ITEM 1A. RISK FACTORS 28
ITEM 1B. UNRESOLVED STAFF COMMENTS 70
ITEM 1C. CYBERSECURITY 70
ITEM 2. PROPERTIES 70
ITEM 3. LEGAL PROCEEDINGS 70
ITEM 4. MINE SAFETY DISCLOSURES 70
part II
ITEM 6. [RESERVED] 71
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 85
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 85
ITEM 9A. CONTROLS AND PROCEDURES 86
ITEM 9B. OTHER INFORMATION 86
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICIONS THAT PREVENT INSPECTIONS 86
part III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 87
ITEM 11. EXECUTIVE COMPENSATION 93
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 103
part IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 104
i
On March 15, 2024, BiomX Inc. acquired Adaptive
Phage Therapeutics, Inc., a Delaware corporation, or APT, and such acquisition, or the Acquisition, pursuant to an agreement and plan
of merger, or the Merger Agreement, by and among BiomX Inc., APT, BTX Merger Sub I, Inc., a Delaware corporation, and BTX Merger Sub
II, LLC, a Delaware limited liability company. References in this Annual Report on Form 10-K , or the Annual Report to the “Company,”
“BiomX,” “we,” “us” or “our” mean BiomX Inc. and its consolidated subsidiaries, including
APT, unless otherwise expressly stated or the context indicates otherwise, provided, however, that the financial information as of and
for the year ended December 31, 2023 and other information as of a date before March 15, 2024, unless noted specifically, does not include
APT. References in this Annual Report to BiomX Ltd. mean BiomX Ltd., our wholly owned Israeli subsidiary. The description of the Company
herein describes the post Acquisition Company and reflects the integration of APT’s business.
All share amounts included in this Annual Report
have been retroactively adjusted to reflect a 1-for-10 reverse stock split, which took effect on August 26, 2024.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended or the Exchange Act. The statements contained in this Annual Report that are not purely historical
are forward-looking statements. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions,
assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,”
“continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,”
“plan,” “potential,” “predict,” “project,” “will” or similar words or phrases,
or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily
mean that a statement is not forward-looking. Examples of forward-looking statements in this Annual Report include, but are not limited
to, statements regarding our disclosure concerning our operations, cash flows, financial position and also regarding our preclinical
and clinical development plans, the safety, tolerability and efficacy of our phage therapy and the conducting, design, aims and timing
of its preclinical and clinical studies and announcing results thereof.
Forward-looking statements appear in a number
of places in this Annual Report including, without limitation, in the sections entitled “Management’s Discussion and Analysis
of Financial Conditions and Results of Operations,” and “Business.” The risks and uncertainties include, but are not
limited to:
ii
● our ability to obtain required regulatory approvals;
● delays in developing manufacturing processes for our product candidates;
● reliance on third-party collaborators;
● potential security breaches, including cybersecurity incidents; and
Forward-looking statements are subject to known
and unknown risks and uncertainties and are based on our management’s potentially inaccurate assumptions that could cause actual
results to differ materially from those expected or implied by the forward-looking statements. While these statements are based upon
information available to us as of the filing date of this Annual 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. Actual results could differ materially from those anticipated in forward-looking
statements for many reasons, including the factors discussed in the section of this Annual Report entitled “Risk Factors”.
Except as may be required by applicable law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances
or events after the date of this Annual Report or to reflect the occurrence of unanticipated events. You should, however, review the
factors and risks we describe in the reports we will file from time to time with the U.S. Securities and Exchange Commission, or the
SEC, after the date of this Annual Report.
iii
RISK FACTORS SUMMARY
The summary below provides an overview of many
of the risks the Company faces, and a more detailed discussion of risks can be found in Item 1A. “Risk Factors” below. You
should carefully consider these risks and uncertainties when investing in our securities. The principal risks and uncertainties affecting
our business include, but are not limited to, the following:
● We have not completed composition development of our product candidates.
iv
v
PART I
ITEM 1. BUSINESS
Overview
We are a clinical stage product discovery company
developing products using both natural and engineered phage technologies designed to target and kill specific harmful bacteria associated
with chronic diseases, such as cystic fibrosis, or CF and diabetic foot osteomyelitis, or DFO. Bacteriophage or phage are bacterial,
species-specific, strain-limited viruses that infect, amplify and kill the target bacteria and are considered inert to mammalian cells.
By utilizing proprietary combinations of naturally occurring phage and by creating novel phage using synthetic biology, we develop phage-based
therapies intended to address both large-market and orphan diseases.
Based on the urgency of treating the infection
(whether acute or chronic), the susceptibility of the target bacteria to phage (e.g. the ability to identify a phage cocktail that would
target a broad range of bacterial strains) and other considerations, we offer two phage-based product types:
In our therapeutic programs, we focus on using
phage therapy to target specific strains of pathogenic bacteria that are associated with diseases. Our phage-based product candidates
are developed utilizing our BOLT proprietary research and development platform. The BOLT platform is unique, employing cutting edge methodologies
and capabilities across disciplines including computational biology, microbiology, synthetic engineering of phage and their production
bacterial hosts, bioanalytical assay development, manufacturing and formulation, to allow agile and efficient development of natural
or engineered phage combinations, or cocktails. The cocktail contains phage with complementary features and is optimized for multiple
characteristics such as broad target host range, ability to prevent resistance, biofilm penetration, stability and ease of manufacturing.
Our goal is to develop multiple products based
on the ability of phage to precisely target harmful bacteria and on our ability to screen, identify and combine different phage, both
naturally occurring and created using synthetic engineering, to develop these treatments.
Our Product Pipeline
The chart below identifies our product candidates’
pipeline, their current status and expected timing for upcoming milestones. We do not have any products approved or available for sale,
our product candidates are still in the preclinical and clinical development stages, and we have not generated any revenue from product
sales.
Ongoing Programs
BX004 – Treatment of Cystic Fibrosis
BX004 is our therapeutic phage product candidate
under development for chronic pulmonary infections caused by Pseudomonas aeruginosa, or P. aeruginosa, a main contributor to morbidity
and mortality in patients with CF. Enhanced resistance to antibiotics develops, particularly in CF patients, due to extensive drug use
consisting of prolonged and repeated broad-spectrum antibiotic courses often beginning in childhood, and leading to the appearance of
multidrug-resistant strains. In preclinical in vitro studies, BX004 was shown to be active against antibiotic resistant strains
of P. aeruginosa and demonstrated the ability to penetrate biofilm, an assemblage of surface-associated microbial cells enclosed
in an extracellular polymeric substance and one of the leading causes for antibiotic resistance.
1
The Phase 1b/2a trial in CF patients with chronic
respiratory infections caused by P. aeruginosa. was comprised of two parts. The study design was based on recommendations from
the Cystic Fibrosis Therapeutic Development Network.
In February 2023, we announced positive results
from Part 1 of the Phase 1b/2a trial evaluating BX004. Part 1 evaluated the safety, tolerability, pharmacokinetics, or PK, and microbiologic
activity of BX004 over a 7-day ascending treatment period in nine CF patients (7 on BX004, 2 on placebo) with chronic P. aeruginosa
pulmonary infection in a single ascending dose and multiple dose design.
Results from Part 1 of the Phase 1b/2a trial included
the following findings: No safety events related to treatment with BX004 occurred; Mean P. aeruginosa colony forming units, or CFU, at
Day 15 (compared to baseline): -1.42 log (BX004) vs. -0.28 log (placebo). This reduction was seen on top of standard of care inhaled
antibiotics; Phage were detected in all patients treated with BX004 during the dosing period, including in several patients up to Day
15 (one week after end of therapy); no phage were detected in patients receiving placebo; there was no evidence of treatment-related
resistance to BX004 during or after treatment, compared to placebo; and as expected due to the short duration of treatment, there was
no detectable effect on % predicted forced expiratory volume in 1 second, or FEV1.
In November 2023, we announced positive topline
results from Part 2 of the Phase 1b/2a trial evaluating BX004. The objectives of Part 2 of the Phase 1b/2a trial were to evaluate the
safety and tolerability of BX004 in a larger number of CF patients dosed for a longer treatment duration than Part 1 of the study, with
the anticipation that the longer treatment might result in greater effects than in the Part 1. In Part 2, 34 CF patients were randomized
in a 2:1 ratio with 23 CF patients receiving BX004 and 11 patients receiving placebo via nebulization twice daily for 10 days.
Key results from Part 2 of the Phase 1b/2a trial
included the following findings:
In August 2023, the FDA granted BX004 Fast Track
designation for the treatment of chronic respiratory infections caused by P. aeruginosa bacterial strains in patients with CF.
In addition, in December 2023, BX004 received orphan drug designation from the FDA.
BiomX expects to initiate a randomized, double
blind, placebo-controlled, multi-center Phase 2b study in CF patients with chronic P. aeruginosa pulmonary infections in
the second quarter of 2025. The study is designed to enroll approximately 60 patients randomized at a 2:1 ratio to BX004 or placebo.
Treatment is expected to be administered via inhalation twice daily for a duration of 8 weeks. The study is designed to monitor the safety
and tolerability of BX004 and is designed to demonstrate improvement in microbiological reduction of P. aeruginosa burden
and evaluation of effects on clinical parameters such as lung function measured by FEV1 and patient reported outcomes. BX004 Phase 2b
topline results are anticipated in the first quarter of 2026.
BiomX has been in communication with the FDA and
additional regulatory agencies regarding the potential to use Real-World Evidence, or RWE, to explore the link between P. aeruginosa
reduction and improved clinical outcomes. RWE is clinical evidence on the usage, benefits, or risks of a medical product derived from
real-world data, which includes sources such as electronic health records, claims data, patient registries, wearable devices, and observational
studies. We anticipate further discussion with the FDA and European Committee for Medicinal Products for Human Use, or CHMP, in 2025 to
discuss our proposed plan to use RWE to support potential future regulatory filings.
2
BX211 – Treatment of Diabetic Foot Osteomyelitis (DFO)
BX211 is a phage therapy for the
treatment of DFO associated with Staphylococcus aureus, or S. aureus. The personalized phage treatment tailors a specific
phage selected from a proprietary phage-bank according to the specific strain of S. aureus biopsied and isolated from each patient. DFO
is a bacterial infection of the bone that usually develops from an infected foot ulcer and is a leading cause of amputation in patients
with diabetes. We believe that scientific literature demonstrating the potential benefit in treating osteomyelitis using phage in animal
models as well as numerous successful compassionate cases using phage therapy to treat DFO patient support our approach of using phage
therapy to treat DFO.
The randomized, double-blind, placebo-controlled,
multi-center phase 2 study investigating the safety, tolerability, and efficacy of BX211 for subjects with DFO associated with S. aureus
enrolled 41 subjects randomized at a 2:1 ratio to BX211 or placebo. BX211 or placebo is designed to be administered weekly, by topical
and intravenous, or IV route at week 1 and by the topical route only at each of weeks 2-12. Over the 12-week treatment period, all subjects
will be treated in accordance with standard of care which includes antibiotic treatment as appropriate. Readout of study topline results
is expected at week 13 evaluating healing of the wound associated with osteomyelitis, and is expected in the first quarter of 2025.
Non-CF Bronchiectasis, or NCFB
NCFB is a chronic, progressive inflammatory lung
disease characterized by permanent dilation of the bronchi. Affecting over 1 million diagnosed patients across the US, Europe, and Japan
(according to Weycker, Chron Respir Dis. 2017, Quint, European Respiratory Journal, 2016, Ringshausen, European Respiratory Journal, 2019,
Henkle, Chest, 2018, Asakura, American Journal of Respiratory and Critical Care Medicine 2024, Insmed Commercial Presentation June 4th,
2024), NCFB is caused by multiple etiologies but manifests with similar debilitating symptoms, including chronic cough, sputum production,
and recurrent infections. Chronic P. aeruginosa infections in NCFB patients are a main contributor to morbidity and mortality in
this disease. In preclinical in vitro studies, BX004 was shown to be active against antibiotic resistant strains of P. aeruginosa
and demonstrated the ability to penetrate biofilm, an assemblage of surface-associated microbial cells enclosed in an extracellular polymeric
substance and one of the leading causes for antibiotic resistance.
Pending positive data of BX004 in our CF Phase
2b study, we will explore the feasibility of a Phase 2 study in NCFB as an additional indication for BX004.
National Institutes of Health, or NIH study in Cystic Fibrosis
We are supporting a study conducted by the NIH
and The Antibacterial Resistance Leadership Group targeting P. Aeruginosa infections in CF patients under FDA emergency Investigational
New Drug, or eIND, allowance. The Phase 1b/2, multi-centered, randomized, double-blind, placebo-controlled trial is assessing the safety
and microbiological activity of a single IV dose of bacteriophage therapy in cystic fibrosis subjects colonized with P. aeruginosa.
Programs on hold
Prosthetic Joint Infections, or PJI
Our personalized phage therapy for treating PJI
targets multiple bacterial organisms such as Staphylococcus aureus, Staphylococcus epidermidis and Enterococcus faecium. This treatment
was granted Orphan-drug designation by the FDA in July 2020. As of the date of this Annual Report, we have paused development efforts
of this program due to prioritizing resources towards our CF and DFO programs, and we cannot provide guidance on resuming its development.
Discontinued programs
BX005 – Treatment of Atopic Dermatitis, or AD
BX005 is our topical phage product candidate targeting
Staphylococcus aureus, or S. aureus, a bacterium associated with the development and exacerbation of inflammation in AD.
S. aureus is more abundant on the skin of AD patients than on the skin of healthy individuals and on lesional skin than non-lesional
skin. It also increases in abundance, becoming the dominant bacteria, when patients experience flares. By reducing the load of S.
aureus, BX005 is designed to shift the skin microbiome composition to its ‘pre-flare’ state and potentially provide a
clinical benefit. In preclinical in vitro studies, BX005 was shown to eradicate over 90% of strains, including antibiotic resistant
strains, from a panel of S. aureus strains (120 strains isolated from skin of subjects from the U.S. and Europe). On April 8,
2022, the FDA approved the Company’s Investigational New Drug, or IND, application for BX005.
In 2024, we discontinued the development of BX005,
choosing instead to focus our resources on our Cystic Fibrosis and DFO programs.
3
Our Strategy
Our goal is to develop multiple products based
on the ability of phage to precisely target harmful bacteria and on our ability to screen, identify and optimally combine different phage,
both naturally occurring and generated using synthetic engineering, to develop these treatments. We intend to continue to:
Our phage discovery platform
Our approach is driven by the convergence of several
factors: a rapidly increasing understanding of phage, including the links between phage behaviors and their genomes; growing evidence
that the presence of specific harmful bacteria may impact chronic diseases, such as CF, making them in principle, amenable to treatment
with phage; and by a growing number of anecdotal reports from different academic centers of successful compassionate use of phage to
treat seriously ill patients who were unresponsive to other therapies. We believe our phage therapeutic product candidates have the potential
to treat conditions and diseases by precisely targeting pathogenic bacteria without disrupting elements of the healthy microbiota.
Our phage-based product candidates, either fixed
phage cocktails or personalized phage treatments, are developed utilizing our proprietary research and development platforms, named BOLT
and PST. The BOLT, platform is unique, employing cutting edge methodologies and capabilities across disciplines including computational
biology, microbiology, synthetic engineering of phage and their production bacterial hosts, bioanalytical assay development, manufacturing
and formulation, to allow agile and efficient development of natural or engineered phage combinations, or cocktails.
The PST platform utilizes proprietary assays to
allow us to screen extensive phage libraries in search of optimal phage for treatment of the specific target bacteria isolated from a
given patient.
BOLT is designed to allow the rapid development
of optimized phage cocktails. These cocktails may be comprised of naturally-occurring or synthetically engineered phage. The cocktail
contains phage with complementary features and is optimized for multiple characteristics such as broad target host range, ability to
prevent resistance, biofilm penetration, stability and ease of manufacturing. Pre-clinical development of the optimized phage cocktail
is anticipated to require 1-2 years.
We combine multiple technologies that originate
from the laboratories of our scientific founders and that were developed internally. Technologies that were developed by our scientific
founders are described in leading scientific journals. One of our scientific founders, Professor Rotem Sorek, a Professor in the Department
of Molecular Genetics at the Weizmann Institute of Science, or WIS, is a world leader in phage genomics and bacterial defense mechanisms.
Another scientific founder, Professor Eran Elinav, a Professor in the Department of Immunology at the WIS, is an expert in investigating
the link between the microbiome and human health and disease. Our third scientific founder, Professor Timothy K. Lu, is a world leader
in synthetic biology approaches to engineering gene circuits and phage, leading the Synthetic Biology Group in the Department of Electrical
Engineering and Computer Science and the Department of Biological Engineering at the Massachusetts Institute of Technology. In addition,
through the acquisition of the privately held Israel-based company, RondinX Ltd. in 2017, we gained access to high throughput genomic
analyses techniques developed by Professor Eran Segal, a leading computational biologist from the Department of Computer Science and
Applied Mathematics at the WIS. The combination of the technologies and expertise from these leaders in each of their respective fields
is critical in enabling us to focus on treating complex human diseases and conditions by precise manipulation of the microbiome.
4
Additionally, we developed proprietary assays
and screening technology for robust and high throughput testing PST. The PST platform combines state of the art automation with advanced
microbiology assays. The output is a reproducible conclusive decision for optimal phage matching, based on multiple factors, including
success of phage infection, suppression of resistant mutants, and antibiofilm activity.
Manufacturing
We have developed manufacturing processes that
utilize state-of-the-art industrial methods for the manufacturing of our product candidates. These processes are designed to comply with
current Good Manufacturing Practice, or cGMP, with the appropriate scale to meet our clinical study needs, and to fulfill the requirements
of regulators for human studies.
In February 2021, we consolidated our U.S. Good
Manufacturing Practice, or GMP, manufacturing, testing and development into a 6,100 square feet space in our Gaithersburg facility and
in March 2021, we moved into a new 6,500 square feet manufacturing facility in our headquarters, in Ness Ziona, Israel. Both facilities
were designed to produce clinical quantities of our product candidates required for early-stage clinical development with compliance
suitable for this stage of development and to support eIND. Currently, our use of these 2 facilities for GMP manufacturing has been put
on hold while our in-house development activities continue to support our projects in other ways.
The Ness Ziona facility, which has currently been
put on hold but can resume GMP manufacturing, consists of two suites for drug substance phage production/development as well as formulation
and final drug product production rooms to support topical, oral, inhaled and injectable phage-based products in a liquid, cream, semi-solid
or dry form. We no longer expect to use our Gaithersburg facility for manufacturing.
We currently operate a manufacturing model that
combines in-house process development and testing with the flexibility to outsource to third-party development, manufacturing, testing,
and logistics organizations, when needed. We maintain service agreements with multiple manufacturers, testing laboratories and a third-party
logistics warehouse for product candidate distribution. These service agreements are generally short-term in nature and can be extended
or renewed. As such, for BX004, we have engaged a third-party to supplement our in-house process development activities. We selected
this organization based on its experience, capability, capacity and regulatory status. Manufacturing and development projects are managed
by a team of internal staff who assure compliance with the technical aspects and regulatory requirements of the manufacturing process.
5
While we do not have a current need for a commercial
scale manufacturing capacity, at the appropriate time we intend to evaluate building large scale cGMP internal manufacturing capabilities,
which may include expansion of our operations.
Intellectual Property
We strive to protect the proprietary technology
that we believe is important to our business, including seeking and maintaining patent protection in the United States and internationally
for our product candidates and discovery platform. We also rely on trademarks, trade secrets, know-how, copyrights, continuing technological
innovation and in-licensing opportunities to develop and maintain our proprietary position. For more information regarding the risks
related to our intellectual property, see “Risk Factors — Risks Related to our Licensed and Co-Owned Intellectual Property.”
We plan to continue to expand our intellectual
property estate by filing patent applications directed to formulations, related methods of treatment, methods of manufacture or identification
from our ongoing development of our product candidates, as well as discovery based on our proprietary product platform. Our success will
depend on our ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions
and know-how related to our business, defend, and enforce any patents that we may obtain, preserve the confidentiality of our trade secrets
and know-how and operate without infringing the valid and enforceable patents and proprietary rights of third parties.
Because patent applications in the United States
and certain other jurisdictions are maintained in secrecy for 18 months or potentially even longer, and because publication of discoveries
in the scientific or patent literature often lags behind actual discoveries and patent application filings, we cannot be certain of the
priority of inventions covered by pending patent applications. Accordingly, we may not have been the first to invent the subject matter
disclosed in some of its patent applications or the first to file patent applications covering such subject matter, and we may have to
participate in interference proceedings or derivation proceedings declared by the United States Patent and Trademark Office, or USPTO,
to determine priority of invention.
Patent portfolio
Our patent portfolio consists of owned patent
applications, as well as both licensed and co-owned patent applications (that are also licensed). See “Risk Factors —
Risks Related to our Licensed and Co-Owned Intellectual Property.” For some of these applications, prosecution has not started,
and others are in the early stages of prosecution in the United States and in selected jurisdictions outside of the United States. We
solely own eight patent families. We co-own one US patent family with Keio University in Tokyo, Japan, or Keio, one international patent
family (United States, Australia, Canada, European Patent Office national filings) with Yeda Research and Development Company Limited,
the technology transfer office of the WIS, or Yeda, and one international patent family (United States, Europe) with both Keio and Yeda.
We have an exclusive license from Yeda and Keio for these co-owned patent applications. We have exclusive licenses from Yeda or Keio
for the rest of the patents and patent applications in its portfolio.
A significant portion of our portfolio is directed
to CF, as well as product candidates relevant to programs which we have stopped their development such as: AD, inflammatory bowel disease,
or IBD, primary sclerosing cholangitis and colorectal cancer, or CRC, as well as to our bacterial target discovery and bacteriophage
discovery technology platforms. Prosecution has yet to commence for most of the pending patent applications covering our product candidates.
Prosecution is a lengthy process, during which the scope of the claims initially submitted for examination by the USPTO are often significantly
narrowed by the time they issue, if they issue at all. We expect this to be the case with respect to our licensed and co-owned patent
applications, described briefly below.
6
In connection with the Acquisition, we further
enhanced our intellectual property portfolio with the addition of APT’s portfolio comprising of 7 issued or allowed patents, 19
patent families (including applications in United States, Europe, Australia, Canada, China, India, Japan, Korea, Israel, Brazil, and
South Africa). APT’s patents and patent applications consist of patents and patent applications with respect to pharmaceutical
compositions and methods of treatment, methods of manufacture of such compositions and expire between June 2037 and October 2043.
CF
We solely own two patent families (one at pre-PCT
stage and a second in national phase stage in United States, Australia, Canada, European Patent Office, Japan and China) containing claims
directed to pharmaceutical compositions comprising combinations of bacteriophage to treat chronic Pseudomonas lung infections, especially
common in CF patients, methods of use for these bacteriophage combinations, and methods of identifying patients who will respond to these
bacteriophage combinations. Any United States patents issuing from the pending application covering our lead bacteriophage combination
in this program, if issued, are expected to expire in 2042. Patent term adjustments or patent term extensions could result in later expiration
dates.
DFOAD
We solely own one patent family (United States,
Australia, Canada, European Patent Office and Japan) containing claims directed to pharmaceutical compositions comprising combinations
of bacteriophage to treat staphylococcus aureus infections, common in patients with DFO and in AD patients, methods of use for these
bacteriophage combinations, and methods of identifying patients who will respond to these bacteriophage combinations. Any United States
patents issuing from the pending application covering our lead bacteriophage combination in this program, if issued, are expected to
expire in 2042. Patent term adjustments or patent term extensions could result in later expiration dates.
Patent term
The term of individual patents depends upon the
legal term of the patents in the countries in which they are obtained. In most countries in which we file patent applications, including
the United States, the base term is 20 years from the filing date of the earliest-filed non-provisional patent application from which
the patent claims priority. The term of a United States patent can be lengthened by patent term adjustment, which compensates the owner
of the patent for administrative delays at the USPTO. In some cases, the term of a United States patent is shortened by a terminal disclaimer
that reduces its term to that of an earlier-expiring patent. The term of a United States patent may be eligible for patent term extension
under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act, to account for at least
some of the time the drug is under development and regulatory review after the patent is granted. With regard to a drug for which FDA
approval is the first permitted marketing of the active ingredient, the Hatch-Waxman Act allows for extension of the term of one United
States patent that includes at least one claim covering the composition of matter of such an FDA-approved drug, an FDA-approved method
of treatment using the drug and/or a method of manufacturing the FDA-approved drug. The extended patent term cannot exceed the shorter
of five years beyond the non-extended expiration of the patent or fourteen years from the date of the FDA approval of the drug, and a
patent cannot be extended more than once or for more than a single product. During the period of extension, if granted, the scope of
exclusivity is limited to the approved product for approved uses. Some foreign jurisdictions, including Europe and Japan, have analogous
patent term extension provisions, which allow for extension of the term of a patent that covers a drug approved by the applicable foreign
regulatory agency.
In the future, if and when our product candidates
receive FDA approval, we expect to apply, if appropriate, for patent term extension on patents directed to those product candidates,
their methods of use and/or methods of manufacture. However, there is no guarantee that the applicable authorities, including the FDA
in the United States, will agree with our assessment of whether such extensions should be granted, and if granted, the length of such
extensions.
7
Trade Secrets and Know-How
In addition to patents, we rely on trade secrets
and know-how to develop and maintain our competitive position. We typically rely on trade secrets to protect aspects of our business
that are not amenable to, or that we do not consider appropriate for, patent protection. We protect trade secrets and know-how by establishing
confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and
collaborators. These agreements provide that all confidential information developed or made known during the course of an individual’s
or entities’ relationship with us must be kept confidential during and after the relationship. These agreements also provide that
all inventions resulting from work performed for us or relating to our business and conceived or completed during the period of employment
or assignment, as applicable, shall be our exclusive property. In addition, we take other appropriate precautions, such as physical and
technological security measures, to guard against misappropriation of its proprietary information by third parties.
Although we take steps to protect our proprietary
information and trade secrets, including through contractual means with our employees and consultants, third parties may independently
develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our
technology. Thus, we may not be able to meaningfully protect our trade secrets and benefit from the exclusive use thereof. For more information
regarding the risks related to our intellectual property, see “Risk Factors — Risks Related to Our Licensed and Co-Owned
Intellectual Property.”
Competition
The biotechnology and pharmaceutical industries
are characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products. While we believe that
our technology, knowledge and experience provide us with competitive advantages, we face substantial competition from many different
sources, including larger pharmaceutical companies with more resources. Specialty biotechnology companies, academic research institutions,
governmental agencies, as well as public and private institutions are also potential sources of competitive products and technologies.
We believe that the key competitive factors affecting the success of any of our product candidates will include efficacy, safety profile,
time to market, cost, level of promotional activity and intellectual property protection.
We are aware of a number of biotechnology companies
developing bacteriophage products to treat diseases. To our knowledge, several biotechnology companies, such as Locus Biosciences, Inc.,
Armata Pharmaceuticals, Inc. and SNIPR Biome, as well as academic institutions, have discovery stage or clinical programs utilizing naturally
occurring phage or synthetic biology approaches. In addition, we are aware of several investigational and marketed products to treat
the indications that we are targeting with our product candidates, including, but not limited to:
● CF: Trikafta, Symdeco, Pulmozyme, Tobramycin, Aztreonam
Many of our competitors, either alone or with
their strategic partners, have substantially greater financial, technical and human resources than ours and significantly greater experience
in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization
of those products. Accordingly, our competitors may be more successful than us in discovering product candidates, obtaining approval
for such product candidates and achieving widespread market acceptance. Our competitors’ products may be more effective, or more
effectively marketed and sold, than any product we may commercialize and may render our product candidates obsolete or non-competitive
before we can recover the expenses of developing and commercializing any of our product candidates. We anticipate that we will face intense
and increasing competition as new drugs enter the market and advanced technologies become available.
These third parties compete with us in recruiting
and retaining qualified scientific, clinical, manufacturing, sales and marketing and management personnel, establishing clinical trial
sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our program.
8
Sales and Marketing
We intend to pursue the commercialization of our
drug product candidates either by building internal sales and marketing capabilities or through collaborations with others.
Government Regulation
Government authorities in the United States and
other countries regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging,
storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import
of drug and biological products. Generally, before a new drug or biologic can be studied in human clinical trials or marketed, considerable
data demonstrating its quality, safety, efficacy, purity, and/or potency must be obtained, organized into a format specific for each
regulatory authority, submitted for review and approved by the regulatory authority where the product is intended to be studied or marketed.
U.S. Biological Product Development Process
In the United States, the FDA regulates drugs
under the Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations under the FDCA, the Public Health Service
Act, or the PHSA, and their implementing regulations. Both drugs and biologics are also subject to other federal, state and local statutes
and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state and local
statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with applicable U.S.
requirements at any time during the product development, approval, or post-marketing process may subject an applicant to administrative
or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal
of an approval or license revocation, a clinical hold, untitled or warning letters, product recalls or market withdrawals, product seizures,
total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement
and civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.
Certain of our current product candidates and
future product candidates must be approved by the FDA through a Biologics License Application, or BLA, process before they may be legally
marketed in the United States. The process generally involves the following. However, the new Trump administration may change or overhaul
existing drug regulations, which would lead to additional time and money to comply with:
● Submission to the FDA of a BLA;
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Preclinical Studies and IND
Preclinical studies include laboratory evaluation
of product chemistry and formulation, as well as in vitro and animal studies to establish a rationale for therapeutic use and
in some cases to assess the potential for adverse events. The conduct of preclinical studies is subject to federal regulations and requirements,
including in some cases GLP regulations for safety/toxicology studies. An IND sponsor must submit the results of the preclinical tests,
together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among
other things, to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational product
to humans, and, must become effective before human clinical trials may begin. Some long-term preclinical testing may continue after the
IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time, the FDA raises
concerns or questions related to one or more proposed clinical trials and places the trial on clinical hold. In such a case, the IND
sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may
not result in the FDA allowing clinical trials to commence.
Clinical Trials
Clinical trials involve the administration of
the drug or biological product candidate to healthy volunteers or disease-affected patients under the supervision of qualified investigators,
generally physicians not employed by, or under, the trial sponsor’s control. Clinical trials are conducted under protocols detailing,
among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters
to be used to monitor subject safety and efficacy, including stopping rules that assure a clinical trial will be stopped if certain adverse
events should occur. Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND. Clinical trials
must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement
that all research subjects provide informed consent. Further, each clinical trial must be reviewed and approved by an IRB at or servicing
each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of study participants
and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in
relation to anticipated benefits. The IRB also approves the form and content of the informed consent that must be signed by each clinical
trial subject or his or her legal representative and must monitor the clinical trial until completed. There are also requirements governing
the reporting of ongoing clinical trials and completed clinical trial results to public registries. Information about certain clinical
trials, including clinical trial results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov
website.
Clinical trials generally are conducted in three
sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap.
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Post-approval trials, sometimes referred to as
Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are conducted to gain additional experience
from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase
4 clinical trials as a condition of approval of a BLA.
Progress reports detailing the results of the
clinical trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted
to the FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies or animal or in
vitro testing that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected
adverse reaction over that listed in the protocol or investigator brochure.
It is possible for Phase 1, Phase 2, Phase 3 and
other types of clinical trials not to be completed successfully within a specified period, if at all. The FDA or the sponsor may suspend
or terminate a clinical trial at any time on various grounds, including a finding that the patients are being exposed to an unacceptable
health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not
being conducted in accordance with the IRB’s requirements or if the tested biological product has been associated with unexpected
serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the
clinical trial sponsor, or the Data Safety Monitoring Board. This group provides authorization for whether a trial may move forward at
designated check points based on access to certain data from the trial.
Concurrent with clinical trials, companies may
complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the
biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The
manufacturing process must be capable of consistently producing quality batches of the product and, among other things, companies must
develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must
be selected and tested, and stability studies must be conducted to demonstrate that the product candidates do not undergo unacceptable
deterioration over their shelf life.
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FDA Review Process
Following completion of the clinical trials, data
are analyzed to assess whether the investigational product is safe and effective for the proposed indicated use or uses and also meets
the regulatory requirements for potency and purity. The results of preclinical studies and clinical trials are then submitted to the
FDA as part of a BLA, along with proposed labeling, chemistry and manufacturing information to ensure product quality and other relevant
data. The BLA is a request for approval to market the biological product for one or more specified indications and must contain proof
of safety, purity and potency. The application may include both negative and ambiguous results of preclinical studies and clinical trials,
as well as positive findings. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s
use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted
must be sufficient in quality and quantity to establish the safety and efficacy in the intended indication, purity and potency of the
investigational product to the satisfaction of the FDA. FDA approval of a BLA must be obtained before a biologic may be marketed in the
United States. Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a user fee. The FDA adjusts
the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a waiver of the application
fee for the first application filed by a small business. Additionally, no user fees are assessed on BLAs for products designated as orphan
drugs, unless the product also includes a non-orphan indication.
The FDA reviews all submitted BLAs before it accepts
them for filing and may request additional information rather than accept the BLA for filing. The FDA must make a decision on accepting
a BLA for filing within 60 days of receipt, and such a decision could include a refusal to file by the FDA. Once the submission is accepted
for filing, the FDA begins an in-depth review of the BLA. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has
10 months, from the filing date, in which to complete its initial review of an original BLA and respond to the applicant, and 6 months
from the filing date of an original BLA designated for priority review. The FDA does not always meet its PDUFA goal dates for standard
and priority BLAs, and the review process is often extended by FDA requests for additional information or clarification.
Before approving a BLA, the FDA will conduct a
pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements.
The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP
requirements and adequate to assure consistent production of the product within required specifications. The FDA also may audit data
from clinical trials to ensure compliance with GCP requirements. Additionally, the FDA may refer applications for novel products or products
which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other
experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions, if any.
The FDA is not bound by recommendations of an advisory committee, but it considers such recommendations when making decisions on approval.
The FDA likely will reanalyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant
during the review process.
After the FDA evaluates a BLA, it will issue an
approval letter, or a Complete Response Letter. An approval letter authorizes commercial marketing of the biologic with specific prescribing
information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the
application will not be approved in its present form. A Complete Response Letter usually describes all the specific deficiencies in the
BLA identified by the FDA. The Complete Response Letter may require additional clinical data and/or other significant and time-consuming
requirements related to clinical trials, preclinical studies or manufacturing. If a Complete Response Letter is issued, the applicant
may either resubmit the BLA, addressing all the deficiencies identified in the letter, or withdraw the application. Even if such data
and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval. Data obtained from clinical
trials are not always conclusive and the FDA may interpret data differently than the sponsor’s interpretation of the same data.
Orphan Drug Designation
Under the Orphan Drug Act of 1983, or the Orphan
Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition, which is
generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in
the United States and for which there is no reasonable expectation that the cost of developing and making the product available in the
United States for this type of disease or condition will be recovered from sales of the product. Orphan drug designation for a biological
product must be requested before submitting a BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent
and its potential orphan use are disclosed publicly by the FDA. orphan drug designation does not convey any advantage in or shorten the
duration of the regulatory review and approval process.
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Orphan drug designation entitles a party to financial
incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers. If a product that
has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the
product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same drug
for the same indication for seven years from the date of such approval, except in limited circumstances, such as a showing of clinical
superiority to the product with orphan exclusivity by means of greater effectiveness, greater safety or providing a major contribution
to patient care, or in instances of drug supply issues. Competitors, however, may receive approval of either a different product for
the same indication or the same product for a different indication but that could be used off-label in the orphan indication. Orphan
drug exclusivity also could block the approval of one of our products for seven years if a competitor obtains approval before we do for
the same product, as defined by the FDA, for the same indication we are seeking approval, or if our product is determined to be contained
within the scope of the competitor’s product for the same indication or disease. If one of our products designated as an orphan
drug receives marketing approval for an indication broader than that which is designated, it may not be entitled to orphan drug exclusivity.
In December 2023, BX004, received orphan drug designation from the FDA.
Expedited Development and Review Programs
The FDA has a fast-track program that is intended
to expedite or facilitate the process for reviewing new drugs and biologics that meet certain criteria. Specifically, new drugs and biologics
are eligible for fast-track designation if they are intended to treat a serious or life-threatening condition and preclinical or clinical
data demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to the combination of
the product and the specific indication for which it is being studied. Any product submitted to the FDA for marketing, including under
a fast-track program, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review
and accelerated approval. A product is eligible for priority review if it treats a serious or life-threatening condition and, if approved,
would provide a significant improvement in safety and effectiveness compared to available therapies. The FDA will attempt to direct additional
resources to the evaluation of an application for a new drug or biologic designated for priority review in an effort to facilitate the
review.
A product may also be eligible for accelerated
approval if it treats a serious or life-threatening condition and demonstrates an effect on a surrogate endpoint that is reasonably likely
to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM,
that is reasonably likely to predict an effect on IMM or other clinical benefit. As a condition of approval, the FDA generally requires
that a sponsor of a drug or biologic receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials
to demonstrate clinical benefit. Products receiving accelerated approval may be subject to expedited withdrawal procedures if such clinical
trials fail to verify the predicted clinical benefit or if the sponsor fails to conduct such trials in a timely manner.
Additionally, a drug or biologic may be eligible
for designation as a breakthrough therapy if the product is intended, alone or in combination with one or more other drugs or biologics,
to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial
improvement over currently approved therapies on one or more clinically significant endpoints. The benefits of breakthrough therapy designation
include the same benefits as fast-track designation, plus intensive guidance from the FDA to ensure an efficient drug development program.
Even if a product qualifies for one or more of
these programs, the FDA may later decide that the product no longer meets the conditions for qualification or the time period for FDA
review or approval may not be shortened. Furthermore, fast track designation, priority review, accelerated approval and breakthrough
therapy designation do not change the standards for approval, but may expedite the development or approval process.
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Pediatric Information
Under the Pediatric Research Equity Act of 2003,
or PREA, a BLA or supplement to a BLA must contain data to assess the safety and efficacy of the biologic for the claimed indications
in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product
is safe and effective. The FDA may grant deferrals for submission of pediatric data or full or partial waivers. A sponsor who is planning
to submit a marketing application for a drug that includes a new active ingredient, new indication, new dosage form, new dosing regimen
or new route of administration must submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-Phase 2 meeting
or, if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 study. The initial PSP must
include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups,
relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral
of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting
information. The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP
at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical
trials and/or other clinical development programs.
Post-marketing Requirements
Following approval of a new product, the manufacturer
and the approved product are subject to continuing regulation by the FDA, including, among other things, monitoring and record-keeping
activities, reporting of adverse experiences, complying with promotion and advertising requirements, which include restrictions on promoting
products for unapproved uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific
and educational activities. Although physicians may prescribe legally available products for off-label uses, manufacturers may not market
or promote such uses. Prescription drug and biologic promotional materials must be submitted to the FDA in conjunction with their first
use. Further, if there are any modifications to the biologic, including changes in indications, labeling or manufacturing processes or
facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require the development
of additional data or preclinical studies and clinical trials.
The FDA may also place other conditions on approvals
including the requirement for a Risk Evaluation and Mitigation Strategy, or REMS, to assure the safe use of the product. If the FDA concludes
a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA will not approve the BLA without an approved REMS, if required.
A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution
methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial
promotion, distribution, prescription or dispensing of products. Newly discovered or developed safety or effectiveness data may require
changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the
implementation of other risk management measures, including a REMS or the conduct of post-marketing studies to assess a newly discovered
safety issue. Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial
marketing.
FDA regulations require that products be manufactured
in specific approved facilities and in accordance with cGMP regulations, which require, among other things, quality control and quality