EXHIBIT 99.1 FOR IMMEDIATE RELEASE Iterum Therapeutics Reports First Quarter 2024 Financial Results --NDA Resubmitted; FDA Action Expected in Early Q4 24— --Cash Runway into 2025, including through Potential FDA Approval-- --Company to Host Conference Call Today at 8:30 a.m. EDT-- DUBLIN, Ireland and CHICAGO, May 13, 2024 -- Iterum Therapeutics plc (Nasdaq: ITRM), (Iterum) a clinical-stage pharmaceutical company focused on developing next generation oral and IV antibiotics to treat infections caused by mult ...

--NDA Resubmitted; FDA Action Expected in Early Q4 24-- --Cash Runway into 2025, including through Potential FDA Approval-- --Company to Host Conference Call Today at 8:30 a.m. EDT-- DUBLIN, Ireland and CHICAGO, May 13, 2024 (GLOBE NEWSWIRE) -- Iterum Therapeutics plc (NASDAQ:ITRM), (Iterum) a clinical-stage pharmaceutical company focused on developing next generation oral and IV antibiotics to treat infections caused by multi-drug resistant pathogens in both community and hospital settings, today reported ...

DUBLIN, Ireland and CHICAGO, May 06, 2024 (GLOBE NEWSWIRE) -- Iterum Therapeutics plc (NASDAQ:ITRM) (the Company), a clinical-stage pharmaceutical company focused on developing next generation oral and IV antibiotics to treat infections caused by multi-drug resistant pathogens in both community and hospital settings, today announced that the Company will release its first quarter 2024 financial results before the open of the U.S. financial markets on Monday, May 13, 2024. Management will host a conference c ...

--First Oral Penem in the U.S. and Second New Oral Treatment for uUTIs in Over 25 Years, if approved-- --Potential Approval Early Q4 2024-- DUBLIN, Ireland and CHICAGO, April 29, 2024 (GLOBE NEWSWIRE) -- Iterum Therapeutics plc (NASDAQ:ITRM) (the Company), a clinical-stage pharmaceutical company focused on developing next generation oral and IV antibiotics to treat infections caused by multi-drug resistant pathogens in both community and hospital settings, today announced that it has resubmitted its New Dru ...

EXHIBIT 99.1 FOR IMMEDIATE RELEASE Iterum Therapeutics Reports Fourth Quarter and Full Year 2023 Financial Results --Resubmission of NDA On Track for Early Q2 24— --Cash Runway into 2025, including through Potential FDA Approval in Early Q4 24-- --Company to host conference call today at 8:30amET-- DUBLIN, Ireland and CHICAGO, March 28, 2024 -- Iterum Therapeutics plc (Nasdaq: ITRM), a clinical-stage pharmaceutical company focused on developing next generation oral and IV antibiotics to treat infections cau ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38503 Iterum Therapeutics plc (Exact name of Registrant as specified in its Charter) Ireland 98-1283148 (State or other jurisdiction ...

Financial Data and Key Metrics Changes - Total operating expenses increased to $16.7 million in Q3 2023 from $7 million in Q3 2022, primarily driven by higher R&D expenses related to the REASSURE trial [38] - Net loss on a U.S. GAAP basis was $3.9 million for Q3 2023 compared to $29.1 million for the same period in 2022, while non-GAAP net loss was $15.7 million in Q3 2023 versus $5.3 million in Q3 2022, reflecting a $10.4 million increase due to higher R&D expenses [39] Business Line Data and Key Metrics Changes - R&D costs rose to $14.9 million in Q3 2023 from $4.4 million in Q3 2022, mainly due to costs associated with the REASSURE trial [69] Market Data and Key Metrics Changes - The market for uncomplicated urinary tract infections (uUTI) is substantial, with approximately 15 million to 17 million infections annually in the U.S. [23] Company Strategy and Development Direction - The company aims to bring the first new oral treatment for uncomplicated urinary tract infections to the U.S. market in over 20 years and is focused on efficiently raising capital to fund operations [15][18] - The timeline for key milestones has been accelerated by a quarter, with top line data expected in early Q1 2024 and potential NDA resubmission to the FDA in Q2 2024 [12][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the value of oral sulopenem for treating multidrug-resistant infections and looks forward to the upcoming top line data readout [54] - The company is exploring various financing strategies to ensure continued operations through 2024 and beyond, including potential partnerships and debt financing [50][52] Other Important Information - As of September 30, 2023, the company had cash and cash equivalents of $35.9 million, which is expected to fund operations into Q3 2024 [18][37] - The company has been granted new patents in Korea and Australia, enhancing its patent estate for oral sulopenem [36][63] Q&A Session Summary Question: When do you expect that oral sulopenem will be approved? - Approval is anticipated in Q4 2024, following a potential resubmission of the NDA in Q2 2024 [26][35] Question: How long can the company operate with its current cash on hand? - Current cash is sufficient to fund operations into Q3 2024, covering the top line data readout and NDA resubmission [37][49] Question: Can you discuss the long-term financing strategy of the company? - The company is evaluating various financing strategies, including share issuances and partnerships, to ensure sufficient capital for operations [50][52] Question: What actions are being taken for sulopenem in ex-U.S. markets? - The company plans to initiate discussions for ex-U.S. markets after obtaining data from the REASSURE trial [45]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Iterum Therapeutics plc [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Iterum Therapeutics plc's unaudited financial statements, highlighting significant operating losses and going concern doubt [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from **$66.833 million** to **$39.728 million**, primarily due to reduced cash and investments, with a significant decline in equity | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $4,816 | $21,092 | | Short-term investments | $31,076 | $39,712 | | Total current assets | $38,527 | $62,444 | | Total assets | $39,728 | $66,833 | | Total current liabilities | $16,396 | $9,064 | | Total liabilities | $36,296 | $38,834 | | Total shareholders' equity | $3,432 | $27,999 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss improved to **$3.877 million** for Q3 2023, from **$29.109 million** in Q3 2022, due to derivative fair value adjustments and no share option cancellation expense | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :-------------------- | :------------------------------ | :------------------------------ | | Research and development | $(14,852) | $(4,353) | | General and administrative | $(1,833) | $(2,681) | | Total operating expenses | $(16,685) | $(7,034) | | Operating loss | $(16,685) | $(7,034) | | Adjustments to fair value of derivatives | $13,199 | $(4,834) | | Cancellation of share options | $0 | $(17,350) | | Net loss | $(3,877) | $(29,109) | | Net loss per share – basic and diluted | $(0.30) | $(2.38) | | Metric (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------- | :----------------------------- | :----------------------------- | | Research and development | $(30,248) | $(11,777) | | General and administrative | $(5,789) | $(10,680) | | Total operating expenses | $(36,037) | $(22,457) | | Operating loss | $(36,037) | $(22,457) | | Adjustments to fair value of derivatives | $11,361 | $2,498 | | Cancellation of share options | $0 | $(17,350) | | Net loss | $(26,009) | $(39,344) | | Net loss per share – basic and diluted | $(2.02) | $(3.22) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash used in operations increased from **$14.208 million** to **$26.487 million** for the nine months ended September 30, 2023, partially offset by investing activities | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(26,487) | $(14,208) | | Net cash provided by investing activities | $9,813 | $9,579 | | Net cash provided by / (used in) financing activities | $445 | $(2,251) | | Net decrease in cash, cash equivalents and restricted cash | $(16,276) | $(6,957) | | Cash, cash equivalents and restricted cash, at end of period | $4,850 | $20,553 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Shareholders' equity decreased from **$27.999 million** to **$3.432 million**, primarily due to the net loss incurred during the period | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Ordinary Shares (Amount) | $130 | $126 | | Additional Paid-in Capital | $452,235 | $451,150 | | Accumulated Deficit | $(448,936) | $(422,927) | | Total Shareholders' Equity | $3,432 | $27,999 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, fair value, debt, equity, and commitments, highlighting liquidity challenges and going concern doubt [1. Basis of Presentation](index=10&type=section&id=1.%20Basis%20of%20Presentation) Iterum Therapeutics, a clinical-stage company, faces substantial doubt about its going concern ability due to significant losses and funding needs - Iterum Therapeutics plc is a clinical-stage pharmaceutical company developing sulopenem, a novel anti-infective compound, aiming to be the first oral penem in the U.S. and the first oral and IV branded penem globally[24](index=24&type=chunk) - The company has incurred operating losses since inception, with net losses of **$26.009 million** and **$39.344 million** for the nine months ended September 30, 2023 and 2022, respectively, and an accumulated deficit of **$448.936 million** as of September 30, 2023[31](index=31&type=chunk) - Based on available cash, cash equivalents, and short-term investments, the company does not have sufficient funds to cover operations and capital expenditures for the next 12 months, raising substantial doubt about its ability to continue as a going concern[31](index=31&type=chunk)[33](index=33&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines significant accounting policies, including estimates, cash, credit risk, and net loss per share, noting ASU 2016-13 adoption - The company operates as a single business segment focused on the development and commercialization of innovative treatments for drug-resistant bacterial infections[45](index=45&type=chunk) | Operating Expenses (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Ireland | $15,201 | $5,675 | $31,754 | $15,302 | | U.S. | $1,484 | $1,352 | $4,260 | $7,129 | | Bermuda | $0 | $7 | $23 | $26 | | Total | $16,685 | $7,034 | $36,037 | $22,457 | - The company adopted ASU No. 2016-13, Financial Instruments - Credit Losses, effective January 1, 2023, but does not expect a material impact on its financial statements[47](index=47&type=chunk) [3. Fair Value of Financial Assets and Liabilities](index=13&type=section&id=3.%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) This note details fair value measurements of financial assets and liabilities, categorizing them by level, with Level 3 derivatives valued using specific models | Assets (in thousands) | Sep 30, 2023 Total | Dec 31, 2022 Total | | :-------------------- | :----------------- | :----------------- | | Commercial paper | $4,734 | $15,232 | | U.S. Treasury and Agency bonds | $26,342 | $16,699 | | Corporate bonds | $0 | $7,781 | | Total Short-term investments | $31,076 | $39,712 | | Liabilities (in thousands) | Sep 30, 2023 Book Value | Sep 30, 2023 Approximate Fair Value | Dec 31, 2022 Book Value | Dec 31, 2022 Approximate Fair Value | | :------------------------- | :---------------------- | :---------------------------------- | :---------------------- | :---------------------------------- | | Long-term exchangeable note | $12,462 | $12,569 | $10,094 | $10,827 | | Derivative liability - exchange option and change of control | $75 | $75 | $196 | $196 | | Royalty-linked notes | $7,131 | $7,131 | $18,372 | $18,372 | | Total | $19,668 | $19,775 | $28,662 | $29,395 | - The fair value of the derivative liability (exchange option and change of control premium) was determined using the binomial option pricing model and DCF analysis, with key inputs including share price, market capitalization, volatility, and risk-free interest rate[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) [4. Short-term Investments](index=15&type=section&id=4.%20Short-term%20Investments) Short-term investments, classified as available-for-sale, comprise commercial paper and U.S. Treasury bonds, reported at fair value - Short-term investments are classified as available-for-sale and consist of highly liquid, minimum 'A-' rated commercial paper and U.S. Treasury and Agency bonds with maturities over three months at purchase[59](index=59&type=chunk) | Investment Type (in thousands) | Amortized Cost (Sep 30, 2023) | Fair Value (Sep 30, 2023) | Amortized Cost (Dec 31, 2022) | Fair Value (Dec 31, 2022) | | :----------------------------- | :---------------------------- | :------------------------ | :---------------------------- | :------------------------ | | Commercial paper | $4,736 | $4,734 | $15,230 | $15,232 | | U.S. Treasury and Agency bonds | $26,337 | $26,342 | $16,996 | $16,699 | | Corporate bonds | $0 | $0 | $7,836 | $7,781 | | Total | $31,073 | $31,076 | $40,062 | $39,712 | [5. Prepaid Expenses and Other Current Assets](index=16&type=section&id=5.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets increased from **$1.338 million** to **$2.635 million**, mainly due to higher prepaid R&D expenses | Item (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------ | :----------- | :----------- | | Prepaid research and development expenses | $1,705 | $458 | | Prepaid insurance | $687 | $592 | | Research and development tax credit receivable | $170 | $118 | | Other prepaid assets | $73 | $170 | | Total | $2,635 | $1,338 | [6. Intangible Asset, net](index=16&type=section&id=6.%20Intangible%20Asset,%20net) Net intangible asset decreased from **$1.719 million** to **$0.432 million** due to accumulated amortization of a tableting facility reservation right | Item (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------ | :----------- | :----------- | | Gross intangible asset | $5,148 | $5,148 | | Less: accumulated amortization | $(4,716) | $(3,429) | | Net intangible asset | $432 | $1,719 | [7. Property and Equipment, net](index=16&type=section&id=7.%20Property%20and%20Equipment,%20net) Net property and equipment slightly decreased from **$0.069 million** to **$0.059 million**, reflecting ongoing depreciation | Item (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------ | :----------- | :----------- | | Leasehold improvements | $148 | $148 | | Furniture and fixtures | $120 | $120 | | Computer equipment | $98 | $85 | | Total | $366 | $353 | | Less: accumulated depreciation | $(307) | $(284) | | Net property and equipment | $59 | $69 | [8. Leases](index=18&type=section&id=8.%20Leases) Lease liabilities and right-of-use assets significantly decreased due to lease derecognition, with new agreements under ASC 842 - A Deed of Assignment in August 2023 led to the derecognition of a Right of Use asset and lease liability, reducing total lease liabilities from **$1.636 million** (Dec 31, 2022) to **$0.621 million** (Sep 30, 2023)[65](index=65&type=chunk)[70](index=70&type=chunk) - The weighted-average remaining lease term decreased from **5.04 years** (Dec 31, 2022) to **1.71 years** (Sep 30, 2023), and the weighted-average discount rate increased from **5.5%** to **12.9%**[69](index=69&type=chunk) | Lease Liabilities (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------- | :----------- | :----------- | | Other assets (Right-of-use) | $630 | $1,770 | | Other current liabilities | $314 | $332 | | Other liabilities | $307 | $1,304 | | Total lease liabilities | $621 | $1,636 | [9. Accrued Expenses](index=19&type=section&id=9.%20Accrued%20Expenses) Accrued expenses significantly increased from **$4.346 million** to **$9.049 million**, primarily due to higher accrued clinical trial costs | Item (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :------------------ | :----------- | :----------- | | Accrued clinical trial costs | $6,634 | $1,549 | | Accrued payroll and bonus expenses | $2,113 | $1,971 | | Accrued professional fees | $83 | $606 | | Accrued other expenses | $219 | $220 | | Total | $9,049 | $4,346 | [10. Debt](index=19&type=section&id=10.%20Debt) This note details debt obligations, including repaid facilities and outstanding 2025 Exchangeable Notes, with significant conversions to ordinary shares - The Secured Credit Facility with SVB and the Paycheck Protection Program loan were fully repaid in March 2022[73](index=73&type=chunk)[89](index=89&type=chunk) - As of September 30, 2023, **$12.607 million** aggregate principal amount of 2025 Exchangeable Notes remained outstanding, after **$39.201 million** were exchanged for **3,592,555** ordinary shares between January 21, 2021, and September 30, 2023[81](index=81&type=chunk)[88](index=88&type=chunk) | Scheduled Principal Payments (in thousands) | Amount | | :---------------------------------------- | :----- | | Year Ending September 30, 2024 | $0 | | Year Ending September 30, 2025 | $12,607 | | Thereafter | $104 | | Total | $12,711 | [11. Royalty-Linked Notes](index=23&type=section&id=11.%20Royalty-Linked%20Notes) RLNs entitle holders to payments based on U.S. sulopenem net revenues, with the fair value liability adjusted due to reduced revenue forecasts - RLNs entitle holders to payments based on a percentage of U.S. net revenues from specified sulopenem products, contingent on FDA approval by December 31, 2025, and subject to a maximum return of **$160.00** per RLN[91](index=91&type=chunk) - The RLN liability is carried at fair value, determined using discounted cash flow (DCF) analysis, and experienced a non-cash adjustment of **$13.2 million** (three months) and **$11.4 million** (nine months) ended September 30, 2023, primarily due to reduced management's forecasted U.S. sulopenem sales[92](index=92&type=chunk) | RLN Liability (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------- | :----------- | :----------- | | Total liability related to the sale of future royalties, on inception | $10,990 | $10,990 | | Adjustments to fair value | $(7,576) | $3,665 | | Total liability at period end | $7,131 | $18,372 | | Long-term Portion | $7,131 | $18,372 | [12. Shareholders' Equity](index=23&type=section&id=12.%20Shareholders'%20Equity) Authorized ordinary shares increased to **80,000,000**, with **363,828** shares sold for **$0.4 million** and **3,592,555** shares issued from note conversions - Shareholders approved an increase of **60,000,000** ordinary shares, bringing the total authorized to **80,000,000** ordinary shares of **$0.01** par value each as of September 30, 2023[95](index=95&type=chunk) - During the nine months ended September 30, 2023, the company sold **363,828** ordinary shares under an 'at-the-market' agreement for net proceeds of **$0.4 million**[97](index=97&type=chunk) - Between January 21, 2021, and September 30, 2023, **$39.201 million** of Exchangeable Notes were exchanged for **3,592,555** ordinary shares[98](index=98&type=chunk) [13. Share-Based Compensation](index=25&type=section&id=13.%20Share-Based%20Compensation) The company granted **857,500** share options and recognized **$0.645 million** in share-based compensation, with **$1.255 million** unamortized - The company granted **857,500** share options to employees and directors during the nine months ended September 30, 2023, compared to **167,960** in the same period of 2022[118](index=118&type=chunk) | Share-Based Compensation Expense (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and development expense | $96 | $118 | $315 | $1,258 | | General and administrative expense | $46 | $304 | $330 | $3,043 | | Total | $142 | $422 | $645 | $4,301 | - Total unamortized share-based compensation expense for options and RSUs was **$1.255 million** as of September 30, 2023, expected to be recognized over a remaining average vesting period of **2.32 years**[123](index=123&type=chunk) [14. Income Taxes](index=28&type=section&id=14.%20Income%20Taxes) Income tax expense was **$0.471 million** for the nine months ended September 30, 2023, with a full valuation allowance against NOLs due to historical losses - Income tax expense for the nine months ended September 30, 2023, was **$0.471 million**, compared to **$0.200 million** in the prior year[124](index=124&type=chunk) - The company has net operating loss carryforwards in Ireland of approximately **$40.873 million** as of September 30, 2023, for which a full valuation allowance has been recognized due to a history of losses[125](index=125&type=chunk) [15. Commitments and Contingencies](index=28&type=section&id=15.%20Commitments%20and%20Contingencies) The company has commitments under its Pfizer license, including milestone payments and royalties, and obligations for Royalty-Linked Notes based on future sulopenem sales - Under the Pfizer License, the company is obligated to pay Pfizer potential future regulatory and sales milestone payments (ranging from **$250 million** to **$1 billion** per product type) and royalties (single-digit to mid-teens percentage) based on net sales of licensed products[127](index=127&type=chunk) - Royalty-Linked Notes (RLNs) entitle holders to payments based on a percentage of U.S. net revenues from specified sulopenem products, subject to FDA approval and a maximum return of **$160.00** per RLN[128](index=128&type=chunk) [16. Condensed Consolidating Financial Statements](index=29&type=section&id=16.%20Condensed%20Consolidating%20Financial%20Statements) Iterum Bermuda issued Exchangeable Notes and RLNs, fully guaranteed by Iterum Therapeutics plc and its subsidiaries, with no significant funding restrictions - Iterum Bermuda, a wholly-owned finance subsidiary, issued **$12.607 million** in Exchangeable Notes and all RLNs outstanding as of September 30, 2023[132](index=132&type=chunk) - Iterum Therapeutics plc and its Subsidiary Guarantors provide a full and unconditional guarantee of Iterum Bermuda's obligations under the Exchangeable Notes and RLNs[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, sulopenem development, significant losses, and going concern doubt, outlining plans for funding and strategic alternatives [Overview](index=30&type=section&id=Overview) Iterum Therapeutics, a clinical-stage company developing sulopenem, completed REASSURE trial enrollment, but significant losses raise going concern doubt - Iterum Therapeutics is developing sulopenem as potentially the first oral branded penem in the U.S. and the first oral and IV branded penem globally for drug-resistant bacterial infections[136](index=136&type=chunk) - The company completed enrollment of **2,229** patients in the REASSURE Phase 3 clinical trial for oral sulopenem in uUTIs in October 2023, with topline data expected in Q1 2024 and a potential NDA resubmission in Q2 2024[137](index=137&type=chunk) - The company has incurred significant operating losses since inception, with an accumulated deficit of **$448.9 million** as of September 30, 2023, and does not have sufficient cash to fund operations for the next 12 months, raising substantial doubt about its ability to continue as a going concern[138](index=138&type=chunk)[141](index=141&type=chunk) [Components of Our Results of Operations](index=31&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section details R&D, G&A, interest, derivative fair value adjustments, and other income, emphasizing high costs and uncertainty in drug development - Research and development expenses primarily include costs for CROs, CMOs, clinical trials, manufacturing, employee-related expenses, regulatory compliance, and third-party licensing agreements[143](index=143&type=chunk) - General and administrative expenses cover salaries, benefits, share-based compensation for executive and administrative functions, director compensation, professional fees, and pre-commercialization activities[148](index=148&type=chunk) - Derivative liabilities, including Royalty-Linked Notes and embedded features in Exchangeable Notes, are revalued at each balance sheet date, with changes in fair value recorded as adjustments to fair value of derivatives in the statements of operations[151](index=151&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) Management's financial statements rely on significant estimates for share-based compensation, RLNs, derivatives, and R&D accruals, with no material changes - Significant estimates and assumptions in the financial statements include the valuation of share-based compensation, Royalty-Linked Notes, and derivative liabilities, as well as accruals for research and development expenses[37](index=37&type=chunk) - There have been no significant changes to the company's critical accounting estimates from those described in its Annual Report on Form 10-K filed on March 16, 2023[156](index=156&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section compares financial performance for Q3 and YTD 2023 vs. 2022, noting increased R&D, decreased G&A, and derivative fair value fluctuations [Comparison of the three months ended September 30, 2023 and 2022](index=35&type=section&id=Comparison%20of%20the%20three%20months%20ended%20September%2030,%202023%20and%202022) Operating loss increased to **$(16.685) million** in Q3 2023, but net loss improved to **$(3.877) million** due to derivative fair value adjustments | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Change | | :-------------------- | :------------------------------ | :------------------------------ | :----- | | Operating loss | $(16,685) | $(7,034) | $(9,651) | | Total other income / (expense), net | $12,969 | $(22,645) | $35,614 | | Loss before income taxes | $(3,716) | $(29,679) | $25,963 | - Research and development expenses increased by **$10.1 million**, primarily due to increased costs for the REASSURE trial[158](index=158&type=chunk) - General and administrative expenses decreased by **$0.7 million**, mainly due to lower legal fees[160](index=160&type=chunk) [Comparison of the nine months ended September 30, 2023 and 2022](index=36&type=section&id=Comparison%20of%20the%20nine%20months%20ended%20September%2030,%202023%20and%202022) Operating loss increased to **$(36.037) million** for YTD 2023, but loss before taxes improved to **$(25.538) million** due to derivative fair value adjustments | Metric (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change | | :-------------------- | :----------------------------- | :----------------------------- | :----- | | Operating loss | $(36,037) | $(22,457) | $(13,580) | | Total other income / (expense), net | $10,499 | $(16,687) | $27,186 | | Loss before income taxes | $(25,538) | $(39,144) | $13,606 | - Research and development expenses increased by **$19.2 million**, primarily due to increased costs for the REASSURE trial[168](index=168&type=chunk) - General and administrative expenses decreased by **$2.5 million**, mainly due to lower share-based compensation expense and legal fees[169](index=169&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces going concern doubt due to insufficient cash, actively evaluating financing and strategic alternatives amidst share issuance limitations - As of September 30, 2023, the company had cash, cash equivalents, and short-term investments of **$35.9 million**, which is insufficient to fund operating expenses and capital expenditure requirements for the next 12 months, raising substantial doubt about its ability to continue as a going concern[141](index=141&type=chunk)[182](index=182&type=chunk)[204](index=204&type=chunk) - The company is evaluating corporate, strategic, financial, and financing alternatives, including licensing, sale of assets, merger, or other strategic transactions, to maximize stakeholder value[142](index=142&type=chunk)[208](index=208&type=chunk) - Shareholder approval for the disapplication of statutory pre-emption rights was not received, limiting the company's ability to efficiently issue new ordinary shares for cash in capital raising transactions without a time-consuming pro-rata rights offering[178](index=178&type=chunk)[231](index=231&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on marketable securities, foreign currency fluctuations, and potential inflation impacts, without hedging activities - An immediate **100 basis point** increase in interest rates would result in a **$0.1 million** decrease in the fair market value of the company's investment portfolio as of September 30, 2023[214](index=214&type=chunk) - The company is exposed to foreign currency rate fluctuations from global CRO and CMO contracts, but substantially all liabilities are U.S. dollar denominated, and no material effect from foreign currency gains/losses was reported for the nine months ended September 30, 2023[215](index=215&type=chunk) - Inflation has not had a material effect on the financial statements to date, but continued increases could raise labor, research, manufacturing, and development costs[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting - The company's disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of September 30, 2023[217](index=217&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended September 30, 2023[218](index=218&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, exhibits, and signatures, detailing potential challenges and compliance matters [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings or aware of any threatened litigation that could adversely affect its business - The company is not currently involved in any material legal proceedings and is unaware of any pending or threatened litigation that could materially adversely affect its business, operating results, or financial condition[220](index=220&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks, including going concern doubt, dependence on sulopenem development, regulatory approval challenges, and the need for additional capital - The company has identified conditions that raise substantial doubt about its ability to continue as a going concern, with only **$35.9 million** in cash, cash equivalents, and short-term investments as of September 30, 2023, insufficient for the next 12 months[222](index=222&type=chunk) - The company is heavily dependent on the successful development, regulatory approval, and commercialization of its sulopenem program, particularly oral sulopenem, following a Complete Response Letter (CRL) from the FDA[223](index=223&type=chunk)[240](index=240&type=chunk) - Failure to obtain additional funding on acceptable terms could force the company to delay, reduce, or eliminate product development programs or commercialization efforts[229](index=229&type=chunk)[232](index=232&type=chunk) [Risks Related to Our Financial Position and Capital Requirements](index=47&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Requirements) Significant financial risks include going concern doubt, uncertain future funding, potential shareholder dilution, and financial statement volatility from derivative revaluations - The company has an accumulated deficit of **$448.9 million** as of September 30, 2023, and has incurred net losses every year since its inception in 2015[223](index=223&type=chunk) - The company's ability to raise additional capital is severely limited by the lack of shareholder approval for the disapplication of statutory pre-emption rights under Irish law, restricting cash issuance to **5.2 million** ordinary shares until January 26, 2026[231](index=231&type=chunk) - The company's financial statements include substantial non-operating gains or losses from quarterly revaluation of derivative instruments, which are highly sensitive to changes in share price and management assumptions[235](index=235&type=chunk) [Risks Related to Clinical Development and Commercialization](index=56&type=section&id=Risks%20Related%20to%20Clinical%20Development%20and%20Commercialization) Success depends on sulopenem regulatory approval and commercialization, facing clinical setbacks, market acceptance challenges, and intense competition - The FDA issued a Complete Response Letter (CRL) for oral sulopenem, requiring at least one additional adequate and well-controlled clinical trial and non-clinical PK/PD studies, which are being addressed by the ongoing REASSURE trial[223](index=223&type=chunk)[237](index=237&type=chunk)[272](index=272&type=chunk) - The REASSURE Phase 3 clinical trial for oral sulopenem in uUTIs completed enrollment in October 2023, with topline data expected in Q1 2024 and a potential NDA resubmission in Q2 2024, but an SPA agreement does not guarantee marketing approval[223](index=223&type=chunk)[237](index=237&type=chunk)[272](index=272&type=chunk)[276](index=276&type=chunk)[281](index=281&type=chunk)[294](index=294&type=chunk)[410](index=410&type=chunk)[414](index=414&type=chunk) - Even if approved, oral sulopenem may not achieve market acceptance due to physician reluctance, broad availability of existing antibiotics, and potential pricing premiums over generic alternatives[304](index=304&type=chunk)[305](index=305&type=chunk) [Risks Related to Our Dependence on Third Parties](index=64&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) Heavy reliance on third parties for Pfizer License, commercialization, and manufacturing poses risks to development, commercialization, and financial results - The company relies heavily on the Pfizer License for exclusive worldwide rights to develop, manufacture, and commercialize sulopenem, and failure to comply with obligations could lead to termination of the license[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) - The company intends to use collaborators for commercialization outside the U.S. and may seek them for U.S. development, but such arrangements carry risks of non-performance, delays, and relinquishing control[337](index=337&type=chunk)[339](index=339&type=chunk) - The company relies on third-party contract manufacturers for all raw materials, drug substance, and finished product for preclinical and clinical trials, and will for commercialization, exposing it to risks of manufacturing delays, non-compliance with cGMPs, and potential misappropriation of trade secrets[349](index=349&type=chunk)[350](index=350&type=chunk)[354](index=354&type=chunk) [Risks Related to Our Intellectual Property](index=73&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) IP protection via Pfizer License and patents is crucial but uncertain, facing limited lifespan, infringement claims, litigation costs, and global trade secret challenges - The company's intellectual property for oral sulopenem relies on in-licensed patents from Pfizer and its own patents, including a U.S. patent for a bilayer tablet composition expiring no earlier than 2039 (absent extensions) and another for method of use[364](index=364&type=chunk)[372](index=372&type=chunk) - The patent prosecution process is expensive, time-consuming, and uncertain, with risks of patent applications failing to issue, being narrowed, invalidated, or challenged by third parties[365](index=365&type=chunk)[367](index=367&type=chunk) - The company also relies on trade secrets, protected by non-disclosure agreements, but faces risks of unauthorized disclosure, independent development by competitors, and difficulties in enforcement, particularly in countries with weaker intellectual property laws[401](index=401&type=chunk)[402](index=402&type=chunk)[403](index=403&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=83&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) Substantial risks exist in obtaining and maintaining regulatory approvals globally, with complex compliance for anti-kickback, fraud, abuse, and privacy laws - Obtaining regulatory approval is a lengthy, expensive, and uncertain process, with the FDA having substantial discretion to delay, limit, or deny approval, as evidenced by the CRL for oral sulopenem[409](index=409&type=chunk)[410](index=410&type=chunk)[412](index=412&type=chunk) - Any approved product will be subject to ongoing regulatory requirements for labeling, manufacturing (cGMPs), reporting adverse events, and marketing, with potential for restrictions or withdrawal from the market if non-compliance occurs[426](index=426&type=chunk)[428](index=428&type=chunk) - The company's relationships with healthcare providers and third-party payors are subject to complex anti-kickback, fraud and abuse, and privacy laws (e.g., FCPA, GDPR, HIPAA), with potential for significant civil and criminal penalties, fines, and reputational harm for non-compliance[431](index=431&type=chunk)[433](index=433&type=chunk)[462](index=462&type=chunk)[467](index=467&type=chunk) [Risks Related to Employee Matters and Managing Growth](index=94&type=section&id=Risks%20Related%20to%20Employee%20Matters%20and%20Managing%20Growth) Future success depends on retaining key personnel and managing growth, requiring significant improvements in managerial, operational, and financial systems - The company's success is highly dependent on retaining its Chief Executive Officer and other key executives, and its ability to attract, retain, and motivate qualified personnel in a competitive industry[474](index=474&type=chunk)[476](index=476&type=chunk) - Managing potential growth, particularly in manufacturing, regulatory affairs, sales, and marketing, will require significant improvements in managerial, operational, and financial systems, potentially diverting management attention and increasing expenses[477](index=477&type=chunk) - Conducting business in international markets, if approvals are obtained, exposes the company to additional risks such as reduced intellectual property protection, economic instability, and compliance with foreign regulations[479](index=479&type=chunk) [Risks Related to Taxation](index=96&type=section&id=Risks%20Related%20to%20Taxation) Past and potential future PFIC status could adversely affect U.S. Holders, while Irish stamp duty and dividend withholding tax may impact shareholder returns - The company was a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes in 2017, and while not expected to be a PFIC for 2023, its status is determined annually and could subject U.S. Holders to adverse tax consequences[483](index=483&type=chunk)[484](index=484&type=chunk)[486](index=486&type=chunk) - Transfers of ordinary shares not effected through DTC may be subject to Irish stamp duty (currently **1%**), and dividends paid by the company may be subject to Irish dividend withholding tax (currently **25%**), though exemptions exist for certain shareholders[492](index=492&type=chunk)[493](index=493&type=chunk) [Risks Related to Our Ordinary Shares](index=98&type=section&id=Risks%20Related%20to%20Our%20Ordinary%20Shares) Ordinary shares face price volatility, delisting risk, potential dilution from new issuances, and limitations on shareholder influence due to Irish law - The price of the company's ordinary shares has been highly volatile, ranging from a high of **$1.495** to a low of **$0.65** in the twelve months ending November 10, 2023, and may continue to fluctuate dramatically[497](index=497&type=chunk)[498](index=498&type=chunk) - The company received a Nasdaq non-compliance letter on September 26, 2023, for failing to maintain a minimum bid price of **$1.00** per share, with a deadline of March 25, 2024, to regain compliance; delisting could trigger a fundamental change under debt instruments[502](index=502&type=chunk)[503](index=503&type=chunk) - The issuance of additional ordinary shares from future capital raises, conversion of Exchangeable Notes, or exercise of outstanding warrants and options could materially dilute existing shareholders' ownership interests[510](index=510&type=chunk)[511](index=511&type=chunk)[512](index=512&type=chunk) [Item 6. Exhibits](index=108&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[547](index=547&type=chunk) [Signatures](index=109&type=section&id=Signatures) The report is signed by Corey Fishman, President and CEO, and Judith Matthews, CFO, on November 14, 2023 - The report is signed by Corey Fishman, President and Chief Executive Officer, and Judith Matthews, Chief Financial Officer, on November 14, 2023[551](index=551&type=chunk)

Financial Data and Key Metrics Changes - Total operating expenses increased to $10.8 million in Q2 2023 from $8.1 million in Q2 2022 [19] - R&D costs rose significantly to $9 million in Q2 2023 from $4 million in Q2 2022, primarily due to costs associated with the REASSURE trial [20] - G&A costs decreased to $1.9 million in Q2 2023 from $4.1 million in Q2 2022, attributed to lower share-based compensation and reduced legal fees [21] - Net loss on a GAAP basis was $12.2 million in Q2 2023 compared to $6.7 million in Q2 2022; on a non-GAAP basis, the net loss was $10 million in Q2 2023 versus $5.7 million in Q2 2022 [22][23] Business Line Data and Key Metrics Changes - The REASSURE trial reached 50% enrollment with 983 patients, indicating strong progress in clinical development [8][10] Market Data and Key Metrics Changes - The company has a strong cash position with approximately $45 million as of June 30, 2023, expected to fund operations into Q3 2024 [13][23] Company Strategy and Development Direction - The company aims to resubmit the NDA for oral sulopenem in the second half of 2024, contingent on positive trial results [10][24] - The company is exploring various financing strategies to support ongoing operations and future development [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the REASSURE trial's progress and the potential to bring the first new oral penem to market [17][35] - The company is focused on satisfying U.S. regulatory requirements while considering opportunities for international submissions based on trial outcomes [30][34] Other Important Information - The company has been granted a patent in Japan for oral sulopenem, enhancing its intellectual property portfolio [11][12] Q&A Session Summary Question: When is the expected timing for the interim analysis of the REASSURE trial? - Management expects the data monitoring committee's recommendation in early Q4, following an eight-week period post-enrollment [29] Question: Will positive data from REASSURE fulfill requirements for other regulatory agencies? - The company is primarily focused on U.S. requirements but will evaluate opportunities for submissions in other regions based on the trial data [30][34]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and related notes for Iterum Therapeutics plc [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Iterum Therapeutics plc, including the balance sheets, statements of operations and comprehensive loss, statements of cash flows, and statements of stockholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, fair value measurements, debt, equity, and other financial commitments [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $13,734 | $21,092 | | Short-term investments | $30,998 | $39,712 | | Total current assets | $47,653 | $62,444 | | Total assets | $51,021 | $66,833 | | Total current liabilities | $10,829 | $9,064 | | Total liabilities | $43,892 | $38,834 | | Total shareholders' equity | $7,129 | $27,999 | - Total assets decreased from **$66.8 million** at December 31, 2022, to **$51.0 million** at June 30, 2023, primarily due to a reduction in cash, cash equivalents, and short-term investments[15](index=15&type=chunk) - Shareholders' equity significantly decreased from **$28.0 million** at December 31, 2022, to **$7.1 million** at June 30, 2023[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section details the company's revenues, expenses, and net loss over specific reporting periods | Metric (in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $(8,964) | $(3,984) | $(15,396) | $(7,424) | | General and administrative | $(1,858) | $(4,066) | $(3,956) | $(7,999) | | Total operating expenses | $(10,822) | $(8,050) | $(19,352) | $(15,423) | | Operating loss | $(10,822) | $(8,050) | $(19,352) | $(15,423) | | Net loss | $(12,243) | $(6,735) | $(22,132) | $(10,235) | | Net loss per share | $(0.95) | $(0.55) | $(1.73) | $(0.84) | - Net loss for the three months ended June 30, 2023, increased to **$12.2 million** from **$6.7 million** in the prior year, driven by higher R&D expenses and negative adjustments to fair value of derivatives[17](index=17&type=chunk) - For the six months ended June 30, 2023, net loss more than doubled to **$22.1 million** from **$10.2 million** in the same period last year, primarily due to increased R&D expenses related to the REASSURE trial and negative fair value adjustments[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities | Metric (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(17,222) | $(9,669) | | Net cash provided by (used in) investing activities | $9,453 | $(6,268) | | Net cash provided by (used in) financing activities | $435 | $(2,251) | | Net (decrease) / increase in cash, cash equivalents and restricted cash | $(7,358) | $(18,237) | | Cash, cash equivalents and restricted cash, at end of period | $13,768 | $9,273 | - Net cash used in operating activities increased to **$17.2 million** for the six months ended June 30, 2023, from **$9.7 million** in the prior year, reflecting higher net losses[20](index=20&type=chunk) - Investing activities provided **$9.5 million** in cash for the six months ended June 30, 2023, primarily from the sale of short-term investments, a significant shift from **$6.3 million** used in the prior year[20](index=20&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section presents changes in the company's equity accounts, including ordinary shares and accumulated deficit | Metric (in thousands) | Balance at December 31, 2022 | Issuance of ordinary shares, net | Share-based compensation expense | Net loss | Unrealized gain on available-for-sale securities | Balance at June 30, 2023 | | :-------------------- | :--------------------------- | :------------------------------- | :------------------------------- | :------- | :--------------------------------------------- | :----------------------- | | Ordinary Shares (Amount) | $126 | $4 | — | — | — | $130 | | Additional Paid-in Capital | $451,150 | $431 | $503 | — | — | $452,084 | | Accumulated Deficit | $(422,927) | — | — | $(22,132) | — | $(445,059) | | Accumulated Other Comprehensive Loss | $(350) | — | — | — | $324 | $(26) | | Total Shareholders' Equity | $27,999 | $435 | $503 | $(22,132) | $324 | $7,129 | - Total shareholders' equity decreased from **$27.9 million** at December 31, 2022, to **$7.1 million** at June 30, 2023, primarily due to a net loss of **$22.1 million**[23](index=23&type=chunk) - The company issued ordinary shares resulting in **$0.4 million** in net proceeds and recognized **$0.5 million** in share-based compensation expense during the six months ended June 30, 2023[23](index=23&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Basis of Presentation](index=9&type=section&id=1.%20Basis%20of%20Presentation) Iterum Therapeutics plc is a clinical-stage pharmaceutical company focused on developing sulopenem, a novel anti-infective compound, for potential use as the first oral penem in the U.S. and the first oral and IV branded penem globally. The company has incurred significant operating losses since inception and relies on external funding, with current cash and short-term investments expected to fund operations for at least one year. Management is evaluating strategic alternatives to maximize stakeholder value - Iterum Therapeutics plc is a clinical-stage pharmaceutical company developing sulopenem, a novel anti-infective compound, aiming to be the first oral penem in the U.S. and the first oral and IV branded penem globally[24](index=24&type=chunk) - The company has incurred operating losses since inception, with net losses of **$22.1 million** and **$10.2 million** for the six months ended June 30, 2023 and 2022, respectively, and an accumulated deficit of **$445.1 million** as of June 30, 2023[30](index=30&type=chunk) - Management believes existing cash and short-term investments (**$13.7 million cash**, **$31.0 million short-term investments** as of June 30, 2023) are sufficient to fund operations for at least one year from the filing date[30](index=30&type=chunk) - The company is evaluating corporate, strategic, financial, and financing alternatives to maximize stakeholder value, which may include licensing, sale of assets, a company sale, merger, or other strategic transactions[32](index=32&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the company's significant accounting policies, including the use of estimates, classification of cash and cash equivalents, concentration of credit risk, net loss per ordinary share calculation, and segment reporting. It also details the adoption of ASU 2016-13 regarding credit losses, which is not expected to have a material impact - Significant estimates in financial statements include valuation of share-based compensation, royalty-linked notes (RLNs), and derivative liabilities (embedded features in Exchangeable Notes)[36](index=36&type=chunk) - Cash and cash equivalents include highly liquid investments with maturities of three months or less; restricted cash is held for warrants issued in prior offerings[38](index=38&type=chunk)[39](index=39&type=chunk) - The company operates as a single business segment focused on developing and commercializing treatments for drug-resistant bacterial infections[43](index=43&type=chunk) - The adoption of ASU 2016-13 (Credit Losses) on **January 1, 2023**, is not expected to materially impact the company's financial position or results of operations[47](index=47&type=chunk) [3. Fair Value of Financial Assets and Liabilities](index=12&type=section&id=3.%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) The company's financial assets and liabilities are measured at fair value, categorized into Level 1, 2, or 3 inputs. Short-term investments (commercial paper, U.S. Treasury bonds) are Level 2. Exchangeable Notes are valued using DCF (Level 2), while derivative liabilities (exchange option, change of control premium) and Royalty-Linked Notes (RLNs) are Level 3, valued using binomial option pricing and DCF analysis, respectively, with key assumptions like share price, volatility, and discount rates | Asset/Liability (in thousands) | June 30, 2023 Total | Level 1 | Level 2 | Level 3 | | :----------------------------- | :------------------ | :------ | :------ | :------ | | Short-term investments | $30,998 | $— | $30,998 | $— | | Exchangeable Notes (Long-term) | $11,959 | $— | $11,959 | $— | | Derivative liability | $154 | $— | $— | $154 | | Royalty-linked notes | $20,251 | $— | $— | $20,251 | - Level 3 liabilities, including the embedded exchange option and change of control premium in Exchangeable Notes, and Royalty-Linked Notes (RLNs), are valued using binomial option pricing and DCF analysis, respectively[52](index=52&type=chunk)[54](index=54&type=chunk)[57](index=57&type=chunk) | Assumption | June 30, 2023 | December 31, 2022 | | :------------------- | :------------ | :---------------- | | Share price | $1.07 | $0.84 | | Volatility | 100% | 100% | | Risk-free interest rate | 5.14% | 4.46% | | RLN Discount rate | 22% | N/A | [4. Short-term Investments](index=14&type=section&id=4.%20Short-term%20Investments) The company classifies its short-term investments as available-for-sale, consisting of highly liquid, minimum 'A-' rated commercial paper and U.S. Treasury bonds with maturities over three months. These are reported at fair value, with unrealized gains or losses recorded in comprehensive loss | Security Type (in thousands) | Amortized Cost (June 30, 2023) | Fair Value (June 30, 2023) | Amortized Cost (Dec 31, 2022) | Fair Value (Dec 31, 2022) | | :--------------------------- | :----------------------------- | :------------------------- | :---------------------------- | :------------------------ | | Commercial paper | $9,151 | $9,142 | $15,230 | $15,232 | | U.S. Treasury bonds | $21,875 | $21,856 | $16,996 | $16,699 | | Corporate bonds | — | — | $7,836 | $7,781 | | Total | $31,026 | $30,998 | $40,062 | $39,712 | - Short-term investments decreased from **$39.7 million** at December 31, 2022, to **$31.0 million** at June 30, 2023, with a shift from corporate bonds to U.S. Treasury bonds[61](index=61&type=chunk) - As of June 30, 2023, short-term investments had a weighted average maturity of **0.3 years**[59](index=59&type=chunk) [5. Prepaid Expenses and Other Current Assets](index=15&type=section&id=5.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets increased significantly from $1.3 million at December 31, 2022, to $2.9 million at June 30, 2023, primarily driven by a rise in prepaid research and development expenses | Category (in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Prepaid R&D expenses | $1,610 | $458 | | Prepaid insurance | $971 | $592 | | Total | $2,914 | $1,338 | - Prepaid research and development expenses saw a substantial increase from **$458 thousand** to **$1,610 thousand**[62](index=62&type=chunk) [6. Intangible Asset, net](index=15&type=section&id=6.%20Intangible%20Asset,%20net) The net intangible asset, primarily a reservation right for a tableting facility, decreased from $1.7 million at December 31, 2022, to $0.9 million at June 30, 2023, due to ongoing amortization over its three-year term | Metric (in thousands) | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | Gross intangible asset | $5,148 | $5,148 | | Less: accumulated amortization | $(4,287) | $(3,429) | | Intangible asset, net | $861 | $1,719 | - The intangible asset, a reservation right for a tableting facility, is being amortized over a **three-year term** from **January 1, 2021**, to **December 31, 2023**[63](index=63&type=chunk) [7. Property and Equipment, net](index=15&type=section&id=7.%20Property%20and%20Equipment,%20net) Net property and equipment remained stable at $69 thousand from December 31, 2022, to June 30, 2023, with depreciation expense of $16 thousand for the six months ended June 30, 2023 | Category (in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Leasehold improvements | $148 | $148 | | Furniture and fixtures | $120 | $120 | | Computer equipment | $101 | $85 | | Less: accumulated depreciation | $(300) | $(284) |\ | Total | $69 | $69 | - Depreciation expense for the six months ended June 30, 2023, was **$16 thousand**[64](index=64&type=chunk) [8. Leases](index=16&type=section&id=8.%20Leases) The company has operating leases for office and commercial property, with remaining terms ranging from 0.33 to 5.0 years. Operating lease costs for the six months ended June 30, 2023, were $214 thousand, with additional rental expense for short-term leases of $145 thousand and sublease income of $151 thousand | Metric (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :----------------------------- | :----------------------------- | | Operating lease costs | $214 | $410 | | Rental expense (short-term leases) | $145 | $121 | | Sublease income | $151 | $148 | | Lease Liability (in thousands) | June 30, 2023 | December 31, 2022 | | :----------------------------- | :------------ | :---------------- | | Other current liabilities | $348 | $332 | | Other liabilities | $1,146 | $1,304 | | Total lease liabilities | $1,494 | $1,636 | - Future lease payments total **$1,648 thousand**, with **$414 thousand** due in the next 12 months[68](index=68&type=chunk) [9. Accrued Expenses](index=17&type=section&id=9.%20Accrued%20Expenses) Accrued expenses increased from $4.3 million at December 31, 2022, to $5.2 million at June 30, 2023, primarily due to a significant rise in accrued clinical trial costs | Category (in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Accrued clinical trial costs | $3,471 | $1,549 | | Accrued payroll and bonus expenses | $1,407 | $1,971 | | Accrued professional fees | $99 | $606 | | Total | $5,171 | $4,346 | - Accrued clinical trial costs nearly doubled, reflecting increased activity[69](index=69&type=chunk) [10. Debt](index=17&type=section&id=10.%20Debt) This section details the company's debt obligations, including the fully repaid Secured Credit Facility with SVB and the 2025 Exchangeable Notes. As of June 30, 2023, $12.6 million in Exchangeable Notes remained outstanding, with $39.2 million having been exchanged for ordinary shares since January 2021. The PPP loan was also fully repaid in March 2022 - The Secured Credit Facility with Silicon Valley Bank (SVB) was fully repaid on **March 1, 2022**, including a **$0.6 million** final interest payment[71](index=71&type=chunk) - The company issued warrants to SVB and LSF in connection with the initial **$15.0 million** draw, exercisable at **$282.75 per share**, expiring **April 27, 2028**[72](index=72&type=chunk) - As of June 30, 2023, **$12.6 million** aggregate principal amount of 2025 Exchangeable Notes remained outstanding, with **$39.2 million** having been exchanged for **3,592,555 ordinary shares** since January 2021[77](index=77&type=chunk)[83](index=83&type=chunk) - The embedded exchange option and change of control feature in the Exchangeable Notes are accounted for as a derivative liability, revalued each reporting period[79](index=79&type=chunk) - The Paycheck Protection Program (PPP) loan of **$0.7 million** was fully repaid on **March 17, 2022**, after **$0.3 million** was forgiven in November 2020[84](index=84&type=chunk) | Year Ending June 30, | Scheduled Principal Payments (in thousands) | | :------------------- | :---------------------------------------- | | 2024 | $— | | 2025 | $12,607 | | Thereafter | $104 | | Total | $12,711 | [11. Royalty-Linked Notes](index=21&type=section&id=11.%20Royalty-Linked%20Notes) The company issued Royalty-Linked Notes (RLNs) as part of private placements, entitling holders to payments based on a percentage of U.S. net revenues from specified sulopenem products, capped at $160.00 per RLN. The RLNs are accounted for as a derivative liability and remeasured to fair value at each reporting date, with a total liability of $20.3 million as of June 30, 2023 - RLNs entitle holders to payments based on a percentage of U.S. net revenues from specified sulopenem products, contingent on FDA approval by **December 31, 2025**[86](index=86&type=chunk) - Payments on RLNs are capped at a maximum return of **$160.00** (4,000 times the principal amount) per note[86](index=86&type=chunk) - The RLNs are accounted for as a derivative and remeasured to fair value at each reporting date using DCF analysis[87](index=87&type=chunk) | Metric (in thousands) | June 30, 2023 | | :-------------------- | :------------ | | Total liability related to the sale of future royalties, on inception | $10,990 | | Adjustments to fair value | $5,544 | | Total liability at June 30, 2023 | $20,251 | [12. Shareholders' Equity](index=21&type=section&id=12.%20Shareholders%27%20Equity) The company's shareholders approved an increase in authorized ordinary shares to 80,000,000 at $0.01 par value. The company sold 355,765 ordinary shares for net proceeds of $0.4 million under an 'at-the-market' agreement and 3,592,555 ordinary shares were issued upon exchange of Exchangeable Notes - Authorized ordinary shares increased to **80,000,000** at **$0.01 par value** as of June 30, 2023[92](index=92&type=chunk) - During the six months ended June 30, 2023, **355,765 ordinary shares** were sold under an 'at-the-market' agreement for net proceeds of **$0.4 million**[93](index=93&type=chunk) - From **January 21, 2021**, to **June 30, 2023**, **$39.2 million** aggregate principal amount of Exchangeable Notes were exchanged for **3,592,555 ordinary shares**[94](index=94&type=chunk) - The company has **100,000,000 authorized undesignated preferred shares**, with no shares issued as of June 30, 2023[102](index=102&type=chunk) [13. Share-Based Compensation](index=23&type=section&id=13.%20Share-Based%20Compensation) The company operates under the 2018 Equity Incentive Plan and the 2021 Inducement Equity Incentive Plan, granting share options and restricted share units (RSUs). Total share-based compensation expense for the six months ended June 30, 2023, was $503 thousand, significantly lower than $3.9 million in the prior year, with unamortized expense of $1.4 million remaining - The company granted **857,500 share options** during the six months ended June 30, 2023, compared to **152,456** in the prior year[113](index=113&type=chunk) | Metric (in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | R&D share-based compensation | $95 | $614 | $219 | $1,140 | | G&A share-based compensation | $15 | $1,370 | $284 | $2,739 | | Total share-based compensation expense | $110 | $1,984 | $503 | $3,879 | - Total unamortized share-based compensation expense for options and RSUs was **$1.4 million** as of June 30, 2023, expected to be recognized over a weighted average vesting period of **2.57 years**[117](index=117&type=chunk) [14. Income Taxes](index=27&type=section&id=14.%20Income%20Taxes) The company recorded an income tax expense of $310 thousand for the six months ended June 30, 2023. It has significant net operating loss carryforwards in Ireland ($38.4 million as of June 30, 2023) for which a full valuation allowance has been recognized due to uncertainty of realization | Metric (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $310 | $770 | - As of June 30, 2023, the company had net operating loss carryforwards in Ireland of approximately **$38.4 million**, with a full valuation allowance recognized[119](index=119&type=chunk) [15. Commitments and Contingencies](index=27&type=section&id=15.%20Commitments%20and%20Contingencies) The company is obligated to Pfizer for potential future regulatory and sales milestone payments, as well as single-digit to mid-teens royalties on net sales of licensed products under the Pfizer License. Royalty-Linked Notes (RLNs) also entitle holders to payments based on U.S. sulopenem sales, contingent on FDA approval by December 31, 2025, with a maximum return of $160 per RLN. The company has no material legal proceedings or contingent liabilities from ordinary business - Under the Pfizer License, the company is obligated to pay Pfizer potential future regulatory and sales milestone payments (ranging from **$250 million to $1.0 billion**) and royalties (single-digit to mid-teens percentage) on net sales of each licensed product[121](index=121&type=chunk) - RLNs entitle holders to payments based on a percentage of U.S. net revenues from specified sulopenem products, contingent on FDA approval by **December 31, 2025**, with a maximum return of **$160.00 per RLN**[122](index=122&type=chunk) - The company has no contingent liabilities from legal claims in the ordinary course of business[123](index=123&type=chunk) [16. Condensed Consolidating Financial Statements](index=28&type=section&id=16.%20Condensed%20Consolidating%20Financial%20Statements) Iterum Bermuda, a wholly-owned finance subsidiary, issued Exchangeable Notes and Royalty-Linked Notes (RLNs). Iterum Therapeutics plc and its Subsidiary Guarantors provide a full and unconditional guarantee of Iterum Bermuda's obligations, with no material differences in assets, liabilities, or operations compared to the consolidated statements - Iterum Bermuda, a wholly-owned finance subsidiary, issued **$51.8 million** in Exchangeable Notes and **$0.1 million** in RLNs[125](index=125&type=chunk) - Iterum Therapeutics plc and its Subsidiary Guarantors fully and unconditionally guarantee Iterum Bermuda's obligations under the Exchangeable Notes and RLNs[126](index=126&type=chunk) - The assets, liabilities, and results of operations of the parent and subsidiary guarantors are not materially different from the condensed consolidated financial statements[126](index=126&type=chunk) [17. Subsequent Events](index=28&type=section&id=17.%20Subsequent%20Events) On August 1, 2023, the company's shareholders did not approve the renewal of the disapplication of statutory pre-emption rights, failing to meet the required 75% affirmative vote under Irish law, despite receiving over 62% support - Shareholders did not approve the renewal of the disapplication of statutory pre-emption rights at an extraordinary general meeting on **August 1, 2023**, failing to meet the **75% affirmative vote** required by Irish law[127](index=127&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, highlighting its status as a clinical-stage pharmaceutical company focused on sulopenem. It discusses the significant operating losses, the ongoing Phase 3 clinical trial (REASSURE) in response to the FDA's Complete Response Letter (CRL), and the need for additional funding. The analysis covers key components of operations, detailed results for the three and six months ended June 30, 2023 and 2022, and the company's liquidity and capital resources [Overview](index=29&type=section&id=Overview) Iterum Therapeutics is a clinical-stage pharmaceutical company developing sulopenem as a potential first oral and IV branded penem globally. The company is conducting a Phase 3 clinical trial (REASSURE) for oral sulopenem in uUTIs, following a Complete Response Letter from the FDA. It has incurred significant operating losses and is evaluating strategic alternatives to secure additional funding - Iterum Therapeutics is a clinical-stage pharmaceutical company focused on developing sulopenem as a potential first oral and IV branded penem globally[130](index=130&type=chunk) - The company is conducting a Phase 3 clinical trial, REASSURE, for oral sulopenem for the treatment of uUTIs, in response to a Complete Response Letter (CRL) from the FDA in **July 2021**[131](index=131&type=chunk) - The company has incurred significant operating losses since inception, with an accumulated deficit of **$445.1 million** as of June 30, 2023[132](index=132&type=chunk) - Management believes existing cash, cash equivalents, and short-term investments (**$44.7 million** as of June 30, 2023) are sufficient to fund operations for at least one year[135](index=135&type=chunk) - The company is evaluating corporate, strategic, financial, and financing alternatives to maximize stakeholder value[135](index=135&type=chunk) [Components of Our Results of Operations](index=30&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section outlines the key components of the company's results of operations: Research and Development (R&D) expenses, General and Administrative (G&A) expenses, Interest Expense, Adjustments to Fair Value of Derivatives, Other Income, and Provision for Income Taxes. R&D costs are expensed as incurred, G&A includes executive and administrative functions, and derivative liabilities are revalued quarterly. The company recognizes income taxes under the asset and liability method - Research and development expenses include costs for CROs, CMOs, clinical trials, manufacturing, employee-related expenses, regulatory compliance, and third-party licensing agreements[136](index=136&type=chunk) - General and administrative expenses primarily cover salaries, benefits, share-based compensation for executive and administrative personnel, professional fees, and pre-commercialization activities[139](index=139&type=chunk)[140](index=140&type=chunk) - Interest expense, net, includes interest on Exchangeable Notes, realized gains/losses on short-term investments, and interest earned on cash and equivalents[142](index=142&type=chunk) - Derivative liabilities (RLNs and embedded features in Exchangeable Notes) are revalued quarterly, with changes in fair value recorded in the statements of operations[143](index=143&type=chunk) - The company recognizes income taxes using the asset and liability method, with valuation allowances provided when deferred tax assets are not likely to be realized[145](index=145&type=chunk)[146](index=146&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) The company experienced a significant increase in operating loss and net loss for both the three and six months ended June 30, 2023, compared to the prior year. This was primarily driven by a substantial increase in research and development expenses due to the REASSURE trial, coupled with negative adjustments to the fair value of derivatives [Comparison of the three months ended June 30, 2023 and 2022](index=33&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030,%202023%20and%202022) This section compares the company's operational performance and financial results for the second quarter of 2023 versus 2022 | Metric (in thousands) | June 30, 2023 | June 30, 2022 | Change | | :-------------------- | :------------ | :------------ | :----- | | Research and development | $(8,964) | $(3,984) | $(4,980) | | General and administrative | $(1,858) | $(4,066) | $2,208 | | Total operating expenses | $(10,822) | $(8,050) | $(2,772) | | Operating loss | $(10,822) | $(8,050) | $(2,772) | | Total other (expense) / income, net | $(1,234) | $1,658 | $(2,892) | | Loss before income taxes | $(12,056) | $(6,392) | $(5,664) | - Research and development expenses increased by **$5.0 million**, primarily due to a **$5.7 million** increase in costs for the REASSURE trial, partially offset by a **$0.5 million** decrease in personnel-related costs[149](index=149&type=chunk) - General and administrative expenses decreased by **$2.2 million**, mainly due to a **$1.4 million** decrease in personnel-related costs (including share-based compensation) and a **$0.5 million** decrease in legal fees[150](index=150&type=chunk) - Adjustments to fair value of derivatives resulted in a **$1.0 million expense** in Q2 2023, compared to a **$2.2 million income** in Q2 2022, primarily due to an increase in the fair value of RLNs[153](index=153&type=chunk) [Comparison of the six months ended June 30, 2023 and 2022](index=34&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030,%202023%20and%202022) This section compares the company's operational performance and financial results for the first half of 2023 versus 2022 | Metric (in thousands) | June 30, 2023 | June 30, 2022 | Change | | :-------------------- | :------------ | :------------ | :----- | | Research and development | $(15,396) | $(7,424) | $(7,972) | | General and administrative | $(3,956) | $(7,999) | $4,043 | | Total operating expenses | $(19,352) | $(15,423) | $(3,929) | | Operating loss | $(19,352) | $(15,423) | $(3,929) | | Total other (expense) / income, net | $(2,470) | $5,958 | $(8,428) | | Loss before income taxes | $(21,822) | $(9,465) | $(12,357) | - Research and development expenses increased by **$8.0 million**, primarily due to a **$9.1 million** increase in costs for the REASSURE trial, partially offset by a **$0.9 million** decrease in personnel-related costs[156](index=156&type=chunk) - General and administrative expenses decreased by **$4.0 million**, mainly due to a **$2.6 million** decrease in personnel-related costs (including share-based compensation) and a **$0.8 million** decrease in legal fees[158](index=158&type=chunk) - Adjustments to fair value of derivatives resulted in a **$1.8 million expense** in H1 2023, compared to a **$7.3 million income** in H1 2022, primarily due to an increase in the fair value of RLNs[161](index=161&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company has historically funded operations through equity and debt financings, with $44.7 million in cash, cash equivalents, and short-term investments as of June 30, 2023, expected to fund operations for at least one year. However, the recent failure to renew the disapplication of statutory pre-emption rights limits future equity fundraising flexibility. The company anticipates significant future expenses for clinical trials and commercialization, requiring additional capital - Shareholders did not approve the renewal of the disapplication of statutory pre-emption rights at an EGM on **August 1, 2023**, limiting the company's ability to issue new shares for cash without a time-consuming pro-rata rights offering[164](index=164&type=chunk)[165](index=165&type=chunk) - As of June 30, 2023, the company had **$44.7 million** in cash, cash equivalents, and short-term investments, which management believes is sufficient to fund operations for at least one year[168](index=168&type=chunk)[188](index=188&type=chunk) - Net cash used in operating activities was **$17.2 million** for the six months ended June 30, 2023, compared to **$9.7 million** in the prior year[182](index=182&type=chunk) - The company expects to incur significant expenses for the REASSURE clinical trial, potential marketing approval, and commercialization, requiring additional funding through equity, debt, or collaborations[187](index=187&type=chunk)[192](index=192&type=chunk) - Contractual obligations include potential regulatory and sales milestone payments and royalties to Pfizer, and payments to RLN holders based on U.S. sulopenem sales[193](index=193&type=chunk)[194](index=194&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk on its $44.7 million in cash, cash equivalents, and short-term investments, with a 100 basis point interest rate increase estimated to decrease fair value by $0.1 million. It also faces foreign currency risk from global CRO/CMO agreements, though realized foreign currency gains/losses were not material. Inflation is noted as a potential future risk to operating costs - As of June 30, 2023, the company held **$44.7 million** in cash, cash equivalents, and short-term investments, primarily in money market funds, commercial paper, and U.S. Treasury bonds[197](index=197&type=chunk) - An immediate **100 basis point increase** in interest rates would result in an estimated **$0.1 million decrease** in the fair market value of the investment portfolio[197](index=197&type=chunk) - The company is exposed to foreign currency rate fluctuations from global CRO and CMO agreements, but realized net foreign currency gains and losses were not material for the six months ended June 30, 2023[198](index=198&type=chunk) - Inflation has not had a material effect on financial statements to date, but continued increases could impact labor, research, manufacturing, and development costs[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023. No material changes in internal control over financial reporting occurred during the three months ended June 30, 2023 [Evaluation of Disclosure Controls and Procedures](index=42&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's controls designed to ensure timely and accurate financial disclosures - As of June 30, 2023, management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective at the reasonable assurance level[200](index=200&type=chunk) [Changes in Internal Control over Financial Reporting](index=42&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting during the period - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2023[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section includes legal proceedings, comprehensive risk factors, and a list of exhibits for the company's quarterly report [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings and is unaware of any pending or threatened litigation that could materially adversely affect its business, operating results, or financial condition - The company is not currently involved in any material legal proceedings[203](index=203&type=chunk) - No pending or threatened litigation is known that could have a material adverse effect on the business, operating results, or financial condition[203](index=203&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially and adversely affect the company's business, financial condition, results of operations, and future growth prospects. Key risk areas include the company's financial position and capital requirements, challenges in clinical development and commercialization of its sole product candidate (sulopenem), dependence on third parties, intellectual property protection, regulatory approval and compliance, employee matters, taxation, and risks related to its ordinary shares [Risks Related to Our Financial Position and Capital Requirements](index=43&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Requirements) The company has a history of net losses and an accumulated deficit of $445.1 million, with its ability to achieve profitability dependent on the successful commercialization of sulopenem. It requires significant additional capital to fund ongoing clinical trials and potential commercialization, but recent shareholder non-approval of pre-emption rights disapplication limits its ability to raise equity efficiently. Failure to secure funding could force delays or termination of development programs - The company has incurred net losses since inception, with an accumulated deficit of **$445.1 million** as of June 30, 2023[205](index=205&type=chunk) - The FDA issued a Complete Response Letter (CRL) for oral sulopenem, requiring at least one additional clinical trial (REASSURE) and non-clinical PK/PD studies, which are ongoing[205](index=205&type=chunk) - The company will require additional capital to fund operations, including clinical trials and potential commercialization, and faces risks if financing is not available on acceptable terms[210](index=210&type=chunk)[211](index=211&type=chunk) - Shareholders did not approve the disapplication of statutory pre-emption rights, limiting the company's ability to issue new shares for cash without a time-consuming pro-rata rights offering[212](index=212&type=chunk) - The company's financial statements include substantial non-operating gains or losses from quarterly revaluation of derivative instruments, which are highly sensitive to share price and management assumptions[216](index=216&type=chunk) [Risks Related to Clinical Development and Commercialization](index=45&type=section&id=Risks%20Related%20to%20Clinical%20Development%20and%20Commercialization) The company's success hinges entirely on the development and commercialization of sulopenem, which faces significant risks including the need to resolve issues from the FDA's CRL, potential delays in clinical trials (like REASSURE), and the inherent uncertainty of regulatory approval. The company lacks prior experience in obtaining regulatory approval or commercializing drugs, and may struggle with market acceptance due to existing therapies, pricing, and competition. Unforeseen adverse events or side effects could also halt development or limit commercial potential - The company's prospects depend entirely on the successful development and commercialization of its sole product candidate, sulopenem, for which FDA approval is not assured[222](index=222&type=chunk) - The FDA issued a Complete Response Letter (CRL) for oral sulopenem, requiring additional clinical trial data and non-clinical PK/PD studies, which could significantly delay or prevent approval[217](index=217&type=chunk)[219](index=219&type=chunk) - The company has no prior experience in obtaining regulatory approval or commercializing a drug, posing challenges in navigating extensive preclinical and clinical trials[252](index=252&type=chunk) - Clinical trials may fail to demonstrate safety and efficacy, leading to additional costs, delays, or abandonment of product development[256](index=256&type=chunk)[262](index=262&type=chunk) - Serious adverse events or undesirable side effects could cause clinical trial suspension, regulatory denial, or post-approval restrictions, limiting commercial potential[274](index=274&type=chunk)[280](index=280&type=chunk) - Market acceptance for sulopenem is uncertain due to existing therapies, physician prescribing patterns, and the need for significant resources to educate the medical community[282](index=282&type=chunk)[284](index=284&type=chunk) - The company lacks a commercial organization and must build or outsource sales, marketing, and distribution capabilities, which is resource-intensive and time-consuming[288](index=288&type=chunk)[290](index=290&type=chunk) - The company faces substantial competition from major pharmaceutical and biotechnology companies with greater resources and expertise in developing and commercializing anti-infective products[295](index=295&type=chunk)[299](index=299&type=chunk) [Risks Related to Our Dependence on Third Parties](index=64&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) The company heavily relies on the Pfizer License for sulopenem's intellectual property and is dependent on third-party collaborations for development and commercialization in certain territories. It also relies on CROs for clinical trials and CMOs for manufacturing, increasing risks of non-compliance, delays, or insufficient supply. Failure of these third parties to perform as expected could severely impact regulatory approval and commercialization efforts - The company relies heavily on the Pfizer License for exclusive worldwide rights to develop, manufacture, and commercialize sulopenem, with obligations including diligence, milestone payments, and royalties[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) - Failure to comply with Pfizer License obligations could lead to termination, loss of rights, and material harm to the business[319](index=319&type=chunk) - The company expects to depend on third-party collaborations for development and commercialization of sulopenem in certain territories, but such arrangements carry risks of non-performance, delays, or termination[320](index=320&type=chunk)[322](index=322&type=chunk) - Reliance on third-party CROs for preclinical studies and clinical trials limits control over these activities, and their failure to perform could delay or prevent regulatory approval[326](index=326&type=chunk)[327](index=327&type=chunk)[329](index=329&type=chunk) - The company relies on third-party CMOs for manufacturing preclinical, clinical, and commercial supplies of sulopenem, which increases risks of delays, non-compliance with cGMPs, and potential misappropriation of trade secrets[331](index=331&type=chunk)[335](index=335&type=chunk) [Risks Related to Our Intellectual Property](index=68&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's intellectual property (IP) protection for sulopenem is critical, relying heavily on the Pfizer License and a combination of patents, trademarks, and trade secrets. Risks include the expiration of existing patents, challenges to patent validity or enforceability, inability to obtain new patents, and the high costs and uncertainties of IP litigation. Global IP protection is challenging, and changes in patent laws or jurisprudence could diminish the value of its IP - The company relies heavily on the Pfizer License for intellectual property rights related to oral sulopenem and know-how for IV sulopenem, but does not own patent rights for the IV formulation[341](index=341&type=chunk) - Failure to obtain or maintain broad patent protection for sulopenem or other product candidates could harm the business, as patent prosecution is expensive and uncertain[344](index=344&type=chunk)[346](index=346&type=chunk) - The patent position of pharmaceutical companies is highly uncertain, with risks of third-party challenges, invalidation, or narrow interpretation of patent claims[348](index=348&type=chunk) - The licensed U.S. patent for oral sulopenem's composition of matter expires in **2029** (potentially **2034** with extension), and a newly granted patent for the bilayer tablet expires no earlier than **2039**, but patent lifespan limitations could reduce commercial value[352](index=352&type=chunk) - Changes in patent laws (e.g., America Invents Act) or jurisprudence could diminish patent value and increase prosecution/defense costs[359](index=359&type=chunk)[361](index=361&type=chunk)[364](index=364&type=chunk) - The company may be involved in costly and time-consuming lawsuits to protect or enforce its IP, or defend against infringement claims by third parties[365](index=365&type=chunk)[368](index=368&type=chunk) - Protecting IP globally is expensive and challenging, as laws vary, and enforcement may be less effective in some countries[374](index=374&type=chunk)[375](index=375&type=chunk) - Failure to protect trade secrets through confidentiality agreements or independent development by competitors could harm the business[381](index=381&type=chunk)[383](index=383&type=chunk) - Trademark registrations are not guaranteed, and FDA/EMA approval of proprietary names is required, which could lead to delays or additional costs[385](index=385&type=chunk)[386](index=386&type=chunk) [Risks Related to Regulatory Approval and Other Legal Compliance Matters](index=77&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) The company faces substantial risks in obtaining and maintaining regulatory approvals for sulopenem, particularly after receiving a CRL from the FDA. The approval process is lengthy, uncertain, and subject to regulatory discretion, with no guarantee that the ongoing REASSURE trial or additional data will be sufficient. Post-approval, the company will be subject to extensive ongoing regulatory obligations, including cGMPs and reporting requirements. Additionally, compliance with complex healthcare fraud and abuse laws, anti-corruption laws, and evolving global data privacy regulations poses significant legal and financial risks - Failure to obtain regulatory approval for sulopenem will prevent commercialization and materially impair revenue generation[388](index=388&type=chunk)[389](index=389&type=chunk) - The FDA's Complete Response Letter (CRL) for oral sulopenem requires additional clinical trial data and non-clinical PK/PD studies, and there is no assurance that these will be adequate for resubmission or approval[391](index=391&type=chunk) - An SPA agreement with the FDA for the REASSURE trial does not guarantee marketing approval or a faster review process[395](index=395&type=chunk)[396](index=396&type=chunk) - Disruptions at the FDA or other government agencies (e.g., funding shortages, shutdowns) could delay product review and approval[397](index=397&type=chunk)[399](index=399&type=chunk) - Obtaining marketing approval outside the U.S. is a separate, complex process, and FDA approval does not ensure approval by foreign authorities (e.g., EMA may require additional trials)[401](index=401&type=chunk)[402](index=402&type=chunk) - Post-approval, sulopenem will be subject to ongoing regulatory requirements for labeling, manufacturing (cGMPs), advertising, and safety reporting, with non-compliance leading to penalties or market withdrawal[407](index=407&type=chunk)[408](index=408&type=chunk)[410](index=410&type=chunk) - Relationships with healthcare providers and payors are subject to anti-kickback, fraud and abuse, and other healthcare laws (e.g., False Claims Act, HIPAA), with potential for significant penalties for non-compliance[413](index=413&type=chunk)[415](index=415&type=chunk)[417](index=417&type=chunk) - Healthcare legislative reforms (e.g., ACA, IRA) could lead to reduced reimbursement, increased pricing pressure, and new regulatory requirements, adversely affecting business and profitability[419](index=419&type=chunk)[425](index=425&type=chunk)[430](index=430&type=chunk)[434](index=434&type=chunk) - Compliance with anti-corruption laws (e.g., FCPA) and trade control laws is complex, especially in international operations, and violations could result in criminal/civil penalties and reputational harm[445](index=445&type=chunk)[448](index=448&type=chunk) - Evolving global data privacy regulations (e.g., GDPR, CCPA) impose strict requirements on personal data processing, with non-compliance leading to significant fines, litigation, and business disruption[449](index=449&type=chunk)[450](index=450&type=chunk)[452](index=452&type=chunk)[453](index=453&type=chunk) [Risks Related to Employee Matters and Managing Growth](index=89&type=section&id=Risks%20Related%20to%20Employee%20Matters%20and%20Managing%20Growth) The company's future success is highly dependent on retaining key executives, particularly the CEO, and attracting qualified personnel in a competitive industry. Managing potential growth, especially if sulopenem receives regulatory approval, will require significant managerial attention and expansion of operational and financial systems, which could lead to operational mistakes or diversion of resources. Operating in international markets also introduces additional risks - The company's future success depends on retaining its CEO and other key executives, and attracting/retaining qualified personnel in a competitive industry[456](index=456&type=chunk)[457](index=457&type=chunk) - Managing potential growth in employees and operations (e.g., manufacturing, regulatory affairs, sales) could divert management attention and lead to operational weaknesses[458](index=458&type=chunk)[459](index=459&type=chunk) - Conducting business in markets outside the United States exposes the company to additional risks, including intellectual property protection, economic instability, and compliance with foreign regulations[461](index=461&type=chunk) - Future acquisitions could disrupt business, dilute shareholders, or reduce financial resources, and may require consent from holders of the Securities[462](index=462&type=chunk) [Risks Related to Taxation](index=90&type=section&id=Risks%20Related%20to%20Taxation) The company faces risks related to its U.S. federal income tax status as a potential Passive Foreign Investment Company (PFIC), which could subject U.S. Holders to adverse tax consequences. Additionally, transfers of ordinary shares may be subject to Irish stamp duty, and dividends could be subject to Irish dividend withholding tax or income tax for certain shareholders. Changes in U.S. federal income tax laws could also have material consequences - The company was a PFIC for U.S. federal income tax purposes in **2017** and its status in future years depends on assets and activities, potentially subjecting U.S. Holders to adverse tax consequences[465](index=465&type=chunk) - If the company is a PFIC and a U.S. Holder does not make a mark-to-market election, they may face deferred tax and interest charges on distributions and dispositions[468](index=468&type=chunk) - Transfers of ordinary shares not through DTC may be subject to Irish stamp duty (currently **1%**)[474](index=474&type=chunk) - Dividends paid by the company may be subject to Irish dividend withholding tax (currently **25%**) or Irish income tax for certain shareholders, though exemptions exist for EU/treaty-country residents[475](index=475&type=chunk)[476](index=476&type=chunk) - Gifts or inheritances of ordinary shares could be subject to Irish capital acquisitions tax[477](index=477&type=chunk) [Risks Related to Our Ordinary Shares](index=92&type=section&id=Risks%20Related%20to%20Our%20Ordinary%20Shares) The company's ordinary shares have experienced significant price volatility, and an active trading market may not be sustained. Failure to comply with Nasdaq listing requirements could lead to delisting, impacting liquidity and capital access. The issuance of additional shares, including from Exchangeable Notes and warrants, could dilute existing shareholders. Irish law and anti-takeover provisions may limit shareholder influence and make acquisitions more difficult. The company also incurs increased costs as a public company and faces challenges in managing its capital structure due to Irish legal requirements - The price of the company's ordinary shares has been highly volatile, with a range of **$0.705 to $4.20** in the **12 months ending August 9, 2023**, and may continue to fluctuate dramatically[480](index=480&type=chunk) - Failure to comply with Nasdaq Capital Market listing requirements (e.g., minimum bid price, market value of publicly held shares) could lead to delisting, negatively impacting liquidity and capital access, and triggering debt defaults[485](index=485&type=chunk)[486](index=486&type=chunk) - The issuance of additional ordinary shares, whether for capital raising or upon exchange/exercise of convertible securities (Exchangeable Notes, warrants, options), may dilute existing shareholders' ownership and voting power[493](index=493&type=chunk)[494](index=494&type=chunk)[495](index=495&type=chunk) - Sales of a substantial number of ordinary shares in the public market, or the perception of such sales, could cause the share price to fall[497](index=497&type=chunk) - Irish law differs from U.S. law, potentially affording less protection to shareholders and making enforcement of U.S. judgments difficult[503](index=503&type=chunk)[505](index=505&type=chunk) - Anti-takeover provisions in the Articles of Association and under Irish law (e.g., Irish Takeover Rules) could make acquisitions more difficult and limit shareholder influence over management[519](index=519&type=chunk)[522](index=522&type=chunk) - Certain capital structure decisions, such as increasing authorized share capital or disapplying pre-emption rights, require specific shareholder approvals under Irish law, which may limit financial flexibility[525](index=525&type=chunk)[526](index=526&type=chunk)[527](index=527&type=chunk) - The company incurs increased costs and management time due to operating as a public company, subject to SEC and Nasdaq regulations (e.g., Sarbanes-Oxley Act)[509](index=509&type=chunk) [Item 6. Exhibits](index=102&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including the company's amended and restated constitution, an amendment to a consulting agreement, certifications from the principal executive and financial officers, and Inline XBRL documents - Exhibits include the Amended and Restated Constitution, an amendment to a consulting agreement, and certifications required by the Sarbanes-Oxley Act[530](index=530&type=chunk) - The report includes Inline XBRL documents for instance, schema, calculation, definition, label, and presentation linkbase[530](index=530&type=chunk) [Signatures](index=103&type=section&id=Signatures) The Quarterly Report on Form 10-Q was duly signed on August 11, 2023, by Corey Fishman, President and Chief Executive Officer, and Judith Matthews, Chief Financial Officer, pursuant to the requirements of the Securities Exchange Act of 1934 - The report was signed by Corey Fishman, President and Chief Executive Officer, and Judith Matthews, Chief Financial Officer, on **August 11, 2023**[534](index=534&type=chunk)