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

Greetings, and welcome to the Acurx Pharmaceuticals First Quarter 2025 Financial Results and Business Update. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Rob Shawah, Chief Financial Officer of Acurx Pharmaceuticals. Thank you. You may begin.

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 first quarter 2025, which is available on our website at acurxpharma.com. Joining me today is David 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 first quarter ended March 31 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 quarterly report on Form 10-Q, which we filed yesterday, Monday, May 12, 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, May 13, 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 first quarter of 2025 and 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 first quarter 2025 or in some cases, shortly thereafter. In January, we announced that we closed a $2.5 million registered direct offering priced at the market under NASDAQ rules. Also in January, we announced that we received positive regulatory guidance from the European Medicines Agency for the ibezapolstat Phase III clinical trial program, which 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 a marketing authorization application to be filed by the company after successfully completing Phase III clinical trials. With mutually consistent feedback from both EMA and FDA, Acurx is well positioned to commence our international Phase III registration program. In February and March, we announced new publications in the Journal of Antimicrobial Agents and Chemotherapeutics of 2 very important nonclinical studies, which we believe can leverage -- we can leverage to show further positive differentiation for competitive advantage of ibezapolstat versus all other antibiotics used for first-line therapy to treat C. difficile infection or CDI. And for that matter, given our clinical results to date, we anticipate that this antirecurrence effect of ibezapolstat could mitigate the patient's need for expensive microbiome therapeutic agents to prevent recurrent C. diff. Specifically, in February, we announced positive results from the first study conducted by Dr. Justin McPherson from University of Houston and funded by the National Institute of Allergy and Infectious Disease. It was an in silico study that predicted the microbiome restorative potential of ibezapolstat for treating C. diff. Our scientific advisers consider this to be a major finding, which provides a mechanistic explanation for ibezapolstat's selectivity in that the predicted bactericidal interaction between ibezapolstat and its target, the pol IIIC enzyme allows regrowth of gut microbes known to confer health benefits. The second study conducted by Dr. Trenton Wolfe from the University of Montana was funded by the National Institute of Allergy and Infectious Disease, the National Cancer Institute, National Center for Advancing Translational Science and Acurx. This study is the first head-to-head comparison of gut microbiome changes associated with ibezapolstat when compared to other anti-CDI antibiotics in a germ-free mouse model. The data show that changes in alpha and beta microbiome diversities following ibezapolstat treatment were less pronounced compared to those observed in vancomycin or metronidazole treated groups, complementing prior Phase II clinical findings showing ibezapolstat's more selective antibacterial activity. Further and very important -- and very importantly, notable differences were observed between the microbiome of the ibezapolstat and fidaxomicin treatment groups, which may allow for differentiation of these 2 anti-CDI antibiotics in future studies. These results established ibezapolstat's differentiating effects on the gut microbiome, indicating a more selective spectrum of microbiome alteration compared to a broad spectrum antibiotics like vancomycin and metronidazole and narrower spectrum of microbiome alteration compared to fidaxomicin. Also in February, the Japanese patent office granted a new patent for our DNA pol IIIC inhibitors, which expires in 2039, subject to extension. This constitutes a significant building block for our ongoing development of ACX-375, our preclinical antibiotic program targeting the treatment of infections caused by methicillin-resistant staph, vancomycin-resistant enterococcus and anthrax. In March, we announced the closing of a registered direct offering and concurrent private placement, raising gross proceeds of $1.1 million. And just last month, the Indian Patent Office granted a new patent for our DNA pol IIIC inhibitors, which expires in December 2039, subject to extension. This constitutes another significant building block for our ongoing preclinical antibiotic development program of ACX-375, which targets the treatment of MRSA VRE and anthrax infections. And just last week, on May 8, we closed an equity line of credit with Lincoln Park Capital for up to $12 million of additional funding. Looking forward to the weeks ahead, I can share with you that our outstanding Phase II clinical trial data has been accepted for publication in the premier medical journal, Lancet Microbe and is now in press to be published shortly and summarizes ibezapolstat's Phase II results as follows. And I quote, Results included high rates of clinical cure in ibzapolstat-treated subjects with no recurrence. Furthermore, ibezapolstat was found to be safe, well tolerated and associated with the preservation of key health-promoting bacteria responsible for bile acid homeostasis, a key component in preventing recurrent CDI. The publication establishes that ibezapolstat's potential as a novel antibiotic treatment for CDI with high rates of clinical cure and sustained clinical cure while minimally disturbing the protective gut microbiota. The senior author, Professor Kevin Garey, University of Houston and a co-author of the IDSA treatment guidelines for CDI noted that current U.S. and European treatment guidelines for CDI recommend only 2 antibiotics, oral vancomycin or fidaxomicin. Vancomycin is most commonly used, but has a low clinical cure rate of 70% to 92% and a sustained cure rate of just 42% to 71%. Fidaxomicin has fewer recurrences but low rates of clinical cure, 84% and sustained clinical cure, 67%. Dr. Garey further notes that both antibiotics are associated with emerging antimicrobial resistance, stating "The clinical need for a new antibiotic like ibezapolstat to treat CDI is underscored by a recently published study in clinical infectious disease by Dr. Curtis Donskey of the Cleveland VA and conducted in hospital setting documented that C. difficile isolates with clinically relevant reduced fidaxomicin susceptibility may emerge during therapy and spread to other patients. The medical community should be aware of this alarming finding." Also upcoming regarding Acurx's overall DNA pol IIIC inhibitor platform is a scientific presentation to be given on May 21 by Dr. [indiscernible] from Leiden University Medical Center in the Netherlands entitled A Unique Inhibitor confirmation selectively targets the DNA policy of gram-positive priority pathogens. This scientific conference is sponsored by the Federation of American Societies for Experimental Biology and is the premier venue for the newest research and technological trends in molecular machines inside the human body that ensure DNA replication and expression of genes to create proteins that make up a cell. We continue to identify and pursue funding opportunities for our Phase III ibezapolstat clinical trial program. We have several initiatives underway to that end, and we hope to have something to report in future updates. As we've continually reported, ibezapolstat clinical results continue to outperform in a serious and potentially life-threatening infectious disease caused by C. difficile bacteria that the CDC categorizes as an urgent threat and calls for new classes of antibiotics for initial treatment that also have a low incidence of recurrence like ibezapolstat. Ibezapolstat has FDA QIDP and Fast Track designations for the treatment of CDI. We also believe that ibezapolstat, if approved, could make a favorable economic impact by reducing the overall annual U.S. cost burden for C. diff infection, which is $5 billion per year, of which $2.8 billion is due to recurrent infection. With our continuing momentum and passion to achieve success for our stakeholders, we remain confident that the best is yet to come as we plow through these very challenging times in the macroeconomic environment and in our industry sector. And now back to our CFO, Rob Shawah, to guide you through the highlights of our financial results for the first quarter of 2025. Rob?

Thanks, Dave. Our financial results for the first quarter ended March 31, 2025, were included in our press release issued earlier this morning. The company ended the quarter with cash totaling $4.6 million compared to $3.7 million as of December 31, 2024. The company raised a total of approximately $3.6 million of gross proceeds through 2 registered direct offerings during the quarter. Research and development expenses for the 3 months ended March 31 were $0.6 million compared to $1.6 million for the 3 months ended March 31, 2024, a decrease of $1 million. The decrease was primarily due to a decrease in manufacturing costs of $0.4 million and a decrease in consulting costs of $0.6 million as a result of the prior year trial-related expenses. General and administrative expenses for the 3 months ended March 31, 2025, were $1.6 million compared to $2.8 million for the 3 months ended March 31, 2024, a decrease of $1.2 million. The decrease was primarily due to a $0.7 million decrease in professional fees resulting from lower consulting expenses, and a $0.6 million decrease in share-based compensation costs. The company reported a net loss of $2.1 million or $0.11 per diluted share for the 3 months ended March 31, 2025, compared to a net loss of $4.4 million or $0.28 per diluted share for the 3 months ended March 31, 2024, all for the reasons previously mentioned. The company had 22,397,511 shares outstanding as of March 31, 2025. 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 Jason McCarthy with the Maxim Group.

This is Joanne Lee on for Jason McCarthy. Just one for me regarding the recent publications highlighting ibeza's selective activity and potential microbiome preserving effects. I'm just curious if the company plans to explore this further and if these complementary findings are informing the Phase III trial in any way? Are you considering incorporating microbiome-related endpoints to help reinforce ibeza's differentiation in the CDI space?

Thank you very much, Joanne. Yes, we are indeed exploring this actively. It's already -- the microbiome preservation and restoration is already a secondary endpoint in the Phase III program design as it had been in Phase IIb. But we're exploring it nonetheless. We're seeing that this is an area of differentiation, which is one of the primary reasons we believe that we're seeing so distinctively less recurrent C. diff than is experienced by patients on other antibiotics. And with the new administration in Washington and Marty Makary at the lead, we're reading the tea leaves and exploring other possibilities in terms of pathway to approval. We hope to have more on that on the next call, but that's currently a hot topic internally.

[Operator Instructions] Our next question comes from the line of James Molloy with Alliance Global Partners.

Just quick looking at sort of G&A and R&D and OpEx, I guess, for the quarter. Are these levels we should expect going forward? I see that R&D has been coming down pretty dramatically. I know you've been waiting to get the Phase III started. It will ramp up. I presume it will ramp up once that gets going. Any thoughts on the trajectory of that through 2025? And any updates on sort of the expected start date of any potential Phase IIIs?

Thanks so much, Jim. I appreciate the questions. I can hop in here. We've done some dramatic cost cutting that started in the first quarter of 2025 and will continue. So I would expect our -- both our G&A and our R&D costs to continue to go down as quarters go by until we start the Phase III program. I don't want to provide a hypothetical date for the start of Phase III because we don't have the funding yet. And since we don't make the decision on the other side of where that funding is coming from, it's kind of hard to project. But we do have a lot of irons in the fire. We did close on the equity line of $12 million with Lincoln Park Capital last week. So we feel that we are in a decent position relative to other biotech companies to kind of tread water until one of these funding opportunities comes through.

Understood. Now you guys have been excellent stewards of shareholder capital. One, notably, the accruals are always in good shape, Robert. As you look at the -- any updates on the PASTEUR Act and what might be going on there?

We don't have anything specific on the PASTEUR Act, although I'm in touch with our lobby group probably a half a dozen times a day and things in Washington are frenetically busy, notably of recent vintage, the drug pricing reductions, which in a strange way, I think, help our little company as compared to big pharma. But nothing specific on the PASTEUR Act or I think we talked before about PASTEUR [ Light. ] But it's still out there. There's also traditional BARDA grants that may become available. And for the second program, we recently put in an application to ARPA-H. So -- and there's a European FDA type group that has taken some interest. So there's a -- we've got a lot of lines in the water, so to speak, for anyone who's a fisherman like in the Cape Cod area like yourself. We got lines in the water, and we're just waiting to get a bite.

That's understood. And last question, Marty Makary had some comments about sort of the ultra-rare path for approvals based on plausible mechanisms rather than actual clinical trials. That wouldn't apply to you guys though, right?

It's so funny. I mean, Joanne had a good question before. That's a great question. It's right on point with something that's being discussed internally right now based on Marty Makary's comments. So it may apply to us. It would be a first for an antibiotic to follow that pathway, but our scientific team is taking a look.

Doesn't hurt to look. Absolutely.

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