On November 9, 2023 Aptose Biosciences Inc. ("Aptose" or the "Company") (NASDAQ: APTO, TSX: APS), a clinical-stage precision oncology company developing highly differentiated oral targeted agents to treat hematologic malignancies, reported its financial results for the three months and nine months ended September 30, 2023, and provided a corporate update (Press release, Aptose Biosciences, NOV 9, 2023, View Source [SID1234637352]).

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"The data we presented last week during the European School of Haematology (ESH) conference on acute myeloid leukemia (AML) demonstrate the exciting potential for tuspetinib (TUS) in the treatment of the very ill relapsed/refractory AML population and as part of a frontline triplet combination regimen in newly diagnosed AML," said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer. "Investigator enthusiasm for our tuspetinib/venetoclax (TUS/VEN) doublet has led to brisk enrollment in the APTIVATE trial. The number of evaluable patients and clinical responses continue to grow, and we look forward to reporting the next data set just a few weeks from now during the American Society of Hematology (ASH) (Free ASH Whitepaper) meeting."

Key Corporate Highlights

Tuspetinib APTIVATE Expansion Trial Ongoing – Tuspetinib, a once daily oral agent with a unique kinase targeting pattern, is being developed for the treatment of patients with R/R AML. As reported at ESH, more than 140 patients have been treated in the ongoing APTIVATE Phase 1/2 clinical trial: 91 patients have received TUS as a single agent; 51 thus far have been treated in the TUS/VEN cohort, with keen investigator interest accelerating patient enrollment in the doublet arm. In the most recent data cut (October 23, 2023), the favorable safety profile remained consistent for TUS and TUS/VEN treated R/R AML patients. TUS avoids many typical toxicities observed with other kinase, IDH1/2, and menin inhibitors.

Tuspetinib Single Agent Active with Favorable Safety – As reported at ESH, tuspetinib as a single agent was well-tolerated and highly active among relapsed or refractory (R/R) AML patients with a diversity of adverse genotypes. TUS single agent delivered 42% and 60% CR/CRh response rates across all patients and across FLT3-mutated patients, respectively, among evaluable VEN-naïve patients at the 80mg daily recommended phase 2 dose (RP2D). Tuspetinib demonstrated a 29% CR/CRh rate in VEN-naïve FLT3 unmutated (wildtype) AML at 80 mg daily RP2D, unlocking the potential for TUS to treat the additional 70-75% of the AML population without FLT3-mutation not currently addressed by any approved tyrosine kinase inhibitors. Tuspetinib single agent response rates compared favorably to the marketed FLT3 inhibitor gilteritinib, which has not demonstrated meaningful activity in FLT3 unmutated AML.

TUS/VEN Doublet Delivers Responses in Tough to Treat Populations – As reported in the ESH update from a data cut taken on October 23, 2023, the TUS/VEN doublet showed a 48% overall response rate (ORR) in 31 evaluable patients (15 of 31). 81% of those patients had previously failed VEN treatment, representing an increasing AML population in need of improved salvage therapies, and TUS/VEN had a 44% ORR in those VEN failure patients. TUS/VEN showed a 60% ORR (6 of 10) in FLT3-mutant AML, and a 43% (9 of 21) ORR in FLT3-wildtype AML. Analyses from the October 23rd data cut included preliminary data from patients very early in their treatment who may see their responses to treatment mature over time.

TUS Targets VEN Resistance Mechanisms; ESH Poster Presentation – Aptose presented a poster at ESH, Tuspetinib Oral Myeloid Kinase Inhibitor Creates Synthetic Lethal Vulnerability to Venetoclax, demonstrating the ability of TUS to suppress a set of key oncogenic signaling pathways that mediate resistance to AML drugs by potently inhibiting SYK, mutated and unmutated forms of FLT3, JAK1/2, RSK2, mutant forms of KIT, and TAK1-TAB1 kinases. Aptose researchers investigated the effects of TUS on key elements of the phospho-kinome and apoptotic proteome in both parental and TUS-resistant AML cells. In parental cells, TUS acutely inhibits key oncogenic signaling pathways and shifts the balance of pro- and anti-apoptotic proteins in favor of apoptosis, suggesting that it may generate vulnerability to VEN. Indeed, acquired TUS resistance generated a synthetic lethal vulnerability to VEN of unusually high magnitude, making cells more than 2,000 times more sensitive to VEN. Concurrent administration of TUS and VEN may eliminate cells that carry this form of TUS resistance at the start of therapy and discourage the emergence of TUS resistance during treatment.

Tuspetinib Clinical Data Selected for Oral Presentation at 2023 ASH (Free ASH Whitepaper) Annual Meeting – Aptose announced last week that clinical data for tuspetinib was selected for oral presentation at the 65th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition being held December 9-12, 2023 in San Diego, CA. Lead investigator Dr. Naval Daver, Professor, Director Leukemia Research Alliance Program, Department of Leukemia, The University of Texas MD Anderson Cancer Center, will present data from Aptose’s ongoing APTIVATE trial of tuspetinib (TUS) single agent and the TUS/VEN doublet in relapsed/refractory patients with acute AML.

Multiple Planned Value-creating Milestones Ahead

APTIVATE oral presentation at ASH (Free ASH Whitepaper) 2023 by Dr. Naval Daver
TUS/VEN incremental data readout in R/R AML planned: ASH (Free ASH Whitepaper) 2023
TUS/VEN further data on duration of response in R/R AML planned: 1Q & 2Q2024
TUS/VEN/HMA planned initiation of pilot triplet study in 1L AML: 1H2024
Extension into HR-MDS and CMML planned: 4Q2023

FINANCIAL RESULTS OF OPERATIONS
Aptose Biosciences, Inc.
Statements of Operations Data
(unaudited)
($ in thousands, except per share data)

Three months ended Nine months ended
September 30, September 30,
2023 2022 2023 2022
Expenses:
Research and development $ 8,256 $ 6,578 $ 27,649 $ 21,312
General and administrative 3,425 3,448 12,580 10,887
Operating expenses 11,681 10,026 40,229 32,199
Other income, net 234 249 977 376
Net loss $ (11,447 ) $ (9,777 ) $ (39,252 ) $ (31,823 )
Net Loss per share, Basic and diluted $ (1.76 ) $ (1.59 ) $ (6.14 ) $ (5.17 )

Weighted average number of common shares outstanding used in computing net loss per share, basic and diluted (in thousands)

6,495 6,153 6,391 6,150
Net loss for the three-month period ended September 30, 2023 increased by $1.7 million to $11.4 million, as compared to $9.8 million for the comparable period in 2022. Net loss for the nine-month period ended September 30, 2023 increased by $7.4 million to $39.3 million, as compared to $31.8 million for the comparable period in 2022.

Aptose Biosciences, Inc.
Balance Sheet Data
(unaudited)
($ in thousands)

September 30, December 31,
2023 2022
Cash, cash equivalents and short-term investments $ 17,717 $ 46,959
Working capital 7,291 37,235
Total assets 20,876 51,027
Long-term liabilities 720 1,002
Accumulated deficit (503,582 ) (464,330 )
Stockholders’ equity 7,776 37,741

Total cash and cash equivalents and investments as of September 30, 2023, were $17.7 million, a decrease of $5.6 million as compared to $23.3 million at June 30, 2023, and a decrease of $29.2 million as compared to $46.9 million at December 31, 2022. Based on current operations, the Company expects that cash on hand and available capital provide the Company with sufficient resources to fund planned Company operations including research and development through March of 2024.

Common shares outstanding on November 9, 2023, were 7,816,923.

RESEARCH AND DEVELOPMENT EXPENSES

The research and development expenses for the three-month and nine-month periods ended September 30, 2023, and 2022 were as follows:

Three months ended Nine months ended
September 30, September 30,
(in thousands) 2023 2022 2023 2022

Program costs – Tuspetinib $ 5,814 $ 3,049 $ 18,659 $ 6,570
Program costs – Luxeptinib 648 1,390 2,643 6,624
Program costs – APTO-253 2 66 28 345
Personnel related expenses 1,523 1,627 5,107 5,821
Stock-based compensation 259 440 1,183 1,923
Depreciation of equipment 10 6 29 29
Total $ 8,256 $ 6,578 $ 27,649 $ 21,312
Research and development expenses increased by $1.7 million to $8.3 million for the three-month period ended September 30, 2023, as compared to $6.6 million for the comparative period in 2022. Changes to the components of our research and development expenses presented in the table above are primarily as a result of the following events:

Program costs for tuspetinib were $5.8 million for the three-month period ended September 30, 2023. The higher program costs for tuspetinib in the current period represent the enrollment of patients in our APTIVATE clinical trial, our healthy volunteer trial, manufacturing activities to support clinical development, and related expenses.
Program costs for luxeptinib decreased by approximately $742 thousand, primarily due to lower clinical trial costs and lower manufacturing costs as a result of the current formulation requiring less API than the prior formulation.
Program costs for APTO-253 decreased by approximately $64 thousand, due to the Company’s decision on December 20, 2021 to discontinue further clinical development of APTO-253.
Personnel-related expenses decreased by $104 thousand, related to fewer employees in the current three-month period, partially offset by salary increases.
Stock-based compensation decreased by approximately $181 thousand in the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to stock options granted with lower grant date fair values, in the current period.
Research and development expenses increased by $6.3 million to $27.6 million for the nine-month period ended September 30, 2023, as compared to $21.3 million for the comparative period in 2022. Changes to the components of our research and development expenses presented in the table above are primarily as a result of the following events:

Program costs for tuspetinib were $18.7 million for the nine-month period ended September 30, 2023, an increase of $12.1 million compared with $6.6 million in the corresponding period in 2022. The higher program costs for tuspetinib in the current period represent the enrollment of patients in our APTIVATE clinical trial, our healthy volunteer trial, manufacturing activities to support clinical development, and related expenses.
Program costs for luxeptinib decreased by approximately $4 million from $6.6 million in the nine months ended September 30, 2022 to $2.6 million in the current period, primarily due to lower clinical trial costs and lower manufacturing costs as a result of the current formulation requiring less API than the prior formulation.
Program costs for APTO-253 decreased by approximately $317 thousand, due to the Company’s decision on December 20, 2021 to discontinue further clinical development of APTO-253.
Personnel-related expenses decreased by $714 thousand, related to fewer employees in the current nine-month period and partially offset by salary increases.
Stock-based compensation decreased by approximately $740 thousand in the nine months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to stock options granted with lower grant date fair values, in the current period.
Conference Call & Webcast:

Date: Thursday, November 9, 2023
Time: 5:00 PM ET
Audio Webcast Only: link
Q&A Participant Registration Link*: link
(https://register.vevent.com/register/BIb770b610b0744016870ec2150989ea78)
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The audio webcast also can be accessed through a link on the Investor Relations section of Aptose’s website here. A replay of the webcast will be available on the Company’s website for 30 days.

The press release, the financial statements and the management’s discussion and analysis for the quarter ended September 30, 2023 will be available on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.shtml.