Acurx Pharmaceuticals, Inc. (ACXP) on Q1 2024 Results - Earnings Call Transcript
Operator: Hello, and welcome to the Acurx Pharmaceuticals First Quarter 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the conference over to CFO, Robert Shawah. Please go ahead.
Robert Shawah: Thank you, Kevin. 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 2024, which is available on our website at acurxpharma.com. Joining me today is Dave Luci, President and CEO of Acurx, who will give a corporate update and outlook, as well as our Executive Chairman, Bob DeLuccia. After that, I'll provide some highlights of the financials from the quarter ended March 31, 2024, then turn the call back over to Dave and Bob for their closing remarks. As a reminder, during today's call, we'll be making certain forward-looking statements. These forward looking statements 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 made with the Securities and Exchange Commission, including our quarterly report on Form 10-Q, which we filed on Tuesday, May 14, 2024. You are cautioned not to place undue reliance on these forward-looking statements and Acurx 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 15, 2024. I'll now turn the call over to Dave Luci. Dave?
David Luci: Thanks Rob. Good morning, everyone, and thanks for joining us to review our financial results for the first quarter and also to hear some exciting recent updates. Then we'd be pleased to take any questions. First, I'll summarize some of our key activities for the first quarter of 2024 or in some cases, shortly thereafter. In January, we announced positive comparative microbiology and microbiome data for ibezapolstat, our lead antibiotic candidate in C. diff patients from the Phase 2b clinical trial segment. Ibezapolstat outperformed vancomycin, a standard of care, showing eradication of fecal C. difficile at day three of treatment in 15 of 16 treated patients, 94%, versus vancomycin, which had eradication of C. difficile in 10 of 14 treated patients, or 71%. Additional data from the Phase 2b clinical trial showed that ibezapolstat, but not vancomycin, consistently preserved and allowed regrowth of key gut bacterial species believed to confer health benefits, including preventing recurrent C. diff infection. Additional data from exploratory endpoints will provide further favorable separation between these two therapeutic options in our Phase 3 clinical trial program and ultimately in the marketplace, if approved. We remain particularly excited about the dual impact of ibezapolstat to treat acute C. difficile on the one hand, while appropriately managing the long term care of each patient's microbiome, which we believe is truly exceptional for antibiotic therapy. Having robust preclinical, clinical and manufacturing data to date, we submitted in January a formidable information package to the FDA, along with a request for an end of Phase 2 meeting, which was granted on February 26th, and the meeting was convened on April 17th. At the FDA meeting, we reached agreement on key elements of our Phase 3 program, including important agreement with the FDA regarding readiness to proceed to Phase 3, as well as agreement on the regulatory pathway for a new drug application filing for marketing approval in the U.S. We will press release further details on the FDA meeting pre-market this morning. In February, we announced that the European Medicines Agency approved their application to be designated as a small to medium sized enterprise, or SME, in Europe, which provides for certain benefits, including fee reductions and other support from the Agency for seeking a marketing authorization in Europe. We attended the European Society of Microbiology and Infectious Disease, or ESCMID, Scientific Congress in April 2024, where Dr. Kevin Garey, Professor and Chair of University of Houston and College of Pharmacy and the Principal Investigator for Microbiology and Microbiome aspects of our clinical trial program, and our Scientific Advisory Board member, provided an oral presentation of Phase 2 data entitled: A phase 2, randomized, double-blind study of ibezapolstat compared with vancomycin for the treatment of C. difficile infection. The presentation included additional analyses of clinical and microbiological data and is available on our website at www.acurxpharmaceuticals.com. The complete Phase 2 results are being prepared for submission to a prominent scientific journal for publication this year. Throughout the rest of this year, we'll continue to roll out our Phase 2 results in either oral presentations or scientific posters, or in some cases, both, which will include results from new analyses as data become available at various prominent scientific conferences, including the Houston C diff. and Microbiome Conference later this month, the Anaerobe Society of Americas Annual Conference in July, the World Anti-Microbial Resistance Conference in September. Also in September is the International C. diff Symposium. And, of course, the Annual Meeting of the Infectious Disease Society of America, or ID Week in October. Throughout the first quarter, we continued preparations for Phase 3 trials, including advances in micro and manufacturing, CRO selection and clinical site screening and building a team of international drug development experts to support our Phase 3 mandate. To ensure Phase 3 clinical trial enrollment as quickly as possible, we're adding substantially more clinical trial sites, way above the number used to conduct the U.S. only Phase 2 trials. We're now finalizing costs and timelines, and our plan is to conduct the required two Phase 2 registration trials consecutively, not concurrently, given the size of our company and need to use our financial resources most efficiently. The timeline to conduct our Phase 3 trials is not a concern since ibezapolstat will have a rolling 10 years of regulatory exclusivity in the U.S. from the date of the FDA approval, with similar exclusivity available in Europe, the U.K., Japan and Canada. We will continue to seek a strategic transaction for the company, including a potential partnership for the further development and potential commercialization of ibezapolstat, alongside preparation for Phase 3 in our build-out strategy. At this time, we have no commitments from potential partners or others to report, but now having FDA confirmation of the registration plan, this has become an active initiative. As we've consistently reported, ibezapolstat clinical results continue to outperform in a series of potentially life threatening infection. The CDC categorizes C. difficile as an urgent threat and calls for new classes of antibiotics for initial treatment that also have a low incidence of recurrence. Ibezapolstat is also FDA fast-track designated for the treatment of C. difficile infection. Initially, we believe ibezapolstat, if approved, could make a favorable impact by reducing the cost burden of recurrent C. diff infection on the U.S. healthcare system, which is estimated at $4.7 billion annually. We do believe the best is yet to come. And now back to our CFO, Rob Shawah, to guide you through the highlights of our financial results for the first quarter. Rob?
Robert Shawah: Thanks Dave. Our financial results for the first quarter ended March 31, 2024, were included in our press release issued earlier this morning. The company ended the quarter with cash totaling $8.9 million, compared to 7.5 million as of December 31, 2023. During the first quarter, the company sold an additional 1,121,793 shares under its ATM Financing Program with gross proceeds of approximately $4.4 million. Research and development expenses for the three months ended March 31, 2024, were $1.6 million, compared to $1 million for the three months ended March 31, 2023. The increase was due primarily to an increase in manufacturing related costs during the quarter. General and administrative expenses for the three months ended March 31, 2024, were $2.8 million, compared to $1.9 million for the three months ended March 31, 2023. The increase was due primarily to a $0.7 million increase in professional fees and a $0.2 million increase in non-cash share based compensation. The company reported a net loss of $4.4 million, or $0.28 per diluted share for the three months ended March 31, 2024, compared to a net loss of $2.9 million, or $0.25 per diluted share for the three months ended March 31, 2023. All for the reasons previously mentioned. The company had 15,757,102 shares outstanding as of March 31, 2024. With that, I'll turn the call back over to Dave. Dave?
David Luci: Thanks, Rob, and thanks to all of you for joining us today. I'll now ask Bob DeLuccia, our Executive Chairman, who managed the FDA post Phase 2 meeting process, to provide his perspective on the FDA meeting and the company's Phase 3 mandate. Bob?
Robert DeLuccia: Yes, thanks, Dave. So let me just add a few thoughts on top of Dave's comments about our end of Phase 2 meeting with the FDA. In general, it was a very thorough, productive and successful meeting regarding four things. First. We had overall agreement that was reached based upon the strength of our pre-clinical and Phase 2 clinical trial results, including the anticipated safety database. We're ready to move forward with plans for our Phase 3 program. Second. With respect to the phase three clinical trial design, as expected, it will be the same design as our Phase 2b trial, which is non-inferiority to vancomycin, with the primary endpoint being clinical cure after 10 days of treatment and a secondary endpoint of sustained clinical cure about 30 days after the end of treatment. Third. We agreed on the statistical analysis patient population, which will be a modified intent to treat, or what's called MITT population, with an estimated 450 subjects in that MITT group. And this is roughly what we had expected and will now be in sync with requirements for an EMA clinical trial authorization. And lastly, agreement on the registration program for two non-inferiority trials versus vancomycin, which should be required for marketing approval. Now, I'd also add that we were very pleased with suggestions from the FDA, including ultimate labeling and overall supportive tone of the FDA from our submitted data to date and our plan going forward. So, bottom line, we now have a complete regulatory roadmap to move forward with our Phase 3 program, which is the last clinical development step toward marketing registration of ibezapolstat globally. For a small entrepreneurial company like Acurx, it's a very significant milestone that we've reached. Then Dave, if you don't mind, I'd like to add one more thing, just on top of what you said, recall that ibezapolstat has FDA fast-track designated status due to the urgent need classification by the U.S. CDC for new classes of antibiotics, and there are similar classifications like this available in other geographies including Europe, U.K., Japan and Canada. If approved, ibezapolstat will be the first new class of antibiotics brought to the market in over three decades. So we've got no time to waste to get this new product over the goal line. And with the continued support of all our shareholders, we have a clear vision and a strong passion to be successful for the ultimate benefit of patients who need better treatments for C. difficile infection and all our stakeholders, and in general, for better public health. Kevin?
Operator: [Operator Instructions] Our first question today is coming from Ed Arce from H.C. Wainwright. Your line is now live.
Ed Arce: Great. Thanks for taking our questions. And Bob, I appreciate the comments at the end. Those were some of the questions I had regarding the specifics around the trial. A couple follow-ups there. Firstly, the 450 patients or subjects that you mentioned, is that the total number for the trial? And also the usual requirement from the FDA of two well-designed pivotal studies. I want to just confirm that the Phase 2b is being considered as one of those two, and so this upcoming trial would be the final study. Secondly, I wanted to ask about the costs and timelines. I know that you said that those are currently being finalized, but any preliminary or early commentary around those would be helpful for us. And then lastly, around the strategic partners and your efforts now that you characterized as being active, now that you have a pathway for pivotal study, I'm wondering, although you don't have any current commitments, do you have any active discussions at this point? Thanks so much.
David Luci: Thank you for your questions, Ed. The last question being the easiest. I'll hit that one first. So we have active discussions, several active discussions at the moment, nothing to report. But, for example, the company will be well represented at the BIO CEO conference in San Diego. And my schedule is chock-full. So there's a lot of activity. We felt it most appropriate, before making outbound calls, to have the FDA piece to the puzzle in place, because we now are truly Phase 3 ready, and that removes another piece of the puzzle in terms of things being set, set in stone. So that's all set. On the first question with regard to the 450 MITT patients, that's the total MITT patients for each of two Phase 3 registration trials, Phase 3 registration trials. So the Phase 2b is not considered a registration trial. You may recall the small numbers of patients, and quite frankly, we needed a lot more patients to have satisfactory safety database for an NDA application thereafter. So it's 450 patients MITT for each of two trials for a total of 900. And to your question, we are still going through the costings, so we don't know exactly how much it will cost. And in some cases, if we have a partnership, it may be that some of the work that we would have paid for would be internalized by a fully integrated pharma company that will be side by side with us with mutual interest to get the Phase 3 program done as quickly as possible, and using our Phase 3 data for filing in Europe, the U.K., Japan. So the MITT piece to the puzzle was a quick conversation with the FDA, because, really, you need that to get to file for approval in Europe and the U.K. So by agreeing on that particular point, we were able to avoid further clinical trials beyond the two Phase 3s. And quite literally, we have an equal pathway in the U.S., the U.K. and Europe. So we're kind of delighted with that piece to the puzzle. But that's I think that's -- is there another piece to your question that I may have missed?
Robert DeLuccia: I think Dave. Yes, David, he had a question on timeline. I mean, I can answer it if you'd like to.
David Luci: Oh, the timeline. Yes, we feel based on what we expect out so far, that would be a year and a half to two years from first patient enrolled.
Robert DeLuccia: And Ed, this is Bob. Just to reiterate, too, the two Phase 3 trials are straightforward from the FDA guideline. The October 22, I think it was guideline, and that's a very clear path for what's needed for approval. And an NDA.
Ed Arce: Got it. Thank you so much. Appreciate it.
Operator: Thank you. [Operator Instructions] Our next question is coming from Mike Boyd, a Private Investor. Your line is out live.
Unidentified Analyst: Good morning, gentlemen, and thank you for the update. It's very exciting. I can't wait to see the next steps. I had quick question, easy one, I hope. Has the company considered a priority review voucher for this application? Thank you.
David Luci: Thanks for the question, Mike. Bob, do you want to hit that one?
Robert DeLuccia: Yes, I mean, we already have priority review because of our FDA fast-track status, so we already have that.
Unidentified Analyst: Yes, but the voucher itself is actually, there's value to that. You could actually sell that, if you chose. Current market value is about $100 million. So looking at that as a source of possible funding at some point.
David Luci: We can certainly take a look.
Robert DeLuccia: Yes.
Unidentified Analyst: Okay, cool.
Robert DeLuccia: I mean, the timing is right to begin thinking about it. It's associated with the NDA, so it's time to put it on the radar if it's something that could, that the FDA would consider.
Unidentified Analyst: Okay.
Operator: Thank you. Our next question today is coming from James Molloy from Alliance Global Partners. Your line is now live.
James Molloy: Hi, good morning, guys. Thanks for taking my question. I apologize if I missed it on the call. Did you guys state when you're starting the first of the two Phase 3s, and can you walk us through what the all-in cost on the Phase 3s are anticipated?
David Luci: Thanks, Jim, and good morning. Yes, we hope to start -- we will be ready to start in the fourth quarter of this year with enrollment, with our manufacturing update that we recently received. So we hope to be funded satisfactorily by then in order to start. So that's the gating factor. But, yes, we hope to start in the fourth quarter and then enrollment should take 18 to 24 months. And it's difficult for us to guesstimate exactly how much this is going to cost, because we have a lot of partnering discussions currently ongoing, and they're all different, and they all have various internal capabilities that dramatically impact what the Phase 3 mandate will cost. It's certainly something in the $50 to $60 million range if we were to do it all independently ourselves. So a partnership would be appropriate course.
James Molloy: How would you characterize the current partnership environment? And obviously, after Phase 3 is your best deal, you're obviously not there. But how do you characterize sort of the going into Phase 3 the partnership opportunities you're seeing?
David Luci: You know, I would characterize it as pretty robust. I mean, probably my last 20 emails in my inbox are people wanting to meet me, and I haven't even looked at the emails yet. That's just from overnight. I mean, it's just a lot, a lot of interest. And we may not be enrolling in Phase 3, but we're Phase 3 ready, and we know we have a drug from our Phase 2b data. So we have to be patient and we have to take the right deal. And when things come along that are going to constitute 60% of the company being lost to a round of investment, then sometimes it's the deals that you don't do that make the most sense. So we're trying to be judicious about raising capital as non-dilutively as possible, knowing that we have a drug and that we're Phase 3 ready. And there aren't a lot of Phase 3 antibiotics out there right now, especially not in a billion dollar plus market where you have a reasonable chance to be frontline therapy.
James Molloy: Excellent. Maybe last questions on my end on the design. I know that, obviously a year, year and a half as you get to run the first of the Phase 3s, is there any opportunity for any interim looks and any thoughts on timing on that? And then any update on the PASTEUR Act? What's going on?
David Luci: I'll leave the question on the PASTEUR Act, I'll leave to Bob. There's some, some new legislation, actually old legislation that may be expanded to include antibiotics that treat life threatening infections that Katie Britt in the Senate has gotten in touch with Health and Human Resources about, but I'll let Bob talk about that. But the interim, look, Jim, that's kind of like a head fake. I know it's NBA playoff time. So for you NBA fans, the interim look, that would go through an independent committee of scientists and doctors. And if you take an interim look, you necessarily statistically have to add patients to the trial, and the interim look doesn't give you any sense of, percentage wise, how you're doing with the primary endpoint or the secondary endpoints. All it does is this group of experts tell you to either keep going or to stop due to futility. So for the amount of information you get out of that, to me, it's not worth adding millions of dollars in time to a trial.
Robert DeLuccia: Yes, I agree. I agree with you, Dave, on that for sure. And hope that answers the question. But remember, this is a blinded trial, so you really cannot break the blind if you're going to continue to proceed. About second, I think there was a second question there regarding.
David Luci: It was about PASTEUR Act.
Robert DeLuccia: What was the question?
David Luci: What's going on with the PASTEUR Act?
Robert DeLuccia: Yes, PASTEUR Act, there's a lot of effort to try to get that through. We're really unlikely going to occur this year under the current political environment. However, there is some activity with a special program that requires a drug to be determined as a material threat in order to get some additional funding from a government organization called BARDA for new classes of antibiotics that are in late stage clinical trials, namely Phase 3. So this is being circulated as pending legislation, trying to move it forward this year. I wouldn't put a high probability that it's going to get through this year, but if it does, we'll be able to tap into that for some partial funding for our Phase 3 Program.
David Luci: Actually, just a slight nuance on that is that the legislation is actually old. It's been approved a long time ago. So what would need to happen is that the scope of the program would need to be expanded, which I understand can be done by HHS on their own. It would need to be expanded to include antimicrobials that treat life threatening infections. So it doesn't rise to the level of needing a new law; the law is there. It's just the program needs to be expanded to include this new class of things that ultimately will be stockpiled by the federal government through the Department of Defense.
James Molloy: Yes. Great. Thank you for taking my questions.
James Molloy: Thank you, Jim.
Operator: Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.
David Luci: We just like to thank everyone for participating today, and thank you for your patience. And the best is yet to come.
Operator: Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.
