Acurx Pharmaceuticals, Inc.

Greetings and welcome to the Accurate Pharmaceuticals to discuss second quarter 2025 Financial Results Conference Call. 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Robert Shaw, Chief Financial Officer. Please go ahead.

Thank you, Stacey. Good morning and welcome to our call. This morning we issued a press release providing financial results and company highlights for the second quarter of 2025, which is available on our website at acorexpharma.com. Joining me today is Dave Lucci, President and CEO of Acorex, who will give a corporate update and outlook. Following that, I'll provide some highlights of the financials from the second quarter ended June 30th 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 all 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 quarterly report on Form 10-Q, which we filed yesterday, Monday, August 11, 2025. You are cautioned not to place undue reliance on these forward-looking statements and after X 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, August 12th, 2025. I'll now turn the call over to Dave. Dave?

Thanks, Rob. Good morning, everyone, and thank you so much for joining us to review our financial results for the second quarter of 25 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 second quarter or, in some cases, shortly thereafter. In April, we announced that the Indian Patent Office granted a new patent for our DNA polymerase 3C inhibitors, which expires in December 2039, subject to extension. This constitutes another significant building block for our ongoing preclinical antibiotic development program of ACX375C, which targets the treatment of infections caused by MRSA, VRE, DRSP, and anthrax. In May, we closed an equity line of credit with Lincoln Park Capital for up to $12 million of additional funding. In June, the company entered into a warrant inducement agreement with an existing warrant holder for the exercise of warrants to purchase an aggregate of 222,272 shares of the company's common stock, having a current exercise price for the Series A warrants to purchase 538 shares of the company's common stock at $65 per share. For Series B warrants to purchase 27,400 shares of our common stock at $65 per share. And for Series C warrants to purchase 66,667 shares of our common stock at $65.20 per share. And Series D warrants to purchase 66,667 shares of our common stock at an exercise price of $65.20 per share. Original was issued in July 22 and May 23 at a reduced exercise price of $12 per share. In consideration for the company's agreement to issue new Series G1 warrants to purchase up to an aggregate of 311,180 shares of common stock with a five-year term and new Series G warrants to purchase up to an aggregate 133,363 shares of a common stock with a five-year term from shareholder approval, each at an exercise price of $8.50 per share. The gross proceeds to the company from the exercise of the existing warrants was approximately 2.7 million, with net proceeds of 2.5 million after deducting fees and expenses payable by the company. The warrant-inducing transaction closed on June 20th. The company will continue its multi-step approach to raising capital through customary financings, warranted inducements, and public-private partnership opportunities going forward. In June, we announced the publication of our Phase 2B clinical trial data for a desert pulse bat and C. vivacele infection in Lancet Micro, the world-leading microbiology research journal. This publication is available on our website at accuracypharma.com. The Lancet micro summary highlighted Ivesipulstat's phase two results as follows, and I quote, results included high rates of clinical cure in Ivesipulstat-treated subjects with no recurrence. Furthermore, Ivesipulstat was found 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 recurrent CDI, end quote. The Lancet publication also highlighted Ibexipustep's potential as a novel antibiotic treatment for CDI with high rates of clinical cures and sustained clinical cure, while preserving and restoring the healthy gut microbiota. The senior author, Professor Tanigiri, PhD, University of Houston, and a co-author of the IDSA infectious disease society of America treatment guidelines for C. difficile infection, noted that current U.S. and European treatment guidelines for CDI recommend only two antibiotics for treatment, oral vancomycin or fadaxomycin. Vancomycin is most commonly used but has a low clinical cure rate of 70% to 92% and a sustained clinical cure rate of 42% to 71%. Fadaxomycin has fewer recurrences but low rates of clinical cure at about 84%, and sustained clinical cure at 67%. Professor Gary further noted that both marketed antibiotics for CDI are associated with emerging antimicrobial resistance, stating, and I quote, the clinical need for a new antibiotic, like Ibenzopulstat, to treat CDI is underscored by a recently published study in clinical infectious diseases by Dr. Curtis Donsky of the Cleveland VA and conducted in a hospital setting documented that C. difficile isolates with clinically relevant reduced Fidaximinosine susceptibility may emerge during therapy and spread to other patients. The medical community should be aware of this alarming finding, end quote. Again, that's by Dr. Gary. Also in June, we announced results from our collaboration with Leiden University Medical Center of its study of the mechanism of action of our polymerase 3C platform of inhibitors, with data presented at the Federation of American Societies for Experimental Biology Scientific Topics, to meet in the Netherlands on May 21st. A scientific presentation was provided by Mia Oren, PhD, from Leiden University Medical Center, entitled, A Unique Inhibitor Confirmation Selectively Targets the DNA Polymerase Policy of Gram-Positive Priority Pathogens. This scientific conference is the premier venue for the newest research and technological trends in molecular machines in the human body that ensure DNA replication and expression of genes to create proteins that make up the cell. In August, we implemented a 1 for 20 reverse stock split in an effort to comply with the NASDAQ listing maintenance requirements. We continue to identify and pursue funding opportunities for our Phase III clinical trial program for Ibenzopulstat and consider alternative financial pathways to achieve success. We have several initiatives underway to this end and will report in future updates as appropriate. As we've continually reported, Ibenzopulstat clinical results continue to demonstrate its leadership in the field in a serious and potentially life-threatening infectious disease called C. difficile bacteria. that the U.S. CDC categorizes as an urgent threat and calls for new classes of antibiotics for initial treatment that also have low incidence of recurrence. Ibenzapolstap has FDA QIDP and fast-track designations for the treatment of CDI. We also believe that Ibenzapolstap, if approved, could make a favorable economic impact by reducing the overall annual U.S. cost burden for C. diff infection of approximately $5 billion a year, of which 2.8 billion is due to recurrent infection, what we call the secondary market. With our continuing momentum and passion to achieve success for our stakeholders, we remain confident that while development of IPEZA's competitive profile continues to strengthen, the best is yet to come as we navigate through these very challenging times in the macroeconomic environment and in our industry sector. And now back to our CFO, Rob Schaller, to guide you through the highlights of our financial results for the second quarter of 25. Rob?

Thanks, Dave. Our financial results for the second quarter ended June 30, 2025, were included in our press release issued earlier this morning. The company ended the quarter with cash totaling $6.1 million. Compared to $3.7 million, as of December 31, 2024. During the second quarter, the company raised a total of approximately $3.4 million for gross proceeds through purchases under the equity line of credit and a warrant-inducing agreement. Research and development expenses for the three months ended June 30th were $.5 million, compared to $1.8 million for the three months ended June 30, 2024. a decrease of $1.3 million. The decrease was due primarily to a decrease in manufacturing costs of $0.3 million and a decrease in consulting costs of $1 million as a result of the prior year trial-related expenses. For the six months ended June 30, 2025, research and development expenses were $1.1 million. versus $3.4 million for the six months ended June 30, 2024. The decrease of $2.3 million was primarily due to a reduction of $.6 million in manufacturing costs and a $1.7 million decrease in consulting costs due to higher trial-related costs in the prior year. General and administrative expenses for the three months ended June 30, 2025 were $1.7 million compared to $2.3 million for the three months ended June 30, 2024, a decrease of $.6 million. The decrease was primarily due to a $.7 million decrease in share-based compensation offset by a $.1 million increase in professional fees. For the six months ended June 30, 2025, General and administrative expenses were $3.3 million versus $5.1 million for the six months ended June 30, 2024, a decrease of $1.8 million. The decrease was due primarily to a $.6 million decrease in professional fees and a $1.2 million decrease in share-based compensation. The company reported a net loss of $2.2 million or $1.89 per diluted share for the three months ended June 30, 2025, compared to a net loss of $4.1 million or $5.21 per diluted share for the three months ended June 30, 2024, and a net loss of $4.4 million or $4.01 per diluted share for the six months ended June 30, 2025, compared to a net loss of $8.5 million. or $10.84 per diluted share for the six-month end of June 30, 2024, all for the reasons previously mentioned. The company had a reverse split adjusted 1,470,352 shares outstanding at the June 30, 2025. With that, I'll turn the call back over to Dave.

Thanks, Rod. Thank you to all of you for joining us today. And now back to our operator, Stacey, to open the call for questions. Stacey?

Thank you. We will now be conducting a question and answer session. If you would 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 to remove yourself from the queue. For participants, use equipment and may be necessary to pick up your handset before pressing the star key. First question, Jim Malloy with Alliance Global Partners. Please go ahead.

Hey, guys. Good morning. Thank you for taking my questions. Just a quick call. Thank you. Looking at the OPEX coming down, you know, in line, something with cash preservation, high priority. Is this a trend we should expect to continue through the rest of 2025 and 2026? And then maybe following up on that, I know it's a bit up in the air and a little out of your hands, but as an outsider looking in, when should we anticipate potentially either a partnership to be signed? Is that something that 2025, 2026? And then you're getting these trials up and running for BEZA. Thank you.

Sure, Jim. I'll start with your second question. I'll ask you to repeat the first, but for your second question, you know, it could be any time here in the second half in terms of a private partnership if we're able to announce something like that. In terms of, I use the word partnership broadly to include government agencies because that's their preference. They've They like to say that they're not providing grants. They're entering into partnerships, and they expect their incubator companies to be good partners. So that process is ongoing and will certainly slip into 2026, given the dynamics that are going on in Washington. So the federal government's year end is September 30th, and as I understand it through the folks we work with in Washington, they're expecting a continuing resolution toward the end of the year, kind of the usual annual punt to kind of calendar year ends as being likely the time when funding for the new fiscal year gets appropriated through the study with the House Ways and Means Committee. So those are all going very well, I would say. And we're confident that we will have success in these regards. You know, but I think also particularly with the government, it's going to take time. But could I ask you to ask the first question again, please?

Yes, of course. And I see that you guys are preserving cash, operating expenses coming down nicely in line with your expectation to preserve capital. Is that something we should expect, a trend we should continue through second half 25 and into 26?

Oh, absolutely. We're trimming tremendously. What I would say is, you know, when you're seeing things like G&A expenses that we report on these earnings calls, you know, that's a different number than cash flow. That includes cash and non-cash items. So our cash burn is, you know, it's down to close to $400,000 a month at this point. And we expect to continue that process. Now, there's some clinical strategy things that we will be announcing in the near future that we're currently considering for a new very small clinical trial that we can handle financially without a lot of heavy lift on our end. But we'll be able to come out with more information on that next quarter after we get in front of our board of directors.

Excellent. And as always, excellent work on keeping the accruals in line. Thank you, David. Thank you so much. Thank you, David.

Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Next question comes from Matthew Keller with H2O Network. Please proceed.

Yeah, hey, good morning, everyone, and congrats on the quarter. So just two quick ones from us. Obviously, the publication of the 2B data was very nice. I was wondering if there were any additional feedback that you got from either physician community or KOL community on that publication. And then the second question I have for you is kind of related to maybe the previous question, but are there any other rate-limiting steps ahead of the upcoming Phase 3 studies that we should be thinking about?

Well, thank you, Matthew, for the questions. For rate-limiting steps, the only one, and it's not even really a long, you know, rate limit, would be, you know, as we've talked about, the fill finish of the Ibezapulstat supply into the Phase III trials. We've been reluctant to do fill finish because once you do, then your drug is dated. And we want to forestall that to maximize the amount of time we have to use the Ibeza Pulsat without it becoming obsolete. So that may be a couple of month process. It's nothing significant. But everything else is literally ready. The European Medicines Agency and FDA amazingly agreed entirely on the identical same protocol for the two trials. So that's gone quite well. Yeah, okay, great. Makes sense. Thank you.

There are no further questions. This concludes today's teleconference. Thank you for your participation. You may now disconnect your lines.

Thank you, Stephanie.