Q1 2024 Iterum Therapeutics PLC Earnings Call

Participants

Louise Barrett; Senior Vice President, Legal Affairs; Iterum Therapeutics PLC

Corey Fishman; Chief Executive Officer, Director; Iterum Therapeutics PLC

Judith Matthews; Chief Financial Officer; Iterum Therapeutics PLC

Michael Rabinowitz; Analyst; Maxim Group, LLC

Thomas Yip; Analyst; H.C. Wainwright & Co., LLC

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 the operator in the call today. (Operator Instructions) 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

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; our Chief Financial Officer, Judy Matthews. Corey will provide some opening remarks. Judy will provide details on the financial results, and then we'll open the lines to Q&A.
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 operating expenses into 2025, and our strategic process to sell, license, or otherwise dispose of our rights to sulopenem to maximize stakeholder value.
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 and 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, affects, and result of our pursuit of strategic alternatives, including the terms, timing, structure, value benefits and costs of any strategic process on our ability to complete one and all, and then other factors issued under the caption Risk Factors in the quarterly report on 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 Corey for your opening remarks.

Corey Fishman

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 for addresses the FDA's recommendations for additional data to support approval of oral sulopenem for the treatment of adult women with uncomplicated urinary coronary 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.
We believe this 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.

Judith Matthews

Thanks, Corey. Total operating expenses were $6.2 million in the first quarter of 2024 compared to $8.5 million in the first quarter 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 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.
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 a US 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 noncash 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.
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 3 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 the potential FDA approval expected early in the fourth quarter of 2024.
In April 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. 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 a note holder for approximately 1.2 million shares. If the notes are not exchanged, we will be obligated to pay the note holders $11.1 million plus accrued interest in January 2025. Now I will turn it back over to Corey for some closing comments.

Corey Fishman

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

Question and Answer Session

Operator

(Operator Instructions) Jason McCarthy, Maxim Group.

Michael Rabinowitz

Hey, guys, thanks for taking the question. This is [Michael Rabinowitz] 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

Yeah, we are. This is Corey, thanks for the question. Michael. The original CRL was pretty straightforward and just saying, we didn't, the FDA reaffiliated, we think that you have provided enough data to approve the drug and what they said was they would request at least one more Phase 3 study. And so we have pretty extensive conversations with the agency about that other Phase 3 study and eventually put in place a Special Protocol Assessment agreement or SPA agreement with them to address that basic deficiency of them feeling like there wasn't sufficient amount of data and put together a pretty substantial study as you saw over 2,200 patients.
We feel very confident that addresses their underlying question of was there enough data here and 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 augmented, we also showed statistical superiority to that augmented susceptible population. We feel very confident that we have provided sufficient data for them to approved the drug.

Michael Rabinowitz

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 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

Yeah, as we've said publicly, we aren't going to comment on the process in terms of 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 disclosable, we obviously will go ahead and disclose it. But I think that's probably sufficient on that topic.

Michael Rabinowitz

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?

Judith Matthews

This is Judy Matthews. Yeah, it you should come down some more there and we are done with recurring costs of that trial.

Michael Rabinowitz

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

Operator

Ed Arce, H.C. Wainwright.

Thomas Yip

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 [PDO] for complicated uUTI last month, how do you envision sulopenem professionally in the market? And also, can you discuss any points of differentiation between the two charts, assuming sulopenem receive approval maybe this year?

Corey Fishman

Yeah. So yes, [PDO] you got approved by the FDA in the end of April. We are quite sure, based on public disclosures, what the timing of the launches, and I don't think they have talked about that as of yet. And what we've always said, Thomas, is 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 tibia. 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. 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, still 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 sulopenem for those high-risk patients.
So we feel very good that we have got a very solid position. I don't believe that's where Trivia or GSK's product will be playing primarily. And therefore, I feel very comfortable in a scenario where they both make it to market and launch, and we feel like we've got a very good commercial position for that.

Thomas Yip

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

Corey Fishman

Yeah, as we've said, our priority is a strategic transaction, and 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 again, it is not our priority with regard to how we're thinking today, but it certainly is a potential down the road.

Thomas Yip

Understood. Thank you again for taking your questions and we look forward to [the FDA approval] later this year.

Operator

We currently have no further questions, I'll hand back over to Corey Fishman for any final remarks.

Corey Fishman

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

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