On May 11, 2017 Aptose Biosciences Inc. ("Aptose" or the "Company") (NASDAQ:APTO) (TSX:APS), a clinical-stage company developing highly differentiated therapeutics that target the underlying mechanisms of cancer, reported financial results for the three months ended March 31, 2017 and reported on corporate developments. Unless specified otherwise, all amounts are in Canadian dollars (Press release, Aptose Biosciences, MAY 11, 2017, View Source [SID1234519036]). Schedule your 30 min Free 1stOncology Demo! The net loss for the quarter ended March 31, 2017 was $4.4 million ($0.25 per share) compared with $5.1 million ($0.42 per share) in the quarter ended March 31, 2016. Total cash and cash equivalents and investments as of March 31, 2017 were $12.0 million (or $9.0 million US dollars) which, based on information currently available, provides the Company with sufficient resources to fund research and development and operations into Q2 2018.
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"We, along with some of the nation’s leading hematology researchers, continue to generate compelling data on CG’806, an oral first-in-class pan-FLT3/BTK inhibitor that we plan to develop for patients with FLT3-driven acute myeloid leukemia and certain B-cell malignancies," said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer. "Preclinical data presented at AACR (Free AACR Whitepaper) this past week demonstrated the ability of CG’806 to potently inhibit all mutant forms of FLT3 tested and to completely eradicate tumors in AML xenograft models in the absence of toxicities. Though early, we believe these data begin to position CG’806 as a best-in-class pan-FLT3 inhibitor for the treatment of AML. In addition, CG’806 is a potent non-covalent inhibitor of the wild type and C481S mutant forms of BTK, and we plan to develop CG806 in parallel for patients with B cell malignancies resistant and intolerant to covalent BTK inhibitors. We are working towards advancing this molecule into clinical trials within a year."
Corporate Highlights
In January 2017, Aptose announced the prioritization of its resources toward the development of CG’806, an oral preclinical compound being developed for patients with FLT3-driven acute myeloid leukemia (AML) and certain BTK-driven B-cell malignancies.
CG’806 was the subject of two poster presentations at the 2017 AACR (Free AACR Whitepaper) Hematologic Malignancies meeting held in Boston this past week (May 6-9).
° The first poster included data from studies conducted at The University of Texas MD Anderson Cancer Center, in which CG’806 demonstrated superior potency relative to competitive agents, against hematologic malignancy cell lines driven by various WT or mutant forms of FLT3. In addition, once daily oral dosing of CG’806 in a murine model achieved sustained micromolar plasma concentration over a 24 hour period, and was accompanied by complete elimination of AML FLT3-ITD tumors in the absence of toxicity.
° The second poster included highlighted studies conducted at Oregon Health & Science University (OHSU) and through a collaboration with the Beat AML Initiative, in which CG’806 demonstrated the ability to potently kill primary malignant cells in samples from patients with various hematologic malignancies including AML, CLL and others.
Separately, Aptose has begun formal studies on APTO-253, a phase 1 stage compound for AML, in an effort to define the root cause of recent manufacturing setbacks related to the intravenous formulation, and to restore the molecule to a state supporting clinical development and potential partnering. APTO-253, which effectively inhibits expression of the c-Myc oncogene, is a potential treatment for AML.
Financial Results
Our net loss for the three months ended March 31, 2017 was $4.4 million ($0.25 per share) compared with $5.1 million ($0.42 per share) during the three months ended March 31, 2016.
The decrease in the net loss during the three months ended March 31, 2017 compared with the three months ended March 31, 2016 is primarily related to savings from cancelling the LALS/Moffitt collaboration, lower stock-based compensation, and offset by development activities related to the CG’806 development program which started in the second half of 2016.
We utilized cash of $3.5 million in our operating activities in the three months ended March 31, 2017 compared with $4.5 million in the three months ended March 31, 2016. The decrease in cash used in operating activities in the current period is due mostly to increased accounts payable and accrual balances during the three months ended March 31, 2017.
Research and Development
Research and development expenses totaled $2.3 million in the three months ended March 31, 2017 compared with $2.3 million in the three months ended March 31, 2016. Research and development costs consist of the following:
Three months ended
(in thousands) March 31,
2017 March 31,
2016
Program costs – APTO-253 S 1,102 $ 1,040
Program costs – CG’806 540 -
Program costs – LALS/Moffitt - 485
Salaries 566 722
Stock-based compensation 68 56
Depreciation of equipment 19 12
$ 2,295 $ 2,315
Expenditures for the three months ended March 31, 2017 were comparable to the expenses incurred in the three months ended March 31, 2016. Higher program costs associated with the Company’s CG’806 program were offset by lower costs associated related to the cancellation of the LALS/Moffitt collaboration. Lower salaries expense was primarily related to severance payments made in the three months ended March 31, 2016 due to a reduction in Research & Development FTE.
General and Administrative
General and administrative expenses totaled $2.1 million in the three months ended March 31, 2017, compared to $2.6 million in the three months ended March 31, 2016. General and administrative costs consist of the following:
Three months ended
(in thousands) March 31,
2017 March 31,
2016
General and administrative excluding salaries $ 942 $ 1,133
Salaries 1,135 975
Stock-based compensation 13 479
Depreciation of equipment 11 21
$ 2,101 $ 2,608
General and administrative expenses excluding salaries, decreased in the three months ended March 31, 2017, compared with the three months ended March 31, 2016, mostly the result of lower travel, consulting and rent costs in the current year related to cost containment initiatives taken in the prior fiscal year. Salary charges in the three months ended March 31, 2017, increased slightly in comparison with the three months ended March 31, 2016, due to severance payments made in the current period that will result in savings in the following fiscal quarters.
Stock-based compensation decreased in the three months ended March 31, 2017, compared with the three months ended March 31, 2016, due to large forfeitures in the current period and also due to grants in prior periods having a greater fair value than the grants issued in the three months ended March 31, 2017, and therefore contributing to higher stock-based compensation in the prior year period.
Finance Expense
Three months ended
March 31,
2017 March 31,
2016
Foreign exchange loss - 196
$ - $ 196
Foreign exchange loss in the three months ended March 31, 2016, is the result of a decrease in the value of US dollar denominated cash and cash equivalents balances during the period due to an appreciation of the Canadian dollar compared to the US dollar. During this period the Company’s functional currency was the Canadian dollar.
Finance Income
Three months ended
March 31,
2017 March 31,
2016
Interest income $ 11 $ 47
Foreign exchange gain 30 –
$ 41 $ 47
Interest income represents interest earned on our cash and cash equivalent and investment balances. Foreign exchange gains in the three months ended March 31, 2017, are the result of an appreciation of the Canadian dollar compared to the US dollar. During this period the Company’s functional currency was the US dollar.
Effective January 1, 2017, the Company changed its functional currency to US dollars given the prevalence of US dollar denominated activities over time. The Company’s historic source of financing, with the exception of the recent at-the-market equity facility, has been in Canadian dollars and the Company still has a majority of its shareholders in Canada. For this reason the Company has chosen to keep the presentation currency as Canadian.
Aptose Biosciences Inc.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(unaudited)
Three Three
months ended months ended
(amounts in 000’s of Canadian Dollars except for per common share data) March 31, 2017 March 31, 2016
REVENUE $ - $ -
EXPENSES
Research and development 2,295 2,315
General and administrative 2,101 2,608
Operating expenses 4,396 4,923
Finance expense – 196
Finance income (41 ) (47 )
Net financing income (41 ) 149
Net loss for the period 4,355 5,072
Other comprehensive loss
Items that may subsequently be reclassified to earnings:
Foreign currency translation loss 123 -
Comprehensive loss for the period 4,478 5,072
Basic and diluted loss per common share $ 0.25 $ 0.42
The press release, the financial statements and the management’s discussion and analysis for the quarter ended March 31, 2017 will be available on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml