Acurx Pharmaceuticals, Inc. (ACXP) on Q2 2022 Results - Earnings Call Transcript
Operator: Greetings. Welcome to Acurx Pharmaceuticals' Second Quarter 2022 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. Please note, this conference is being recorded. I will now turn the conference over to Robert Shawah, CFO. Thank you. You may begin.
Robert Shawah: Thank you. Good morning, and welcome to our call. Yesterday, we issued a press release providing financial results and company highlights for the second quarter of 2022. This press release is available on our website at acurxpharmaceuticals.com. Joining me today is David Luci, President and CEO of Acurx, who will give a corporate update and outlook for the remainder of 2022. After that, I'll provide some highlights to the financials from the quarter-ended June 30, and then turn the call back over to Dave for his closing remarks. As a reminder, during todays' call, weâll 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 Friday, August 12, 2022. 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 thatâs accurate only as of the date of this live broadcast today, August 16, 2022. Acurx undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date and time of this conference call. I'll now turn the call over to Dave Luci. Dave?
David Luci: Thanks, Rob. Good morning, everyone. And thanks for joining us on this conference call to review our financial results. During today's call, we will review our financial results for the quarter-ended June 30 and also cover some key corporate highlights. And then we'd be pleased to take any questions. In the second quarter, we continue to enroll more patients in the Phase 2b clinical trial of ibezapolstat, our lead antibiotic candidate for the treatment of patients with C. difficile Infection, or CDI. The Phase 2b clinical trial is a 64 patient randomized one-to-one non-inferiority double blind trial of oral ibezapolstat compared to oral vancomycin, a standard of care for the treatment of CDI. The primary endpoint of the Phase 2b clinical trial is clinical cure at the end of treatment, and the secondary endpoint is sustained clinical cure measured at day 30th follow up visit. Since this is a double-blind trial, results won't be known until the end of the trial. However, operationally the trial is proceeding as expected with no safety signals recorded to-date. The protocol includes an exploratory endpoint comparing the impact on the microbiome between ibezapolstat and the oral vancomycin, and the event non-inferiority of ibezapolstat to vancomycin is demonstrated. Further analysis will be conducted to test for superiority. Additionally, due to slower than expected enrollment, we expanded the number of clinical trial sites participating in the Phase 2b trial, from the initial eight U.S. trial sites to up to 30 trial sites. Currently, there are 16 trial sites open for enrollment, with an additional eight trial sites currently onboarding at this time. We remain particularly excited about the dual impact of using ibezapolstat to treat acute CDI, while appropriately managing the long-term care of each patient's microbiome, which we believe is exceptional for antibiotic therapy. Other key highlights from the second quarter of 2022, or in some cases shortly thereafter, include the following. First, we've completed certain portions of our laboratory study at the University of Houston, comparing the killing effect of ibezapolstat, vancomycin, fidaxomicin and metronidazole using both in-vitro and ex-vivo analyses. Certain results were presented on our behalf by Dr. Eugenie Bassere, Professor at the University of Houston College of Pharmacy at Anaerobe 2022, The Anaerobe Society of America Annual Scientific Conference. The conclusion from this study, from the data presented to-date, analyzed to-date, is that ibezapolstat demonstrated favorable killing kinetics compared to currently marketed antibiotics to treat C. difficile Infection at standard and high concentrations, supporting continued development of a potential first-in-class antibiotic to treat C. difficile Infection. Secondly, in terms of highlights, ibezapolstat presentations have also been accepted at three upcoming prominent scientific conferences later this year, including the Antimicrobial Resistance Conference in September, ID Week in October, and the C. Diff Foundation Conference in November. Third, our scientific collaboration with Leiden University Medical Center continues to support our preclinical development program, to further study the mechanism of action of pol IIIC inhibitors, in a consortium partnership with our company. This innovative research project under a $500,000 grant to Leiden University Medical Center with Acurx as its consortium partner is studying three-dimensional structures of DNA polymerases, and their binding interactions with Acurx inhibitors. The antimycobacterial molecular target of Acurx's pipeline of novel DNA pol IIIC has been clinically validated by ibezapolstat's recent completion of its Phase 2a trial in C. diff infection. The research outcome at Leiden University is intended to accelerate lead product candidate selection for our ACX-375 program, our second drug for systemic treatment against multi-drug resistant Gram-positive bacteria, where no new classes of antibiotics -- where new classes of antibiotics are urgently needed. This project was initiated by Leiden University in September '21, and emerging data are expected to facilitate the 375 program development. Fourth, in July 2022, we launched an innovative patient enrollment acceleration program to optimize patient enrollment in our ongoing 2b trial of ibezapolstat in patients with C diff. Our newly instituted referring physician program involves principal investigators and study coordinators of our clinical trial sites, reaching into potential referring physicians within an appropriate -- an approximate 25-mile radius from our clinical trial sites. In each case, we've identified potential referring physicians as high prescribing physicians of the most commonly used antibiotics for the treatment of C Diff over in recent 12-month period from IMS data. According to the physician prescribing data available to us from an industry standard source, identified referring physicians in the aggregate just 14 -- the first 14 of our currently activated trial sites treated a total of over 30,000 patients in a recent 12-month period, suggesting that a substantial number of subjects could potentially be available for referral to one of the 14 clinical trial sites if the patient is qualified. The first tranche of this program has been activated with four of our clinical trial sites, and is planned to be followed up later this year with a second tranche as we expand our participating sites from 16 up to 30. We believe the referring physician program, which has a number of other supportive elements will enhance the rate of enrollment, potentially mitigating or partially mitigating the countervailing enrollment disruption caused by the COVID-19 pandemic. Additionally, to reiterate, in July 2022, we increased the target number of clinical trial sites participating in our Phase 2b trial from a targeted 24 sites from last quarter up to 30 sites now, with 16 sites active and eight more onboarding. Our scientific team will continue to target six additional trial sites to participate in the 2b clinical trial. Finally, in July '22, the company raised an additional $4.225 million of gross proceeds by consummating a registered direct offering issuing an aggregate of 1,290,000 shares of common stock, which included about 130,000 pre-funded warrants to purchase shares of our common stock to one institutional investor at a purchase price of $3.25 per share, which represents for common shares at $0.001 share exercise price, for the pre-funded warrants, and a price of $3.80 per share for the company's executives that invested in the offering, three of us in particular. The company has also issued to each investor a Series A unregistered warrants to purchase 1,290,000 shares of our common stock and a Series B warrant to purchase another 1,290,000 shares of our common stock. The B warrant has a one and a half year expiry and has no cash flows exercise unless not registered with the SEC, which basically means we'll get another $4.2 million in the door, assuming success with the Phase 2b trial. Now, back to our CFO, Rob Shawah, to guide you through the highlights about some interesting stuffs for the second quarter of '22. Rob?
Robert Shawah: Thanks, Dave. Our financial results for the second quarter ended June 30 were included in our press release issued earlier this morning. Acurx ended the second quarter on June 30, with cash totaling $9.1 million, compared to $13 million as of December 31, 2021. Cash used in operating activities for the six months ended June 30 was $3.9 million, of which approximately $1.7 million was spent on research and development related activities. Research and development related expenses for the three months ended June 30, were $0.9 million compared $0.1 million for the three months ended June 30, 2021. The increase was due to Phase 2b trial related cost and an increase in related consulting costs. For the six months ended June 30, 2022, research and development expenses were $1.7 million, versus $0.2 million for the six months ended June 30, 2021. The increase was due primarily to Phase 2b trial related costs, and an increase in consulting costs. General and administrative expenses for three months ended June 30, 2022 were $1.7 million, compared to $3.9 million for three months ended June 30, 2021. The decrease was primarily due to a decreased professional fees and share-based compensation. For the six months ended June 30, 2022, general and administrative expenses were $3.6 million versus $5.4 million for the six months ended June 30, 2021. The decrease is primarily attributable to a decrease in professional fees, and stock-based compensation, partially offset by an increase in legal and insurance costs. The company reported a net loss of $2.6 million, or $0.26 per diluted share, for the three months ended June 30, 2022, compared to a net loss of $4 million, or $0.57 per diluted share for three months ended June 30, 2021. And a net loss of $5.3 million, or $0.52 per share for the six months ended June 30, 2022, compared to a net loss of $5.5 million, or $0.79 per diluted share for the six months ended June 30, 2021. The company had 10,263,202 shares outstanding as of June 30, 2022. With that, I'll turn the call back over to Dave.
David Luci: Thanks, Rob and to all of you joining us today. We're very enthusiastic about our continuing strong fundamentals. And we're especially pleased to report Acurx's progress on the second quarter. We look forward to building on this momentum in the second half of this year. We have challenging times, there's no doubt. And we look forward to overcoming those challenges and reporting to as we have in the past year since going public. I'll now open up the call for questions, operator?
Operator: Thank you. Our first question is from Jim Molloy with Alliance Global Partners. Please proceed.
Jim Molloy : Hey, good morning. Thank you for taking my questions. I was wondering if you can touch on something a little outside, you guys -- pretty well outside of your control, of course, The Pasteur Act. And any updates on where that might stand? And I know it's outside of your control, but what are -- as you look at it, how would you best handicap the opportunity for that? What will be -- the potential impact for you guys?
David Luci: Thank you, Jim. And good morning. Yes, we're quite focused on The Pasteur Act. And for those who may not know, I know Jim knows. Our Chairman, Bob DeLuccia, is actually a member of the Antimicrobial Working Group. And as such, we've actually shadowed, drafted and reviewed portions of The Pasteur Act over the past nine months or so. And we understands from the AWG meetings, which are monthly that The Pasteur Act still has a very strong likelihood of being passed. We understand that it's a question of when and not a question of if. It doesn't support, because, in part, it involves stockpiling an antibiotic for life threatening infections, which is something that Democrats like, while at the same time, weaning us off of dependence on China for life-threatening -- antibiotics that treat life-threatening infections, which is something that Republicans like. So as I understand that, it's when, not an if. And it's likely to be sometime in the next Congress, because time has pretty much run out now. It looks like the built back better light program is the last thing that Congress will address before going on break and kind of reconvening with the new Congress. So we're hopeful that it's, net-net sometime in the first half of next year, we hope that it gets done. Because if it does get done, it is transformative for sponsors of new classes of antibiotics that treat life-threatening infections. Those are the folks that that would get the benefit of The Pasteur Act. And the benefit is that it would pay for Phase 3, and it would pay $750 million to $3 billion to each sponsor that gets passed through a designation over a course of 10 years.
Jim Molloy : Another follow up, could you walk through sort of, how directly or could apply directly to Acurx and what the impact could be to you guys, should this pass and should The Pasteur Act qualify?
David Luci: Sure. So if it were passed, we would have a non-dilutive method to pay for Phase 3, along with all the manufacturing involved with Phase 3. And we would also stockpile drugs supply to all the public hospitals in the country in exchange for $750 million to $3 billion over 10 years. So $75 million to $300 million a year for 10 years. And where do you fall within that $75 million to $300 million a year will depend on a formula to be included in the legislation. And that formula will be you know, basically a pharmaco-economic argument based on the reduction of downstream costs, public health costs, by virtue of your medicine being available.
Jim Molloy : Got it. Thank you. Thank you for --
David Luci: No problem. Thanks, Jim.
Operator: There are no more questions at this time. So I would like to conclude today's conference. You may disconnect your lines at this time. And have a wonderful day.
David Luci: Thank you, Sherry.
Operator: Thank you.
