Acurx Pharmaceuticals, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023; financial statements are unaudited. Acurx is a clinical-stage biopharmaceutical company developing antibiotics, led by ibezapolstat for C. difficile infection (CDI). It has not generated revenue.
Financial results and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development | $1.35 million | $1.59 million | $4.10 million | $3.32 million |
| General and administrative | $1.77 million | $1.95 million | $5.36 million | $5.51 million |
| Total operating expenses and net loss | $3.11 million | $3.54 million | $9.46 million | $8.83 million |
| Basic and diluted loss per share | $0.24 | $0.32 | $0.77 | $0.84 |
- Q3 operating expenses and net loss decreased 12% year over year, mainly due to lower R&D trial costs and professional fees. Nine-month expenses rose 7% and net loss widened, mainly because of Phase 2b trial and consulting costs.
- Cash was $7.05 million at September 30, down from $9.11 million at December 31, 2022. Working capital was $3.9 million; current liabilities were $3.22 million, primarily accrued R&D costs. The company reported no debt.
- For the first nine months, operating cash use was $5.60 million, compared with $6.05 million in 2022. Financing provided $3.54 million, principally net proceeds from the May 2023 offering; cash decreased by $2.06 million.
- Management stated existing resources would not be sufficient to fund anticipated requirements for at least 12 months after issuance of these financial statements. It plans to seek equity financing and grants, with no assurance of availability on acceptable terms. The filing identifies substantial doubt about the company’s ability to continue as a going concern. No margins are reported; with no revenue, operating margins are not meaningful.
Material developments and changes
- Clinical program: On October 2, 2023, after quarter-end, Acurx discontinued the Phase 2b ibezapolstat trial early, citing slow enrollment, site costs, and review of aggregate blinded data—not a safety concern. The company reported high clinical-cure rates in both treatment groups and said the independent monitoring committee supported the decision.
- On November 2, 2023, Acurx announced top-line Phase 2 results: clinical cure in 25 of 26 ibezapolstat patients across Phase 2a and Phase 2b (96% pooled), and 14 of 14 patients in the Phase 2b vancomycin control arm. The reported ibezapolstat populations differ by trial (Phase 2a modified intent-to-treat; Phase 2b per protocol). The company said further analyses, including sustained cure, extended cure and microbiome endpoints, were forthcoming.
- Management said it is preparing for an FDA End-of-Phase 2 meeting and intends to advance to Phase 3. Its stated confidence in demonstrating non-inferiority is a forward-looking expectation, not a reported Phase 3 result or regulatory determination.
- The May 2023 offering generated approximately $4.0 million gross and $3.5 million net. At September 30, 13.0 million common shares were outstanding and 6.88 million warrants remained outstanding. Warrants amended in connection with the offering resulted in an estimated $2.0 million increase in fair value recorded in equity and as a non-cash offering cost.
- By November 13, 2023, common shares outstanding had increased to 13.77 million. The filing says warrant exercises, including issuance of 682,769 shares, generated approximately $2.2 million in proceeds after quarter-end.
Risks, contingencies and other disclosures
- The business is dependent on additional financing and successful development of ibezapolstat; it may never achieve approval, commercialization or profitability. Clinical results are preliminary and small in number, and later trials may differ.
- A single vendor represented 66% of nine-month R&D expenditures and 82% of accounts payable and accrued expenses at September 30. The company expects significant spending with this vendor over the next 12 months.
- Cash was held at one financial institution and was not fully insured by the FDIC. The company also relies on third parties for clinical work and manufacturing; its principal drug-substance and drug-product supplier is in India, and it reported no long-term supply agreements.
- Potential contingent obligations include up to $700,000 in development milestones under the ibezapolstat asset purchase agreement, including $50,000 already paid, and royalties of 4% of net sales subject to the agreement. No additional milestone was reached in the nine-month periods presented.
- Management reported disclosure controls and procedures were effective at a reasonable assurance level and no material change in internal control over financial reporting during the quarter. The company reported no material pending legal proceedings.
Important facts for investors to verify
- Cash runway, planned financing needs and whether new capital can be secured before resources are exhausted.
- Full, final Phase 2 data, including sustained and extended clinical cure, safety, and microbiome results; the FDA’s feedback on the Phase 3 design and non-inferiority approach.
- Phase 3 start timing, enrollment assumptions, trial costs and funding sources, particularly following early discontinuation of Phase 2b.
- Potential dilution from outstanding warrants and options, including subsequent warrant exercises and the terms and timing of remaining warrants.
- Continuity and cost of the concentrated vendor and manufacturing relationships, along with the status of any backup supply arrangements.