Q2 2023 Acurx Pharmaceuticals Inc Earnings Call
Greetings and welcome to the accurate pharmaceuticals to discuss second quarter 2023 financial results and business update.
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It is still my pleasure to introduce your host Mr. Rob shower chief.
Chief Financial Officer.
Thank you Sir you may begin.
Thank you.
Good morning, and welcome to our call.
This morning, we issued a press release, providing financial results and company highlights.
The second quarter of 2023.
Which is available on our website and Aker X pharmaceuticals Dot com.
Joining me today is Dave Lucci Crazy.
President and C E O of Aker X.
We will give a corporate update and outlook.
For 2023.
After that I'll provide some highlights of the financials from the quarter ended June 30th and then turn the call back to Dave for his closing remarks.
Joining me too as a reminder.
On 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.
They are subject to change and involve a number of risks and uncertainties that may cause actual results with <unk>.
For 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.
Which we filed on Friday August 11 2023.
You are cautioned not to place undue reliance on these forward looking statements and accurate disclaims any obligation to update such statements at any time in the future.
This conference call contains time sensitive information that is accurate only as of the date of this live broadcast today August 14th 2023.
Great accuracy 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 Lucci Gabe.
Thanks, Rob Good morning, everyone and thanks for joining us to review our financial results for the second quarter of 2023.
It also to cover some recent updates and we'd be pleased to take any questions.
In the second quarter of two O 23, we continue to enroll more patients in the phase two b clinical trial.
All of our lead antibiotic candidate desert pool stat for the treatment of patients with C difficile infection or CDI.
We're pleased to report we now have enrolled 31 patients in the phase two b trial.
Only five more patients need to be enrolled to trigger interim data review by an independent data monitoring committee that we appointed in the first quarter of 'twenty three for this purpose.
The I D. M C will review the data upon their 36 patients being evaluated.
I am Mary endpoint is clinical cure at the end of the treatment.
Property provide its recommendation either to early terminate the two b trial as we had done with the phase Iia trial or alternatively to continue enrolling.
Well report the I N I G M C recommendation after the after the interim review of the data.
It's the I D. M. C recommends early termination of the <unk> trial.
Well probably report the top line data on the primary endpoint and safety data when they're 36 patient.
Enrolled patients complete treatment, we anticipate completing enrollment of the 36 patients.
<unk> for the interim review in the coming months.
Operationally, we're pleased to report that the blinded observed data from that they used to be trial has been exceptional and the trial is proceeding as expected with no safety signals reported to date.
He used to be trial protocol includes an exploratory endpoint comparing the impact on the microbiome between that desert pools that are standard of care oral vancomycin.
And is that non inferiority mesopause that tobacco Biogen has demonstrated further analysis will be conducted to test for superiority.
Due to slower than expected.
Expected enrollment during the COVID-19 pandemic and its aftermath, we did expand the number of trial sites participating in the B trial.
Initial 12 sites up to 28 sites as we now have.
And have increased our support to higher enrolling sites, resulting in increased screening and the past couple of months.
On March 23, the FDA accepted our protocol amendment or I N D, which will allow an independent data monitoring committee to re review the interim data.
That's been pre cleared with the FDA.
We remain particularly excited about the dual impact like Bezeq pool stat.
At the same time to treat the acute infection. The 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 for the second quarter of 'twenty three or in some cases. Shortly thereafter include the following.
In April of this year or two presentations were made at the 33 annual European Congress of clinical microbiology, and infectious disease or estimate in Copenhagen.
First a scientific poster entitled novel, Pharmacology, and susceptibility desert pools that against C. Diff isolates with reduced susceptibilities to C. Diff directed antibiotics.
And quote was presented by Dr. Kevin Gary.
That's right Chair University of Houston Intelligence Pharmacy.
And the principal investigator for microbiome aspects of our IDE as opposed that clinical program.
After Gary's work demonstrated that I bet as opposed to its mechanism of action is not only bactericidal or C. Diff, but also could inhibit some of its virology mechanisms, meaning its capability to cause disease.
Dr. Gary also noted that see that strains with reduced susceptibility any of the other antibiotics used to treat C. Diff metronidazole vancomycin and Fidaxomicin those see that strange were susceptible to it that supports that.
So just to say it again as a pulse that is able to successfully kill.
C diff bacteria that in many cases is resistant to all the other antibiotics used to treat C. Diff currently.
And as opposed to have anti viral effect, namely reduced flagellar movement of the C. Diff organism was a positive unexpected findings.
Selecting the unique mode of action and inhibiting DNA <unk>.
And the second of two presentations at Ash addresses executive Chairman bought dilute yet presented an update regarding the company's preclinical the stomach oral and IV program for the treatment of other gram positive infections like.
I'd MRSA vre and D. R. S P a.
The pipeline corner featured session at Achmad.
Organized by Doctor Herschel up there its back or a world renowned microbiology experts involved in anti bacterial drug research discovery and development strategies and policies for our clinical and public health needs.
Bob summarized the progress of the company's gram-positive select spectrum program.
Both posters are available on our website.
Additionally, in the third quarter, we were notified by carve outs that we did not receive funding approval and their recently closed twenty-three omnibus funding round for our second antibiotic candidate <unk> 375, C, which is in preclinical development.
We did appeal this decision based on certain modifications to the scope of our program.
Box governance structure did not not allow.
For acceptance of an appeal process.
That's noted that the 23 round of funding was very competitive and that's your scientific Advisory Board was enthusiastic about all three C. As the bacterial target of our molecules and.
And that's a sufficiently good PK and safety properties of the compounds that we have justified the proposed lead optimization plan.
So our best encourage us to reapply for future request for proposals or Rfps that carve outs will continue to promulgate from time to time for funding consideration.
While this news was disappointing we will continue to monitor and apply for grants.
From all funding sources as they become available.
Now just now looking at sort of adjusted that.
The upcoming antimicrobial resistance Congress is next month.
It will convene its annual meeting in Philadelphia, we're experts in the field from both the public and private sectors weigh in on the latest innovations.
The address anti microbial resistance.
This is the world's largest conference for all stakeholders combating antimicrobial resistance and our executive Chairman will speak at the innovation. So showcase section of the conference on September seven and will present, an update entitled novel DNA <unk> inhibitors for Gram positive bacterial infections.
Caring for the next pandemic 'end-quote.
After the presentation it will be available on our website.
In addition, we have ideally coming up the infectious disease Society of America will convene its annual meeting called Ivy League and Boston October 11 of 15.
<unk> will be featured at two scheduled events first.
An oral presentation by Dr. Kevin Gary.
We'll be given on October 14th entitled.
Elucidating the Gram positive select collective spectrum activity like that as opposed to that.
Area analysis from the Phase Iia trial.
And secondly, aircrafts will present at the symposium entitled New Antimicrobials in the pipeline on October 12th at the Symposium <unk> presentation will be entitled novel, DNA polymerase inhibitor inhibitors for Gram positive bacterial infections.
After this presentation will be available on our website.
And I would say the past Stuart as we've discussed in the past the bipartisan pass through where it continues to generate news and enthusiasm in Washington D. C. On April 27th U S Senators, Michael Barrett and Todd Young reintroduced the past door Act.
To encourage innovative drugs drug development targeting the most threatening infections improve the appropriate use of antibiotics and ensure domestic availability of antibiotics when needed.
11 Senate Subcommittee hearing was convenient led by Senators Markey at Marshall highlighting the need to address the anti microbial resistance to super bugs, including MRSA and C. Diff.
Accordingly, we're quite enthusiastic about the prospects over the past or at being passed into law.
On the bipartisan.
And support.
Second national Spotlight and NASA.
Dire need for new classes of antibiotics to treat serious or life threatening infections.
And now back to our CFO Raj Shah to guide you through the highlights of our financial results for the second quarter of 2023, Rob.
Thanks, Dave.
Our financial results for the second quarter ended June 32023 were included in our press release issued earlier this morning.
The company ended the second quarter with cash totaling $9 $1 million.
Compared to $9 $1 million as of December 31, 2023 2022.
Research and development expenses for three months ended June 32023 were $1 $7 million.
Compared to <unk> $9 million for three months ended June 32022 inch.
The increase was due to an increase in phase II b trial related costs.
For the six months ended June 32023 research and development expenses were $2 $8 million versus $1 7 million for the six months ended June 30.
2022.
The increase is due primarily to phase two b trial related costs and an increase in consulting costs.
General and administrative expenses for three months ended June 30.
2023 were $1 $7 million compared to $1 $7 million.
The three months ended June 32022.
The expenses reflect a slight decrease in professional fees of $1 million.
Offset by a slight increase.
Point 1 million in employee compensation related costs.
For the six months ended June 32023.
General and administrative expenses were $3 $6 million.
First is $3 $6 million for the six months ended June 32 022.
The amount reflects a decrease in professional fees.
Point $2 million.
All set by an increase.
Point 2 million in employee compensation related costs.
The company reported a net loss of $3 $4 million or 28 cents per diluted share for the three months ended June 32023.
Compared to a net loss of $2 6 million.
Or 26 cents per diluted share.
For the three months ended June 32022.
And a net loss of $6 3 million.
Or <unk> 53 per share for the six months ended June 32023.
Compared to a net loss of $5 $3 million.
Or 52 cents per diluted share for the six months ended June 32022 off for the reasons previously mentioned.
The company had $13 million.
5128 shares outstanding as of June 32023.
With that I'll turn the call back over to Dave.
Thanks, Rob and to all of you joining us today.
Outlined advances in several areas that we believe will spur continued momentum and growth build on our strong fundamentals.
We look forward to sustaining this momentum even during these challenging times and sharing future updates and results in the coming months.
I will now open the call for any questions operator.
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One moment, please while we poll for questions.
Thank you.
Our first question comes from the line of Ed Arce with H C. Wainwright. Please proceed with your question.
Hi, Good morning, everyone. This is Thomas Yip.
Asking a couple questions for a second but there are no questions.
Hey, good morning.
Good to hear the update for accurate.
So back in March.
Guidance for the Phase II interim review.
What's the anticipated mid year 2023, okay.
Okay.
Oh, why some major factors there.
Right behind us.
Shift in finding and also it was some remedies.
That you are implementing to address it.
Oh, okay.
Thomas.
I think the question is about 180 degrees in the wrong direction I'm, sorry to say if you check your notes.
You'll find that.
On may 14th in the fruit at the end of the first quarter, we guided folks that we would be done in the second half of 2023 with the <unk> trial and if anything today, we've guided folks that we're gonna be done before that.
Yeah.
Okay. So.
So the labor, yes, I do remember the latest guidance was second half so you mentioned in coming.
So as that.
Sounds more like a third quarter or early fourth quarter events.
Yes, yes, so what I say before that I mean before the end of the second half, but yeah. We we do think that it will be you know in the company as I mentioned in the coming month or two.
We've had significantly better enrollment.
We plugged a new CRO into special situations and we're starting that's starting to bear fruit.
Including a substantial increase and the.
The number of patients that are screened.
So maybe it's also in combination a bit with a COVID-19 being further and further behind us and maybe some of the behavioral patterns are changing back.
So in any of that whatever the causes were screening more patients in.
You know, we we don't think we have far to go.
Got it and then you mentioned there.
Well the phase II interim analysis.
P M C.
Can you.
Give some details on the <unk> on this board.
Is it the same core members.
<unk> for the Phase III study.
Oh, Okay, Yeah, no we.
So we don't give out the names of the members.
But just to be clear for the phase Iia study are the two eight trial was early terminated on the recommendation of our scientific Advisory Board, which.
Which is included in our in our slide deck and on our website.
But the phase two b trial for it we.
We had to create a separate independent data monitoring committee and these are all independent scientific experts.
Such as disease and in one case.
Statistician.
None of which have shares in our company or get paid by our company and they're doing this as a public service.
The constituency of the IV M C. It's different people in every case than those who serve their scientific advisory Board members.
For the company and who opined on the <unk> trial.
Okay understood. Thank you for the clarification, perhaps one question regarding the Capex funding.
Sorry to hear that.
Advancing to the next round.
In order to be eligible for future grants, we need a new program or do you continue to plan to continue.
But would be eligible.
So for each grant whether by car Bachelor or other folks like NIH.
Be eligible you have to look at the RFP a request for proposal.
With Carb X in particular this was the first car beds.
RSP in years that allowed folks who are developing.
Antibiotics that target treatment of Gram positive bacteria infections, not just gram negative.
So we were excited to see that.
The scope of the RFP it expanded to include.
Sponsors like us.
We expect based on our conversations with private I think that will continue and as we continue to develop our jobs.
Get through lead optimization, we think our candidacy will become more and more compelling in these challenging times for for money.
Ah Okay.
<unk>.
Perhaps one last question from us at this one of his financial.
It sounds like Oh.
As you mentioned there was interim analysis seems to be recovering very soon.
So our cash runway should extend beyond that but can you give us a perhaps a more specific timeframe for approximate cash runway.
Sure Thomas.
I think our our cash runway is sufficient through Q3 of 'twenty, four and and kind of and then some.
So we're burning a 2.1 $2 2 million per quarter.
And that's during the quite expensive to be trial times.
So once you get to the trial is over we should eliminate probably a million dollars.
Of that 2.1, $2 2 million quarterly burn.
So if you take two point to when you flatline it for four quarters Thats eight eight.
Even if that to be you know for some reason got extended.
You know enormously long weeks, we'd have money through Q3 and <unk>.
Given where we are we probably have money all the way through 'twenty four because of the JV will be over.
Okay understood. Thank.
Thank you well Catholics go no questions and looking forward to the interim analysis for the phase <unk> study.
No problems that was if you have any other questions just give me a call or shoot me an email and looking at.
Definitely thank you.
Thank you. Our next question comes from the line of Jason Mccarthy with Maxim Group. Please proceed with your question.
Hey, guys. This is Mike look Juno, which on the line for Jason. Thank you so much for taking my questions today.
No problem, thanks for calling Mike.
Yeah. So so I'd like to see if you could talk a little bit more about the specifics of the past year Act is obviously just the validation of the problem and that Congress.
Is paying attention to this is huge in itself but.
But specifics have been suggested that could aid in clinical development and uptake of new anti infectives, it, particularly as it relates to <unk>.
Sure No problem, Mike because this is you know the.
This is the transitional.
Piece of legislation that was completely redefined.
The antibiotics sector in the United States.
Just to be perfectly clear this puts the antibiotics back on par profit wise.
Revenue wise with cancer drugs.
And diabetes drugs.
Neurological drugs for AOS and other neurological disorders.
It's a game changer.
So what the pass through or that does generally.
And there's also a pass through or light and I'll get to the.
Passenger asks if approved as a as a poll incentives like the Poland set similar to the plants that are already approved and made law in the U K a few years back.
And what the pull incentive does is it says hey sponsors of new antibiotics, and those who invest in them.
If you invest in and antibiotics, if you take your time to develop.
On antibiotics.
For our lifesaving or serious clinical indication.
So that is a new class of antibiotics, not just a new generation of amoxicillin and old class.
If that's what you have will pay for phase III.
Including all the manufacturing for phase III.
And we will give you between $750 million and $3 billion over a 10 year period of time in order to stockpile your antibiotics.
Public health facilities.
Over a 10 year period of time under our license agreement with health and human services.
Pass through or light would be basically half of that.
It would be 300.
And 75 million minimum.
Two $1 5 billion for each sponsor.
Q IDP.
Ah the antibiotic that treats serious or life threatening infections and is a new class of antibiotics each sponsor can only get one.
<unk> designation under the past due are at.
To get that designation you get a letter from HHS after you apply and get accepted.
And that's a critical need antimicrobial designation letter. It will include a dollar amount which will be.
Under the current draft of the law passed or light at least $375 million over 10 years.
And the amount between $3 75, and $1 5 billion over 10 years under.
Under pass through or like will be determined by HHS based on a formula to be provided in the law and basically that formula we will try to get you.
<unk>.
The savings to the public health system.
In the United States by having your antibiotic approved to treat these serious and life threatening infections.
So in the case of C difficile.
Reinfection market and C difficile.
Has a price tag of $4 $7 billion to U S public health every year.
So patients that have recurrent C diff infection.
With the cost the total cost of treating those re infections.
From the hospitalizations to the medicines that are being used.
$4 $7 billion a year.
Our case, if we come out with an antibiotic.
Bottom line capable.
Treating.
Patients with anything close to a 100% cure rate and anything close to zero percent re infections.
I think that would have a significant.
Value savings to public health in the U S. Not the full $4 7 billion that is the cost of the reinfection market foresee deaths every.
Every year in the U S, but it would be significant but its very least it would be $375 million to us.
$37 5 million a year for 10 years.
So is the $30 million market cap company you could see if we were designated as a critical need antimicrobial under the past due or actually it would be an absolute game changer.
Certainly there's a lot of potential there.
And just a follow up on the phase II like to see if you could provide a bit more color on the potential to possibly stop it early on efficacy.
It needs to be demonstrated and then expand a little bit on how you can use changes in the microbiome. In addition to the primary endpoint to support a readout on that study.
Okay, Great no problem so.
The microbiome changes.
That's the easier questions I'll answer first.
We see.
The rest of the full restoration of the fully healthy microbiome.
And our C diff patients that we've treated by the end of the third day of a 10 day treatment regimen on our drug.
That's from the Phase Iia trial.
We have no reason to expect that will change because of the scientific underpinning of no reinfection is why why are there no reinfection, because we're fully restoring the microbiome.
By day three of treatment and how are we restoring the microbiome well we have a very narrow spectrum antibiotics, that's only able to kill C. Diff, leaving all of the other classes of healthy bacteria in the gut alone.
Writing them, an environment, where they can kind of repair themselves.
Unlike the normally antibiotic like vancomycin, the standard of care, which decimate the healthy microbiome wireless curing the direct C diff infection.
Putting that patient at high risk for reinfection.
So based on that the microbiome, we believe is going to be a big part of the story because it's going to help us avoid re infections.
And although that's a secondary endpoint.
Part of the story.
Now the primary endpoint of cures at end of treatment 10 days of treatment measured plus.
Plus or minus two days at.
That's a 12 or 11.
Yeah.
Those cures reflect the fact that we're getting over 100 times the concentration of our medicine to the site of the C. Diff infection in the colon than is needed to kill.
<unk> bacteria based on our Mic's minimum inhibitory concentration studies.
So that that's why that's the underpinning for why we're so successful.
Killing the bacteria at end of treatment and that's the primary endpoint, we expect that to continue when we read out there to be data.
The 31 patients that are enrolled are evaluated the blinded observed data is tremendous.
Satish dish and say, yes, there are.
Up to two patients who are not cures out of the 36 patients evaluated at the interim look even if those two patients are on our side.
The two arm trial.
We would still be able to achieve statistical non inferiority.
So on that basis, and given we have 65 years of clinical trial data.
Look at for how Vasco was going to do in our trial.
And you see that never never gets higher than 92% and it's been as low as 70% over 65 years, it's going to be in the kind of low eighty's.
So yeah, we're feeling very bullish on our possibilities that getting through this binary endpoint.
And then you'll have to ask yourself, what's the intrinsic value of this drug.
And the C diff market to big pharma.
One $7 billion market.
And with a clear shot at frontline therapy, you'd have to ask what's that worth.
And when you're asking yourself, what's that worth you could reasonably look at.
For example, the till its pharma acquisition of the EU rights.
To merch Fidaxomicin last line in the U S.
For about $125 million in 2022.
That would seem that's just European rights, and we have U S Europe and Japan.
And you can also look at the March 'twenty three is to be able to pharmaceuticals deal to buy destiny pharma.
For in a structured deal totaling $570 million.
And that was a much earlier stage development program than we have.
So the intrinsic value is quite high we got to get through this binary.
Yeah.
Phase two b trial readout.
And we're really excited about where we go from there.
Alright. Thank you I really appreciate your additional insights here.
No problem. Thank you Mike.
Thank you and our next question comes from the line of Jim Molloy with Alliance Global Partners. Please proceed with your question.
Hi, Good morning, Thanks for taking my questions I had a question on the.
On the <unk>.
You walk through sort of what next steps are for 375 C. As there are no opportunity to move forward absent the carb X funds.
Funding I went to the Carb X notify you guys that they werent going to proceed forward with 375.
The carve out spokesman notified us.
Kind of probably a couple of weeks ago late in July .
And we followed up with the <unk>.
Questions and an appeal and that process took a couple of weeks.
They tend to meander through.
So the tiniest purpose for this call.
But the program never stops we continue do.
To evaluate and work on the lead optimization process.
Which is why I say that as that process continues and gets their completion.
We're going to have a stronger and stronger chance at the nest Carb X RFP that.
That comes out.
That we get picked up.
Within the scope of that RFP if it includes a.
Grant positive treating.
If I audits will apply again with a more compelling package.
And we feel that you know because we werent we werent.
Rejected back in April like others, where we feel were like kind of on the bubble and we just have to kind of push forward present, a little bit more R&D and then we feel that will be will.
It will be successful.
When did you state the next opportunity to apply for Carb X funding will occur it sounded like it was a bit up in the air.
Well they do an RFP every November .
There may be other rfps that they do but pretty much every November they seem to come out with an RFP that we've noticed.
The only question will be whether that RFP continues to include.
Gram positive treating antibiotics, if it does we'll refi in the fourth quarter and hope for.
Positive.
Reconsideration in April .
Got it thank you and then on the.
On the phase II B, how long from the funding for the fifth and final patient 36 patient.
Coming in to final final data are final.
But the idea of them see on what next steps are.
So.
If you assume a 30 patient came in today.
That 36 patient would be out of this study 10 days from today.
And they would be evaluated for the primary endpoint two days thereafter, so 12 days.
After that the I D. M C. While meeting date, 13, 14 like that and come back with their recommendation.
As soon as we have that right. So basically a couple of weeks.
Have that recommendation from the <unk> well.
It out a press release well first of all we put out a press release that we got to the 36 patient set.
The second press release will be the I D. M C recommendation and the company's decision to take or not take the recommendation of course, we'll probably take it.
So that'd be the second press release.
Then assuming the I D M C recommends that we early terminate.
And when that 36 patient is completely out of the trial.
And we have a final study report, we'll put out a press release with all of the data on the primary and secondary endpoints.
And it certainly seems are positive signs for potential early termination.
Given the historical data on Vancouver, and the data you guys have seen them, even though it's still blinded.
But what.
Assuming that you have to run.
Given the 36, you're only halfway through forgive me if the rents at the 72nd patient.
What's the.
What's the what is it what's the thinking.
Going forward on that and what's your what's the ability of.
Patrick So the fun that second half of this trial if it's needed.
Yeah, I mean, if it if we have to go to the 72.
We'll be able to continue to run the trial in the ordinary course as I imagine you know.
If we have to keep paying $2 2 million per quarter for ongoing cost that's fine.
We could raise a tiny amount of money.
You know 5 million whatever the number might be just to kind of pick up some international sites and pay for them.
Hi, enrolling eastern European sites and Canadian sites.
Just following up on you know how did.
Summit therapeutics manage to enroll so quickly during COVID-19.
And that's in our estimation, that's kind of how they did it they opened up the international sites and high enrolling areas that werent terribly impacted by the pandemic.
So that's what we would do if we had to do another 36, it would be adding new trial sites International trial sites.
And kind of expanding in that way to make sure it could take as long.
Understood and then what I.
And on the passenger like I know, it's a bit out of your like I was completely out of your control, but what should what should we be looking for for the next the next catalyst, they're essentially give an idea of what might be coming out of this if anything on the pass through of a burst or light.
Yeah.
It's probably you know I mean as you know as investors are aware when youre dealing with the government.
You know kind of movements in Manhattan.
Copies of the government when things get approved it's just extremely difficult to benchmark and to handicap.
The antimicrobial working group meets every month and continues which we're a member they continue to kind of go back and forth on you know when it would be that pass through would be passed and whether it would be pass through or pass through or light.
The best we can say is it's looking very positive for past due or light not for Paas door.
Passenger light by itself is like a six are on home run for us.
And we think that public health needs it.
And that's been made very clear by those in public health and it's already approved in the U K, which paves the way for us.
So we can't speak as to timing, but.
Wouldn't it be ironic if this delay in the enrollment leads us to an M&A situation, where passengers passed and we can capitalize on it before we were able to do a transaction that would be great.
Yeah.
Yeah.
Jim do we still have it.
Sorry, excuse me.
If you would like to ask a question. Please press star one on your telephone keypad.
Our next question comes from the line of Nick Meyer, who is a private investor. Please proceed with your question.
Good morning, David.
Question on the IBM Z and the data readout. So does the FDA have to approve the idea M sees a recommendation or they left are they not.
Not involved.
Hi, good morning, and thanks for your question.
No. The the FDA does not involve any longer they they had to approve a well they didn't have to approve they had to accept our.
The amendment to our trial protocol and our Hyatt are related I N D. In order to provide for this IDM see mechanism, but thats. It I D. M. C is free to make whatever recommendation that they feel is most appropriate.
And the F D a.
I won't review any of it until.
We get to an application for FDA approval.
Okay and then the.
The idea of <unk> is only looking at the primary metric, which is clinical cure theyre not all looking at the secondary metrics at all for their recommendation.
Well there there are only looking at that right.
At the end of treatment, but also the safety.
Yeah that makes sense.
Then.
Last question I have is what what is the value pivot between if you were to do an M&A, but for phase III or going to the interim look on the first leg of phase III.
What does your consideration there.
Oh well yeah.
I would I would take that question in reference.
The bio industry Guy.
You know what they have is like a blue book for.
For personal injury lawyers, where they they have a percentage likelihood of FDA approval when you're in preclinical phase one phase two phase III for any disease indication, including infectious disease.
Right, so if you're able to get halfway through the first half.
H three registration studies and show consistent data with everything before it.
You know you have about a 30%.
The likelihood of failure in phase III.
We're all antibiotics.
When you.
Zero in on antibiotics to treat Gram positive infections instead of Gram negative.
That's probably down to a 10 or 15% failure rate and you could probably chopped that failure rate in half when you present interim data on the first half of the first of the two phase threes.
So it would be okay.
Again value enhancement.
You know that might be offset by having an even worse stock market and then we have when we come out with it to be data, it's hard to say the biggest bogey will be if the past due are at this path and we get designated as a critical need antimicrobials.
That is an absolute game changer, even under pass through or light that would have a dramatic impact on what we were able to sell for.
Now we could sell before getting that designation, so hypothetically if passed stewarts past and.
And we're not yet designated even though it would seem that we would be.
One of the.
The most qualifying potential candidates.
It could be a contingent value right.
Deal that could be negotiated.
To having the designation and we would just have to.
Consider the various factors as we continue to talk to potential partners.
Okay, but is there a specific market value that you're looking for.
Or is that how is that going to be acuity determined.
Yeah, it's gonna be a it's all kind of.
And then just going to have to you know.
Valuate or that we may get and consider the intrinsic value of the admin.
Whether or not the offer is within a range that is acceptable and of course, we'll have you know advice from the banking side.
Likely a fairness opinion will be involved to make sure that our bankers think that whatever germs.
Being offered in the board sets are fair.
Into that acceptance.
The board so.
And it's all going to be kind of deal related.
And the board doesn't if we're trading at a low valuation in Soma is China.
Undercut the real value the board can can say no.
Yes that makes sense alright, thank you for answering the questions I appreciate it.
No problem. Thank you.
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Thank you.
We have reached the end of our question and answer session and with that this will conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
Thank you.
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