Acurx Pharmaceuticals, Inc. (NASDAQ:ACXP) Q1 2023 Earnings Call Transcript May 12, 2023

Acurx Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.25, expectations were $-0.29.

Operator: Greetings, and welcome to the Acurx Pharmaceuticals First Quarter 2023 Financial Results and Business Update. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rob Shawah, Chief Financial Officer. Thank you, sir. You may begin.

Rob Shawah: Thank you. 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 2023 which is available on our website at acurxpharma.com. Joining me today is David Luci, President and CEO of Acurx, who will give a corporate update and outlook for 2023. After that, I’ll provide some highlights to the financials from the quarter-ended March 31, 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. 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 today, Friday May 12, 2023. 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 12, 2023. 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?

Dave Luci: Thanks, Rob. Good morning, everyone, and thanks for joining us to review our financial results for the first quarter of ’23 and to cover some recent updates, then we’d be pleased to take any questions. In the first quarter, we continued to enroll more patients in our Phase 2b clinical trial of our oral ibezapolstat, our lead antibiotic candidate for the treatment of patients with C. difficile infection although 2b trial is a randomized 1:1 non-inferiority double blind trial of oral ibezapolstat compared to oral vancomycin, a standard of care to treat C. difficile infection. The primary endpoint is clinical cure at the end of treatment and a secondary endpoint is sustained clinical cure measured at day 38 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 reported to date and the blinded observed data has been exceptional. The phase 2b trial protocol includes an exploratory endpoint comparing the impact on the microbiome between ibezapolstat and vanco. In the event non-inferiority of ibezapolstat to vanco has demonstrated further analysis will be conducted to test for superiority. Due to slower than enrolment expected during the COVID-19 and its aftermath, we expanded the number of clinical trial sites participating in the Phase 2b trial from the initial 12 sites to now we have a total of 28 trial sites. Most importantly in March 2023, the FDA accepted our protocol amendment to our IND, which will allow an independent data monitoring committee, which we’ve assembled to review interim clinical data upon reaching 36 patients enrolled and then to provide its recommendation either to early terminate the 2b trial as we had done with the 2a trial, you may recall, or alternatively continue enrolling.

We anticipate completing enrollment of the 36 patients in the second half of ’23. The company intends to report available data properly after the IDMC conducts this interim review. The company has – we remain particularly excited about the dual impact of ibezapolstat to treat C. diff infection 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 first quarter of ’23 or in some cases shortly thereafter include the following. In April ’23, two presentations were made at the 33 Annual ECCMID Conference in Copenhagen, Denmark. First, a scientific poster entitled “Novel Pharmacology and Susceptibility of Ibezapolstat Against C. difficile Isolates with Reduced Susceptibility to C.

difficile-directed Antibiotics” was presented by Dr. Kevin Garey, Professor and Chair, University of Houston College of Pharmacy, and Principal Investigator for microbiome aspects of our ibezapolstat clinical trial program. Dr. Garey’s work demonstrated that it ibezapolstat’s mechanism of action is not only bacterial target to C. diff but also inhibit some of its virulence mechanisms, meaning its capability to cause disease. Dr. Garey also noted that C. difficile strains will reduced susceptibility to metronidazole, vanco and fidaxomicin were in fact susceptible to ibezapolstat. Ibezapolstat’s anti-virulence effect, namely reduced flagellar movement of the C. diff organism was a positive unexpected finding reflecting the unique mode of action in inhibiting DNA pol IIIC.

The second of the two ECCMID Presentation was by our Chairman, our Executive Chairman, Bob DeLuccia, who presented an update regarding the company’s preclinical systemic oral and IV program for treatment of other gram positive infections caused by MRSA, VRE and DRSP at the pipeline corner, featured session at ECCMID organized by Dr. Ursula Theuretzbacher, a world renowned microbiology expert in antibacterial research. Following the clinical validation of the pol IIIC bacterial target in our Phase 2a trial showing 100% cures with no re-infections, we’ve made significant improvements in cytotoxicity, solubility and protein binding in vitro, and in vivo safety and have demonstrated oral and IV efficacy in a number of mouse infection models. Both the poster and the presentation are available on our website.

Additionally, we wanted to mention Dutch sponsorship, the company has continued its R&D collaboration with Leiden University Medical Center in Holland under a previously awarded grant from the Dutch government of approximately a $0.5 million to further evaluate the mechanism of action of our inhibitors against the DNA pol IIIC enzyme which is the bacterial target of our antibiotic pipeline for the systemic treatment, IV and oral of gram positive bacterial infections. Data generated from this program was critical to include in a recent non-dilutive grant application to CARB-X, which I’ll describe in more detail in a moment. But based on this successful collaboration, we’re hoping to receive an additional two-year grant for more research in this regard, which if it comes through, we’re expecting in the middle of the year and it would be in the range of $800,000 for this second component.

Let’s now turn to CARB-X. We remain in the running for funding our second antibiotic candidate targeting the treatment of MRSA infections by CARB-X and we expect a final decision no later than October of this year. Just to reflect on how this came about in October of ’22, we applied to CARB-X for a non-dilutive grant of up to $11.3 million which if approved would provide funding for our second antibiotic program targeting MRSA infections for a period of five years up to the start of Phase 2 clinical trials. CARB-X recently informed us that our application is in the active review pool and the final decision is to be rendered by CARB-X no later than October 23. We believe that based on our recent development progress and the unique nature of having a new class of antibiotics together with our understanding that CARB-X already made final decisions on most candidates, we remain under active review.

For these reasons, we believe we have a strong possibility to gain CARB-X approval for funding later in the year. If approved, CARB-X will fund the $11.3 million of a $16 million project and that would cover oral and IV formulations of our second antibiotic candidate ACX-375. Now just looking ahead a bit the AMR Congress later this year in September, the World-Antimicrobial Resistance Congress will convene its annual meeting in Philadelphia, where experts in the field from both public and private sectors weigh in on the latest innovations to address AMR. Our Executive Chairman Bob DeLuccia was invited to and will speak at the Innovative showcase section of the conference and will present an update entitled novel DNA poly IIIC inhibitors for gram-positive bacterial infections preparing for the next pandemic.

After the presentation, it will be available on our website. Also looking ahead a bit, we’d like to mention the PASTEUR Act. Last month, U. S. Senators Michael Bennet from Colorado and Todd Young, reintroduced the PASTEUR Act, pioneering antimicrobial subscription is to end up searching resistance. To encourage innovative drug development targeting the most threatening infections, improve the appropriate use of an antibiotics and ensure domestic availability of antibiotics when needed. According to Senator Bennett, the bipartisan PASTEUR Act is the strongest bill ever written to strengthen antibiotic development and use. It will fix our market failures, expand the pipeline for next generation antibiotics and save lives. If approved, PASTEUR Act has the potential to enhance the commercial prospects for our antibiotics by providing funding for our Phase 3 clinical trials in stockpiling our antibiotic at public health facilities in the U.S. each year for 5 to 10 years, as currently drafted designation as a critical need antimicrobial under the PASTEUR Act if approved would apply to sponsors of antibiotic candidates, which are a new class of antibiotics and that target a treatment of serious or life threatening infections as is the case with our lead antibiotic candidate ibezapolstat.

Accordingly, we’re quite enthusiastic about the prospects of the PASTEUR Act being passed into law. Now back to our CFO, Rob Shawah, to guide you through the highlights of our financial results for the quarter. Rob?

Rob Shawah: Thanks, Dave. Our financial results for the first quarter ended March 31, 2023 were included in our press release issued earlier this morning. The company ended the first quarter with cash totaling $7.2 million compared to $9.1 million as of December 31, 2022. Research and development expenses for a three months ended March 31, 2023 were $1 million compared to $800,000 for the three months ended March 31, 2022. The increase was due to Phase 2b trial related costs. General and administrative expenses for the three months ended March 31 were $1.9 million compared to $1.9 million for a three months ended March 31, 2022. The company reported a net loss of $2.9 million or $0.25 per diluted share for a three months ended March 31, 2023 compared to a net loss of $2.7 million or $0.26 per diluted share for the three months ended March 31, 2022. The company had 11,671,795 shares outstanding as of March 31, 2023. With that, I’ll turn the call back to Dave.

Dave Luci: Thanks, Rob. And to all of you joining us today. As you’ve heard, we’ve kicked off 2023 with advances in several areas that we believe will spur continued growth and momentum to build on our strong fundamentals. We look forward to sustaining this momentum even during these challenging times and sharing future updates in the coming months. I’ll now open the call for questions. Operator?

Q&A Session

Operator: [Operator Instructions] Our first question comes from Ed Arce with H.C. Wainwright. Please proceed with your question.

Operator: Our next question comes from Jim Molloy with Alliance Global Partners. Please proceed with your question.

Operator: [Operator Instructions] Our next question comes from Nick Meyer. Please proceed with your question.

Operator: We have reached the end of our question-and-answer session. This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time.

Dave Luci: Thanks, Maria.