Iterum Therapeutics PLC
NASDAQ:ITRM
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Iterum Therapeutics PLC
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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.
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. Corey 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 our evaluation of corporate, strategic and financing strategies and alternatives to fund future development operations, including the issue of new shares for cash.
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 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 into the future our cash on 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 alternative 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.
With that said, I'll turn it over to you now, Corey, for your opening remarks.
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 III 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 6 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-licensed 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.
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 was 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 adjustment, 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 plan, 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.
[Operator Instructions] And our first question today is from the line of Ed Arce of H.C. Wainwright.
This is Thomas Yip asking a couple of questions for Ed. So first, perhaps a discussion for the Phase III study with over 2,200 patients enrolled versus the target of 1,966. And also, Corey, as you mentioned earlier, one quarter ahead, very impressive. Can you discuss what are the main drivers of this open enrollment and also accelerated the pace with some initial feedback for the study?
Yes. Thanks for the question, Thomas. The interim analysis was the real driver in terms of determining power. That's a very complicated -- it was blinded, of course. And it was a very complicated as all interim analysis are set of analysis based on a variety of factors, including actual data and understanding where our power calculation was.
And the reason we overenrolled, as you say, is we wanted to be at the higher end of that power calculation, which was between 80% and 90% per our SPA agreement with the FDA. So we were able to do that in a very efficient manner and keep that time line to basically 1 year for full enrollment, but we took that opportunity to increase the power or the expected power of the study based on the data from the interim analysis.
Got it. And then trying to narrow down the early first quarter 2024 readout time line a little bit. Would this be a kind of January, or late January, February time frame?
Yes. We're obviously still working on that. We don't have any definitive date other than we believe it will be earlier in the quarter versus later in the quarter.
Understood. Understood. Perhaps just one more question from us. We've seen, as you announced, multiple new patents issue both in the U.S. and ex U.S. Can you discuss what are some actions for sulopenem for ex U.S. markets?
Yes. We will start looking at those conversations when we have our data. In terms of ex U.S., we know that the market is very large. And we know that the majority of prescribing for oral products is in a handful -- just like it is in the U.S., a handful of therapies. And so what we really have to do is get the data, determine the best route of conversation for potential partnerships outside the U.S. and then begin those conversations in earnest.
The good news is the market is very large. There's -- I don't remember the exact number, but somewhere around 15 million or 17 million infections for uncomplicated UTI in what used to be called the Big 5. And so we know that there's an opportunity there. It's just a question of having conversations with partners who are appropriate to make sure that we can optimize what we have outside the U.S. as well.
And we have no further questions on the line today. So I'd like to hand back to Louise Barrett to continue.
Great. Thanks, Harry. At this time, Corey and Judy will take questions that we've been receiving from some of our shareholders.
So Corey, first question for you. When do you expect that oral sulopenem will be approved?
Thanks, Louise. We expect, as we mentioned, to report top line data in the early part of Q1. And then subject to our analysis of that data, we'd expect to resubmit the NDA to the FDA in the second quarter of 2024.
Provided that our resubmission does address the deficiencies that were identified in our complete response letter, we would expect the time line of the FDA to operate under would be to complete its review and take action 6 months from the date of that resubmission and therefore, a potential approval would occur in the fourth quarter of 2024.
Great. Thanks, Corey. And one for you, Judy. How long can the company operate with its current cash on hand?
Thanks, Louise. Based on our current production, our cash on hand is sufficient to allow us to operate into the third quarter of 2024. Though we said that should allow us to fund our operations through the top line data as well as the NDA resubmission. However, additional funds are needed to get to approval in the fourth quarter.
Great. So Corey, Judy has talked about cash runway. What about the long-term financing strategy of the company? Can you talk to us a little bit about that?
Sure. Thanks for the question, investors, because this is one we get quite frequently. And we want to address it head on. We're constantly evaluating a variety of financing strategies to ensure that we can continue to fund operations through '24 and over the next few years.
One such strategy is to take advantage of opportunities to raise capital through share issuances or cash. As we've discussed previously, as an Irish-incorporated company, our shareholders must approve the disapplication of statutory preemption rights over the authorized but unissued share capital, including the additional ordinary shares that were approved at the Annual General Meeting in May, and this is otherwise known as the waiver of preemption rights.
This waiver provides us with the ability to more efficiently and cost-effectively access the capital necessary to continue to execute on our business plans and strategies. Without this waiver, our ability to raise additional capital for cash is severely limited under our existing authority, which does not cover the new shares that were approved at the Annual General Meeting in May.
As you may know, we did ask shareholders to approve this waiver earlier this year at our Annual General Meeting and at a subsequent extraordinary meeting in August. And while we received over 60% support of the votes on both occasions, we did not receive the affirmative vote of at least 75% of the votes cast as is required under Irish law.
Simply stated, without this waiver extending to all authorized and unissued shares, in order to issue shares and raise sufficient capital in the equity markets, we'd be required to either seek a transaction-specific waiver from shareholders every time we want to issue shares, that would entail an extraordinary general meeting each time and significantly impede the timing of a financing transaction and our likely ability to do a deal efficiently or at all.
Alternatively, we can attempt to issue shares through our rights offering by first offering the shares to all existing shareholders for a period of time, and then perhaps finding additional investors willing to take any shares that are not subscribed for on the same terms as the rights offering. The rights offering is also quite time-consuming, costly and there can be no guarantee that we would raise sufficient capital via this process.
We strongly believe that having the flexibility to quickly take advantage of opportunities to raise capital through share issuances for cash in order to fund the continued execution of our business plans and strategies is critical to interim success and our ability to bring oral sulopenem, if approved, to market.
While we will also continue to pursue other corporate strategic financial and financing alternatives, including partnerships and debt financings, we plan to go back to you, our shareholders, in the near future to seek approval for the waiver of preemption rights over a portion of the authorized, but unissued shares.
Great. Thanks, Corey. That's all the questions for now. So I'll pass it back to you, Corey, just for your closing remarks.
Great. Thank you, Louise. Thanks for joining us today.
We've taken the opportunity to address some of the questions we get most frequently from investors in order to provide as much clarity as we can regarding our upcoming milestones and time lines and to reiterate the importance of obtaining the waiver of preemption rights from shareholders with regard to the long-term financing of the company.
We continue to remain confident in the value of oral sulopenem to treat multidrug-resistant infections in the community. We look forward to our upcoming top line data readout and subject to our analysis of the data, resubmitting our NDA to the FDA for this important treatment option for physicians and patients.
Thanks again for joining us today, and have a good day.
This concludes today's call. Thank you all for joining. You may now disconnect your lines.