Q2 2021 Iterum Therapeutics PLC Earnings Call

Development.

The ability and timing of data from clinical trials and non clinical development.

The timing or likelihood of regulatory filings and approvals, including a potential resubmission of our NDA for it we will see the panel.

Changes in public policy or legislation the actions of third party clinical research organization suppliers and manufacturers.

The accuracy of our expectations regarding how far into the future of the Colgate cash on hand will fund our ongoing operations the impact of COVID-19 unrelated response measures there too and other risk factors set out in our filings with the SEC, including the most recently filed quarterly report on 10-Q.

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 obligations to update such statements.

With that I'll turn the call over to Corey for his opening remarks.

Thanks Louise.

Welcome and thanks for joining us today I want to begin by discussing the complete response letter we received from FDA in late July in response to our new drug application of Sulu pattern for the treatment of uncomplicated urinary tract infections for patients with a known or suspected quinolone non susceptible organisms.

As we noted in our press release, we are disappointed in this outcome and believe our data package was adequate for approval of <unk>.

And the complete response letter.

<unk> acknowledged that the statistical significance was demonstrated for the difference in overall response rate by treatment arm and the <unk> resistant population in other words demonstrated statistical significance in difference of overall response rates compared to Super flux in the quinolone resistant population.

<unk>.

However, the FDA determined that additional data are unnecessary to support approval and recommended that interim conduct at least one additional adequate and well controlled clinical trial potentially with a different comparator drove.

Also recommended further non clinical investigation to determine the optimal dosing regimen, although the FDA stated that this recommendation does not raise and improve ability issue.

There were no CMC issues identified in the complete response letter nor were there any safety issues identified in the over 800 patients treated with two low Panama across the company's clinical development program.

Along with our outside advisers, we have been reviewing the complete response letter as well as putting together a meeting request for a type a meeting with the FDA and accompanying briefing book and will submit this document shortly.

Assuming you're meeting request is granted and the timeline set out and FDA guidelines for such meeting requests are followed we'd expect the meeting to be held by the end of the third quarter.

Our hope and expectation is that we leave that meeting with a go forward plan that aligns with FDA requirements to address the issues noted in the complete response letter to support a potential resubmission of the NDA.

Note that the FDA has indicated their willingness to work with us on the design of any additional clinical trial to be conducted.

It is important to note that we remain confident in the value of and the unmet medical need for oral <unk>, Panama to treat multi drug resistant infections.

With regard to pre commercialization activities undertaken with our partner <unk> to date, we have completed a great deal of research and planning that will ultimately be valuable when commercialization activities are to be resumed following resolution of the issues identified in the complete response letter however.

However, given the complete response letter and the current uncertainty regarding what additional clinical work may need to be done prior to any NDA resubmission in order to reduce operating expenses and conserve cash resources, we halted any remaining pre commercial activities and pause.

<unk> on the definitive agreement for commercialization services.

Lastly, I want to reiterate that with over $90 million of cash on our balance sheet at the end of Q2 and based on the current operating plan subject to final determination of the design and additional clinical and non clinical development work required to support a potential resubmission. We believe we are well positioned <unk>.

Actually to fund our operations into the second half of 2023.

Now I'll turn the call over to Judy for details on our financial results.

Thanks Corey.

Total operating expenses were $7 million in the second quarter of 2021 compared to $8.3 million in the second quarter of 2020.

Operating expenses include research and development expenses and general and administrative expenses.

R&D costs were $2.7 million for the second quarter of 2021 compared to $5 million at the same period in 2020.

The R&D category includes expenses for our clinical and development program, our CMC costs and our regulatory expenses.

Mary driver of the $2.3 million decrease in R&D costs with the completion of our phase III program in 2020.

G&A costs were $4.3 million for the second quarter of 2021, which is $1.1 million higher than G&A cost of $3.2 million in the second quarter of 2020 due to higher spend on pre commercialization activities and higher consulting cost to.

Support administrative functions, partially offset by lower G&A head count as Corey mentioned, we have put on hold any further pre commercialization activities. Following receipt of the <unk> in July.

Moving on to non operating items.

Interest expense was $1 million for the second quarter of 2021 compared to $4.1 million in the second quarter of 2020.

Primary reason for the $3.1 million decrease in interest expense with noncash interest expense associated with a lower outstanding exchangeable note balance of $12.6 million as of June 32021 versus <unk> 51, 6 million as of June 30.

2020.

On a strictly cash basis, we paid interest related to our term loan with SBB of approximately $120000 in the second quarter of 2021 versus approximately $250000 in the second quarter of 2020.

The reduction in cash interest is largely due to a lower principal balance on our term loan as monthly amortization began in the fourth quarter of 2019 and will continue until our final payment in March 2022.

As of June 32021, and with the remaining balance of $4.7 million on our term loan with FCB.

Our net income on a U S GAAP basis was $7.8 million.

$11.8 million was driven by a $15.8 million noncash adjustment to record our royalty linked notes at fair value.

There was no impact of this adjustment on cash our cash runway, which I'll turn to in a moment.

On a non-GAAP basis, which exclude certain noncash adjustments, including adjustments to record the revenue at their fair value. Our net loss was seven of seven $2 million for the second quarter of 2021 was $1.6 million less than our non-GAAP net loss of <unk>.

$8.8 million in the second quarter of 2020 as a result of the lower operating expenses previously discussed.

At the end of June we had cash and short term investments of $91.5 million based on our current operating plan and subject to final determination of the design and planned conduct a potential additional clinical and non clinical development of our solar panel, we have cash into the second half of 2012.

<unk> three.

As I mentioned, we have halted pre commercialization activities and plan to limit spending to essential costs required in connection with the potential resubmission of the NDA.

As of June 32021, we had approximately 183 million ordinary shares outstanding.

Also as of the end of June we had $7.2 million warrants outstanding at an average price of $1.61 per share.

And $12.6 million of exchangeable notes, which can be exchanged for approximately $17.7 million shares which includes accrued interest at the option of the note holder.

Now I will turn the call back over to Corey for some closing comments.

Thanks, Judy I'd like to open the call now for any questions that folks may have.

Thank you Cory and for the rest of the team as a reminder to everyone on the call today to ask a question simply press Star followed by one on your Todd. Thank you Pat.

We wish to ask a question I'll field that your question has been sufficiently answer is just stopped followed by team phase.

Today's question today comes from Gregory <unk> of RBC capital markets. Your line is open. Please go ahead.

Hey, Cory Thanks for holding the call today and thanks for taking my questions just wanted to perhaps take a step back Cory and as you and the team prepared for the type a meeting just curious if you could comment on just how youre thinking about the company strategically and really what inputs you will be.

Considering of course aside from the feedback that you received from <unk>.

From FDA on the path forward in a potentially new trial, and just thinking Korea about how the competitive landscape both on marketing more importantly, developmentally has evolved since you.

Certainly engaged in the pennant trials, a few years ago and over that time. Thank you very much.

Thanks, Greg It's a great question and here's how we look at this.

We are still very enthusiastic and optimistic about the opportunity for oral suitable Panama in the uncomplicated UTI market.

So we are going to work with the agency to try to develop a go forward plan together in alignment with them.

That would allow us to to participate in that market. We don't know exactly what they're looking for and obviously that's part of the reason, we're having a type a meeting to really try to nail down exactly what the efficiencies in our submission work. So we can respond appropriately and after that I think importantly, we'll be able to pull together.

We plan that.

Thankfully, we've got plenty of cash to be able to execute against and put ourselves into a position to be able to hopefully compete in that market in the near term.

And I think youre competitive questions are really important one and I think there is good news on that from the landscape has not changed dramatically in the last couple of years with regard to potential competition in uncomplicated urinary tract space. There are really only two products that are potential market entrants one of which.

As a product from glaxo that is under clinical trials now isn't expected to be complete with those until end of 'twenty. Two early 'twenty, three which would put the timeline for them launching probably into the 2004 timeframe and then one is a product from utility therapeutics that they have brought over from Europe. It is not.

Proved here in the U S.

And they are planning on.

Submitting an NDA.

Fourth quarter I believe is what they've said at the end of this year. So I think the good news is in a market with the scale of uncomplicated urinary tract infections, and unfortunately with the resistance profile of the existing oral products.

We will be in a very solid position to be able to capture a very reasonable share of that market and make similar pattern.

A very important part of the treatment paradigm.

That's very helpful. I appreciate the color and look forward to the updates later this year.

Thanks, Greg.

Thank you. Our next question today comes from Ed Arce of H C. Wainwright. Your line is open. Please go ahead.

Hello, everyone. This is Thomas Yip asking.

Conversions.

Thank you.

Yes.

First regarding <unk>.

The FDA suggests that things are different.

Eric It's Rob.

Just wondering.

There are some possibilities that you got in mind.

Regarding this comparator there.

Are there any expected changes.

Based on this.

Alright.

Yes, so it's a good question and actually it's a really important one comments because.

We are we are.

We're working on.

An analysis of all the existing products as we have done before and part of the challenge that the marketplace. In general has as many of these products are not working very well.

And therefore, that's going to be the part of a very important part of the conversation with the agency.

We could choose any of a number of three or four different oral competitors, but I think the agency is going to want to see a product that is still working well and we know that almost all of the products with regard to the oral is in the market are having problems with resistance with some of the pathogens that exist.

So it's going to make that a little bit more challenging.

Just as a point of reference Glaxo has used nature of Purion <unk> that is there a comparator so thats a potential the other products in this space are backstrom.

Others that again have been around for a long time, but have a lot of resistance and so that's part of part of what we really want to think about and what we want to talk about the guidance also that FDA has put out also talks about doing a placebo controlled trial with <unk>.

Superiority as your endpoint and so that's something that we're thinking about talking to the agency about as well because thats a potential for <unk>.

For another route forward with the agency given that it's in the guidance.

The other important question you raised is label, we don't know what that label is going to look like if we have a non inferiority study against an active comparator a superiority study again to placebo, we don't know those answers yet.

We would have that conversation and certainly hope to understand better once we come out of that meeting what are potential label would look like but that's really importantly kind of the crux of the discussion is if we're not using cipro not doing a similar trial.

Then we have to understand what the label look like and work forward from there.

Okay. Thanks for that.

Perhaps a question.

Yes.

In Nebraska.

Second half.

Great.

Just wonder does that include.

Cause.

Spyros.

Okay.

Okay.

Yes.

Yes.

Alright.

Thank you.

Sure.

Okay.

Got it.

Yes so.

The question it was a little hard to hear you, but I think it was regarding cash and whether that includes an estimate for a clinical trial. The short answer is it does.

To your point, we don't know exactly what that looks like but barring anything really unusual I think we would be in a reasonably good spot to be able to get into that second half of 2023.

Again, thats part of what we'll update as soon as we have some clarity around the discussion with the agency and the protocol for a potential new study if that's if that's where it is required but we are we are planning to in this kind of cash runway. We certainly plan to do additional clinical work and that cost is covered in there.

<unk>.

Sounds good. Thank you so much for clarifying thank.

Thank you for taking our questions we look forward to meeting.

Meeting minutes.

Great.

Thank you all for your questions I will now hand over to Corey Fishman to conclude today's call.

Great.

Well, thanks again for joining us today, although receiving a complete response letter has certainly left all of US greatly disappointed we will work diligently with the FDA to align on a path forward that provides the agency the additional data they require in the most efficient manner possible.

As we stated earlier, we remain confident in the value of and the unmet medical need for oral <unk> to treat multi drug resistant infections and importantly, we believe our cash provided from the ability to do this additional work subject to our discussions with the FDA without the need for additional capital. So thanks again for <unk>.

Joining us and enjoy the day.

Thank you for joining today's call has now concluded and you may now disconnect your line.

Wow.