Iterum Therapeutics plc

Ladies and gentlemen, hello and welcome to the interim therapeutics third quarter 2022 financial results call. My name is Maxine and I'll be coordinating the call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I will now hand you over to Louise Barrett, SVP of Legal Affairs to begin. Louise, please go ahead when you're ready.

Thank you, Maxine. Good morning and welcome to Agile and Therapeutic's third quarter 2020 financial results call. A press release of our third quarter results was issued earlier this morning and can be found on our website. We are joined this morning by Corey Fishman, CEO, and Judy Matthews, the Echo. Corey will provide some opening remarks, Judy will provide details on her financial results, and then we'll open the floor for Q&A. Before we begin, I would like to remind you that this call will contain four different statements concerning our plans, strategies, and prospects for our business, including the selfless therapies we can mark potential through the pen, the timing, conduct, progress, and results of a reassured clinical trial, our expectations with regard to our ability to resolve the matter set forth in the complete response letter received by us in July 2021, and to obtain approval for all of those plans. the expected timing of resubmission of our NDA, the term and coverage provided by our patent and other intellectual property rights, and the sufficiency of our cash resources. Actual results can be different from those indicated by these forward-looking statements as a result of various important factors, including uncertainties inherent in the design, notation, and conduct of clinical and non-clinical development, including the reassure clinical trials, and non-clinical development being conducted by us in response to the CRL in July 2021. The ability and timing of data for the reassured clinical trial and the ongoing non-clinical development. Changes in regulatory requirements or decisions with registered authorities. The timing or likelihood of regulatory filings and approvals, including the potential resubmission of our NDA. The public policy or legislation and commercialization of the timeline, if all two of them are approved. the actions of third-party clinical research organizations and private manufacturers, the accuracy of our expectations regarding how fires will future our cash and handle some of our ongoing operations, and other risk factors set in our findings via SEC, including the quarterly report files today. In addition, any forward-looking statements or representative views only as of the date of this call and should not be related We specifically disclaim any obligation to state such data. We will also be referencing non-GAAP financial measures during the call. We've provided reconciliation to non-GAAP information issued earlier this morning. With that said, I'll turn it over now to you, Corey, for your opening remarks.

Great. Thanks, Louise. Welcome and thanks for joining us today. I'd like to share some very exciting company highlights with you this morning. First, we are thrilled to have begun enrollment in our new phase three clinical trial for uncomplicated urinary tract infections. We have named this trial ReAssure. The ReAssure trial is designed as a non-inferiority trial comparing oral sulopenem and oral augmentin in the augmentin-susceptible population. We are conducting this trial to address certain deficiencies the FDA noted in their complete response letter that we received in July of 2021. The trial is expected to enroll approximately 1,966 patients and is being conducted under a special protocol assessment SPA agreement with the FDA. The SPA agreement provides that the design and planned analysis of the trial as set out in the protocol submitted to the FDA, adequately addresses the objectives necessary to support the potential resubmission of the company's new drug application for oral sulopenem. In the REASSURE trial, patients will be randomized to receive either oral sulopenem twice daily for five days or oral Augmentin twice daily for five days. The primary endpoint is the overall response, which is the clinical and microbiologic combined response at day 12 of the trial. We expect to complete enrollment in the first half of 2024, and if successful, we'll resubmit our NDA to the FDA in the second half of 2024. If the resubmission addresses all deficiencies in the complete response letter we received in July of 2021 from the FDA, then the FDA action should occur six months from receipt of our resubmission. It's important to note that there are approximately 33 million uncomplicated urinary tract infections in the US annually, and approximately 30% of those infections are caused by a quinolone non-susceptible organism. Additionally, about 1% of all infections are caused by pathogens that are resistant to all commonly available classes of oral antibiotics. And as a result, the need for new oral antibiotics in this therapy area remains very high. On the intellectual property front, ITERM has been granted a U.S. patent directed to the composition of the bilayer tablet of oral sulopenem, which contains sulopenem atzidroxyl and pervenacid in a single bilayer tablet. This is an incredibly important milestone, as this patent will extend our existing patent protection until at least 2039, which provides a substantial runway to protect the long-term commercial value of oral sulopenem in the U.S. Outside the U.S., we have pending patent applications including Europe, China, Japan, and parts of South America which were submitted following receipt of the written opinion of the International Search Authority indicating that several claims directed to the composition of the bilayer tablet of oral sulopenem are novel and inventive. We are beginning to explore potential new areas where there is an unmet medical need and where Sulopenem could be an important potential alternative in treating those patients. We are currently evaluating a number of potential new indications and subject to that review are planning an initial discussion with the FDA in the first half of 2023. We will share further details as and when this plan develops further. On the corporate front, we regained compliance with the NASDAQ bid price rule by affecting a one for 15 reverse share split in August. Lastly, but quite importantly, our cash position remains solid with a balance of $64 million as of September 30th. As we have stated in our press release, we expect this existing cash to fund operations into 2024 including through the top line data readout from the REASSURE trial. In summary, we are excited to have begun enrollment in the REASSURE clinical trial and are looking forward to potentially bringing the first new oral penem to the market in order to help address a serious medical need in the community. We are also looking forward to potentially expanding the utility of sulopenem into other areas that are in need of new treatment alternatives. Now I'll turn the call over to Judy for details on our financial results. Thanks, Corey.

Total operating expenses were $7 million and $22.4 million in the third quarter in year-to-date 2022, compared to $4.9 million and $17.7 million in the third quarter in year-to-date 2021. Operating expenses include research and development expenses, and general and administrative expenses. R&D costs were $4.4 million for the third quarter of 2022, compared to $1.8 million for the same period in 2021. The primary driver of the $2.6 million increase in R&D costs was the initiation of our REASSURE trial, which began in Roman in October 2022. Year to date, R&D costs were $11.8 million in 2022 versus $7 million in 2021 as a result of the cost to support our reassured trial. G&A costs were $2.7 million for the third quarter of 2022, which is $300,000 lower than G&A costs of $3 million in the third quarter of 2021, due primarily to lower share-based compensation expense. partially offset by higher legal fees associated with the class action lawsuit filed in August 2021, following the receipt of the CRL from the FDA in July 2021. Year to date, G&A costs were $10.7 million in 2022, compared to $10.7 million in 2021, or flat. Higher consulting spend on pre-commercialization activities through the first half of 2021 prior to receiving the CRL were offset by higher share-based compensation expense and legal fees in 2022. Moving on to non-operating items. Interest expense was $600,000 for the third quarter of 2022 compared to $800,000 in the third quarter of 2021. The primary reason for the $200,000 decrease in interest expense was the repayment of our SBB loan in March 2022. Our net loss on a U.S. GAAP basis was $29.1 million for the third quarter of 2022 and $39.3 million for the year-to-date period. Impacting the third quarter and year-to-date net loss was a non-cash charge of $17.4 million included in other income and expense in connection with the cancellation of share options. In July 2022, certain executives and employees agreed to the surrender and cancellation of previously granted share options in order to make available additional shares under the company's equity incentive plan, giving rise to this non-cash charge. 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 $5.3 million and $16.5 million in the third quarter and year to date 2022 compared to our non-GAAP net loss of $3.7 million and $16.1 million in the third quarter and year to date 2021. The $1.5 million and $0.4 million increase in our non-GAAP net loss for the third quarter and year-to-date respectively was primarily a result of higher R&D expenses related to our reassured trial. At the end of September, we had cash equivalents and short-term investments of 64.3 million dollars. Based on our current operating plans, we expect to have cashed into 2024, which includes through top-line data readout for the reassured trial. If the reassured trial is successful, a resubmission to the FDA of the MDA for oral sulopenem for the treatment of UUTI is expected in the second half of 2024. As of September 30, 2022, we had approximately 12.2 million ordinary shares outstanding. As mentioned, in August 2022, we affected a 1 for 15 reverse share split, and as a result, we gained compliance with NASDAQ's bid price rule in September 2022. Also, as of the end of September 2022, We had approximately half a million warrants outstanding at an average price of $24.09 per share. And $12.6 million of exchangeable notes, which can be exchanged at the option of the note holder for approximately 1.3 million shares, which includes accrued interest. If the notes are not exchanged, we will pay the note holders $12.6 million plus accrued interest in January 2025. Now I will turn it back over to Corey for some closing comments.

Great. Thank you, Judy. We would like to open up the lines for any questions now.

Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad now. If you do change your mind, please press star followed by 2. When preparing to ask your question, please ensure that your line is unmuted. Our first question comes from Ed Aker from HC Wainwright. Please go ahead, your line is now open. Hi, good morning.

Thanks for taking our questions, and congrats on the recent initiation of Reassure. Firstly, I wanted to ask about the powering of the study, given it's roughly 2,000 patients randomized one-to-one. and perhaps talk a little bit about how you came to that determination given this is augmented versus the other comparator for the prior study. And then I wanted to ask also about the new patent. I know it's described as a composition, but is this actually a composition of matter patent? for the combination of Sulopenem and Provenacid? Or is it really a formulation? And then I have a follow up, thanks.

Great. Thanks for the questions, Ed. We'll start with the powering question. We are powering the study based on a set of assumptions which include things like the point estimate for Sulopenem as well as Augmentum. at 90%. So we will endeavor to keep that power. We do have a interim analysis at the 50% enrollment point where the data management committee will look at the blinded data and assess where we are with regard to potential power. But as of right now, we are powering the study at 90%. The second question you had was regarding the patent. And our attorneys have told us that this is essentially a composition of matter patent for the bilayer tablet. So it's not really a formulation patent per se. It is more of a composition of matter patent for the combination of sulopenamide hydroxyl and probenacid. So we feel pretty good about it. It's not a use patent per se, anything like that. And so we think that there is a very strong patent situation for us that would get us out into a very healthy runway assuming we launch the product in the next couple of years. Our patent wouldn't expire, that particular patent wouldn't expire in the US until at least 2039.

Great, that's helpful. And then a couple more, if I may. First, just wanted to clarify the cash runway. Given that you've stated you expect enrollment to complete in the first half of 24, and if successful would be filing your NDA or resubmitting the NDA in the second half of 24, It seems pretty clear that the top line data release would be sometime around the middle of the year, mid-24. But you state that the runway is into 24. Is it not at least halfway or more into the year? And then the other question is if you could just provide any commentary or details around what's going on with the class action lawsuit. Thanks so much. Sure.

So, yeah, we're not trying to be clever with our words with regard to being, you know, saying cash into 2024. It's more a factor of we, you know, we feel confident that we will have cash to get through the top line data. And that just becomes a question of when does that occur, right? So to your point, could it be, you know, mid-year or a little earlier or, Whatever it is, our general sense is that we've got cash to get through that. And so we're not being specific about a particular quarter because we just don't know that answer based on enrollment yet. But I think what you can take away from this is we feel confident that we've got the cash to get us through the top-line data at this point. And with regard to the lawsuit, I don't think there's any... Any new information? We do have a conference on December 7th on the litigation matter. And, you know, we're just waiting on that date. Obviously, we've done a lot of work preparing for that, and we're waiting on that date to see what happens there.

Great. Thanks so much, Troy. I appreciate it. Thank you, Ed.

Thank you. This concludes our Q&A session, so I'll hand you back to Corey Fishman for closing remarks.

Great. Well, thanks for joining us today. We remain confident in the value of oral sulopenem to treat multi-drug resistant infections. We are looking forward to completing our ongoing clinical work and, if successful, resubmitting our NDA to the FDA. for this really important treatment option for physicians and patients in the uncomplicated urinary tract infection therapy area. So thank you very much for attending this morning, and we wish you all a great day.

Thank you, ladies and gentlemen. This concludes today's call. Thank you for joining. You may now disconnect your lines.