Earnings Call Transcript - ITRM Q1 2025

Operator, Operator

Hello, everyone, and thank you for joining the Iterum Therapeutics plc First Quarter 2025 Earnings and Business Update Call. My name is Lucy and I'll be coordinating your call today. I will now hand over to your host, Louise Barrett, SVP of Legal Affairs to begin. Please go ahead.

Louise Barrett, SVP of Legal Affairs

Thank you, Lucy. Good morning and welcome to Iterum Therapeutics plc first quarter 2025 earnings and business update call. The press release of the 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 for 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 developments, therapeutic, and market potential of our ORLYNVAH, the sufficiency of our cash resources to fund our operating expenses into 2026, our strategic process to sell, license, or otherwise expose our rights to penem, our ability to complete pre-commercialization activities for ORLYNVAH and prepare for a potential launch of ORLYNVAH by the fourth quarter of 2025, and the protection provided by our patents. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors outside our control, including risks and uncertainties concerning the outcome, impact, effects, and results of our evaluation of strategic alternatives, including the terms, timing, structure, value, benefits, and cost of any strategic alternative, our ability to complete a strategic term of transaction, our ability to successfully prepare and implement commercialization plans for ORLYNVAH with a commercial partner or directly, the design and timing of potential launch plans, the market opportunity for and potential market acceptance of ORLYNVAH, our ability to continue as a going concern, the accuracy of our expectations regarding how far into the future our cash on hand will fund our ongoing operations, and other factors discussed under the caption risk factors in our quarterly report on form 10-Q filed with the SEC this morning. In addition, any forward-looking statements represent only our views 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've provided reconciliations of GAAP recorded to non-GAAP adjusted information in the press release issued this morning. With that all said, now I'll turn it over to you, Corey, for your opening remarks.

Corey Fishman, CEO

Thanks, Louise. Welcome, and thanks for joining us today. I'd like to begin by providing some comments on our company priorities and associated activities. Our outreach to potential business development partners has yet to result in a transaction that the board views as acceptable, being in the best interests of our stakeholders. Business development remains a potential opportunity for us at any point, and while we continue to pursue a strategic transaction, we remain open and excited to engage in discussions as they arise. Having said that, we believe there is urgency to bring ORLYNVAH to the U.S. market to serve patients suffering with uncomplicated urinary tract infections who have limited or no other oral alternative treatment options, and as such, we have been preparing for the potential commercialization of ORLYNVAH over the last several months. As we have noted before, the U.S. market has been plagued by a lack of innovation in this therapy area over the last 25 years, and antibiotic resistance to existing generic oral treatment options is eroding the efficacy of current therapies. Additionally, almost all of the existing oral treatments have some safety challenges, which again leaves physicians looking for efficacious and safe alternative treatments. Given this background, and with the safety and efficacy of ORLYNVAH for the treatment of uncomplicated urinary tract infections in adult women with designated microorganisms, we believe there's an excellent opportunity in this expansive market, which has been hugely neglected for nearly three decades. Let's take a moment now and talk about this complicated urinary tract infection market in the U.S. It is quite large and based on our research generates approximately 40 million prescriptions annually in the U.S. and of those approximately two-thirds or about 26 million prescriptions are written for at-risk patients. At-risk patients are defined as women who are elderly, have comorbidities like diabetes, heart failure, kidney failure, or cancer, or women with a history of recurrent infections. We believe these at-risk patients represent ORLYNVAH's addressable market, as they likely are the patients with limited or no other oral treatment options available and are the patients most in need of new therapies. To put this addressable market size in a practical perspective, if a company were to capture a 1% share of the addressable market at peak, say the fifth or sixth year after launch, and using current branded oral antibiotic pricing, resulting net sales would be over $250 million in that year. With regard to new competition in the marketplace, there was a product approved in April of 2024 that has yet to launch. Additionally, in the first quarter of this year, GlaxoSmithKline received approval for a product in the uncomplicated urinary tract infection space, and their current guidance is that they will launch in the second half of this year. Clearly, this increases the urgency for us to get ORLYNVAH to market as quickly and efficiently as possible. I want to spend a minute and talk about the potential commercialization of ORLYNVAH. We have been working with EVERSANA, an end-to-end commercialization firm, to prepare for a potential launch. As we build out our commercial launch plan, we have invested in pre-commercialization activities including market research with physicians and payers, building the key promotional messaging for ORLYNVAH, determining the optimal trade, distribution and patient services strategies, developing discussion materials for payers, beginning to compile a medical information database, and determining potential territory alignment for sales resources. We believe that all the work done so far indicates ORLYNVAH as an important alternative for patients with limited or no other oral treatment options. In a commercialization scenario, we would expect to execute our launch in phases. Our first phase would be to put commercial resources in a limited number of territories based on three key criteria: number one, the rate of antibiotic resistance in that territory, number two, the number of physicians in a territory who write a large amount of prescriptions in the uncomplicated urinary tract infection field, and number three, managed care access in a designated territory. Post-launch, assuming we see solid results in these initial territories, we expect the next phase of the plan would be to either expand the number of territories we are promoting in still using the same three criteria to determine optimal geographies, or to remain in the existing territories, or cover more physicians in those territories with additional resources. Of course, any near-term expansion would be subject to successfully raising additional capital. We expect that in a commercialization scenario, we will be able to launch ORLYNVAH in the U.S. market by the fourth quarter. There are a couple other topics I'd like to cover today as well. As some of you may know, in January of this year, we repaid the outstanding principal and interest due under our exchangeable notes. This repayment eliminated a large amount of debt that has been on the company's books for a number of years. Lastly, we have extended our cash runway into 2026, which includes the potential launch of ORLYNVAH by the fourth quarter. In summary, as we look forward, we are very excited about the potential commercialization of ORLYNVAH in the U.S. The market dynamics remain favorable. Our planning work is going very well. No new products have launched in the space to date. And we have a very long runway to capture value with our patent protection going into 2039. I'll now turn the call over to Judy Matthews, our chief financial officer, for a financial update.

Judy Matthews, CFO

Thanks, Corey. Total operating expenses were $3.7 million in the first quarter of 2025, compared to $6.2 million in the first quarter of 2024. Operating expenses include the cost of sales, which is primarily the amortization of an intangible asset, research and development expenses, and general and administrative expenses. R&D costs were approximately $600,000 in the first quarter, compared to $4 million for the same period in 2024. The primary driver of the decrease in R&D expense for the first quarter was the decrease in costs associated with the REASSURE trial. G&A costs were $2.8 million for the first quarter, compared to G&A costs of $2.2 million for the same period in 2024. The primary driver of the increase in G&A expense for the first quarter was pre-commercialization activities. Our net loss on a U.S. GAAP basis was $4.9 million for the first quarter of 2025, compared to a net loss of $7.1 million for the first quarter of 2024. On a non-GAAP basis, which excludes certain non-cash adjustments, our net loss was $3.3 million in the first quarter of 2025, compared to our non-GAAP net loss of $5.8 million in the first quarter of 2024. The $2.5 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. At the end of March, we had cash and cash equivalents of $12.7 million. Based on our current operating plan, which includes our currently planned pre-commercialization spend and potential commercial launch of ORLYNVAH by the fourth quarter of 2025, we expect that our cash and cash equivalents, together with $1 million of net proceeds raised under our asset market offering program from April 1 to April 22, 2025, and net proceeds of $4.2 million from the registered direct offering that closed April 30, 2025, will be sufficient to fund our operation into 2026. On January 31, 2025, we repaid the outstanding principal and interest due under the exchangeable notes in accordance with their terms. As of May 12, 2025, we had approximately 40 million ordinary shares outstanding. Now we will open the line for questions.

Operator, Operator

Thank you. We have a question from Matthew Keller of H.C. Wainwright. Matthew, your line is now open, please go ahead.

Matthew Keller, Analyst

Yes, thank you. Good morning, everyone, and thanks for taking our questions. Just two quick ones from us. So we've got two quick ones from us. The first, I was wondering if you could possibly speak a little bit more to the maturity of these conversations you're having with potential commercial partners. And then secondly, do you foresee any outstanding rate limiting steps ahead of launch later this year?

Corey Fishman, CEO

Matt, this is Corey. Thanks for the questions. Can you just repeat the second one? I'm sorry.

Matthew Keller, Analyst

Oh, yes, no problem. Just if you foresee, you mentioned the pre-commercialization activities, if there's any other outstanding rate limiting steps that you might foresee ahead of or limited launch later this year?

Corey Fishman, CEO

Thank you for the questions. Let's address them in the order you asked. We don't have much to share regarding discussions with commercial partners, particularly on the business development side. While we consider EVERSANA our commercial partner, I understand that's not what you were referring to. We've had several significant discussions, and it seems there are various reasons why potential partners might feel it's not the right time for collaboration. It's worth noting that business development is an ongoing process in the biotech industry, and this is certainly true for us as well. We're always open to discussions and willing to engage with interested parties when the opportunity arises. However, we do feel a sense of urgency as we've been approved for six months now, and the market remains attractive. We believe ORLYNVAH can significantly benefit patients facing challenges, and our primary goal is to make this product available to patients and physicians. Regarding your second question about any remaining obstacles for launching the drug by the fourth quarter, I can assure you that I don't see any major barriers. There is a lot of work to be done, but there are no real impediments that would prevent us from meeting our timeline. The good news is we have already produced the product and it's available, so manufacturing timelines are not an issue for us at this point. Overall, we are in a strong position to achieve our target for commercial launch by the fourth quarter.

Matthew Keller, Analyst

Yes, no, totally makes sense. Thanks for taking my questions. And again, congrats on the quarter. Thanks again.

Corey Fishman, CEO

Thanks, Matt.

Operator, Operator

We have no further questions. So I will hand back to Corey Fishman, CEO for closing remarks.

Corey Fishman, CEO

Thanks, Lucy. We appreciate you joining us today. We're very excited about the potential launch of ORLYNVAH by the fourth quarter of this year. We believe there really is a significant need for ORLYNVAH in the uncomplicated urinary tract infection market for those at-risk patients. And we are looking forward to making this first and only approved oral penem product available to patients and physicians as efficiently and quickly as we can. So thanks again and have a great day, everyone.

Operator, Operator

This concludes today's call. Thank you for joining. You may now disconnect your lines.