trials are as follows:

Phase 3 Frontline MDS Trial -- In June 2020, we completed full enrollment of

154 patients in a pivotal Phase 3 trial of eprenetapopt with azacitidine for

frontline treatment of TP53 mutant MDS. The pivotal Phase 3 trial is supported

by data from two Phase 1b/2 investigator-initiated trials, one in the U.S. and

? one in France, testing eprenetapopt with azacitidine as frontline treatment in

TP53 mutant MDS and AML patients. The data from the U.S. and French Phase 1b/2

trials were published in The Journal of Clinical Oncology in January 2021 and

February 2021, respectively. In December 2020, we announced that our pivotal

   Phase 3 trial failed to meet


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its predefined primary endpoint of complete remission (CR) rate. Analysis of the

primary endpoint at this data cut demonstrated a higher CR rate (53% more

patients achieving a CR) in the experimental arm receiving eprenetapopt with

azacitidine versus the control arm receiving azacitidine alone but did not reach

statistical significance. Based on a thorough analysis of the current Phase 3

trial data and comparisons to the U.S. and French Phase 1b/2 trials, we believe

that despite similar types and frequency of adverse events observed in the Phase

3 experimental arm and the Phase 1b/2 trials, patients in the Phase 3

experimental arm experienced substantially more study treatment dose

modifications compared to the experience in the U.S. and French Phase 1b/2

trials. We believe that the dose modifications of eprenetapopt and azacitidine

led to undertreatment in the Phase 3 experimental arm that negatively impacted

efficacy, particularly the primary endpoint of CR rate. We continue to follow

patients who remain on-study. Based on initial feedback from the FDA and the

partial clinical hold on our myeloid malignancy programs, we believe that there

is no registrational pathway for this Phase 3 trial and we have voluntarily

withdrawn our Breakthrough Therapy designation.

Phase 2 MDS/AML Post-Transplant Trial -- In July 2021, we announced positive

results from a single-arm, open-label Phase 2 clinical trial evaluating

eprenetapopt with azacitidine as post-transplant maintenance therapy in TP53

mutant MDS and AML patients who have received an allogeneic stem cell

transplant. The primary endpoint of the trial is the rate of relapse-free

survival (RFS) at 12 months. In 33 patients enrolled in the trial, the RFS at

1-year post-transplant was 58% and the median RFS was 12.1 months. The overall

? survival (OS) at 1-year post-transplant was 79%, with a median OS of 19.3

months. Prior clinical trials evaluating post-transplant outcomes in TP53

mutant MDS and AML patients have reported a 1-year post-transplant RFS of ~30%

and a median OS of ~5-8 months. As part of our plan to seek to resolve the

partial clinical hold, we plan to share data with the FDA. Data from this

clinical trial has been accepted for oral presentation at the 63rd American

Society of Hematology (ASH) Annual Meeting on December 12, 2021 (abstract #409)

and we may also present data from this clinical trial at additional future

scientific or medical conferences.

Phase 1/2 AML Trial -- We are currently conducting a Phase 1/2 clinical trial,

which is currently subject to a partial clinical hold, evaluating the safety,

tolerability, and preliminary efficacy of eprenetapopt therapy in TP53 mutant

AML patients. The lead-in portion of the trial evaluated the tolerability of

eprenetapopt with venetoclax, with or without azacitidine, and no dose-limiting

toxicities were observed in 12 patients receiving either regimen. Based on

these results, we have expanded the trial to treat 33 additional frontline TP53

mutant AML patients with the combination of eprenetapopt, venetoclax and

azacitidine. In June 2021, we announced that the regimen of eprenetapopt with

? venetoclax and azacitidine met the CR primary efficacy endpoint. In 30 patients

who were evaluable for efficacy at the time of the analysis, the CR rate was

37% and the composite response rate of CR plus CR with incomplete hematologic

recovery (CRi), CR/CRi, was 53%. The trial met the primary efficacy endpoint of

CR, which is based on a Simon 2-stage design. We plan to continue collecting

data from this Phase 2 clinical trial and share data with the FDA as part of

our effort to resolve the partial clinical hold. Data from this clinical trial

has been accepted for poster presentation at the 63rd American Society of

Hematology (ASH) Annual Meeting on December 13, 2021 (abstract #3409) and we

may also present data from this clinical trial at additional future scientific

or medical conferences.

Phase 1 NHL Trial -- We have initiated a Phase 1 clinical trial, which is

currently subject to a clinical hold, in relapsed/refractory TP53 mutant

chronic lymphoid leukemia (CLL) assessing eprenetapopt with venetoclax and

? rituximab and eprenetapopt with acalabrutinib in order to further assess

eprenetapopt in hematological malignancies. The first patient was enrolled in

the first quarter of 2021. The Company intends to work with the FDA to address

the specific questions raised, and seek to resolve the clinical hold as soon as

possible.

Phase 1/2 Solid Tumor Trial - We are currently conducting a Phase 1/2 clinical

trial in relapsed/refractory gastric, bladder and non-small cell lung cancers

assessing eprenetapopt with anti-PD-1 therapy. The dose-escalation phase of the

trial enrolled 6 patients with advanced solid tumors and no dose-limiting

toxicities were observed. Based on these results, we enrolled additional

? patients into expansion cohorts for advanced gastric, bladder and non-small

cell lung cancers. Data from this trial was presented at the European Society

of Medical Oncology (ESMO) Congress 2021 (Presentation #516MO) and reported

interim results for 31 patients who had initiated treatment, including three

gastric/GFJ, three bladder/urothelial cancer and 19 non-small lung cancer

   (NSCLC) patients. In the bladder/urothelial cohort, one patient with localized
   TP53 mutant high-grade


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transitional cell bladder cancer had achieved complete remission (CR) by RECIST

criteria at the first response assessment at 9 weeks. In the NSCLC cohort, two

patients with TP53 mutant squamous NSCLC had reductions in target lesions of

26.7% and 8.2%, respectively, from baseline by RECIST criteria at the first

  response assessment at 9 weeks.


   APR-548 Phase 1 Trial - Our second product candidate, APR-548, is a next

generation p53 reactivator that is being developed in an oral dosage form. We

? are currently enrolling a Phase 1 dose-escalation clinical trial evaluating

safety, tolerability, and preliminary efficacy of APR-548 with azacitidine in

frontline and relapsed/refractory MDS patients. The trial is open and patients

are enrolled in the first dosing cohort.

Aprea Therapeutics AB, or Aprea AB, was originally incorporated in 2002 and
commenced principal operations in 2006. We incorporated Aprea Therapeutics, Inc.
(the "Company") in May 2019. In September 2019 we completed a corporate
reorganization and, as a result, all of the issued and outstanding stock of
Aprea AB was exchanged for common stock, preferred stock or options, as
applicable, of the Company As a result of such transactions, Aprea AB became a
wholly-owned subsidiary of the Company.

We have devoted substantially all of our resources to developing our product
candidates, including eprenetapopt, building our intellectual property
portfolio, business planning, raising capital and providing general and
administrative support for these operations. To date, we have financed our
operations through private placements of preferred stock and the net proceeds
received from the initial public offering (IPO) of our common stock. Through
September 30, 2021, we had received net proceeds of approximately $224.0 million
from our sales of preferred and common stock.

Since our inception, we have incurred significant losses on an aggregate basis.
Our ability to generate product revenue sufficient to achieve profitability will
depend on the successful development and eventual commercialization of one or
more of our product candidates. Our net losses were $9.5 million and $29.4
million for the three and nine months ended September 30, 2021, respectively,
$12.3 million and $38.1 million for the three and nine months ended September
30, 2020, respectively, and $53.5 million, $28.1 million and $15.5 million for
the years ended December 31, 2020, 2019 and 2018, respectively. As of September
30, 2021, we had an accumulated deficit of $173.4 million. These losses have
resulted primarily from costs incurred in connection with research and
development activities, patent investment, and general and administrative costs
associated with our operations. We expect to continue to incur significant
expenses and increasing operating losses for at least the next several years.

We anticipate that our expenses will increase substantially if and as we:

? conduct our current and future clinical trials and additional preclinical

research of eprenetapopt;

? initiate and continue research and preclinical and clinical development of our

other product candidates;

? seek to identify and develop additional product candidates;

? seek marketing approvals for any of our product candidates that successfully

complete clinical trials, if any;

? establish a sales, marketing, manufacturing and distribution infrastructure to

commercialize any products for which we may obtain marketing approval;

? require the manufacture of larger quantities of our product candidates for

clinical development and potential commercialization;

? maintain, expand, protect and enforce our intellectual property portfolio;

? acquire or in-license other drugs and technologies;

? defend against any claims of infringement, misappropriation or other violation

of third-party intellectual property;


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? hire and retain additional clinical, quality control and scientific personnel;

and

add operational, financial and management information systems and personnel, ? including personnel to support our drug development, any future

commercialization efforts and our operation as a public company.



Furthermore, if we obtain marketing approval for any of our product candidates,
we expect to incur significant commercialization expenses related to product
manufacturing, marketing, sales and distribution.

As a result, we will need additional financing to support our continuing
operations. Until such time as we can generate significant revenue from product
sales, if ever, we expect to finance our operations through a combination of
public or private equity or debt financings or other sources, which may include
collaborations with third parties. We may be unable to raise additional funds or
enter into other agreements or arrangements when needed on favorable terms, or
at all. If we fail to raise capital or enter into such agreements as and when
needed, we may have to significantly delay, scale back or discontinue the
development or commercialization of one or more of our product candidates.

Because of the numerous risks and uncertainties associated with product
development, we are unable to predict the timing or amount of increased expenses
or when or if we will be able to achieve or maintain profitability. Even if we
are able to generate revenue from product sales, we may not become profitable.
If we fail to become profitable or are unable to sustain profitability on a
continuing basis, then we may be unable to continue our operations at planned
levels and be forced to reduce or terminate our operations.

As of September 30, 2021, we had cash and cash equivalents of $61.4 million. We
believe that our existing cash and cash equivalents will enable us to fund our
operating expenses and capital expenditure requirements into 2023. We have based
this estimate on assumptions that may prove to be wrong, and we could exhaust
our available capital resources sooner than we expect. See "-Liquidity and
Capital Resources."

The COVID-19 pandemic



The novel coronavirus outbreak (COVID-19) has been declared a "Public Health
Emergency of International Concern" by the World Health Organization. COVID-19
has spread to the countries in which we, our suppliers, and our other business
partners conduct business. Governments in affected regions have implemented, and
may continue to implement or re-implement, safety precautions, including
quarantines, travel restrictions, business closures, cancellations of public
gatherings, and other measures they deem necessary. Like many other
organizations and individuals, the Company and our employees are taking
additional steps to avoid or reduce infection, including limiting travel and
implementing remote work arrangements. We will continue to actively monitor the
situation and may take further actions that could alter our business operations
as may be required by national, state, or local authorities, or that we
determine are in the best interests of our employees and stockholders.



Together with our investigators and clinical sites, we continue to assess the
impact of the coronavirus pandemic on data integrity, patient enrollment, the
ability to maintain patients in our clinical trials and, the corresponding
impact on the timing of the completion of our clinical trials.



We have assessed both capacity and the current clinical supply chain associated
with the production of eprenetapopt and APR-548 and have observed no disruptions
to date in our clinical supply chain and our ability to provide supply for our
on-going clinical trials. We will continue to monitor and assess the potential
impact of the COVID-19 pandemic on our clinical trial supply chain.



There are many uncertainties regarding the COVID-19 pandemic, and we are closely
monitoring the impact of the pandemic on all aspects of our business, including
how it will impact our clinical trials, employees, suppliers, vendors and
business partners. While the pandemic did not materially affect our financial
results and business operations for the three and nine months ended September
30, 2021, we are unable to predict the impact that COVID-19 will have on our
financial position and operating results at this time due to numerous
uncertainties such as the duration and spread of the outbreak. We will continue
to assess the evolving impact of the COVID-19 pandemic and will make adjustments
to our operations if necessary.

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Components of our results of operations

Revenue


We have not generated any revenue from product sales and do not expect to
generate any revenue from the sale of products in the near future. If our
development efforts for eprenetapopt or other product candidates that we may
develop in the future are successful and result in marketing approval or
collaboration or license agreements with third parties, we may generate revenue
in the future from a combination of product sales or payments from collaboration
or license agreements that we may enter into with third parties.

Operating expenses

Our expenses since inception have consisted solely of research and development costs and general and administrative costs.

Research and development expenses


Research and development expenses consist primarily of costs incurred for our
research activities, including our discovery efforts, and the development of our
product candidates, and include:

expenses incurred under agreements with third parties, including contract

research organizations, or CROs, that conduct research, preclinical activities ? and clinical trials on our behalf as well as contract manufacturing

organizations, or CMOs, that manufacture our product candidates for use in our

preclinical and clinical trials;

? salaries, benefits and other related costs, including stock-based compensation

expense, for personnel engaged in research and development functions;

? costs of outside consultants, including their fees, stock-based compensation

and related travel expenses;

? costs of laboratory supplies and acquiring, developing and manufacturing

preclinical study and clinical trial materials;

? expenses related to compliance with regulatory requirements; and

facility-related expenses, which include direct depreciation costs and ? allocated expenses for rent and maintenance of facilities and other operating

costs.



We expense research and development costs as incurred. We recognize costs for
certain development activities, such as clinical trials, based on an evaluation
of the progress to completion of specific tasks using data such as patient
enrollment, clinical site activations, or information provided to us by our
vendors and our clinical investigative sites. Payments for these activities are
based on the terms of the individual agreements, which may differ from the
pattern of costs incurred, and are reflected in our financial statements as
prepaid or accrued research and development expenses.

We typically use our employee and infrastructure resources across our
development programs. We track outsourced development costs and payments made to
our research partners by product candidate or development program, but we do not
allocate personnel costs or other internal costs to specific development
programs or product candidates.

Research and development activities are central to our business model. Product
candidates in later stages of clinical development generally have higher
development costs than those in earlier stages of clinical development,
primarily due to the increased size and duration of later-stage clinical trials.
We expect that our research and development expenses will continue to increase
for the foreseeable future as we initiate additional clinical trials of
eprenetapopt, pursue later

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stages of clinical development of eprenetapopt, initiate clinical trials for
product candidates other than eprenetapopt and continue to discover and develop
additional product candidates.

We cannot determine with certainty the duration and costs of the current or
future clinical trials of our product candidates or if, when, or to what extent
we will generate revenue from the commercialization and sale of any our product
candidates for which we obtain marketing approval. We may never succeed in
obtaining marketing approval for any of our product candidates. The duration,
costs and timing of clinical trials and development of our product candidates
will depend on a variety of factors, including:

the scope, rate of progress, expense and results of our ongoing clinical trials ? of eprenetapopt and APR-548, as well as of any future clinical trials of

eprenetapopt, APR-548, or other product candidates and other research and

development activities that we may conduct;

our ability to resolve the partial clinical hold on our clinical trials of ? eprenetapopt in combination with azacitidine in our myeloid malignancy

programs;

? our ability to resolve the clinical hold on our clinical trial of eprenetapopt

with acalabrutinib or with venetoclax and rituximab in lymphoid malignancies;

? uncertainties in clinical trial design and patient enrollment rates;

? significant and changing government regulation and regulatory guidance;

? the timing and receipt of, and any limitations imposed by regulatory bodies on,

any marketing approvals; and

? the expense of filing, prosecuting, defending and enforcing any patent claims

and other intellectual property rights.



A change in the outcome of any of these variables with respect to the
development of a product candidate could mean a significant change in the costs
and timing associated with the development of that product candidate. For
example, if the U.S. Food and Drug Administration, or FDA, or another regulatory
authority in a foreign jurisdiction were to require us to conduct clinical
trials beyond the scope we currently anticipate, or additional clinical trials
beyond those that we anticipate will be required for the completion of clinical
development of a product candidate, or if we experience significant trial delays
due to patient enrollment or other reasons, we would be required to expend
significant additional financial resources and time on the completion of
clinical development.

We are currently conducting multiple clinical trials of eprenetapopt: a Phase 3
trial in the United States for the treatment of TP53 mutant MDS with azacitidine
which is supported by published data from two Phase 1b/2 investigator-initiated
trials, one in the U.S. and one in France testing eprenetapopt with azacitidine
as frontline treatment in TP53 mutant MDS and AML patients; a Phase 2 trial of
post-transplant maintenance therapy with azacitidine in TP53 mutant MDS and AML;
a Phase 1b/2 trial for the treatment of TP53 mutant AML with venetoclax and
azacitidine; a Phase 1/2 solid tumor trial assessing eprenetapopt with anti-PD-1
therapy; and a Phase 1/2 trial for the treatment of TP53 mutant
relapsed/refractory CLL with venetoclax and rituximab or with ibrutinib. We are
currently conducting a Phase 1 trial of APR-548 with azacitidine in TP53 mutant
frontline and relapsed/refractory MDS. At this time, we cannot reasonably
estimate the cost for initiating and completing other clinical trials or
preclinical studies of eprenetapopt or other product candidates, as it will be
highly dependent on the clinical data from ongoing clinical trials as well as
any target disease subpopulations chosen for further evaluation. On August 4,
2021, the FDA placed a partial clinical hold on our clinical trials of
eprenetapopt in combination with azacitidine in our myeloid malignancy programs.
We intend to work with the FDA to analyze the data, address the specific
questions raised, and seek to resolve the partial clinical hold as soon as
possible. On August 11, 2021, the FDA placed a clinical hold on our clinical
trial of eprenetapopt with acalabrutinib or with venetoclax and rituximab in
lymphoid malignancies. We intend to work with the FDA to address the specific
questions raised and seek to resolve the clinical hold as soon as possible.

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General and administrative expenses

General and administrative expenses consist primarily of salaries and other
related costs, including stock-based compensation, for personnel in our
executive, finance, corporate and business development and administrative
functions. General and administrative expenses also include legal fees relating
to patent and corporate matters; professional fees for accounting, auditing, tax
and consulting services; insurance costs; travel expenses; and facility-related
expenses, which include direct depreciation costs and allocated expenses for
rent and maintenance of facilities and other operating costs.

We expect that our general and administrative expenses will increase in the
future as we increase our headcount to support personnel in research and
development and to support our operations generally as we increase our research
and development activities and activities related to the potential
commercialization of our product candidates. We also expect to incur increased
expenses associated with being a public company, including costs of accounting,
audit, legal, regulatory and tax-related services associated with maintaining
compliance with exchange listing and SEC requirements; director and officer
insurance costs; and investor and public relations costs.

Other income and expense

Interest income and expense

Interest income consists of income earned on our cash and cash equivalents.
Interest expense consists of the interest component associated with our facility
leases. Our interest income initially increased as our cash and cash equivalents
were higher due to the cash proceeds received from our IPO. Such interest income
is subsequently decreasing as (i) our cash balance decreases as we continue to
fund operations and (ii) a decrease in interest rates.

Foreign currency gain

Our consolidated financial statements are presented in U.S. dollars, which is
our reporting currency. The financial position and results of operations of our
subsidiary Aprea AB is measured using the foreign subsidiary's local currency as
the functional currency. Aprea AB cash accounts holding U.S. dollars are
remeasured based upon the exchange rate at the date of remeasurement with the
resulting gain or loss included in the consolidated statement of operations and
comprehensive loss. Expenses of such subsidiaries have been translated into U.S.
dollars at average exchange rates prevailing during the period. Assets and
liabilities have been translated at the rates of exchange on the consolidated
balance sheet date. The resulting translation gain and loss adjustments are
recorded directly as a separate component of stockholders' equity and as other
comprehensive loss on the consolidated statement of operations and comprehensive
loss.

Income taxes
We have not recorded any U.S. federal, state or foreign income tax expense or
benefits for the net losses we have incurred in any year, due to our uncertainty
of realizing a benefit from those items. We have provided a valuation allowance
for the full amount of the net deferred tax assets as, based on all available
evidence, it is considered more likely than not that all the recorded deferred
tax assets will not be realized in a future period.

Critical accounting policies and use of estimates

Our management's discussion and analysis of financial condition and results of
operations is based on our financial statements, which have been prepared in
accordance with generally accepted accounting principles in the United States.
The preparation of our financial statements and related disclosures requires us
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, costs and expenses in our financial statements. We base our
estimates on historical experience, known trends and events and various other
factors that we believe are reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. We evaluate
our estimates and assumptions on an ongoing basis. Our actual results may differ
from these estimates under different assumptions or conditions.

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While our significant accounting policies are described in more detail in the notes to our financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Accrued research and development expenses


As part of the process of preparing our financial statements, we are required to
estimate our accrued research and development expenses at each balance sheet.
This process involves reviewing open contract and purchase orders, communicating
with our personnel to identify services that have been performed on our behalf
and estimating the level of service performed and the associated costs incurred
for the services when we have not yet been invoiced or otherwise notified of the
actual costs. The majority of our service providers invoice us in arrears for
services performed, on a pre-determined schedule or when contractual milestones
are met; however, some require advanced payments. We make estimates of our
accrued expenses as of each balance sheet date in our financial statements based
on facts and circumstances known to us at that time. Examples of estimated
accrued research and development expenses include fees paid to:

? CROs in connection with performing research activities on our behalf and

conducting preclinical studies and clinical trials on our behalf;

? investigative sites or other service providers in connection with clinical

trials;

? vendors in connection with preclinical and clinical development activities; and

? vendors related to product manufacturing and development and distribution of

preclinical and clinical supplies.

We base our expenses related to preclinical studies and clinical trials on our
estimates of the services received and efforts expended pursuant to quotes and
contracts with multiple CROs that conduct and manage preclinical studies and
clinical trials on our behalf. The financial terms of these agreements are
subject to negotiation, vary from contract to contract and may result in uneven
payment flows. There may be instances in which payments made to our vendors will
exceed the level of services provided and result in a prepayment of the expense.
Payments under some of these contracts depend on factors such as the successful
enrollment of patients and the completion of clinical trial milestones. In
accruing fees, we estimate the time period over which services will be
performed, enrollment of patients, number of sites activated and the level of
effort to be expended in each period. If the actual timing of the performance of
services or the level of effort varies from our estimate, we adjust the accrual
or amount of prepaid expense accordingly. Although we do not expect our
estimates to be materially different from amounts actually incurred, our
understanding of the status and timing of services performed relative to the
actual status and timing of services performed may vary and may result in us
reporting amounts that are too high or too low in any particular period. To
date, we have not made any material adjustments to our prior estimates of
accrued research and development expenses.

Stock-based compensation

We measure stock options and other stock-based awards granted to employees and
directors based on their fair value on the date of the grant and recognize
compensation expense of those awards, over the requisite service period, which
is generally the vesting period of the respective award. We apply the
straight-line method of expense recognition to all awards with only
service-based vesting conditions and apply the graded-vesting method to all
awards with performance-based vesting conditions or to awards with both
service-based and performance-based vesting conditions.

For stock-based awards granted to non-employees, compensation expense is
recognized over the period during which services are rendered by such
non-employees until completed in accordance with the FASB issued
ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to
Nonemployee Share-Based Payment Accounting. The new standard largely aligns the
accounting for share-based payment awards issued to employees and nonemployees
by expanding the scope of ASC 718 to apply to nonemployee share-based
transactions, as long as the transaction is not effectively a form of financing.

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We estimate the fair value of each stock option grant on the date of grant using
the Black-Scholes option-pricing model, which uses as inputs the fair value of
our common stock and assumptions we make for the volatility of our common stock,
the expected term of our stock options, the risk-free interest rate for a period
that approximates the expected term of our stock options and our expected
dividend yield.

We also award restricted stock units ("RSUs") to employees and directors. RSUs
are generally subject to forfeiture if employment terminates prior to completion
of the vesting restrictions. We expense the cost of the RSUs, which is
determined to be the fair market value of the shares of common stock underlying
the RSUs at the date of grant, ratably over the period during which the vesting
restrictions lapse.

Emerging growth company and smaller reporting company status

We are an emerging growth company (EGC), as defined in the JOBS Act. Under this
act, emerging growth companies are permitted to delay adopting new or revised
accounting standards applicable to public companies until those standards would
otherwise apply to private companies. We have irrevocably elected not to avail
ourselves of this exemption from new or revised accounting standards and,
therefore, will be subject to the same new or revised accounting standards as
other public companies that are not emerging growth companies.

We may remain classified as an EGC until the end of the fiscal year in which the
fifth anniversary of our IPO occurs, although if the market value of our common
stock that is held by non-affiliates exceeds $700 million as of the last trading
day of the second quarter before that time or if we have annual gross revenues
of $1.07 billion or more in any fiscal year, we would cease to be an EGC as of
December 31 of the applicable year. We also would cease to be an EGC if we issue
more than $1 billion of non-convertible debt over a three-year period.

We are also a "smaller reporting company," as such term is defined in Rule 12b-2
of the Exchange Act, meaning that the market value of our common stock held by
non-affiliates is less than $700 million and our annual revenue is less than
$100 million during the most recently completed fiscal year. We may continue to
be a smaller reporting company if either (i) the market value of our common
stock held by non-affiliates is less than $250 million or (ii) our annual
revenue is less than $100 million during the most recently completed fiscal year
and the market value of our common stock held by non-affiliates is less than
$700 million. If we are a smaller reporting company at the time we cease to be
an emerging growth company, we may continue to rely on exemptions from certain
disclosure requirements that are available to smaller reporting companies.
Specifically, as a smaller reporting company we may choose to present only the
two most recent fiscal years of audited financial statements in our Annual
Report on Form 10-K and, similar to emerging growth companies, smaller reporting
companies have reduced disclosure obligations regarding executive compensation.

Results of operations

Comparison of the three months ended September 30, 2021 and 2020




                                    Three months ended September 30,
                                        2021                 2020             Change
Operating expenses:
Research and development          $       6,015,616     $     8,761,095    $ (2,745,479)
General and administrative                3,414,795           3,473,210       (58,415)
Total operating expenses                  9,430,411          12,234,305      (2,803,894)
Other income (expense):
Interest (expense) income, net            (33)               (9,212)       
    9,179
Foreign currency gain                      (21,907)            (74,565)           52,658
Total other (expense) income               (21,940)            (83,777)           61,837
Net loss                          $     (9,452,351)     $  (12,318,082)    $  2,865,731






                                       23

  Table of Contents




Research and development expenses




                                                    Three months ended September 30,
                                                       2021                  2020              Change
Eprenetapopt (APR-246)                           $       3,378,188     $       7,923,977    $ (4,545,789)
Other early-stage development programs                   1,067,960               428,485        639,475
Unallocated research and development expenses            1,569,468               408,632        1,160,835
Total research and development expenses          $       6,015,616     $   
   8,761,095    $ (2,745,479)



Research and development expenses for the three months ended September 30, 2021
were $6.0 million, compared to $8.7 million for the three months ended September
30, 2020. The overall decrease of $2.7 million was primarily due to the
continued development of our lead product candidate, eprenetapopt, as follows:

a decrease of $2.3 million related to our pivotal Phase 3 clinical trial of

eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS which

? completed enrollment in Q2 2020. The $2.3 million decrease included $1.0

million related to the development of an in vitro companion diagnostic test for

eprenetapopt during the three months ended September 30, 2020 for which there

were no comparable costs during the three months ended September 30, 2021;

a decrease of $0.5 million related to the development of a Phase 1/2 clinical

trial in relapsed/refractory TP53 mutant chronic lymphoid leukemia (CLL)

? assessing eprenetapopt with venetoclax and rituximab and eprenetapopt with

   ibrutinib in order to further assess eprenetapopt in hematological
   malignancies; and

a decrease of $0.3 million in manufacturing expenses related to the pausing of

? scale-up of manufacturing activities for the anticipated commercial production

of eprenetapopt.

The above decreases were offset, in part by the following:

? an increase of $0.3 million related to pre-clinical activities; and

an increase of $0.1 million related to the development of a Phase 1

? dose-escalation clinical trial of APR-548, a next generation p53 reactivator

being developed in an oral dosage form.

General and administrative expenses


General and administrative expenses for the three months ended September 30,
2021 were $3.4 million, compared to $3.5 million for the three months ended
September 30, 2020. The decrease of $0.1 million was primarily related to
decreases in commercial development expense of $0.8 million, offset in part, by
an increase of $0.2 million in non-cash stock-based compensation expense, an
increase of $0.2 million in legal expenses and an increase of $0.2 million in
personnel costs. The decrease in commercial development expense was related to
the initiation of certain pre-commercialization activities such as market
research and brand building in the three months ended September 30, 2020 for
which there was no comparable expense for the comparable period in 2021. The
increase in non-cash stock-based compensation expense was primarily related to
stock option and RSU grants made in February 2021 in connection with the
Company's annual compensation review for employees and stock option and RSU
grants made in June 2021 in connection with the Company's annual compensation
review for its non-employee board members.

                                       24

Table of Contents

Other income and expense


Foreign currency loss for the three months ended September 30, 2021 was $21,907
compared to a foreign currency loss of $74,565 for the three months ended
September 30, 2020. The decrease in the foreign currency loss of $52,658 was
primarily due to a strengthening of the U.S. dollar against the Swedish Krona
during the three months ended September 30, 2021. Interest expense for the three
months ended September 30, 2021 consisted of interest expense associated with
our facility leases, offset in part, by interest earned on our cash and cash
equivalents.

Comparison of the nine months ended September 30, 2021 and 2020




                                  Nine months ended September 30,
                                      2021                 2020            Change
Operating expenses:
Research and development        $      19,433,721     $   28,551,246    $ (9,117,525)
General and administrative             10,183,953         10,036,564        147,389
Total operating expenses               29,617,674         38,587,810      (8,970,136)
Other income (expense):
Interest (expense) income             (1,678)             217,908          (219,586)
Foreign currency gain                     247,233            283,636         (36,403)
Total other (expense) income              245,555            501,544       
(255,989)
Net loss                        $    (29,372,119)     $ (38,086,266)    $   8,714,147



Research and development expenses




                                                    Nine months ended September 30,
                                                       2021                  2020               Change
Eprenetapopt (APR-246)                           $      10,843,510     $      22,529,194    $ (11,685,684)
Other early-stage development programs                   3,493,027             1,405,402       2,087,625
Unallocated research and development expenses            5,097,184             4,616,650           480,534

Total research and development expenses $ 19,433,721 $

  28,551,246    $  (9,117,525)




Research and development expenses for the nine months ended September 30, 2021
were $19.4 million, compared to $28.5 million for the nine months ended
September 30, 2020. The overall decrease of $9.1 million was primarily due to
the continued development of our lead product candidate, eprenetapopt as
follows:

a decrease of $8.6 million related to our pivotal Phase 3 clinical trial of

eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS which

? completed enrollment in Q2 2020. The $8.6 million decrease included $2.2

million related to the development of an in vitro companion diagnostic test for

eprenetapopt during the nine months ended September 30, 2020 for which there

were no comparable costs during the nine months ended September 30, 2021;

? a decrease of $1.4 million related to our Phase 2 post-transplant MDS/AML

clinical trial; and

a decrease of $0.7 million in manufacturing expenses related to the pausing of

? scale-up of manufacturing activities for the anticipated commercial production

of eprenetapopt.

The above decreases were offset, in part by the following:

an increase of $1.0 million related to our Phase 1/2 clinical trials in

? relapsed/refractory gastric, bladder and non-small cell lung cancers assessing

eprenetapopt with anti-PD-1 therapy which enrolled its first patient in Q3

2020; and

an increase of $0.6 million related to the development of a Phase 1

? dose-escalation clinical trial of APR-548, a next generation p53 reactivator

   being developed in an oral dosage form.


                                       25

  Table of Contents

General and administrative expenses

General and administrative expenses for the nine months ended September 30, 2021
were $10.2 million, compared to $10.0 million for the nine months ended
September 30, 2020. The increase of $0.2 million was primarily related to
increases of $1.4 million in non-cash stock-based compensation expense, $0.3
million in legal expense and $0.2 million in insurance expense, offset in part
by decreases in commercial development expense of $1.1 million and $0.7 million
of consulting expense. The increase in non-cash stock-based compensation expense
was primarily related to stock option and RSU grants made in February 2021 in
connection with the Company's annual compensation review for employees and stock
option and RSU grants made in June 2021 in connection with the Company's annual
compensation review for its non-employee board members. The decrease in
commercial development expense was related to the initiation of certain
pre-commercialization activities such as market research and brand building in
the nine months ended September 30, 2020 for which there was no comparable
expense for the comparable period in 2021. The decrease in consulting expense
was related to decreased recruiting and search fees.

Other income and expense


Foreign currency gain for the nine months ended September 30, 2021 was
$0.2 million compared to a foreign currency gain of $0.3 million for the nine
months ended September 30, 2020. The decrease in foreign currency gain of
$0.1 million was primarily due to a weakening of the U.S. dollar against the
Swedish Krona during the nine months ended September 30, 2021. Interest expense
for the nine months ended September 30, 2021 consisted of interest expense
associated with our facility leases, offset in part, by interest earned on our
cash and cash equivalents.

Liquidity and capital resources


Since our inception, we have incurred significant losses on an aggregate basis.
We have not yet commercialized any of our product candidates, which are in
various phases of preclinical and clinical development, and we do not expect to
generate revenue from sales of any products for several years, if at all. To
date, we have financed our operations through private placements of our
preferred and common stock and the net proceeds received from the initial public
offering (IPO) of our common stock. Through September 30, 2021, we had received
net proceeds of $224.0 million from our sales of preferred and common stock. As
of September 30, 2021, we had cash and cash equivalents of $61.4 million.

Cash flows


The following table summarizes our sources and uses of cash for each of the
periods presented:




                                               Nine months ended September 30,
                                                   2021                 2020
Net cash provided by (used in):
Operating activities                         $    (27,507,392)     $ (28,603,470)
Investing activities                                        --            (9,419)
Financing activities                                    86,970            150,949

Net decrease in cash and cash equivalents $ (27,420,422) $ (28,461,940)





Operating activities.

Cash used in operating activities resulted primarily from our net losses
adjusted for non-cash charges and changes in components of working capital. Net
cash used in operating activities was $27.5 million for the nine months ended
September 30, 2021 compared to $28.6 million for the nine months ended September
30, 2020. The decrease in cash used in operating activities of $1.0 million was
primarily attributable to a decrease in our net loss of $8.7 million and a
decrease in operating assets and liabilities of $9.9 million, partially offset
by an increase in non-cash stock-based compensation of $2.2 million.

                                       26

  Table of Contents

Investing activities.

No cash was used in investing activities for the nine months ended September 30,
2021, while $9,419 was used in investing activities for the nine months ended
September 30, 2020. Cash used in investing activities for the nine months ended
September 30, 2020 represented the acquisition of property and equipment.

Financing activities.

Cash provided by financing activities was $86,970 and $150,949 for the nine months ended September 30, 2021 and 2020, respectively and represented proceeds received from the exercise of stock options.

Funding requirements


We expect our expenses to increase substantially in connection with our ongoing
development activities related to eprenetapopt, APR-548 and other product
candidates and programs which are still in the early stages of clinical
development. In addition, we have incurred and continue to incur additional
costs associated with operating as a public company. We expect that our expenses
will increase substantially if and as we:

? conduct our current and future clinical trials and additional preclinical

research of eprenetapopt and APR-548;

? decide to continue with the development of an in vitro companion diagnostic

test for eprenetapopt;

? initiate and continue research and preclinical and clinical development of our

other product candidates;

? seek to identify and develop additional product candidates;

? seek marketing approvals for any of our product candidates that successfully

complete clinical trials, if any;

? establish a sales, marketing, manufacturing and distribution infrastructure to

commercialize any products for which we may obtain marketing approval;

? require the manufacture of larger quantities of our product candidates for

clinical development and potentially commercialization;

? maintain, expand, protect and enforce our intellectual property portfolio;

? acquire or in-license other drugs and technologies;

? defend against any claims of infringement, misappropriation or other violation

of third-party intellectual property;

? hire and retain additional clinical, quality control and scientific personnel;

? build out new facilities or expand existing facilities to support our ongoing

development activity;

add operational, financial and management information systems and personnel, ? including personnel to support our drug development, any future

commercialization efforts and our transition to a public company; and

? continue to operate as a public company.



As of September 30, 2021, we had cash and cash equivalents of $61.4 million. We
believe that our existing cash and cash equivalents will enable us to fund our
operating expenses and capital expenditure requirements into 2023. We have based
this estimate on assumptions that may prove to be wrong, and we could exhaust
our available capital resources sooner than we expect.

                                       27

Table of Contents


Because of the numerous risks and uncertainties associated with the development
of eprenetapopt and other product candidates and programs and because the extent
to which we may enter into collaborations with third parties for development of
our product candidates is unknown, we are unable to estimate the timing and
amounts of increased capital outlays and operating expenses associated with
completing the research and development of our product candidates. Our future
capital requirements will depend on many factors, including:

? the scope, progress, results and costs of our current and future clinical

trials of eprenetapopt for our current targeted indications;

? the scope, progress, results and costs of drug discovery, preclinical research

and clinical trials for eprenetapopt and our other product candidates;

? the number of future product candidates that we pursue and their development

requirements;

? the costs, timing and outcome of regulatory review of our product candidates;

the extent to which we acquire or invest in businesses, products and

technologies, including entering into or maintaining licensing or collaboration ? arrangements for product candidates on favorable terms, and although we may

  explore such opportunities from time to time during the normal course of
  business, we have no commitments or agreements to complete any such
  transactions;

the costs and timing of future commercialization activities, including drug

sales, marketing, manufacturing and distribution, for any of our product ? candidates for which we receive marketing approval, to the extent that such

sales, marketing, manufacturing and distribution are not the responsibility of

any collaborator that we may have at such time;

? the amount of revenue, if any, received from commercial sales of our product

candidates, should any of our product candidates receive marketing approval;

? the impact of COVID-19 on the financial markets in general and on our business

in particular;

the costs of preparing, filing and prosecuting patent applications, ? maintaining, protecting and enforcing our intellectual property rights and

defending intellectual property-related claims;

? our headcount growth and associated costs as we expand our business operations

and our research and development activities; and

? the costs of operating as a public company.



Developing drug products, including conducting preclinical studies and clinical
trials, is a time-consuming, expensive and uncertain process that takes years to
complete, and we may never generate the necessary data or results required to
obtain marketing approval for any product candidates or generate revenue from
the sale of any products for which we may obtain marketing approval. In
addition, our product candidates, if approved, may not achieve commercial
success. Our commercial revenues, if any, will be derived from sales of drugs
that we do not expect to be commercially available for many years, if ever.
Accordingly, we will need to obtain substantial additional funds to achieve our
business objectives.

Adequate additional funds may not be available to us on acceptable terms, or at
all. We do not currently have any committed external source of funds. To the
extent that we raise additional capital through the sale of equity or
convertible debt securities, ownership interests in our securities may be
diluted, and the terms of these securities may include liquidation or other
preferences and anti-dilution protections that could adversely affect the rights
of our common stockholders. Additional debt or preferred equity financing, if
available, may involve agreements that include restrictive covenants that may
limit our ability to take specific actions, such as incurring debt, making
capital

                                       28

  Table of Contents

expenditures or declaring dividends, which could adversely impact our ability to conduct our business, and may require the issuance of warrants, which could potentially dilute existing ownership interest.

If we raise additional funds through collaborations, strategic alliances or
licensing arrangements with third parties, we may have to relinquish valuable
rights to our technology, future revenue streams, research programs, or product
candidates or grant licenses on terms that may not be favorable to us. If we are
unable to raise additional funds through equity or debt financings or
collaborations, strategic alliances or licensing arrangements with third parties
when needed, we may be required to delay, limit, reduce and/or terminate our
product development programs or any future commercialization efforts or grant
rights to develop and market product candidates that we would otherwise prefer
to develop and market ourselves.

Contractual obligations and commitments

For additional details regarding our contractual obligations, see Note 3 "Leases" to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Shelf Registration Statement


On November 12, 2020, we filed a universal shelf registration statement with the
SEC for the issuance of common stock, preferred stock, warrants, rights and debt
securities and units up to an aggregate of $350.0 million. On November 30, 2020,
the Shelf Registration Statement was declared effective by the SEC. The
universal shelf registration statement includes an at-the-market offering
program for the sale of up to $50.0 million of shares of our common stock. As of
September 30, 2021, no sales of our common stock occurred under the
at-the-market offering program.

Recent accounting pronouncements

See Note 2 to our condensed consolidated financial statements which discusses new accounting pronouncements.

Off-balance sheet arrangements

We did not have during the periods presented, and we do not currently have, any
off-balance sheet arrangements, as defined in the rules and regulations of the
SEC.

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Sales 2021 - - -
Net income 2021 -38,2 M - -
Net cash 2021 55,1 M - -
P/E ratio 2021 -1,28x
Yield 2021 -
Capitalization 49,4 M 49,4 M -
EV / Sales 2021 -
EV / Sales 2022 -
Nbr of Employees 11
Free-Float -
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Managers and Directors
Christian S. Schade Chairman, President & Chief Executive Officer
Scott M. Coiante Chief Financial Officer, Secretary & Senior VP
Eyal C. Attar Chief Medical Officer & Senior Vice President
Lars AbrahmsÚn Chief Scientific Officer & Senior Vice President
Bernd Robert Seizinger Independent Director
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