APREA THERAPEUTICS, INC. 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
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, fast track and breakthrough therapy
designations from the FDA for MDS, orphan drug and fast track designations from
the FDA for AML and orphan drug designation from the
We are conducting, supporting and planning multiple clinical trials of
eprenetapopt and APR-548. On
There are approximately 20 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
On
Our current clinical trials are as follows:
Phase 3 Frontline MDS Trial -- In
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
? one in
TP53 mutant MDS and AML patients. The data from the
trials were published in
Phase 3 trial failed to meet its predefined primary endpoint of complete
remission (CR) rate. Analysis of the primary endpoint at this data
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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
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
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
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 are considering withdrawing our Breakthrough Therapy
designation.
Phase 2 MDS/AML Post-Transplant Trial -- In
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
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. We also expect to
present data from the clinical trial at a future scientific or medical
conference.
Phase 1/2 AML Trial -- We are currently enrolling a Phase 1/2 clinical trial
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
? regimen of eprenetapopt with venetoclax and azacitidine met the CR primary
efficacy endpoint. In 30 patients
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.
As of the data cut, 11 patients remain on study treatment and continue to be
followed for safety and efficacy. 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. We also expect to present data from this
clinical trial at a future scientific or medical conference.
Phase 1 NHL Trial -- We are currently enrolling a Phase 1 clinical trial 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 enrolling 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 are enrolling expansion
cohorts for patients with advanced gastric, bladder and non-small cell lung
cancers and have currently enrolled 26 patients across these expansion arms. A
poster presentation for this trial was presented at the 2021 ASCO Annual
Meeting (abstract TPS3161).
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
? have planned a Phase 1 dose-escalation clinical trial evaluating safety,
tolerability, and preliminary efficacy of APR-548 with azacitidine in frontline
and relapsed/refractory
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MDS patients. The trial is open for enrollment. We anticipate the first patient
to be enrolled in the second half of 2021.
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
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
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;
? 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.
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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
The COVID-19 pandemic
The novel coronavirus outbreak (COVID-19) has been declared a "Public Health
Emergency of International Concern" by the
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 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 six months ended
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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 stages of clinical development of eprenetapopt, initiate clinical trials for product candidates other than eprenetapopt and continue to discover and develop additional product candidates.
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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, as well as of any future clinical trials of eprenetapopt 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
We are currently conducting multiple clinical trials of eprenetapopt: a Phase 3
trial in
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.
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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
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
Income taxes
We have not recorded any
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
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.
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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.
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.
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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
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
Results of operations
Comparison of the three months ended
Three months ended June 30,
2021 2020 Change
Operating expenses:
Research and development $ 6,654,257 $ 10,694,029 $ (4,039,772)
General and administrative 3,343,325 3,786,886 (443,561)
Total operating expenses 9,997,582 14,480,915 (4,483,333)
Other income (expense):
Interest (expense) income, net (588) 2,678 (3,266)
Foreign currency gain (252,843) (1,889,690) 1,636,847
Total other (expense) income (253,431) (1,887,012) 1,633,581
Net loss $ (10,251,013) $ (16,367,927) $ 6,116,914 Research and development expenses
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Three months ended June 30,
2021 2020 Change
Eprenetapopt (APR-246) $ 3,662,149 $ 7,568,258 $ (3,906,109)
Other early-stage development programs 1,309,067 407,476 901,591
Unallocated research and development expenses 1,683,041 2,718,295 (1,035,254)
Total research and development expenses
Research and development expenses for the three months ended
a decrease of
eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS which
? completed enrollment in Q2 2020. The
million related to the development of an in vitro companion diagnostic test for
eprenetapopt during the three months ended
no comparable costs during the three months ended
? a decrease of
clinical trial;
? a decrease of
scaled down preparation of a New Drug Application (NDA) for eprenetapopt; and
a decrease 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
? 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;
an increase of
? dose-escalation clinical trial of APR-548, a next generation p53 reactivator
being developed in an oral dosage form; and
an increase of
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.
General and administrative expenses
General and administrative expenses for the three months ended
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Other income and expense
Foreign currency loss for the three months ended
Comparison of the six months ended
Six months ended June 30,
2021 2020 Change
Operating expenses:
Research and development $ 13,418,105 $ 19,790,151 $ (6,372,046)
General and administrative 6,769,158 6,563,354 205,804
Total operating expenses 20,187,263 26,353,505 (6,166,242)
Other income (expense):
Interest (expense) income (1,645) 227,120 (228,765)
Foreign currency gain 269,140 358,201 (89,061)
Total other (expense) income 267,495 585,321 (317,826)
Net loss $ (19,919,768) $ (25,768,184) $ 5,848,416 Research and development expenses
Six months ended June 30,
2021 2020 Change
Eprenetapopt (APR-246) $ 7,465,322 $ 14,605,217 $ (7,139,895)
Other early-stage development programs 2,425,067 976,917 1,448,150
Unallocated research and development expenses 3,527,716 4,208,017 (680,301)
Total research and development expenses
Research and development expenses for the six months ended
a decrease of
eprenetapopt with azacitidine for frontline treatment of TP53 mutant MDS which
? completed enrollment in Q2 2020. The
million related to the development of an in vitro companion diagnostic test for
eprenetapopt during the six months ended
comparable costs during the six months ended
? a decrease of
clinical trial;
? a decrease of
scaled down preparation of a New Drug Application (NDA) for eprenetapopt; and
a decrease 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
? 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;
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an increase of
? dose-escalation clinical trial of APR-548, a next generation p53 reactivator
being developed in an oral dosage form; and
an increase of
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.
General and administrative expenses
General and administrative expenses for the six months ended
Other income and expense
Foreign currency gain for the six months ended
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
Cash flows
The following table summarizes our sources and uses of cash for each of the
periods presented:
Six months ended June 30,
2021 2020
Net cash provided by (used in):
Operating activities $ (19,273,989) $ (17,179,938)
Investing activities -- (10,144)
Financing activities -- 150,949
Net decrease in cash and cash equivalents
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
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activities of
Investing activities.
No cash was used in investing activities for the six months ended
Financing activities.
No cash was provided by financing activities for the six months ended
Funding requirements
We expect our expenses to increase substantially in connection with our ongoing development activities related to eprenetapopt 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;
? 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.
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As of
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, although we currently
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
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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 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
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
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