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Iterum Therapeutics plc (ITRM)·Q3 2024 Earnings Summary

Executive Summary

  • FDA approved ORLYNVAH (oral sulopenem) on October 25, 2024, granting 10 years of market exclusivity under the GAIN Act and listing four U.S. patents in the FDA’s Orange Book; management renewed outreach to potential partners, positioning approval as a major strategic catalyst .
  • Q3 operating expenses fell sharply year over year (R&D: $3.1M vs. $14.9M), reflecting completion of the REASSURE trial; GAAP net loss was $6.1M vs. $3.9M last year, while non-GAAP net loss improved to $4.8M vs. $15.7M, driven by lower R&D and absence of large derivative adjustments .
  • Cash, cash equivalents and short-term investments were $14.5M at September 30; including warrant exercises and ATM proceeds through November 4, management guides runway into 2025, including through the exchangeable notes repayment date (Jan 31, 2025) .
  • No formal revenue guidance; management focused on BD/partner outreach and potential commercialization pathways post-approval, with a targeted strategy emphasizing elevated-risk uUTI patients and physician education on local resistance trends .

What Went Well and What Went Wrong

What Went Well

  • FDA approval of ORLYNVAH, the first oral penem in the U.S., with 10-year exclusivity to October 25, 2034 and patents extending U.S. protection potentially into 2039: “We have received formal communication from the FDA of 5 additional years of exclusivity… market exclusivity for 10 years from the date of approval” .
  • Significant OpEx reduction as clinical spend rolled off: “R&D costs were $3.1M in Q3 2024 vs. $14.9M in Q3 2023, primarily due to higher costs incurred in 2023 to support our REASSURE trial” .
  • Strengthened cash position sequentially with financing flexibility: cash was $14.5M at Q3-end and management reiterated runway into 2025; shares outstanding increased to ~27.5M post ATM/warrants, supporting liquidity for near-term obligations .

What Went Wrong

  • GAAP net loss widened year over year to $6.1M (from $3.9M), reflecting lower favorable non-cash derivative fair value adjustments vs. prior-year quarter; interest expense also persisted with looming debt repayment .
  • Continued balance sheet pressure: exchangeable notes outstanding (~$11.1M at management commentary) due in January 2025 and a $20M regulatory milestone owed to Pfizer (deferred for two years via promissory note) .
  • No revenue contribution yet and no quantified commercial guidance; execution risk remains around partnering and launch readiness, with management actively pursuing strategic alternatives .

Financial Results

P&L – Last Three Quarters (chronological order)

MetricQ1 2024Q2 2024Q3 2024
R&D Expense ($USD Millions)$4.0 $2.075 $3.107
G&A Expense ($USD Millions)$2.186 $1.901 $1.780
Total Operating Expenses ($USD Millions)$6.163 $3.976 $4.887
Operating Loss ($USD Millions)$6.163 $3.976 $4.887
Interest Expense, Net ($USD Millions)$0.487 $0.571 $0.590
Adjustments to Fair Value of Derivatives ($USD Millions)$0.386 $0.407 $0.433
Net Loss ($USD Millions)$7.101 $4.997 $6.094
Net Loss per Share (Basic & Diluted, $)$(0.46) $(0.30) $(0.30)
Weighted Avg Shares (Millions)15.433 16.552 20.044
Non-GAAP Net Loss ($USD Millions)$5.827 $3.773 $4.837
Non-GAAP EPS (Basic & Diluted, $)$(0.38) $(0.23) $(0.24)

YoY Comparison

MetricQ3 2023Q3 2024
R&D Expense ($USD Millions)$14.852 $3.107
G&A Expense ($USD Millions)$1.833 $1.780
Total Operating Expenses ($USD Millions)$16.685 $4.887
Net Loss ($USD Millions)$3.877 $6.094
Net Loss per Share (Basic & Diluted, $)$(0.30) $(0.30)
Non-GAAP Net Loss ($USD Millions)$15.709 $4.837

Balance Sheet Snapshot

MetricDec 31, 2023Jun 30, 2024Sep 30, 2024
Cash, Cash Equivalents & Short-term Inv. ($USD Millions)$23.930 $11.717 $14.502
Total Assets ($USD Millions)$26.259 $14.174 $15.924
Exchangeable Notes ($USD Millions)$11.453 $12.952 $13.708
Royalty-Linked Notes ($USD Millions)$7.503 $8.296 $8.728
Total Liabilities ($USD Millions)$32.662 $25.087 $27.431
Shareholders’ Deficit ($USD Millions)$(6.403) $(10.913) $(11.507)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayInto 2025“Runway into 2025” (Q1/Q2) “Runway into 2025 incl. through Jan 31, 2025 notes repayment date” (post ATM/warrants) Maintained/clarified
Exchangeable NotesJan 31, 2025~$14.7M incl. accrued interest if not exchanged (Q2) ~$11.1M principal outstanding; repayment obligation if not exchanged (Q3) Updated detail
Pfizer Regulatory MilestoneUpon approvalNot applicable pre-approval$20M milestone deferred for 2 years via promissory note New disclosure
Strategic AlternativesOngoingActive outreach/process (Q1/Q2) Process renewed post-approval; adviser-led outreach Continued emphasis

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Regulatory/ApprovalResubmitted NDA; AdComm stewardship/patient population focus; PDUFA 10/25 FDA approval 10/25; 10-year GAIN exclusivity; Orange Book patents Positive inflection (approval secured)
R&D ExecutionREASSURE trial completed; strong data; SPA with FDA R&D cost decline YoY; post-approval postmarketing requirements standard (pediatrics/surveillance) Transition from development to post-approval
BD/PartneringStrategic alternatives active; prioritize transaction Outreach renewed post-approval; adviser engaged Intensifying post-approval
Commercial StrategyElevated-risk patient focus; education on local resistance; targeted launch approach Emphasis on at-risk women; competitive label; targeted distribution/patient services Consistent, more concrete post-approval
Ex-U.S. ExpansionPatent applications pending Europe/other territories EU could file with current package; local trials needed in China/Japan Opportunity, with regional requirements
Financial PositionRights offering; runway into 2025 Cash $14.5M; ATM/warrants augment runway; debt/milestone obligations detailed Stable runway, obligations highlighted

Management Commentary

  • “Our approval marks the first U.S. approval of an oral product in the penem class of drugs… Having an approved oral penem enables treatment for appropriate patients in the community” (Corey Fishman, CEO) .
  • “We have received formal communication from the FDA of 5 additional years of exclusivity under the GAIN Act… market exclusivity for 10 years… Our U.S. patent portfolio provides protection… into 2039” (CEO) .
  • “Total operating expenses were $4.9M in the third quarter… R&D costs were $3.1M… primarily due to higher costs incurred in 2023 to support our REASSURE trial” (CFO) .
  • “Including warrant exercises and amounts raised under our ATM subsequent to quarter end, we expect to be able to fund operations into 2025, including through the repayment date of the exchangeable notes on January 31, 2025” (CFO) .
  • “We’ve renewed our process… outreach to companies in an effort to achieve a strategic transaction” (CEO) .

Q&A Highlights

  • Exclusivity and IP coverage: 10-year market exclusivity to 2034; patents protect into 2039; EU patents not yet granted, some coverage in Japan/Australia .
  • Label quality and restrictions: management “very pleased” with label suitability for at-risk patients; no unusual post-marketing requirements beyond standard pediatric and surveillance studies .
  • BD strategy: adviser-led renewed outreach post-approval; monitoring counterparties for strategic transaction .
  • Ex-U.S. path: EU filing feasible with current package; local studies likely required in China and Japan .
  • Indication expansion: potential interest in cUTI as step-down oral therapy could be attractive to partners; would require one additional study for formal approval .

Estimates Context

  • Attempts to retrieve S&P Global Wall Street consensus for Q3 2024 EPS and revenue were unsuccessful due to SPGI daily request limits; as such, estimates are unavailable for this recap, and no beat/miss assessment vs. consensus can be provided at this time [GetEstimates error].

Key Takeaways for Investors

  • FDA approval of ORLYNVAH with 10-year exclusivity is a transformational asset-level catalyst; expect heightened BD/partnering activity as management renews outreach .
  • Operating model is transitioning post-approval; R&D expenses have normalized lower with REASSURE completion, supporting improved non-GAAP loss trajectory despite GAAP noise from derivatives/interest .
  • Liquidity adequate into 2025 with ATM/warrant proceeds, but near-term cash uses include exchangeable notes due Jan 31, 2025 and a deferred $20M milestone to Pfizer—monitor capital strategy and potential deal timing closely .
  • Commercial narrative targets elevated-risk uUTI patients with unmet need due to resistance and safety issues; a focused launch or partner-led commercialization could drive early adoption if pricing/access align with the value proposition .
  • Ex-U.S. optionality exists (EU with current package); China/Japan need local trials—global partnering could unlock incremental value over time .
  • Potential indication expansion (cUTI step-down oral) may enhance medium-term asset value depending on partner appetite and clinical design .
  • Near-term trading impulses likely tied to partnering headlines, financing clarity, and early commercialization updates; medium-term thesis hinges on execution in targeted segments and payer access post-approval .
Sources: Company 8-K press releases and transcripts.  
Q3 2024 8-K and press release: **[1659323_0000950170-24-126734_itrm-20241114.htm:1]** **[1659323_0000950170-24-126734_itrm-ex99_1.htm:0]** **[1659323_0000950170-24-126734_itrm-ex99_1.htm:4]**.  
Q3 2024 earnings call (Nov 14): **[1659323_ITRM_3408703_0]** **[1659323_ITRM_3408703_1]** **[1659323_ITRM_3408703_3]** **[1659323_ITRM_3408703_4]** **[1659323_ITRM_3408703_6]** **[1659323_ITRM_3408703_7]** **[1659323_ITRM_3408703_8]** **[1659323_ITRM_3408703_9]**.  
FDA approval press releases (Oct 25, Oct 28): **[1659323_fc3c7a099ad84326af2fe65ea47d47ea_0]** **[1659323_fc3c7a099ad84326af2fe65ea47d47ea_1]** **[1659323_20241028SF41031:0]**.  
Prior quarters Q2 and Q1 2024 8-Ks and calls: **[1659323_0000950170-24-096649_itrm-ex99_1.htm:0]** **[1659323_0000950170-24-096649_itrm-ex99_1.htm:5]** **[1659323_ITRM_3398779_1]** **[1659323_ITRM_3398779_3]**; **[1659323_0000950170-24-058190_itrm-ex99_1.htm:0]** **[1659323_0000950170-24-058190_itrm-ex99_1.htm:4]** **[1659323_ITRM_3388693_1]** **[1659323_ITRM_3388693_2]**.