On Wednesday, H.C. Wainwright changed its stance on Iterum Therapeutics (NASDAQ:ITRM), moving from a Neutral rating to Buy. The firm has set a new price target for Iterum at $6.00, following the announcement of successful clinical trial results for the company's antibiotic treatment.
Iterum Therapeutics reported on January 30 that its oral sulopenem antibiotic demonstrated superiority in a pivotal Phase 3 trial for treating uncomplicated urinary tract infections (uUTI). The drug, a combination of sulopenem etzadroxil and probenecid, achieved a higher overall response rate compared to Augmentin, a currently used antibiotic. In the trial, 61.7% of patients treated with sulopenem showed clinical success and microbiologic eradication, compared to 55.0% for Augmentin.
The primary endpoint of the trial was met with statistical superiority, as the lower bound of the 95% confidence interval for the treatment difference was above the threshold for both non-inferiority and superiority. Sulopenem also met secondary endpoints, including clinical success and microbiologic eradication at the test-of-cure visit.
Iterum is expected to present the full results of the REASSURE trial at an upcoming scientific meeting. The trial design was agreed upon with the FDA under a special protocol assessment, indicating a likelihood of FDA approval by the fourth quarter of 2024. Iterum plans to resubmit a New Drug Application in the second quarter of 2024, with the anticipation of a positive outcome.
The upgrade and the optimistic price target reflect the firm's confidence in sulopenem's market potential and the anticipated approval by the FDA. This news has positioned Iterum Therapeutics favorably within the pharmaceutical industry, particularly in the segment of antibiotic treatments for urinary tract infections.
InvestingPro Insights
Following the positive clinical trial results for Iterum Therapeutics' (NASDAQ:ITRM) oral sulopenem antibiotic, the company's financial health and market performance have come into focus. According to InvestingPro data, Iterum Therapeutics currently has a market capitalization of 21.23 million USD. Despite the company's promising clinical outcomes, it has not been profitable over the last twelve months, with an operating income (adjusted) of -43.96 million USD and an EBITDA of -42.21 million USD for the same period.
The stock's Price / Book ratio stands at 6.19 as of the last twelve months ending Q3 2023, which indicates that it is trading at a premium compared to the book value of its assets. Furthermore, the company's stock price has shown significant volatility, with a 107.89% three-month price total return, yet a -21.39% return over the last month, underscoring the stock's unpredictable nature.
Among the InvestingPro Tips, it is noted that Iterum Therapeutics holds more cash than debt on its balance sheet, which could provide some financial flexibility. However, the company is also quickly burning through cash, which may raise concerns about its long-term sustainability. These factors, combined with the lack of profitability and high volatility in stock price movements, are critical considerations for investors.
For those interested in deeper analysis, there are additional InvestingPro Tips available, such as insights into Iterum's weak gross profit margins and the anticipation by analysts that the company will not be profitable this year. Subscribers to InvestingPro can access these tips to better understand Iterum's financial position and market outlook. Use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription, and uncover more in-depth analysis to inform your investment decisions.
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