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Item 1. Business

2024-03-15 compared with 2023-03-15 · 232 added, 119 removed, 607 unchanged (37% of the section changed)

We are a clinical stage biopharmaceutical company developing a new class of antibiotics for infections caused by bacteria listed as priority pathogens by the World Health Organization (“WHO”), the U.S.

Centers for Disease Control and Prevention (“CDC”) and the U.S.

Acurx Pharmaceuticals is a late-stage biopharmaceutical company focused on developing a new class of small molecule antibiotics for difficult-to-treat bacterial infections.

Our approach is to develop antibiotic candidates with a Gram-positive selective spectrum (“GPSS®”) that block the active site of the Gram positive specific bacterial enzyme deoxyribonucleic acid (“DNA”) polymerase IIIC ("pol IIIC”), inhibiting DNA replication and leading to Gram-positive bacterial cell death.

Our research and development (“R&D”) pipeline includes antibiotic product candidates that target Gram-positive bacteria, including Clostridioides difficile (“C.

difficile”), methicillin-resistant Staphylococcus aureus (“MRSA”), vancomycin resistant Enterococcus (“VRE”) and drug-resistant Streptococcus pneumoniae (“DRSP”).

These bacterial targets are listed as priority pathogens by the World Health Organization (“WHO”), the United States (“U.S.”) Centers for Disease Control and Prevention (“CDC”) and the U.S.

Food and Drug Administration (“FDA”).

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The CDC estimates that, in the U.S., antibiotic-resistant pathogens infect one individual every 11 seconds and result in one death every 15 minutes.

The WHO recently stated that growing antimicrobial resistance is equally as dangerous as the ongoing COVID-19 pandemic, threatens to unwind a century of medical progress and may leave us defenseless against infections that today can be treated easily.

The WHO recently stated that growing antimicrobial resistance is equally as dangerous as the recent COVID-19 pandemic, threatens to unwind a century of medical progress and may leave us defenseless against infections that today can be treated easily.

According to the WHO, the current clinical development pipeline remains insufficient to tackle the challenge of the increasing emergence and spread of antimicrobial resistance.

Our approach is to develop a new class of antibiotic candidates that block the DNA polymerase IIIC enzyme (“Pol IIIC”).

We believe we are developing the first Pol IIIC inhibitor to enter clinical trials and have clinically validated the efficacy of our lead Pol IIIC antibiotic candidate in a Phase 2a clinical trial.

We believe we are developing the first DNA pol IIIC inhibitor to enter Phase 3 clinical trials and have clinically validated the efficacy of our lead pol IIIC antibiotic candidate in a Phase 2 clinical trial.

Pol IIIC is the primary catalyst for DNA replication of several Gram-positive bacterial cells.

Our research and development pipeline includes clinical stage and early stage antibiotic candidates that target Gram-positive bacteria for oral and/or parenteral treatment of infections caused by Clostridium difficile (“C.

difficile”), Enterococcus (including vancomycin-resistant strains (“VRE”)), Staphylococcus (including methicillin-resistant strains (“MRSA”)), and Streptococcus (including antibiotic resistant strains).

Our research and development pipeline includes clinical stage and early-stage antibiotic candidates that target Gram-positive bacteria for oral and/or parenteral treatment of infections caused by C.

difficile , Enterococcus (including VRE), Staphylococcus (including MRSA), and Streptococcus (including antibiotic resistant strains).

Pol IIIC is required for the replication of DNA in certain Gram-positive bacterial species.

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difficile , MRSA, vancomycin-resistant Enterococcus, penicillin-resistant Streptococcus pneumonia (“PRSP”) and other resistant bacteria.

We intend to “de-risk” this new class of antibiotics through our drug development activities and potentially partner with a fully-integrated pharmaceutical company for late-stage clinical trials and commercialization.

We have now “de-risked” this new class of antibiotics through our drug development activities as we advance to Phase 3 clinical trials by demonstrating proof of principal in Phase 2 human efficacy studies that demonstrate comparable efficacy to the standard of care with no drug related side effects and a positive impact on the microbiome of patients with C.

difficile infections.

We expect to partner with a fully-integrated pharmaceutical company for late-stage clinical trials and commercialization or conduct Phase 3 clinical trials prior to such partnership and continue to review partnership opportunities on an ongoing basis up to FDA approval.

Our lead antibiotic candidate, ibezapolstat (formerly named ACX-362E), has a novel mechanism of action that targets the pol IIIC enzyme, a previously unexploited scientific target.

Phase 2a clinical data validate the efficacy of our lead antibiotic candidate as well as Pol IIIC as an appropriate bacterial target.

On December 3, 2021, we commenced enrollment in a Phase 2b 64-patient, randomized (1-to1), non-inferiority, double-blind trial of oral ibezapolstat compared to oral vancomycin, a standard of care to treat C.

difficile infections (“CDI”).

Prior to that, we completed our Phase 2a clinical trial of ibezapolstat to treat patients with CDI and reported the top-line data in November 2020.

The Phase 2a clinical trial was terminated early based upon the recommendation of our Scientific Advisory Board (the “SAB”).

The SAB reviewed the study data presented by management, including adverse events and efficacy outcomes, and discussed its clinical impressions.

The SAB unanimously supported the early termination of the Phase 2a trial after 10 patients were enrolled in the trial instead of 20 patients as originally planned.

The early termination was further based on the evidence of meeting the treatment goals of eliminating the infection with an acceptable adverse event profile.

The SAB noted that 10 out of 10 patients enrolled in the Phase 2a trial reached the Clinical Cure endpoint, defined in the study protocol as the resolution of diarrhea in the 24-hour period immediately before the end-of-treatment that is maintained for 48 hours after end of treatment.

Such cure was sustained, meaning that the patients showed no sign of infection recurrence, for 30 days thereafter.

This constitutes a 100% response rate for the primary and secondary endpoints of the trial.

All 10 patients enrolled in the Phase 2a trial met the study’s primary and secondary efficacy endpoints, namely, Clinical Cure at end of treatment and Sustained Clinical Cure of no recurrence of CDI at the 28-day

follow-up visit.

No treatment-related serious adverse events (“SAEs”) were reported by the investigators who enrolled patients in the trial.

We believe these results represent the first-ever clinical data showing Pol IIIC has potential as a therapeutically-relevant antibacterial target.

Our Phase 2b clinical trial commenced enrollment on December 3, 2021.

The SAB is comprised of seven scientists and clinicians who have significant expertise in the scientific disciplines required for the research and development of antibiotics.

The members of the SAB serve at the pleasure of management, are paid in cash on an hourly basis for their services and do not receive equity compensation.

Generally, the SAB is consulted by management during the process of designing our preclinical and clinical trials as well as in the process of analyzing data generated from these trials, although the SAB’s services are not limited to such activities.

Currently available antibiotics used to treat CDI infections utilize other mechanisms of action.

Phase 2 clinical data validate the efficacy of our lead antibiotic candidate as well as pol IIIC as an appropriate bacterial target.

Currently available antibiotics used to treat C.

difficile infection (“CDI”) infections utilize other mechanisms of action.

We believe ibezapolstat is the first antibiotic candidate to work by blocking the DNA pol IIIC enzyme in C.

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This pipeline includes ACX-375C, a potential oral and parenteral treatment targeting Gram-positive bacteria, including MRSA, VRE and PRSP.

We continue to evaluate a strategic transaction for the Company, including a partner for the further development and potential commercialization of our lead antibiotic candidate, ibezapolstat, as well as a potential sale, merger, third-party licensing arrangement or other strategic transaction.

At this time we have no commitments from potential partners or others to provide the company with capital.

Our Technology

The results of our Phase 2a clinical trial also represent the first-ever clinical validation of DNA polymerase IIIC as a therapeutically relevant antibacterial target.

Ibezapolstat was very well tolerated with no treatment-related SAEs noted in the Phase 2a trial.

The results of our Phase 2 (2a and 2b) clinical trials also represent the first-ever clinical validation of DNA pol IIIC as a therapeutically relevant antibacterial target.

Ibezapolstat was very well tolerated with no treatment-related SAEs noted in the Phase 2 trials.

Additionally, data obtained to date demonstrate that ibezapolstat enhances actinobacteria in the microbiome and suppresses regrowth of proteobacteria;

potentially lessening the likelihood of CDI recurrence or new infection by MDR Gram-negative bacteria.

Additionally, the unexpected finding from further analysis of the Phase 2a study is that the beneficial Firmicutes were shown to regrow while patients were receiving ibezapolstat therapy.

Several follow-up experiments have demonstrated that many of these beneficial Firmicutes have heterogeneous susceptibility to ibezapolstat allowing them to continue to perform their beneficial biologic functions even while a patient is receiving ibezapolstat for their C.

difficile infection.

potentially lessening the likelihood of CDI recurrence or new infection by Multi-Drug Resistant Gram-negative bacteria.

Additionally, the unexpected finding from further analysis of the Phase 2 study is that the beneficial Firmicutes were shown to be preserved and/or regrow while patients were receiving ibezapolstat therapy.

(Garey, Oral Presentation, IDSA, IDWeek 2022 Conference, Oct 19-23, 2022).

These data were confirmed by the comparative microbiome data generated in the Phase 2b clinical trial and presented in a scientific poster on January 18, 2024 at the Gulf Coast Consortia Antimicrobial Resistance (AMR) Conference in Houston, Texas by Kevin Garey, PharmD, MS, Professor and Chair, University of Houston College of Pharmacy, the Principal Investigator for microbiology and microbiome aspects of the ibezapolstat clinical trial program.

Prior to conducting the Phase 2a clinical trial, we successfully completed a Phase 1 clinical trial of ibezapolstat for the oral treatment of CDI (the “Phase 1 Trial”).

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In addition, the laboratory of Dr.

Kevin Garey at the University of Houston performed state-

of-the-art microbiomic testing of gastrointestinal flora in trial subjects as compared with vancomycin, the standard of care for the treatment of patients with CDI, which testing was the first of its kind in Phase 1 clinical trials for CDI.

Kevin Garey at the University of Houston performed state-of-the-art microbiomic testing of gastrointestinal flora in trial subjects as compared with vancomycin, the standard of care for the treatment of patients with CDI, which testing was the first of its kind in Phase 1 clinical trials for CDI.

Data from the case report forms completed by the principal investigators of the Phase I trial showed that single and multiple ascending doses of ibezapolstat demonstrated a safety signal similar to placebo according to the principal investigators as evidenced by the case report forms.

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Free concentrations of ibezapolstat were found to be high enough to kill C.

difficile but too low to kill healthy bacteria like Bacteroides & Firmicutes which constitute approximately 90% of healthy microbiome in the judgment of our scientific advisors.

difficile but too low to kill healthy bacteria like Bacteroides &

Firmicutes which constitute approximately 90% of healthy microbiome in the judgment of our scientific advisors.

Upon review of the final Phase 1 Trial data, our medical and scientific advisors suggested these data supported advancing ibezapolstat into a Phase 2 clinical trial at doses up to 450 mg, twice daily, for 10 days of treatment, as described above.

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difficile by acting specifically on pol IIIC.

We have worked closely with the FDA to obtain our investigational new drug application (“IND”), and to obtain FDA fast track designation as well as designation of ibezapolstat as a qualified infectious disease product (“QIDP”), which provides incentives through the Generating Antibiotic Incentives Now Act (the “GAIN Act”) including FDA priority review for the first application submitted for the QIDP, fast track designation eligibility and extension of statutory exclusivity periods in the U.S.

This first clinical trial was a Phase 1 randomized, double-blind, placebo-controlled, single and multiple ascending dose study of safety, pharmacokinetics, food, and fecal microbiome effects in healthy adults (ACX 362E 101).

This was a first-in-human trial that was a 3-part, randomized, placebo-controlled study.

The parts consisted of a single ascending dose (“SAD”) part (Part 1), food effect crossover part (Part 2), and multiple ascending dose (“MAD”) part (Part 3).

Vancomycin was administered in open-label fashion in Part 3 of the study.

The primary objective of the study was to assess the safety and tolerability of ibezapolstat in both SAD and MAD administration to healthy subjects.

Secondary objectives were to assess pharmacokinetic changes associated with food, determine systemic and fecal pharmacokinetics of ibezapolstat during both SAD and MAD administration, and to determine the fecal microbiome effects of ibezapolstat compared with oral vancomycin.

A total of 62 subjects were randomized to ibezapolstat or placebo.

Ibezapolstat was administered at a dose of 150, 300, 600, 900 mg or placebo for 1 dose in the SAD part (6 active:2 placebo/ group), 300 mg for 1 dose in the food effect part (n=8), and 300 or 450 mg or placebo every 12 hours (6 active:2 placebo) or vancomycin 125 mg every 6 hours (n=6) for 10 days in the MAD part.

Overall, ibezapolstat was administered to 44 subjects in Phase 1 and was well tolerated with a safety signal similar to placebo.

No dose-dependent increase in AEs was observed.

The proportion of subjects with an AE was similar to placebo at each ibezapolstat dose level.

Administration of study drug in the fasting or fed state had a similar proportion of AEs.

All AEs were considered mild or moderate in severity and none required a change in therapy or intervention.

No diarrhea was reported, and all stool samples were categorized as 4 or below on the Bristol Stool Chart (formed or semi formed).

No changes were observed in physical examinations, vital signs, 12-lead electrocardiograms (ECGs), or clinical laboratory results.

The majority of ibezapolstat Cmax values at doses of 450 mg or below were <1 µg/mL.

In the Phase 2b trial segment, 32 patients with CDI were enrolled and randomized in a 1:1 ratio to either ibezapolstat 450 mg every 12 hours or vancomycin 125 mg orally every 6 hours, in each case, for 10 days and followed for 28 ± 2 days following the end of treatment for recurrence of CDI.

The two treatments were identical in appearance, dosing times, and number of capsules administered to maintain the blind.

The overall observed Clinical Cure rate in the combined Phase 2 trials in patients with CDI was 96% (25 out of 26 patients), based on 10 out of 10 patients (100%) in Phase 2a in the Modified Intent to Treat Population, plus 15 out of 16 (94%) patients in Phase 2b in the Per Protocol Population, who experienced Clinical Cure during treatment with ibezapolstat.

Ibezapolstat was well-tolerated, with three patients each experiencing one mild adverse event assessed by the blinded investigator to be drug-related.

All three events were gastrointestinal in nature and resolved without treatment.

There were no drug-related treatment withdrawals and no drug-related serious adverse events, or other safety findings of concern.

In the Phase 2b vancomycin control arm, 14 out of 14 patients experienced Clinical Cure.

We believe that based on the pooled Phase 2 ibezapolstat Clinical Cure rate of 96% and the historical vancomycin cure rate of approximately 81% (Vancocin® Prescribing Information, January 2021), we will demonstrate non-inferiority of ibezapolstat to vancomycin in Phase 3 trials in accordance with the applicable FDA Guidance for Industry (October, 2022).

The Phase 2b clinical trial segment was discontinued due to success.

We made this decision in consultation with our medical and scientific advisors and statisticians based on observed aggregate blinded data and other factors, including the cost to maintain clinical trial sites and slow enrollment due to COVID-19 and its aftermath.

We determined that the trial performed as anticipated for both treatments, ibezapolstat and the control antibiotic vancomycin (a standard of care to treat patients with CDI), with high rates of clinical cure observed across the trial without any emerging safety concerns.

Accordingly, an Independent Data Monitoring Committee was not required to perform an interim analysis of this Phase 2b trial data as originally planned.

We anticipated that this decision would allow us to advance this first-in-class, FDA QIDP/Fast Track-designated antibiotic product candidate to Phase 3 clinical trials more expeditiously.

The Phase 2b trial was originally designed to be a non-inferiority (“NI”) trial and later amended to include an interim efficacy analysis with review by an Independent Data Monitoring Committee (“IDMC”).

The decision to end the trial early based on blinded clinical observations obviated the need for an interim analysis, IDMC review, and NI

We determined, in consultation with our clinical and statistical experts, that presenting clinical cure rates for the primary efficacy endpoint is the most appropriate representation for the clinical activity of ibezapolstat in treating CDI.

In the Phase 2 clinical trial, we also evaluated PK and microbiome changes and tested for anti-recurrence microbiome properties, including the change from baseline in alpha diversity and bacterial abundance, especially overgrowth of healthy gut microbiota Actinobacteria and Firmicute phylum species during and after therapy.

Phase 2a data demonstrated complete eradication of colonic C.

difficile by day three of treatment with ibezapolstat as well as the observed overgrowth of healthy gut microbiota, Actinobacteria and Firmicute phyla species, during and after therapy.

Also, in Segment 2B of the study, ibezapolstat showed eradication of fecal C.

difficile at day three of treatment in 15 of 16 treated patients (94%), versus vancomycin, which had eradication of C.

difficile in 10 of 14 treated patients (71%) in the Per Protocol Population.

Ibezapolstat, but not vancomycin, consistently preserved and allowed regrowth of key gut bacterial species such as Firmicutes, which are believed to help prevent CDI recurrence.

Emerging data show an increased concentration of secondary bile acids during and following ibezapolstat therapy which is known to correlate with colonization resistance against C.

A decrease in primary bile acids and the favorable increase in the ratio of secondary-to-primary bile acids suggest that ibezapolstat may reduce the likelihood of CDI recurrence when compared to vancomycin.

We worked closely with the FDA to obtain authorization to proceed with clinical trials under our investigational new drug application (“IND”), and to obtain FDA fast track designation as well as designation of ibezapolstat as a qualified infectious disease product (“QIDP”), which provides incentives through the Generating Antibiotic Incentives Now Act (the “GAIN Act”) including FDA priority review for the first application submitted for the QIDP, fast track designation eligibility and extension of statutory exclusivity periods in the U.S.

for an additional 5 years upon FDA marketing approval of the product to treat patients with CDI.

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As of the date of this Form 10-K, of the $700,000 of potential milestone payments, we have paid to GLSynthesis a total of $50,000, including $25,000 paid upon receipt of a “safe to proceed” notification from FDA relating to the commencement of clinical trials (December 2018) and $25,000 paid upon the successful completion of clinical trial drug supply suitable to support our Phase 1 clinical trial (December 2018).

The patent jurisdictions of the acquired patents include the U.S., European Union, Japan and Canada.

The patent jurisdictions of the acquired patents include the U.S., European Union (“EU”), Japan and Canada.

About QIDP and Fast Track Designations

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The GAIN Act amended the federal Food, Drug, and Cosmetic Act to add a designation for QIDPs.

A QIDP is defined as “an antibacterial or antifungal drug for human use intended to treat serious

or life-threatening infections, including those caused by (1) an antibacterial or antifungal resistant pathogen, including novel or infectious pathogens, or (2) qualifying pathogens listed under” 21 C.F.R.

A QIDP is defined as “an antibacterial or antifungal drug for human use intended to treat serious or life-threatening infections, including those caused by (1) an antibacterial or antifungal resistant pathogen, including novel or emerging infectious pathogens, or (2) qualifying pathogens listed under” 21 C.F.R.

The primary incentive for developing a QIDP is a five-year exclusivity extension for the relevant antibiotic or antifungal indications of the QIDP, but the designation also offers FDA priority review for the first application submitted for the QIDP and eligibility for fast track designation.

FDA’s fast track designation is a process designed to facilitate the development and expedite the regulatory pathway of new drugs to treat serious or life-threatening conditions and that fill a high unmet medical need.

To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.

FDA’s fast track designation is a program designed to facilitate the development and expedite the regulatory pathway of new drugs to treat serious or life-threatening conditions and that fill a high unmet medical need.

eligible for a Fast Track Designation, the FDA must determine, based on preclinical study data submitted by the sponsor, that a product is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.

Fast track designation provides opportunities for more frequent interactions with the FDA review team to expedite development and review of the product.

The FDA may also review sections of the new drug application (“NDA”) for a fast track product on a rolling basis before the complete application is submitted, if the sponsor and the FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the NDA.

In addition, fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging from the clinical trial process.

The FDA may also review sections of the new drug application (“NDA”) for a fast track designated product on a rolling basis before the complete application is submitted, if the sponsor and the FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the NDA.

In addition, fast track designation does not change the standards for product approval and may not ultimately expedite the development or approval process and the designation may be withdrawn by the sponsor or rescinded by the FDA if it is no longer supported by data emerging from the clinical trial process.

A product designated as a QIDP also receives priority review for the first application for marketing authorization submitted to FDA for the product.

The priority review program is intended to direct overall attention and resources to the evaluation of designated applications and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months for an original NDA for a new molecular entity from the date of filing.

Based upon advice from our scientific advisors, we believe ACX-375C, our second antibiotic candidate currently in pre-clinical development, will also be eligible for FDA’s QIDP and fast track designations.

This advice is supported by the “qualifying” criteria for a QIDP listed in GAIN Act legislation of 2012 enacted as part of the FDASIA.

A QIDP is defined as “an antibacterial or antifungal drug for human use intended to treat serious or life-threatening infections, including those caused by qualifying pathogens listed under 21 C.F.R.

§ 317.2 which include bacterial pathogens against which ACX-375C has demonstrated microbiological activity namely, methicillin-resistant Staphylococcus aureus and vancomycin-resistant enterococcus.

Specifically, the qualifying pathogens listed under 21 C.F.R.

§ 317.2 include bacterial pathogens against which ACX-375C has demonstrated microbiological activity, namely, methicillin-resistant Staphylococcus aureus and vancomycin-resistant enterococcus.

These bacteria are generally causative of serious or life-threatening infections, including, but not limited to, acute bacterial skin and skin structure infections, community acquired pneumonia, blood stream infections, hospital acquired bacterial pneumonia and ventilator acquired bacterial pneumonia, which are planned to be studied in future clinical trials at the appropriate time in product development.

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Elucidation of the Structure of DNA Polymerase C (polC) of Multidrug Resistant Bacteria in Complex with Novel Classes of Antimicrobials (POLSTOP2)” will study 3-dimensional structures of DNA polymerases and their binding interactions with our inhibitors.

The antibacterial molecular target of our pipeline of novel DNA pol IIIC inhibitors has been clinically validated by ibezapolstat’s recent completion of a Phase 2a trial in patients with CDI.

The Health Holland Research Project is intended to accelerate lead product candidate selection for our ACX-375 program for systemic treatment against multidrug resistant bacteria such as methicillin resistant Staphylococcus aureus (MRSA), vancomycin resistant Enterococci (VRE) and Drug-Resistant Streptococcus Pneumoniae (DRSP) and for other WHO, CDC and FDA high-priority, drug-resistant Gram-positive pathogens where new classes of antibiotics are needed.

The antibacterial molecular target of our pipeline of novel DNA pol IIIC inhibitors has been clinically validated by ibezapolstat’s recent completion of a Phase 2 trial in patients with CDI.

The Health Holland Research Project is intended to accelerate lead product candidate selection for our ACX-375 program for systemic treatment against multidrug resistant bacteria such as MRSA, VRE and DRSP and for other WHO, CDC and FDA high-priority, drug-resistant Gram-positive pathogens where new classes of antibiotics are needed.

This project was initiated by LUMC in September 2021 and emerging data are expected to contribute to the ACX-375C program development.

Recently, we screened the activity of a library of 50 compounds for activity against pol IIIC of VRE and PRSP in a medium throughput assay (Panel A below), leading to a IC50-ranked list of compounds with best in vitro activity.

Additionally, mutants conferring reduced susceptibility to ACX compounds in VRE and MRSA were mapped onto modelled structures of pol IIIC in the presence of a DNA template (panel B below).

Importantly, the first cryogenic electron microscopy structures have been obtained using full length VRE pol IIIC, which resolved domains that are absent in previous X-ray crystallographic data (panel C below).

Ongoing efforts are aimed at refining the structure (currently at 3.0Å resolution) in the presence of both DNA and representative ACX inhibitors, as well as extending the structural work to MRSA pol IIIC.

Pre-Clinical Studies

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Plasma levels declined with an apparent terminal half — life of 3.82 hours and were still quantifiable at 24 hours post-dose.

Oral bioavailability in

male rats was 8.6%.

Oral bioavailability in male rats was 8.6%.

Ibezapolstat excretion in feces was much greater than urinary excretion, consistent with incomplete oral bioavailability.

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difficile Clinical Isolates

In Vitro Activity (in µg/mL) of ACX-362E (ibezapolstat) and Comparators against 104 C.

difficile Clinical Isolates

(ibezapolstat)

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Current treatment options for CDI are limited.

The current standard-of-care for CDI is treatment with vancomycin or off label use of metronidazole, both of which are broad-spectrum antibiotics.

The current standard-of-care for CDI is treatment with vancomycin or, to a lesser extent, off label use of metronidazole, both of which are broad-spectrum antibiotics.

Although these antibiotics reduce levels of C.

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difficile Infection by the Infectious Diseases Society of America (IDSA) and Society of Healthcare Epidemiology of America (SHEA) provides a recommendation for clinicians to prescribe either vancomycin or fidaxomicin over metronidazole for an initial episode of CDI and metronidazole is no longer recommended for treatment of patients with CDI.

Fidaxomicin (Dificid ® ) is an antibiotic approved to treat patients with CDI in the U.S.

and the European Union, but it has not been shown to be superior to vancomycin in the treatment of patients with the hypervirulent strain ribotype 027.

Fidaxomicin (Dificid ® ) is also a standard of care to treat patients with CDI.

It is an antibiotic approved to treat patients with CDI in the U.S.

and the EU, but it has not been shown to be superior to vancomycin in the treatment of patients with the hypervirulent strain ribotype 027.

Fidaxomicin (Dificid ® ) was approved by FDA in 2011.

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Fidaxomicin was the first antibacterial drug the FDA approved in more than 30 years to treat CDI.

Cubist Pharmaceuticals was acquired by Merck in 2015 for approximately $8.4 billion.

continues to market fidaxomicin (Dificid ® ) and is expected to continue through the patent life which is expected to expire in mid-2027.

Cubist Pharmaceuticals was acquired by

Merck in 2015 for approximately $8.4 billion.

Merck continues to market fidaxomicin (Dificid ® ) and is expected to continue through the patent life which is expected to expire in mid-2027.

Summit Therapeutics had a clinical stage antibiotic, ridinilazole, and in January 2019 had opened enrollment of two Phase 3 clinical trials to treat patients with CDI.

In December 2021, Summit Therapeutics announced that ridinilazole had failed to achieve the primary endpoint in the Phase 3 clinical trials and has since announced a plan to partner ridinalazole and has moved strategically into oncology drug development.

In December 2021, Summit Therapeutics announced that ridinilazole had failed to achieve the primary endpoint in the Phase 3 clinical trials and has since announced a plan to partner ridinilazole and has moved strategically into oncology drug development.

The ridinilazole Phase 3 program included two randomized trials testing efficacy in CDI versus oral vancomycin, the standard of care, as the positive control.

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For the single-dose ascending portion of the trial, the objectives were to evaluate the safety and determine the pharmacokinetics and systemic exposure of single doses as well as the effects of food on PK.

The multiple ascending dose portion of the trial evaluated the safety, PK and fecal concentrations of repeated doses as well as evaluate the effects of ibezapolstat on characteristics of the gut microbiome in comparison to the current standard of care treatment antibiotic, oral vancomycin.

the current standard of care treatment antibiotic, oral vancomycin.

We successfully completed the Phase 1 clinical trial in August 2019 and the data supported advancing to Phase 2 according to our medical and scientific advisors.

of ibezapolstat show low systemic exposure, as predicted by previously conducted animal studies and are desirable in treating CDI, and fecal concentrations of ibezapolstat were 2 to 3 orders of magnitude above the level required to kill CDI bacteria at the site of the infection.

Blood levels of ibezapolstat show low systemic exposure, as predicted by previously conducted animal studies and are desirable in treating CDI, and fecal concentrations of ibezapolstat were 2 to 3 orders of magnitude above the level required to kill CDI bacteria at the site of the infection.

Phase 2 Clinical Trial.

The Phase 2 clinical trial design is structured as a randomized, controlled Phase 2 trial of the efficacy and safety of ibezapolstat compared to vancomycin in the treatment of CDI in a total of up to 84 evaluable patients (Phase 2a;

The Phase 2 clinical trial design was structured as a randomized, controlled Phase 2 trial of the efficacy and safety of ibezapolstat compared to vancomycin in the treatment of CDI in a total of up to 84 evaluable patients (Phase 2a;

up to 20 patients;

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Phase 2a was designed to enroll up to 20 patients with a data review planned by a Trial Oversight Committee after 10 patients completed the trial.

Based upon the recommendation of the SAB, in August 2020, we terminated enrollment in Phase 2a early and advanced to Phase 2b in December 2021.

Based upon the recommendation of our Scientific Advisory Board (the “SAB”), in August 2020, we terminated enrollment in Phase 2a early and advanced to Phase 2b in December 2021.

The SAB unanimously supported the early termination of the Phase 2a trial after 10 patients were enrolled in the trial instead of 20 patients as originally planned.

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No treatment-related serious adverse events were reported by the investigators who enrolled patients in the trial.

We believe these results represent the first-ever clinical data showing Pol IIIC has potential as a therapeutically-relevant antibacterial target.

The Phase 2b portion of the Phase 2 clinical trial is designed as a 64-patient vancomycin- controlled, non-inferiority designed efficacy study.

32 of the patients will receive 450mg of ibezapolstat twice per day, and 32 of the patients will receive 125mg of vancomycin four times per day.

Both groups of patients will receive this treatment for 10 days.

Phase 2b began enrollment on December 3, 2021.

In the event non-inferiority of ibezapolstat to vancomycin is demonstrated, further analysis will be conducted to test for superiority.

We believe these results represent the first-ever clinical data validating pol IIIC as a therapeutically-relevant antibacterial target.

The Phase 2b portion of the Phase 2 clinical trial was designed as a 64-patient vancomycin-controlled, non-inferiority designed efficacy study.

The SAB is comprised of seven scientists and clinicians who have significant expertise in the scientific disciplines required for the research and development of antibiotics.

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The two treatments were identical in appearance, dosing times, and number of capsules administered to maintain the blind.

Ibezapolstat was well-tolerated, with three patients each experiencing one mild adverse event assessed by the blinded investigator to be drug-related.

All three events were gastrointestinal in nature and resolved without treatment.

There were no drug-related treatment withdrawals or no drug-related serious adverse events, or other safety findings of concern.

In the Phase 2b vancomycin control arm, 14 out of 14 patients experienced Clinical Cure.

The Phase 2b clinical trial segment was discontinued due to success.

We determined that the

trial performed as anticipated for both treatments, ibezapolstat and the control antibiotic vancomycin (a standard of care to treat patients with CDI), with high rates of clinical cure observed across the trial without any emerging safety concerns.

Accordingly, an Independent Data Monitoring Committee was not required to perform an interim analysis of this Phase 2b trial data as originally planned.

We anticipated that this decision would allow us to advance this first-in-class, FDA QIDP/Fast Track-designated antibiotic product candidate to Phase 3 clinical trials more expeditiously.

The Phase 2b trial was originally designed to be a non-inferiority (NI) trial and later amended to include an interim efficacy analysis with review by an Independent Data Monitoring Committee (IDMC).

The decision to end the trial early based on blinded clinical observations obviated the need for an interim analysis, IDMC review, and NI assessment.

In the Phase 2 clinical trial, we also evaluated pharmacokinetics (PK) and microbiome changes and tested for anti-recurrence microbiome properties, including the change from baseline in alpha diversity and bacterial abundance, especially overgrowth of healthy gut microbiota Actinobacteria and Firmicute phylum species during and after therapy.

Phase 2a data demonstrated complete eradication of colonic C.

difficile by day three of treatment with ibezapolstat as well as the observed overgrowth of healthy gut microbiota, Actinobacteria and Firmicute phyla species, during and after therapy.

Also, in Segment 2B of the study, ibezapolstat showed eradication of fecal C.

difficile at Day 3 of treatment in 15 of 16 treated patients (94%), versus vancomycin, which had eradication of C.

difficile at in 10 of 14 treated patients (71%) in the Per Protocol Population.

Ibezapolstat, but not vancomycin, consistently preserved and allowed regrowth of key gut bacterial species such as Firmicutes, which are believed to help prevent CDI recurrence.

Emerging data show an increased concentration of secondary bile acids during and following ibezapolstat therapy which is known to correlate with colonization resistance against C.

Phase 3 Clinical Trial(s).

We intend to meet with the FDA after completing the Phase 2b clinical trial to finalize the size and scope of the Phase 3 clinical trial program.

Regulatory precedent indicates that two Phase 3 trials of approximately 400 patients each would need to be conducted.

Following completion of our Phase 2b clinical trial, we intend to meet with the FDA to finalize the size and scope of the Phase 3 clinical trial program.

Regulatory precedent indicates that two Phase 3 trials would need to be conducted.

We plan to include international clinical trial sites for our Phase 3 clinical trial program to enhance overall enrollment and provide clinical data to support an approval pathway outside the U.S.

in major pharmaceutical markets.

Regulatory Status

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However, we inherited the manufacturing and pre-clinical data generated by the prior sponsor of our lead product candidate which we believe will reduce the timeline for regulatory approval by two to three years.

We have worked closely with the FDA to obtain our IND, and to obtain FDA fast track designation as well as designation of ibezapolstat as a QIDP, which provides incentives through the GAIN Act including FDA priority review for the first application submitted for the QIDP, fast-track designation eligibility and extension of statutory exclusivity periods in the U.S.

We have worked closely with the FDA to obtain authorization to proceed with clinical trials under our IND, and to obtain FDA fast track designation as well as designation of ibezapolstat as a QIDP, which provides incentives through the GAIN Act including FDA priority review for the first application submitted for the QIDP, fast-track designation eligibility and extension of statutory exclusivity periods in the U.S.

for an additional five years upon FDA approval of the product for the treatment of CDI.

We intend to launch regulatory activities in 2024 to design a regulatory approval pathway for ibezapolstat in the EU, the United Kingdom (“UK”), Canada and possibly Japan.

We commenced this international regulatory pathway by obtaining micro, small and medium-sized enterprises (“SME”) designation from the European Medicines Agency in February 2024.

The SME designation provides much reduced fees associated with the drug development pathway and close interaction with the regulatory authorities throughout the drug development process.

Government Regulation

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The process required by the FDA before a drug may be marketed in the United States generally involves the following:

● completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices (“GLP”), regulations or other applicable regulations;

● completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practice (“GLP”) regulations or other applicable regulations;

● submission to the FDA of an IND, which must become effective before human clinical trials may begin;

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Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the clinical protocol, GCP, or other IRB requirements or if the drug has been associated with unexpected serious harm to patients.

In the Consolidated Appropriations Act for 2023, Congress amended the FDCA to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug to support marketing authorization, to submit a diversity action plan for such clinical trial.

The action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.

A sponsor must submit a diversity action plan to FDA by the time the sponsor submits the trial protocol to the agency for review.

The FDA may grant a waiver for some or all of the requirements for a diversity action plan.

If FDA objects to a sponsor’s diversity action plan and requires the sponsor to amend the plan or take other actions, it may delay trial initiation.

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with information relating to the product’s chemistry, manufacturing, and controls and proposed labeling, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

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These fees are typically adjusted annually, but exemptions and waivers may be available under certain circumstances.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), for original NDAs, the FDA has ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), for original NDAs, the FDA has ten months from the filing date (i.e., the date on which the FDA accepts a submitted NDA for filing) in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review.

For an all new molecular entity (“NME”), NDAs, the ten and six-month time periods run from the filing date;

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or mandated modification of promotional materials and labeling and the issuance of corrective information.

The Hatch-Waxman Act and Marketing Exclusivity

In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress authorized the FDA to approve generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute and also enacted Section 505(b)(2) of the FDCA.

To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application (“ANDA”) to the agency.

In support of such applications, a generic manufacturer may rely on the preclinical and clinical testing conducted for a drug product previously approved under an NDA, known as the reference listed drug (“RLD”).

Specifically, in order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, and the strength of the drug.

At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug.

In contrast, Section 505(b)(2) enables the applicant to rely, in part, on the FDA’s prior findings of safety and efficacy data for an existing product, or published literature, in support of its application.

Section 505(b)(2) NDAs may provide an alternate path to FDA approval for new or improved formulations or new uses of previously approved products;

for example, an applicant may be seeking approval to market a previously approved drug for new indications or for a new patient population that would require new clinical data to demonstrate safety or effectiveness.

Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

A Section 505(b)(2) applicant may eliminate the need to conduct certain nonclinical or clinical studies, if it can establish that reliance on studies conducted for a previously approved product is scientifically appropriate.

Unlike the ANDA pathway used by developers of bioequivalent versions of innovator drugs, which does not allow applicants to submit new clinical data other than bioavailability or bioequivalence data, the 505(b)(2) regulatory pathway does not preclude the possibility that a follow-on applicant would need to conduct additional clinical trials or nonclinical studies;

for example, they may be seeking approval to market a previously approved drug for new indications or for a new patient population that would require new clinical data to demonstrate safety or effectiveness.

The FDA may then approve the new product for all or some of the label indications for which the RLD has been approved, or for any new indication sought by the Section 505(b)(2) applicant, as applicable.

Upon NDA approval of a new chemical entity (“NCE”), which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity.

During the exclusivity period, the FDA cannot accept for review any ANDA or 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.

However, a follow-on product application may be submitted one year before NCE exclusivity expires if a Paragraph IV certification, which states that the listed patent for the RLD is invalid or will not be infringed by the follow-on product, is filed on an NCE patent and any time after approval if the application is filed based on a new indication or a new formulation.

The Hatch-Waxman Act also provides three years of data exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug.

This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving follow-on applications for drugs containing the original active agent.

If there is no listed patent in the Orange Book, there may not be a Paragraph IV certification, and, thus, no ANDA or 505(b)(2) NDA may be filed before the expiration of the exclusivity period.

Five-year and three-year exclusivity also will not delay the submission or approval of a traditional NDA filed under Section 505(b)(1) of the FDCA.

However, an applicant submitting a traditional NDA would be required to either conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Patent Term Restoration

Depending upon the timing, duration and specifics of FDA approval of the use of our therapeutic candidates, some of our U.S.

patents may be eligible for limited patent term extension under the Hatch-Waxman Act.

The Hatch-Waxman Act permits a patent restoration term of up to five years as compensation for any patent term lost during product development and the FDA regulatory review process.

However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.

The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the approval of that application.

Only one patent applicable to an approved drug is eligible for the extension and the application for extension must be made prior to the expiration of the patent.

The United States Patent and Trademark Office (“USPTO”), in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.

In the future, we intend to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond their current expiration date, depending on the expected length of clinical trials and other factors involved in the submission of the relevant NDA.

Manufacturing

Overall, management believes the manufacturing process established by the prior sponsor of our ibezapolstat development program is efficient with cost of goods sold expected to be less than 5% of a preliminary range of proposed sales price estimates.

Thus far, ibezapolstat drug substance (DS) has been manufactured successfully in both 1 kg and 9 kg batches, with 9 kg batches considered to be a commercial scale.

We anticipate that the commercial batch size upon completion of the clinical development program and submission of a New Drug Application (NDA) will be 10 kg to 15 kg which in our estimation will further reduce our cost of goods sold.

The 9 kg batch was sufficient to support the Phase 1 and Phase 2 clinical trial needs (Phase 2a and Phase 2b).

Thus far, ibezapolstat drug substance (“DS”) has been manufactured successfully in both 1 kg and 9 kg batches, with 9 kg batches considered to be at commercial scale.

We anticipate that the commercial batch size upon completion of the clinical development program and submission of a New Drug Application (“NDA”) will be 10 kg to 15 kg which in our estimation will further reduce our cost of goods.

The 9kg batch was sufficient to support the Phase 1 and Phase 2 clinical trial needs.

No material issues were noted in the manufacture of either the 1 kg or 9 kg batches of ibezapolstat to date with 36-month stability very good and well within acceptable FDA standards.

Additionally, we can extrapolate to 48-months stability per FDA Manufacturing Guidance in advance of a 48-month pull point to occur in the first half of 2024.

Ibezapolstat drug product (DP), 150mg capsules, have been manufactured and used in the Phase 1 and Phase 2a clinical trial and are being used in the Phase 2b clinical trial.

Ibezapolstat drug product (“DP”), 150mg capsules, has been manufactured and used in the Phase 1 and Phase 2 clinical trials.

Thirty-six months stability data on capsules show no significant changes in the key quality attributes and no discernable data trends at any of the storage conditions.

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Due to high costs and the inability to use antibodies as a first-line treatment, antibodies have gained limited commercial traction and there has only been one antibody treatment for CDI approved to date.

As of the date of this Form 10-K, there are currently two microbiologics in late-stage development with clinical data forthcoming.

As of the date of this Form 10-K, there are currently two microbiologics that have been approved for marketing.

Safety is a concern with microbiologics, and this course of treatment is only recommended for patients with multiple recurrences of CDI who have failed appropriate antibiotic treatments.

There are also several vaccines against C.

difficile in late-stage development, but none are currently approved.

difficile reportedly in late-stage development, but none are currently approved.

A vaccine is only likely to be commercially viable as a prevention of recurrent CDI in high-risk patients, if such patients can be identified.

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difficile bacteria that produce toxins causing inflammation of the colon, severe diarrhea and, in the most serious cases, death.

Patients typically develop CDI from the use of broad-

spectrum antibiotics that disrupt normal gastrointestinal (gut) flora, thus allowing C.

Patients typically develop CDI from the use of broad-spectrum antibiotics that disrupt normal gastrointestinal (gut) flora, thus allowing C.

difficile bacteria to flourish and produce toxins.

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Many of our competitors may have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do.

clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

These competitors also compete with us in recruiting and retaining qualified scientific advisors and consultants as well as management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Other small or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

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Our competitors also may obtain marketing approvals for their products more rapidly than we obtain approval for ours.

In addition, our ability to compete in the marketplace may be affected because in some cases insurers or other third-party payors seek to encourage the use of generic products.

In addition, our ability to compete in the marketplace may be affected because in some

cases insurers or other third-party payors seek to encourage the use of generic products.

This may have the effect of making branded products less attractive, from a cost perspective, to buyers.

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Finch Therapeutics recently failed with CP101, its lead therapeutic targeting patients with multiple recurrences of CDI using donor derived stool samples in an oral formulation, to our understanding, and in January 2023 discontinued its Ph3 clinical trial in this area.

● Fecal biotherapy approaches in development include SER-109, being developed by Seres Therapeutics, Inc., which is an investigational oral microbiome therapeutic for the prevention of recurrent C.

difficile infection in adults with multiply recurrent CDI.

The FDA has granted SER-109 both Breakthrough Therapy and Orphan Drug designations and has recently initiated a Phase 3 clinical trial.

● Rebiota™(fecal microbiota, live-jslm) was recently approved by FDA as a fecal microbiota product which is prepared from stool donated by qualified individuals and delivered via enema for the prevention of recurrent Clostridioides difficile infection (CDI) in adults.

● Fecal biotherapy approaches in development include SER-109 (“VOWST”), which has now been FDA approved and marketed by Seres Therapeutics, Inc., is an oral microbiome therapeutic for the prevention of recurrent C.

difficile infection in adults with multiply recurrent CDI only after antibiotic therapy is administered.

The FDA granted SER- 109 both Breakthrough Therapy and Orphan Drug designations.

Although VOWST was recently introduced to the market, we believe its penetration has been lower than expected and the price point is high at approximately $17,500 per full course of treatment.

● Rebyota® (fecal microbiota, live-jslm) was recently approved by FDA, and marketed by Ferring Pharmaceuticals, is a fecal microbiota product which is prepared from stool donated by qualified individuals and delivered via enema for the prevention of recurrent Clostridioides difficile infection (rCDI) in adults.

This would only be used after a standard antibiotic therapy in patients with mild-to-moderate CDI, and we believe the price point is approximately $12,500 per full course of therapy.

● CRS3123 (Crestone Inc) is a novel small molecule that selectively inhibits methionyl-tRNA synthetase of C.

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Moreover, a decrease in primary bile acids and the favorable increase in the ratio of secondary-to-primary bile acids provides more scientific evidence suggesting recurrences may be very low in future trials.

The Phase 2b trial demonstrated positive comparative microbiome data where ibezapolstat, but not vancomycin, consistently preserved and allowed regrowth of key gut bacterial species believed to confer health benefits including to prevent recurrence of CDI.

(vi) To date, ibezapolstat has shown an excellent human safety profile;

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(viii) We have a simple and low-cost process of manufacturing which is expected to yield cost of goods of less than 5% of the anticipated retail price;

(ix) We believe that there is a high probability that the Phase 2b trial will be successful.

If the vancomycin cure rate in our Phase 2b trial is 26/32 (81%);

then ibezapolstat needs to achieve a cure rate of 24/32 (75%) in the Phase 2b clinical trial to be considered non-inferior (“NI”), to vancomycin based on a “p-value” of .0344.

A “p value” is a statistical probability value used by FDA and drug developers to evaluate the efficacy, in this case, of development stage antibiotic candidates and their comparability to one or more approved products.

A “p value” of .0344 is within FDA standards used by drug development companies to compare an experimental product candidate, like ibezapolstat, against an existing standard-of-care.

(ix) We successfully completed the Phase 2b clinical trial in the fourth quarter of 2023.

The Phase 2b trial was originally designed to be a non-inferiority (NI) trial and later amended to include an interim efficacy analysis with review by an Independent Data Monitoring Committee (IDMC).

The decision to end the trial early based on blinded clinical observations obviated the need for an interim analysis, IDMC review, and NI assessment.

(x) The overall observed Clinical Cure rate in the combined Phase 2 trials in patients with CDI was 96% (25 out of 26 patients), based on 10 out of 10 patients (100%) in Phase 2a in the Modified Intent to Treat Population, plus 15 out of 16 (94%) patients in Phase 2b in the Per Protocol Population, who experienced Clinical Cure during treatment with ibezapolstat.

Ibezapolstat was well-tolerated, with three patients each experiencing one mild adverse event assessed by the blinded investigator to be drug-related.

All three events were gastrointestinal in nature and resolved without treatment.

There were no drug-related treatment withdrawals or no drug-related serious adverse events, or other safety findings of concern.

In the Phase 2b vancomycin control arm, 14 out of 14 patients experienced clinical cure.

We believe that based on the pooled Phase 2 ibezapolstat clinical cure rate of 96% and the historical vancomycin cure rate of approximately 81% (Vancocin® Prescribing Information, January 2021), we will demonstrate non-inferiority of ibezapolstat to vancomycin in Phase 3 trials in accordance with the applicable FDA Guidance for Industry (October, 2022).

(xi) We announced the sustained clinical cure data in December 2023 and the cumulative EOT and SCC data are summarized below:

(xii) On January 17, 2024, we announced positive microbiology and microbiome comparative data to vancomycin from the Phase 2b trial.

Ibezapolstat outperformed vancomycin showing eradication of fecal C.

difficile at Day 3 of treatment in 15 of 16 treated patients (94%), versus vancomycin which had eradication of C.

difficile in 10 of 14 treated patients (71%).

Ibezapolstat, but not vancomycin, consistently preserved and allowed regrowth of key gut bacterial species believed to confer health benefits including to prevent recurrent of CDI.

Intellectual Property and Market Exclusivity

We have two U.S.

patents (U.S.

Patent Numbers 6,926,763 and 8,796,292), with claims that cover ibezapolstat that expire in May 2023 and September 2030, respectively.

The most important U.S.

patent in management’s view, is the composition-of-matter patent (8,796,292) which expires in September 2030.

Patent Number 6,926,763 includes claims that cover disubstituted purine compounds, compositions, surface coatings, and methods of treating bacterial infection or inhibiting bacterial growth, and these claims cover ibezapolstat.

Patent Number 8,796,292 includes other claims that cover other disubstituted purine compounds, compositions, and methods of inhibiting bacterial growth and these claims cover ibezapolstat.

Either patent may be subject to extension subject to certain circumstances.

We have a U.S.

Patent Numbers 8,796,292), with claims that cover ibezapolstat that expires in September 2030.

We believe this patent is important because it has composition claims for ibezapolstat, in addition to claims that cover other disubstituted purine compounds, compositions, and methods of inhibiting bacterial growth.

This patent may be subject to extension subject to certain circumstances.

For ibezapolstat, we also have one composition-of-matter patent in each of Europe, Japan and Canada.

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patents expire in September 2030, subject to extension under certain circumstances.

In addition, we have filed three provisional patent applications in 2021 covering methods of treating C.

difficile infection and preventing recurrence as well as simultaneous promotion of microbiome health.

We filed a non-

provisional patent application and an international patent application in 2022 covering methods of treating C.

In addition, we have filed two provisional patent applications and an international patent application in 2023 covering methods and compositions for promoting microbiome health and for achieving and/or maintaining healthy proportions of gut microflora.

We also filed foreign applications in 2023 in Australia, Canada, China, Europe, Israel, Japan, Mexico, New Zealand and Singapore covering methods of treating C.

difficile infection and preventing recurrence while simultaneously promoting microbiome health.

We also filed a new provisional patent application in 2022 covering compositions and methods to promote gut microbiome health.

We believe the commercial opportunity for ibezapolstat is best protected by regulatory exclusivity in the U.S.

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Accordingly, we will have 10 years of regulatory exclusivity on the oral use of ibezapolstat to treat CDI from the date of FDA marketing approval.

For geographies outside the U.S., we believe the following regulatory exclusivity is available:

8-years data exclusivity;

plus 2 additional years of marketing exclusivity plus 1 year for additional

indication (e.g., pediatric use);

8-years post-approval data exclusivity period for NCE;

8-years data exclusivity plus 6 months extension for pediatric use.

We believe the patent and regulatory coverage already in place provides strong protection for the commercialization of ibezapolstat and we will continue to consider additional patent submissions as we review available pre-clinical and clinical data as it becomes available throughout the development program.

We have obtained three U.S.

patents and one Israeli patent on ACX-375C, our second antibiotic program, and has a fourth U.S.

patents and one Israeli patent on ACX-375C, our second antibiotic program, and have a fourth U.S.

patent application and multiple foreign applications pending for ACX-375C.

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Congress which would remove the financial disincentives now in place for prescribers of antibiotics to use novel agents possibly more efficacious than older, less effective antibiotics that are prescribed at a lower cost.

Accordingly, treating physicians would have the opportunity to

treat patients with infectious disease with the most effective agents thereby enhancing patient outcomes as well as reducing the cost burden on public health.

Accordingly, treating physicians would have the opportunity to treat patients with infectious disease with the most effective agents thereby enhancing patient outcomes as well as reducing the cost burden on public health.

EU Pull Incentives .

Given the adoption of pull incentives for certain critical antibiotics adopted in the U.K.

and under consideration in the U.S., the European Union currently is considering adopting certain pull incentives specifically to incentivize sponsors of key antibiotic development programs in the European Union.

The European Union also is considering the creation and funding of a new regulatory organization similar to the Biomedical Advanced Research and Development Authority (“BARDA”), which is a division of the HHS which, among other things, is responsible to protect the U.S.

and under consideration in the U.S., the EU currently is considering adopting certain pull incentives specifically to incentivize sponsors of key antibiotic development programs in the EU.

The EU also is considering the creation and funding of a new regulatory organization similar to the Biomedical Advanced Research and Development Authority (“BARDA”), which is a division of the HHS which, among other things, is responsible to protect the U.S.

against pandemic threats.

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A series of novel antibacterial molecules derived from ACX-375C appear to share the same mechanism of action with ibezapolstat, i.e.

they inhibit the Pol IIIC enzyme in certain Gram-positive bacterial cells including both sensitive and resistant Clostridium difficile (C.

they inhibit the pol IIIC enzyme in certain Gram-positive bacterial cells including both sensitive and resistant C.

difficile, MRSA, vancomycin resistant Enterococcus, PRSP and other resistant bacteria.

Further characterization and testing of these molecules is ongoing.

Further characterization and testing of these molecules are ongoing.

This diverse series of new agents which are believed to bind pol IIIC and thereby prevent it from synthesizing new DNA, as shown below, where the gray area is the pol IIIC enzyme and the therapeutic molecule occupies the critical binding pocket.

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Further characterization and testing in animal models are ongoing.

Acurx has pioneered the clinical development of a pol IIIC inhibitor as a clinically valid bacterial target.

We have pioneered the clinical development of a pol IIIC inhibitor as a clinically valid bacterial target.

Ibezapolstat cured 10 of 10 (100%) patients after 10-days treatment with no recurrences during the 30-day follow up period in a Phase 2a trial for C.

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the pol IIIC Mechanism-of-Action (MOA) suggests that this is a class effect.

Acurx is also developing a systemic pol IIIC Gram-positive selective spectrum (GPSS) oral and IV antibiotic.

The initial hit ACX 375C is pan-active against wild-type and drug-resistant Gram-positive bacteria (e.g., MRSA, VRE

Acurx has synthesized and tested >600 novel analogs targeting pol IIIC.

We are also developing a systemic pol IIIC Gram-positive selective spectrum (GPSS) oral and IV antibiotic.

The initial hit ACX 375C is pan-active against wild-type and drug-resistant Gram-positive bacteria (e.g., MRSA, VRE and PRSP).

We have synthesized and tested >600 novel analogs targeting pol IIIC.

To date, 20 novel compounds with MIC values ≤1 μg/mL for both MRSA and VRE have been identified (see Table below).

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Spontaneous resistance frequency is low (<3.17x10-9 and <1.30x10-9 for MRSA and VRE, respectively, at 4xMIC), and there is no cross-resistance with other antibiotics.

Acurx is studying potential MOR (Mechanism of Resistance) to pol IIIC inhibitors using whole genome sequencing.

We are studying potential MOR (Mechanism of Resistance) to pol IIIC inhibitors using whole genome sequencing.

In collaboration with two laboratories at Leiden University Medical Center under a Dutch government grant, the 3-D structure of pol IIIC from MRSA, VRE and PRSP alone and bound to Acurx inhibitors will be studied using cryo-EM/X-ray crystallography.

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Based on a review of other antibiotics currently marketed to treat these bacterial infections, our early estimate of peak year sales potential is 4% to 5% of this annual incidence and a peak year sales potential of approximately $1 billion.

The priority lead indication and dosage form is for oral treatment of bacterial infections caused by MSSA and MRSA, which is the leading cause of hospital based bacterial infections in the U.S.

Patents extend out to FYE 2039;

Eligible for FDA QIDP / Fast Track Designations which provide 10 years of regulatory exclusivity in U.S.

and other regulatory exclusivity periods Ex-US.

Employees and Human Capital Resources

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business