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, 2025
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: 001-38762
BIOMX INC.
(Exact name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including
area code: +972545610935
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: 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.
☐
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, 2025, 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 $11,899,466 based on the closing sale price of the Registrant’s shares of Common Stock on June 30, 2025 (the
last trading day of the fiscal quarter) of $8.55 per share. The price of the Registrant’s shares of Common Stock was retroactively
adjusted to reflect a 1-for-19 reverse stock split, which took effect on November 25, 2025.
The number of shares outstanding of the Registrant’s shares of
Common Stock as of February 16, 2026 was 1,593,703.
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 2025 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, 2025.
BIOMX INC.
Annual Report on Form 10-K for the Year Ended
December 31, 2025
part I
ITEM 1. BUSINESS 1
ITEM 1A. RISK FACTORS 24
ITEM 1B. UNRESOLVED STAFF COMMENTS 60
ITEM 1C. CYBERSECURITY 60
ITEM 2. PROPERTIES 60
ITEM 3. LEGAL PROCEEDINGS 60
ITEM 4. MINE SAFETY DISCLOSURES 60
part II
ITEM 6. [RESERVED] 61
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 73
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 73
ITEM 9A. CONTROLS AND PROCEDURES 74
ITEM 9B. OTHER INFORMATION 74
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICIONS THAT PREVENT INSPECTIONS 74
part III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 75
ITEM 11. EXECUTIVE COMPENSATION 75
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 76
part IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 77
i
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 unless otherwise expressly stated or the context indicates otherwise,. References in this
Annual Report to Adaptive Phage Therapeutics LLC, or APT, mean our wholly owned subsidiary, and reference to BiomX Ltd. mean BiomX Ltd.,
our wholly owned Israeli subsidiary that is now under dissolution proceedings in Israel as provided in more detail below.
On December 16, 2025, our Israeli subsidiary,
BiomX Ltd., filed for insolvency proceedings in Israel. On January 25, 2026, the District Court of Tel-Aviv, Israel, appointed a trustee to BiomX Ltd.
to handle the administration of the insolvency proceedings. The trustee is responsible for managing BiomX Ltd.’s assets,
evaluating claims from creditors, and overseeing the orderly wind-down or restructuring of BiomX Ltd.’s operations in
accordance with applicable Israeli insolvency law. As a result of these proceedings, we no longer control BiomX Ltd. and
do not deem it as part of our assets.
On December 26, 2025, the Company entered into
a Securities Purchase Agreement, or the 2025 Second SPA, with Pyu Pyu Capital, LLC, or the Investor, subject to customary closing conditions,
which were satisfied on January 13, 2026. Pursuant to the 2025 Second SPA, the Company agreed to issue and sell, in a private placement
transaction, an aggregate of 3,300 shares of its newly created Series Y Convertible Preferred Stock, as defined below, with an aggregate
stated value of $3.3 million, and warrants to purchase up to 3,300,000 shares of the Company’s common stock, for aggregate gross
proceeds of $3.0 million. The Series Y Convertible Preferred Stock has a stated value of $1,000 and is convertible into Common Stock at
an initial conversion price of $2.00 per share (i.e., 1,650,000 shares of Common Stock), subject to adjustments. Accordingly, subject
to receipt of approval of the stockholders of the Company, the Investor will beneficially own the majority of the shares of common stock
of the Company and may have control over the Company. Therefore, if the stockholders’ approval is obtained, the Investor may cause the
Company to change its business, strategy and objectives.
All amounts of shares of Common Stock included
in this Annual Report have been retroactively adjusted to reflect a 1-for-19 reverse stock split, which took effect on November 25, 2025.
ii
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:
iii
● 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.
iv
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.
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 diabetic foot infections, or DFI.
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 large-market 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 proprietary research and development platform. Our 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.
In December 2025, we discontinued the development
of our phage cocktail product for the treatment of Cystic Fibrosis or, BX004, following an internal analysis and feedback from the Data
Monitoring Committee, or DMC, which recommended consideration of alternative dosing regimens or treatment strategies in response to adverse
events experienced by certain participants; however, pursuing such alternatives was beyond the Company’s available resources. Additionally,
we implemented cost-cutting measures including a significant reduction in workforce while reviewing other strategic alternatives.
1
In December 2025, following the discontinuation of the development
of BX004, our Israeli subsidiary, BiomX Ltd., commenced insolvency proceedings in Israel. Prior to the commencement of these insolvency
proceedings, BiomX Ltd. served as the core operational subsidiary of the Company, employing a significant portion of our workforce. As
a result of BiomX Ltd.’s insolvency, our business has been materially impacted, and without additional resources, we have limited ongoing
operations and limited ability to advance our programs as previously planned. Accordingly, we are actively evaluating and pursuing strategic
alternatives and other business opportunities to exploit the expertise of our management staff, based on time, available resources and
market conditions.
On December 26, 2025, the Company entered into
the 2025 Second SPA with the Investor. Pursuant to the 2025 Second SPA, we agreed to issue and sell, in a private placement transaction,
an aggregate of 3,300 shares of its newly created Series Y Convertible Preferred Stock, as defined below, with an aggregate stated value
of $3.3 million, and warrants to purchase up to 3,300,000 shares of the Company’s common stock, for aggregate gross proceeds of
$3.0 million. The Series Y Convertible Preferred Stock has a stated value of $1,000 and is convertible into Common Stock at an initial
conversion price of $2.00 per share (i.e., 1,650,000 shares of Common Stock), subject to adjustments. Accordingly, subject to receipt
of approval of the stockholders of the Company, the Investor will beneficially own the majority of the shares of common stock of the Company
and may have control over the Company. Therefore, if the stockholders’ approval is obtained, the Investor may cause the Company
to change its business, strategy and objectives. However, our ability to fully realize the benefits of the 2025 Second SPA, including
the issuance of shares in excess of the NYSE American 19.99% limitation, as described further below, is contingent upon obtaining the
stockholder approval required pursuant to the 2025 Second SPA. Failure to obtain this approval would severely limit our financial flexibility,
potentially requiring us to seek alternative financing on less favorable terms, or cease our operations, which would have a material adverse
effect on our business and financial condition.
Our Product Pipeline
We do not have any products approved or available
for sale, our product candidates are still in the clinical development stages, and we have not generated any revenue from product sales.
Ongoing Programs
BX011 - Treatment of Diabetic Foot Infections, or DFI
BX011 is a fixed multi-phage cocktail, for the
treatment of DFI associated with Staphylococcus aureus, or S. aureus, a key bacterium implicated in development and exacerbation of DFI.
DFI is a serious bacterial infection commonly arising from an ulcer on the foot and is a leading cause of amputation in patients with
diabetes. We previously reported positive statistically significant results targeting S. aureus in diabetic foot osteomyelitis, or
DFO, patients. BX011 incorporates multiple proprietary phages, among them phage previously evaluated in the BX211 study, to provide broad
and potent coverage against this S. aureus in DFI patients. BX011’s advancement will continue in alignment with ongoing discussions
with the U.S. Defense Health Agency and subject to the availability of necessary financial resources, with plans to initiate a Phase 2a
clinical trial in DFI.
BX211 – Treatment of Diabetic Foot Osteomyelitis (DFO)
BX211 is a phage therapy for the treatment of DFO
associated with 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.
In March 2025, we announced positive results from
the phase 2 trial evaluating BX211 for the treatment of DFO, or the DFO Trial. The DFO Trial is a randomized, double-blind, placebo-controlled,
multi-center study investigating the safety, tolerability, and efficacy of BX211 to treat individuals with DFO associated with S. aureus.
The DFO Trial enrolled a total of 41 patients randomized for treatment at a 2:1 ratio, 26 of whom received intravenous, or IV, and topical
administration of BX211 on week 1 followed by a topical weekly dose through week 12, while 15 patients were assigned to the placebo arm.
Over the 12-week treatment period, all subjects (treatment and placebo) were also treated in accordance with standard of care, including
with systemic antibiotic therapy as appropriate. A readout of the DFO Trial results at week 13 evaluated healing of the wound associated
with osteomyelitis. The primary efficacy endpoint was percent area reduction, or PAR, of study ulcer through week 13. Study design was
guided in part by experience with numerous compassionate cases using phage therapy for the treatment of DFO and osteomyelitis.
Results from the DFO Trial findings included:
● BX211 was found to be safe and well-tolerated.
2
All p-values described in the above DFO Trial are non-adjusted.
Given the straightforward pathway for regulatory approval
in DFI provided by the FDA, BiomX is prioritizing the development of BX011 for DFI before potential expansion to address DFO patient populations,
which share the same S. aureus bacterial target, pending sufficiency of financial resources.
National Institutes of Health, or NIH, study in Cystic Fibrosis,
or CF
We are supporting a study conducted by the NIH
and The Antibacterial Resistance Leadership Group targeting Pseudomonas aeruginosa, or P. Aeruginosa, infections in CF patients under
FDA emergency Investigational New Drug 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.
Discontinued programs
BX004 – Treatment of Cystic Fibrosis
BX004 is our therapeutic phage product candidate
under development for chronic pulmonary infections caused by 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.
In August 2025, we announced that the FDA had placed
a clinical hold on the Company’s Phase 2b clinical trial of the BX004 product candidate, or the Study. As a result of the FDA’s
notification, patient screening and enrollment in the U.S. portion of the Study had been paused. Furthermore, in November 2025, we announced
that the FDA was continuing its evaluation of the third-party nebulizer device used in the Study in connection with the clinical hold,
and that an independent DMC recommended that the Study continue with an adjusted dosing regimen.
In light of the foregoing, and as detailed above,
in December, 2025, we discontinued the development of BX004, following internal analysis and DMC feedback, on an alternative dosing regimen
or treatment strategy which were beyond the Company’s available resources.
BX005 – Treatment of Atopic Dermatitis, or AD
BX005 is our topical phage product candidate targeting
S. aureus, a bacterium associated with the development and exacerbation of inflammation in AD. S. aureus is more abundant
on the skin of AD patients than on the skin of healthy individuals and on lesional skin than non-lesional skin. It also increases in abundance,
becoming the dominant bacteria, when patients experience flares. By reducing the load of S. aureus, BX005 is designed to shift the
skin microbiome composition to its ‘pre-flare’ state and potentially provide a clinical benefit. In preclinical in vitro
studies, BX005 was shown to eradicate over 90% of strains, including antibiotic resistant strains, from a panel of S. aureus strains (120
strains isolated from skin of subjects from the U.S. and Europe). On April 8, 2022, the FDA approved the Company’s Investigational
New Drug, or IND, application for BX005.In 2024, we discontinued the development of BX005.
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 investigate
clinical safety and efficacy of our lead phage-based product candidates to treat DFI and DFO; however, our business, strategy, and objectives
are expected to be subject to change in accordance with the plans of the Investor, should they become a majority stockholder upon stockholder
approval.
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 DFI, 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.
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.
The combination of the technologies and expertise from our scientific founders 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.
Additionally, we developed proprietary assays and
screening technology for robust and high throughput testing and patient specific targeting. The patient specific targeting platform combines
state of the art automation with advanced microbiology assays. We believe that 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.
4
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 our 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 one patent family
(United States, Canada, European Patent Office, China and Japan), solely owned by APT and directed to treating implantable device infections
among them staphylococcus aureus infections, common in patients with DFO. For some of the 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. Prosecution
is a lengthy process, during which the scope of the claims initially submitted for examination by the USPTO is often significantly narrowed
by the time they issue, if they issue at all.
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.
5
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, with respect to DFI/DFO,
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, TP-102 being developed by Technophage, a phage-based product being developed by Phaxiam.
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.
6
Sales and Marketing
We may consider to pursue the commercialization
of our drug product candidates either by building internal sales and marketing capabilities or through collaborations with others.
Government Regulation
Government authorities in the United States and
other countries regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging,
storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import
of drug and biological products. Generally, before a new drug or biologic can be studied in human clinical trials or marketed, considerable
data demonstrating its quality, safety, efficacy, purity, and/or potency must be obtained, organized into a format specific for each regulatory
authority, submitted for review and approved by the regulatory authority where the product is intended to be studied or marketed.
U.S. Biological Product Development Process
In the United States, the FDA regulates drugs under
the Federal Food, Drug, and Cosmetic Act, or the FDCA, and its implementing regulations under the FDCA, the Public Health Service Act,
or the PHSA, and their implementing regulations. Both drugs and biologics are also subject to other federal, state and local statutes
and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state and local
statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with applicable U.S.
requirements at any time during the product development, approval, or post-marketing process may subject an applicant to administrative
or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal
of an approval or license revocation, a clinical hold, untitled or warning letters, product recalls or market withdrawals, product seizures,
total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement
and civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.
Certain of our current product candidates and future
product candidates must be approved by the FDA through a Biologics License Application, or BLA, process before they may be legally marketed
in the United States. The process generally involves the following. However, the Trump administration may change or overhaul existing
drug regulations, which would lead to additional time and money to comply with:
● Submission to the FDA of a BLA;
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Preclinical Studies and IND
Preclinical studies include laboratory evaluation
of product chemistry and formulation, as well as in vitro and animal studies to establish a rationale for therapeutic use and in
some cases to assess the potential for adverse events. The conduct of preclinical studies is subject to federal regulations and requirements,
including in some cases GLP regulations for safety/toxicology studies. An IND sponsor must submit the results of the preclinical tests,
together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among
other things, to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational product
to humans, and, must become effective before human clinical trials may begin. Some long-term preclinical testing may continue after the
IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time, the FDA raises
concerns or questions related to one or more proposed clinical trials and places the trial on clinical hold. In such a case, the IND sponsor
and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result
in the FDA allowing clinical trials to commence.
Clinical Trials
Clinical trials involve the administration of the
drug or biological product candidate to healthy volunteers or disease-affected patients under the supervision of qualified investigators,
generally physicians not employed by, or under, the trial sponsor’s control. Clinical trials are conducted under protocols detailing,
among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters
to be used to monitor subject safety and efficacy, including stopping rules that assure a clinical trial will be stopped if certain adverse
events should occur. Each protocol and any amendments to the protocol must be submitted to the FDA as part of the IND. Clinical trials
must be conducted and monitored in accordance with the FDA’s regulations comprising the GCP requirements, including the requirement
that all research subjects provide informed consent. Further, each clinical trial must be reviewed and approved by an IRB at or servicing
each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of study participants
and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in
relation to anticipated benefits. The IRB also approves the form and content of the informed consent that must be signed by each clinical
trial subject or his or her legal representative and must monitor the clinical trial until completed. There are also requirements governing
the reporting of ongoing clinical trials and completed clinical trial results to public registries. Information about certain clinical
trials, including clinical trial results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website.
Clinical trials generally are conducted in three
sequential phases, known as Phase 1, Phase 2 and Phase 3, and may overlap.
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Post-approval trials, sometimes referred to as
Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are conducted to gain additional experience from
the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4
clinical trials as a condition of approval of a BLA.
Progress reports detailing the results of the clinical
trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted to the
FDA and the investigators for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing
that suggest a significant risk for human subjects and any clinically important increase in the rate of a serious suspected adverse reaction
over that listed in the protocol or investigator brochure.
It is possible for Phase 1, Phase 2, Phase 3 and
other types of clinical trials not to be completed successfully within a specified period, if at all. The FDA or the sponsor may suspend
or terminate a clinical trial at any time on various grounds, including a finding that the patients are being exposed to an unacceptable
health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being
conducted in accordance with the IRB’s requirements or if the tested biological product has been associated with unexpected serious
harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical
trial sponsor, or the Data Safety Monitoring Board. This group provides authorization for whether a trial may move forward at designated
check points based on access to certain data from the trial.
Concurrent with clinical trials, companies may
need to complete additional animal studies and also must develop additional information about the chemistry and physical characteristics
of the biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
The manufacturing process must be capable of consistently producing quality batches of the product and, among other things, companies
must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging
must be selected and tested, and stability studies must be conducted to demonstrate that the product candidates do not undergo unacceptable
deterioration over their shelf life.
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FDA Review Process
Following completion of the clinical trials, data
are analyzed to assess whether the investigational product is safe and effective for the proposed indicated use or uses and also meets
the regulatory requirements for potency and purity. The results of preclinical studies and clinical trials are then submitted to the FDA
as part of a BLA, along with proposed labeling, chemistry and manufacturing information to ensure product quality and other relevant data.
The BLA is a request for approval to market the biological product for one or more specified indications and must contain proof of safety,
purity and potency. The application may include both negative and ambiguous results of preclinical studies and clinical trials, as well
as positive findings. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s
use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted
must be sufficient in quality and quantity to establish the safety and efficacy in the intended indication, purity and potency of the
investigational product to the satisfaction of the FDA. FDA approval of a BLA must be obtained before a biologic may be marketed in the
United States. Under the Prescription Drug User Fee Act, or PDUFA, as amended, each BLA must be accompanied by a user fee. The FDA adjusts
the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a waiver of the application
fee for the first application filed by a small business.
The FDA reviews all submitted BLAs before it accepts
them for filing and may request additional information rather than accept the BLA for filing. The FDA must make a decision on accepting
a BLA for filing within 60 days of receipt, and such a decision could include a refusal to file by the FDA. Once the submission is accepted
for filing, the FDA begins an in-depth review of the BLA. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has 10
months, from the filing date, in which to complete its initial review of an original BLA and respond to the applicant, and 6 months from
the filing date of an original BLA designated for priority review. The FDA does not always meet its PDUFA goal dates for standard and
priority BLAs, and the review process is often extended by FDA requests for additional information or clarification.
Before approving a BLA, the FDA will conduct a
pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements. The
FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements
and adequate to assure consistent production of the product within required specifications. The FDA also may audit data from clinical
trials to ensure compliance with GCP requirements. Additionally, the FDA may refer applications for novel products or products which present
difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for
review, evaluation and a recommendation as to whether the application should be approved and under what conditions, if any. The FDA is
not bound by recommendations of an advisory committee, but it considers such recommendations when making decisions on approval. The FDA
likely will reanalyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the
review process.
After the FDA evaluates a BLA, it will issue an
approval letter, or a Complete Response Letter. An approval letter authorizes commercial marketing of the biologic with specific prescribing
information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the
application will not be approved in its present form. A Complete Response Letter usually describes all the specific deficiencies in the
BLA identified by the FDA. The Complete Response Letter may require additional clinical data and/or other significant and time-consuming
requirements related to clinical trials, preclinical studies or manufacturing. If a Complete Response Letter is issued, the applicant
may either resubmit the BLA, addressing all the deficiencies identified in the letter, or withdraw the application. Even if such data
and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval. Data obtained from clinical
trials are not always conclusive and the FDA may interpret data differently than the sponsor’s interpretation of the same data.
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Pediatric Information
Under the Pediatric Research Equity Act of 2003,
or PREA, a BLA or supplement to a BLA must contain data to assess the safety and efficacy of the biologic for the claimed indications
in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product
is safe and effective. The FDA may grant deferrals for submission of pediatric data or full or partial waivers. A sponsor who is planning
to submit a marketing application for a drug that includes a new active ingredient, new indication, new dosage form, new dosing regimen
or new route of administration must submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-Phase 2 meeting or,
if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 study. The initial PSP must include
an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant
endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of
pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.
The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed-upon initial PSP at any time
if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or
other clinical development programs.
Post-marketing Requirements
Following approval of a new product, the manufacturer
and the approved product are subject to continuing regulation by the FDA, including, among other things, monitoring and record-keeping
activities, reporting of adverse experiences, complying with promotion and advertising requirements, which include restrictions on promoting
products for unapproved uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific
and educational activities. Although physicians may prescribe legally available products for off-label uses, manufacturers may not market
or promote such uses. Prescription drug and biologic promotional materials must be submitted to the FDA in conjunction with their first
use. Further, if there are any modifications to the biologic, including changes in indications, labeling or manufacturing processes or
facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require the development
of additional data or preclinical studies and clinical trials.
The FDA may also place other conditions on approvals
including the requirement for a Risk Evaluation and Mitigation Strategy, or REMS, to assure the safe use of the product. If the FDA concludes
a REMS is needed, the sponsor of the BLA must submit a proposed REMS. The FDA will not approve the BLA without an approved REMS, if required.
A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution
methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial
promotion, distribution, prescription or dispensing of products. Newly discovered or developed safety or effectiveness data may require
changes to a product’s approved labeling, including the addition of new warnings and contraindications, and also may require the
implementation of other risk management measures, including a REMS or the conduct of post-marketing studies to assess a newly discovered
safety issue. Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.
FDA regulations require that products be manufactured
in specific approved facilities and in accordance with cGMP regulations, which require, among other things, quality control and quality
assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP. Manufacturers
and other entities involved in the manufacture and distribution of approved drugs or biologics are required to register their establishments
with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for
compliance with cGMP requirements and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area
of production and quality control to maintain cGMP compliance. The discovery of violative conditions, including failure to conform to
cGMP regulations, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions
on a product, manufacturer or holder of an approved BLA, including recall.
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Biosimilars and Exclusivity
An abbreviated approval pathway for biological
products shown to be biosimilar to, or interchangeable with, an FDA licensed reference biological product was created by the Biologics
Price Competition and Innovation Act of 2009. This amendment to the PHSA, in part, attempts to minimize duplicative testing. Biosimilarity,
which requires that the biological product be highly similar to the reference product notwithstanding minor differences in clinically
inactive components and that there be no clinically meaningful differences between the product and the reference product in terms of safety,
purity and potency, can be shown through analytical studies, animal studies and a clinical trial or trials.
Interchangeability requires that a biological product
be biosimilar to the reference product and that the product can be expected to produce the same clinical results as the reference product
in any given patient and, for products administered multiple times to an individual, that the product and the reference product may be
alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative
to exclusive use of the reference biological product without such alternation or switch.
A reference biological product is granted 12 years
of data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable
product based on the reference biological product until four years after the date of first licensure of the reference product. “First
licensure” typically means the initial date the particular product at issue was licensed in the United States. Date of first licensure
does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure
is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product
(or licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological
product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or
strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.
Pediatric exclusivity is another type of regulatory
market exclusivity in the United States, available under the Best Pharmaceuticals for Children Act by way of its application to biologics
through the Biologics Price Competition and Innovation Act. Pediatric exclusivity, if granted, adds six months to existing regulatory
exclusivity periods, which must be in place in order for pediatric exclusivity to apply. This six-month exclusivity may be granted based
on the voluntary completion of a pediatric trial in accordance with an FDA issued “Written Request” for such a trial, although
FDA may issue such a Written Request at the request of the sponsor.
Companion Diagnostics
We may employ companion diagnostics to identify
the most suitable phage to treat a specific patient under our personalized phage treatments and to help more accurately identify patients
sensitive to our phage cocktails, during our clinical trials and potentially also in connection with the commercialization of our product
candidates that we are developing or may in the future develop. Companion diagnostics can identify patients who are most likely to benefit
from a particular therapeutic product; identify patients likely to be at increased risk for serious side effects as a result of treatment
with a particular therapeutic product; or monitor response to treatment with a particular therapeutic product for the purpose of adjusting
treatment to achieve improved safety or effectiveness. Companion diagnostics are regulated as medical devices by the FDA and, as such,
require either clearance or approval prior to commercialization. The level of risk combined with available controls to mitigate risk determines
whether a companion diagnostic device requires Premarket Approval Application approval or is cleared through the 510(k) premarket notification
process. For a novel therapeutic product for which a companion diagnostic device is essential for the safe and effective use of the product,