Q4 2021 Iterum Therapeutics PLC Earnings Call

Yeah.

Hello, and welcome to the interim therapeutics fourth quarter and full year 2021 financial results Cool My name is Alex they'll be cool. Thanks, Nicole today, if you'd like to ask a question at the end of the presentation. You can press star one on your telephone keypad, if you'd like to withdraw. Your question you May Press Star two.

Now I'll hand over to your host Luis Barrett Senior Vice President of legal affairs over T. Louise.

Thanks, Alex.

Good morning, and welcome to interim <unk> fourth quarter and full year 2021 financial results and business update conference call.

A press release with our fourth quarter and full year results was issued earlier this morning and can be found on our website.

We are joined this morning by Cory Fishman, our CEO and Judy Matthews our CFO .

Cory will provide some opening remarks, Judy will provide details on our financial results and then we will open the lines for Q&A.

Before we begin I would just like to remind you that this call will contain forward looking statements concerning our plans strategies and prospects for our business, including with respect to planned attractions in communications with the FDA and our ability to reach agreement with the FDA on the design of the post clinical trial, our expectations with regard to our ability to resolve them.

Matters set forth in the complete response letter received in July 'twenty, 'twenty, one and obtain approval for all still dependent on the timing and conduct of potential future clinical development of a suite of Panama and the sufficiency of our cash resources to execute on our strategy.

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 initiation and conduct of clinical development avail.

Availability and timing of data from clinical trials.

Timing or likelihood of regulatory filings and approvals, including the potential resubmission of our NDA for all through the panel.

Changes in regulatory requirements public policy or legislation 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, including carrying I propose additional clinical development of ore from the panel the.

The impact of COVID-19, and related response measures there too.

To maintain our listing on the NASDAQ capital market and other risk factors set out in our filings with the SEC, including the most recently filed annual report on Form 10-K .

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.

We will also be referencing non-GAAP financial measures during the call and have provided reconciliations of GAAP reported non-GAAP adjusted information in the press release issued this morning, we.

We believe that the presentation of these measures when viewed with our results under GAAP and the accompanying reconciliation provides useful supplementary information and facilitates additional analysis by our investors analysts and our management and assessing our performance and our results from period to period.

With that I'll turn it over to you Cory for your opening remarks.

Great. Thanks Louise.

Welcome and thanks for joining us today on our year end 2021 conference call.

Like to begin by highlighting that in 2021, we raised a substantial amount of cash and continue to operate our organization in an extremely streamlined fashion.

These proactive steps have allowed us to extend our cash runway into 2024.

Subject to final determination of design and plan to conduct additional clinical and non clinical development of oral sooner program, which I will discuss more detail later in the call to carry out the proposed additional development to support if successful the resubmission of our NDA to the FDA.

We ended 2021 with about $81 million of cash on the balance sheet.

Since the end of 2021, there are two significant events that I'd like to share.

First we fully repaid our outstanding term loan with Silicon Valley Bank and now have no bank debt at all on the balance sheet.

Additionally, as it relates to compliance with nasdaq's minimum bid price requirement in early March we received a 180 day extension to regain compliance with this requirement.

We now have until September 5th to meet this requirement, including by affecting a reverse share split if necessary.

On the FDA front over the last few months, we have held.

Three substantive meetings and a number of discussions with the agency to talk about the additional clinical work required to support the potential resubmission of our package.

Specifically based on those discussions to date. The FDA has stated they will require an additional phase III clinical study.

Complicated urinary tract infection.

If successful along with our existing data package should support the resubmission of our NDA.

We are working diligently to align with the FDA on the specifics of this additional clinical study and hope to finalize the details of this study in the second quarter.

If we are successful in finalizing the details of that study in the second quarter, we would expect to be in a position to begin this additional phase III study with oral <unk> in the second half of this year.

Once the design and planned conduct has been finalized we will provide an outline of the study and its relevant parameters, including a proposed high level timeline for enrollment and completion of the study.

The likely timing for availability of topline data and if the study is successful potential timing for resubmission of our NDA.

As we have said before we believe that oral sullo, Panama can play a very important role in the treatment of uncomplicated urinary tract infections in the community for elevated risk patients and those patients with resistant infections.

Also we'd like to thank our investors and stakeholders for their patience as we work diligently with the FDA to define our path forward.

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

Thanks Karri.

Total operating expenses were $6 8 million and $24 $5 million in the fourth quarter and full year 2021.

<unk> to $4 6 million and $32 1 million in the fourth quarter and full year 2020.

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

R&D costs were $3 $7 million for the fourth quarter of 2021 compared to two 4 million for the same period in 2020.

The primary driver of the $1 $3 million increase in R&D costs was noncash amortization of an intangible asset in 2021.

Full year R&D costs were $10 $7 million in 2021 versus $21 $1 million in 2020 as a result of the completion of our phase III trials in 2020.

G&A costs were $3 $1 million for the fourth quarter of 2021, which is $800000 higher than G&A costs of $2 3 million in the fourth quarter of 2020, due primarily to higher noncash share based compensation for employees and directors.

Full year G&A costs were $13 $8 million in 2021 compared to $11 $1 million in 2020.

Or a $2 7 million increase due to higher consulting spend on pre commercialization activities through the first half of 2021 prior to receiving a CR Alan Tse, our all in July and higher share based compensation expense.

Partially offset by lower G&A head count.

Moving on to non operating items.

Interest expense was $800000 for the fourth quarter of 2021 compared to $4 2 million in the fourth quarter of 2020.

The primary reason for the $3 $4 million decrease in interest expense was noncash interest expense associated with the lower outstanding exchangeable notes balance of $12 $6 million as of December 31, 2021 versus <unk> 51 $8 million as of December 30.

<unk> 2020.

On a strictly cash basis, we paid interest related to our term loan with SBB of approximately $60000 in the fourth quarter of 2021 versus approximately $230000 in the fourth 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 continued until our final payment which was made earlier this month.

Our net loss on a U S. GAAP basis was $4 2 million for the fourth quarter of 2021, and 91 6 million for the full year.

The full year net loss was primarily driven by noncash fair value adjustment totaling $61 million recorded at the time of conversion of approximately $39 million of the exchangeable notes in 2021.

There was no impact of these adjustments on cash our cash runway, which I will turn to in a moment.

On a non-GAAP basis, which exclude certain non cash adjustments, our net loss of $3 3 million and $19 4 million in the fourth quarter and full year 2021, compared to our non-GAAP net loss of $4 4 million and $30 9 million in the fourth.

Quarter and full year 2020.

The $1 1 million and 11 $5 million decrease and our non-GAAP net loss for the fourth quarter and full year was as a result of lower operating expenses previously discussed.

At the end of December we had cash and short term investments of 81 $3 million.

Full year 2021, we spent approximately $16 million or $1 $3 million on average per month operating the business on an efficient basis, and we also made loan repayments to SBB of $6 $5 million for total cash spend in 2021.

Of approximately $22 5 million and as previously mentioned our final payment to SBB with me earlier in March.

On our current operating plan and subject to final determination of the design and planned conduct a potential additional clinical and non clinical development for Sullo, Panama, we have cash into 2024.

As such we expect that our existing cash will be sufficient to allow us to carry out the proposed additional development of oral so low Panama to support a successful resubmission of the NDA to the FDA for the treatment of you UTI.

As of December 31, 2021, we had approximately 183 million ordinary shares outstanding.

Also as of the end of December 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 18 million shares which includes accrued interest at the option of the note holder.

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

Great. Thank you Judy we'd like to open the line now for any questions.

Thank you as a reminder, if you'd like to ask a question you compress star one on your telephone keypad.

I would like to withdraw your question you May press Star two.

Please ensure you're on mute and lately when asking your question.

Our first question for today comes from Ed Arce of H C. Wainwright.

Your line is now open.

Hi, Good morning, everyone. This is Thomas Yip, asking a couple questions for Ed.

Perhaps first question for Corey.

Obviously, the most important.

This year, our phase III studies, starting in the second half of this year can.

Can you give us a rough idea on size and primary endpoint and perhaps.

As a comparator drugs been finalized with the FDA yet.

Thanks Thomas.

We would love to give you that except it has not been finalized yet and that is part of what we continue to have discussions with the agency on and as I mentioned, we hope to finalize that in the next quarter.

The endpoint as far as we know as we sit here today will be the same endpoint.

That was in the previous uncomplicated UTI study, which is a combined endpoint of clinical and micro.

But the other details have not been finalized and aligned with the agency as of yet and as soon as we have that of course, we'll be happy to provide all that information to you.

Understood and perhaps.

A follow up on that can.

Can you tell us.

They made it tough.

Timeframe than perhaps cause of this new phase III study for perhaps a relative to the completed phase III.

Complicated UTI study.

Yeah.

Yes, it's a little hard to do that only because we don't have those parameters defined fully yet with the agency and therefore any any projection I'd give you wouldnt really wouldn't have the.

The veracity that I'd like it to we don't know that answer and it's a little frustrating of course for investors and of course for us as well as we try to nail that down with the FDA. So.

I wouldn't want to tell you something that could change the course of the next couple of months, but.

Suffice to say I think one of the important elements of Judy mentioned in.

We'll cover as well is we have a sufficient cash balance that depending on how that outcome is.

Derived with the agency regarding the size of the study the comparator et cetera. We believe we have cash to get into 2024 and that should give us a pretty good chance to finish that study up.

Our current thinking at least.

Understood.

Perhaps one final question for Judy.

In this press release.

Outline.

The Silicon Valley Bank, along with payment.

Just want to confirm that this is the 20 to 25 notes and then can you tell us what is the rough amount of debt was repaid in the.

Primary rationale retained alone.

Yeah. So.

Yes.

We paid off the SBB the term loan. So we do have the exchangeable notes, which I mentioned as well during the call. So we had started out the year with $51 8 million and we now have the only $12 6 million outstanding all the other 39 million people had converted to shares.

So if no one else convert that $12 6 million along with interest will be due in January 2025.

And Thomas this quarter just to add to that important to note because it sounds like you may you may be under the impression that we paid some of those notes off those are conversions or redemptions by the note holders those are not anything that interim has paid cash to redeem so that's an important distinction and as Judy said.

Those are convertible and during the early part of 'twenty, one a number of folks did convert those those notes, but we did not pay any cash to redeem them.

I'd say, so so to clarify the amount.

The amount that was repaid this year March 2022 for the long so it would be approximately $12 6 million close.

Interest.

I'm sorry, this year, if youre talking about the SBB term loan that we repaid this year.

We had only had about $1 5 million outstanding as of the December <unk>.

Paid that off this first quarter.

That has gone again to $12 6 million.

If the note holders do not exchange that we would have to pay that back in January 2025.

Okay.

Okay got it so the amount that was repaid in March.

Well I guess earlier this month.

It would be about one 5 million barrels.

Yes, yes.

Okay alright. Thank you so much for clarifying that and also really appreciate all the details where phase III.

We look forward to a strong starting later this year. Thank you again for taking my questions.

Thanks Thomas.

Thank you.

We have no further questions for today, so I'll hand back to Corey Fishman for any closing remarks.

Thank you.

Just wanted to close by saying, we appreciate you joining our conference call today, we remain confident in the value of oral <unk> in the community for both patients and physicians and we will continue to work collaboratively with the FDA to provide the additional clinical data needed for a potential.

<unk> NDA Resubmission we.

We expect our existing cash resources to allow us to operate the company into 2024 and to carry out the proposed additional clinical study subject to final determination of the design of such study and we look forward to sharing more details with you as they become available in the coming months.

Thanks, and have a great day.

Thank you for joining today's call you may now disconnect.

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