Iterum Therapeutics Q1 2024 Earnings Report

Iterum Therapeutics EPS Results

• Actual EPS: -$0.46
• Consensus EPS: -$0.57
• Beat/Miss: Beat by +$0.11
• One Year Ago EPS: N/A

Iterum Therapeutics Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Iterum Therapeutics Announcement Details

• Quarter: Q1 2024
• Date: 5/13/2024
• Time: N/A
• Conference Call Date: Monday, May 13, 2024
• Conference Call Time: 8:30AM ET

Iterum Therapeutics (NASDAQ:ITRM) is a clinical-stage biopharmaceutical company focused on the development and commercialization of anti-infective products targeting drug-resistant bacterial infections. The company’s research efforts are centered on novel therapeutic agents designed to address serious community-acquired and hospital-acquired infections where current treatment options are limited by emerging resistance.

The company’s lead product candidate, sulopenem, is being evaluated in both intravenous and oral formulations for the treatment of complicated urinary tract infections (cUTI) and intra-abdominal infections (IAI). Iterum’s development strategy seeks to leverage the broad spectrum of activity exhibited by sulopenem against resistant Gram-negative pathogens, with the goal of offering a seamless transition from hospital to outpatient care via its oral formulation.

Incorporated in 2014 and headquartered in Dublin, Ireland, Iterum Therapeutics maintains additional operations in the United States, including a presence in Malvern, Pennsylvania, to support clinical and regulatory activities. The company is backed by a management team and board with extensive experience in anti-infective drug discovery, clinical development and life-cycle management. Iterum continues to advance its pipeline through ongoing regulatory interactions and clinical studies aimed at meeting unmet medical needs in infectious diseases.

Iterum Therapeutics Q1 2024 Earnings Call Transcript

Key Takeaways

• We resubmitted our NDA for oral sulapenem within three months of our positive REASSURE results and expect an FDA PDUFA date in early Q4 2024.
• The REASSURE Phase III trial in 2,222 adult women under an SPA showed non-inferiority to Augmentin and statistical superiority in the susceptible population.
• As of March 31, 2024, we held $18.2 million in cash, providing a runway into 2025, including through the expected approval decision.
• Q1 2024 operating expenses declined to $6.2 million from $8.5 million year-over-year, narrowing our GAAP net loss to $7.1 million.
• We are pursuing a strategic review to sell, license or otherwise dispose of sulapenem rights, with independent commercialization as a fallback option.

Presentation

[Operator]

Hello, and welcome to the Iterum Therapeutics First Quarter 2024 Financial Results and Business Update. My name is Carla, and I'll be operating the call today. During the presentation, you can register to ask questions by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I will now hand you over to your host, Louise Barrett, Senior Vice President of Legal Affairs, to begin. Louise, please go ahead.

[Louise Barrett, SVP of Legal Affairs at Iterum Therapeutics]

Thank you, Carla. Good morning, and welcome to Iterum Therapeutics' First Quarter 2024 Financial Results and Business Update Conference Call. A press release with our first quarter results was issued earlier this morning and can be found on our website. We are joined this morning by our Chief Executive Officer, Corey Fishman, and our Chief Financial Officer, Judy Matthews. Corey will provide some opening remarks, Judy will provide details on our financial results, and then we'll open the lines to Q&A.

[Louise Barrett, SVP of Legal Affairs at Iterum Therapeutics]

Before we begin, I'd like to remind you that some of the information presented on this conference call will contain forward-looking statements concerning our plans, strategies, and prospects for our business, including the development, therapeutic and market potential of oral sulopenem, our ability to address the deficiencies set out in the Complete Response Letter received from the FDA in July 2021, the expected timing of review of the resubmitted NDA by the FDA, potential action by the FDA with respect to the resubmitted NDA, the sufficiency of Iterum's cash resources to fund its operating expenses into 2025, and our strategic process to sell, license or otherwise dispose of our rights to sulopenem to maximize stakeholder value.

[Louise Barrett, SVP of Legal Affairs at Iterum Therapeutics]

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, initiation, and conduct of clinical and non-clinical development, changes in regulatory requirements or decisions of regulatory authorities, the timing or likelihood of regulatory filings and approvals, changes in public policy or legislation, commercialization plans and timelines if oral sulopenem is approved, the accuracy of our expectations as to how far into the future our cash in hand will fund our ongoing operations, our ability to maintain our listing on the Nasdaq Capital Market, risks and uncertainties concerning the outcome, impact, effects and results of our pursuit of strategic alternatives, including the terms, timing, structure, value, benefits, and costs of any strategic process and our ability to complete one at all.

[Louise Barrett, SVP of Legal Affairs at Iterum Therapeutics]

Then other factors issued under the caption Risk Factors in the quarterly report and Form 10-K filed with the SEC this morning. 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 obligation to update such statements. We will also be referencing non-GAAP financial measures during the call. We have provided reconciliations of GAAP reported to non-GAAP adjusted information in the press release issued this morning. With that said, I'll turn it over to you now, Corey, for your opening remarks.

[Corey Fishman, CEO at Iterum Therapeutics]

Thanks, Louise. Welcome, and thanks for joining us today. As you may know, we have recently resubmitted our New Drug Application to the FDA. We are very pleased to have accomplished this resubmission within just three months of announcing our positive top-line results from our REASSURE clinical trial. We believe that the strong results from this trial, which was conducted under a Special Protocol Assessment agreement with the FDA, addresses the FDA's recommendations for additional data to support approval of oral sulopenem for the treatment of adult women with uncomplicated urinary tract infections. The potential approval of sulopenem, which could occur early in the fourth quarter of 2024, would mark the first oral penem approved in the US and the second new oral treatment for uncomplicated urinary tract infections in over 25 years.

[Corey Fishman, CEO at Iterum Therapeutics]

We believe that sulopenem, the sulopenem data we have generated shows that sulopenem would be a safe and effective treatment option. We are encouraged by recent comments from the director of the Division of Anti-Infectives in the FDA's Center for Drug Evaluation and Research, who stated, quote: "The FDA is committed to fostering new antibiotic availability when they prove to be safe and effective." End quote. We look forward to working closely with the FDA during our review period. Lastly, as we look at our cash as of March 31, we had $18.2 million in cash and cash equivalents. Based on our current operating plan, this amount provides a cash runway into 2025, including through the expected PDUFA date in early Q4. I'll now turn it over to Judy for information on our financial results.

[Judy Matthews, CFO at Iterum Therapeutics]

Thanks, Corey. Total operating expenses were $6.2 million in the first quarter of 2024, compared to $8.5 million in the first quarter of 2023. Operating expenses include research and development expenses, and general and administrative expenses. R&D costs were $4 million for the first quarter of 2024, compared to $6.4 million for the same period in 2023. The primary driver of the $2.4 million-dollar decrease in R&D expense for the first quarter was primarily due to higher costs incurred in 2023 to support our REASSURE trial, which began enrollment in October 2022 and completed enrollment in October 2023....

[Judy Matthews, CFO at Iterum Therapeutics]

G&A costs were $2.2 million for the first quarter of 2024, which is $100,000 higher than G&A costs of $2.1 million in the first quarter of 2023, due primarily to an increase in legal fees and an increase in consultants used to support pre-commercialization activities. Our net loss on the U.S. GAAP basis was $7.1 million for the first quarter of 2024, compared to $9.9 million for the same period in 2023. On a non-GAAP basis, which excludes certain non-cash adjustments, our net loss of $5.8 million in the first quarter of 2024 compared to our non-GAAP net loss of $7.4 million in the first quarter of 2023.

[Judy Matthews, CFO at Iterum Therapeutics]

The $1.6 million decrease in our non-GAAP net loss for the first quarter was primarily a result of lower R&D expenses related to our REASSURE trial, as enrollment of the 2,222 patients in this phase III trial was completed in October 2023. At the end of March, we had cash, cash equivalents, and short-term investments of $18.2 million, which, based on our current operating plan, will provide a cash runway into 2025, including through potential FDA approval expected early in the fourth quarter of 2024. In April of 2024, we resubmitted to the FDA, the NDA for oral sulopenem for the treatment of UTI and expect the FDA to assign a PDUFA date early in the fourth quarter of 2024.

[Judy Matthews, CFO at Iterum Therapeutics]

As of April 30, 2024, we had approximately 16.6 million ordinary shares outstanding. Also, as of the end of April 2024, we had approximately $11.1 million of exchangeable notes outstanding, which can be exchanged at the option of the noteholder for approximately 1.2 million shares. If the notes are not exchanged, we will be obligated to pay the noteholders $11.1 million plus accrued interest in January 2025. Now, I will turn it back over to Corey for some closing comments.

[Corey Fishman, CEO at Iterum Therapeutics]

Thanks, Judy. We'll go ahead and open up the line for questions now.

[Operator]

Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Jason McCarthy from Maxim Group. Your line is now open.

[Michael Okunewitch, Senior Research Analyst at Maxim Group]

Hey, guys. Thank you for taking the questions. This is Michael Okunewitch on the line for Jason. I guess to start off, just with the BLA resubmitted, could you remind us of what the original deficiencies noted in the prior CRL, and then why you're confident that the new NDA package addresses those?

[Corey Fishman, CEO at Iterum Therapeutics]

Yeah, we, this is, Corey. Thanks for the question, Michael. The original CRL was pretty straightforward in just saying, "We didn't—we, the FDA, didn't think that you had provided enough data to approve the drug." And what they said was they would request at least one more, phase III study. And so we had pretty extensive conversations with the agency about that other phase III study, and eventually put in place a special protocol assessment agreement, a SPA agreement, with them to address that, basic deficiency of them feeling like there wasn't a sufficient amount of data, and put together a pretty substantial study, as you saw, you know, over 2,200 patients. We feel very confident that addresses their, their underlying question of, you know, was there enough data here?

[Corey Fishman, CEO at Iterum Therapeutics]

We feel, particularly based on the results of that study, which showed not only that we hit our primary endpoint of non-inferiority to our comparator Augmentin, we also showed statistical superiority to Augmentin in that Augmentin-susceptible population. Feel very confident that we have provided sufficient data for them to approve the drug.

[Michael Okunewitch, Senior Research Analyst at Maxim Group]

Thank you for that. And then I'd like to see if you could provide just a bit more color on the strategic review process, when and when you think a sale or a license agreement could be finalized. Just thinking in broad strokes, is this something that would make most sense post an approval decision, or is that something that could be finalized leading into that?

[Corey Fishman, CEO at Iterum Therapeutics]

Yeah, as we've said publicly, you know, we aren't gonna comment on the process in terms of, you know, anything that's ongoing. What I would tell you is the process is ongoing. We continue to have discussions, and as soon as there's something that is, you know, disclosable, we obviously will go ahead and disclose it. But, you know, I think that's probably sufficient on that topic.

[Michael Okunewitch, Senior Research Analyst at Maxim Group]

All right. Thank you. And then one last one is more of a modeling question. Are you still incurring final costs from the REASSURE trial, or should we expect to see the R&D expense line continue to come down in the next quarter or two?

[Judy Matthews, CFO at Iterum Therapeutics]

This is Judy Matthews. Yeah, it should come down some more there, and we are done incurring costs for that trial.

[Michael Okunewitch, Senior Research Analyst at Maxim Group]

... All right. Thank you very much, and congratulations on all the progress.

[Michael Okunewitch, Senior Research Analyst at Maxim Group]

Thank you.

[Corey Fishman, CEO at Iterum Therapeutics]

Thanks, Michael.

[Operator]

Our next question comes from Ed Arce from H.C. Wainwright. Your line is now open.

[Thomas Hoffman, Head of Institutional Equities at HC Wainwright]

Hi, good morning, everyone. This is Thomas asking a couple of questions for Ed. Thank you so much for taking our questions. So, first question, given the FDA approval of Pivya for uncomplicated UTI last month, how do you envision sulopenem's positioning in the market? And also, can you discuss any points of differentiation between the two trials, assuming sulopenem receive the approval later this year?

[Corey Fishman, CEO at Iterum Therapeutics]

Yeah. So Pivya, yes, Pivya got approved by the FDA in the end of April. We aren't quite sure, based on public disclosures, what the timing of a launch is, and I don't think they have talked about that as of yet. And what we've always said, Thomas, is, you know, we believe that given the market size and particularly our positioning within the market, and that positioning, as we've said for many, many years now, is for elevated-risk patients. We believe we have a very solid position to work from, irrespective of any new entrants. And again, there could only be potentially two over the next few years. That would be Pivya, and also GSK has said that they would potentially file their new drug in the end of the second half of this year. So we feel really good about our positioning.

[Corey Fishman, CEO at Iterum Therapeutics]

We estimate the market to be about 40 million prescriptions annually, and of that, we think our addressable market with elevated-risk patients is about two-thirds of that. So a very large market. And given that we're a penem antibiotic, we have a very solid reputation in terms of the class of drug, and we believe that there will be a very strong response by physicians to wanting to use something like a sulopenem for those high-risk patients. So we feel very good that we've got a very solid position. I don't believe that's where Pivya or GSK's product will be playing primarily. And therefore, I feel very comfortable in a scenario where both, you know, if they both make it to market and launch, we feel like we've got a very good commercial position for that.

[Thomas Hoffman, Head of Institutional Equities at HC Wainwright]

Understood. Thank you so much, Corey. And then perhaps one follow-up. I know you mentioned earlier that the strategic option or exploration is still ongoing. Would independently bringing sulopenem to the market be an option on the table?

[Corey Fishman, CEO at Iterum Therapeutics]

Yeah. As we've said, our priority is a strategic transaction, and, you know, we will prepare to the best of our ability to bring it to market independently over time if the strategic process doesn't result in something that the board feels maximizes value for the shareholders. So, you know, again, it is not our priority with regard to how we're thinking today, but it certainly is a potential down the road.

[Thomas Hoffman, Head of Institutional Equities at HC Wainwright]

Understood. Thank you again for taking our questions, and we look forward to the specific date later this year.

[Corey Fishman, CEO at Iterum Therapeutics]

Thanks, Thomas, for your questions.

[Operator]

We currently have no further questions. I will hand it back over to Corey Fishman for any final remarks.

[Corey Fishman, CEO at Iterum Therapeutics]

Thanks, Carla. We appreciate you joining us today. We're very excited about working closely with the FDA during the review period of our new drug application resubmission, and we're looking forward to potentially bringing sulopenem, an important treatment option, to physicians and patients in the underserved markets of uncomplicated urinary tract infections. Thanks very much, and have a great day.

[Operator]

That concludes our conference call. Thank you for joining. You may now disconnect your lines.

Participants

Executives

• Corey Fishman, CEO
• Judy Matthews, CFO
• Louise Barrett, SVP of Legal Affairs

Analysts

• Michael Okunewitch, Senior Research Analyst at Maxim Group
• Thomas Hoffman, Head of Institutional Equities at HC Wainwright