What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-12 compared with 2024-11-12 · 59 added, 91 removed, 143 unchanged (51% of the section changed)

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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 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.

According to the WHO Fact Sheet (November 2023), AMR is one of the top global public health and development threats.

It is estimated that bacterial AMR was directly responsible for 1.27 million global deaths in 2019 and contributed to 4.95 million deaths.

Furthermore, the world faces an antibiotics pipeline and access crisis.

There is an inadequate research and development pipeline in the face of rising levels of resistance, and urgent need for additional measures to ensure equitable access to new and existing vaccines, diagnostics and medicines.

We believe we are developing the first DNA pol IIIC inhibitor to enter Phase 3 clinical trials and our Phase 2 clinical trial has provided positive clinical trial results for our lead pol IIIC antibiotic candidate.

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Recent Developments

On September 26, 2024, we announced results from new analyses that extend data on the beneficial effects of ibezapolstat on the gut microbiome.

The data show an increased proportion of actinobacteriota and increased quantity of beneficial bacillota (firmicutes) leading to reversal of dysbiosis and contributing to the CDI anti-recurrence effect of ibezapol stat.

Microbiological testing of certain ACX-375 DNA pol IIIC analogues in independent qualified laboratories, including the University of Florida, demonstrated in vitro activity with minimal inhibitory concentrations of 0.5-2mcg/mL against B.anthracis, a Bioterrorism Category A pathogen including activity against ciprofloxacin resistant B.

These results were presented at the premier International C .difficile Symposium (“ICDS”) held in Bled, Slovenia in September 2024.

On September 24, 2024, we announced results from our pioneering research with ibezapolstat in collaboration with Leiden University Medical Center.

This detailed demonstration of the mode of action of DNA pol IIIC inhibitors in general, and for ibezapolstat specifically, is critically important to support our scientific foundation and our regulatory filings as we advance into this late-stage of ibezapolstat's development.

These results were similarly presented at the ICDS held in September 2024 .

Ibezapolstat Phase 2 Clinical Results

On November 2, 2023, we announced top-line results from the Phase 2b segment of our Phase 2 clinical trial of ibezapolstat in patients with CDI.

In the Phase 2b segment of the clinical trial, the observed Clinical Cure rate in the per protocol population was 15 of 16 patients (94%) in the ibezapolstat arm and 14 out of 14 patients (100%) in the vancomycin arm, respectively.

In the Phase 2a segment of the clinical trial that evaluated ibezapolstat in patients with CDI, the observed Clinical Cure rate in the per protocol population was 10 out of 10 patients (100%).

In a post hoc analysis conducted with the data available at the time of discontinuation of the trial, the overall observed Clinical Cure rate for ibezapolstat in the combined Phase 2a and Phase 2b segments of the clinical trial in patients with CDI was 96% (25 out of 26 patients), based on 10 out of 10 patients (100%) in the Phase 2a segment in the per protocol population, plus 15 out of 16 (94%) patients in the Phase 2b segment We believe that, based on the post hoc pooled Phase 2 ibezapolstat Clinical Cure rate of 96% and the historical vancomycin cure rate of approximately 81% (Vancocin® Prescribing Information, January 2021), Phase 3 trials conducted in accordance with the applicable FDA Guidance for Industry (October 2022) would be able to demonstrate the non-inferiority of ibezapolstat to vancomycin, though there can be no assurance that these early-stage, Phase 2 data will predict results in Phase 3 clinical trials.

Further analysis of the secondary and exploratory endpoints from the Phase 2b segment showed the following:

● 15 of 15 (100%) of the ibezapolstat-treated patients who achieved Clinical Cure (“CC”) at end of treatment (“EOT”) remained free of C.

difficile Infection (“CDI”) recurrence through one month after EOT, for a Sustained Clinical Cure (“SCC”) rate of 100%.

In the Phase 2a segment, 10 of 10 (100%) of the ibezapolstat-treated patients who had achieved CC at EOT remained free of CDI recurrence through one month after EOT, for an SCC rate of 100%;

● 2 of 14 patients treated with standard of care, vancomycin, experienced recurrent infection within one month after EOT for a SCC of 86%;

For extended clinical cure, data also showed that 100% (5 of 5) of ibezapolstat-treated patients who agreed to observation for up to three months following CC at EOT experienced no recurrence of infection;

● Additional microbiology and microbiome analysis of patients in the Phase 2b segment data showed that 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 recurrence of CDI.

Ibezapolstat was well-tolerated in the Phase 2 clinical trial.

In the Phase 2b segment, there were 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.

In the Phase 2a segment, there were seven adverse events reported in four patients, with only one (nausea) likely related to ibezapolstat.

One severe adverse event occurred (an exacerbation of a migraine headache) but was considered to be unrelated to ibezapolstat.

There were no drug-related treatment withdrawals or no drug-related serious adverse events, or other safety findings of concern in either segment of the Phase 2 clinical trial.

Further analyses will be forthcoming regarding other exploratory endpoints from the Phase 2b segment of the Phase 2 clinical trial later this year.

The Company anticipates presenting data from the Phase 2 clinical trial at one or more scientific conferences throughout 2024.

We convened an End-of-Phase 2 Meeting with the FDA on April 17, 2024 and announced on May 15, 2024 that we had a successful meeting, including confirmation of Phase 3 readiness for ibezapolstat for the treatment of C.

difficile infection.

Agreement with the FDA was reached on key elements to move forward with our international Phase 3 clinical trial program.

Agreement was also reached with the FDA on the complete non-clinical and clinical development plan for filing of a New Drug Application (“NDA”) for marketing approval.

Planning continues to advance ibezapolstat into international Phase 3 clinical trials for treatment of C.

difficile infection (“CDI”).

We are also now preparing to submit requests for guidance to initiate clinical trials in the European Union, the United Kingdom, Japan and Canada, as well as preparing for a manufacturing meeting with the FDA to be scheduled prior to Phase 3 enrollment.

In July 2024, we announced that a new patent has been granted by the United States Patent and Trademark Office (“USPTO”).

This patent relates to ibezapolstat and its use to treat C.

difficile infection while reducing the recurrence of the infection, as well as improving the health of the gut microbiome.

This is the latest in the series of granted patents and pending patent applications that we have filed to protect our proprietary technologies in the field of antimicrobials.

Following our successful End-of-Phase 2 Meeting with the FDA, which confirmed our Phase 3 clinical trial readiness, and per the FDA regulatory requirements, in August 2024, we submitted our request to the FDA for a meeting to review our manufacturing processes and specifications for drug substance and final project and packaging (typically referred to as Chemistry, Manufacturing and Controls (“CMC”)) for our Phase 3 clinical trials.

We anticipate the FDA to grant a meeting in the fourth quarter.

2023 At-the-Market Offering

On November 15, 2023, we entered into a Sales Agreement and established an “ATM Program”, pursuant to which we may offer and sell, from time to time through A.G.P/Alliance Global Partners, as sales agent, shares of our common stock having an

aggregate offering price of up to $17.0 million.

Under the Sales Agreement, the sales agent is entitled to compensation of 3 .0% of the gross offering proceeds of all shares of common stock sold through it pursuant to the Sales Agreement.

As of the period ended September 30, 2024, we sold a total of 2,692,190 shares of our common stock under the ATM Program at a weighted-average price of $3.35 per share, raising $9.0 million of gross proceeds and net proceeds of $8.6 million, after deducting commissions to the sales agent and other ATM Program related expenses.

As of November 11, 2024, total sales under the ATM Program since it was implemented in November 2023 are approximately $9.0 million out of the total $17 million ATM facility.

There remains approximately $8.0 million available for future sales of shares of common stock under the ATM Program.

Entry into a Material Definitive Agreement

On May 8, 2025, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $12.0 million in shares of our common stock, $0.001 par value per share.

Concurrently with the execution of the Purchase Agreement on May 8, 2025, we also entered into a registration rights agreement (the “Registration Rights Agreement”) with Lincoln Park, relating to the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the offer and sale of the securities that have been and may be issued and sold by us to Lincoln Park, from time to time in our sole discretion, from and after the date of this report, under the Purchase Agreement and to take such other specified actions to maintain such registration under the Securities Act.

Under the terms and subject to the conditions of the Purchase Agreement, we have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $12.0 million in shares of our common stock.

Such sales of our common stock, if any, will be subject to certain limitations, and may occur from time to time, at our sole discretion, over the 24-month period commencing on the date that a registration statement covering the resale by Lincoln Park of shares that have been and may be issued under the Purchase Agreement is declared effective by the Securities and Exchange Commission (the “SEC”) and a final prospectus, if necessary, in connection therewith is filed and the other conditions in the Purchase Agreement are satisfied (the date on which all such conditions are satisfied, the “Commencement Date”).

Sales of shares of our common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of our common stock and our determination as to the appropriate sources of funding for our operations.

We expect that any proceeds we receive from such sales will be used for working capital and general corporate purposes.

In connection with entering into the Purchase Agreement, on May 8, 2025, we issued 899,258 shares of our common stock to Lincoln Park in consideration for its commitment to purchase shares under the Purchase Agreement.

Nasdaq Minimum Stockholders’ Equity Requirement

On March 25, 2025, we received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we are not in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market (the “Notice”) based on the information provided in our Annual Report on Form 10-K for the year ended December 31, 2024.

Nasdaq Listing Rule 5550(b)(1) requires that companies listed on The Nasdaq Capital Market with a market value of listed securities of less than $35,000,000 and annual net income of less than $500,000 maintain stockholders’ equity of at least $2,500,000 (the "Stockholders’ Equity Requirement”).

In accordance with Nasdaq rules, we were provided 45 calendar days to submit a plan to regain compliance with the Stockholders’ Equity Requirement (the "Compliance Plan”).

We submitted the Compliance plan on May 9, 2025.

If the Compliance Plan is determined to be acceptable to the Staff, the Staff would have the discretion to grant the Company an extension of 180 calendar days from the date of the Notice to regain compliance with the Stockholders’ Equity Requirement.

There can be no assurance that the Compliance Plan will be accepted or that, if it is, we will be able to regain compliance.

The Notice has no immediate effect on our continued listing on The Nasdaq Capital Market, subject to our compliance with other continued listing requirements.

If the Staff does not accept the Compliance Plan, the Staff will provide written notification to us that the Compliance Plan has been rejected and that our common stock is subject to delisting.

At that time, we may appeal the Staff’s determination to a Nasdaq Hearing Panel.

Nasdaq Minimum Bid Price Requirement

On February 24, 2025, we received a letter from The Nasdaq Stock Market notifying us that for the preceding 31 consecutive business days, our common stock did not maintain a minimum closing bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).

The notice has no immediate effect on the listing or trading of our common stock, and the common stock will continue to trade on The Nasdaq Capital Market under the symbol “ACXP” at this time.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a grace period of 180 calendar days, or until August 25, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2).

Compliance can be achieved automatically and without further action if the closing bid price of our common stock is at or above $1.00 for a minimum of 10 consecutive business days at any time during the 180-day compliance period, in which case Nasdaq will notify us of our compliance and the matter will be closed.

If, however, we do not achieve compliance with the Minimum Bid Price Requirement by August 25, 2025, we may be eligible for additional time to comply.

In order to be eligible for such additional time, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and must notify Nasdaq in writing of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.

However, if it appears to Nasdaq that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will provide notice that our common stock will be subject to delisting.

We would then be entitled to appeal that determination to a Nasdaq hearings panel.

We intend to actively monitor the bid price of our common stock and will consider available options to regain compliance with the Minimum Bid Price Requirement.

However, there can be no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement or that Nasdaq will grant us a further extension of time to regain compliance, if applicable.

Effects of Coronavirus (COVID-19) on Our Business

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Results of Operations

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

The following table presents a summary of the changes in our results of operations for the three months ended September 30, 2024 compared with the three months ended September 30, 2023:

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

The following table presents a summary of the changes in our results of operations for the three months ended March 31, 2025 compared with the three months ended March 31, 2024:

Three Months Ended

September 30,

(in thousands)

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Research and Development Expenses

Research and development expenses were $1.2 million for the three months ended September 30, 2024 and $1.3 million for the three months ended September 30, 2023, a decrease of $0.1 million primarily due to $0.1 million increase in manufacturing related costs offset by $0.2 million decrease in consulting fees.

General and Administrative Expenses

General and administrative expenses were $1.6 million for the three months ended September 30, 2024 and $1.8 million for the three months ended September 30, 2023, a decrease of $0.2 million.

The decrease was primarily due to $0.2 million increase in professional fees and $0.1 million increase in compensation related costs offset by $0.5 million decrease in share-based compensation related costs.

Net loss was $2.8 million for the three months ended September 30, 2024, and $3.1 million for the three months ended September 30, 2023, a decrease of $0.3 million, due to the reasons stated above.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

The following table presents a summary of the changes in our results of operations for the nine months ended September 30, 2024 compared with the nine months ended September 30, 2023:

Nine Months Ended

September 30,

(in thousands)

OPERATING EXPENSES:

Research and Development

General and Administrative

TOTAL OPERATING EXPENSES

Research and Development Expenses

Research and development expenses were $4.6 million for the nine months ended September 30, 2024 and $4.1 million for the nine months ended September 30, 2023, an increase of $0.5 million primarily due to $0.9 million increase in manufacturing related costs offset by $0.4 million decrease in consulting fees.

Research and development expenses were $0.6 million for the three months ended March 31, 2025 and $1.6 million for the three months ended March 31, 2024, a decrease of $1.0 million due to $0.4 million decrease in manufacturing related costs and $0.6 million decrease in consulting fees as a result of clinical trial related expenses in the prior year.

General and Administrative Expenses

General and administrative expenses were $6.7 million for the nine months ended September 30, 2024 and $5.4 million for the nine months ended September 30, 2023, an increase of $1.3 million.

The increase was primarily due to $1.1 million increase in professional fees and $0.2 million increase in legal costs.

Net loss was $11.3 million for the nine months ended September 30, 2024, and $9.5 million for the nine months ended September 30, 2023, an increase of $1.8 million, due to the reasons stated above.

General and administrative expenses were $1.6 million for the three months ended March 31, 2025 and $2.8 million for the three months ended March 31, 2024, a decrease of $1.2 million.

The decrease was primarily due to $0.7 million decrease in professional fees as a result of lower consulting expenses and $0.6 million decrease in share-based compensation related costs.

Net loss was $2.1 million for the three months ended March 31, 2025, and $4.4 million for the three months ended March 31, 2024, a decrease of $2.3 million, due to the reasons stated above.

Liquidity and Capital Resources

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $64.5 million as of September 30, 2024.

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $69.5 million as of March 31, 2025.

We have funded our operations primarily from equity issuances.

We received net cash proceeds of approximately $12.9 million from equity financings closed between March 2018 and October 2020.

We received net proceeds of approximately $12.9 million from equity financings closed between March 2018 and October 2020.

On June 29, 2021, we completed our IPO resulting in net proceeds of approximately $14.8 million after deducting underwriter discounts of $1.4 million and offering costs of approximately $1.1 million.

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Under the ATM Program, we raised net proceeds of approximately $ 8.8 million after deducting sales agent commissions and other related expenses of $0.4 million.

As of January 6, 2025, we suspended the ATM program.

In January 2025, we completed a registered direct offering and concurrent private placement for net proceeds of $2.1 million after deducting placement agent fees and offering expenses.

In March 2025, we completed a registered direct offering and concurrent private placement for net proceeds of $0.9 million after deducting placement agent fees and offering expenses.

Based upon our lack of revenue expected for the foreseeable future, and because of numerous risks and uncertainties associated with the research, development and future commercialization of our product candidates, we are unable to estimate with certainty the amounts of increased capital outlays and operating expenditures associated with our anticipated clinical trials and development activities.

As of September 30, 2024, we had working capital of $2.7 million, consisting primarily of $5.8 million of cash, $0.2 million of other receivable and prepaid expenses, offset by approximately $3.3 million of accounts payable and accrued expenses.

As of March 31, 2025, we had working capital of $2.3 million, consisting primarily of $4.6 million of cash and $0.2 million of prepaid expenses, offset by approximately $2.5 million of accounts payable and accrued expenses.

The following table sets forth selected cash flow information for the periods indicated:

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

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Financing activities

Net increase/(decrease) in cash

Net increase in cash

Net Cash Used in Operating Activities

Net cash used in operating activities was $8.1 million for the nine months ended September 30, 2024.

The net loss was greater than the net cash used in operating activities by $3.2 million, primarily attributable to share-based compensation and share-based vendor payments of $2.9 million and increase in accounts payable and accrued expenses of $0.3 million.

Net cash used in operating activities was $5.6 million for the nine months ended September 30, 2023.

The net loss was greater than the net cash used in operating activities by $3.8 million, primarily attributable to share-based compensation and share-

based vendor payments of $2.5 million and an increase in accounts payable and accrued expenses of $1.2 million and decrease in prepaid expenses of $0.1 million.

Net cash used in operating activities was $2.1 million for the three months ended March 31, 2025.

The net loss was greater than the net cash used in operating activities by $0.1 million, primarily attributable to share-based compensation and share-based vendor payments of $0.4 million offset by decrease in accounts payable and accrued expenses of $0.3 million.

Net cash used in operating activities was $3.1 million for the three months ended March 31, 2024.

The net loss was greater than the net cash used in operating activities by $1.3 million, primarily attributable to share-based compensation and share-based vendor payments of $1.2 million.

Net Cash Provided by Financing Activities

Net cash provided from financing activities was $6.4 million for the nine months ended September 30, 2024, which was primarily attributable to the ATM Program.

Net cash provided from financing activities was $3.5 million for the nine months ended September 30, 2023, which was attributable to the net proceeds from the registered direct offering.

Net cash provided from financing activities was $3.0 million for the three months ended March 31, 2025, which was primarily attributable to the net proceeds from the January and March Registered Direct Offerings.

Net cash provided from financing activities was $4.5 million for the three months ended March 31, 2024, which was primarily attributable to the ATM Program.

Critical Accounting Policies and Estimates

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We account for the cost of services performed by vendors in exchange for an award of our common stock or stock options, based on the grant-date fair value of the award or the fair value of the services rendered, whichever is more readily determinable.

We also use Black-Scholes option pricing model for the purpose of estimating the fair value of options and warrants.

also use Black-Scholes option pricing model for the purpose of estimating the fair value of options and warrants.

Changes in our Black-Scholes assumptions, or if we were to utilize an alternative method for valuing options or warrants issued to our vendors, could impact our expense and our results of operations.

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Improvements to Income Tax Disclosures , which expands the disclosures required for income taxes.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendment should be applied on a prospective basis while retrospective application is permitted.

The Company is currently evaluating the effect of this pronouncement on its disclosures.

This ASU is effective for fiscal years beginning after December 15, 2024, we currently believe that it will not have a material impact on our disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures , to improve transparency in financial reporting by requiring entities to present more detailed information about the nature of expenses included within the Income Statement.

The guidance will first be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

We are currently evaluating the effect of this pronouncement on our disclosures.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-Q

Item 2. Management’s Discussion and Analysis