Seeking Alpha: Aptose Still Looks Like A High-Risk/Reward Call Option

For small biotechs not all that much changes for long stretches of time … and then things can change very quickly. Aptose Biosciences (NASDAQ:APTO) is moving ahead with its Phase Ib study of lead drug APTO-253, an oral KLF4 activator being developed as a possible treatment for hematological cancers including acute myeloid leukemia (or AML). Results from this study, which is testing the drug in other cancers beside AML, should be available late this year - most likely at the December ASH annual meeting. If the results show meaningful anti-cancer activity, I believe Aptose will become a more viable investment, even though the company is a long way from FDA approval and faces numerous challenges.

I continue to believe that $13 is a reasonable fair value for these shares on the assumption of 15% odds of success in AML and myelodysplastic syndromes (or MDS). If Aptose reports solid data, those approval odds can improve over time (improving the fair value), but likewise there is a very real risk of a total wipeout here - the more typical fate for most biotech investments.

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Aptose Still Looks Like A High-Risk/Reward Call Option