http://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrent0001659323--12-31http://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrent1falsehttp://fasb.org/us-gaap/2021-01-31#OtherAssetsNoncurrentQ1http://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrent0001659323us-gaap:ValuationTechniqueOptionPricingModelMember2021-12-310001659323srt:MinimumMemberitrm:OfficeSpaceAndCommercialPropertyMember2022-03-310001659323us-gaap:MeasurementInputExpectedTermMember2021-02-080001659323us-gaap:ValuationTechniqueOptionPricingModelMember2021-01-012021-12-310001659323srt:MaximumMemberitrm:FebruaryRegisteredDirectOfferingMember2021-02-120001659323country:BM2022-01-012022-03-310001659323us-gaap:RestrictedStockUnitsRSUMemberitrm:TwoThousandFifteenEquityIncentivePlanTwoThousandEighteenEquityIncentivePlanAndTwoThousandTwentyOneInducementPlanMember2022-03-3100016593232021-01-280001659323srt:MaximumMemberitrm:PfizerLicenseAgreementMember2015-11-180001659323itrm:IterumBermudaMember2020-01-210001659323itrm:FebruaryRegisteredDirectOfferingMember2021-02-092021-02-090001659323itrm:OptionsAndRestrictedShareUnitsAndPerformanceRestrictedShareUnitsMember2022-03-310001659323itrm:RoyaltyLinkedNotesMemberitrm:RightsOfferingMember2020-09-072020-09-080001659323country:US2022-03-310001659323itrm:LoanAndSecurityAgreementMemberitrm:SiliconValleyBankMember2018-04-270001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberitrm:RightsOfferingMember2022-03-3100016593232021-01-012021-03-310001659323us-gaap:FurnitureAndFixturesMember2022-03-310001659323us-gaap:MeasurementInputExpectedDividendRateMember2021-02-080001659323itrm:TwoThousandEighteenEquityIncentivePlanMemberitrm:EmployeesAndDirectorsStockOptionsMember2022-01-012022-03-310001659323itrm:JuneThirtySecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2022-03-310001659323us-gaap:MeasurementInputPriceVolatilityMember2021-02-100001659323us-gaap:MeasurementInputExpectedTermMember2021-02-120001659323itrm:SecuritiesMemberus-gaap:PrivatePlacementMember2020-09-072020-09-080001659323itrm:FebruaryUnderwrittenOfferingMember2021-02-100001659323us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001659323itrm:FebruaryUnderwrittenOfferingMemberitrm:UnderwritingAgreementMember2021-02-030001659323us-gaap:EquipmentMember2022-03-310001659323country:IE2022-01-012022-03-310001659323country:IE2021-01-012021-03-310001659323itrm:FebruaryUnderwrittenOfferingMembersrt:MaximumMember2021-02-100001659323us-gaap:CommonStockMember2022-03-310001659323itrm:PreferredStockDesignatedMember2021-03-310001659323itrm:SiliconValleyBankAndLifeSciencesFundIILimitedLiabilityCompanyMemberitrm:SeriesBConvertiblePreferredSharesMember2018-04-270001659323us-gaap:ComputerEquipmentMember2021-12-310001659323itrm:RoyaltyLinkedSubordinatedNotesMemberitrm:PrivatePlacementAndRightsOfferingMember2020-01-210001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2021-01-012021-03-310001659323itrm:TwoThousandEighteenEquityIncentivePlanMember2018-03-140001659323us-gaap:PrivatePlacementMemberitrm:June3SecuritiesPurchaseAgreementMember2020-06-050001659323us-gaap:RestrictedStockUnitsRSUMemberitrm:TwoThousandTwentyOneInducementPlanMember2022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanTwoThousandEighteenEquityIncentivePlanAndTwoThousandTwentyOneInducementPlanMember2021-12-310001659323itrm:RoyaltyLinkedSubordinatedNotesMemberitrm:PrivatePlacementAndRightsOfferingMember2020-09-080001659323itrm:ExchangeableNotesMember2021-01-012021-03-310001659323us-gaap:RestrictedStockUnitsRSUMemberitrm:EmployeesAndDirectorsMember2021-01-012021-03-310001659323srt:MaximumMemberitrm:OctoberOfferingMember2020-10-270001659323itrm:RoyaltyLinkedSubordinatedNotesMemberus-gaap:PrivatePlacementMember2020-01-210001659323itrm:ConversionOfThousandExchangeableNotesDueJanuaryThirtyOneTwoThousandTwentyFiveMember2022-03-310001659323itrm:OctoberOfferingMember2020-10-272020-10-270001659323us-gaap:RestrictedStockUnitsRSUMember2022-03-310001659323itrm:PreferredStockDesignatedMember2022-03-310001659323itrm:OfficeSpaceAndCommercialPropertyMember2021-01-012021-03-310001659323itrm:TwothousandAndTwentyOneInducementPlanMember2021-11-242021-11-240001659323itrm:TwoThousandEighteenEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMemberitrm:EmployeesMember2022-01-012022-03-310001659323itrm:RoyaltyLinkedNotesMember2022-01-012022-03-310001659323itrm:SecuritiesMemberus-gaap:PrivatePlacementMember2020-01-212020-01-210001659323itrm:SiliconValleyBankAndLifeSciencesFundIILimitedLiabilityCompanyMemberitrm:SeriesBConvertiblePreferredSharesMember2022-03-310001659323srt:MaximumMemberitrm:OfficeSpaceAndCommercialPropertyMember2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberus-gaap:PrivatePlacementMember2021-01-212022-03-310001659323itrm:JuneThirtySecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2020-06-300001659323itrm:PursuantToUnderwritingAgreementMemberitrm:FebruaryUnderwrittenOfferingMember2021-02-100001659323us-gaap:MeasurementInputPriceVolatilityMember2021-02-080001659323itrm:JuneThirtySecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2022-01-012022-03-310001659323itrm:PrivatePlacementAndRightsOfferingMemberitrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2020-01-210001659323itrm:TwoThousandEighteenEquityIncentivePlanMember2020-06-092020-06-100001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2022-01-012022-03-310001659323itrm:ExchangeableNotesMemberus-gaap:PrivatePlacementMember2022-03-310001659323itrm:OctoberOfferingMember2020-10-310001659323itrm:TwoThousandEighteenEquityIncentivePlanMembersrt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMemberitrm:EmployeesMember2022-01-012022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanAndTwoThousandEighteenEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2021-12-310001659323us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2021-01-012021-03-310001659323itrm:PaycheckProtectionProgramMemberitrm:SiliconValleyBankMemberitrm:IterumTherapeuticsUSLimitedMember2022-01-012022-03-310001659323itrm:FebruaryUnderwrittenOfferingMemberitrm:UnderwritingAgreementMember2021-02-032021-02-030001659323us-gaap:WarrantMember2021-01-012021-03-310001659323us-gaap:WarrantMember2022-01-012022-03-310001659323us-gaap:MeasurementInputExpectedTermMember2021-02-100001659323us-gaap:RestrictedStockUnitsRSUMemberitrm:EmployeesAndDirectorsMember2022-01-012022-03-3100016593232021-02-120001659323us-gaap:EmployeeStockOptionMember2022-03-310001659323us-gaap:MeasurementInputPriceVolatilityMember2021-02-120001659323itrm:RoyaltyLinkedSubordinatedNotesMemberus-gaap:PrivatePlacementMember2020-01-212020-01-210001659323itrm:TwoThousandEighteenEquityIncentivePlanMember2018-12-042018-12-050001659323itrm:OctoberOfferingMember2020-10-270001659323itrm:OfficeSpaceAndCommercialPropertyMember2022-03-310001659323itrm:LoanAndSecurityAgreementMemberitrm:SiliconValleyBankMemberitrm:WallStreetJournalPrimeRateMember2018-04-262018-04-270001659323itrm:LoanAndSecurityAgreementMemberitrm:SiliconValleyBankMember2018-04-262018-04-270001659323itrm:ConversionOfThousandExchangeableNotesDueJanuaryThirtyOneTwoThousandTwentyFiveMember2022-01-012022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanAndTwoThousandEighteenEquityIncentivePlanMember2021-12-310001659323itrm:RoyaltyLinkedNotesMemberus-gaap:PrivatePlacementMember2020-01-212020-01-210001659323us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2020-09-080001659323itrm:TwoThousandTwentyOneInducementPlanMember2021-12-310001659323us-gaap:EmployeeStockOptionMember2022-01-012022-03-3100016593232022-01-012022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanTwoThousandEighteenEquityIncentivePlanAndTwoThousandTwentyOneInducementPlanMemberus-gaap:EmployeeStockOptionMember2022-01-012022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanAndTwoThousandEighteenEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2022-03-310001659323country:IE2021-12-310001659323country:IE2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2020-01-210001659323itrm:RoyaltyLinkedNotesMemberitrm:PfizerLicenseAgreementMemberitrm:RightsOfferingMember2020-09-072020-09-080001659323itrm:SubsidiaryGuarantorsMember2020-01-210001659323us-gaap:MeasurementInputRiskFreeInterestRateMember2021-02-120001659323us-gaap:MeasurementInputSharePriceMember2021-02-100001659323us-gaap:RestrictedStockUnitsRSUMember2021-12-310001659323itrm:RoyaltyLinkedSubordinatedNotesMemberitrm:RightsOfferingMember2020-09-080001659323us-gaap:PrivatePlacementMemberitrm:June3SecuritiesPurchaseAgreementMember2020-06-030001659323itrm:RoyaltyLinkedSubordinatedNotesMemberus-gaap:PrivatePlacementMember2020-01-210001659323itrm:OctoberOfferingMember2020-10-302020-10-310001659323itrm:JuneThirtySecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2020-06-012020-06-3000016593232021-02-100001659323srt:MinimumMemberitrm:PfizerLicenseAgreementMember2015-11-180001659323us-gaap:RestrictedStockUnitsRSUMemberitrm:TwoThousandFifteenEquityIncentivePlanTwoThousandEighteenEquityIncentivePlanAndTwoThousandTwentyOneInducementPlanMember2022-01-012022-03-310001659323itrm:OctoberTwoThousandTwentyOfferingMemberitrm:WarrantIssuedMember2022-03-310001659323itrm:TwoThousandTwentyOneInducementPlanMember2022-03-310001659323us-gaap:ValuationTechniqueOptionPricingModelMember2022-01-012022-03-310001659323itrm:PursuantToUnderwritingAgreementMemberitrm:FebruaryUnderwrittenOfferingMember2021-02-102021-02-100001659323itrm:USTreasuryBillsMember2021-12-310001659323itrm:UnvestedPerformanceRestrictedShareUnitsMember2021-01-012021-03-310001659323us-gaap:RestrictedStockUnitsRSUMemberitrm:TwoThousandFifteenEquityIncentivePlanTwoThousandEighteenEquityIncentivePlanAndTwoThousandTwentyOneInducementPlanMember2021-12-310001659323us-gaap:MeasurementInputRiskFreeInterestRateMember2021-02-100001659323itrm:TwothousandAndTwentyOneInducementPlanMemberitrm:EmployeesAndDirectorsStockOptionsMember2022-01-012022-03-310001659323itrm:SeptemberTwoThousandTwentyOneThousandExchangeableNotesDueJanuaryThirtyOneTwoThousandTwentyFiveMember2022-01-012022-03-310001659323itrm:FebruaryUnderwrittenOfferingMember2021-02-102021-02-100001659323itrm:TwoThousandFifteenEquityIncentivePlanTwoThousandEighteenEquityIncentivePlanAndTwoThousandTwentyOneInducementPlanMember2022-01-012022-03-310001659323itrm:RoyaltyLinkedSubordinatedNotesMemberus-gaap:PrivatePlacementMember2020-09-072020-09-080001659323us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001659323itrm:TwoThousandFifteenEquityIncentivePlanMember2017-05-180001659323itrm:CommercialPropertyMember2022-01-012022-03-310001659323itrm:OptionsAndRestrictedShareUnitsAndPerformanceRestrictedShareUnitsMember2021-03-310001659323itrm:LoanAndSecurityAgreementMemberitrm:SiliconValleyBankMember2022-01-012022-03-310001659323itrm:SecuritiesMemberus-gaap:PrivatePlacementMember2020-01-212020-01-210001659323itrm:PaycheckProtectionProgramMemberitrm:SiliconValleyBankMemberitrm:IterumTherapeuticsUSLimitedMember2020-12-012020-12-310001659323itrm:OptionsAndRestrictedShareUnitsAndPerformanceRestrictedShareUnitsMember2022-01-012022-03-310001659323srt:MaximumMemberus-gaap:PrivatePlacementMemberitrm:June3SecuritiesPurchaseAgreementMember2020-06-030001659323itrm:LoanAndSecurityAgreementMemberitrm:SiliconValleyBankMembersrt:MaximumMember2018-04-270001659323us-gaap:LeaseholdImprovementsMember2022-03-310001659323us-gaap:PrivatePlacementMemberitrm:SecuritiesMember2020-11-022020-11-020001659323itrm:TwoThousandEighteenEquityIncentivePlanMember2018-12-302018-12-310001659323us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2020-01-012020-12-310001659323itrm:RoyaltyLinkedNotesMemberitrm:PfizerLicenseAgreementMember2022-01-012022-03-310001659323srt:MinimumMember2022-01-012022-03-310001659323itrm:PreferredStockUndesignatedMember2022-03-310001659323us-gaap:RestrictedStockUnitsRSUMemberitrm:TwoThousandTwentyOneInducementPlanMember2021-12-310001659323country:US2022-01-012022-03-310001659323us-gaap:CommercialPaperMember2022-03-310001659323us-gaap:FairValueInputsLevel1Member2021-12-310001659323us-gaap:RestrictedStockUnitsRSUMember2021-03-310001659323itrm:USTreasuryBillsMember2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2022-03-310001659323us-gaap:CommonStockMember2018-04-270001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberus-gaap:PrivatePlacementMember2020-01-210001659323itrm:FebruaryRegisteredDirectOfferingMember2021-02-120001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberus-gaap:PrivatePlacementMember2020-01-212020-01-210001659323itrm:RoyaltyLinkedNotesMember2021-01-012021-03-310001659323us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001659323itrm:EmployeesAndDirectorsStockOptionsMember2021-01-012021-03-310001659323itrm:OfficeSpaceAndCommercialPropertyMember2022-01-012022-03-310001659323us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001659323srt:MaximumMember2022-03-310001659323itrm:JuneThirtySecuritiesPurchaseAgreementMemberitrm:WarrantIssuedMember2022-03-310001659323itrm:FebruaryUnderwrittenOfferingMembersrt:MaximumMember2021-02-080001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberus-gaap:PrivatePlacementMember2022-03-310001659323itrm:JuneThirtySecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2020-07-022020-07-020001659323itrm:PerformanceRSUMember2022-01-012022-03-3100016593232022-03-310001659323itrm:WarrantIssuedMemberitrm:JuneThreeSecuritiesPurchaseAgreementMember2022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanMember2015-11-180001659323us-gaap:PrivatePlacementMemberitrm:June3SecuritiesPurchaseAgreementMember2020-06-032020-06-030001659323itrm:OctoberOfferingMember2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberus-gaap:PrivatePlacementMember2020-01-2100016593232021-03-310001659323itrm:PaycheckProtectionProgramMemberitrm:SiliconValleyBankMemberitrm:IterumTherapeuticsUSLimitedMember2020-04-300001659323itrm:JanuaryTwoThousandTwentyOneThousandExchangeableNotesDueJanuaryThirtyOneTwoThousandTwentyFiveMember2022-01-012022-03-310001659323itrm:TwoThousandEighteenEquityIncentivePlanMember2021-06-232021-06-230001659323itrm:UnvestedRestrictedStockUnitsMember2021-01-012021-03-310001659323us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001659323itrm:SeptemberTwoThousandTwentyOneThousandExchangeableNotesDueJanuaryThirtyOneTwoThousandTwentyFiveMember2022-03-310001659323itrm:OptionsToPurchaseOrdinarySharesMember2022-01-012022-03-310001659323itrm:SecuritiesMemberus-gaap:PrivatePlacementMember2020-11-022020-11-020001659323us-gaap:MeasurementInputRiskFreeInterestRateMember2021-02-080001659323itrm:RoyaltyLinkedNotesMemberitrm:SulopenemMember2022-03-310001659323itrm:RoyaltyLinkedSubordinatedNotesMemberus-gaap:PrivatePlacementMember2020-01-212020-01-210001659323us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2022-03-310001659323itrm:FebruaryUnderwrittenOfferingMember2021-02-082021-02-080001659323us-gaap:EquipmentMember2021-12-3100016593232022-04-300001659323itrm:UnderwritingAgreementMemberitrm:FebruaryTwoThousandTwentyOneUnderwritingOfferingMember2021-02-0300016593232021-02-0800016593232021-12-310001659323us-gaap:RestrictedStockUnitsRSUMembersrt:DirectorMember2022-01-012022-03-310001659323itrm:TwoThousandTwentyOneInducementPlanMember2022-01-012022-03-310001659323srt:MaximumMember2022-01-012022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberitrm:PrivatePlacementAndRightsOfferingMember2020-09-080001659323us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001659323itrm:OctoberOfferingMember2022-01-012022-03-3100016593232020-01-012020-12-310001659323itrm:ExchangeableNotesMember2021-01-212022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2022-01-012022-03-310001659323itrm:UnvestedRestrictedStockUnitsMember2022-01-012022-03-310001659323itrm:LoanAndSecurityAgreementMemberitrm:SiliconValleyBankMember2022-03-310001659323us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001659323us-gaap:WarrantMember2022-01-012022-03-310001659323itrm:PerformanceRSUMember2021-01-012021-03-310001659323us-gaap:MeasurementInputSharePriceMember2021-02-080001659323itrm:TwoThousandEighteenEquityIncentivePlanMember2021-06-222021-06-220001659323us-gaap:CertificatesOfDepositMember2022-03-310001659323country:BM2021-01-012021-03-310001659323us-gaap:CommercialPaperMember2021-12-310001659323itrm:FebruaryUnderwrittenOfferingMember2021-02-080001659323country:US2021-12-310001659323us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-12-310001659323itrm:PaycheckProtectionProgramMemberitrm:SiliconValleyBankMemberitrm:IterumTherapeuticsUSLimitedMember2020-04-292020-04-300001659323itrm:OptionsToPurchaseOrdinarySharesMember2021-01-012021-03-310001659323us-gaap:LeaseholdImprovementsMember2021-12-310001659323us-gaap:MeasurementInputExpectedDividendRateMember2021-02-100001659323itrm:ExchangeableNotesMember2022-01-012022-03-310001659323us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanAndTwoThousandEighteenEquityIncentivePlanMember2022-01-012022-03-310001659323us-gaap:FurnitureAndFixturesMember2021-12-310001659323itrm:OptionsAndRestrictedShareUnitsAndPerformanceRestrictedShareUnitsMember2021-01-012021-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanTwoThousandEighteenEquityIncentivePlanAndTwoThousandTwentyOneInducementPlanMember2022-03-310001659323us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2022-03-310001659323country:US2021-01-012021-03-310001659323us-gaap:PrivatePlacementMemberitrm:June3SecuritiesPurchaseAgreementMember2022-01-012022-03-310001659323itrm:PaycheckProtectionProgramMemberitrm:SiliconValleyBankMemberitrm:IterumTherapeuticsUSLimitedMember2020-11-012020-11-3000016593232020-12-310001659323itrm:RoyaltyLinkedNotesMemberus-gaap:PrivatePlacementMemberitrm:PfizerLicenseAgreementMember2020-01-212020-01-210001659323us-gaap:FairValueInputsLevel1Member2022-03-310001659323us-gaap:MeasurementInputExpectedDividendRateMember2021-02-120001659323itrm:JuneThirtySecuritiesPurchaseAgreementMemberus-gaap:PrivatePlacementMember2020-07-020001659323us-gaap:EmployeeStockOptionMember2021-03-310001659323itrm:FebruaryRegisteredDirectOfferingMember2021-02-090001659323us-gaap:ComputerEquipmentMember2022-03-310001659323itrm:TwoThousandEighteenEquityIncentivePlanMember2020-02-142020-02-140001659323itrm:JuneThirtySecuritiesPurchaseAgreementMembersrt:MaximumMemberus-gaap:PrivatePlacementMember2020-06-300001659323itrm:RoyaltyLinkedNotesMemberitrm:SulopenemMember2020-01-210001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberus-gaap:PrivatePlacementMember2020-01-212020-01-210001659323itrm:ExchangeableNotesMemberus-gaap:PrivatePlacementMember2021-01-212022-03-310001659323itrm:FebruaryRegisteredDirectOfferingMember2021-02-122021-02-120001659323itrm:JanuaryTwoThousandTwentyOneThousandExchangeableNotesDueJanuaryThirtyOneTwoThousandTwentyFiveMember2022-03-310001659323us-gaap:MeasurementInputSharePriceMember2021-02-120001659323itrm:ExchangeableNotesMember2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMember2020-12-310001659323us-gaap:ValuationTechniqueOptionPricingModelMember2022-03-310001659323itrm:LoanAndSecurityAgreementMemberitrm:SiliconValleyBankMember2021-01-012021-03-310001659323us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-03-310001659323itrm:TwoThousandFifteenEquityIncentivePlanAndTwoThousandEighteenEquityIncentivePlanMember2022-03-310001659323srt:MinimumMember2022-03-310001659323itrm:ExchangeableSeniorSubordinatedNotesDueTwoThousandTwentyFiveMemberus-gaap:PrivatePlacementMember2020-09-072020-09-080001659323itrm:TwoThousandFifteenEquityIncentivePlanAndTwoThousandEighteenEquityIncentivePlanMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-3100016593232021-01-012021-12-310001659323itrm:BinomialOptionPricingModelMember2022-01-012022-03-31iso4217:EURxbrli:pureitrm:Debtinstrumentitrm:Segmentxbrli:sharesiso4217:USDitrm:Rnlitrm:Voteiso4217:USDiso4217:USDxbrli:shares

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2022

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 of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Fitzwilliam Court 1st Floor,

Leeson Close,

Dublin 2, Ireland

(Address of principal executive offices)

Not applicable

(Zip Code)

 

(+353) 1 669-4820

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Ordinary Shares, $0.01 par value per share

 

ITRM

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. Seee the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of April 30, 2022, the registrant had 183,353,418 ordinary shares, $0.01 par value per share, outstanding.

 

 


 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

 

Condensed Consolidated Statements of Cash Flows

3

 

Notes to Unaudited Condensed Consolidated Financial Statements

4

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

35

PART II.

OTHER INFORMATION

35

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 2.

Recent Sales of Unregistered Securities

91

Item 6.

Exhibits

92

 

Signatures

93

 

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

our use of cash reserves;
the design, initiation, timing, progress and results of our preclinical studies and clinical trials, and our research and development programs including the additional clinical trial and non-clinical development to be conducted in response to the Complete Response Letter (CRL) received from the U.S. Food and Drug Administration in July 2021 in connection with our New Drug Application (NDA) for oral sulopenem for the treatment of uncomplicated urinary tract infections (uUTIs) in patients with a quinolone non-susceptible pathogen;
our ability to resolve the issues set forth in the CRL and resubmit our NDA;
our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals;
our ability to advance product candidates into, and successfully complete, clinical trials;
the potential advantages of our product candidates;
the timing or likelihood of regulatory filings and approvals, including with respect to the potential resubmission of our NDA for oral sulopenem;
the commercialization of our product candidates, if approved;
our manufacturing plans;
our sales, marketing and distribution capabilities and strategy;
market acceptance of any product we successfully commercialize;
the pricing, coverage and reimbursement of our product candidates, if approved;
the implementation of our business model, strategic plans for our business and product candidates;
the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and our ability to defend and enforce any such intellectual property rights;
our ability to enter into strategic arrangements, collaborations and/or commercial partnerships in the United States and other territories and the potential benefits of such arrangements;
our estimates regarding expenses, capital requirements and needs for additional financing;
our expectations regarding how far into the future our cash on hand will fund our ongoing operations;
our financial performance;
developments relating to our competitors and our industry;
the impact of COVID-19, including the responsive measures taken by governmental authorities and others, on our clinical trials, on regulatory approval, on future commercialization of, and future demand for, our products, available funding, our operations and the economy in general, which may precipitate or exacerbate other risks and/or uncertainties;
our ability to regain and maintain compliance with listing requirements of the Nasdaq Capital Market; and
the outcome, impact, effects and results of our evaluation of corporate, strategic, financial and financing alternatives, including the terms, timing, structure, value, benefits and costs of any corporate, strategic, financial or financing alternative and our ability to complete one at all.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the

ii


 

forward-looking events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to new information, actual results or to changes in our expectations, except as required by law.

You should read this Quarterly Report and the documents that we have filed with the Securities and Exchange Commission (SEC), as exhibits to this Quarterly Report with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

This Quarterly Report also contains industry, market and competitive position data from our own internal estimates and research as well as industry and general publications and research surveys and studies conducted by third parties. Industry publications, studies, and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source. The industry in which we operate is subject to a high degree of uncertainty and risks due to various factors, including those described in the section titled “Risk Factors”.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

 

 

iii


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ITERUM THERAPEUTICS PLC

Condensed Consolidated Balance Sheets

(In thousands except share and per share data)

(Unaudited)

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

31,361

 

 

$

27,446

 

Short-term investments

 

 

43,909

 

 

 

53,898

 

Prepaid expenses and other current assets

 

 

1,111

 

 

 

1,922

 

Total current assets

 

 

76,381

 

 

 

83,266

 

Intangible asset, net

 

 

3,006

 

 

 

3,435

 

Property and equipment, net

 

 

62

 

 

 

91

 

Restricted cash, less current portion

 

 

64

 

 

 

64

 

Other assets

 

 

4,550

 

 

 

4,653

 

Total assets

 

$

84,063

 

 

$

91,509

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

684

 

 

$

878

 

Accrued expenses

 

 

1,972

 

 

 

1,165

 

Derivative liability

 

 

4,451

 

 

 

6,058

 

Current portion of long-term debt

 

 

 

 

 

1,627

 

Income taxes payable

 

 

648

 

 

 

221

 

Other current liabilities

 

 

2,326

 

 

 

2,992

 

Total current liabilities

 

 

10,081

 

 

 

12,941

 

Long-term debt, less current portion

 

 

7,713

 

 

 

6,930

 

Royalty-linked notes

 

 

14,397

 

 

 

17,968

 

Other liabilities

 

 

3,237

 

 

 

3,436

 

Total liabilities

 

$

35,428

 

 

$

41,275

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Undesignated preferred shares, $0.01 par value per share: 100,000,000 shares
authorized at March 31, 2022 and December 31, 2021;
no shares issued at
March 31, 2022 and December 31, 2021

 

 

 

 

 

 

Ordinary shares, $0.01 par value per share: 300,000,000 shares authorized at March 31, 2022 and December 31, 2021, 183,353,418 shares issued at March 31, 2022; 182,775,282 shares issued at December 31, 2021

 

 

1,833

 

 

 

1,827

 

Additional paid-in capital

 

 

428,795

 

 

 

426,900

 

Accumulated deficit

 

 

(381,993

)

 

 

(378,493

)

Total shareholders' equity

 

$

48,635

 

 

$

50,234

 

Total liabilities and shareholders’ equity

 

$

84,063

 

 

$

91,509

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

ITERUM THERAPEUTICS PLC

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

$

(3,440

)

 

$

(2,451

)

General and administrative

 

 

(3,933

)

 

 

(3,396

)

Total operating expenses

 

 

(7,373

)

 

 

(5,847

)

Operating loss

 

 

(7,373

)

 

 

(5,847

)

Interest expense, net

 

 

(1,039

)

 

 

(2,952

)

Adjustments to fair value of derivatives

 

 

5,177

 

 

 

(90,103

)

Other income, net

 

 

162

 

 

 

41

 

Total other income / (expense), net

 

 

4,300

 

 

 

(93,014

)

Loss before income taxes

 

 

(3,073

)

 

 

(98,861

)

Income tax expense

 

 

(427

)

 

 

(60

)

Net loss and comprehensive loss

 

 

(3,500

)

 

 

(98,921

)

Net loss attributable to ordinary shareholders

 

$

(3,500

)

 

$

(98,921

)

Net loss per share attributable to ordinary shareholders – basic and diluted

 

$

(0.02

)

 

$

(0.81

)

Weighted average ordinary shares outstanding – basic and diluted

 

 

182,901,530

 

 

 

121,549,083

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

ITERUM THERAPEUTICS PLC

Condensed Consolidated Statements of Cash Flows

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(3,500

)

 

$

(98,921

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

 

 

Depreciation

 

 

29

 

 

 

35

 

Amortization of intangible asset

 

 

429

 

 

 

 

Share-based compensation expense

 

 

1,895

 

 

 

281

 

Interest on short-term investments

 

 

(100

)

 

 

(85

)

Non-cash loss on short-term investments

 

 

395

 

 

 

52

 

Amortization of debt discount and deferred financing costs

 

 

572

 

 

 

2,372

 

Interest on exchangeable notes - non-cash

 

 

205

 

 

 

436

 

Adjustments to fair value of derivatives

 

 

(5,177

)

 

 

90,103

 

Other

 

 

798

 

 

 

345

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

181

 

 

 

3,170

 

Accounts payable

 

 

(195

)

 

 

1,037

 

Accrued expenses

 

 

810

 

 

 

248

 

Income taxes

 

 

427

 

 

 

60

 

Other liabilities

 

 

(174

)

 

 

(265

)

Net cash used in operating activities

 

 

(3,405

)

 

 

(1,132

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of short-term investments

 

 

(11,307

)

 

 

(33,920

)

Proceeds from sale of short-term investments

 

 

20,900

 

 

 

 

Net cash provided by / (used in) investing activities

 

 

9,593

 

 

 

(33,920

)

Cash flows from financing activities:

 

 

 

 

 

 

Repayments of long-term debt

 

 

(2,251

)

 

 

(1,629

)

Proceeds from issuance of ordinary shares, net of transaction costs

 

 

 

 

 

88,611

 

Net cash (used in) / provided by financing activities

 

 

(2,251

)

 

 

86,982

 

Effect of exchange rates on cash and cash equivalents

 

 

(22

)

 

 

(6

)

Net increase in cash, cash equivalents and restricted cash

 

 

3,915

 

 

 

51,924

 

Cash, cash equivalents and restricted cash, at beginning of period

 

 

27,510

 

 

 

14,816

 

Cash, cash equivalents and restricted cash, at end of period

 

$

31,425

 

 

$

66,740

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

Interest paid

 

$

22

 

 

$

152

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


ITERUM THERAPEUTICS PLC

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

 

 

1. Basis of Presentation

Iterum Therapeutics plc (the Company) was incorporated under the laws of the Republic of Ireland in June 2015 as a limited company and re-registered as a public limited company on March 20, 2018. The Company maintains its registered office at Fitzwilliam Court, 1st Floor, Leeson Close, Dublin 2, Ireland. The Company commenced operations in November 2015. The Company licensed global rights to its novel anti-infective compound, sulopenem, from Pfizer Inc. (Pfizer). The Company is a clinical-stage pharmaceutical company dedicated to developing and commercializing sulopenem to be potentially the first oral penem available in the United States and the first and only oral and intravenous (IV) branded penem available globally.

Since inception, the Company has devoted substantially all of its efforts to research and development, recruiting management and technical staff, and raising capital, and has financed its operations through the issuance of ordinary and convertible preferred shares, debt raised under a financing arrangement with Silicon Valley Bank (SVB) including the Paycheck Protection Program loan (PPP loan), a sub-award from the Trustees of Boston University under the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X) program and the proceeds of a private placement (Private Placement) and subsequent rights offering (Rights Offering) pursuant to which its wholly owned subsidiary, Iterum Therapeutics Bermuda Limited (Iterum Bermuda) issued and sold $51,808 aggregate principal amount of 6.500% Exchangeable Senior Subordinated Notes due 2025 (Exchangeable Notes) and $104 aggregate principal amount of Limited Recourse Royalty-Linked Subordinated Notes (the RLNs and, together with the Exchangeable Notes, the Securities), which Securities were sold in units consisting of an Exchangeable Note in the original principal amount of $1,000 and 50 RLNs (the Units). The Company has not generated any product revenue. The Company is subject to risks and uncertainties common to early-stage companies in the pharmaceutical industry, including, but not limited to, the ability to secure additional capital to fund operations, failure to achieve regulatory approval, failure to successfully develop and commercialize its product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology and compliance with government regulations. Product candidates currently under development will require additional research and development efforts, including regulatory approval prior to commercialization.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and include the accounts of the Company and its subsidiaries.

In accordance with Accounting Standards Update (ASU) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date of issue of these quarterly condensed consolidated financial statements.

The Company has funded its operations to date primarily with proceeds from the sale of preferred shares and ordinary shares, warrants, debt raised under financing arrangements with SVB including the PPP loan, payments received under the CARB-X program and the proceeds of the Private Placement and Rights Offering. The Company has incurred operating losses since inception, including net losses of $3,500 and $98,921 for the three months ended March 31, 2022 and 2021, respectively, and a net loss of $91,564 for the year ended December 31, 2021. The Company had an accumulated deficit of $381,993 as of March 31, 2022 and expects to continue to incur net losses for the foreseeable future. Management believes that its cash and cash equivalents balance of $31,361 and short-term investments balance of $43,909 at March 31, 2022 are sufficient to fund operations into 2024. In making this assessment management have considered the planned operations of the company and the ability to adjust its plans if required.

In addition, in parallel, the Company is evaluating its corporate, strategic, financial and financing alternatives, with the goal of maximizing value for its stakeholders. These alternatives could potentially include the licensing, sale or divestiture of the Company’s assets or proprietary technologies, a sale of the Company, a merger or other business combination or another strategic transaction involving the Company. The evaluation of corporate, strategic, financial and financing alternatives may not result in any particular action or any transaction being pursued, entered into or consummated, and there is no assurance as to the timing, sequence or outcome of any action or transaction or series of actions or transactions.

 

COVID-19 Global Pandemic

The global impact of the COVID-19 pandemic has caused a disruption of the normal operations of many businesses, including the temporary closure or scale-back of business operations and/or the imposition of either quarantine or remote work or meeting requirements for employees, either by government order or on a voluntary basis. The pandemic may impact the ability of the Company’s strategic partners to operate and fulfill their contractual obligations, and result in an increase in their costs and cause delays in performance. The Company may experience an impact to the timelines of any potential additional clinical and non-clinical development for sulopenem due to the worldwide spread of COVID-19. These effects, and the direct effect of the virus and any potential disruption on the Company’s operations, may negatively impact the Company’s ability to meet its strategic targets. The Company’s employees, in most cases, are working remotely due to safety concerns and using various technologies to perform their

4


ITERUM THERAPEUTICS PLC

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

 

functions. Additionally, the disruption and volatility in the global and domestic capital markets may increase the cost of capital and limit the Company’s ability to access capital. Both the health and economic aspects of COVID-19 are highly fluid and the future course of each is uncertain. For these reasons and other reasons that may come to light if the coronavirus pandemic and associated protective or preventative measures expand, the Company may experience a material adverse effect on its business operations and financial condition; however, its ultimate impact is highly uncertain and subject to change.

The Company cannot foresee if and when the COVID-19 pandemic will be effectively contained, nor can the Company predict the severity and duration of its impact. COVID-19 has not yet had a significant impact on the Company’s day to day operations but there can be no assurance that the continued spread of COVID-19 and the responsive measures taken to date will not impact patient enrollment in the additional clinical trial to be conducted in response to the Complete Response Letter (CRL) from the FDA to support a potential resubmission of our New Drug Application (NDA) for oral sulopenem for the treatment of uncomplicated urinary tract infections (uUTIs). Additionally, the COVID-19 pandemic could impact the FDA’s regulatory review process, including delays in meetings related to planned or completed clinical trials and ultimately the review and approval of our product candidates. The FDA’s review of any resubmitted NDA for oral sulopenem for the treatment of uUTI may be delayed due to COVID-19, including an inability to schedule, or delays in scheduling, meetings and inspections. Additionally, the COVID-19 pandemic may negatively impact the Company’s ability to initiate or complete future clinical trials, disrupt the Company’s regulatory and commercialization activities, and result in other adverse effects on the Company’s business and operations.

Management is actively monitoring the global situation and its possible effects on its financial condition, liquidity, suppliers, industry, and operations including manufacturing, clinical trials and workforce. Given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, the Company is not able to estimate the adverse effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity.

Interim Financial Information

The condensed consolidated balance sheet at December 31, 2021 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2022. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s financial position as of March 31, 2022, and results of operations for the three months ended March 31, 2022 and 2021, and cash flows for the three months ended March 31, 2022 and 2021 have been made. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2022.

2. Summary of Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies, other than the adoption of accounting pronouncements as described below, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the valuation of share-based compensation awards, the valuation of the RLNs and the Derivative liabilities, which consist of embedded features in the Exchangeable Notes, and the accrual for research and development expenses. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Actual results could differ materially from those estimates. The Company has contemplated the impact of COVID-19 within its financial statements and is not aware of any specific event or circumstance that would require the Company to update estimates or judgments or revise the carrying value of any assets or liabilities.

5


ITERUM THERAPEUTICS PLC

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

 

Specifically, management has estimated variables used to calculate the discounted cash flow analysis (DCF) to value derivative instruments (see Note 3 - Fair Value of Financial Assets and Liabilities).

Cash and Cash Equivalents

The Company’s cash and cash equivalents consist of cash balances and highly liquid investments with maturities of three months or less at the date of purchase. Accounts held at U.S. financial institutions are insured by the Federal Deposit Insurance Corporation up to $250, while accounts held at Irish financial institutions are insured under the Deposit Guarantee Scheme up to $111 (€100).

Cash accounts with any type of restriction are classified as restricted cash. If restrictions are expected to be lifted in the next twelve months, the restricted cash account is classified as current. Included within restricted cash on the Company’s condensed consolidated balance sheet is a certificate of deposit for $30 as of March 31, 2022 which is being held by a third party bank as collateral for the irrevocable letter of credit issued in March 2018 to secure an office lease. Also included within restricted cash on the Company’s condensed consolidated balance sheet is $17 as of March 31, 2022 relating to the warrants issued on June 5, 2020 pursuant to the securities purchase agreement (June 3, 2020 SPA) from the June 3, 2020 registered direct offering (June 3, 2020 Offering), $6 as of March 31, 2022 relating to the warrants issued on July 2, 2020 pursuant to the securities purchase agreement (June 30, 2020 SPA) from the June 30, 2020 registered direct offering (June 30, 2020 Offering) and $11 as of March 31, 2022 relating to warrants issued in the underwritten offering in October 2020 (October 2020 Offering). These restricted cash amounts are unchanged from December 31, 2021. On the closing date of each of the June 3, 2020 Offering, June 30, 2020 Offering and the October 2020 Offering, each investor deposited $0.01 per warrant issued being the nominal value of the underlying ordinary share represented by each warrant. This amount will be held in trust by the Company pending a decision by the relevant investor to exercise the warrant by means of a “cashless exercise” pursuant to the terms of the warrant, in which case the $0.01 will be used to pay up the nominal value of the ordinary share issued pursuant to the warrant. Upon the exercise of the warrants other than by means of a "cashless exercise", the amount held in trust will be returned to the relevant investor in accordance with the terms of the applicable purchase agreement or prospectus.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and short-term investments. The Company has most of its cash, cash equivalents and short-term investments at two accredited financial institutions in the United States and Ireland, in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Net Loss Per Ordinary Share

Basic and diluted net loss per ordinary share is determined by dividing net loss attributable to ordinary shareholders by the weighted-average ordinary shares outstanding during the period in accordance with Accounting Standard Codification (ASC) 260, Earnings per Share. For the periods presented, the following ordinary shares underlying the options, unvested restricted share units, unvested performance restricted share units, warrants and the Exchangeable Notes have been excluded from the calculation because they would be anti-dilutive.

 

 

Three months ended

 

 

 

March 31, 2022

 

 

March 31, 2021

 

Options to purchase ordinary shares

 

 

16,227,246

 

 

 

690,733

 

Unvested restricted share units

 

 

1,236,573

 

 

 

1,198,136

 

Unvested performance restricted share units

 

 

 

 

 

407,000

 

Warrants

 

 

7,202,878

 

 

 

8,240,955

 

Exchangeable Notes

 

 

18,524,277

 

 

 

19,828,296

 

Total

 

 

43,190,974

 

 

 

30,365,120

 

 

Segment and Other Information

The Company determines and presents operating segments based on the information that is internally provided to the Chief Executive Officer, Chief Financial Officer and Chief Medical Officer, who together are considered the Company’s chief operating decision maker, in accordance with ASC 280, Segment Reporting. The Company has determined that it operates as a single business segment, which is the development and commercialization of innovative treatments for drug resistant bacterial infections.

6


ITERUM THERAPEUTICS PLC

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

 

The distribution of total operating expenses by geographical area was as follows:

 

 

 

Three Months Ended March 31,

 

Operating expenses

 

2022

 

 

2021

 

Ireland

 

$

4,549

 

 

$

3,918

 

U.S.

 

 

2,811

 

 

 

1,884

 

Bermuda

 

 

13

 

 

 

45

 

Total

 

$

7,373

 

 

$

5,847

 

 

The distribution of long-lived assets by geographical area was as follows:

 

Long-lived assets

 

March 31, 2022

 

 

December 31, 2021

 

Ireland

 

$

7,105

 

 

$

7,601

 

U.S.

 

 

513

 

 

 

578

 

Total

 

$

7,618

 

 

$

8,179

 

 

Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law in the United States to provide certain relief as a result of the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of COVID-19. Neither the enactment of the CARES Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on the Company’s income tax provision for the three months ended March 31, 2022 and 2021, or to the Company’s net deferred tax assets as of March 31, 2022.

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which reduces the number of accounting models for convertible instruments and allows more contracts to qualify for equity classification. The ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2021. The new standard became effective for the Company on January 1, 2022 and did not have a material impact on the Company’s condensed consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which clarifies an issuer’s accounting for modifications or exchanges of freestanding written call options that remain equity-classified after modification. The ASU 2021-04 is effective for all entities for interim and annual periods in fiscal years beginning after December 15, 2021. The new standard became effective for the Company on January 1, 2022 and did not have a material impact on the Company’s condensed consolidated financial statements.

In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments, which requires a lessor to classify a lease with entirely or partially variable payments that do not depend on an index or rate as an operating lease if a different classification would result in a commencement date selling loss (Day 1 loss). For entities that have adopted ASU 2016-02, Leases, as of July 19, 2021, ASU 2021-05 is effective for annual and interim periods in fiscal years beginning after December 15, 2021 for public business entities and annual periods in fiscal years beginning after December 15, 2021 and interim periods in fiscal years beginning after December 15, 2022 for all other entities. The new standard became effective for the Company on January 1, 2022 and did not have a material impact on the Company’s condensed consolidated financial statements.

3. Fair Value of Financial Assets and Liabilities

The following table presents information about the Company’s financial assets that were carried at fair value on a recurring basis on the condensed consolidated balance sheet as of March 31, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value.

7


ITERUM THERAPEUTICS PLC

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

 

 

March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Short-term investments

 

$

43,909

 

 

 

43,909

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Short-term investments

 

$

53,898

 

 

 

53,898

 

 

 

 

 

 

 

 

See Note 4 for details on the short-term investments. The carrying amounts reported in the condensed consolidated balance sheets for prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate their fair value based on the short-term maturity of these instruments.

The following table presents information about the Company’s debt, Exchangeable Notes, Derivative liability and RLNs. The Company’s long-term debt was carried at amortized cost on the condensed consolidated balance sheet as of December 31, 2021 and indicates the fair value hierarchy of the valuation inputs utilized to determine the approximate fair value:

 

March 31, 2022

 

Book

 

 

Approximate

 

 

 

 

 

 

 

 

 

 

Liabilities

 

Value

 

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Exchangeable Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term exchangeable note

 

 

7,713

 

 

 

9,788

 

 

 

 

 

 

9,788

 

 

 

 

Derivative liability - exchange option and change of control

 

 

4,451

 

 

 

4,451

 

 

 

 

 

 

 

 

 

4,451

 

Revenue Futures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalty-linked notes

 

 

14,397

 

 

 

14,397

 

 

 

 

 

 

 

 

 

14,397

 

Total

 

$

26,561

 

 

$

28,636

 

 

 

 

 

 

9,788

 

 

 

18,848

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

Book

 

 

Approximate

 

 

 

 

 

 

 

 

 

 

Liabilities

 

Value

 

 

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

1,627

 

 

$

1,627

 

 

 

 

 

 

1,627

 

 

 

 

Exchangeable Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term exchangeable note

 

 

6,930

 

 

 

9,495

 

 

 

 

 

 

9,495

 

 

 

 

Derivative liability - exchange option and change of control

 

 

6,058

 

 

 

6,058

 

 

 

 

 

 

 

 

 

6,058

 

Revenue Futures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalty-linked notes

 

 

17,968

 

 

 

17,968

 

 

 

 

 

 

 

 

 

17,968

 

Total

 

$

32,583

 

 

$

35,148

 

 

 

 

 

 

11,122

 

 

 

24,026

 

The book value of the current portion of long-term debt approximates its fair value due to the short-term nature of the balance.

The fair value of long-term Exchangeable Notes was determined using DCF analysis using the fixed interest rate outlined in the indenture governing the Exchangeable Notes (Exchangeable Notes Indenture), without consideration of transaction costs, which represents a Level 2 basis of fair value measurement.

The Level 3 liabilities held as of March 31, 2022 consist of the embedded exchange option and change of control premium contained in the Exchangeable Notes (see Note 10 - Debt) and a separate financial instrument, that was issued as part of the Units, the RLNs (see Note 11 – Royalty-Linked Notes). The exchange option and change of control premium met the criteria requiring these to be bifurcated and accounted for separately from the host debt in accordance with ASC 815-15, Derivatives and Hedging; Embedded Derivatives. The exchange option and change of control premium are presented as a Derivative liability upon issuance of the Exchangeable Notes under the Private Placement and Rights Offering and are subsequently remeasured to fair value at the end of each reporting period. At any time on or after January 21, 2021, subject to specified limitations, the Exchangeable Notes are exchangeable for the Company’s ordinary shares, cash or a combination of ordinary shares and cash, at an exchange rate of 1,286.1845 shares per $1,000 principal and interest on the Exchangeable Notes (equivalent to an exchange price of approximately $0.7775 per ordinary share) as of November 2, 2020, which was adjusted from an initial exchange rate of 1,000 shares per $1,000 principal and interest on the Exchangeable Notes (equivalent to an initial exchange price of $1.00 per ordinary share) and is subject to further adjustment pursuant to the terms of the Exchangeable Notes Indenture. Beginning on January 21, 2021 to March 31, 2022, certain noteholders of $39,201 aggregate principal amount of Exchangeable Notes have exchanged their notes for an aggregate of 53,888,331 of the Company’s ordinary shares, which included accrued and unpaid interest relating to such notes. The aggregate principal amount of

8


ITERUM THERAPEUTICS PLC

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

 

Exchangeable Notes outstanding as of March 31, 2022 was $12,607. The fair value of the exchange option at March 31, 2022 amounted to $3,459.

In the event of a fundamental change that is not a liquidation event (Fundamental Change), under the Exchangeable Notes Indenture, the Company will be required to pay each holder of an Exchangeable Note the greater of three times the outstanding principal amount of such Exchangeable Note and the consideration that would be received by the holder of such Exchangeable Note, in connection with such Fundamental Change, if the holder had exchanged its note for ordinary shares immediately prior to the consummation of such Fundamental Change, plus any accrued and unpaid interest. The Derivative liability, representing the change of control feature, was recorded at a fair value of $992 at March 31, 2022.

The fair value of each component of the Derivative liability was determined using the binomial option pricing model, and in the case of the change of control component, in combination with a DCF analysis, without consideration of transaction costs, which represents a Level 3 basis of fair value measurement. The key inputs to valuing the Derivative liability as of March 31, 2022 include the terms of the Exchangeable Notes Indenture, the Company’s share price and market capitalization, the expected annual volatility of the Company’s ordinary shares, management’s assumption regarding the probability of a Fundamental Change pursuant to the terms of the Exchangeable Notes Indenture, and the risk-free interest rate. Fair value measurements are highly sensitive to changes in these inputs and significant changes in these inputs could result in a significantly higher or lower fair value.

The following table presents the changes in fair value of the Company's Derivative liability for the three months ended March 31, 2022:
 

 

 

March 31, 2022

 

Balance at December 31, 2021

 

$

6,058

 

Conversion of Exchangeable Notes

 

 

 

Adjustment to fair value

 

 

(1,607

)

Balance at period end

 

$

4,451

 

The following summary table shows the assumptions used in the binomial option pricing model to estimate the fair value of the Derivative liabilities:
 

 

 

March 31, 2022

 

 

December 31, 2021

 

Share price

 

$

0.355

 

 

$

0.392

 

Market capitalization

 

$

65,090,463

 

 

$

71,647,911

 

Volatility

 

 

110

%

 

 

130.00

%

Risk-free interest rate

 

 

2.50

%

 

 

1.00

%

Dividend rate

 

 

0

%

 

 

0

%

The additional significant assumption used in the DCF model, to estimate the fair value of the change of control feature at March 31, 2022, was management’s assumption regarding the probability of a Fundamental Change pursuant to the terms of the Exchangeable Notes Indenture.

The RLN liability is carried at fair value on the condensed consolidated balance sheet as of March 31, 2022 (see Note 11 – Royalty-Linked Notes). The total fair value of $14,397 was determined using DCF analysis, without consideration of transaction costs, which represents a Level 3 basis of fair value measurement. The key inputs to valuing the RLNs were the terms of the indenture governing the RLNs (the RLN Indenture), the expected cash flows to be received by holders of the RLNs based on management’s revenue forecasts of U.S. sulopenem sales and a risk-adjusted discount rate to derive the net present value of expected cash flows. The RLNs will be subject to a maximum return amount, including all principal and payments and certain default interest in respect of uncurable defaults, of $160.00 (or 4,000 times the principal amount of such note). The discount rate applied to the model was 20%. Fair value measurements are highly sensitive to changes in these inputs and significant changes in these inputs could result in a significantly higher or lower fair value.

There have been no transfers of assets or liabilities between the fair value measurement levels.

4. Short-term Investments

The Company classifies its short-term investments as available for sale. Short-term investments comprise highly liquid investments with minimum “A-” rated securities and as at period-end consist of corporate entity commercial paper and U.S. Treasury and Agency Bonds with maturities of more than three months at the date of purchase. Short-term investments as of March 31, 2022 have a weighted average maturity of 0.89 years. The investments are reported at fair value with unrealized gains or losses recorded in the condensed consolidated statements of operations and comprehensive loss. Any differences between the cost and fair value of investments are represented by unrealized gains or losses. The fair value of short-term investments is represented by Level 1 fair value measurements – quoted prices in active markets for identical assets.

9


ITERUM THERAPEUTICS PLC

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except share and per share data)

 

The following table represents the Company’s available for sale short-term investments by major security type as of March 31, 2022 and December 31, 2021:

March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

Maturity by period

 

 

 

Cost

 

 

Unrealized

 

 

Unrealized

 

 

Fair Value

 

 

Less than 1

 

 

1 to 5

 

Available for sale

 

Total

 

 

gains

 

 

(losses)

 

 

Total

 

 

year

 

 

years

 

Commercial paper

 

$

21,443

 

 

 

19

 

 

 

(725

)

 

 

20,737

 

 

 

16,683

 

 

 

4,054

 

U.S. Treasury and Agency Bonds

 

 

23,514

 

 

 

4

 

 

 

(346

)

 

 

23,172

 

 

 

8,491

 

 

 

14,681

 

Total

 

$

44,957

 

 

$

23

 

 

$

(1,071

)

 

$

43,909

 

 

$

25,174

 

 

$

18,735

 

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Maturity by period

 

 

 

 

 

 

Unrealized

 

 

Unrealized

 

 

Fair Value

 

 

Less than 1

 

 

 

 

Available for sale

 

Cost Total

 

 

gains

 

 

(losses)

 

 

Total

 

 

year

 

 

1 to 5 years

 

Commercial paper

 

$

37,549

 

 

 

17

 

 

 

(570

)

 

 

36,996

 

 

 

31,833

 

 

 

5,163

 

U.S. Treasury and Agency Bonds

 

 

16,984

 

 

 

6

 

 

 

(88

)

 

 

16,902

 

 

 

 

 

 

16,902

 

Total

 

$

54,533

 

 

 

23

 

 

 

(658

)

 

 

53,898

 

 

 

31,833

 

 

 

22,065

 

 

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

 

 

 

March 31,
2022

 

 

December 31,
2021

 

Research and development tax credit receivable

 

$

295

 

 

$

840

 

Other prepaid assets

 

 

262

 

 

 

56

 

Prepaid insurance

 

 

250

 

 

 

624

 

Prepaid research and development expenses

 

 

150

 

 

 

 

Interest receivable

 

 

100

 

 

 

290

 

Short-term deposits

 

 

36

 

 

 

37

 

Value added tax receivable

 

 

18

 

 

 

75

 

Total

 

$

1,111

 

 

$

1,922

 

 

 

6. Intangible Asset, net

Intangible asset and related accumulated amortization are as follows:

 

 

March 31, 2022

 

 

December 31, 2021

 

Gross intangible asset

 

$

5,148

 

 

$

5,148

 

Less: accumulated amortization

 

 

(2,142

)

 

 

(1,713

)

 

 

$

3,006

 

 

$

3,435

 

On December 10, 2021, the Company entered into an amendment to an agreement with a supplier whereby advance payments made from June 2016 to January 2020 are being set against a reservation fee for a tableting facility for the period from January 1, 2021 to December 31, 2023. This reservation right is being amortized over the three year term of the amended agreement.

7. Property and Equipment, net

Property and equipment and related accumulated depreciation are as follows:

 

 

 

March 31,
2022

 

 

December 31,
2021

 

Leasehold improvements

 

$

148

 

 

$

148

 

Furniture and fixtures

 

 

120

 

 

 

120

 

Laboratory equipment

 

 

86

 

 

 

86

 

Computer equipment

 

 

23

 

 

 

23

 

 

 

 

377