Acurx Pharmaceuticals Inc. (NASDAQ: ACXP) Update

May 21, 2024

We have completed an update report for Acurx following the release of the March quarterly report on 14 May 2024 and the business update provided on 15 May 2024. The key takeaways from the report are:

  • Phase 3 Clinical Trial Protocol Finalized with FDA: In April, the Company met with the FDA for an end of Phase 2 meeting. At the meeting, the Company and the FDA reached an agreement on the protocol for the Phase 3 clinical trial for ibezapolstat in the treatment of CDI and the regulatory pathway for a new drug application (NDA) filing for marketing approval in the US. The agreed upon trial design is largely the same as anticipated, with the Company to run an international trial comprising two arms to be completed sequentially. The trials are required to comprise 450 patients each for a total of 900 patients. The primary endpoint for the trial will be non-inferior CC to vancomycin with secondary endpoints including non-inferior SCC and reduced recurrence rates. The ability to show non-inferior CC and reduced recurrence on the larger patient population will set ibezapolstat up to become a first-line therapy for the treatment of CDI, with the expectation that it would replace the current standard of care.
  • Non-Inferior ECC and Positive Impact on Microbiome Reduces Recurrence: In January 2024, the Company released the Extended Clinical Cure (ECC) data for the Phase 2b trial and the head to head microbiome results with vancomycin. The results were positive for ibezapolstat with non-inferior ECC when compared to vancomycin and ibezapolstat, but not vancomycin, consistently preserved and allowed for regrowth of gut bacterial species. The microbiology and microbiome results validate the novel target and mechanism of action for ibezapolstat. The clinical trials to date have shown that inhibiting Pol IIIC and the selective effects on the gut microbiome has resulted in ibezapolstat being bactericidal while promoting restoration of the microbiome resulting in reduced recurrence rates. The results provide a level of confidence heading into the Phase 3 trial.
  • Groundwork Laid for Approval in Europe: During the March quarter, the Company was granted Small and Medium-sized Enterprise (SME) status by the European Medicine Agency (EMA). This is an important milestone with regards to laying the groundwork for gaining marketing approval in Europe. The designation allows the Company to benefit from fee incentives and other support from the EMA for the approval and commercialization of ibezapolstat in Europe.
  • Acurx Actively Seeking Strategic Partner: While there is no official news on the partnership front, now the Phase 3 protocol is finalized and the FDA has provided the regulatory pathway for ibezapolstat, the Company is actively pursuing strategic partnership opportunities to assist with funding for the Phase 3 trial and the commercialization and marketing of the drug. The Company will be attending a number of conferences in the coming months which the Company hopes will provide the opportunity to find a suitable partner for the development of Ibezapolstat. Given the dataset and the finalization of the Phase 3 protocol we believe the Company is well placed to secure a partner.
  • Capital Position: The Company had $8.9 million cash on hand as at 31 March 2024. This is up from $7.5 million as at 31 December 2023. The cash position was boosted from the sale of 1.22 million shares under the ATM program, raising ~$4.4 million before costs. As at 31 March 2024, the Company had issued 1.82 million shares under the ATM program, raising $7.1 million before costs ($6.7 million net of costs). There is approximately $9.9 million remaining under the agreement. The cost of the Phase 3 clinical trials is still being finalized, however with the cost expected to be in the range of $50 million to $60 million, the Company will have to raise additional capital or secure a partnership to complete the clinical program.
  • Valuation: We have reduced our price target for Acurx from $12.35 per share to $10.64 per share ($7.40 per share on a fully diluted basis and $8.13 per share using the treasury stock method). The reduction in the price target is due to the increased number of shares on issue after the issue of new shares under the ATM program in the March quarter and the increased costs associated with the Phase 3 trial due to the larger than expected patient population required by the FDA. Despite the reduction in the price target, IIR continues to view there to be material upside for Acurx with our price target representing a 373% premium to the share price as at 17 May 2024. The finalisation of the Phase 3 protocol was a significant milestone achieved by the Company with commencement of the first of the two Phase 3 trials expected in 4Q’2024 set to be the next major milestone for the Company. Ibezapolstat has shown strong Clinical Cure (CC), Sustained Clinical Care (SCC) and Extended Clinical Cure (ECC) for the treatment of CDI. Results from the Phase 2 trial show ibezapolstat to be noninferior to vancomycin with ibezapolstat having a more favourable impact than vancomycin on the microbiome, which is believed to a key reason for reduced recurrence rates. IIR views ibezapolstat to be an attractive target for big pharma with the drug candidate providing a novel target to extend the pipeline of antibiotics for companies and if the Phase 3 trial validates the reduction in recurrence rates the Company may prove to be an attractive target for those who have invested in drugs focused solely on rCDI, a market which may be impacted if ibezapolstat is approved.

For a copy of the full report click here.