Acurx Pharmaceuticals, Inc.

Greetings and welcome to the Acurex Pharmaceuticals fourth quarter and full year 2024 financial results and business update. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'll now turn the conference over to your host, Mr. Rob Shawa, Chief Financial Officer for Acurex Pharmaceuticals. Please go ahead, sir.

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 of 2024, which is available on our website at accorexpharma.com. Joining me today is Dave Lucci, President and CEO of Accorex, who will give a corporate update and outlook. Following that, I'll provide some highlights of the financials from the fourth quarter and full year ended December 31, 2024, 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, which 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 with the Securities and Exchange Commission, including our annual report on Form 10-K, which we filed yesterday, Monday, March 17, 2025. Your caution not to place undue reliance on these forward-looking statements And Accrax 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 18th, 2025. I'll now turn the call over to Dave Lucci. Dave?

Thanks, Rob. Good morning, everyone, and thank you so much for joining us to review our financial results for the fourth quarter and full year 2024. and also to hear some recent updates. Then we'd be pleased to take any questions. First, I'd like to briefly summarize just a few of our key activities for the fourth quarter of 24, or in some cases shortly thereafter, which have been the most significant in our company's history, as we're now finalizing preparation to advance our lead antibiotic candidate, Ibezopulstat, or IBEZ, as we call it, for the treatment of C. difficile infection into international phase three clinical trials. We believe that if successful, this last set of clinical trials to complete will be pivotal to form the basis for our new drug application in the U.S. and marketing authorization application for the European Union. In October 24, we exhibited at ID Week in Los Angeles, which was the annual scientific conference of the Infectious Disease Society of America, where Drs. Gary and Eubank from the University of Houston School of Pharmacy presented a scientific poster showing that in our Phase IIb clinical trial, iBEDS had comparable clinical cure and sustained clinical cure rates and safety profile to becromycin. As previously reported, the overall observed clinical cure rate in the combined Phase II trials, Phase IIa and Phase IIb, in patients with CDI was 96%, 25 out of 26 patients, And importantly, 100%, or 25 of 25, of the IBEZ-treated patients in the Phase II program who had clinical cure at the end of treatment remains cured through one month after EOT, as compared to just 86%, 12 of 14 patients in the vancomycin treatment arm in Phase IIb. Also, in a subset of IBEZ or PULSTAT patients, Five of five followed for three months after the end of treatment experienced no recurrence of infection. IBEZ-treated patients showed decreased concentration of fecal primary bile acids and higher ratios of secondary to primary bile acids than vancomycin-treated patients. According to Dr. Gary, these exciting results demonstrate two properties of IBEZ-epolstat which may contribute to its anti-recurrence effect. First, the preservation and restoration of beneficial bacteria classes in the gut provide resistance to recolonization by C. difficile. Second, these data presented for the first time indicate that these beneficial bacteria known to metabolize primary to secondary bile acids persist in ipazepulstat-treated patients, providing another important mechanism to prevent recurrent CDI. In November last year, we announced sponsorship and participation in the inaugural Peggy Willis Foundation, CDI Scientific Symposium, and presented an IBEZA polls that face to the clinical data update. In January 25, the company announced that it closed the $2.5 million registered direct offering priced at the market under NASDAQ rules. Also in January 25, we announced that we received positive regulatory guidance from the European Medicines Agency for the Ibex and Polestat Phase III clinical trial program, which guidance is aligned with FDA on matters of manufacturing, non-clinical, and clinical aspects of the Phase III program. The EMA guidance also confirmed Ibex and Polestat's regulatory pathway for a marketing authorization application to be filed by the company after successful completion of the Phase III clinical trials. So now with mutually consistent feedback from both the EMA and FDA, Acorex is well positioned to commence our international phase three registration program. This past February and just this month, we announced new publications in the Journal of Antimicrobial Agents and Chemotherapeutics of two very important non-clinical studies which we believe can leverage to show further positive differentiation for competitive advantage of IBEZ as compared with all other antibiotics used for frontline therapy to treat C. difficile infection. And for that matter, given our clinical results to date, we're hopeful that this anti-recurrence effect of IBEDS could mitigate the need for expensive microbiome therapeutic agents to prevent recurrent CDI. In February, we announced positive results from this first study conducted by Dr. Justin McPherson from the University of Houston and funded by the National Institute of Allergy and Infectious Diseases, or NIAID. It was an in silico study that predicted the microbiome restorative potential of I-bez for treating C. difficile infection. Our scientific advisors consider this to be a major finding, which provides a mechanistic explanation for I-bezoplastat selectivity in that the predicted bactericidal interaction between I-bez and its target the DNA Pol3C enzyme, allows regrowth of gut microbes known to confer health benefits. The second study, conducted by Dr. Trenton Wolfe from the University of Montana, was funded by NIAID, the National Cancer Institute, National Center for Advancing Translational Sciences, and the company. The second study is the first ever head-to-head comparison of gut microbiome changes associated with IVEZ when compared to other anti-CDI antibiotics in a germ-free mouse model. The data showed that changes in alpha and beta microbiome diversities following IVEZ treatment were less pronounced compared to those observed in vancomycin or metronidazole-treated groups, complementing prior Phase II findings showing IVEZopil sets more selective antibacterial activity. Further, and very importantly, notable differences were observed between the microbiome of Ibezopulstat and the Fedaxomycin-treated groups, which may allow for differentiation of these two anti-CDI antibiotics in future studies. These results established Ibezopulstat's differentiating effects on the gut microbiome indicating a more selective spectrum of microbiome alteration compared to broader spectrum antibiotics like vancomycin and metronidazole, and a narrower spectrum of microbiome alteration compared to finaximiacin. Also in February 25, last month, the Japanese Patent Office granted a new patent for our DNA glenraze 3C inhibitors, which expires in December 2039, subject to extension. This constitutes a significant building block for our ongoing development of ACX375C, our preclinical antibiotic candidate, targeting the treatment of MRSA, VRE, and anthrax infections. On March 10th, just a week ago, we announced the closing of a registered direct offering and concurrent private placement, raising gross proceeds of $1.1 million. We continue to identify and pursue funding opportunities for our Phase III clinical trial program. We have several initiatives underway to that end and hope to have something to report in future updates. So now we've got even more momentum going into 2025 and beyond. As we've continually reported, I-VEST clinical results continue to outperform in a serious and potentially life-threatening infectious disease caused by acetobacillus bacteria, that the CDC categorizes as an urgent threat and calls for new classes of antibiotics for initial treatment that also have a low incidence of recurrence. From a regulatory perspective, FDA has granted IBEZ, QIDP, and fast-track designations for the treatment of C. difficile infection. We also believe that Ibezapulsa, if approved, could make a favorable economic impact by reducing the overall annual cost burden in the U.S. for C. difficile infection, $5 billion annually, of which $2.8 billion is due to recurrent infection. And that's what our data shows we may solve for. With our continuing momentum and passion to achieve success for our stakeholders, we do believe the best is yet to come. And now back to our CFO, Rob Schauer, to guide you through the highlights of our financial results for the fourth quarter and full year 2024. Rob?

Thanks, Dave. Our financial results for the fourth quarter near end of December 31, 2024, were included in our press release issued earlier this morning. The company ended the year with cash totaling $3.7 million, compared to $7.5 million as of December 31, 2023. The company raised a total of $6.6 million of gross proceeds under its ATM financing program for the year ended December 31, 2024. Research and development expenses for the three months ended December 31, 2024 were $0.8 million compared to $1.9 million for the three months ended December 31, 2023, a decrease of $1.1 million. The decrease was primarily due to a decrease in consulting related costs of $1.2 million offset by an increase in manufacturing costs of $.1 million. For the year ended December 31, 2024, Research and development expenses were $5.4 million compared to $6 million for the year ended December 31, 2023, a decrease of $.6 million. The decrease was primarily due to a $1.6 million decrease in consulting related costs offset by a $1 million increase in manufacturing related costs. General and administrative expenses for the three months ended December 31, 2024 were $2 million, compared to $3.2 million for the three months ended December 31, 2023, a decrease of $1.2 million. The decrease is primarily due to a half million dollar decrease in professional fees, a half million dollar decrease in share-based compensation costs, and a $.2 million decrease in employee compensation costs. For the year ended December 31, 2024, general and administrative expenses were $8.7 million compared to $8.5 million for the year ended December 31, 2023, an increase of $.2 million. The increase is primarily due to a $.7 million increase in professional fees a $.3 million increase in legal fees offset by a $.6 million decrease in share-based compensation costs and a $.2 million decrease in insurance costs. The company reported a net loss of $2.8 million or 16 cents per diluted share for the three months ended December 31, 2024. compared to a net loss of 5.1 million or 37 cents per diluted share for the three months ended December 31, 2023. The net loss of $14.1 million or 87 cents per share for the full year ended December 31, 2024 compared to a net loss of 14.6 million or $1.15 per share for the year ended December 31, 2023. all for the reasons previously mentioned. The company had 17,030,686 shares outstanding as of December 31, 2024. With that, I'll turn the call back over to Dave.

Thanks, Rob, and to all of you for joining us today. I'll now turn the call over to Melissa, our operator, to open the call for questions. Melissa?

Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Ed Arcee with HC Wainwright. Please proceed with your question.

Hello. Good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you so much for taking our questions.

Thank you, Thomas.

Good morning. Good morning. So first question for the Phase III program, can you discuss some notable differences and also similarities between what the FDA and the EMA are looking for for the Phase III?

It's identical, Thomas. We're so fortunate in that regard. We waited, and part of it is strategy. We didn't go to the European Medicines Agency until we had cleared all of the non-clinical, clinical, and manufacturing aspects with the FDA. So only with that in hand, we went with a final package to the Europeans. And it's an identical protocol. There's complete agreement in all regards from both agencies.

Okay. So in that vein, how do you envision the Phase 3 program will enroll patients geographically? Will it be like a 50-50 split between the U.S. and the EU? Or how do you envision to proceed?

Well, subject to the normal adjustments that you may call in audibles along the way, we're going to start out with 150 clinical trial sites. And A full half of those sites will be in Europe, and the other half will be a combination of U.S., Canada, and South America.

Okay.

I guess you could say, by a plurality, it will be more European than American. Maybe there will be 30% of the sites in the U.S. compared to 50% of the sites in Europe.

That's it. I got it. And then moving on to additional data that you have been presenting, you know, either at conferences or publications. So after this microbiome study data that were published last month, when should we expect more data with this year?

That's, you know, a very poignant question. Thanks for asking. There's a very prestigious scientific publication within which our full set of phase two data will be included and published. And we think that will be sometime in the next 30 days.

Okay. So that's the next one.

But they appear periodically. There's continually more and more data coming out from what we've already done. from the labs at the Houston College of Pharmacy and also up in Montana.

Okay, understood. We'll look forward to that. And then perhaps one final question from us. What options do you have available to fund development of 375 into the clinic?

So we haven't taken any options off the table. You know, obviously we're continuing our multi-step approach. to funding, uh, the company and, uh, most importantly, the phase three trial. Um, you know, as I see it, you know, as with, uh, funding opportunities, I see the most likely opportunities, um, with partnerships or grants, if you will, um, with, uh, government, uh, bodies or quasi government bodies, either in Europe or in the U S. Um, So I think those aspects of our activities are kind of in the forefront, at least for right now. While we continue to pursue private partnerships and M&A activity, that seems to be less active than the responses we're getting from some of the government and crazy government agencies. And I think that's because folks are recognizing as more and more of our data gets out there that we have a real drug that has a real need. And not only would it be good for the public to have this available front line for C. difficile, but it would be quite beneficial for the cost of public health because of the no recurrences.

Understood. If I may, just one additional question, actually. Just wonder if your plan is still to look for a partnership to move, does it post that into phase three, or are there other options as well?

Yes. I mean, we're looking for a partnership, but remember, we use the term partnership broadly to include a number of different agencies of the government along with the private sector. So in broad sense, yes, that's still the plan.

Okay, understood. Thank you so much for the kind of questions.

Thank you so much, Thomas.

Thank you. Our next question comes from the line of James Malloy with Alliance Global Partners. Please proceed with your question.

Good morning, James. Good morning. Thank you very much for taking my questions. Of course. I was wondering if you could characterize the partnership environment. I know there's a lot of turmoil in the market. Has that impacted your ability to secure partnerships? Is this something you think will happen in the 2025 timeframe? Or is this a 2026 event? And sort of if you have any, and I know that perhaps that leads into the next question, when do you think you'll start the phase threes? I'm guessing that depends quite a bit upon either a partnership or a funding event, right?

Yes, I agree and I agree. The tumultuous nature of the things happening in the world today certainly present an even more keen challenge than we were facing coming into 25. But we feel that we're up for the challenge and we're going to continue the fight and I do see potential partnerships with, you know, various groups throughout the world that are not pharmaceutical companies as being, you know, kind of further along at this point than private sector partnerships. But we're continuing our efforts in both regards. I have been to Washington, D.C. on Capitol Hill several times now. And I can tell you firsthand that that everyone's looking over their shoulder down there right now. And it's a different vibe than I experienced when I was down in Capitol Hill back in September. So hopefully things settle down over the next couple of months and we can get down to some appropriations. But there are still appropriations from prior approvals, government approved programs. that we're chasing down and in one case have applied for. So we're continuing the process. I think something will happen in 2025 that will allow us to start the phase three trials with an enrollment. There may be a time lag between that event and the enrollment starting just because we don't wanna make our fill finish pill form until we're certain to have the money to start the trial because we don't want to date the packages before we have to. So that's the final step, and that'll take place after the money comes in. So that may present a few-month time lag between having the sufficient funding and starting the enrollment. Does that answer your question, Jennifer?

It does indeed. I know there's a lot of uncertainty on these things, of course. Should you get this trial started, what's the current expectation for soup to nuts, have a top-line data or an interim look? What do you think that could occur should the trial start tomorrow?

Yeah, well, so the interim look, we decided against the interim look because statistically, it adds like 10% to the required number of patients in the trial. And it wouldn't really provide us anything other than an advisory committee would tell us, you know, keep enrolling or, you know, futility. You know, we wouldn't be able to see any of the numbers, you know, it being a double-blind study. So we didn't do the interim look, but I think it would be two years from first patient enrolled

uh to top line data all right excellent that wraps up my question thank you very much for taking me excellent i hope you uh enjoyed uh your holiday yesterday could you have the calls uh not on the day at the saint patrick's day

Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of Claire Aitchison with Independent Investment Research. Please proceed with your question. Good morning, gentlemen.

Good afternoon, Claire.

Just a couple of things for me. I just noticed that you've made mention of the suspension of the ATM program in January. I was just wondering if you could talk a little bit about what's happening there. And then also, if you could just comment on the risks with the NASDAQ listing, given where the share price is currently trading.

Sure. So we suspended the ATM program in connection with the offering that we were conducting in January. And we can put the ATM back in place and, you know, reactivate it, so to speak, when, you know, the company management decides, you know, to do that. So there's no prohibition on us reactivating the ATM. You know, it's currently not part of our, you know, ongoing plan, several months. Um, but you know, with the, with the D listing, I can tell you, Claire, that, uh, there's, you know, no sense internally that we'll let the NASDAQ listing go. Um, and we're working on, uh, some things which we think, uh, will help with the listing in that regard. Um, so, you know, we're leaving with us for now, but the last thing I would expect to see is, uh, for us to be traded out of the bulletin board.

Okay. So you're confident you'll be able to manage that?

Oh, yes. Absolutely.

Okay. Great. Thank you.

Thank you, Claire.

Thank you. Ladies and gentlemen, this concludes our question and answer session, and we'll conclude our call today. We thank you for your interest and participation. You may now disconnect your lines.

Thank you, Melissa.