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CORRESP
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SIDLEY AUSTIN LLP

787 SEVENTH AVENUE

NEW YORK, NY 10019

+1 212 839 5300

+1 212 839 5599 FAX

AMERICA  ·    ASIA PACIFIC  ·    EUROPE

GLEVIN@SIDLEY.COM

+1 212 839 5776

CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***].”

September 16, 2019

Via EDGAR and Hand Delivery

U.S. Securities and Exchange Commission

Division of Corporation Finance

Office of Healthcare & Insurance

100 F Street, N.E.

Washington, D.C.  20549-3720

Attention:

Sonia Bednarowski

Dietrich King

FOIA   Confidential Treatment

Keira Nakada

Requested   Under 17 C.F.R. § 200.83

Kevin Vaughn

Re:                             Aprea Therapeutics, Inc.

Registration Statement on Form S-1 (File No. 333-233662)

Ladies and Gentlemen:

On behalf of our client, Aprea Therapeutics, Inc., we submit this letter (this “Letter”) in response to comments received from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) by letter dated August 8, 2019 (the “Comment Letter”), relating to the Company’s Registration Statement on Form S-1 (File No. 333-233662), originally confidentially submitted to the Commission on July 12, 2019 and filed with the Commission on September 6, 2019 (the “Registration Statement”).  We are providing this Letter on the basis of information provided to us by the Company.  The Company would like to begin marketing its initial public offering on Monday, September 23, 2019, subject, of course, to the timing of the completion of the Staff’s review. The purpose of this Letter is to respond to Comment #11 of the Comment Letter. References to the “Company” in this Letter refer to Aprea Therapeutics, Inc. and

CONFIDENTIAL TREATMENT REQUESTED BY

APREA THERAPEUTICS, INC.

Sidley Austin (NY) LLP is a Delaware limited liability partnership doing business as Sidley Austin LLP and practicing in affiliation with other Sidley Austin partnerships.

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its consolidated subsidiaries, after giving effect to the Holdco Reorganization (as defined in the Registration Statement), and to Aprea Therapeutics AB and its consolidated subsidiaries prior to giving effect to the Holdco Reorganization.

We are respectfully requesting confidential treatment for certain portions of this Letter pursuant to Rule 83 promulgated by the Commission, 17 C.F.R. §200.83.  This Letter is accompanied by such request for confidential treatment because of the commercially sensitive nature of the information discussed in this Letter.  A redacted letter will be filed on EDGAR, omitting the confidential information contained in this Letter.

In this Letter, we have recited the prior comment from the Staff in italicized, bold type and have followed the comment with the Company’s response in ordinary type.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Stock-based compensation, page 89

11.                               Once you have an estimated offering price or range, please explain to us how you determined the fair value of the common stock underlying your equity issuances and the reasons for any differences between the recent valuations of your common stock leading up to the initial public offering and the estimated offering price. This information will help facilitate our review of your accounting for equity issuances including stock compensation and beneficial conversion features.

The Company expects to include an anticipated price range in an amendment to the Registration Statement that would be filed shortly before the commencement of the road show for the initial public offering (the “IPO”), which the Company anticipates could commence as soon as September 23, 2019. That price range will be subject to then-current market conditions, continuing discussions with J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC (the “Underwriters”) and any other factors affecting the Company or the proposed offering.

Valuation Guidance

The Company supplementally advises the Staff that, while currently not reflected in the Registration Statement, based on discussions with the Company’s board of directors (the “Board”) and in consultation with the Underwriters, if the Company were to commence marketing of an IPO raising $[***] million in aggregate offering amount today, the Company presently anticipates that the estimated pre-offering equity value at its IPO would range from $[***] million to $[***] million, implying a price range of $[***] to $[***] per share (post-stock split ($[***] to $[***] per share pre-stock split)) for the Company’s common stock (the “Preliminary IPO Price Range”), with a midpoint of the anticipated range of $[***] per share (post-stock split) (the

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“Preliminary Assumed IPO Price”). The Preliminary IPO Price Range and Preliminary Assumed IPO Price reflect the expected corporate reorganization referenced under the heading “Corporate Reorganization” on page 79 of the prospectus forming part of the Registration Statement, which will take effect prior to the completion of the IPO (the “Corporate Reorganization”). Please note that unless otherwise indicated, the per share amounts and share amounts in this letter reflect the impact of an anticipated 1-for-[***] split of its common stock that the Company plans to effect following the Corporate Reorganization but prior to the completion of the IPO.

The Preliminary IPO Price Range is based on a number of factors, including the market environment for the pharmaceutical and biotechnology industry, especially with respect to initial public offerings, estimates of the Company’s future prospects, the general condition of the securities markets, and preliminary discussions with the Underwriters regarding potential valuations of the Company.  For consistency with the Registration Statement, all data in this letter, unless otherwise indicated, is reflected on a pre-Corporate Reorganization (and thus pre-stock split) basis. The actual bona fide price range to be included in the “red herring” preliminary prospectus in a subsequent amendment to the Registration Statement has not yet been determined and remains subject to adjustment based on factors outside of the Company’s control. However, the Company believes that the actual bona fide price range will be within the Preliminary IPO Price Range.  In addition, the actual price range to be included in such amendment will comply with the Staff’s interpretive guidance regarding the parameters of a bona fide price range.

Previously Provided Information Concerning Fair Value of Common Stock

The section captioned “Critical Accounting Policies and Use of Estimates—Stock-based compensation” beginning on page 92 in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of the Registration Statement includes an explanation of (i) the Company’s approach to accounting for stock-based compensation and (ii) the methodology used by the Company to determine the fair value of its common stock on the dates that options were granted by the Board. The assumptions used for estimating the weighted average fair value of the Company’s option grants using a Black-Scholes option-pricing model are set forth in Note 10 of the Audited Consolidated Financial Statements of Aprea Therapeutics AB and the Condensed Consolidated Unaudited Interim Financial Statements of Aprea Therapeutics AB included in the Registration Statement. The Company and the Board have consistently sought to comply with the form and substance of the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “AICPA Practice Aid”). The Company obtained independent valuations performed in accordance with the AICPA Practice Aid from an independent valuation firm and acted in good faith to ensure that relevant business developments were taken into account in making valuation determinations.  The discussion that follows describes certain stock-based compensation grants made within the 12 months prior to the date of the original confidential submission of the Company’s Registration Statement to the Commission.

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Stock Option Grants and Common Stock Valuation

As stated in the Registration Statement, the Company has granted stock-based awards, consisting of stock options, to its employees and certain members of its board of directors. The Company measures stock-based compensation expense for stock options granted to its employees and directors on the date of grant and recognizes the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award.

The Registration Statement describes the Company’s use of the Black-Scholes option-pricing model for the purpose of calculating the fair value of the stock options. In the preceding twelve months, equity awards were granted and the Company’s board of directors, with input from management, determined the fair value of the Company’s common stock to be $1.62 per share (pre-stock split) as of July 31, 2018, $5.11 per share (pre-stock split) as of February 28, 2019 and $17.57 per share (pre-stock split) as of August 8, 2019, after considering valuation reports from an independent third-party valuation specialist as of October 2, 2017, December 31, 2018 and July 15, 2019, respectively, as well as the other objective and subjective factors described in the Registration Statement. Set forth below in this letter is a discussion of each common stock valuation and the option grants in the preceding twelve months, along with a comparison of the fair value of the Company’s common stock from July 31, 2018 to the Preliminary Assumed IPO Price.

The following table presents a summary of equity awards in the preceding twelve months:

Grant Date

Shares of Common
   Stock Subject to
   Options Granted

Effective Date
   of 409A
   Valuation

Fair Value of Common Stock
   on Effective Date of 409A
   Valuation

Fair Value of Common Stock
   on Grant Date

Exercise Price of Options

Pre-Stock Split

Post-Stock Split

Pre-Stock Split

Post-Stock Split

Pre-Stock Split

Post-Stock Split

7/31/2018

15,000

10/2/2017

$

1.62

$

[***]

$

1.62

$

[***]

$

1.62

$

[***]

2/28/2019

613,650

12/31/2018

$

5.11

$

[***]

$

5.11

$

[***]

$

5.11

$

[***]

8/8/2019

129,850

7/15/2019

$

17.57

$

[***]

$

17.57

$

[***]

$

17.57

$

[***]

October 2, 2017 Valuation

In preparing the October 2, 2017 valuation of its Common Stock, the Company determined the enterprise value using the Market Approach with Option Pricing Method (“OPM”) based on the then-recent Series B Preferred transaction. Management concluded that the use of the Series B preferred stock transaction supported this methodology since the willingness of existing investors to invest new money into the Company demonstrated that the transaction was indicative of

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enterprise value.  The resulting estimated fair value of the Company’s common stock was $1.62 per share (pre-stock split).

Under the OPM, the Company used a back-solve method so that the enterprise value equaled the contemplated value of the Company determined by the Series B preferred stock financing transaction with both existing and new third-party investors, the first tranche of which closed in March of 2016 and the second tranche of which closed in October 2017. The discount for lack of marketability (“DLOM”) of [***]% applied was derived from the then-current estimates of the time to a liquidity event made by the Company’s senior management.

July 31, 2018 Grants

On July 31, 2018, the Company’s board of directors determined that the fair value of the Company’s common stock was $1.62 per share (pre-stock split) in consideration of the valuation analysis as of October 2, 2017 and the other objective and subjective factors described in the Registration Statement. As part of this determination, the Company’s board of directors concluded that no significant internal or external value-generating events had taken place between the October 2, 2017 valuation date and the grant date listed above.

December 31, 2018 Valuation

In preparing the December 31, 2018 valuation of the Company’s Common Stock, the independent third-party valuation firm used the Hybrid Approach with OPM and determined the enterprise value using a merger and acquisition (“M&A”) scenario and an IPO scenario. Both the M&A and the IPO scenarios enterprise values were based on the recent Series C Preferred transaction consummated in November 2018. Management concluded that the use of the Series C preferred stock transaction supported this methodology since the willingness of current and two new non-affiliated investors to invest new money into the Company demonstrated that the transaction was indicative of enterprise value.  The IPO scenario was assigned a weight of [***]% reflecting that management had begun its initial consideration of an IPO and the M&A scenario was assigned a weight of [***]%.  The resulting estimated fair value of the Company’s common stock was $5.11 per share (pre-stock split).

A DLOM of [***]% was applied to the M&A scenario and a weighted average cost of capital (“WACC”) of [***]% and DLOM of [***]% was applied to the IPO scenario. The DLOMs used for both scenarios were derived from the then-current estimates of the time to the liquidity events made by the Company’s senior management.

February 28, 2019 Grants

On February 28, 2019, the Company’s board of directors determined that the fair value of the Company’s common stock was $5.11 per share (pre-stock split) in consideration of the valuation

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analysis as of December 31, 2018 and the other objective and subjective factors described in the Registration Statement, including the investment by another new non-affiliated investor in the Series C preferred stock in February 2019 at the same price as the November 2018 transaction. As part of this determination, the Company’s board of directors concluded that no significant internal or external value-generating events had taken place between the December 31, 2018 valuation date and the grant date listed above.

July 15, 2019 Valuation

In preparing the July 15, 2019 valuation of the Company’s Common Stock, the independent third-party valuation firm used the Hybrid Approach with OPM and determined the enterprise value using a M&A scenario and an IPO scenario. The M&A scenario enterprise value was based on the guideline transactions (between the median and 25th percentile) and the IPO scenario enterprise value was based on recent industry IPO transactions (between the median and 75th percentile). The IPO scenario was assigned a weight of [***]% reflecting that the Company had held the organizational meeting on June 19, 2019 and confidentially submitted to the Commission its Registration Statement on Form S-1 on July 12, 2019 and the M&A scenario was assigned a weight of [***]%. As part of this determination, the Company’s board of directors noted the following significant developments between the February 28, 2019 grants and the July 15, 2019 valuation date: (a) the probability of an initial public offering increased from [***]% at December 31, 2018 to [***]% at July 15, 2019, (b) the Company had received preliminary topline results from its Phase 1b/2 Trial in MDS and AML and (c) the Company had made significant process in enrollment of its pivotal Phase 3 clinical trial. The resulting estimated fair value of the Company’s common stock was $17.57 per share (pre-stock split) taking into consideration, among other factors, that, under a M&A scenario, the common stock only has value if the funds avail