Acurx Pharmaceuticals, Inc.

and welcome to the Accurate Pharmaceuticals first quarter 2025 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 bar zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Rob Schaller, Chief Financial Officer of Accurate Pharmaceuticals. Thank you. You may begin.

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 first quarter of 2025, which is available on our website at accorexpharma.com. Joining me today is David 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 first quarter ended March 31, and then turn the call back over to Dave for 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 in 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 quarterly report on Form 10-Q, which we filed yesterday, Monday, May 12, 2025. You are cautioned not to place undue reliance on these forward-looking statements An ACREX 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, May 13th, 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 first quarter of 2025. And if you 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 first quarter 2025, or in some cases shortly thereafter. In January, we announced that we closed a $2.5 million legislative grant offering price at the market under NASDAQ rules. Also in January, we announced that we received positive regulatory guidance from the European Medicines Agency for the Adventist Full-Step Phase 3 Clinical Trial Program, which is aligned with FDA on matters of manufacturing, non-clinical, and clinical aspects of the Phase 3 program. The EMA guidance also confirmed that there's a full-step regulatory pathway for a marketing authorization application to be filed by the company after successfully completing Phase 3 clinical trials. When mutually consistent feedback from both EMA and FDA ACORET is well-positioned to commence our international Phase III registration program. In February and March, we announced new publications in the Journal of Antimicrobial Agents and Chemotherapeutics of two very important non-central studies which we believe can leverage to show further positive differentiation for contentious advances in mycobacteria versus all other antibiotics used for first-line therapy to treat C. difficile infection, or CDI. And for that matter, given our clinical results to date, we anticipate that this anti-recurrence effect, as I said before, could mitigate the patient's need for expensive microbiome therapeutic agents to prevent recurrence C. diff. Specifically, in February, we announced positive results from the first study conducted by Dr. Justin McPherson from the University of Houston, and funded by the National Institute of Allergy and Infectious Beasts. It was an in silico study that predicted the microbiome restorative potential of Ibexifloxac for treating seed death. Our scientific advisors consider this to be a major finding, which provides a mechanistic explanation for Ibexifloxac's selectivity, in that the predicted bactericidal interaction between Ibexifloxac known to confer health benefits. The second study, conducted by Dr. Trenton Wolfe from the University of Montana, was funded by the National Institute of Allergy and Infectious Disease, the National Cancer Institute, National Center for Advancing Translational Science, and ACRES. This study is the first accurate comparison of gut microbiome changes associated with hyperbolic death when compared to other anti-TDI antibiotics in a germ-free mouse model. The data show that changes in alpha and beta microbiome diversities following a desulfocan treatment were less pronounced compared to those observed in vancomycin or methamycin-treated groups, complementing prior Phase II clinical findings showing a desulfocan's more selective antibacterial activity. Further, and very importantly, notable differences were observed between the microbiome of the Ibezopulsat and Padexamycin treatment groups, which may allow for a differentiation of these two anti-PDI antibiotics in future studies. These results established Ibezopulsat differentiating effects on the gut microbiome, indicating a more selective spectrum of microbiome alteration compared to a broad spectrum antibiotic like vancomycin and metronidazole, and narrow spectrum microbiome alteration compared to benaxamycin. Also in February, the Japanese Patent Office granted a new patent for our DMA-PAL3C inhibitors, which expires in 2039, subject to extension. This constitutes a significant building block for our ongoing development of ACX375, our preclinical anti-spiron program, serving the treatment of infections caused by methicillin-resistant staph, vancomycin-resistant peripapus, and anthrax. In March, we announced the closing of a registered miracle offering and concurrent private placement, raising gross proceeds of $1.1 million. And just last month, the Indian Patent Office granted a new patent for our DNA All-3C inhibitors, which expired in December 2039, subject to extension. This constitutes another significant building block for our ongoing preclinical antibiotic development program, ASEAN 375, which targets the treatment of MRSA, VRE, and anthrax infections. And just last week, at any age, we closed an equity line of credit with Lincoln Park Capital for up to $12 million of additional funding. Looking forward to the weeks ahead, I can share with you that our outstanding faith to clinical trial data has been accepted for publication in the premier medical journal, Lancet Micro, and is now in press to be published shortly and summarizes abeziflofab's safety results, as follows, and I quote, results include a high rate of clinical cure in abeziflofab-treated subjects with no recurrence. Furthermore, abeziflofab is proud to be safe, well-tolerated, and associated with the preservation of key health-promoting bacteria responsible for bile acid homeostasis, a key component in preventing refrained CDIs. The publication establishes that there's a forecast potential as a novel antibiotic treatment for CDIs with high rates of clinical cure and sustained clinical cure while minimally disturbing the protective gut microbiota. The senior author, Professor Kevin Geary, University of Houston, and a co-author of the IESA Treatment Guidelines for TDI, noted that current U.S. and European treatment guidelines for TDI recommend only two antibiotics, oral vancomycin or vancomycin. Vancomycin is most commonly used to have a low clinical cure rate of 70% to 92%, and a sustained cure rate of just 42% to 71%. Pedactomycin has fewer recurrences but low rates of clinical cure, 84%, and sustained clinical cure, 67%. Dr. Gary further notes that both antibiotics are associated with emerging antibiotic antipyrogel resistance, stating what involves the clinical need for a new antibiotic like adenosine for effect to treat TBI is underscored by a recently published study in Clinical Infectious Disease by Dr. Chris Donkey of the T1VA and conducted at hospital setting documented that C. difficile ice was clinically relevant, reduced to asthmatic susceptibility, may emerge during therapy and spread to other patients. The medical community should be aware of this alarming finding, end quote. Also upcoming, regarding the overall GNA-PAL3T inhibitor platform, is a scientific presentation to be given on May 21 by Dr. Nia Urim from Leiden University Medical Center in the Netherlands, entitled, A Unique Intimidator Conformation Selectively Projects the DNA Policy of Gram-Positive Priority Pathogens. This scientific conference is sponsored by the Federation of American Societies for Spearmethobiology and is the premier venue for the newest research and technological trends in molecular machines, inside the human body that ensure DNA replication and expression of genes to create proteins that make up a cell. We continue to identify and pursue funding opportunities for our Phase III Ibenzapulsa clinical trial program. We have several initiatives underway to that end, and we hope to have something to report in future updates. As we've continually reported, Ibenzapulsa clinical results continue to outperform and serious and potentially life-threatening infectious disease caused by C. patella 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, like adenosine folic acid. Adenosine folic acid has FDA QIDC and pass-track designations for the treatment of CDI. We also believe that adenosine folic acid is approved but make a favorable economic impact by reducing the overall annual U.S. cost burden for C. diff infection, which is $5 billion per year, of which $2.8 billion is due to recurrent infection. With our continuing momentum and passion to achieve success for our stakeholders, we remain confident that the best is yet to come as we plow through these very challenging times in the macroeconomic environment and in our industry sectors. And now back to our CFO, Rob Schauer, to guide you through the highlights of our financial results for the first quarter of 2025.

Rob? Thanks, Dave.

Our financial results for the first quarter ended March 31, 2025, or included in our press release issued earlier this morning. The company ended the quarter with cash totaling $4.6 million, compared to $3.7 million as of December 31, 2024. The company raised a total of approximately $3.6 million of gross proceeds through two registered direct offerings during the quarter. Research and development expenses for the three months ended March 31 were $.6 million, compared to $1.6 million for the three months ended March 31, 2024, a decrease of $1 million. The decrease is primarily due to a decrease in manufacturing costs of $0.4 million and a decrease in consulting costs of $0.6 million as a result of the prior year trial related expenses. General and administrative expenses for the three months ended March 31, 2025 were $1.6 million compared to $2.8 million for the three months ended March 31, 2024. a decrease of $1.2 million. The decrease is primarily due to a $0.7 million decrease in professional fees resulting from lower consulting expenses and a $0.6 million decrease in share-based compensation costs. The company reported a net loss of $2.1 million, or 11 cents per diluted share, for the three months ended March 31, 2025. compared to a net loss of $4.4 million, or $0.28 per diluted share, for the three months ended March 31, 2024, all for the reasons previously mentioned. The company had 22,397,511 shares outstanding as of March 31, 2025.

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

Hi, good morning. This is Joanne Leon for Jason McCarthy. Thanks for taking our question. Just one for me regarding the recent publication highlighting IPEDS as a selective activity and potential microbiome preserving effect. I'm just curious if the company plans to explore this further and if these complementary findings on forming the phase three trial in any way. Are you considering incorporating microbiome-related endpoints to help reinforce the differentiation in the CDI space?

Thanks. Thank you very much, Dylan. Yes, we are indeed exploring this actively. It's already the microbiome preservation and restoration is already a secondary endpoint in the phase three program. as it has been and seems to be. But we're exploring it nonetheless. We're seeing that this is an area of differentiation, which is one of the primary reasons, we believe, that we're seeing so distinctively less recurrent C. diff than is experienced by patients on other antibiotics. And, you know, with the new administration in Washington and Marty McCary, you know, I believe, you know, we're reading the TV and exploring other possibilities in terms of pathways to approval. We'll have to add more on that on the next call, but, you know, that's currently our topic internally.

Great. That was helpful. Looking forward to seeing how things progress.

Thank you so much.

Thank you. Again, as a reminder, it's star 1 to join the question queue. Our next question comes from the line of James Malloy with Alliance Global Partners. Please proceed with your question.

Hey, good morning, guys. Thanks for taking my questions. Just quick looking at sort of G&A and R&D and OpEx, I guess, for the quarter. These are levels we should expect going forward. I see that R&D has been coming down pretty dramatically. I know you've been waiting to get the phase 3 started. It'll ramp up. I presume it'll ramp up, you know, once that gets going. Any thoughts on the trajectory of that through 2025? Any updates on sort of the expected start date of any potential phase threes?

Thanks so much, Jim.

I appreciate the question. You know, I can hop in here. We've done some dramatic cross-cutting that started in the first quarter of 2025 and will continue. So I would expect both our G&A and our R&D costs will continue to go down as quarters go by until we start the Phase 3 program. I don't want to provide a hypothetical date for the start of Phase 3 because we don't have the funding yet, and if we don't make the decision on the other side of where that funding is coming from, it's kind of hard to predict, but we do have a lot of liners in the fire. We did close down the equity line of $12 million with Lincoln Park Capital last week. So we feel that we are in a decent position relative to other biotech companies.

It's kind of a tread water until one of these funding opportunities comes through. It's been excellent.

The stewards of the capital, notably the accruals, are always in good shape. Roberts, As you look at the, uh, any updates on the Pasture Act and what might be going on there?

Um, we don't have anything specific on the Pasture Act, although, you know, I'm in touch with our lobby group probably a half dozen times a day, and things in Washington are frenetically busy. Um, notably of recent vintage, the Trump pricing reductions, which, um, In a strange way, I think, help our little company as compared to Big Pharma. But nothing specific on the Pasture Act, or I think we talked before about Pasture Life. But it's still out there. There's also traditional barter grants that may become available. And for the second program, we recently put in an application to ARPA-H. So we'll try to go with And there's a European FDA-type group that's taking submissions. So we've got a lot of lines in the water, so to speak, for anyone who's a fisherman, like in the Cape Cod area, like south. We've got lines in the water, and we're just waiting to get a bite.

That's understood. And last question. Marta Vicaria had some comments about sort of the ultra-rare path for approvals based on plausible mechanisms rather than in actual clinical trials. That wouldn't apply to you guys, though, right?

You know, it still applies. I mean, Julia had a good question before. You know, it's a great question. It's right on point with, you know, something that's being discussed internally right now based on Marty McCary's comments. So it may apply to us. It would be a first for an antibiotic to follow that pathway. But our scientific team is taking a look.

Governor, it's a look, absolutely. Thank you guys very much for taking the questions. Thanks so much, Jim.

Thank you. Ladies and gentlemen, this 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.