Iterum Therapeutics plc (NASDAQ:ITRM) Q3 2023 Earnings Call Transcript November 14, 2023
Operator: Hello, everyone, and welcome to the Iterum Therapeutics Third Quarter 2023 Financial Results and Business Update. My name is Harry, and I’ll be your operator today. [Operator Instructions] And I will now hand the call over to Louise Barrett, Senior Vice President, Legal Affairs, to begin. Please go ahead.
Louise Barrett: Thank you, Harry. Good morning, and welcome to Interim Therapeutics’ Third Quarter 2023 Financial Results and Business Update Conference Call. A press release with our third quarter results was issued earlier this morning and can be found on our website. We are joined this morning by Corey Fishman, CEO; and Judy Matthews, CFO. Cory will provide some opening remarks, Judy will provide details on our financial results, and then we’ll open the lines for Q&A. In addition, we’ll be extending the Q&A portion to answer a few questions we’ve been routinely receiving from some of our shareholders. Before we begin, I would like to remind you that some of the information presented on this conference call today will contain forward-looking statements concerning our plans, strategies and prospects for our business, including the development, therapeutic and market potential of oral sulopenem, the timing and results of top line data from REASSURE clinical trial, our ability to address the deficiency set out in the complete response letter received from the FDA in July 2021, the expected timing of resubmission of our NDA and timing of review of the NDA by the FDA; the term and coverage provided by our patents; the sufficiency of our cash resources; and evaluating of corporate strategic and financing strategies and alternatives to fund future development operations, including the issue of new shares for cash.
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Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors outside our control, including uncertainties inherent in the design initiated and conduct of clinical and nonclinical development; 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 for oral sulopenem; changes in public policy or legislation; the accuracy of our expectations regarding how far in the future or cash in hand will fund ongoing operations; risks and uncertainties concerning the outcome, impact effects and results of our evaluation of financing alternatives to fund future development operations, including the terms, timing, structure, value benefits and costs of any such alternatives; and our ability to complete one at all; our ability to maintain our listing on the NASDAQ capital market and other factors included and discussed under the caption Risk Factors in our quarterly report on Form 10-Q filed with the SEC today.
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, and we specifically disclaim any obligation to update such statements. We will also be referencing non-GAAP financial measures during the call. We’ve provided a reconciliation of GAAP reported to non-GAAP adjusted information in the press release issued this morning. That said, I’ll turn it over to you now, Corey, for your opening remarks.
Corey Fishman: Thanks, Louise. Welcome, and thanks for joining us today. I want to share some exciting highlights about the business and our ongoing activities. Let’s begin by talking a bit about our upcoming key milestones and associated timing. Overall, we want to share with you that the timing for these key milestones has been moved forward by an entire quarter versus our previous guidance. We are very pleased to report that in October, we completed enrollment in our pivotal Phase 3 trial of oral sulopenem, for the treatment of uncomplicated urinary tract infections in adult women, our REASSURE clinical trial. The REASSURE trial completed enrollment in just 12 months, which is quite remarkable given how long it takes uncomplicated urinary tract infection studies to complete enrollment from our experience and based on other recent uUTI studies.
With enrollment in the REASSURE trial complete, our next key milestone will be reporting top line data, which we now expect will occur early in the first quarter of 2024. Subject to our analysis of the data, we expect to resubmit our NDA to the FDA in the second quarter of 2024. Provided that our resubmission addresses the deficiencies identified in our complete response letter, we expect the FDA to complete its review and take action six months from the date of resubmission or in the fourth quarter of 2024. Now I’d like to take a moment and share the results of our interim analysis and the impact on our overall enrollment. As previously announced, once we achieved our halfway point of enrollment, a blinded interim analysis was conducted by an independent data monitoring committee to determine whether a sample size adjustment was recommended.
The interim analysis showed that, based on the blinded data review, we were within the 80% to 90% power range outlined in our special protocol assessment agreement with the FDA. We chose to enroll an additional 263 patients for a total of 2,229 patients in order to finish the study with a power figure towards the top end of that range based on the blinded data. Importantly, we were able to add these incremental patients and still complete enrollment in the trial, a full quarter ahead of our previous guidance. On the patent front, we are happy to inform you that we continue to enhance our patent estate, which provides a substantial runway to protect the value of oral sulopenem in the U.S. and other countries. During this quarter, we have been granted a patent in Korea directed to the composition of the bilayer tablet of oral sulopenem.
This patent is scheduled to expire no earlier than 2039. Additionally, we were granted a patent in Australia, which is also directed to the composition of the bilayer tablet of oral sulopenem and its related uses. As a reminder, in addition to the newly granted Korean and Australian patents and our in-license patents, Iterum owns two U.S. patents for oral sulopenem and a Japanese patent, all expiring in 2039 barring any extensions. One U.S. patent and the Japanese patent is directed to the composition of the bilayer tablet and its related preparations and/or uses, and the other U.S. patent is directed to the method of use of oral sulopenem in treating multiple diseases, including uncomplicated urinary tract infections. Additionally, we have a number of pending patent applications in the U.S. and other jurisdictions, including Europe and China.
As of September 30, we had cash and cash equivalents of $36 million. Based on our current operating plan, we expect that our current cash, cash equivalents and short-term investments will be able to fund our operations into the third quarter of 2024. Therefore, given our accelerated time line, we expect our existing cash to be able to fund operations through the top line data readout as well as a potential NDA resubmission. In summary, we are very pleased to have completed enrollment well ahead of our previous guidance and are looking forward to our upcoming milestones on the accelerated time line I have just laid out for you. As mentioned, based on our current projections, we expect to have the cash on hand to fund operations through top line data readout and the potential resubmission of our NDA.
We continue to explore opportunities to efficiently and cost effectively raise capital to ensure that we can fund operations into the future. Lastly, we remain excited about potentially bringing the first new oral treatment for uncomplicated urinary tract infections to the market in the U.S. in over 20 years. Now I’ll turn the call over to Judy for details on our financial results.
Judith Matthews: Thanks, Corey. Total operating expenses were $16.7 million in the third quarter of 2023 compared to $7 million in the third quarter of 2022. Operating expenses include research and development expenses and general and administrative expenses. R&D costs were $14.9 million for the third quarter compared to $4.4 million for the same period in 2022. The primary driver of the increase in R&D expense for the third quarter with cost to support our REASSURE trial, which began enrollment in October 2022 and completed enrollment last month. G&A costs were $1.8 million for the third quarter of 2023, which is $900,000 lower than G&A costs of $2.7 million in the third quarter of 2022, due primarily to lower share-based compensation expense and a decrease in legal fees incurred in connection 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 $3.9 million for the third quarter of 2023 and $29.1 million for the same period in 2022. On a non-GAAP basis, which excludes certain noncash adjustments, our net loss of $15.7 million in the third quarter of 2023 compared to our non-GAAP net loss of $5.3 million in the third quarter of 2022. The $10.4 million increase and our non-GAAP net loss for the third quarter was primarily a result of higher R&D expenses related to our REASSURE trial. At the end of September, we had cash, cash equivalents and short-term investments of $35.9 million, which, based on our current operating plans, will provide a cash runway into the third quarter of 2024. We expect to report top line data early in the first quarter 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 quarter of 2024. Provided that the resubmitted NDA addresses all of the deficiency of identified in the CRL, we expect that the FDA will complete its review and take action 6 months from the date the FDA received the resubmitted NDA or during the fourth quarter of 2024. As of September 30, 2023, we had approximately 13 million ordinary shares outstanding. Also, as of the end of September, we had approximately $12.6 million of exchangeable notes outstanding, which can be exchanged at the option of the noteholder 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.
Operator, please open the line for questions.
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