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Iterum Therapeutics plc (ITRM)·Q1 2024 Earnings Summary

Executive Summary

  • Iterum resubmitted its NDA for oral sulopenem in April; management expects FDA action six months from receipt, i.e., early Q4 2024, with cash runway into 2025 supporting operations through the expected PDUFA timeline .
  • Q1 2024 operating expenses fell to $6.163M from $8.530M YoY as REASSURE trial costs rolled off; GAAP net loss narrowed to $7.101M and non-GAAP net loss to $5.827M .
  • Positive REASSURE Phase 3 results (announced Jan 30) showed statistical superiority vs Augmentin in the susceptible population, reinforcing the regulatory case and pre-commercial narrative .
  • Management reiterated focus on strategic alternatives; while priority is a transaction, Iterum is preparing to commercialize independently if needed, a key narrative lever ahead of PDUFA .
  • Near-term catalysts: ongoing FDA review of the resubmitted NDA, competitive context with a newly approved uUTI therapy (Pivya) and a potential GSK filing, and continued OpEx moderation as trial costs decline .

What Went Well and What Went Wrong

  • What Went Well

    • NDA resubmission completed within three months of topline data; CEO highlighted “the first oral penem approved in the U.S.” potential and confidence that the SPA trial addresses CRL deficiencies .
    • REASSURE met primary endpoint and showed superiority in overall response vs Augmentin; safety profile consistent with prior trials with no SAEs on sulopenem .
    • Expense discipline: R&D fell to $4.0M vs $6.4M YoY; CFO emphasized OpEx decline tied to completed enrollment and indicated further R&D decreases next quarters .

  • What Went Wrong

    • No revenue generation and continuing losses: GAAP net loss of $7.101M and net loss per share of $(0.46) in Q1; shareholders’ deficit persisted at $(6,150) .
    • Balance sheet leverage/obligations remain: exchangeable notes $12,203 and royalty-linked notes $7,889 at quarter-end; CFO noted ~$11.1M of exchangeable notes could be due in Jan 2025 if not exchanged .
    • Competitive backdrop tightening: approval of Pivya and a potential GSK filing for uUTI raise stewardship and positioning questions, even as management stresses Iterum’s elevated-risk patient focus .

Financial Results

Metric (USD Thousands unless noted)Q3 2023 (oldest)Q4 2023Q1 2024 (newest)
Research & Development(14,852) (9,744) (3,977)
General & Administrative(1,833) (1,687) (2,186)
Total Operating Expenses(16,685) (11,431) (6,163)
Operating Loss(16,685) (11,431) (6,163)
Interest Expense, net(300) (405) (487)
Adjustments to FV of Derivatives13,199 (305) (386)
Other (Expense)/Income, net70 (79) (17)
Income Tax (Expense)(161) (142) (48)
Net Loss(3,877) (12,362) (7,101)
Net Loss per Share ($)(0.30) (0.94) (0.46)
Non-GAAP Net Loss(15,709) (10,704) (5,827)
Non-GAAP Net Loss per Share ($)(1.20) (0.81) (0.38)
Weighted Avg Shares (basic/diluted)13,039,437 13,180,447 15,432,693
Cash, Cash Equivalents & ST Investments35,892 23,964 18,214
Exchangeable Notes (Balance Sheet)12,462 11,453 12,203
Royalty-Linked Notes (Balance Sheet)7,131 7,503 7,889
Total Shareholders’ (Deficit)/Equity3,432 (6,403) (6,150)
Revenue and MarginsQ3 2023Q4 2023Q1 2024
Revenues ($USD Thousands)Not reported (clinical-stage; statement shows only OpEx/Operating loss) Not reported Not reported
Gross Margin %N/A N/A N/A

KPIs (Clinical/Operating)

KPIQ1 2024
Overall Response (m-MITTS) at TOC: Sulopenem vs Augmentin61.7% vs 55.0%; Difference 6.7 (95% CI: 0.3, 13.0)
Clinical Success @ TOC77.3% vs 76.7%; Difference 0.6 (95% CI: -4.8, 6.1)
Microbiologic Success @ TOC75.2% vs 66.7%; Difference 8.5 (95% CI: 2.6, 14.3)
Safety: SAEs0 on sulopenem; 5 on Augmentin; discontinuations <1% both arms
Cash runwayInto 2025 including through expected PDUFA date early Q4 2024

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NDA Resubmission Timing2024Early Q2 2024 (pre-announced in Q4 release) Resubmitted in April 2024; FDA review ongoing Achieved milestone (timing met)
FDA Action Timing (PDUFA expectation)2024Six months from resubmission; first half of Q4 2024 Six months from resubmission; early Q4 2024 Maintained (minor phrasing)
Cash RunwayThrough 2025Into 2025 including through expected PDUFA Into 2025 including through expected PDUFA Maintained
R&D TrajectoryQ2–Q3 2024Not formally guidedCFO indicated R&D should “come down some more” as REASSURE costs end Qualitative reduction expected

No revenue/margin guidance, tax rate, OI&E, or dividend guidance was provided in Q1 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2023)Previous Mentions (Q-1: Q4 2023)Current Period (Q1 2024)Trend
Regulatory/NDAEnrollment complete; topline expected early Q1 2024; plan to resubmit NDA in Q2 2024 Resubmission on track for early Q2 2024 NDA resubmitted; FDA action expected early Q4 2024 Progressing to decision
Strategic AlternativesEvaluating alternatives broadly Engaged financial advisor; process to sell/license/dispose rights Process ongoing; priority is a transaction, independence possible if needed Ongoing, more concrete
Cash Runway & LiquidityRunway into Q3 2024 Into 2025; ATM proceeds post year-end Into 2025; Q1 ATM extended runway; ~$18.2M cash at 3/31 Improved vs Q3 ’23
Competitive LandscapeFocus on uUTI need/new products Emphasized first oral penem potential Acknowledged Pivya approval; potential GSK filing; positioning for elevated-risk patients More competitive; clear positioning
R&D ExecutionREASSURE enrollment completed NDA prep underway R&D down; further decline expected as trial costs taper OpEx declining

Management Commentary

  • CEO: “We have recently resubmitted our new drug application… within just 3 months of announcing our positive top line results… The potential approval… would mark the first oral penem approved in the U.S.” .
  • CEO on CRL deficiencies: FDA sought “at least one more Phase III study” and the SPA-backed REASSURE trial “addresses their underlying question… we hit our primary endpoint of noninferiority… [and] statistical superiority” .
  • CFO: “Total operating expenses were $6.2 million… net loss… $7.1 million… non-GAAP net loss of $5.8 million… At the end of March, we had cash… $18.2 million… runway into 2025” .
  • CFO on capital structure: “~$11.1M of exchangeable notes outstanding… could be exchanged for ~2M shares; otherwise due plus accrued interest in January 2025” .
  • CEO on competition/positioning: Market ~40M prescriptions annually; Iterum targets elevated-risk patients (~two-thirds of market), expecting strong physician response to penem class .

Q&A Highlights

  • CRL resolution: SPA-based Phase 3 trial designed to address adequacy-of-data deficiency; management confident in sufficiency given superiority in susceptible population .
  • Strategic review: Discussions ongoing; disclosure only upon material developments; independence remains contingency if Board deems no value-maximizing transaction .
  • Expense trajectory: R&D expected to decline further as REASSURE costs wind down; supports runway into PDUFA .
  • Competitive context: Acknowledged Pivya approval and potential GSK filing; Iterum’s focus is elevated-risk patients where penem profile may resonate .
  • Capital structure clarity: Exchangeable notes terms and potential share issuance discussed; timing of obligations noted (Jan 2025) .

Estimates Context

  • Wall Street consensus estimates (EPS, revenue) via S&P Global were unavailable during this session due to data request limits. As a clinical-stage company reporting only operating expenses and losses, comparison to Street revenue/EPS was not possible at this time [GetEstimates attempt error].
  • Investors should anchor near-term expectations on OpEx discipline and regulatory timeline rather than revenue/EPS consensus until commercialization.

Key Takeaways for Investors

  • Regulatory catalyst: NDA resubmission completed; FDA action expected early Q4 2024, a defining binary event for the stock’s medium-term trajectory .
  • Clinical de-risking: REASSURE demonstrated superiority vs Augmentin in susceptible population, improving approval probability and commercial positioning narrative .
  • Expense moderation: R&D tapering post-enrollment completion supports declining OpEx and extends runway; monitor G&A spend tied to pre-commercial activity .
  • Capital structure watch: Exchangeable notes and royalty-linked notes remain key overhangs into early 2025; potential equity issuance upon exchange may affect float .
  • Competitive dynamics: Pivya approval and a potential GSK entrant heighten stewardship/patient selection scrutiny; Iterum’s strategy targets elevated-risk segments where penem differentiation is strongest .
  • Strategic optionality: Ongoing process to sell/license sulopenem is a parallel path; transaction outcomes could re-rate the equity independently of PDUFA .
  • Trading setup: Expect stock sensitivity to FDA interactions and any Advisory Committee developments; OpEx prints and liquidity updates are secondary but supportive until PDUFA .

Appendix: Additional Q1 2024 Press Releases and Prior Quarters’ Context

  • Q1 2024 8-K 2.02 press release: NDA resubmission, cash runway, Q1 financials .
  • March 6, 2024 Business Update: accelerated resubmission timeline, cash runway into 2025, strategic alternatives update .
  • Jan 30, 2024 REASSURE topline press release and investor presentation: efficacy and safety details, superiority vs Augmentin .
  • Prior quarters: Q4 2023 results emphasized NDA preparation and cash runway; Q3 2023 detailed trial completion and near-term topline timeline .