Iterum Therapeutics plc (ITRM) Q2 2024 Earnings Call Transcript

Iterum Therapeutics plc (NASDAQ:ITRM) Q2 2024 Results Conference Call August 14, 2024 8:30 AM ET

Company Participants

Louise Barrett – Senior Vice President of Legal Affairs & Secretary
Corey Fishman – President, CEO & Director
Judith Matthews – Chief Financial Officer

Conference Call Participants

Jason McCarthy – Maxim Group

Operator

Good morning, everyone. Welcome to Iterum Therapeutics Second Quarter 2024 Financial Results and Business Update. My name is Kiki, and I will be your conference operator today. [Operator Instructions]

I will now hand you over to your host, Louise Barrett, Senior Vice President, Legal Affairs, to begin. Louise, please go ahead.

Louise Barrett

Thank you, Kiki. Good morning, and welcome to Interim Therapeutics’ Second Quarter 2024 Financial Results and Business Update Conference Call. A press release with our second quarter results was issued earlier this morning and can be found on our website. We are joined this morning by our Chief Executive Officer, Corey Fishman; and our Chief Financial Officer, Judy Matthews. Corey will provide some opening remarks Judy will provide details on our financial results, and then we will open the lines for Q&A.

Before I begin, I’d like to remind you that some of the information presented on this conference call will contain forward-looking statements concerning our plans, strategies and prospects for our business. These include statements regarding the topics that will be covered at the upcoming advisory committee meeting in relation to our resubmitted NDA for oral sulopenem. The date by which the FDA will take action regarding or NDA the expected use of proceeds from our recently completed rights offering, the planned extraordinary general meeting of shareholders to consider the disapplication of preemption rights, the efficiency of interims cash resources to fund its operating expenses into 2025 and our strategic process to sell, license or otherwise dispose of our rights to sulopenem to maximize stakeholder value.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors outside of our control, including uncertainties inherent in the design, initiation and conduct of clinical and nonclinical development changes in regulatory requirements or decisions of regulatory authorities, the likelihood of regulatory filings and approvals, changes in public policy or legislation, commercialization plans and time lines of oral sulopenem approved.

The accuracy of our expectations regarding how far is the future our cash on hand will fund our ongoing operations, the sufficiency of our cash resources and our ability to continue as a going concern, our ability to regain compliance and maintain our listing on the NASDAQ capital market and risks and uncertainties concerning the outcome impact effects and results of our pursuit of strategic alternatives.

And those other factors discussed under the caption Risk Factors in our quarterly report on Form 10-Q filed with the SEC this morning. In addition, any forward-looking statements center viewed only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements.

We will also be referencing non-GAAP financial measures during the call. We’ve provided a reconciliation of GAAP reported to non-GAAP adjusted information in the press release issued this morning. With that, I’ll say, I’ll turn it over to you now, Corey, for your opening remarks.

Corey Fishman

Thanks, Louise. Welcome, and thanks for joining us today. It continues to be a very busy and productive time for Iterum, and I’m pleased to share the following updates. We were pleased to have recently closed our rights offering, which generated $5.8 million of net proceeds after taking into account fees and expenses.

This additional capital will allow us to continue to pursue our business plan and strategy, including funding our ongoing strategic process to maximize the value of sulopenem for our stakeholders. Now turning to upcoming milestones. On September 9, Iterum will meet with the FDA’s Antimicrobial Drugs Advisory Committee to discuss our resubmitted new drug application for oral sulopenem for the treatment of uncomplicated urinary tract infections in adult women.

The general function of the Antimicrobial Drugs Advisory Committee is to provide advice and recommendations to FDA on regulatory issues. We have been working diligently to prepare materials for this upcoming meeting and are looking forward to the discussion. Another important date is October ’25, that is the PDUFA action date assigned by FDA to Iterum’s resubmitted new drug application for oral sulopenem. We continue to work with the FDA during their review process.

If the FDA completes its review within their general time frame, on or about this date, we should receive a decision regarding the approvability of oral sulopenem or the treatment of uncomplicated urinary tract infections in adult women. If approved, oral sulopenem would be the first oral penem approved in the United States. We continue to expand our intellectual property estate.

Most recently, we announced that 2 pending U.S. patent applications and 1 pending Canadian patent application were recently allowed. One allowed U.S. patent implication is directed to the method of use of oral sulopenem in treating uncomplicated urinary tract infections. While the other allowed U.S. patent application is directed to the method of use of sulopenem etzadroxil, Probenecid and Valproic acid in treating multiple diseases.

The allowed Canadian patent application is directed to the bi-layer tablet of oral sulopenem and its related preparation and/or uses. Once these new patents issue, in addition to in-license patents, we will have owned patents in the U.S., Japan, Australia, Korea and Canada with patent applications pending in Europe, China and other key territories.

As we look at our cash as of June 30, we had $11.7 million in cash and cash equivalents. Based on our current operating plan, we believe that the current cash, cash equivalents and short-term investments plus the newly raised cash from the rights offering provides a runway into 2025, including through the expected PDUFA date in late October of this year.

Looking to future capital requirements, we are once again seeking approval of our shareholders at an upcoming Extraordinary General Meeting of Shareholders to disapply the statutory preemption rates applicable to the increase in authorized share capital that was approved by our shareholders at our 2023 Annual General Meeting.

This will enable us to quickly take advantage of opportunities to raise capital through share issuances for cash, which, in turn, allow us to fund the continued execution of our business plans and strategies further into 2025, including funding our ongoing strategic process and repayment of $14.7 million of principal and interest due in January 2025 on the outstanding 6.5% exchangeable senior subordinated notes.

The granting of the preemption opt-out authority eliminates the competitive disadvantage we are placed at compared to non-Irish NASDAQ-listed public companies and the risks associated with seeking transaction-specific shareholder approvals or having to first offer those shares that we propose to issue for cash to all our existing shareholders in a time-consuming and costly pro rata rights offer.

As an example, our recently completed rights offering was both time-consuming and costly taking approximately 3.5 months to implement with total costs in excess of $1.6 million, including dealer manager fees. Our Board of Directors continues to view this proposal as being in the best interest of the company and our shareholders and recommends a vote in favor thereof.

Now I’ll turn the call over to Judy Matthews for an update on our financial performance.

Judith Matthews

Thanks, Corey. Total operating expenses were $4 million in the second quarter of 2024, compared to $10.8 million in the second quarter of 2023. Operating expenses include research and development expenses and general and administrative expenses. R&D costs were $2.1 million for the second quarter compared to $9 million for the same period in 2023.

The primary driver of the $6.9 million decrease and R&D expense for the second quarter was primarily due to higher costs incurred in 2023 to support our REASSURE trial, which began enrollment in October 2022 and completed enrollment in October 2023. G&A costs were $1.9 million for the second quarter of 2024, which is flat to G&A costs of $1.9 million in the second quarter of 2023.

Our net loss on a U.S. GAAP basis was $5 million for the second quarter of 2024 compared to $12.2 million for the same period in 2023. On a non-GAAP basis, which excludes certain noncash adjustments, our net loss of $3.8 million in the second quarter of 2024 compared to our non-GAAP net loss of $10 million in the second quarter of 2023. The $6.2 million decrease in our non-GAAP net loss for the second quarter was primarily a result of lower R&D expenses related to our REASSURE trial as enrollment in this Phase III trial was completed in October 2023.

At the end of June, we had cash, cash equivalents and short-term investments of $11.7 million. And earlier this month, we completed the rights offering resulting in aggregate net proceeds of $5.8 million, based on our current operating plan, we’ll provide cash runway into 2025, including group potential FDA approval on October 25, 2024.

We currently have approximately 22.7 million ordinary shares outstanding, which includes the shares issued in the recently completed rights offering. Also, we currently have approximately $11.1 million of exchangeable notes outstanding, which can be exchanged at the option of a noteholder for approximately 1.9 million shares.

If the notes are not exchanged, we will be obligated to pay the noteholders $14.7 million, which includes accrued interest in January 2025. Now we will open the line for questions.

Question-and-Answer Session

Operator

[Operator Instructions] The first question is from Ed Arce from HC Wainright. Please go ahead.

Unidentified Analyst

This is Thomas asking a couple of questions for Ed. So first question, can you discuss your perspective on the 2 stated objectives of the outcome by the seems as the agency is very concerned about antibiotic resistance with the first oral penem, which is sulopenem. The assessed agency is somewhat reluctant in considering this approval.

Corey Fishman

Thanks for the question, Thomas. I don’t think they’re reluctant considered to approve it. I think what they are thinking about is because it would be the first oral penem to be approved is making sure that it is getting to the right patients for this indication, which, of course, is consistent with what we would want.

And of course, what we would do in terms of any promotion would be only for our approved indication. And so I don’t think they’re reluctant to approve it. I think this is just a little bit of an area they haven’t had to address recently, and therefore, I think they’re just being mindful of the opportunity to have a drug like an oral penem available, which is extremely efficacious and very safe and not being more widely used than it would be natural given the approval that we might get.

Unidentified Analyst

Got it. And to that end, can you align some topics of the date that you would expect at the Ad Comm?

Corey Fishman

I’m sorry, I didn’t catch that question, Thomas.

Unidentified Analyst

What we would like to know is can you outline some topics of the date that you anticipate will be raised at the Ad Comm.

Corey Fishman

Yes. When the FDA sent us our note, and we have obviously talked about this publicly, they did talk about 2 specific things they would like to talk with us and the Ad Comm about which is stewardship. And that, again, goes to what we just talked about, which is making sure that the product is being used appropriately in an appropriate way for the appropriate patient.

And the second topic that they mentioned was what is the appropriate patient population. And obviously, we have done our study based on uncomplicated UTI in adult women and that in and of itself could be the appropriate population. I think they’re trying to just get a sense from the advisory committee as to that conversation. And talking through that, because, again, I think this is a little bit of new ground for the FDA, not so much on whether it should be approved or not.

Obviously, they’ll make their own decision on that, but who uses this and how they use it. So those are the 2 topics that they specifically mentioned in their correspondence to us with regard to what topics they would like to talk with the advisory committee about.

Unidentified Analyst

Got it. And then as one more question from us to provide evidence of sulopenem safety. Are you allowed to include safety data from studies outside of U.K. patients specifically the REASSURANCE study. Are you allowed to include other completed studies as well?

Corey Fishman

Yes. Not only are you allowed to. I think it’s probably — I don’t want to say required, but certainly, we’ve done 4 Phase III studies, and we will have a comprehensive safety data base across all of those patients. And as you know, the good news is from a safety perspective, sulopenem has presented a very clean safety profile. So yes, that will be part of the data that gets presented as well.

Unidentified Analyst

Understood. We look forward to the Ad Comm.

Operator

Thank you. Next question is from Jason McCarthy from Maxim Group.

Jason McCarthy

Corey, this is kind of an impossible question without the briefing documents for the Ad Comm. But do you think because I can appreciate why this is — it’s new. It’s the first oral penem and they want to go through the stewardship discussion. But considering they want to talk about stewardship and then look for the most appropriate patient population.

Do you think they’re trying to maybe narrow the label and indication and thus the commercial opportunity to maybe patients who are failing on Augmentin or [Sipro] or something else and having to go through that process to get to sulo.

Corey Fishman

Yes. Thanks for the question, Jason. It’s a really good one. I don’t know the answer to that other than what I can tell you is we have studied the populations have been what we’ve studied. And so to your point, I think it might be a little difficult to try to narrow that label without having evidence of having studied that particular subgroup.

So having said that, again, I don’t know what the FDA is going to do ultimately, of course, and I don’t know where they’re going. I just think that it would be a little bit more challenging and that could potentially be why they want to talk with the advisory committee. To pick a subgroup and say, well, you have to go through this and this in order to get sulopenem. That’s not what we studied. So it would be very difficult, I think, for the FDA to kind of put those guideposts, if that’s not the population we’ve studied.

So certainly, we’re going to work with the FDA and the advisory committee to try to come to some understanding Clearly, getting the drug approved from our standpoint is going to be the paramount thing and then, of course, what does the label say is next in the conversation. But given the patient populations we’ve studied we just don’t know how that would happen.

And that’s not to say that the FDA won’t come up with something because, of course, that’s their prerogative. But certainly, it isn’t in our study material to say you have to have had a prior infection or have had failed on something else. We just didn’t study it that way.

Jason McCarthy

Got it. And do you think — and I know these are the 2 major topics and maybe it will be in the briefing documents. Do you think there’ll be some discussion around the REASSURE data because while it was non inferior, meaning that primary endpoint, there was statistical superiority and there was also those cases, right, in the prior SUR-1 trial of Cipro or you statistically superior in different cuts of the data, do you think a superiority aspect to this can wind up in the label, which would be great.

Corey Fishman

It’s another good question. I don’t know if that would be something that they would put in the label. It’s certainly something that is a conversation piece for discussion with the FDA. The real question, I think, becomes the strength of the data. And I think we feel very good that given the reassured data of not only, as you said, the non inferiority plus superiority you’ve got some really compelling data there.

So it will be interesting to see if we get to that stage with the agency, where their heads are at with regard to the conversation around what does the label say? Is it kind of your standard label you’re approved for uncomplicated UTI or is it something more broad that says not only are you approved, but you’ve shown superiority to these other agents and will that show up somewhere in the label? It’s possible.

Operator

Thank you. As we currently have no further questions, I would like to turn the conference back over to Corey Fishman, Chief Executive Officer, for closing remarks.

Corey Fishman

Thank you, Kiki. Thanks again for joining us today. We are very excited about our upcoming interactions with the FDA Antimicrobial Advisory Committee and the FDA as part of the continued review of our resubmitted new drug application and are looking forward to potentially bringing sulopenem an important treatment option to physicians and patients in the underserved market of uncomplicated urinary tract infections. Thanks again, and have a good day.

Operator

This concludes today’s conference call. You may now disconnect your lines. Thank you.