Iterum Therapeutics plc (NASDAQ:ITRM) Q4 2022 Earnings Call Transcript

Iterum Therapeutics plc (NASDAQ:ITRM) Q4 2022 Earnings Call Transcript March 16, 2023

Operator: Hello, everyone, and welcome to the Iterum Therapeutics Fourth Quarter and Full-Year 2022 Financial Results and Business Update. My name is Charlie, and I’ll be coordinating the call today. You will have the opportunity to ask questions at the end of the presentation. . I will now hand over to your host, Louise Barrett, SVP, Legal Affairs to begin. Louise, please go ahead.

Louise Barrett: Thank you, Charlie. Good morning, and welcome to Iterum Therapeutics fourth quarter and full-year 2022 financial results and business update conference call. A press release of our fourth quarter and full-year 2022 results were issued earlier this morning and can be find on our website. We are joined this morning by Corey Fishman, CEO; and Judy Matthews, CFO. Corey will provide some opening remarks. Judy will provide details of our financial results and then we’ll open the lines for Q&A. Before I begin, I would like to remind you that this call will contain forward-looking statements concerning our plans, strategies and prospects for our business, including the development therapeutic and massive potential sulopenem, the timing, conduct, progress and results of our ongoing REASSURE clinical trial, 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 may differ materially from those indicated by these forward-looking statements as a result of various important factors, including uncertainties inherent in the design, initiation and conduct of clinical development, including the REASSURE clinical trial, the availability and timing of data from the REASSURE clinical trial, changes in regulatory requirements or decisions of regulatory authorities, the timing or likelihood of regulatory filings and approvals, including the potential resubmission of our NDA oral sulopenem, changes in public policy or legislation, commercialization plans and timelines, if oral sulopenem is approved, the actions of third-party clinical research organizations, suppliers and manufacturers, the accuracy of our expectations regarding how far into the future our cash on hand will fund our ongoing operations, and other factors discussed under the caption Risk Factors in our Annual Report filed this morning.

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In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied on us representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. We will also be referring to non-GAAP financial measures during the call. We’ve provided a reconciliation of GAAP supported to non-GAAP adjusted information in the press release issued this morning. With that said, I’ll turn it over now to Corey for some opening remarks.

Corey Fishman: Thanks, Louise. Welcome, and thanks for joining us today. I want to share some highlights from 2022 and talk about our 2023 activities. We made significant progress in 2022 to move the clinical development of sulopenem forward. We worked with the FDA to align on a design for an additional Phase 3 clinical trial for oral sulopenem to address certain deficiencies the FDA noted in their complete response letter we received in July 2021. We are conducting our new Phase 3 clinical trial under a special protocol assessment SPA agreement with the FDA. The SPA agreement provides that the design and planned analysis of the clinical 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.

As a brief reminder, our new Phase 3 clinical trial known as REASSURE comparing oral sulopenem to oral Augmentin for the treatment of uncomplicated urinary tract infections is currently enrolling subjects. The REASSURE study is designed as a non-inferiority trial comparing oral sulopenem and oral Augmentin in the Augmentin susceptible population and is expected to enroll approximately 1,966 patients. 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, 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 2021 from FDA, then the FDA’s review and action should occur six months from receipt of our resubmission. It’s important to note that the need for new oral treatments in the uncomplicated urinary tract infection therapy area remains high. Although the market is quite large with approximately 33 million prescriptions in the U.S. annually, almost all currently available oral treatment options face safety and efficacy challenges including increasing resistance, leading community physicians seeking new and effective treatment options. We are very pleased to share that Iterum has been granted two U.S. patents, one directed to the composition of the bilayer tablet of oral sulopenem, which contains sulopenem etzadroxil and probenecid in a single bilayer tablet and one patent directed to the method of use of oral sulopenem in treating multiple diseases, including uncomplicated urinary tract infections.

Both of these patents will provide protection into 2039, which allows for a substantial runway to protect the value of oral sulopenem in the U.S. Outside the U.S., we have pending patent applications, including in 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 invented. Additionally, we continue to evaluate potential new areas where there is an unmet medical need and where sulopenem could be an important potential alternative in treating those patients. We will share additional details as and when this plan develops further. Our cash position remains solid with a balance of approximately $61 million as of year-end 2022.

We expect that our current cash, cash equivalents, and short-term investments will be able to fund our operations into mid-2024. In summary, we are pleased to have aligned with the FDA and begun enrollment in our 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. Now, I’ll turn the call over to Judy for additional details on our financial results.

Judy Matthews: Thanks, Corey. Total operating expenses were $7.9 million and $30.4 million in the fourth quarter and full-year 2022, compared to $6.8 million and $24.5 million in the fourth quarter and full-year 2021. Operating expenses include research and development expenses and general and administrative expenses. R&D costs were $5.8 million for the fourth quarter and $17.6 million for the full-year 2022, compared to $3.7 million and $10.7 million for the same period in 2021. The primary driver of the increase in R&D expense for the fourth quarter and full-year was cost to support our REASSURE trial, which began enrollment in October 2022. G&A cost was $2.1 million for the fourth quarter of 2022, which is $1 million lower than G&A costs of $3.1 million in the fourth quarter of 2021, due primarily to lower share-based compensation expense.

Full-year G&A costs were $12.8 million in 2022, which is $1 million lower than G&A cost of $13.8 million in 2021, primarily due to the cost of pre-commercialization activities carried out in 2021 prior to receipt of the CRL and a decrease in consultancies to support our general and administrative functions, partially offset by an increase in legal fees associated with the lawsuit filed in August 2021, which was dismissed with prejudice in January 2023, which means the case cannot be brought back to court. Our net loss on a U.S. GAAP basis was $5.1 million for the fourth quarter of 2022 and $44.4 million for the full-year. Impacting the full-year 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.

As we discussed last time, 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 $6.4 million and $22.9 million in the fourth quarter and full-year 2022, compared to our non-GAAP net loss of $3.3 million and $19.4 million in the fourth quarter and full-year 2021. The $3.1 million and $3.5 million increase in our non-GAAP net loss for the fourth quarter and full-year was primarily result of higher R&D expenses related to our REASSURE trial.

At the end of December, we had cash, cash equivalents and short-term investments of $60.8 million, which based on our current operating plan, will provide a cash runway until mid-2024. We expect to complete enrollment in the first half of 2024 and if the REASSURE trial is successful, we expect to resubmit to the FDA, the NDA for oral sulopenem for the treatment of uUTI in the second half of 2024. As of December 31, 2022, we had approximately 12.6 million ordinary shares outstanding. Also, as of the end of December 2022, we had approximately $12.6 million of exchangeable notes outstanding, which can be exchanged at the option of the note holder for approximately 1.1 million shares. If the notes are not exchanged, we will pay the noteholders $12.6 million plus accrued interest in January 2025.

Now, I will turn it back over to Corey for some closing comments.

Corey Fishman: Thanks, Judy. We’ll open the line now to any questions.

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Q&A Session

Operator: Of course. Thank you. . We have a question from Ed Arce of H.C. Wainwright. Ed, your line is open. Please go ahead.

Thomas Yip: Hi, thank you so much for taking our questions. This is Thomas Yip asking questions for Ed. First regarding REASSURE, can you tell us how many patients have been enrolled so far and if not, approximately what percentage enrollment has been achieved so far?

Corey Fishman: Hey, Thomas, it’s Corey. Thanks for the question. We’re not going to disclose specifics around the study. We generally don’t do that. Just in terms of trying to not get people all riled up in good or bad ways. What I would tell you is I think the study is progressing very nicely. We’ve got a significant amount of sites open and we’ve had significant enrollment so far. So the piece that we will share and we have shared is that based on the current forecast of how that continues to go, we would expect to finish up enrollment in that first half of 2024.

Thomas Yip: Got it. And then, perhaps a question regarding the interim analysis. What type of data can we expect after this analysis is finished and is there any possible to adjust the trial based on the data?

Corey Fishman: Yes. So the purpose of the interim analysis is really just to determine the patient size and make sure that the power remains where we had wanted it. And that’s really the only information you get. It’s generally done on a blinded basis, so you’re really not looking at any of the data. And of course, the company can never do that anyway. It’s done by an outside data safety monitoring committee. So all they’ll do is look at the blinded data and say, yes, based on what we see right now, you are on track to maintain your power, or if you want to maintain this power, you’d need to add X patients, if you’re below where you expect it to be. So that’s really the only piece of information you’ll get when there’s an interim analysis. It’s really not about the efficacy in terms of we aren’t going to know anything specific for sulo. It’s all going to be on a blinded basis.

Thomas Yip: Got it. Thank you for clarification. Perhaps one last question, this one should be for Judy, question about cash runway you mentioned to mid-2024. Just wondering would this expected to include top-line data readout from REASSURE?

Judy Matthews: Yes. Based — we will definitely get through enrollment as we said in that first half of 2024. And we do expect to be able to fund up through data. So it’s expected, data is also expected shortly after of course within a few months of finishing enrollment.

Thomas Yip: Got it. Thank you so much, Corey and Judy for taking our questions and looking forward to interim readout.

Corey Fishman: Thanks, Thomas.

Operator: Thank you. We currently have no further questions. So I hand back over to Corey for any final remarks.

Corey Fishman: Great. Thanks very much. So, in conclusion, we want to thank you for joining us today. We continue to remain confident in the value of oral sulopenem to treat multi-drug resisted infections in the community, and we look forward to completing our ongoing clinical work, and if successful, resubmitting our NDA to the FDA for this important treatment option for physicians and patients.

Operator: Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines.