Q3 2024 Acurx Pharmaceuticals Inc Earnings Call
Speaker Change: Greetings, and welcome to the Acurex Pharmaceuticals, Inc. 3rd Quarter 2024 Results and Business Update Conference Call.
At this time, all participants are in a listen-only mode.
Speaker Change: A brief question and answer session will follow the formal presentation.
Speaker Change: Should anyone require operator assistance during the conference, please press star zero on your telephone keypad.
Speaker Change: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Robert Shawah, Chief Financial Officer. Thank you. You may begin.
Thank you. Good morning and welcome to our call.
Speaker Change: Joining me today is Dave Lucci, President and CEO of Acrex.
who will give a corporate update and outlook.
Speaker Change: After that, I'll provide some highlights of the financials for the quarter ended September 30, 2024, and then turn the call back over to Dave for his closing remarks.
Speaker Change: As a reminder, during today's call, we'll be making certain forward-looking statements.
Speaker Change: These forward-looking statements are based on current information, assumptions, estimates, and projections about future events.
Speaker Change: They 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.
Speaker Change: Investors should consider these risks and other information described in our filings made with the Securities and Exchange Commission.
Speaker Change: including our quarterly report on Form 10-Q, which we filed on Tuesday, November 12, 2024.
Speaker Change: You are cautioned not to place undue reliance on these forward-looking statements and act corrects disclaims any obligation to update such statements at any time in the future.
This conference call contains time sensitive information.
Speaker Change: That's accurate only as of the date of this live broadcast today, November 13, 2024.
I'll now turn the call over to Dave. Dave?
Dave Lucci: Thanks Rob. Good morning everyone and thanks for joining us to review our financial results for the third quarter of 2024 and also to hear some very exciting recent updates. Then we'd be pleased to take any questions.
Dave Lucci: First, I'll summarize some of our key activities for the third quarter of 2024, or in some cases shortly thereafter.
Dave Lucci: In July, results from the Ibeza-Polstad Phase II clinical trial in patients with C. diff infection were presented at the 17th Biennial Congress of the Anaerobic Society of the Americas by Taryn Eubank, PharmD Research Assistant Professor at the University of Houston College of Pharmacy.
Dave Lucci: Taran delivered an oral presentation entitled Clinical Efficacy of Adenosine Polstat in CDI, Results from Phase 2 Trials.
Dave Lucci: Also in July, the USPTO granted Acurex a new patent for the Ibenzapolstat, which specifically encompasses the treatment of C. difficile infection while reducing recurrence of infection and improving the health of the gut microbiome.
Dave Lucci: This patent expires in June 2042, subject to extension, if any, and we think will provide an important downstream competitive advantage.
Dave Lucci: We also filed other patent applications with the U.S. BTO in the third quarter, but we'll discuss those down the road if and when these patents are issued.
Dave Lucci: In August, following our successful end of phase 2 clinical meeting with the FDA, which confirms our phase 3 clinical trial program readiness, and per FDA requirements, we submitted a manufacturing request to the FDA.
Dave Lucci: for a meeting to review our manufacturing processes and specifications for drug substance and final product packaging.
This will allow us to move forward to
Dave Lucci: FDA granted a meeting date in late October which we did not need because of our successful pre-meeting correspondence with the FDA.
Dave Lucci: So, from a regulatory perspective, we're delighted to announce CMC readiness for Phase 3, in addition to FDA agreement on our clinical plan forward for Phase 3.
Dave Lucci: In September, a presentation was given by ACIREX Executive Chairman Bob DeLucia at the World Antimicrobial Resistance Scientific Congress held in Philadelphia.
Dave Lucci: As many of you may know, Bob has over 50 years industry experience in new antibiotic development and commercialization and is responsible for our clinical development programs, including for Ibeza Polstat.
Dave Lucci: In his presentation at the Innovation Showcase Session, Bob highlighted that we have a complete roadmap not only for the required components of our Phase III clinical program, but also what's required for ultimate filing of an NDA, which is to be followed by submissions for marketing authorizations in other countries around the world.
Dave Lucci: Bob also presented an update on the company's preclinical gram-positive selective spectrum program for systemic oral and IV treatment of other gram-positive infections, including MRSA, VRE, and DRSP.
Dave Lucci: Bob summarized our progress stating that we've made substantial progress to our lead compound selection of our gram-positive IV and oral compounds.
Dave Lucci: Our current focus is to prioritize the oral form for acute bacterial skin and skin structure staph infections, including MRSA, to speed lead product selection and advancement to clinical trials.
Dave Lucci: We also participated at the 8th Annual C. difficile Symposium, or ICDS, in Bled, Slovenia.
Dave Lucci: which is the premier global venue for the review of C. difficile research.
Dave Lucci: At the ICDS meeting, two presentations were made on our behalf.
First, Dr. Kevin Gary.
Speaker Change: which was an unexpected finding of a unique microbiome signature in two vancomycin treated patients in the phase 2b trial who experienced recurrence of CDI.
Speaker Change: Since these changes were evident and observed early during treatment and then consistently until the end of therapy, they may be predictive of pending CDI recurrence and suggest the need to modify therapy.
Speaker Change: Accordingly, as we move ahead to our planned international phase 3 clinical trials, we will continue to evaluate what we call our predictive model to determine if there may be a pathway forward.
Speaker Change: toward commercialization as a new diagnostic tool or test kit, if you will.
Speaker Change: Second, in Bled, Slovenia, Dr. Wiet Klaus Smits, Associate Professor, Leiden University Medical Center in Holland.
delivered a presentation
Speaker Change: on the mechanism of action of PAL3C inhibitors. These definitive data result from our multi-year partnership with LUMC and the Dutch government to perform pioneering research on the PAL3C mechanism of action.
Dr. Schmitz emphasized that his findings with Ibeza-Polstad
Speaker Change: regarding the structural biology of DNA Pol-3C inhibitors have important implications for the development of a new family of antibiotics to treat high-priority, multidrug-resistant gram-positive infections.
Speaker Change: and that this novel class of DNA-PoW3C inhibitors could be an important new tool to address the pandemic of antimicrobial resistance.
Also in the quarter we announced that selected ACX 375
DNA-PAL3C analogs demonstrated in vitro activity against anthrax.
Speaker Change: which is a bioterrorism category A pathogen including activity against ciprofloxacin-resistant anthrax.
Speaker Change: In October, we participated at ID Week in Los Angeles, the annual scientific conference of the Infectious Disease Society of America.
Speaker Change: Drs. Kevin Gary and Taryn Eubank presented a scientific poster showing that in the phase 2b clinical trial, ibezapolis that had comparable clinical cure and sustained cure rates and safety profile to vancomycin, the standard of care.
Speaker Change: Also, five of five ibezaplostat patients who were followed for a full three months after the end of treatment experienced no recurrence.
Speaker Change: Ibesipolstat-treated patients showed decreased concentrations of fecal primary bile acids and higher ratios of secondary to primary bile acids than vancomycin-treated patients.
According to Dr. Gary
Speaker Change: These exciting results demonstrate two properties of ibezapolstat, which may contribute to its anti-recurrence effect.
Speaker Change: First, the preservation and restoration of beneficial bacterial classes in the gut provide resistance to recolonization by C. difficile.
Speaker Change: persist in ibezaplostat-treated patients, providing another important mechanism to prevent recurrent CDI.
Speaker Change: So now we have even more momentum going into the fourth quarter.
Speaker Change: As we've continually reported, ibezaplostat clinical results continue to outperform in a serious and potentially life-threatening infectious disease called C. difficile bacteria.
that the U.S. CDC categorizes as an urgent threat.
Speaker Change: and calls for new classes of antibiotics for initial treatment that also have a low incidence of recurrence. Ivesipolstat also has FDA QIDP and Fast-Track designation for the treatment of CDI.
Speaker Change: Additionally, we believe that ibezapolset, if approved, could make a favorable economic impact by reducing the overall annual U.S. cost burden for C. difficile infection of approximately $5 billion per year, of which $2.8 billion is due to recurrent CDI infection.
Speaker Change: Given our continuing momentum, we do believe the best is yet to come.
Speaker Change: And now back to our CFO, Rob Shawah, to guide you through the highlights of our financial results for the third quarter. Rob?
Rob Shawah: Thanks Dave. Our financial results for the third quarter and the September 30th were included in our press release.
issued earlier this morning.
Rob Shawah: The company ended the quarter with cash totaling $5.8 million compared to $7.5 million as of December 31, 2023.
Rob Shawah: During the third quarter, the company raised additional proceeds under its ATM financing program.
with gross proceeds of approximately 1.6 million dollars.
Rob Shawah: Research and development expenses for the three months ended September 30, 2024 were $1.2 million.
Rob Shawah: compared to 1.3 million for the three months ended September 30, 2023.
Rob Shawah: The decrease was due primarily to an increase in manufacturing related costs of 0.1 million dollars offset by a reduction in consulting fees of 0.2 million dollars.
For the nine months ended September 30th.
Rob Shawah: Research and development expenses were 4.6 million dollars compared to 4.1 million dollars for the nine months ended September 30, 2023.
$2.9 million increase in manufacturing related costs.
offset by a 0.4 million dollar decrease in consulting fees.
Rob Shawah: General and administrative expenses for the three months ended September 30th 2024 were 1.6 million dollars.
Rob Shawah: compared to $1.8 million for three months ended September 30, 2023.
A decrease of 0.2 million dollars.
Rob Shawah: The decrease was due primarily to a 0.5 million dollar decrease in non-cash share based compensation.
Rob Shawah: offset by a 0.2 million dollar increase in professional fees and a 0.1 million dollar increase in compensation related costs.
Rob Shawah: For the 9 months ended September 30, 2024, general administrative expenses were $6.7 million compared to $5.4 million for the 9 months ended September 30, 2023.
an increase of 1.3 million dollars.
Rob Shawah: compared to a net loss of 3.1 million dollars or 24 cents per diluted share for three months ended September 30, 2023.
Rob Shawah: and a net loss of $11.3 million or 71 cents per share.
for the nine months ended September 30, 2024.
Rob Shawah: compared to a net loss of 9.5 million dollars or 77 cents per share for the nine months ended September 30, 2023.
all for the reasons previously mentioned.
Rob Shawah: The company had 16,770,378 shares outstanding as of September 30, 2024.
With that, I'll turn the call back over to Dave.
Dave Lucci: Thanks Rob and thanks to all of you for joining us today. I'll now turn the call over to the operator to open up the call for questions. Operator?
Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please, while we poll for questions.
Speaker Change: The first question is from Ed Arce from H.C. Wainwright. Please go ahead.
Speaker Change: Hi, good morning, everyone. This is Thomas. We are asking a couple of questions for Ed. Thank you for picking up questions. So first question. Hi, good morning. Perhaps, well first, can you discuss more about the predictive model that you discussed earlier on the call, you know, as a potential parametric tool?
Speaker Change: that Dr. Gary and our medical director, Mike Silverman, were able to focus in on and see by the end of the third day of treatment,
Speaker Change: If certain measurements were as they found, they would consistently be the same for the rest of the 10-day treatment period.
Speaker Change: And those measurements seem to be predictive as to whether a patient will reinfect.
Speaker Change: different things in the stool samples they can predict, they believe, certainly they need a lot more patience to prove it out, but they think they can predict by the end of three days of treatment
Speaker Change: if any antibiotic is going to be a high risk of reinfection.
Speaker Change: So, we're going to continue to monitor that in phase three, but that by itself could be a diagnostic that could be quite useful.
Speaker Change: to reduce the $2.8 billion per year cost burden for recurrent C. difficile infection because treating physicians could use this test kit as a way to swap out one treatment or one therapeutic for another.
Speaker Change: to try to increase the likelihood that a patient will successfully remain uninfected.
Speaker Change: That sounds interesting. I'm very interested to learn more about this in the near future. And then perhaps another question related to the press release. You mentioned that international recorders are following initiatives.
Speaker Change: are going this quarter. Can you discuss more details about these initiatives?
Speaker Change: Oh sure, so we're starting in in Europe with European Medicines Agency and that process
will probably lead to a meeting.
Speaker Change: on the basis of doing international phase 3 trials including in Europe.
Speaker Change: and you know we what some may ask why haven't we set up that meeting sooner and the answer to that is we needed the results from the FDA clinical and manufacturing regulatory processes to be completed in order to go to the EMEA with
Speaker Change: or EMA as it's now called, with a final package that FDA cleared.
Speaker Change: After Europe, we'll proceed with the UK, Canada, and eventually Japan.
Understood.
David Luccia, Robert DeLuccia, David Luci
Speaker Change: And then, I suppose, as you mentioned, we're close to wrapping up the Phase III program in the U.S. Can you elaborate what are some top options that you will consider likely to be able to fund, depending on those trials, and which one would you prefer?
Speaker Change: In all cases, we prefer anything that's non-dilutive, as I'm sure you understand.
Speaker Change: We like partnering options and I use the word partnering broadly to include the government along with territorial license and co-development partners which we have active dialogue going with several companies now.
in Europe and Japan and South America.
back in October.
Speaker Change: and we've had a lot of follow-up from that meeting, I think there were about 50.
Speaker Change: government officials from different agencies of the government that could fund Phase 3 and also could fund ACX 375, the second program.
which now has the new hook with the Anthrax.
Thank you. Bye-bye. Thank you.
Speaker Change: The non-dilutive sources of funding obviously are better for our shareholders and don't forget the Pasteur Act is still out there and I understand that it's much more prominently
Speaker Change: possible to be passed in the near future more than it's been in any of our prior calls.
Speaker Change: Thank you, thank you so much for the kind of questions again and looking forward to progress in the US and in the Europe as well.
Thank you so much, Thomas.
Speaker Change: The next question is from James Malloy from Alliance Resource Partners. Please go ahead.
Speaker Change: Hello, this is Laura on for Jim Malloy. Thank you for taking the questions.
I'm sorry, was it Laura? Yes, Laura. Good morning.
Speaker Change: Good morning. So for the upcoming phase 3 program, may we just have a bit more insight on the earliest potential site for this for the first phase 3 trial as well as any proposed study designs or data readout timelines that you have here for both of the phase 3 trials.
Speaker Change: So, it's a little bit up in the air as we continue to source the resource that we need to fund the phase three trials. But the trial design is two phase three registration trials, international, at about 150 trial sites.
450 patients per trial for a total of
Speaker Change: for a 10-day treatment period. The primary and secondary endpoints are identical to the Phase IIb clinical trial endpoints that we worked with for Phase IIb.
So that's
Speaker Change: that's really about it. You know we're in a great position in that we can do the phase three program sequentially instead of doing both trials at the same time.
Speaker Change: We have that kind of flexibility because we have 10 years of regulatory exclusivity from the time we get FDA approval. And there are similar advantages available in Europe. I think it's nine years in Europe.
Speaker Change: So, really we're not confined by the commercialization need of having patents that expire.
Speaker Change: So, we really just need to raise the money for one phase three.
Speaker Change: and then as the plan would go if we can raise the money for one of the phase threes and the data is good as we expect then we can raise the money at a higher price for the second phase three.
Speaker Change: Got it. And then also for your ACX 375 candidate, you mentioned the research conducted in anthrax at the University of Florida. So where are you currently in the development of the anthrax bioterrorism program that you've mentioned? And then also what are some potential partnership opportunities currently looking like for this program specifically?
Speaker Change: Well, this program is preclinical, so we don't want to get over our skis on it.
Speaker Change: We have some laboratory studies that we have to do, some animal studies that we have to do.
Speaker Change: Go out and sell anthrax somewhere. It would be kind of like a
Speaker Change: If somebody bought it, they would be buying it to try to get government contracts around the world for stockpiling.
Speaker Change: But this has just been discovered a couple of months ago, so we're just in the beginning phases.
Speaker Change: Understood and then just one more question from us. So you also mentioned the recent presentation done on the pre-clinical GP SS program specifically in targeting MRSA. So what are other future clinical development plans that you have for this program as well?
Speaker Change: Well, it will start with MRSA infections and then it'll go into VRE and DRSP infections.
but abscissi is probably the biggest incidence of MRSA infections.
so
Speaker Change: We think that's the most attractive one for us to go after So it's acute bacterial skin and skin structure infections that we start with those are ones caused by MRSA And then then we'll get into other areas of MRSA infections and VRE and DRSP
Speaker Change: Got it, thank you for taking the question. No problem, thank you Laura.
Speaker Change: As a reminder, it is star one to ask a question.
Speaker Change: The next question is from John Stinson, a private investor. Please go ahead.
Speaker Change: Good morning, David. Thank you for taking our questions. Good morning, John.
I'm
I'm kind of surprised that we haven't heard from a...
Speaker Change: big partner, big pharma partner by now. Did you say you're you're trying to hold off on that because of the amount of dilution that they're demanding? Can you talk a little more about that possibility of partnership in the near future?
Speaker Change: Sure, John. Oh, well, you know, it reminds me of my first biotech company.
Speaker Change: You know we signed up a bank. I think it was
Speaker Change: Credit Suisse and it took three or four years by the time we got a deal done.
Speaker Change: and you know these things are sometimes very time-consuming. Things don't happen overnight. You know, I don't know if you've had experience in Japan, but just as an example, Japanese companies move very slowly.
Speaker Change: They watch, they learn, they look, they diligence, and you keep going until you find deal terms that your board likes.
Speaker Change: So we have different parties looking at M&A, different parties looking at territorial deals.
Speaker Change: and we have the government which is obviously the ultimate non-dilutive partner but we're not slowing any partnerships down. Partnerships with private companies won't dilute our shareholders at all.
Speaker Change: You know, what we would do is, you know, in our financial modeling, if we were to say do a Japanese territorial license and co-development agreement.
Speaker Change: would become one based on upfront payments, clinical and commercial milestones and royalties, as opposed to straight up operational advancements, R&D costs followed by commercialization revenues.
in the territory, so.
Speaker Change: It wouldn't be a dilutive thing to have a private license of co-development agreement in Japan or Europe or South America. It would be a positive thing for us and it would raise us the money that we would need to move toward phase 3.
So, what we look at, generally speaking,
Speaker Change: because we need to raise so much money for phase three, we're taking a multi-step approach and we're basically, you know, using all the levers that we have available to us to raise the money that we need as non-dilutively as possible.
Speaker Change: So that's kind of in a nutshell, that's what we're doing.
All right. Thank you, David.
No problem. Thank you, John, for asking the question.
Speaker Change: This concludes the question and answer session and today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Thank you, operator.