Acurx Pharmaceuticals Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
March 18, 2024

There are 7 speakers on the call.

Operator

Greetings, and welcome to the AcuraX Pharmaceuticals Reports 4th Quarter and Full Year 2023 Earnings Results and Business Update Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Rob Shawa, Chief Financial Officer for Acurex Pharmaceuticals.

Operator

Thank you. You may begin.

Speaker 1

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 Q4 and full year 2023, which is available on our website at acurexpharma.com. Joining me today is David Lucci, President and CEO of Acorex as well as Robert DeLucia, Executive Chairman. David will give a corporate update and outlook.

Speaker 1

After that, I'll provide some highlights of the financials from the quarter year ended December 31, 2023, and 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 ks, which we filed on Friday, March 15, 2024. You are cautioned not to place undue reliance on these forward looking statements and AcuraX disclaims any obligation to update such statements at any time in the future.

Speaker 1

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 Lucci. Dave?

Speaker 2

Thanks, Rob. Good morning, everyone, and thanks for joining us to review our financial results for the Q4 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 Q4 of 'twenty three or in some cases shortly thereafter. On October 2, 2023, we ended enrollment in our Phase 2b clinical trial of Ibezepolstat or Ibez, our lead antibiotic candidate for the treatment of patients with C.

Speaker 2

Difficile infection or CDI. On November 2, 2023, we reported top line data from the Phase 2b clinical trial including overall results from the full Phase 2 study demonstrating an imbecifolstat clinical cure rate at end of 10 days oral treatment or EOT of 96%, 25 of 26 patients which included 100% cure in Phase 2a and 94% cure in Phase 2b compared with Vancomizer control arm standard of care which was 14 for 14 or 100% at end of treatment and 94% was sustained cures. No safety concerns were reported in either arm of the Phase 2b clinical trial and abezapolstat was well tolerated in all patients in both the Phase 2a open label trial and the Phase 2b vecomycin controlled segment. In consultation with our scientific advisors, the company determined that based on review of aggregate blinded data, the Phase 2b vecomycin controlled trial segment was terminated early due to success showing high observed clinical purees with no emerging safety concerns. Clinical comparability was established.

Speaker 2

We also stated that further data would be provided as it becomes available on secondary and exploratory endpoints for the Phase 2b trial segment including sustained clinical cure data at 30 days after EOT and extended clinical cure data 94 days after EOC as well as comparative data on the impact on the patient's microbiome. On December 11, 23, we announced a sustained clinical PURE data. These data showed that in the Phase 2b trial segment 100% or 15 of 15 of our Ibadis patients who were cured at EOT remained cured with no reinfection 30 days later while VAGOMYOS had 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 the Ibesipolstat in CDI patients from the Phase 2b clinical trial segment. Ibesopolstat 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 cetabacil in just 10 of 14 treated patients.

Speaker 2

Additional data from the Phase 2b clinical trial showed that bezepolstat but not vancomycin consistently preserved and allowed regrowth of key bacterial species believed to confer health benefits including prevention of recurrent CWSCL infection. We anticipate that additional data from these secondary and exploratory endpoints will provide further favorable separation between these 2 therapeutic options in our Phase 3 clinical trial program and ultimately in the marketplace if approved. Additional analyses regarding our secondary and exploratory endpoints will be forthcoming as data become available. We remain particularly excited about the dual impact of ipadipolstat 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.

Speaker 2

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 2 meeting which was granted by FDA on Feb 26 and is scheduled to occur in April. We anticipate discussing our Phase 3 clinical trial mandate at this meeting and would anticipate documented meeting minutes from FDA sometime in Q2 this year. We also announced that the European Medicines Agency approved their application to be designated as 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 $17,000,000 at the market or ATM facility with Alliance Global Partners acting as sales agent to the company. Proceeds from the ATM will be used for general corporate purposes going forward, including our planned Phase 3 clinical trial mandate.

Speaker 2

In October 2023, at ID Week, Doctor. Kevin Gary presented on our behalf with selective spectrum of activity data from our Phase 2a clinical trial. Many of you may recall Doctor. Gary is Professor and Chair, University of Houston College of Pharmacy and the Principal Investigator for our microbiome aspects of the imesopulosat clinical trial program. Also at ID Week, Bob DiLucia, our Executive Chairman, presented our new class of novel DNA Pol3c inhibitors in our preclinical pipeline at the symposium entitled New Antimicrobials in the pipeline.

Speaker 2

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 Ibezopolostat 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 3 is completed. We've also officially started the regulatory process in Europe.

Speaker 2

We'll 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.

Speaker 2

To ensure Phase 3 clinical trial enrollment as quickly as possible, we're adding substantially more clinical trial sites way above the number we use to conduct our U. S. Only Phase 2 trials. We're now getting our arms around the cost and timelines, but our plan is to conduct the required 2 Phase 3 registration trials consecutively, not concurrently given the size of our company and need to use our financial resources most efficiently. The timeline for conduct of our Phase 3 trial is not a concern since Ibezepulcet will have a rolling 10 years of regulatory exclusivity in the U.

Speaker 2

S. From the FDA approval date with similar legislation in Europe, the U. K, and Japan. We will continue to seek a strategic transaction for the company including a potential partner for the further development and potential commercialization of IVESAPOLSTAD as well as a potential sale, merger, 3rd party ex U. S.

Speaker 2

Territorial licensing arrangement or other strategic transactions alongside and in parallel with our preparation for Phase 3 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 2b data was released. So basically we have 2 formidable plans A going forward and we're equally excited about partnering M and A and Phase 3 enrollment as next steps over the next 12 months. As we've consistently reported, edezapolstat continues to outperform in a series of potentially life threatening infectious disease called C. Difficile that the U.

Speaker 2

S. CDC categorizes as an urgent threat and there's a need for new classes of antibiotics for initial treatment. It also has a low incidence of recurrence. Imbesipulstat also has FDA Fast Track designation for treatment of C. Difficile infection.

Speaker 2

Additionally, we believe Ibezepulstat if approved could make a favorable impact by reducing the cost burden of current C to the C infection on our U. S. Healthcare system which is estimated at $4,700,000,000 annually. We do believe the best is yet to come. And now back to our CFO, Rob Schaudel to guide you through the highlights of our financial results for the Q4 and full year 2023.

Speaker 2

Rob?

Speaker 1

Thanks, Dave. Our financial results for the Q4 12 months ended December 31, 2023 were included in our press release issued earlier this morning. The company ended the year with cash totaling $7,500,000 compared to $9,100,000 as of December 31, 2022. Subsequent to year end, the company sold an additional 1,121,790 3 shares under its ATM financing program with gross proceeds of approximately $4,500,000 Research and development expenses for the 3 months ended December 31, 2023 were $1,900,000 compared to $1,400,000 for the 3 months ended December 31, 2022. The increase was due to timing of Phase 2b trial related costs and an increase in consulting costs.

Speaker 1

For the year ended December 31, 2023, research and development expenses were $6,000,000 versus $4,800,000 for the year ended December 31, 2022. The increase is due primarily to Phase 2b costs and an increase in consulting costs. General and administrative expenses for the 3 months ended December 31, 2023 were $3,200,000 compared to $1,800,000 for the 3 months ended December 31, 2022. The increase was due primarily to $800,000 increase in professional fees, a $100,000 increase in share based compensation and a $300,000 increase in employee compensation costs. For the year ended December 31, 2023, general and rate of expenses were $8,500,000 versus $7,300,000 for the year ended December 31, 2022.

Speaker 1

The amounts reflect an increase in professional fees of $500,000 an increase of $300,000 in share based compensation and an increase of $300,000 in employee compensation costs. The company reported a net loss of $5,100,000 or $0.37 per diluted share for the 3 months ended December 31, 2023 compared to a net loss of $3,300,000 or $0.28 per diluted share for the 3 months ended December 31, 2022. And a net loss of $14,600,000

Speaker 3

or $1.15

Speaker 1

per share for the year ended December 31, 2023 compared to a net loss of $12,100,000 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.

Speaker 2

Thanks, Rob, and to all of you for joining us today. I'll now ask Bob DiLuci, our Executive Chairman, to provide his perspective given Bob manages our R and D program. And when Bob is finished, operator, please open the call for questions. Bob?

Speaker 4

Thanks Dave and Rob for updating our stakeholders and thanks to all for the continuing support as we advance IVZIPOLSTAD Ibesopulstat 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 500,000 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.

Speaker 4

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 2 meeting next month to discuss trial design, patient enrollment targets and to confirm our readiness to go forward. So to complete our Phase 2 international Phase 3 trials which will be done sequentially as Dave mentioned and as quickly as possible we've already 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 trial sites in our FAST Enrolling Summit Phase 3 CDI flexibility for inclusion and exclusion criteria as a standard for CDI pivotal registration trials. So 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 3 clinical trials in Europe.

Speaker 4

So if approved, we'll have the first new class of antibiotics approved by FDA in over 30 years with only confirmatory Phase 3 trials between now and market introduction. Ibezepulstat 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 2 patients who were initially cured of their infection.

Speaker 4

So in my over 50 years of experience in antibiotic development and marketing, I think I've 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.

Speaker 2

Thank you, Bob. Melissa, we're now ready to go to Q and A.

Operator

Thank Our first question comes from the line of Jason McCarthy with Maxim Group. Please proceed with your question.

Speaker 3

Hey, guys. This is Michael Chienewich on the line for Jason. Thank you for taking my questions today.

Speaker 2

Hi, Michael. Thank

Speaker 1

you. Yes. So I guess just

Speaker 3

to start off, I'd like to see if you could give an idea of what sort of timelines you're expecting between getting those meeting minutes back from the FDA and actually launching the first of those Phase 3 studies?

Speaker 2

So we think that we will be ready to enroll first patient in for the international Phase 3 in the Q4 of this year.

Speaker 3

All right. Thank you. And then, I guess regarding the international component to the study, could you talk a little bit more about the path 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 the study and then layer in these international sites as they're approved?

Speaker 2

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 3 C. Diff international trials who's been guiding us in this regard.

Speaker 2

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.

Speaker 3

All right. Thank you. 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 3 data?

Speaker 2

No, I would expect that the prime time for us to find, say a European partner or Japanese partner would be when we start enrolling the first of the 2 Phase 3 trials. Once we have the Phase 3 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 who want to see how well we do. So, yes, I think that the time is ripe right now. Thank you. Great to hear.

Speaker 2

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 and A full stop and there's territorial licensing and co development agreements that I've entered into in the past. And with our share price being where it is, it's the territorial licensing, it's a bit easier to consummate because it's all about the intrinsic value of your drug as opposed to M and A, which you get in my view wholly 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. Please proceed with your question.

Speaker 5

Thank you for taking my questions. How are you doing David? Thank you very much for taking the questions.

Speaker 2

Excellent.

Speaker 5

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 design to sort of length of time to run the 2 years start to finish in Phase 2b. I know we're dealing with COVID then as well. Does that seem reasonable to run these 2 Phase 3s from start to finish?

Speaker 2

Yes, you know, well, the 2 Phase 3s. So we're going to address 1 Phase 3. And then the idea would be to either do a strategic transaction after that first Phase 3 or with positive data on the 1st Phase 3, if it's the same or consistent with our Phase 2, get a share price rise and then raise capital for the 2nd Phase 3. So we're targeting a year and a half from start to finish for the 1st Phase 3 and that would have us completing the 1st Phase 3 in the Q2 of 'twenty six. 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 So that's a public list on clinicaltrials.gov.

Speaker 2

So we were able to see exactly the heat patterns from their enrollment. So that's gone a long way to helping us get comfortable with fixing the enrollment issues we had during COVID with our U. S. Only trial.

Speaker 5

Okay, my pleasure. I thought I heard you say earlier in the

Speaker 1

call that you're going to

Speaker 5

run the 2 trials at

Speaker 2

the same time. I obviously misheard that during back to back. Oh, yes. No, no. We are going in plan is to do them consecutively instead of concurrently for the financial reasons that we discussed.

Speaker 2

But if we get a partnership say a European licensing agreement you know and that brings in enough money to call an audible along the way and at that point then we would certainly start the 2nd Phase 3 accordingly. Understood. Thank you very much

Speaker 6

for taking the questions.

Speaker 2

Thank you, Jim.

Operator

Thank you. Our next question comes from the line of Ed Arce with H. C. Wainwright. Please proceed with your question.

Speaker 6

Great. Thanks for taking my questions. Dave, Rob and Bob, it's good to hear you on the phone on the call.

Speaker 2

Great. Nice to hear you guys. Thanks Ed. Likewise.

Speaker 6

So a couple from me. Firstly, on the end of Phase 2 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 on 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 3 relative to the prior Phase 2. And so just wanted to get a little more clarity on that, in particular, but a view to concerns there might be around the risk that you can change the sort of design of the trial and there could be some disruption from a slightly different patient population?

Speaker 6

Thanks so much.

Speaker 2

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 design for our Phase 3 trial, including the number of patients to be enrolled, the notion that we're going to have a vychomycin 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 2b. 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 3.

Speaker 2

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?

Speaker 4

Yes. I think really 2 things, which is standard fair for going forward in Phase 3 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 the study. So we've already submitted a framework to the FDA in the meeting package.

Speaker 4

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 as Phase 2 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 3 clinical trials. So we'll be discussing final numbers of patients as I said before and statistical analysis plan will be finalized at that upcoming FDA meeting as well.

Speaker 4

Anything else? Ed, does that answer your question?

Speaker 6

Yes, that's helpful. Thanks so much.

Operator

Thank you. Ladies and gentlemen, that concludes our question and answer session and thus concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.

Remove Ads
Powered by Quartr
Earnings Conference Call
Acurx Pharmaceuticals Q4 2023
00:00 / 00:00
Remove Ads