Iterum Therapeutics plc

Hello everyone and thank you for holding and welcome to the interim therapeutics reports third quarter 2024 financial results. My name is Ezra and I will be your coordinator today. If you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. I will now hand you over to your host Louise Barrett, Senior Vice President Legal Affairs. Louise, please go ahead.

Thank you, Edra. Good morning and welcome to Edram Therapeutics third quarter 2024 financial results and business update conference call. A press release with our third quarter results was issued earlier this morning and can be found on our website. We are joined this morning by our Chief Executive Officer, Corey Fishman, and our Chief Financial Officer, Judy Matthews. Corey will provide some opening remarks. Judy will provide details on our financial results, and then we will open the lines for Q&A. Before we begin, I'd like to remind you that some of the information presented on this conference call today will contain forward-looking statements concerning our plans, strategies, and prospects for our business, including the therapeutic and market potential of our LINVAD, the sufficiency of our cash resources to fund our operating expenses into 2025, including through the repayment date of the exchangeable notes, the listing of patents for our LINVAD in the FDA's Orange Book, the protection provided by our patents for our LINVAD, and our strategic process to sell, license, or otherwise dispose of our rights to our LINVA. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors outside of our control, including but not limited to risks and uncertainties concerning the outcome, impact, effects, and results of our evaluation of strategic alternatives, including the terms, timing, structure, value benefits, and cost of any strategic transaction, Our ability to complete a strategic transaction. Our ability to successfully prepare and implement commercialization plans for our LINVA with a commercial partner or directly if we are unsuccessful at entering into or completing a strategic transaction. The market opportunity for and the potential market acceptance of our LINVA. The accuracy of expectations regarding how far into the future our cash and hand will fund our ongoing operations. Our ability to maintain our listing on the NASDAQ capital market. and other factors discussed under the caption risk factors in our quarterly report on Form 10Q5 with the SEC this morning. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements. We will also be referencing non-GAAP financial measures during the call. We provide reconciliation of gap-reported to non-gap-adjusted information in the press release issued this morning. With that all said, now I'll turn you over to Corey for your opening remarks.

Thank you, Louise. Good morning, and thanks for joining us today. As we previously announced, we are very excited to have received FDA approval for our LINVA, our oral sulopenem product, last month for the treatment of uncomplicated urinary tract infections caused by the designated microorganisms E. coli, Klebsiella pneumonia, or Proteus mirabilis in adult women who have limited or no alternative oral antibacterial treatment options. Our approval marks the first U.S. approval of an oral product in the penum class of drugs, which is a very potent and safe class of drugs currently only delivered as intravenous therapy. Having an approved oral penum enables treatment for appropriate patients in the community where new effective agents are desperately needed. As a potential treatment for patients with uncomplicated urinary tract infections that have limited or no other oral treatment options, Orlinva has the potential to not only effectively treat these patients, but also has the opportunity to help combat the growing health crisis of rising antimicrobial resistance by offering a new treatment alternative. We have received formal communication from the FDA of five additional years of exclusivity under the GAIN Act, meaning that Orlynda has marked its exclusivity for 10 years from the date of approval or until October 25, 2034. Additionally, our U.S. patent portfolio provides protection for oral sulopenem into 2039 with issued U.S. patents covering both method of use and composition of matter. We have also submitted patent information for four U.S. patents for Orlinva that will be listed in FDA's Orange Book, Approved Drug Products with Therapeutic Equivalence Evaluations. Overall, we are very pleased with the amount of protection that Orlinva should have in the U.S. market to capture value without competition from a potential generic product. Now I'll provide a few comments on why we are so excited about the potential for Orlinva. The uncomplicated urinary tract infection market in the U.S. has not had a new oral treatment launched in about 25 years. The leading product in the uncomplicated urinary tract infection market, nitrofurantoin, was approved in 1953, and the majority of the other oral products in the market were approved in the 1970s and 1980s. The use of these products over time has led to rising resistance rates, resulting in the most widely used products having resistance rates approaching 20% and those rates can run as high as 30% or more. As most prescribing for uncomplicated urinary tract infections occurs empirically, this very high and oftentimes increasing resistance rate creates a challenge for practicing physicians since the efficacy of these products are continuing to be eroded over time. Almost all of the widely used oral products in this therapy area have some safety concerns that, again, create challenges for treating physicians as to their choice of agent to use. Unfortunately, with almost no innovation in decades, physicians have been forced to use agents that may not work as well as they would like for their patients. With the Oralinva approval, there now could be an alternative treatment option for those patients who have limited or no other oral treatment options available. We believe that there are many patients that fall into this category, specifically at-risk patients. We define at-risk patients as women that fall into any of the following categories. Women who are 65 years or older, women who have diabetes, women with a history of recurrent or drug-resistant infections, or women that have other comorbidities that negatively impact their immune system. This group of patients are most at risk given their profiles, and many physicians are challenged to treat these patients with existing oral options that have substantial resistance as well as safety hurdles. Another key group of patients that are in significant need of a new efficacious and safe oral treatment alternative are the patients that have pathogens resistant to all commonly used oral antibiotics. In our Reassure uncomplicated urinary tract infection clinical trial, completed earlier this year and conducted exclusively in the U.S., over almost 1,000 patients, we found that approximately 1% of these patients had an isolate that was resistant to all available oral antibiotics. Or LINVA could play an important role in treating these patients as well. We firmly believe that our LINVA has a very important place in the uncomplicated urinary tract infection market for appropriate patients. As we look at our operating plan and go-forward cash runway, we expect to be able to fund our operations into 2025 including through the repayment date of our exchangeable notes due January 31st, 2025. And now I'll turn the call over to Judy Matthews for an update on our financial performance.

Thanks, Corey. Total operating expenses were $4.9 million in the third quarter of 2024, compared to $16.7 million in the third quarter of 2023. Operating expenses include research and development expenses in general and administrative expenses. R&D costs were $3.1 million for the third quarter compared to $14.9 million for the same period in 2023. The primary driver of the $11.8 million decrease in R&D expense for the third quarter was primarily due to higher costs incurred in 2023 to support a reassure trial, which began enrollment in October 2022 and completed enrollment in October 2023. GNA costs were $1.8 million for the third quarter of 2024, which is flat to GNA costs of $1.8 million in the third quarter of 2023. Our net loss on a U.S. GAAP basis was $6.1 million for the third quarter of 2024, compared to 3.9 million for the same period in 2023. On a non-GAAP basis, which excludes certain non-cash adjustments, our net loss of $4.8 million in the third quarter of 2024 compared to our non-GAAP net loss of 15.7 million in the third quarter of 2023. The $10.9 million decrease in our non-GAAP net loss for the third quarter was primarily a result of lower R&D expenses related to our reassured trial. At the end of September, we had cash equivalents and short-term investments of $14.5 million, and including warrant exercises and amounts raised under our ATM subsequent to quarter end. We expect to be able to fund operations into 2025, including through the repayment date of the exchangeable notes, on January 31st, 2025. As of November 4th, 2024, which includes the shares issued under our ATM and warrant exercises, we had approximately 27.5 million ordinary shares outstanding. Also, we currently have approximately $11.1 million of exchangeable notes outstanding, which can be exchanged at the option of the note holder for approximately 1.9 million shares. If the notes are not exchanged, we are obligated to pay the note holders $11.1 million plus accrued interest in January 2025. Further, upon approval of ORT-LINDA, we owed Pfizer a $20 million regulatory milestone, which has been deferred for two years through issuance of a promissory note as permitted under the terms of our Pfizer license. Now we will take questions.

Thank you very much. If you would like to ask a question, please press 1 on your telephone keypad now. Please ensure your device is unmuted locally. If you change your mind or your question has already been answered, please press star 2. We will pause momentarily to let the questions Our first question comes from Ed Ark with HC Wainwright. Ed, your line is now open. Please go ahead.

Hello. Good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you so much for taking our questions. So first, as you outlined earlier in the call, so with now 10 years of market exclusivity up to 2034, can you also Thomas Kieffer- discuss how far out this. Thomas Kieffer- portfolio provide coverage for I suppose both in the US and Europe as well.

James Meeker- Sure Thomas thanks for the question. James Meeker- So the the game act provides the incremental five years of market exclusivity. and so that's 10 years in total from the date of approval so that goes into 2034. the patents we have um the latest dates of expiration are into 2039 in the u.s and they would be the same in other territories that when they're granted assuming they're granted So we have patents in the U.S. and in a couple of other territories. We do not have them yet granted in Europe. So we have U.S. coverage into 2039 with patents and a couple of other territories, including Japan and Australia, but we have not yet been granted European patents.

I guess that's it. And then can you perhaps discuss Olinvac's label as it was approved? Did it meet your internal expectations in terms of how broad it is and also the restrictions anticipated?

I'm sorry, Thomas, I couldn't hear that.

What I was asking was as the James Heiting. Only these label that there was a few just wonder, did I need your internal expectations in terms of how broad it is, and then also the restrictions anticipated?

Yeah, sure. It's a good question. Thanks again. We were very pleased with the label and and I'll tell you exactly what our thoughts were. And I think everyone who has been part of the interim story knows that we have always been very consistent in saying this product, we believe, is best suited for folks who are at risk or elevated risk. And having the label that we have, we believe, gives us the opportunity to treat those patients. Unfortunately, in this space, in the uncomplicated urinary tract infection space, our belief is that we're already at a place where most patients have limited oral options available due to resistance, due to safety profiles of the existing drugs. And that is really kind of, you know, what we thought about and we believe is very appropriate for psilopenia patients. So we're very, very pleased with the label. We don't have any other unusual restrictions. As I think we mentioned last time, we don't have any unusual post-marketing requirements. standard pediatric studies, as well as surveillance, which are standard for all companies and antibiotic companies all have surveillance studies to do. So we're very pleased that, you know, we feel like this is a very, very competitive label. And given all the dynamics of the market, we believe it's got an opportunity to do very well.

Got it. And then perhaps one last question from us. I wonder if you can discuss what's your impression so far on your discussions on the strategic options to date?

Sorry, one more time, Thomas. BD. He's talking about BD. BD? Yeah. So we have, we have, we've renewed our process along with our financial advisor. with regard to outreach to companies in an effort to achieve a strategic transaction. And, you know, that process, obviously, you know, we're just getting the approval. We just kicked it off in terms of renewing that effort, and we'll be monitoring that as we go forward.

Okay. Got it. Thank you again for taking the questions, and looking forward to updates on your position options.

Thank you, Thomas.

Thank you. The next question comes from Jason McCarthy with Maxim Group. Jason, your line is now open. Please go ahead.

Hi, Corey. Thanks for taking the questions. Just from a partnering or acquirer perspective, given that you're The last phase three was only in the U.S. Would they need another trial in EU, China, Japan, or some other region to extend approvals ex-U.S.? Or is the data sufficient with what you have?

Thanks, Jason, for the question. Appreciate it. It's a good question. Our understanding is that in the EU, if you go down that regulatory pathway, You can file with the current data package. They have a very standard process with check-in points and, you know, day 120 questions and day 180 questions, et cetera. So it's kind of a very regulated process, much like it is here. And you do not need another study. My understanding is in China, in mainland China, as well as in Japan, you would need an additional study in local population. So I think you have opportunity everywhere for that, but it would require a little bit more time in China and Japan. I think the majority of the rest of the world has the ability to use the FDA data, and those are the two bigger countries that I believe are requiring a local clinical trial in for potential approval.

And thank you. And just one more. For any potential partner or suitor or otherwise, you did have, I know the trial missed and complicated and surgical, but the data was still very good, kind of very in a similar vein to the uncomplicated UTI. Do you think that would potentially make this more attractive? Could they leverage that data and do just another study like you did to get approval for UTI? Is that a part of the discussions that you're having? Or is it just really they're interested potentially in uncomplicated only?

Yeah, I think it's a great question. And I do think there is some interest in complicated UTI as a step-down drug. Again, you know, we obviously didn't hit that endpoint. But to your point, now that you're approved, in order to get a formal approved indication, you would need to do only one study. And I believe based on the data that we generated, we have a very good understanding of what that study would look like, who the comparator would be, and I think we would have a very good chance of hitting that endpoint. And I do think counterparties might be very interested in that because, again, I think that's where the value is in the oral. It's not so much to have another IV because there are lots of IVs out there, but there's very few orals that I think physicians are feeling comfortable not only in the community but in the hospital to send patients home. So I do think that that could be another area of interest for companies depending on what their portfolios look like.

Got it. Thanks for taking the question.

Thanks, Jason.

Thank you very much, Jason and everyone for participating in the question and answer session. That marks the end of our questions and answer session. I will now hand back over to Corey for any closing remarks.

Thanks very much. So we appreciate you all joining us today. And we want to reiterate that we're very excited to have received approval of ORLINVA. And along with our financial advisors, as I just mentioned, you know, we have renewed our process of outreach to potential partners in an effort to achieve a strategic transaction with the goal of maximizing value for our stakeholders. And that process is underway and ongoing. So we appreciate your interest and your time. And thanks very much and have a great day.

Thank you very much, Corey, and thank you everyone for joining. That ends today's conference call. You may now disconnect your line.