10-K
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f10k2020_biomxinc.htm
ANNUAL REPORT
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
☒ ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year
ended December 31, 2020
or
☐ TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition
period from _________ to _________
Commission file number:
0001-38762
BIOMX INC.
(Exact name of registrant
as specified in its charter)
7 Pinhas Sapir St., Floor 2, Ness Ziona, Israel 7414002
(Address of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: +972 723942377
Securities registered
pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Warrants included as part of the units PHGE.WS NYSE American
Securities registered pursuant to Section
12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has
filed all reports required 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, a smaller reporting company, or an emerging growth company.
See 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
On June 30, 2020, the last day of the Registrant’s most
recently completed second fiscal quarter, the aggregate market value of the Registrant’s shares of Common Stock held by non-affiliates
of the Registrant was $99,734,646 based on the closing sale price of the Registrant’s shares of Common Stock on June 30,
2020 (the last trading day of the fiscal quarter) of $5.52 per share.
The number of shares outstanding of the Registrant’s shares
of Common Stock as of March 25, 2021 was 24,246,010.
DOCUMENTS INCORPORATED
BY REFERENCE
Portions of the registrant’s definitive proxy statement
to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended, relating to the registrant’s 2021 Annual Meeting of Stockholders are incorporated herein by reference into Part
III of this Annual Report on Form 10-K. The definitive proxy statement will be filed with the Securities and Exchange Commission
not later than 120 days after the registrant’s fiscal year ended December 31, 2020.
BIOMX INC.
Annual Report on Form 10-K for the Year
Ended December 31, 2020
part I 1
ITEM 1. BUSINESS 4
ITEM 1A. RISK FACTORS 35
ITEM 1B. UNRESOLVED STAFF COMMENTS 81
ITEM 2. PROPERTIES 81
ITEM 3. LEGAL PROCEEDINGS 81
ITEM 4. MINE SAFETY DISCLOSURES 81
part II
ITEM 6. SELECTED FINANCIAL DATA 82
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 92
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 92
ITEM 9A. CONTROLS AND PROCEDURES 92
ITEM 9B. OTHER INFORMATION 92
part III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 93
ITEM 11. EXECUTIVE COMPENSATION 93
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 94
part IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 95
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PART
I
References in this Annual Report on Form
10-K (this “Annual Report”) to the Company, BiomX, we, us or our, mean BiomX Inc. and its consolidated subsidiaries
unless otherwise expressly stated or the context indicates otherwise. References in this Annual Report to BiomX Ltd. mean BiomX
Ltd., our wholly owned Israeli subsidiary. As further described elsewhere in this Annual Report, on October 28, 2019, Chardan Healthcare
Acquisition Corp., a special purpose acquisition company, combined with BiomX Ltd. in the Business Combination (as defined below)
and changed its name to BiomX Inc.
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 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
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 plan, 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 report including, without limitation, in the sections entitled “Management’s Discussion and
Analysis of Financial Conditions and Results of Operations,” and “Overview.” The risks and uncertainties include,
but are not limited to:
● the availability of specialty raw materials;
● our ability to obtain required regulatory approvals;
● delays in developing manufacturing processes for our product candidates;
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● our limited operating history;
● reliance on third-party collaborators;
● our ability to manage the growth of the business;
● the failure to comply with applicable laws and regulations;
● potential security breaches, including cybersecurity incidents;
● political, economic and military instability in the State of Israel; 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 described in “Risk
Factors” in this Annual Report. 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 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 Securities and Exchange Commission or the SEC, after the date of this report.
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:
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ITEM 1. BUSINESS
Overview
We are a clinical stage microbiome product
discovery company developing products using both natural and engineered phage technologies designed to target and kill specific
harmful bacteria that affect the appearance of skin, as well as bacteria associated with chronic diseases, such as inflammatory
bowel disease IBD, primary sclerosing cholangitis, or PSC, cystic fibrosis, or CF, atopic dermatitis and colorectal cancer, or
CRC. 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.
The microbiome refers to the collection
of microorganisms, including phage, that reside on the skin, line the gastrointestinal tract and reside elsewhere in the body.
The vast majority of these microorganisms are not pathogenic and instead exist in a symbiotic state with the human host, enabling
the body to function normally by protecting against proliferation of pathogenic strains, educating the immune system and assisting
in digestion. Imbalances in the composition of the microbiome have been found in multiple diseases.
Our approach in our therapeutic programs
is based on targeting those specific strains of pathogenic bacteria in the microbiome that are strongly associated with diseases
while leaving the rest of the microbiome intact. Our goal is to restore the natural, healthy balance of the microbiome with rationally
designed phage cocktails. Using our proprietary methods, we can generate and screen large libraries of phage, prioritizing potential
candidates based on selectivity and potency as well as a number of other parameters, that are important for drug development such
as safety, stability and manufacturability.
Our goal is to develop multiple products
based on the ability of phage to precisely target components of the microbiome 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 the 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.
We are developing BX001, our lead product
candidate, to modify the appearance of skin in a range of skin types, including in oily and acne-prone skin. BX001 is a topical
gel that includes a combination of naturally occurring phage that specifically target Cutibacterium acnes, or C. acnes.
C. acnes is thought to be associated with acne vulgaris (acne), and the local inflammation of cells surrounding hair follicles
in this condition. In preclinical in vitro studies, BX001 has been shown to be active on antibiotic resistant C. acnes
strains and not to target other bacteria found on the skin. Furthermore, it has been observed that the C. acnes phage
are able to target bacteria found within biofilm, a matrix secreted by the bacteria which surrounds them and makes them less accessible
to substances such as antibiotics.
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On March 31, 2020, we announced positive
topline results from a 4-week randomized, double-blind, dose-finding, placebo-controlled single center Phase 1 cosmetic clinical
study of BX001. The 75 enrolled individuals with mild-to-moderate acne were randomized into one of three cohorts: a high dose
cohort, a low dose cohort, and a placebo cohort (vehicle). The study met its primary endpoints of safety and tolerability for
both doses of BX001, in addition to demonstrating a statistically significant (p=0.036) reduction of C. acnes levels for
the high dose of BX001 compared to placebo.
On March 2, 2021, we announced the initiation
of our Phase 2 cosmetic clinical study of BX001. The study is a 12-week randomized, single center, double-blind, placebo-controlled
trial with 140 individuals with mild-to-moderate acne vulgaris. Subjects enrolled are randomized into two cohorts: BX001 or placebo
(vehicle) in a 1:1 ratio and will self-administer BX001 or placebo twice daily. The key endpoints will evaluate the safety, tolerability
and efficacy of BX001. Results from the 8-week time point are expected to be available in the third quarter of 2021 and the full
analysis including the 12-week time point is expected to be available in the fourth quarter of 2021.
On February 2, 2021, we announced positive
results of a randomized, single-blind, multiple-dose, placebo-controlled Phase 1a pharmacokinetic study of BX002, our product candidate
for IBD and PSC, conducted under an investigational new drug, or IND, application submitted to the FDA. The study evaluated the
safety and tolerability of orally administered BX002 in 18 healthy volunteers. Subjects were randomized to receive orally either
BX002 or placebo, twice daily for three days. Subjects were monitored for safety for seven days in a clinical unit, with follow-up
for safety assessments done at 14 and 28 days after completion of dosing. BX002 was demonstrated to be safe and well-tolerated,
with no serious adverse events and no adverse events leading to discontinuation. In addition, the study met its objective of delivering
high concentrations of viable phage to the gastrointestinal tract of approximately 1010 PFU, or plaque forming units.
This equals approximately 1,000 times more viable phage compared to the bacterial burden of K. pneumoniae in IBD and PSC
patients as measured in stool. Based on the Phase 1a study results, we plan to advance to a Phase 1b/2a study evaluating the efficacy
of BX003 for the reduction of K. pneumoniae in individuals that carry the target bacteria. Results from the Phase 1b/2a
study are expected by mid-2022.
On November 12, 2020, we announced consolidation
of our IBD and PSC programs into a single broad host range product candidate, named BX003, under development for both indications.
Prior to November 2020, we had two separate phage product candidates for IBD and for PSC, with our IBD product candidate named
BX002 and PSC product candidate named BX003. After the consolidation, the BX003 product candidate is now under development to treat
both IBD and PSC, targeting bacterial strains of Klebsiella pneumoniae, (“K. pneumoniae”), a potential
pathogen implicated in both diseases. K. pneumoniae strains isolated from IBD patients were shown to be pro-inflammatory
in animal models and may have a role in the onset and aggravation of the disease. Strains of K. pneumoniae isolated from
PSC patients were shown to cause an inflammatory response in the liver of animal models and were shown to induce the formation
of pores through monolayer colonic organoid cultures. Prior to the consolidation, our Phase 1a clinical study was conducted only
on BX002, and future clinical studies are planned to be conducted on BX003.
BX004 is our therapeutic phage product candidate
under development for chronic respiratory 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. On March
31, 2021, we announced the selection of the phage cocktail for BX004. Phase 2 results of a proof of concept clinical study evaluating
safety and efficacy of BX004 administered through a nebulizer in CF patients are expected in the fourth quarter of 2021.
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BX005 is our topical phage product candidate
targeting Staphylococcus aureus, or S. aureus, a bacterium associated with the development and exacerbation of inflammation
in atopic dermatitis. S. aureus is more abundant on the skin of atopic dermatitis 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 March 31, 2021, we announced the selection of the phage cocktail for
BX005. We expect to initiate a Phase 2 proof-of-concept clinical study evaluating the safety and efficacy of BX005 in atopic dermatitis
patients in the second half of 2021, with results expected in the first half of 2022.
We are also developing synthetically engineered
phage designed to target strains of bacteria found in CRC tumors. Our CRC program integrates expertise in identifying and validating
associations of specific strains of bacteria with human disease and synthetic biology capabilities enabling design of phage that
are expected to deliver therapeutic payloads to tumors. Only a small percentage of the new cases of CRC respond to immunotherapy.
This lack of response is believed to be due to the lack of novel tumor antigens and scarcity of immune cells in colorectal tumors.
We have observed in vitro and in vivo that phage can be used to target strains of Fusobacterium nucleatum,
a bacterial species that is highly enriched in colorectal tumors and is believed to be pathogenic. We plan to use phage intravenously
to deliver payload genes, such as those encoding immunostimulatory proteins, to tumors while also leading to eradication of these
bacteria. We have successfully engineered an IL-15 gene payload into F. nucleatum phage. Preclinical results from animal
studies evaluating use of our phage therapy in this program in combination with checkpoint inhibitors are expected in the second
and third quarters of 2021.
Our Strategy
Our goal is to develop multiple products
based on the ability of phage to precisely target components of the microbiome 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 IBD, 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 are
developed utilizing our proprietary research and development platform named BOLT. 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.
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BOLT is designed to allow parallel phage
cocktail development under two optional paths:
We combine multiple technologies that originate
from the laboratories of our scientific founders and that were developed internally. Technologies that were developed by its 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, or MIT. 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.
Manufacturing
We have developed a manufacturing process
that utilizes state of the art industrial methods for the manufacture of our product candidates. This process is designed to comply
with current Good Manufacturing, or cGMP, to be scalable to meet our clinical study needs, and to fulfill the requirements of regulators
for human studies. We currently operate a manufacturing model that combines an in-house process development and manufacturing suite
with the flexibility to outsource to third-party manufacturing organizations when needed. As such, for BX001, we have engaged a
vendor to provide purified active ingredients (phage) and established in house capabilities for formulation and fill-finish of
our product candidates for clinical testing. For BX002, we have also engaged an additional third-party provider to supplement our
in-house process development activities. We have selected these organizations based on their experience, capability, capacity and
regulatory status. Projects are managed by a specialist team of our internal staff, who assure compliance with the technical aspects
and regulatory requirements of the manufacturing process.
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We maintain service agreements with multiple
manufacturers. These service agreements generally are short-term in nature and capable of being extended or renewed. The production
amounts identified in our current service agreements are sufficient to support our current clinical study needs.
We currently operate our own 550 square
foot manufacturing facility at our headquarters in Ness Ziona, Israel. During the second quarter of 2021, we are planning to move
into a new 6,500 square foot manufacturing facility at our new headquarters, which will also be based in Ness Ziona, Israel. This
facility has been designed with the capacity to produce clinical quantities of our product candidates required for future early-stage
clinical development. The new facility will consist 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 or dry
form.
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 its 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 its 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
identified 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 three United States provisional patent application. We co-own one
international patent family (Patent Cooperation Treaty, or PCT) with Keio University in Tokyo, Japan, or Keio, one
international patent family (United States, Australia, Brazil, Canada, China, Japan, Israel, European Patent Office, Korea
and India national filings) with Yeda Research and Development Company Limited, or Yeda, and one international patent family
(United States, Europe, Australia, Canada, China and Japan) 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, Keio, or MIT for the rest of the
patents and patent applications in its portfolio.
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A significant portion of our portfolio is
directed to our key product candidates, specifically: acne, IBD, PSC and 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.
Acne
We co-own with Yeda one international patent
family (United States, Australia, Brazil, Canada, China, Japan, Israel, European Patent Office, Korea and India national filings),
containing claims directed to pharmaceutical compositions and formulations comprising combinations of bacteriophage useful to
treat acne, 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 2038. Patent term adjustments or patent term extensions could result in
later expiration dates.
IBD
We solely own one United States provisional
patent application, co-own with Keio one international patent family (PCT stage) and co-own with Keio and Yeda one international
patent family (United States, Europe, Australia, Canada, China and Japan), containing claims directed to pharmaceutical compositions
comprising combinations of bacteriophage useful to treat IBD and other diseases of the gastrointestinal tract, methods of use for
these bacteriophage combinations, methods of identifying patients who will respond to these bacteriophage combinations, and methods
of treating IBD by targeting bacterial strains discovered to cause or contribute to that disease.
We also have an exclusive license from
Keio for an international patent family including patent applications in the United States, Australia, Canada, China, Europe and
Japan. These applications are directed to methods of use for these bacteriophage combinations, methods of identifying patients
who will respond to these bacteriophage combinations, and methods of treating IBD by targeting a bacterial strain discovered to
cause or contribute to that disease. Any United States patents issuing from the pending applications covering our lead bacteriophage
combination in this program, if issued, are expected to expire in 2037, 2038 or 2042. Patent term adjustments or patent term extensions
could result in later expiration dates.
PSC
We have an exclusive license to one United
States national patent application, two United States provisional patent applications and two Japanese patent applications with
claims directed to pharmaceutical compositions comprising bacterial strains discovered to be beneficial in the treatment of PSC
and methods of using the same, and to methods of treating PSC by reducing the level of certain bacterial strains discovered to
contribute to PSC. Any United States patents issuing from the pending applications in this program, if issued, are expected to
expire in 2038 or 2039. Patent term adjustments or patent term extensions could result in later expiration dates.
CF
We solely own one United States provisional
patent application 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.
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CRC
We solely own one United States provisional
patent application containing claims directed to pharmaceutical compositions and formulations comprising combinations of bacteriophage
(both synthetic and naturally occurring) useful to treat cancer. Any U.S. patent issuing from the pending application covering
our lead bacteriophage combination in this program, if issued, are expected to expire in 2041. Patent term adjustments or patent
term extensions could result in later expiration dates.
Technology Platform
We are exclusively licensed to two United
States issued patents, two European Patent Convention applications, and three United States national applications. These licensed
patent families include two issued United States patents and multiple pending patent applications, with claims directed to methods
of producing recombinant bacteriophage in yeast cells, recombinant bacteriophage with broader or altered host range than the parent
strains from which they are derived, and recombinant methods for increasing the lytic efficiency of a bacteriophage. The patents
issuing from the pending applications in the United States directed to our platform, if issued, are expected to expire between
2034 and 2038. 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.
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
its 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.
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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 its 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:
● C. acne: Adapalene, Epiduo, Zineryt, erythromycin and Acnecide
● IBD: Humira, Stelara, Entyvio, Inflectra and Cimzia
● CF: Trikafta, Symdeco, Pulmozyme, Tobramycin, Aztreonam
● Atopic dermatitis: Elidel, Eucrisa, Ruxolitinib, Dupixent
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.
In addition, for any cosmetics products
that we introduce, we will face intense competition from a broader range of cosmetics companies with more resources than ours.
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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.
We seek to distribute BX001 without developing
and relying on our own sales and marketing resources and instead relying on collaborations and other relationships with cosmetic
companies to use their sales and marketing capabilities. However, we also may select an alternate method for distribution.
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 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 marketed.
In addition, in certain countries, cosmetics are subject to a specific regulatory framework.
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:
● Submission to the FDA of a BLA;
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The preclinical and clinical testing and
approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our
product candidates subject to this process will be granted on a timely basis, or at all.
The strategies, nature, and technologies
associated with bacteriophage products are different from those of conventional biological products. From the regulatory requirements
established in order to ensure the safety, efficacy and quality of bacteriophage preparations, there are several matters to consider
during the development, manufacturing, characterization, preclinical study and clinical trials of bacteriophage, including:
● Relevant animal models in preclinical studies; and
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 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 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.
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Clinical trials generally are conducted
in three sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap.
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 biologic 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, known as a data safety monitoring board or committee. 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 biologic 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 six 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