Greetings and welcome to the Acurx Pharmaceuticals Reports Fourth Quarter and Full Year 2023 Earnings Results and Business Update Call. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Robert Shawah, Chief Financial Officer for Acurx Pharmaceuticals. Thank you. You may begin.

Thank you, Melissa. Good morning, and welcome to our call. This morning we issued a press release providing financial results and company highlights for the fourth quarter and full year 2023, which is available on our website at acurxpharma.com. Joining me today is David Luci, President and CEO of Acurx; as well as Robert DeLuccia, Executive Chairman. David will give a corporate update and outlook. After that, I'll provide some highlights of the financials from the quarter and year end of December 31, 2023, and then turn the call back over to Dave for his closing remarks. As a reminder, during today's call, we'll be making certain forward-looking statements. These forward-looking statements are based on current information assumptions, estimates and projections about future events that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in forward-looking statements. Investors should consider these risks and other information described in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K, which we filed on Friday, March 15, 2024. You are cautioned not to place undue reliance on these forward-looking statements and Acurx disclaims any obligations to update such statements at any time in the future. This conference call contains time sensitive information that's accurate only as of the date of this live broadcast today, March 18, 2024. I'll now turn the call over to Dave Luci. Dave?

Thanks Rob. Good morning, everyone, and thanks for joining us to review our financial results for the fourth quarter of 2023 and also to hear some very exciting recent updates. Then we'd be pleased to take any questions. First, I'll summarize some of our key activities for the fourth quarter of ‘23 or in some cases shortly thereafter. On October 2, 2023, we ended enrollment in our Phase IIb clinical trial of ibezapolstat or IBEZ, our lead antibiotic candidate for the treatment of patients with C. difficile infection or CDI. On November 2, 2023, we reported top line data from the Phase IIb clinical trial including overall results from the full Phase II study, demonstrating and ibezapolstat clinical cure rate at end 10 days oral treatment or EOT of 96%, 25 of 26 patients, which included 100% cure in Phase IIa and 94% cure in Phase IIb compared with vancomycin control arm the standard of which was 14 for 14 or a 100% at end of treatment and 94% was sustained cures. No safety concerns were reported in either arm of the Phase IIb clinical trial and ibezapolstat was well tolerated in all patients in both the Phase IIa open-label trial and the Phase IIb vancomycin control segment. In consultation with our scientific advisors, the company determined that based on review of aggregate blinded data, the Phase IIb vancomycin control trial segment was terminated early due to success showing high observed clinical cure rates with no emerging safety concerns, clinical comparability was established. We also stated at that further data would be provided as it becomes available on secondary and exploratory endpoints for the Phase IIb trial segment, including sustained clinical cure data at 30 days after EOT and extended clinical cure data 94 days after EOT as well as…

Thanks, Dave. Our financial results for the fourth quarter and 12 months ended December 31, 2023, were included in our press release issued earlier this morning. The company ended the year with cash totaling $7.5 million compared to $9.1 million as of December 31, 2022. Subsequent to year-end, the company sold an additional 1,121,793 shares under its ATM financing program with gross proceeds of approximately $4.5 million. Research and development expenses for the three months ended December 31, 2023, were $1.9 million compared to $1.4 million for the three months ended December 31, 2022. The increase was due to timing of Phase IIb trial related costs and an increase in consulting costs. For the year ended December 31, 2023, research and development expenses were $6 million, which is $4.8 million for the year ended December 31, 2022. The increase to due primarily the Phase IIb costs and an increase in consulting costs. General and administrative expenses for three months ended December 31, 2023 were $3.2 million compared to $1.8 million, where the three months ended December 31, 2022. The increase was due primarily to $800,000 increase in professional fees, a $0.1 million increase in share based compensation and a $0.3 million increase in employee compensation costs. For the year ended December 31, 2023, general and administrative expenses were $8.5 million versus $7.3 million for the year ended December 31, 2022. The amounts reflect an increase in professional fees of $0.5 million, an increase of $0.3 million in share based compensation and an increase of $0.3 million in employee compensation costs. The company reported a net loss of $5.1 million or $0.37 per diluted share for a three months ended December 31, 2023, compared to an net loss of $3.3 million or $0.28 per diluted share for the three months ended December 31, 2022, and the net loss of $14.6 million or $1.15 per share for the year ended December 31, 2023 compared to a net loss of $12.1 million or $1.12 per diluted share for the year ended December 31, 2022, the reasons previously mentioned. The company had 14,468,229 shares outstanding as of December 31, 2023. With that, I'll turn the call back over to Dave.

Thanks Rob, and to all of you for joining us today. I'll now ask Bob DeLuccia our Executive Chairman to provide his perspective given Bob manages our R&D program and when Bob is finished, operator, please open the call for questions. Bob?

Thanks Dave and Rob for updating our stakeholders and thanks to all for the continuing support as we advance ibezapolstat into Phase III clinical trials. It is a very exciting time and really it's the final step to commercialize ibezapolstat for patients in need of a promising new antibiotic with a novel bactericidal mechanism of action to treat CDI, and many of you will remember that approximately 30,000 people die each year in the U.S. alone from CDI and the annual incidence is more than about 500,000 per year in the United States. But the bottom line here is that if the outcome of our Phase III trials are consistent with our Phase II experience, we'll have an approvable new drug in our hands. The data are solid, the market is large and our manufacturing cost is low. We do have a robust preclinical -- clinical microbiome safety and CMC evidence package that we've submitted to the FDA and as Dave mentioned, they've determined it acceptable to grant us an end of Phase II meeting next month to discuss trial design, patient enrollment targets and to confirm our readiness to go forward. So to complete our Phase II international Phase III trials, which will be done sequentially as Dave mentioned and as quickly as possible, we've already initiated steps to advance screen potential clinical trial sites, which in addition to North America will cover sites in about 17 other countries, including several in Eastern Central, Northern and Western Europe, totaling about 100 sites, which we believe will accelerate overall enrollment. We'll also be including several high enrolling trial sites from the fast enrolling Summit Phase III CDI trial, which was conducted during the height of COVID-19. In addition to global scope of the program compared to Phase II and the…

Thank you, Bob. Melissa, we're now ready to go to Q&A.

[Operator Instructions] First question is from the line of Jason McCarthy with Maxim Group.

This is Michael Okunewithch for Jason. I guess to start off, I'd like to see if you could give an idea of what sort of time line you are expecting between getting those meeting minutes back from the FDA and actually launching the first of those Phase III studies?

So we think that we will be ready to enroll the first patient in for the international Phase III in the fourth quarter of this year.

And then, I guess, regarding the international component to the study, could you talk a little bit more about the path to actually getting those sites online? And is this something that you would look to have in place ahead of the launch? Or would you start with what do you have when you usually enroll the study like you are in these international sites as they were approved?

We will be a little bit on both. We have a number of the sites already kind of ready to go from the international list. There won't be any hold up from the international aspect of it. We actually have a consultant who is extremely familiar with Phase III C. diff international trials who's been guiding us in this regard. But yes, clearly, when our manufactured product is ready, we'll be ready to go with a large wedge at the very least of the hundred sites.

And then one last one from me, and I'll hop back in the queue. With regards to securing international partnerships, do you think this is something with your existing body of data that is compelling enough that you could really progress those conversations now and get a partner or would you expect it to be more after you get that first slot of Phase III data?

No, I would expect that the prime time for us to find, I'd say a European partner or a Japanese partner would be -- when we start enrolling the first of the two Phase III trials, once we have the Phase III trial mandate completed and we're ready to find or to file a new drug application, if we haven't had a partnership by then, I think it would probably not occur until a year after the market introduction, because folks will want to see how well we do. I think that the time is right now. I'll make one additional comment on the territorial partnerships to carry Michael's question response a little bit further. As we look at strategic alternatives, there's M&A full stop and there's territorial licensing and co-development agreements that I have entered into in the past. With our share price being where it is, the territorial licensing is a bit easier to consummate because it's all about the intrinsic value of your drug as opposed to M&A, which you can't in my view, wholly divorce yourself of your NASDAQ share price. So it may be a more attractive option for our board of directors and but we'll see what term sheets present themselves.

Our next question comes from the line of James Molloy with Alliance Global Partners.

The Phase III trials, I know that obviously a lot to go here, but can you walk through expectation which we should expect to see coming out of the end of Phase II? And then the trial designed to sort of the length of time to run is about two years start to finish. So Phase IIb, I know we we're dealing with COVID then as well. Is that seem reasonable to run these two Phase IIIs from start to finish?

So we're going to address one Phase III and then the idea would be to either do a strategic transaction after that first Phase III or with positive data on the first Phase III, if it's the same or consistent with our Phase II, get a share price rise and then raise capital for the second Phase III. So we're targeting a year and a half from start to finish for the first Phase III, and that would have us completing the first Phase III in the second quarter of ‘26. Now I can tell you that we spent a lot of time looking at the Summit Therapeutics experience and Summit enrolled in the teeth of COVID, 750 or so patients in about two years time largely in Eastern Europe, where the behavior patterns weren't dramatically changed apparently, like they were here in the U.S. So, that's a public list on clinicaltrial.gov. So we were able to see exactly the heat patterns from their enrollment. So that's gone a long way to helping us get comfortable with fixing the enrollment issues we had during COVID with our U.S. only trial.

I thought I'd heard you say earlier in the call that you're going to run the two trials at the same time obviously misheard that, you’re running back to back.

No. Our going in plan is to do them consecutively instead of concurrently for the financial reasons that we discussed. But if we get a partnership, say a European licensing agreement and that brings in and enough money to call an audible along the way and at that point then we would certainly start the second Phase III accordingly.

[Operator Instructions] Our next question comes from the line of Ed Arce with H.C. Wainwright.

So a couple from me, firstly on the end of Phase II next month and I apologize I joined late, so maybe you went over this already, but wanted to make sure to review sort of the key objectives in particular what do you not have agreement with the agency yet on that you would seek to get agreement on next month in that meeting? And then secondly, I think you made mention of a wider inclusion exclusion criteria for the Phase III relative to the prior Phase II. And so just wanted to get a little more clarity on that in particular that a view to concerns there might be around the risk that you could change the sort of design of the trial and there could be some disruption from a slightly different patient population.

Thank you, Ed. I'll answer the first part of your question and ask Bob to provide a response for the inclusion and exclusion criteria part of your question. So for the first part of your question, what we hope to agree on with the FDA is the overall protocol designed for our Phase III trial, including the number of patients to be enrolled the notion that we're going to have a vancomycin control arm like we had in our Phase IIb. Largely, the trial design is 90% plus of what the trail design was for our Phase IIb. So we don't expect a real lot of drama, but it's a necessary step in order to kind of be allow to into Phase III, so we’re looking forward to our valuation point that we have to get through. Bob, did you want to add some comment on the inclusion and exclusion criteria?

I think really two things, which is standard fair for going forward in Phase III is that we'll have additional patients beyond mild and moderate that are included in the trial. So this is not severe CDI, but a little bit more than moderate according to the IDSA criteria for patient entry into a trial in the study. So we've already submitted a framework to the FDA in the meeting package. It's very straightforward. I'd even say a higher percentage that they've said at 90%. We're pretty much there with the design. It's the same design basically, it's Phase II and very standard according to the FDA guidance from October 2022, I believe it is, as to what needs to be included in the Phase III clinical trials. So we'll be discussing final numbers of patients, as I said before and statistical analysis plan will be finalized at that upcoming FDA meeting as well. Anything else? Does that answer your question?

Yes, that's helpful.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. And this concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.