Acurx Pharmaceuticals, Inc. (ACXP) Earnings Call Transcript & Summary

Greetings, and welcome to the Acurx Pharmaceutical's Fourth Quarter and Full Year 2024 Financial Results and Business Update. [Operator Instructions] As a reminder, this conference is being recorded. I'll now turn the conference over to your host Mr. Rob Shawah, Chief Financial Officer for Acurx Pharmaceuticals. Please go ahead, sir.

Thank you, Melissa. Good morning, and welcome to our call. This morning, we issued a press release providing financial results and company highlights for the fourth quarter and full year of 2024, which is available on our website at acurxpharma.com. Joining me today is Dave Luci, President and CEO of Acurx, who will give a corporate update and outlook. Following that, I'll provide some highlights of the financials from the fourth quarter and full year ended December 31, 2024, and then turn the call back over to Dave for his closing remarks. As a reminder, during today's call, we'll be making certain forward-looking statements, which are based on current information, assumptions, estimates and projections about future events that 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. Investors should consider these risks and other information described in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, which we filed yesterday, Monday, March 17, 2025. You are cautioned not to place undue reliance on these forward-looking statements, and Acurx disclaims any obligation to update such statements at any time in the future. This conference call contains time-sensitive information that's accurate only as of the date of this live broadcast today, March 18, 2025. I'll now turn the call over to Dave Luci. Dave?

Thanks, Rob. Good morning, everyone, and thank you so much for joining us to review our financial results for the fourth quarter and full year 2024 and also to hear some recent updates -- then we'd be pleased to take any questions. First, I'd like to briefly summarize just a few of our key activities for the fourth quarter of '24, in some cases shortly thereafter, which have been the most significant in our company's history as we are now finalizing preparation to advance our lead antibiotic candidate, ibezapolstat or IBZ as you call it for the treatment of C. difficile infection into international Phase III clinical trials. We believe that if successful, this last set of clinical trials to complete will be pivotal to form the basis for our new drug application in the U.S. and marketing authorization application for the European Union. In October '24, we exhibited at ID Week in Los Angeles, which was the Annual Scientific Conference of the Infectious Disease Society of America where Drs. Garey and Eubank from the University of Houston School of Pharmacy, presented a scientific poster showing that in our Phase IIb clinical trial, IBZ had comparable clinical cure and sustained clinical cure rates and safety profile to vancomycin. As previously reported, the overall observed clinical cure rate in the combined Phase II trials, Phase IIa and Phase IIb in patients with CDI was 96%, 25 out of 26 patients, and importantly, 100% or 25 of 25 of the IBZ treated patients in the Phase II program who had clinical cure at the end of treatment remains cured through 1 month after EOT as compared to just 86%, 12 or 14 patients in the vancomycin treatment arm in Phase IIb. Also in a subset of ibezapolstat patients, 5 of 5 followed for 3 months after the end of treatment and experienced no recurrence of infection. IBZ-treated patients show decreased concentration of fecal primary bile acids and higher ratios of secondary to primary bile acids than vancomycin-treated patients. According to Dr. Gary, these exciting results demonstrate 2 properties of ibezapolstat, which may contribute to its anti-recurrence effect. First, the preservation and restoration of beneficial bacteria classes in the gut provide resistance to recolonization by C. difficile. Second, these data presented for the first time indicate that these beneficial bacteria known to metabolize primary to secondary bile acids persisting ibezapolstat-treated patients, providing another important mechanism to prevent recurrent CDI. In November last year, we announced sponsorship and participation in the inaugural Peggy Lillis Foundation, CDI Scientific Symposium and presented ibezapolstat Phase IIb clinical data update. In January '25, the company announced it had closed a $2.5 million registered direct offering priced at the market under NASDAQ rules. Also in January '25 we announced that we received positive regulatory guidance from the European Medicines Agency for the ibezapolstat Phase III clinical trial program which guidance is aligned with FDA on matters of manufacturing, nonclinical and clinical aspects of the Phase III program. The EMA guidance also confirmed ibezapolstat's regulatory pathway for our marketing authorization application to be filed by the company after successful completion of the Phase III clinical trials. So now with mutually consistent feedback from both the EMA and FDA Acurx is well positioned to commence our international Phase III registration program. This past February, and just this month, we announced new publications in the Journal of Antimicrobial Agents and Chemotherapeutics, 2 very important nonclinical studies, which we believe can leverage to show further positive differentiation for a competitive advantage of IBZ as compared with all other antibiotics used for frontline therapy to treat C. difficile infection. And for that matter, given our clinical results to date, we're hopeful that this anti-recurrence effect of IBZ is could mitigate the need for expensive microbiome therapeutic agents to prevent recurrent CDI. In February, we announced positive results from this first study conducted by Dr. Justin McPherson from the University of Houston and funded by the National Institute of Allergy and Infectious Diseases, or NIAID. It was an in-silico study that predicted the microbiome-restorative potential of IBZ for treating C. difficile infection. Our scientific advisers consider this to be a major finding, which provides a mechanistic explanation for ibezapolstat's selectivity and at the predicted bactericidal interaction between IBZ and its target, the DNA pol IIIC enzyme allows regrowth of microbes known to confer health benefits. The second study conducted by Dr. Trenton Wolfe from the University of Montana was funded by NIAID, the National Cancer Institute National Center for Advancing Translational Sciences and the Company. The second study is the first ever head-to-head comparison of gut microbiome changes associated with IBZ when compared to other anti-CDI antibiotics in a germ-free mouse model. The data showed that changes in alpha and beta microbiome diversities following IBZ treatment were less pronounced compared to those observed in macomycin or metronidazole treated groups, complementing prior Phase II Fridays showing ibezapolstat's more selective antibacterial activity. Further, and very importantly, notable differences were observed between the microbiome of ibezapolstat and the fidaxomicin treated groups, which may allow for differentiation of these 2 anti-CDI antibiotics in future studies. These results establish ibezapolstat's differentiating effects on the gut microbiome indicating a more selective spectrum of microbiome alteration compared to broader-spectrum antibiotics like vancomycin and metronidazole and a narrower spectrum of microbiome alteration compared to fidaxomicin. Also in February '25, last month, the Japanese patent office granted a new patent for our DNA polymerase IIIC inhibitors, which expires in December 2039 subject to extension. This constitutes a significant building block for our ongoing development of ACX-375C, our preclinical antibiotic candidate, targeting the treatment of MRSA, VRE and Anthrax infections. On March 10, just a week ago, we announced the closing of a registered direct offering and concurrent private placement, raising gross proceeds of $1.1 million. We continue to identify and pursue funding opportunities for our Phase III clinical trial program. We have several initiatives underway to that end and hope to have subject to report in future updates. So now we've got even more momentum going into 2025 and beyond. As we have continually reported, IBZ clinical results continue to outperform in a serious and potentially life-threating infectious disease caused by C. difficile bacteria that the CDC categorize as an urgent threat and calls for new classes of antibiotics for initial treatment but also have a low incidence of recurrence. From a regulatory perspective, FDA has granted IBZ, QIDP and Fast Track designations for the treatment of C. difficile infection. We also believe that ibezapolstat, if approved, to make a favorable economic impact by reducing the overall annual cost burden in the U.S. for C. difficile infection. $5 billion annually, of which $2.8 billion is due to recurrent infection. And that's what our data shows we may solve for. With our continuing momentum and passion to achieve success for our stakeholders, we do believe the best is yet to come. And now back to our CFO, Rob Shawah, to guide you through the highlights of our financial results for the fourth quarter and full year 2024. Rob?

Thanks, Dave. Our financial results for the fourth quarter and year ended December 31, 2024, were included in our press release issued earlier this morning. The company ended the year with cash totaling $3.7 million compared to $7.5 million as of December 31, 2023. The company raised a total of $6.6 million of gross proceeds under its ATM financing program for the year ended December 31, 2024. Research and development expenses for the 3 months ended December 31, 2024, were $0.8 million compared to $1.9 million for the 3 months ended December 31, 2023, a decrease of $1.1 million. The decrease was primarily due to a decrease in consulting related costs of $1.2 million offset by an increase in manufacturing costs of $0.1 million. For the year ended December 31, 2024, research and development expenses were $5.4 million compared to $6 million for the year ended December 31, 2023, a decrease of $0.6 million. The decrease was primarily due to a $1.6 million decrease in consulting related costs, offset by a $1 million increase in manufacturing-related costs. General and administrative expenses for the 3 months ended December 31, 2024, were $2 million compared to $3.2 million for the 3 months ended December 31, 2023, a decrease of $1.2 million. The decrease was primarily due to a $0.5 million decrease in professional fees, a $0.5 million decrease in share-based compensation costs and a $0.2 million decrease in employee compensation costs. For the year ended December 31, 2024, general and administrative expenses were $8.7 million compared to $8.5 million for the year ended December 31, 2023, an increase of $0.2 million. The increase is primarily due to a $0.7 million increase in professional fees, a $0.3 million increase in legal fees, offset by a $0.6 million decrease in share-based compensation costs and a $0.2 million decrease in insurance costs. The company reported a net loss of $2.8 million or $0.16 per diluted share for the 3 months ended December 31, 2024 compared to a net loss of $5.1 million or $0.37 per diluted share for the 3 months ended December 31, 2023. Net loss of $14.1 million or $0.87 per share for the full year ended December 31, 2024 compared to a net loss of $14.6 million or $1.15 per share for the year ended December 31, 2023, all for the reasons previously mentioned. The company had 1,730,686 shares outstanding as of December 31, 2024. With that, I'll turn the call back over to Dave.

Thanks, Rob, and to all of you for joining us today. I'll now turn the call over to Melissa, our operator, to open the call for questions. Melissa?

[Operator Instructions] Our first question comes from the line of Ed Arce with H.C. Wainwright.

This is Thomas Yip, asking a couple of questions for Ed. So first question for the Phase III program. Can you discuss some notable differences and also similarities between what the FDA and the EMA are looking forward to the Phase III?

It's identical, Thomas. We're so fortunate in that regard. We waited -- part of it is strategy. We didn't go to the European Medicines Agency until we had cleared all of the nonclinical, clinical and manufacturing aspects with the FDA. So only with that in hand, we went with a final package to the Europeans. And it's identical protocol. There's a complete agreement in all regards from both agencies.

Okay. So in that vein, how do you envision the Phase III program will enroll patients geographically? Will it be like a specifically split between the U.S. and the EU? Or how do you envision to proceed?

Well, subject to the normal adjustments that you make calling audibles along the way, we're going to start out with 150 clinical trial sites. And a full half of those sites will be in Europe. And the other half will be a combination of U.S., Canada and South America. I guess you can say, by a polarity it will be more European than American. Maybe there'll be 30% of the sites in the U.S. compared to 50% of the sites in Europe.

Okay. I got it. And then moving on to additional data that you have been presenting either in conferences or publications. So after this microphone study data that you published in last month, when should we expect more data with ibezapolstat this year?

That's a very pointing question. Thanks for asking. There is a very prestigious scientific publication within which our full set of Phase II data will be included and published. And we think that will be sometime in the next 30 days. So that's the next one, but they appear periodically. There's continually more and more data coming out from what we've already done from the labs at the Houston School of Pharmacy and also up in Montana.

Okay. Understood. We'll look forward to that. And then perhaps 1 final question from us. What actions do you have available to turn development of 375 into the clinic?

So we haven't taken any options off the table. Obviously, we're continuing our multistep approach to funding the company and most importantly, the Phase III trial. As I see it, with funding opportunities, I see the most likely opportunities with partnerships or brands, if you will, with government bodies or quasi government bodies, either in Europe or in the U.S. So I think those aspects of kind of our activities are kind of in the forefront, at least for right now, while we continue to pursue private partnerships and M&A activity. That seems to be less active than the responses we're getting from some of the government and quasi government agencies. And I think that's because folks are recognizing as more and more of our data gets out there, that we have a real drug that has a real need. And not only would it be good for the public to have this available front line for C. difficile, but it would be quite beneficial for the cost of public health because of the no recurrences.

Understood. If I may, just 1 additional question actually. Just wonder if your plan is still to look for a partnership to move to ibezapolstat into Phase III? Or is there other options as well?

Yes. I mean we're looking for a partnership. But remember, we used the term partnership broadly to include a number of different agencies of the government along with the private sector. So in a broad sense, yes, that's still the plan. Okay.

Our next question comes from the line of James Molloy with Alliance Global Partners.

I was just wondering if you can characterize the partnership environment and there was a lot of turmoil in the market earlier has that impacted your ability to secure partnerships? Is this something you think will happen in the 2025 time frame? Or is this a 2026 event? And sort of any -- and I know that perhaps that leads into the next question. One I think you'll start the Phase IIIs, but I guess it depends quite a bit upon either partnership or funding events, right?

Yes. I agree and I agree, the tumultuous nature of the things happening in the world today, certainly present even more team challenged than we were facing coming into '25. But we feel that we're up for the challenge, and we're going to continue to fight. I do see potential partnerships with various groups throughout the world that are not pharmaceutical companies as being kind of further along at this point than private sector partnerships -- but we're continuing our efforts in both regards. I have been to Washington, D.C. on Capitol Hill several times now. And I can tell you firsthand that everyone is looking over their shoulder down there right now. And it's a different vibe than I experienced when I was in Capitol Hill back in September. So hopefully, things settle down over the next couple of months, and we can get down to some appropriations. But there are still appropriations from prior approvals, government approved programs that we're chasing down in 1 case of applied for. So we're continuing to process I think something will happen in 2025 that will allow us to start the Phase III trials with enrollment. There may be a time lag between that event and the enrollment starting just because we don't want to make our fill finish pill form until we're serving to have the money to start the trial because we don't want to date the packages before we have to. So that's the final step, and that will take place after the money comes in. So that may present a few months time lag between having the sufficient funding and starting the enrollment. Does that answer your question?

It does indeed. I know there's a lot of uncertainty on these things, of course. Should you get this trial started, what the current expectation for [indiscernible] have top line data or an interim look? Where do you think that could occur should the trial start tomorrow?

Yes. Well, so the interim look, we decided against the interim look because statistically, it as like 10% to the required number of patients in the trial. And it wouldn't really provide us anything other than an advisory committee would tell us keeping rolling or futility. We wouldn't be able to see any of the numbers with being a double-blind study. So we didn't do the interim look, but I think it would be 2 years from first patient enrolled to top line data.

[Operator Instructions] Our next question comes from the line of [ Claire Addison ] with Independent Investment Research.

Just a couple of things for me. I just noticed that you've made mention of the suspension of the ATM program in January. I was just wondering if you could talk a little bit about what's happening there? And then also if you could just comment on the risk with the NASDAQ listing given where the share price is currently trading.

Sure. So we suspended the ATM in connection with the offering that we are conducting in January. And we can put the ATM back in place and reactivated, so to speak, when the company management decides to do that. So there's no prohibition on us reactivating the ATM. It's currently not part of our ongoing plan, which will unfold over the next several months. But with the delisting, I can tell you, Claire, that there's no sense internally that we'll let the NASDAQ listing go. And we're working on some things which we think will help with the listing in that regard. So we're -- leave it with us for now. But the last thing I would expect to see is for us to be traded at the [indiscernible].

Okay. So you're confident you'll be able to manage that.

Yes. Absolutely.

Ladies and gentlemen, this concludes our question-and-answer session and will conclude our call today. We thank you for your interest and participation. You may now disconnect your lines.