Iterum Therapeutics(ITRM) - 2020 Q1 - Quarterly Report

Financial Position - The company has an accumulated deficit of $251.0 million as of March 31, 2020, indicating significant operating losses since inception [142]. - The company has cash, cash equivalents, and restricted cash of $23.3 million as of March 31, 2020, raising concerns about its ability to continue operations without additional funding [145]. - The company has expressed substantial doubt about its ability to continue as a going concern without adequate financing [174]. - As of March 31, 2020, the company had cash, cash equivalents, and restricted cash totaling $23.3 million [173]. - As of March 31, 2020, the company had cash and cash equivalents of $23.3 million, consisting solely of cash [199]. - Contractual obligations as of March 31, 2020, total $69.7 million, including $64.0 million in principal debt repayments [191]. - The company may face increased capital costs and limited access to funding due to the COVID-19 pandemic's impact on capital markets [190]. Revenue and Funding - The company has not generated any revenue from product sales to date, relying primarily on government awards for funding [149]. - The company anticipates financing operations through a combination of equity offerings, debt financings, and collaboration agreements until it can generate significant revenue [143]. - The company reported no revenue for the three months ended March 31, 2020, compared to $37,000 for the same period in 2019, reflecting a decrease of $37,000 [163]. - Net cash provided by financing activities was $45.9 million for the three months ended March 31, 2020, primarily from a private placement [187]. - The company completed an IPO on May 30, 2018, raising net proceeds of $74.2 million from the sale of 6,350,000 ordinary shares at a price of $13.00 per share [136]. - The company has raised approximately $51.6 million from the issuance of 6.500% Exchangeable Notes and $0.1 million from RLNs as part of a private placement [172]. Expenses - Total operating expenses decreased to $12.9 million for the three months ended March 31, 2020, from $20.5 million in the same period in 2019, a reduction of $7.6 million [163]. - Research and development expenses were $9.7 million for the three months ended March 31, 2020, down from $17.4 million in 2019, primarily due to reduced costs associated with Phase 3 clinical trials [164]. - General and administrative expenses slightly increased to $3.2 million in Q1 2020 from $3.1 million in Q1 2019, with personnel-related costs rising due to increased headcount [165]. - The company anticipates an increase in general and administrative expenses in the future as it prepares for potential commercialization of its products [155]. - Interest expense, net rose significantly to $2.6 million for the three months ended March 31, 2020, compared to $0.1 million in the prior year, largely due to interest on exchangeable notes and amortization of debt costs [170]. - The company incurred private placement transaction costs of $2.1 million for the three months ended March 31, 2020, with no such costs in the same period in 2019 [167]. Clinical Trials and Commercialization - The company initiated three Phase 3 clinical trials for sulopenem in 2018, with topline data expected in the second quarter of 2020 [135]. - The company expects to incur significant commercialization expenses related to product manufacturing, marketing, sales, and distribution if it obtains marketing approval for sulopenem [142]. - The company is evaluating its commercialization strategy in the United States and other territories as it advances its sulopenem program [142]. - The company expects to incur significant expenses for ongoing clinical trials and development of its sulopenem program, impacting future funding requirements [188]. Debt and Financing Arrangements - The company entered into a secured credit facility with SVB for up to $30 million, with an initial draw of $15 million funded [175]. - Monthly amortization payments for the initial $15 million draw began on November 1, 2019, with total principal repayments of $1,552 made during the three months ended March 31, 2020 [176]. - The company issued approximately $51.6 million in Exchangeable Notes with a 6.500% interest rate, repayable on January 31, 2025 [181]. - The interest rate on the secured credit facility is sensitive to changes in interest rates, with a minimum rate of 8.31% [201]. Royalty and Payment Obligations - The company anticipates royalty payments to Pfizer ranging from single-digit to mid-teens percentages based on net sales of licensed products [193]. - Payments on Royalty-Linked Notes will be based on a percentage of net revenues from U.S. sales of specified sulopenem products, capped at $160.00 per note [181][194]. - The payment rate for royalty payments on specified sulopenem products can be up to 20% based on FDA approvals [195]. - The maximum return on RLNs is $160.00, or 4,000 times the principal amount of such RLN [195]. Currency and Accounting - Substantially all of the company's liabilities were denominated in U.S. dollars as of March 31, 2020 [200]. - Realized net foreign currency gains and losses did not materially affect the company's results of operations for the three months ended March 31, 2020 [200]. - The company contracts with CROs and CMOs globally, which may expose it to fluctuations in foreign currency rates [200]. - The company has irrevocably elected to opt out of the extended transition period for new accounting standards applicable to public companies [196]. - The Wall Street Journal prime rate decreased from 5.50% to 3.25% between August 1, 2019, and March 16, 2020 [201].