Q4 2023 Acurx Pharmaceuticals Inc Earnings Call
Participants
David P. Luci; Co-Founder, President, CEO & Director; Acurx Pharmaceuticals, Inc.
Robert G. Shawah; Co-Founder & CFO; Acurx Pharmaceuticals, Inc.
Robert J. DeLuccia; Co-Founder & Executive Chairman; Acurx Pharmaceuticals, Inc.
Antonio Eduardo Arce; MD of Equity Research & Senior Healthcare Analyst; H.C. Wainwright & Co, LLC, Research Division
James Francis Molloy; MD of Equity Research and Biotechnology & Specialty Pharmaceuticals Equity Research Analyst; Alliance Global Partners, Research Division
Michael Okunewitch; Senior Research Analyst; Maxim Group LLC, Research Division
Presentation
Operator
Greetings, and welcome to the Acurx Pharmaceuticals Reports Fourth Quarter and Full Year 2023 Earnings Results and Business Update Call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the call over to your host, Rob Shawah, Chief Financial Officer for Acurx Pharmaceuticals. Thank you. You may begin.
Robert G. Shawah
Thank you, Melissa. Good morning, and welcome to our call. This morning, we issued a press release providing financial results and company highlights for the fourth quarter and full year 2023, which is available on our website at acurxpharma.com.
Joining me today is David Luci, President and CEO of Acurx; as well as Robert DeLuccia, Executive Chairman. David will give a corporate update and outlook. After that, I'll provide some highlights of the financials from the quarter and year ended December 31, 2023. I'll then turn the call back over to Dave for his closing remarks.
As a reminder, during today's call, we'll be making certain forward-looking statements. These forward-looking statements are based on current information, assumptions, estimates and projections about future events that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.
Investors should consider these risks and other information described in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K, which we filed on Friday, March 15, 2024.
You are cautioned not to place undue reliance on these forward-looking statements, and Acurx disclaims any obligation to update such statements at any time in the future.
This conference call contains time-sensitive information that's accurate only as of the date of this live broadcast today, March 18, 2024.
I'll now turn the call over to Dave Luci. Dave?
David P. Luci
Thanks, Rob. Good morning, everyone, and thanks for joining us to review our financial results for the fourth quarter of 2023 and also to hear some very exciting recent updates. Then we'd be pleased to take any questions.
First, I'll summarize some of our key activities for the fourth quarter of '23, or in some cases, shortly thereafter. On October 2, 2023, we ended enrollment in our Phase IIb clinical trial of ibezapolstat, or ibez, our lead antibiotic candidate for the treatment of patients with C. difficile infection or CDI. On November 7, 2023, we reported top line data from the Phase IIb clinical trial including overall results from the full Phase II study, demonstrating ibezapolstat clinical cure rate at end of 10 days oral treatment or EOT of 96%, 25 or 26 patients, which included 100% cure in Phase IIa; and 94% cure in Phase IIb compared with vancomycin control arm, the standard of care, which was 14 for 14 or 100% at end of treatment and at 94% with sustained cures.
No safety concerns were recorded in either arm of the Phase IIb clinical trial, and ibezapolstat was well tolerated in all patients in both the Phase IIa open-label trial and the Phase IIb vancomycin-controlled segment.
In consultation with our scientific advisers, the company determined that based on review of aggregate blinded data, the Phase IIb vancomycin-controlled trial segment was terminated early due to success showing high observed clinical cure rates with no emerging safety concerns. Clinical comparability was established. We also stated at that further -- that further data would be provided as it becomes available on secondary and exploratory endpoints for the Phase IIb trial segment, including sustained clinical cure data at 30 days after EOT and extended clinical cure data 94 days after an EOT as well as comparative data on the impact on the patient's microbiome.
On December 11, '23, we announced the sustained clinical cure data. These data showed that in the Phase IIb trial segment, 100% or 15 of 15 of our advanced patients who were cured at EOT remain cured with no reinfection 30 days later while vancomycin experienced a reinfection rate of 14.3%, 2 of 14 patients were reinfected.
On January 17, 2024, we announced positive comparative microbiology and microbiome data for ibezapolstat in CDI patients from the Phase IIb clinical trial segment. Ibezapolstat outperformed vancomycin, showing eradication of fecal C. difficile at day 3 of treatment in 15 of 16 treated patients versus vancomycin, which had eradication of C. difficile in just 10 of 14 treated patients.
Additional data from the Phase IIb clinical trial showed ibezapolstat, but not vancomycin consistently preserved and allowed regrowth of key bacterial species believed to confer health benefits including prevention of recurrent C. difficile infection.
We anticipate that data from the secondary and exploratory endpoints will provide further favorable separation between these 2 therapeutic options in our Phase III clinical trial program, and ultimately, in the marketplace, if approved. Additional analyses regarding other secondary and exploratory endpoints will be forthcoming as data become available.
We remain particularly excited about the dual impact of ibezapolstat to treat acute C. difficile infection while appropriately managing the long-term care of each patient's microbiome, which we believe is exceptional for antibiotic therapy.
Having robust preclinical, clinical and manufacturing data to date, we submitted a formidable information package in early February to FDA along with a request for an end of Phase II meeting, which was granted by FDA on Feb 26 and is scheduled to occur in April. We anticipate discussing our Phase III clinical trial mandate at this meeting and would anticipate documented meeting minutes from FDA sometime in this year.
We also announced that European Medicines Agency approved our application to be designated as a small- to medium-sized enterprise or SME, in Europe, which provides for certain benefits, including fee reductions and other support from the European Medicines Agency for seeking a marketing authorization in Europe.
In November 2023, we filed an amendment to our shelf registration statement with the Securities and Exchange Commission and put up a $17 million aftermarket or ATM facility with Alliance Global Partners acting as a sales agent to the company. Proceeds from the ATM will be used for general corporate purposes going forward including our planned Phase III clinical trial mandate.
In October 2023 at ID Week, Dr. Kevin Garey presented on our behalf with selective spectrum of activity data from our Phase IIa clinical trial. Many of you may recall Dr. Garey is Professor and Chair, University of Houston College of Pharmacy and the principal investigator for our microbiome aspects of the ibezapolstat clinical trial program. Also at ID Week, Bob DeLuccia, our Executive Chairman, presented our new class of novel DNA pol IIIC inhibitors in our preclinical pipeline at the symposium entitled, "New Antimicrobials in the Pipeline."
Now that's a lot of activity to digest. So I'll summarize further as to where we are today. As we speak, we're preparing to advance ibezapolstat into Phase III clinical trials and anticipate a favorable outcome from our upcoming FDA meeting regarding readiness to proceed and also to obtain agreement on the regulatory pathway for a new drug application filing for marketing approval in the U.S. once Phase III is completed.
We've also officially started the regulatory process in Europe and will add other territories to the list later this year. The Phase III trials will include U.S. and international sites to enhance overall enrollment and to support international regulatory filings for marketing approval. This will save us a lot of time and money and allow us to expand our ultimate commercial reach.
To ensure Phase III clinical trial enrollment as quickly as possible, we're adding substantially more clinical trial sites, way above the number we used to conduct our U.S.-only Phase II trials. We're now getting our arms around the costs and time lines, but our plan is to conduct the required 2 Phase III registration trials consecutively, not concurrently, given the size of our company and need to use our financial resources most efficiently.
The time line for conduct of our Phase III trial is not a concern since ibezapolstat will have a rolling 10 years of regulatory exclusivity in the U.S. from the FDA approval date with similar legislation in Europe, the U.K. and Japan.
We will continue to seek strategic transaction for the company, including a potential partner for the further development and potential commercialization of ibezapolstat as well as a potential sale, merger, third-party ex U.S. territorial licensing arrangement or other strategic transaction alongside and in parallel with our preparation for Phase III clinical trials.
At this time, we have no commitments from potential partners or others to provide the company with capital, but we started this initiative only recently in February after our Phase IIb data was released.
So basically, we have 2 formidable plans [A] going forward, and we're equally excited about partnering, M&A and Phase III enrollment as next steps over the next 12 months.
As we've consistently reported, ibezapolstat continues to outperform in a series of potentially life-threatening in such infectious disease called C. difficile that the U.S. CDC categorizes as an urgent threat and there's a need for new classes of antibiotics for initial treatment, but also has a low incidence of recurrence. Ibezapolstat also has FDA Fast Track designation for treatment of C. difficile infection.
Additionally, we believe ibezapolstat, if approved, could make a favorable impact by reducing the cost burden of current C. difficile infection on our U.S. health care system, which is estimated at $4.7 billion annually. We do believe the best is yet to come.
And now back to our CFO, Rob Shawah, to guide you through the highlights of our financial results for the fourth quarter and full year 2023. Rob?
Robert G. Shawah
Thanks, Dave. Our financial results for the fourth quarter and 12 months ended December 31, 2023, were included in our press release issued earlier this morning.
The company ended the year with cash totaling $7.5 million compared to $9.1 million as of December 31, 2022. Subsequent to year-end, the company sold an additional 1,121,793 shares under its ATM financing program with gross proceeds of approximately $4.5 million.
Research and development expenses for the 3 months ended December 31, 2023, were $1.9 million compared to $1.4 million for the 3 months ended December 31, 2022. The increase was due to timing of Phase IIb trial-related costs and an increase in consulting costs.
For the year ended December 31, 2023, research and development expenses were $6 million versus $4.8 million for the year ended December 31, 2022. The increase is due primarily to Phase IIb costs and an increase in consulting costs.
General and administrative expenses for the 3 months ended December 31, 2023 were $3.2 million compared to $1.8 million for the 3 months ended December 31, 2022. The increase was due primarily to $800,000 increase in professional fees, a $0.1 million increase in share-based compensation and a $0.3 million increase in employee compensation costs.
For the year ended December 31, 2023, general and administrative expenses were $8.5 million versus $7.3 million for the year ended December 31, 2022. The amounts reflect an increase in professional fees of $0.5 million, an increase of $0.3 million in share-based compensation and an increase of $0.3 million in employee compensation costs.
The company reported a net loss of $5.1 million or $0.37 per diluted share for the 3 months ended December 31, 2023, compared to a net loss of $3.3 million or $0.28 per diluted share for the 3 months ended December 31, 2022. And a net loss of $14.6 million or $1.15 per share for the year ended December 31, 2023, compared to a net loss of $12.1 million or $1.12 per diluted share for the year ended December 31, 2022, for the reasons previously mentioned.
The company had 14,468,229 shares outstanding as of December 31, 2023.
With that, I'll turn the call back over to Dave.
David P. Luci
Thanks, Rob. Thanks to all of you for joining us today. I'll now ask Bob DeLuccia, our Executive Chairman, to provide his perspective given and Bob manages our R&D program. And when Bob is finished, operator, please open the call for questions. Bob?
Robert J. DeLuccia
Thanks, Dave and Rob, for updating our stakeholders and thanks to all for the continuing support as we advance ibezapolstat into Phase III clinical trials. It is a very exciting time, and really, it's the final step to commercialize ibezapolstat for patients in need of a promising new antibiotic with a novel bactericidal mechanism of action to treat CDI.
And many of you will remember that approximately 30,000 people die each year in the U.S. alone from CDI and the annual incidence is more than about 0.5 million per year in the United States.
But the bottom line here is that if the outcome of our Phase III trials are consistent with our Phase II experience, we'll have an approvable new drug in our hands. The data are solid, the market is large and our manufacturing cost is low. We do have a robust preclinical clinical microbiome safety and CMC evidence package that we've submitted to the FDA, and as Dave mentioned, they've determined it acceptable to grant us an end of Phase II meeting next month to discuss trial design, patient enrollment targets and to confirm our readiness to go forward.
So to complete our Phase II, international Phase III trials, which will be done sequentially, as Dave mentioned, and as quickly as possible, we initiated steps to advance screen potential clinical trial sites, which in addition to North America, will cover sites in about 17 other countries, including several in Eastern, Central, Northern and Western Europe, totaling about 100 sites, which we believe will accelerate overall enrollment.
We'll also be including several high-enrolling trials sites in the fast-enrolling Summit Phase III CDI trial, which was conducted through in the height of COVID-19.
In addition to global scope for the program compared to Phase II and the strength of our Phase II data, the Phase III protocol will allow more flexibility for inclusion and exclusion criteria as a standard for CDI pivotal registration trials so we anticipate faster enrollment.
Then once we have results from our FDA meeting and documented meeting minutes from the FDA, our next priority will be to submit our plans to the European Medicines Agency or EMA, for conducting Phase III clinical trials in Europe.
So if approved, we'll have the first new class of antibiotics approved by FDA in over 30 years with only confirmatory Phase III trials between now and market introduction. Ibezapolstat, as Dave mentioned, is fast tracked by FDA, it's fully patented and with regulatory exclusivity 10 years post-market introduction in the U.S. and similar opportunities for regulatory exclusivity in other geographies to pursue at the appropriate time.
And also with recent focus on minimizing effects on the microbiome to lower recurrence of infection, we stand out from other antibiotics since we've shown no reinfection in Phase II patients who were initially cured of their infection.
So in my over 50 years of experience in antibiotic development and marketing, I think I have got a great rearview mirror and a clear vision to say that we have a winner here for patients with CDI, and in general, for better public health as well as for our shareholders.
Thanks for letting me comment, Dave.
David P. Luci
Thank you, Bob. And Melissa, we're now ready to go to Q&A.
Question and Answer Session
Operator
(Operator Instructions) First question is from the line of Jason McCarthy with Maxim Group.
Michael Okunewitch
This is Michael Okunewitch on the line for Jason. Yes. So I guess, to start off, I'd like to see if you could give an idea of what sort of time line you're expecting between getting those meeting minutes back from the FDA and actually launching the first of those Phase III studies?
David P. Luci
So we think that we will be ready to enroll first patient in for the international Phase III in the fourth quarter of this year.
Michael Okunewitch
All right. And then, I guess, regarding the international component to the study, could you talk a little bit more about the path to actually getting those sites online? And then is this something that you would look to have in place ahead of the launch? Or would you start with what you have when you're ready to actually enroll a study and then layer in these international sites as they are approved?
David P. Luci
Well, it will be a little bit of both. So we have a number of the sites already kind of ready to go from the international list. There won't be any holdup from the international aspect of it. We actually have a consultant who is extremely familiar with Phase III C. diff international trials who's been guiding us in this regard.
But yes, clearly, when our manufactured product is ready, we'll be ready to go with a large wedge, at the very least, of the 100 sites.
Michael Okunewitch
All right. And then one last one for me and I'll hop back in the queue. With regards to securing international partnerships, do you think this is something with your existing body of data that is compelling enough that you could really progress those conversations now and get a partner? Or would you expect it to be more after you get that first slot of Phase III data?
David P. Luci
No, I would expect that the prime time for us to find, I'll say, a European partner or a Japanese partner would be when we start enrolling the first of the 2 Phase III trials. Once we have the Phase III trial mandate completed and we're ready to file a new drug application, if we haven't had a partnership by then, I think it would probably not occur until a year after the market introduction is folks want to see how well we do. So yes, I think the time is ripe right now.
I'll make one additional comment on the territorial partnerships to carry Michael's question -- response a little bit further. As we look at strategic alternatives, there's M&A full stop and there's territorial licensing and co-development agreements that I've [alluded to] in the past. And with our share price being where it is, the territorial licensing is a bit easier to consummate because it's all about the intrinsic value of your drug as opposed to M&A, which you can't, in my view, fully divorce yourself of your Nasdaq share price. So it may be a more attractive option for our Board of Directors, but we'll see what term sheets present themselves.
Operator
Our next question comes from the line of James Molloy with Alliance Global Partners.
James Francis Molloy
The Phase III trials, I know that obviously a lot to go here, but can you walk through expectation, which we should expect to see coming out of the end of Phase II? And then the trial designed to -- sort of length of time to run the two is about 2 years start to finish the Phase IIb, I know we were dealing with COVID then as well. Does that seem reasonable to run these 2 Phase IIIs from start to finish?
David P. Luci
Well, the 2 Phase IIIs, so we're going to address one Phase III and then the idea would be to either do a strategic transaction after that first Phase III or with positive data in the first Phase III if it's the same or consistent with our Phase II, get a share price rise and then raise capital for the second Phase III. So we're targeting 1.5 years from start to finish for the first Phase III and that would have us completing the first Phase III in the second quarter of '26.
Now I can tell you that we spent a lot of time looking at the Summit Therapeutics experience. And Summit enrolled in the teeth of COVID 750-or-so patients in about 2 years' time, largely in Eastern Europe, where the behavior patterns weren't dramatically changed apparently like they were here in the U.S. So that's a public list on ClinicalTrials.gov. So we were able to see exactly the heat patterns from their enrollment. So that's going a long way to helping us get comfortable with fixing the enrollment issues we had during COVID with our U.S.-only trial.
James Francis Molloy
Okay. My apologies, I thought I heard you say earlier in the call that you're going to run the 2 trials at the same time. I must have misheard that. You're running back to back.
David P. Luci
Yes. No, no. Our going-in plan is to do that consecutively instead of concurrently for the financial reasons that we discussed. But if we hit a partnership, say, a European licensing agreement, and that brings in enough money to call [it on] along the way, and at that point, then we would certainly start the second Phase III accordingly.
Operator
(Operator Instructions) Our next question comes from the line of Ed Arce with H.C. Wainwright.
Antonio Eduardo Arce
Great. So a couple for me. Firstly, on the end of Phase II next month, and I apologize, I joined late, so maybe you went over this already, but wanted to make sure to review sort of the key objectives. In particular, what do you not have agreement with the agency yet that you would seek to get agreement on next month in that meeting?
And then secondly, I think you made mention of a wider inclusion/exclusion criteria for the Phase III relative to the prior Phase II. And so just wanted to get a little more clarity on that, in particular, the view to -- concerns there might be around the risk that could change the sort of design of the trial and there could be some disruption from a slightly different patient population.
David P. Luci
Thank you, Ed. I'll answer the first part of your question and then ask Bob to provide a response for the inclusion and exclusion criteria part of your question. So for the first part of your question, what we hope to agree on with the FDA is the overall protocol designed for our Phase III trial, including the number of patients to be enrolled, the notion that we're going to have a vancomycin control arm like we had in our Phase IIb. Largely, the trial design is 90-plus percent of what the trial design was for our Phase IIb. So we don't expect a real lot of drama, but it's a necessary step in order to kind of be allowed to go into Phase III so we're looking forward to it as a value inflection point that we have to get through.
Bob, did you want to add some comments on the inclusion and exclusion criteria?
Robert J. DeLuccia
I think really 2 things, which is standard fare for going forward in Phase III is that we'll have additional patients beyond mild and moderate that are included in the trial. So this is not severe CDI, but a little bit more than a moderate according to the IDSA criteria for patient entry into a trial in a study.
So we've already submitted a framework to the FDA in the meeting package. It's very straightforward. I'd even say a higher percentage than Dave said at 90%. We're pretty much there with the design, it's the same design. Basically, it's Phase II and very standard according to the FDA guidance from October 2022, I believe it is, as to what needs to be included in the Phase III clinical trials.
So we'll be discussing final numbers of patients, as I said before, and a statistical analysis plan will be finalized at that upcoming FDA meeting as well. Anything else? Does that answer your question?
Antonio Eduardo Arce
Yes, that's helpful.
Operator
Thank you. Ladies and gentlemen, that concludes our question-and-answer session, and that concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.
