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, 2023
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)
22 Einstein St., Floor 4, Ness Ziona, Israel 7414003
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including
area code: +972723942377
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, $0.0001 par value PHGE NYSE American
Securities registered pursuant to Section 12(g)
of the Act
Warrants, each exercisable for one-half of one
share of common stock, $0.0001 par value, at an exercise price of $11.50 per share.
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.
☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during
the relevant recovery period pursuant to §240.10D-1(b). ☐
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, 2023, 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 $16,530,774 based on the closing sale price of the Registrant’s shares of Common Stock on June 30, 2023 (the
last trading day of the fiscal quarter) of $0.36 per share.
The number of shares outstanding of the Registrant’s shares of
Common Stock as of March 28, 2024 was55,220,077.
BIOMX INC.
Annual Report on Form 10-K for the Year Ended
December 31, 2023
part I
ITEM 1. BUSINESS 1
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 83
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 83
ITEM 9A. CONTROLS AND PROCEDURES 83
ITEM 9B. OTHER INFORMATION 84
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICIONS THAT PREVENT INSPECTIONS 84
part III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 85
ITEM 11. EXECUTIVE COMPENSATION 90
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 98
part IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 100
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On March 15, 2024, BiomX Inc. acquired Adaptive
Phage Therapeutics, Inc., a Delaware corporation, or APT, and such acquisition, 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 all financial information included
in this Annual Report, including financial information as of and for the years ended December 31, 2023 and December 31, 2022 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. 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 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:
● the integration of the operations of APT into the Company;
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.
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v
vi
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 fourth quarter of 2024. 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. Study results are expected in the third quarter 2025.
2
BX211 – Treatment of Diabetic Foot Osteomyelitis (DFO)
BX211 is a personalized 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 ongoing 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
is expected to enroll approximately 45 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 are expected to continue to be treated in accordance with standard of care which will include antibiotic treatment
as appropriate. A first readout of study topline results is expected at week 13 evaluating healing of the wound associated with osteomyelitis,
followed by a second readout at week 52 evaluating amputation rates and resolution of osteomyelitis based on X-ray, clinical assessments,
and established biomarkers (Erythrocyte Sedimentation Rate, or ESR, and C-Reactive Protein, or CRP). These readouts are expected in the
first quarter of 2025 and the first quarter of 2026, respectively.
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
BX005 – Treatment of Atopic Dermatitis
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 April 8, 2022, the FDA approved the Company’s IND application for BX005.
As of the date of this Annual Report, we have paused
development efforts for BX005 due to prioritizing resources towards our CF and DFO programs, and we cannot provide guidance on resuming
its development.
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.
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
are 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.
The Ness Ziona facility 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.
The Gaithersburg facility consists of three manufacturing
suites, one for upstream seed banking, one for drug substance phage production, and one for formulation and fill of the final drug product.
This facility is also equipped with in-house quality control testing laboratories to support the release of injectable phage-based products
in a liquid form. Additional laboratory space is allocated for process development and there are laboratory and office spaces available
that can be repurposed for future GMP expansion.
We currently operate a manufacturing model that
combines in-house process development, manufacturing 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.
Additional phage bank product candidates collectively
known as BX211 are manufactured at our in-house GMP facility in Gaithersburg. Such product candidates are produced and released by internal
staff in compliance with cGMPs. We perform release testing in house for most release assays and also outsource testing to qualified laboratories.
In addition, we utilize a third-party logistics warehouse for product storage and distribution to clinical sites.
5
We are considering consolidation of the two GMP
sites into one based on future needs. 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 four
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 our product candidates, specifically: CF and atopic dermatitis as well as product candidates relevant to programs which we have stopped
their development such as: 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 one patent family (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.
Atopic Dermatitis
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 skin infections, especially common in atopic dermatitis 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.
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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.
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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.
In October
2021, we entered into a stock purchase agreement with a subsidiary of Maruho, a leading dermatology-focused pharmaceutical company in
Japan, pursuant to which we issued to Maruho 375,000 shares of Common Stock, at a price of $8.00 per share for gross proceeds of $3 million.
We also granted Maruho a right of first offer to license our BX005 product candidate for atopic dermatitis in Japan. The right of first
offer will commence following the availability of results from a the Phase 1/2 study which is currently on hold.
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:
● 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 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,
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 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 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 biologic
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