Acurx Pharmaceuticals, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. The interim financial statements are unaudited. Acurx is a clinical-stage biotechnology company developing antibiotics, including ibezapolstat for C. difficile infection (CDI); it has no approved products and has generated no revenue.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 / prior period |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $1.016 million | $0.819 million |
| General and administrative expense | $1.887 million | $1.851 million |
| Total operating expenses / net loss | $2.903 million | $2.670 million |
| Basic and diluted loss per share | $0.25 | $0.26 |
| Net cash used in operations | $1.933 million | $1.876 million |
- Cash was $7.179 million at March 31, 2023, down from $9.112 million at December 31, 2022. Working capital was approximately $5.3 million.
- Total liabilities were $2.074 million, all current accounts payable and accrued expenses. The filing reports no debt.
- No operating margin is meaningful because the company had no revenue. Net loss increased about 9% year over year, principally as R&D costs rose 24% amid Phase 2b trial and consulting expenses.
- Noncash share-based compensation and vendor payments totaled approximately $0.9 million in the quarter. No financing cash flows were reported in Q1 2023.
Business developments, outlook, and risks
- The Phase 2b ibezapolstat trial was designed for 64 patients. Acurx reported 26 enrolled and said an FDA-accepted protocol amendment allows an independent data monitoring committee (IDMC) to review interim data after 36 patients are enrolled. The IDMC will recommend whether to stop early or continue enrollment; the company said it intends to report available data promptly after review.
- The company expanded trial sites and launched a referring-physician enrollment program. It cited enrollment challenges, including disruption associated with COVID-19.
- Management stated that existing cash was not expected to fund anticipated requirements for at least 12 months from issuance of the financial statements. The company plans to seek additional equity financing and grant funding, but availability and terms are uncertain. The filing states that these conditions raise substantial doubt about the company’s ability to continue as a going concern; the statements include no related adjustments.
- No formal financial guidance or specific cash-runway date is provided. Management expects continuing losses and increased R&D and administrative spending; profitability and positive cash flows are uncertain.
- Key risks include clinical-trial enrollment and outcomes, regulatory approval, financing and potential dilution, dependence on third-party manufacturers and service providers, and competition. One vendor accounted for approximately 60% of Q1 R&D expenditures and 82% of accounts payable and accrued expenses at quarter-end.
- Potential future obligations include up to $700,000 in aggregate development milestone payments under the ibezapolstat asset agreement, subject to milestones, and royalties of 4% of net sales if a product is commercialized. No additional milestone was reached by March 31, 2023.
- There were 11,671,795 common shares outstanding at March 31, 2023 and 4,217,809 warrants outstanding. The filing says disclosure controls were effective at a reasonable assurance level and reports no material change in internal control during the quarter.
Most important facts to verify
- Whether the company obtains financing sufficient to continue operations and the resulting terms and dilution.
- Enrollment progress, IDMC timing and recommendation, and complete Phase 2b efficacy and safety results.
- Whether trial timelines, costs, or clinical-site activity change, and whether the concentrated vendor relationship remains dependable.
- Potential share dilution from outstanding warrants and equity awards, and the conditions and timing of any milestone or royalty obligations.