Q4 2023 Iterum Therapeutics PLC Earnings Call
Participants
Louise Barrett; SVP, Legal Affairs; Iterum Therapeutics plc
Corey Fishman; CEO; Iterum Therapeutics plc
Judy Matthews; CFO; Iterum Therapeutics plc
Thomas Yip; Analyst; H.C. Wainwright & Co, LLC
Jason McCarthy; Analyst; Maxim Group, LLC
Presentation
Operator
Hello, everyone, and welcome to the Iterum Therapeutics fourth quarter and full year 2023 financial results and business update. My name is Emily, and I'll be coordinating your call. (Operator Instructions)
I will now turn the call over to our host, Louise Barrett, Senior Vice President of Legal Affairs. Louise, please go ahead.
Louise Barrett
Thank you, Emily. Good morning and welcome to Iterum Therapeutics' fourth quarter and full year 2023 financial results and business update conference call. Our press release for our fourth quarter and full 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'll open the line to Q&A.
Before we 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, including the development, therapeutic and market potential levels through the sulopenem.
Our ability to address the deficiencies set out in the complete response letter received from the FDA in July 2021, the expected timing of resubmission of our NDA, the expected timing of review by the of the resubmission by the FDA, the sufficiency of our cash resources to fund our operating expenses into 2025.
The term and coverage provided by our patent and other intellectual property rights and the company's strategic process to sell license or otherwise dispose of its rights to sue upon them to maximize shareholder 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 on regulatory requirements or decisions, regulatory authorities, the timing or likelihood of regulatory filings and approvals, including the potential resubmission of our NDA for oral sulopenem.
Changes in public policy or legislation, commercialization plans and timelines for sulopenem is approved the accuracy of our expectations regarding how far into the future, our cash in hand will fund ongoing operations.
Our ability to maintain our listing on the Nasdaq capital markets, risks and uncertainties concerning the outcome impact effects and results of our pursuit of strategic alternatives, including the terms, timing, structure, value, benefits and cost of any strategic process.
And our ability to complete one at all, whether on attractive terms or at all. And other factors discussed under the caption risk factors in our annual report and Form 10-K filed with the SEC this morning. In addition, any forward-looking statements represent our views only as 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 provided reconciliations of GAAP reported to non-GAAP adjusted information in their press release issued this morning.
With that said, I'll turn it over to you now, Corey, for your opening remarks.
Corey Fishman
Thanks, Louise. Good morning and thanks for joining us today. I'd like to provide a brief recap of 2023 and outline our key activities and milestones for 2024.
Overall 2023 was a very good year for Iterum as we completed enrollment in our confirmatory Phase 3 clinical trial in adult women with uncomplicated urinary tract infections called the REASSURE clinical trial. As a reminder, this trial was conducted under special protocol assessment agreement with the FDA and compared to oral Sulopenem to oral Augmentin.
As many of you know, we were very pleased to recently announce that the REASSURE trial demonstrated that oral sulopenem was noninferior to Augmentin with respect to the trial's primary endpoint, which was overall response, which is the combined clinical cure plus microbiologic eradication at the test-of-cure visit in the microbiological modified intent to treat susceptible populations.
Additionally, oral sulopenem also demonstrated statistically significant superiority to Augmentin in the same patient population. Oral sulopenem also showed consistent efficacy for all key secondary endpoints. Lastly, sulopenem demonstrated a very solid safety profile.
With regards to the sulopenem patent estate. In addition to the in-license patents we obtained in our original license agreement with Pfizer, we continue to seek opportunities to enhance the long-term protection of sulopenem.
We now have issued patents directed to the composition of the bilayer tablet of oral sulopenem granted in the US, Japan, Korea, Australia, and these patents will expire no earlier than 2039. We also have an issued patent in the US directed to the method of use of oral sulopenem in treating multiple diseases including uncomplicated urinary tract infections, which are due to expire no earlier than 2039.
In addition to the in-license and issued patents, we have a number of pending patent applications in the US and other jurisdictions, including Europe and China. We believe that these patents plus our potential data exclusivity would allow oral sulopenem in a long runway to capture value.
I'll spend just a moment now and talk a bit about the market dynamics into which we see sulopenem potentially entering. The uncomplicated urinary tract market is quite large with an estimated 40 million prescriptions annually in the US.
It's estimated that approximately two-thirds of those prescriptions are for elevated risk patients, which are the patients that sulopenem would target. Elevated risk patients are elderly patients with diabetes patients with a history of recurrent infections for patients that have co-morbidities that negatively impact their immune system.
There's a significant need for new efficacious and safe oral products to treat uncomplicated urinary tract infections as the existing older oral products are experiencing high and increasing resistance rates as well as exhibiting subpar safety profiles.
If approved oral sulopenem would be the first oral sulopenem approved in the United States and one of the first new branded treatments approved in the US for uncomplicated urinary tract infections since the turn of the century.
Regarding our upcoming milestones, we plan to resubmit our NDA to the FDA in the first half of the second quarter of this year, provided that the resubmitted NDA addresses all of the deficiencies identified in the complete response letter we received from the FDA in July 2021.
We expect the FDA will complete its review and take action in the first half of the fourth quarter of this year, which would be six months from the date the FDA received the resubmitted NDA. As we look at our cash position based on our current operating plan, we have cash on hand to operate the company through the expected the due date early in the fourth quarter of 2024 and into 2025.
Lastly, as previously stated, we have initiated a strategic process to sell license or otherwise dispose of our rights to sulopenem with the goal of maximizing value for our stakeholders and have engaged a financial advisor to assist management and the Board in evaluating strategic alternatives.
Our Board has not set the timetable for completion of this evaluation process, and we do not intend to disclose further developments unless and until it is determined that further disclosure is appropriate or necessary.
I'll now turn the call over to Judy for details on our financial results.
Judy Matthews
Thanks, Corey. Total operating expenses for $11.4 million to $47.5 million in the fourth quarter and full year 2023 compared to $7.9 million and $30.4 million in the fourth quarter and full year 2022. Operating expenses include research and development expenses and general and administrative expenses.
R&D costs were $9.7 million for the fourth quarter and $40 million for the full year 2023 compared to $5.8 million and $17.6 million for the same periods in 2022. The primary driver of the increase in R&D expense for the fourth quarter and full year was cost to support our REASSURE trial which began enrollment in October 2022 and completed enrollment in October 2023, enrolling 2,222 patients.
G&A costs were $1.7 million in the fourth quarter of 2023, which is $400,000 lower than G&A costs of $2.1 million in the fourth quarter of 2022 due primarily to lower legal fees and insurance costs. Full year G&A costs were $7.5 million in 2023, which is $5.3 million lower than G&A costs of $12.8 million in 2022.
Primarily due to lower share-based compensation expense for employees and directors, lower insurance costs, lower rent expense and a decrease in legal fees associated with the lawsuit filed in August 2021, which was dismissed with prejudice in January 2023, which means the case cannot be brought back to court.
Our net loss on a US GAAP basis was $12.4 million for the fourth quarter of 2023 and $38.4 million for the full year, impacting the full year net loss was a non-cash adjustment of $11.1 million included in other income and expense in connection with the fair value assessment of our Royalty-Linked Note. There was no impact of this adjustment on cash or cash runway, which I will turn to in a moment.
On a non-GAAP basis, which excludes certain non-cash adjustments, our net loss of $10.7 million and $43.8 million for the fourth quarter and full year 2023 compared to our non-GAAP net loss of $6.4 million and $22.9 million in the fourth quarter and full year 2022.
The [$4.3 million and $20.9 million] increase in our non-GAAP net loss for the fourth quarter and full year was primarily a result of higher R&D expenses related to our REASSURE trial as the bulk of the 2,222 patients were enrolled in 2023.
At the end of December, we had cash, cash equivalents and short-term investments of $23.9 million, which based on our current operating plan and including amounts raised under our ATM agreement through the end of February 2024 will provide a cash runway into 2025, including through the expected due for date, in the first half of the fourth quarter of 2024.
We expect to resubmit to the FDA, the NDA will also plan for the treatment of uUTI in the first half of the second quarter of 2024 over the next four to six weeks. As of February 29, 2024, we had approximately 16.4 million ordinary shares outstanding.
Also, as of the end of February 2024, we had approximately $11.1 million of exchangeable notes outstanding, which can be exchanged at the option of the note holder of approximately 1.2 million shares. If the notes are not exchanged prior to maturity, we will be obligated to pay the note holders of $11.1 million plus accrued interest in January 2025.
Now I will turn it back over to Corey.
Corey Fishman
Thanks, Judy. We'll go ahead and open the line for questions now.
Question and Answer Session
Operator
(Operator Instructions)
Ed Arce, H.C. Wainwright.
Thomas Yip
Hi, good morning, everyone. This is Thomas Yip asking a couple of questions were asked. Thank you for taking the questions. So first question we have just wondering, do you have any specific date or triggering events to decide on your strategic options considering that's due for as expected that's you specified earlier early fourth quarter and that cash runway into 2025 inside you have some practically there.
Corey Fishman
Thanks, Thomas. Appreciate the question. We don't have any specific dates or triggering events with regard to the strategic options and primarily because as most folks know, these processes take whatever time is required on a counterparty side to figure out whether there's something that is of interest to them.
And we just don't know how long that process takes. So as we said in our remarks, we're not going to talk about it on each of our calls because at the appropriate time, if and when there's something to disclose, we will of course do that. But until then we don't have any specific dates or timelines on that.
Thomas Yip
Understood. Perhaps a while we understand that the timing details is still up in the air. So will you consider an option, whether it's indication-specific as we understand the NDA resubmission for uncomplicated uUTI, would you consider carving out other indications possible sulopenem and also for geographic areas as well or would certainly consider sulopenem as a single package?
Corey Fishman
Yeah, it's another good question, and we have flexibility on all of those fronts depending on how those conversations go, you bring up a very good point. There's potential for carving up different areas depending on transaction and there's also potential on other indications as well.
So we have flexibility on the company side and again, it's just all a matter of the conversations with other parties as to what they're looking for. But the short answer is yes, we certainly consider any or all of those options potential opportunities.
Thomas Yip
Understood. Thank you again for taking our questions, and we look forward to the NDA resubmission closing.
Corey Fishman
Thanks, Tom.
Operator
Jason McCarthy, Maxim Group.
Jason McCarthy
Thanks, Corey. Thanks for taking the questions. Is Iterum still actively or planning to engage physicians and practices. I guess on an educational level to talk about sulopenem ahead of any type of divestiture or partnering or the focus just getting the NDA done getting to the finish line and seeking to divest or sell the license?
Corey Fishman
Yeah. Thanks, Jason, for the question. The primary focus is going to be around the strategic opportunities and there is a little bit of work ongoing on the commercial side to continue to refine the parameters of the potential commercialization, which could of course, be used by a counterparty at the appropriate time.
I don't think you'll see us at this point spending an awful lot of time out in the physician world, but we will of course, continue to do things like presented conferences put together manuscripts, et cetera, which also help get that message out that is still ongoing and will be ongoing as we continue down the road with sulo.
Jason McCarthy
Got it and does sulo qualify or couldn't qualify ultimately under the past our act, if it should get cleared by congress, obviously there is always challenges in getting things done in congress these days, but it is one of the pure bipartisan bill that is out there in the Senate and that they've heard that it's getting closer and closer. And I wonder sulo could be in that discussion for a kind of, quote-unquote, critical need antimicrobial drug?
Corey Fishman
Yeah, I believe sulo would because of the coverage that it's got on those critical pathogens, much like we have qualified infectious disease product designation from the FDA through the gain act. I believe that sulo would be applicable for anything that would come through under the past direct as well.
Jason McCarthy
Got it. Thanks, Cory.
Corey Fishman
Thanks, Jason.
Operator
We have no further questions, so I'll turn the call back to Corey for closing remarks.
Corey Fishman
Thank you. We appreciate you joining us today. 2023 was a strong year for Iterum, and we're looking forward to 2024, which we will and which will include resubmitting our NDA for oral sulopenem working with the FDA during the review period with an eye toward potentially bringing this important treatment to patients and physicians in the underserved market of uncomplicated urinary tract infections. Thanks again, and have a good day.
Operator
Thank you, everyone, for joining us today. This concludes our call. You may now connect your lines.
