UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
For
the fiscal year ended December 31, 2023
or
For
the transition period from ___________ to __________
Commission
file number: 001-36199
PULMATRIX,
INC.
(Exact
name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
(781)357-2333
Registrant’s
telephone number, including area code
Securities
registered pursuant to Section 12(b) of the Exchange Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.0001 per share PULM The Nasdaq Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Exchange 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 to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. Yes ☐ No ☒
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 ☒
The
aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates computed by reference to
the price at which the common equity was last sold, as of June 30, 2023, the last business day of registrant’s most recently completed
second fiscal quarter, was $9,787,896.
As
of March 25, 2024, the registrant had 3,652,285
shares of common stock, par value $0.0001 per share, issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
PULMATRIX,
INC.
TABLE
OF CONTENTS
Page No.
Forward-Looking Statements 1
PART I
Item 1. Business. 2
Item 1A. Risk Factors. 15
Item 1B. Unresolved Staff Comments. 35
Item 1C. Cybersecurity. 35
Item 2. Properties. 36
Item 3. Legal Proceedings. 36
Item 4. Mine Safety Disclosures. 36
PART II
Item 6. Reserved. 37
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 44
Item 8. Financial Statements and Supplementary Data. 44
Item 9A. Controls and Procedures. 44
Item 9B. Other Information. 45
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 45
PART III
Item 10. Directors, Executive Officers and Corporate Governance. 46
Item 11. Executive Compensation. 52
Item 14. Principal Accountant Fees and Services. 59
PART IV
Item 15. Exhibits, Financial Statement Schedules. 61
Signatures 66
i
PART
I
Forward-Looking
Statements
This
Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical fact contained herein,
including statements regarding our business plans or strategies, projected or anticipated benefits or other consequences of our plans
or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings,
or other aspects of our operating results, are forward-looking statements. Words such as “anticipates,” “assumes,”
“believes,” “can,” “could,” “estimates,” “expects,” “forecasts,”
“guides,” “intends,” “is confident that,” “may,” “plans,” “seeks,”
“projects,” “targets,” and “would,” and their opposites and similar expressions, as well as statements
in future tense, are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of
future performance or results and may not be accurate indications of when such performance or results will actually be achieved. Forward-looking
statements are based on information we have when those statements are made or our management’s good faith belief as of that time
with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially
from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include,
but are not limited to:
● our inability to carry out research, development and commercialization plans;
● termination of certain license agreements;
● adverse market and economic conditions;
● loss of one or more key executives or scientists; and
● difficulties in securing regulatory approval to market our product candidates.
For
a more detailed discussion of these and other risks that may affect our business and that could cause our actual results to differ from
those projected in these forward-looking statements, see the risk factors and uncertainties described under the heading “Risk Factors”
in Part I, Item 1A of this Annual Report on Form 10-K. The forward-looking statements contained in this Annual Report on Form 10-K are
expressly qualified in their entirety by this cautionary statement. We do not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated
events, except as required by law.
Unless
otherwise stated, references in this Annual Report on Form 10-K to “us,” “we,” “our,” or “Company”
refer to Pulmatrix, Inc., a Delaware corporation, and its subsidiary, Pulmatrix Operating Company, Inc., a Delaware corporation.
“iSPERSETM”
is one of our trademarks used in this Annual Report on Form 10-K. Other trademarks appearing in this report are the property of their
respective holders. Solely for convenience, these and other trademarks, trade names and service marks referred to in this report appear
without the ®, TM and SM symbols, but those references are not intended to indicate, in any way, we or the owners of such
trademarks will not assert, to the fullest extent under applicable law, their rights to these trademarks and trade names.
ITEM 1. BUSINESS.
Overview
We
are a clinical-stage biopharmaceutical company focused on the development of novel inhaled therapeutic products intended to prevent and
treat respiratory and other diseases with important unmet medical needs using our patented iSPERSETM technology. Our
proprietary product pipeline includes treatments for central nervous system (“CNS”) disorders such as acute migraine and
serious lung diseases such as Chronic Obstructive Pulmonary Disease (“COPD”) and allergic bronchopulmonary aspergillosis
(“ABPA”). Our product candidates are based on our proprietary engineered dry powder delivery platform, iSPERSETM,
which seeks to improve therapeutic delivery to the lungs by optimizing pharmacokinetics and reducing systemic side effects to improve
patient outcomes.
We
design and develop inhaled therapeutic products based on our proprietary dry powder delivery technology, iSPERSETM, which
enables delivery of small or large molecule drugs to the lungs by inhalation for local or systemic applications. The iSPERSETM
powders are engineered to be small, dense particles with highly efficient dispersibility and delivery to airways. iSPERSETM
powders can be used with an array of dry powder inhaler technologies and can be formulated with a broad range of drug substances
including small molecules and biologics. We believe the iSPERSETM dry powder technology offers enhanced drug loading
and delivery efficiency that outperforms traditional lactose-blend inhaled dry powder therapies.
We
were incorporated in 2013 as a Delaware corporation.
Business
Strategy
Our
goal is to develop breakthrough therapeutic products that are safe, convenient, and more effective than the existing therapeutic products
for respiratory and other diseases where iSPERSETM properties are advantageous.
Our
current pipeline is aligned to this goal as we develop iSPERSETM-based therapeutic candidates which target the prevention
and treatment of a range of diseases, including CNS disorders and pulmonary diseases. These therapeutic candidates include PUR3100 for
the treatment of acute migraine, PUR1800 for the treatment of acute exacerbations of chronic obstructive pulmonary disease (“AECOPD”),
and PUR1900 for the treatment of ABPA in patients with asthma and in patients with cystic fibrosis (“CF”). Each program is
enabled by its unique iSPERSETM formulation designed to achieve specific therapeutic objectives.
We
intend to capitalize on our iSPERSETM technology platform and our expertise in inhaled therapeutics to identify new product
candidates for the prevention and treatment of diseases, including those with considerable unmet medical needs and to build our product
pipeline beyond our existing candidates. In order to advance clinical trials for our therapeutic candidates and leverage the iSPERSETM
platform to enable delivery of partnered compounds, we intend to form strategic alliances with third parties, including pharmaceutical
and biotechnology companies or academic or private research institutes.
We
expect to continue to incur substantial expenses and operating losses for at least the next several years based on our drug development
plans and in connection with our ongoing activities, as we:
iSPERSETM
Technology
We
use simple, safe excipients, including proprietary cationic salt formulations, to create a robust and flexible dry powder platform technology
that can accommodate a wide range of drug loads in highly dispersible particles. Our initial delivery platform emerged from development
of iCALMTM (inhaled Cationic Airway Lining Modulators), a non-steroidal anti-inflammatory therapy. The high degree of
aerosol efficiency and the density profile of our dry powder iCALMTM formulations provided the foundation for our development
of iSPERSETM in 2012, which uses other monovalent and divalent salts.
iSPERSETM
particles are engineered with a small, dense and dispersible profile to exceed the performance of traditional dry powder particles
as the iSPERSETM particles have the dispersibility advantages of porous engineered particles. We believe this
results in superior drug delivery compared to traditional oral and injectable forms of treatment for certain diseases. Unlike lactose-blended
carrier formulations or low-density particles which disperse poorly, we believe that the iSPERSETM technology
platform offers several potential benefits, achieved through the following technological innovations:
iSPERSETM
particles can be engineered to include concentrations from less than one percent (1%) to greater than eighty percent (80%)
active pharmaceutical ingredients (“APIs”), which allows flexibility for dosing both high potency and high-drug load therapeutics.
● Superior flow rate independent lung delivery without carriers.
The
iSPERSETM technology enables pulmonary delivery independent of lactose or other carriers, which results in significantly
greater lung dose at a matched nominal dose of conventional lactose-based formulations. iSPERSETM formulations
are dispersible across a range of flow rates with consistent emitted dose and particle size. Performance across flow rates provides reliable
dose delivery across patient populations and reduces patient-to-patient variability.
● Delivery of macromolecules and biologics.
iSPERSETM
powders can be used with an array of dry powder inhaler technologies and can be formulated with a broad range of therapeutic
compounds ranging from small molecules to proteins for both local and systemic drug delivery applications.
● Homogenous combinations of multiple drugs.
iSPERSETM
creates homogenous particles including excipients and API, which allow for the consistent delivery of multiple APIs in a product.
We have successfully formulated iSPERSETM-based products with dual and triple API combinations.
● Strong safety profile.
Current
iSPERSETM products and planned clinical-stage products to be formulated in iSPERSETM are
supported by robust preclinical safety profiles. iSPERSETM excipients include those with inhalation precedent
and those that are generally regarded as safe by other routes of administration.
Therapeutic
Candidates
PUR3100
In
2020, we developed PUR3100, the iSPERSETM formulation of DHE, for the treatment of acute migraine. Currently DHE is only
available as subcutaneous, intravenous infusion or intranasal delivery. If approved for commercialization, PUR3100 has the opportunity
to be the first orally inhaled DHE treatment for acute migraine and be an alternative to other acute therapies. Given the oral inhaled
route of delivery, PUR3100 is anticipated to provide relief from the rapid onset of migraine symptoms and provide a favorable tolerability
profile.
Competition
and Market Opportunities
The
American Migraine Foundation estimates that at least 39 million people in the United States and 1 billion people worldwide live with migraine, but because
many people are not diagnosed or do not receive the treatment they need, the actual number may be higher. Current treatments for migraine
include oral, intranasal, IV or subcutaneous formulations of triptans, DHE, and calcitonin gene-related peptide (“CGRP”)
antagonists (gepants). Studies show that people with migraines are underdiagnosed, undertreated, and experience substantial decreases
in functioning and productivity, which translates into diminished quality of life for individuals, and financial burdens to patients,
health-care systems, and employers. All current treatments are limited by incomplete efficacy and/or intolerability. Therefore, development
of additional treatments for acute migraine is warranted.
DHE
has been shown to be effective in the treatment of migraine and, in particular, hard to treat migraines, such as menstrual migraine,
migraine upon awakening, and severe migraine. Utilization of DHE has been limited due to its poor oral bioavailability, requiring IV,
subcutaneous or intranasal dosing. IV dosing generally requires administration in a healthcare setting and may result in nausea and vomiting.
Hence, its use has generally been limited to patients with intractable or medication-overuse migraine. Intranasal dosing with DHE, including
Migranal (Bausch Health US LLC), approved in December 1997, and Trudhesa (Impel NeuroPharma, Inc.), approved by the FDA in September
2021, have been poorly adopted due to incomplete efficacy and intolerability of nasal inhalation in patients during a migraine.
There
is precedent for an orally inhaled DHE therapy. MAP Pharmaceuticals, Inc. developed MAP0004, also known as Levadex or Semprana, a liquid
suspension formulation of DHE, designed to be dosed via a pMDI inhalation device. Their published data indicate a safe and well tolerated
formulation with rapid onset and long-lasting efficacy that compared favorably to existing treatments. Development of MAP0004 led to
a new drug application (“NDA”) but was halted after multiple complete response letters from the FDA citing Chemistry, Manufacturing
and Controls (“CMC”) issues related to dose uniformity and stability issues. Regardless of the failure of MAP0004, the efficacy
and tolerability of the formulation reported by MAP Pharmaceuticals provides proof of concept for an orally inhaled DHE formulation.
PUR3100, the iSPERSETM formulation planned by Pulmatrix, is anticipated to deliver DHE to the lung with efficacy
and tolerability that compares favorably with MAP0004, while avoiding the device-related issues of MAP0004 by delivering PUR3100 as an
iSPERSETM dry powder.
We
believe that an iSPERSE formulation of DHE can provide the positive rapid onset and long-lasting efficacy seen in the MAP0004 data by
enabling a similar pharmacokinetic profile while eliminating the manufacturing and device issues which led to the MAP0004 FDA complete
response letters.
To
the best of our knowledge, there are no other orally inhaled DHE formulations currently in development or on the market. Migranal
and Trudhesa are the two currently FDA approved intranasal formulations of DHE. Satsuma Pharmaceuticals, a subsidiary of Shin Nippon
Biomedical Laboratories (“Satsuma”), has developed a dry powder formulation of DHE for intranasal dosing and has
completed two Phase 3 clinical studies (ClinicalTrials.gov: NCT03901482 and NCT04940390). Despite failure of both clinical studies to
achieve primary endpoints, Satsuma filed an NDA in the first quarter of 2023 based on post-hoc analysis showing benefit in secondary
endpoints. In January 2024, the FDA declined to approve the treatment, citing manufacturing concerns. Satsuma plans to work with the
FDA to determine possible paths to resubmit the NDA.
Non-Clinical
Development
A
total of three 14-day GLP toxicology studies have been completed with PUR3100 to support single-dose clinical studies. We are planning
to conduct a chronic toxicology study to support long-term dosing. Based on discussions with the FDA, this would complete the non-clinical
requirements to support an NDA.
Clinical
Development
Our
interactions with the FDA have indicated that, in addition to the planned Phase 2 and Phase 3 studies, long-term safety should be
assessed in a minimum of one hundred patients for six months of dosing and fifty patients for twelve months of dosing. The FDA also
confirmed that it will be necessary to perform a safety study administering PUR3100 to otherwise healthy patients with asthma before
an NDA is submitted.
On
September 26, 2022, we announced the completion of patient dosing in a Phase 1 clinical study, performed in Australia. The study design
was a double-dummy, double-blinded trial to assess the safety, tolerability, and pharmacokinetics of three dose levels of single doses
of inhaled PUR3100 with IV placebo, as compared to IV DHE (DHE mesylate injection) with inhaled placebo. This study may also provide
preliminary comparative bioavailability data to support the use of the 505(b)(2) pathway for marketing authorization. Twenty-six healthy
subjects were enrolled and each of the four groups contained at least six subjects.
On
January 4, 2023, we announced topline results. PUR3100 was well-tolerated and there was a lower incidence of nausea in PUR3100 dose groups
compared to IV DHE, and we presented the Phase 1 study data at the American Headache Society 65th Annual Meeting in June 2023.
In contrast to IV DHE, no vomiting was observed in any of the PUR3100 dose groups. Oral inhalation of PUR3100 achieved peak exposures
in the targeted therapeutic range at all doses and the Tmax occurred at five minutes after dosing.
Based
on the rapid systemic exposure in the therapeutic range and the improved side effect profile relative to IV dosing, we believe the PUR3100
formulation of DHE may differentiate from approved DHE products or those in development. If effectiveness is demonstrated, PUR3100 may offer the convenience of being self-administered with a pharmacokinetic profile that may potentially provide rapid onset of action.
In
September 2023, we announced that the FDA accepted the PUR3100 IND and the receipt of a “study may proceed” letter for the
clinical study: “A Phase 2, Multicenter, Randomized, Double-Blind, Placebo-Controlled, Single Event Study to Evaluate the Safety,
Tolerability, and Efficacy of PUR3100 (Dihydroergotamine Mesylate Inhalation Powder) in the Acute Treatment of Migraine”. We anticipate
that this Phase 2 clinical study will initiate once financing or partnership arrangements have been made.
Clinical
study starts may be affected by conditions related to the COVID-19 pandemic and its ongoing effects with respect to clinical study conduct
and patient enrollment. For more discussion of risks related to the COVID-19 pandemic, please see “Item 1A. RISK FACTORS—Risks
Related to Our Business”.
PUR1800
Reduced
responsiveness to corticosteroids represents an important barrier to effective treatment of COPD and AECOPD and provides a clear rationale
to seek novel medicines to treat these respiratory diseases. In addition, current treatments generally fail to treat the underlying source
of the AECOPD, in particular when a viral or bacterial infection is the cause, which occurs in approximately 80% of exacerbations. RV1162,
the active ingredient of PUR1800, is a novel, potent anti-inflammatory that inhibits the phosphorylation of a narrow spectrum of kinases.
In pre-clinical studies, RV1162 demonstrated direct anti-inflammatory activity in a model of viral induced respiratory inflammation.
RV1162 also demonstrated a reduction in corticosteroid-resistant inflammatory responses in a model of cigarette smoke induced inflammation.
These findings suggested that RV1162 has the potential to deliver effective anti-inflammatory outcomes in corticosteroid-resistant patients
while also reducing the underlying source of inflammation in an exacerbation, such as a viral and/or bacterial respiratory infection.
Clinical
studies conducted by RespiVert/Janssen with RV1162 formulated as a lactose blend for inhalation demonstrated that the molecule was well
tolerated for up to 14 days of dosing in patients with COPD. Analysis of sputum collected from patients with COPD treated with RV1162
showed reduced levels of p38 phosphorylation in sputum cells and decreases in the number of neutrophils recovered in sputum after 12
days of dosing. These findings suggest that inhalation of RV1162 may confer anti-inflammatory benefits after a short dosing regimen.
Long-term toxicology studies with RV1162 as a lactose blend suggested that this formulation was not suitable for chronic dosing.
Based
upon the clinical results generated by RespiVert/Janssen for RV1162 and the anticipated benefits of an iSPERSETM
formulation of RV1162, we entered into a License, Development and Commercialization Agreement with RespiVert Ltd. (“RespiVert”),
a wholly owned subsidiary of Janssen Biotech, Inc. on June 9, 2017. RespiVert granted us an exclusive, royalty-bearing license in a portfolio
of narrow spectrum kinase inhibitor compounds (“NSKI”). We subsequently formulated RV1162 into PUR1800 for development as
a potential therapy for AECOPD.
Competition
and Market Opportunities
There
are 18 million moderate-to-severe episodes of AECOPD in the U.S. each year. AECOPD are sudden onset increases in symptoms, including
increased dyspnea, sputum purulence and volume, and wheezing, coughing, and shortness of breath that require medical intervention and
can lead to hospitalization. The occurrence of an exacerbation greatly increases the likelihood of a further exacerbation within the
following 6 months and creates a significant financial burden to healthcare systems.
Steroids
are standard of care for moderate-to-severe acute exacerbations, which occur across all patient severity types. We believe a substantial
unmet need exists in AECOPD for those patients with underlying infection and/or steroid resistance. Acumapimod (BCT-197) is an oral p38
MAP kinase inhibitor being developed by Mereo BioPharma. BCT-197 completed Phase 2 development as first-line therapy for severe AECOPD.
In April 2019, Mereo BioPharma announced completion of an end of Phase 2 meeting with the FDA and stated the company is continuing discussions
with potential partners for BCT-197. We are not aware of any further progress in either clinical development or partnership efforts on
this product. A generic version of roflumilast, a phosphodiesterase inhibitor approved by the FDA for use in managing COPD exacerbations,
became available in 2022.
Non-Clinical
Development
We
conducted two 28-day GLP toxicology studies in rats and dogs. Results from the two GLP toxicology studies supported the potential for
PUR1800 to improve lung exposure, with reduced lung accumulation, as compared to RV1162 as a lactose blend formulation, suggesting potential
for chronic dosing.
Toxicology
studies in rats and dogs, with durations of six and nine months, respectively, were then completed. The data from both studies demonstrated
that PUR1800 is safe and well tolerated with chronic dosing, with no progression of findings from 28-day studies. We believe this indicates
potential for chronic dosing of PUR1800, within the safety margin identified, enabling us to explore PUR1800 therapy for chronic respiratory diseases such as steroid resistant
asthma, COPD, or idiopathic pulmonary fibrosis. While the program is currently in development for treatment of AECOPD, these positive
toxicology study results could expand potential indications and value of the program.
Clinical
Development
We
completed a Phase 1b safety, tolerability, and pharmacokinetics of PUR1800 for patients with stable moderate-severe COPD. Topline data
was delivered in the first quarter of 2022 and presented at the American Academy of Allergy, Asthma and Immunology conference in the
first quarter of 2023.
The
clinical study, performed at the Medicines Evaluation Unit in Manchester, UK, was a randomized, three-way crossover double-blind study
with 14 days of daily dosing which includes placebo and one of two doses of PUR1800, and included a 28-day follow-up period after each
treatment period. A total of 18 adults with stable COPD were enrolled. Safety and tolerability, as well as systemic PK were evaluated.
PUR1800
was well tolerated and there were no observed safety signals. The PK data indicate that PUR1800 results in low and consistent systemic
exposure when administered via oral inhalation. The topline data, along with the results from chronic toxicology studies, support the
continued development of PUR1800 for the treatment of AECOPD and other inflammatory respiratory diseases. These data will inform the
design of a potential Phase 2 study in the treatment of AECOPD.
PUR1900
PUR1900
is our iSPERSETM inhaled formulation of itraconazole, an antifungal drug commercially available as an oral drug. We developed
PUR1900 for the prevention and treatment of fungal infections and allergic/hypersensitivity reactions to fungus in patients with severe
lung disease, including those with asthma and CF. On January 28, 2020, PUR1900 received Fast Track designation from the FDA for the treatment
of ABPA. Aspergillus colonization and infections are likely underdiagnosed and occur frequently in patients of all ages. Colonization
and infection with Aspergillus can lead to clinical disease with differing severities and complications depending on the immune
status of the host. Invasive aspergillosis is a frequently fatal disease that occurs in patients that are typically immune suppressed
as a result of treatment for hematologic cancers or immunosuppression prior to solid organ transplantation. In patients with asthma and
CF, Aspergillus can cause chronic infections that may be associated with worsening disease and larger declines in lung function
than patients without infection. A subset of patients with asthma and CF with Aspergillus colonization and/or infection develop
ABPA, which is a complex hypersensitivity reaction to fungal antigens. ABPA is a disease resulting in mucus production, wheezing, pulmonary
infiltrates, worsening bronchiectasis, and fibrosis of the lung.
In
patients with both asthma and CF, ABPA is commonly treated with oral steroids to treat inflammation and with oral antifungals to reduce
fungal infection. The inhalation administration of a drug affords direct delivery of the drug to the infected parts of the lung, maximizing
the dose to the affected sites and minimizing systemic exposure to the rest of the body where it could cause dose-limiting side effects.
Therefore, treatment of lung infections by direct administration of anti-infective products to the lung may improve both the safety and
efficacy of treatment compared to systemic administration by other routes, as well as improving patient convenience as compared to oral
and injectable forms of the treatment. We believe that local lung delivery by inhalation of our iSPERSETM formulation
could provide convenient, effective and safe management of the debilitating and often life-threatening lung infections that are not currently
addressed by inhaled therapies.
Competition
and Market Opportunities
Current
treatments of pulmonary fungal infections highlight the limitations of oral or intravenous anti-infective treatments for lung infections.
Itraconazole is one of the most commonly prescribed therapies for treating Aspergillus infections in patients with asthma and
CF. Itraconazole is available commercially as Sporanox® in both a capsule and oral solution form. Itraconazole is metabolized
in the liver by CYP3A4 and coadministration with a large number of drugs is contraindicated due to the potential for severe drug-drug
interactions.
We
have demonstrated that PUR1900 achieves higher local lung itraconazole concentrations with lower systemic exposure relative to oral dosing,
thus allowing for the potential to improve upon both the efficacy and safety profiles observed with oral itraconazole. Furthermore, administration
by inhalation reduces the exposure of the drug in the rest of the body, which may be beneficial in reducing systemic side effects and
the risk of potentially toxic drug-drug interactions.
There
is precedent for both dry powder and nebulized inhaled anti-infective therapy to address specific pulmonary infections in patients
which demonstrates potential utility of inhaled drug delivery and market opportunity. Mylan currently markets TOBI Podhaler for
treatment of Pseudomonas aeruginosa infection in the United States and Teva markets inhaled colistin, Colobreathe, for the
same infection in Europe. Insmed currently markets Amikacin Liposome Inhalation Suspension (Arikayce) in the United States for the
treatment of lung disease caused by a group of bacteria, Mycobacterium avium complex in a limited population of patients with
the disease who do not respond to conventional treatment (refractory disease). There are currently no products specifically approved
for treatment of ABPA, however, there are several inhaled antifungal agents currently under development for the treatment of
invasive aspergillosis or ABPA. Treatments under development for invasive aspergillosis include PC945, a novel azole antifungal
being developed by Pulmocide as a liquid for nebulization, and a dry powder formulation of voriconazole being developed by TFF
Pharmaceuticals. In principle, development of an orally inhaled antifungal for the treatment of invasive aspergillosis could also be
effective for ABPA but would require additional clinical studies in the target patient population. Zambon has also developed a dry
powder formulation of voriconazole for the treatment of ABPA and completed a Phase 1 study in the third quarter of 2020. However, no
additional development has since been reported. Regeneron Pharmaceuticals is currently running a clinical trial with Dupilumab
(NCT04442269) for the treatment of ABPA in asthma. This trial, which is focused on prevention of exacerbations in individuals with
at least one or more severe respiratory exacerbations, completed in February 2024 and is pending results.
New
methods to detect Aspergillus infection in sputum have improved the sensitivity of diagnosis and clinical appreciation for these
infections. Pulmonary Aspergillus infections affect approximately 14 million patients worldwide according to the Global Action
Fund for Fungal Infections (Improving Outcomes for Patients with Fungal Infections across the World: A Road Map for the Next Decade).
The majority of these cases occur in patients with asthma who have allergic disease and also include invasive Aspergillus infections
that are associated with a high rate of mortality in immunocompromised patients. We believe that PUR1900 compares favorably to the products
discussed above and has the potential to generate substantial value based on treating and preventing pulmonary fungal infections in multiple
patient populations.
Clinical
Development
We
completed a Phase 1/1b clinical study in 2018, wherein PUR1900 appeared to be safe and well tolerated in healthy normal volunteers (Parts
1 and 2) and in patients with asthma (Part 3). In Part 3 of the Phase 1/1b clinical study, following a single dose of PUR1900, the pharmacokinetics
(“PK”) analysis of sputum samples demonstrated approximately 70-fold higher maximum lung concentration of itraconazole following
inhalation of PUR1900 compared to oral Sporanox® (Janssen Pharmaceuticals) despite inhaling only one-tenth the dose of
itraconazole (20 mg) relative to the dose of oral Sporanox® (200 mg). Lung exposure, as measured by sputum induction and
analysis, was approximately 50-fold higher and plasma exposure was approximately 85-fold lower following inhalation of 20 mg of PUR1900
compared to 200 mg of oral Sporanox®. All endpoints from the Phase 1/1b clinical study were successfully met.
Successful
completion of the Phase 1/1b clinical study enabled us to initiate a Phase 2 clinical study in 2019, entitled: “A Randomized, Double-Blind,
Multicenter, Placebo-Controlled, Phase 2 Study to Evaluate the Safety, Tolerability, and Pharmacokinetics of Itraconazole Administered
as a Dry Powder for Inhalation (PUR1900) in Adult Asthmatic Patients with ABPA.” This clinical study was terminated in July 2020
due to the impact of the COVID-19 pandemic on patient enrollment and clinical study conduct. The completion of a 6-month inhalation toxicology
study in dogs in 2020 enabled the conduct of a new Phase 2b clinical study.
The
new Phase 2b study included a 16-week dosing regimen and exploration of potential regulatory approval endpoints. We dosed the first
patient during the first quarter of 2023. In January 2024, pursuant to the Third Amendment (as defined herein), we announced plans
to stop patient enrollment at 8 subjects in this study, effective immediately, and to terminate the study as soon as reasonably
possible between the date of the Third Amendment and July 30, 2024.
Our
partner Cipla plans to continue clinical development outside the United States and is currently conducting a Phase 2 study in India.
Should Cipla successfully market PUR1900 outside the United States, Pulmatrix will receive 2% royalties on any potential future net sales
by Cipla outside the United States. Within the United States, we and Cipla will seek to monetize PUR1900 for indications where an orally
inhaled antifungal may provide a therapeutic benefit or fulfill an unmet medical need.
Business
Development
PUR3100
In
September 2023, we announced the FDA’s acceptance of an IND application for PUR3100 and receipt of a “study may
proceed” letter for a Phase 2 study. The IND includes a Phase 2 clinical protocol where safety and preliminary efficacy of PUR3100
will be investigated in patients with acute migraine.
PUR1800
We
completed a Phase 1b safety, tolerability, and pharmacokinetics clinical study of PUR1800 for subjects with stable moderate-severe COPD
and received topline data from the Phase 1b clinical study in the first quarter of 2022. We analyzed data from the completed Phase 1b
clinical study of PUR1800 for AECOPD and presented study results at the American Academy of Allergy, Asthma & Immunology (AAAAI)
conference in the first quarter of 2023. The results indicated PUR1800 was safe and well tolerated with no observed safety signals. The
topline data, along with the results from chronic toxicology studies, support the continued development of PUR1800 for the treatment
of AECOPD and other inflammatory respiratory diseases.
PUR1900
On
April 15, 2019, we entered into a Development and Commercialization Agreement (the “Cipla Agreement”) with Cipla for the co-development and commercialization, on a worldwide, except for the Cipla Territory defined below,
exclusive basis, of PUR1900, our inhaled iSPERSETM drug delivery system (the “Product”) enabled formulation
of the antifungal drug itraconazole, which is only available as an oral drug, for the treatment of all pulmonary indications, including
ABPA in patients with asthma. We entered into an amendment to the Cipla Agreement on November 8, 2021 (the “Second Amendment”)
and a subsequent amendment on January 6, 2024 (the “Third Amendment”). All references to the Cipla Agreement herein refer
to the Cipla Agreement, as amended. The Cipla Agreement will remain in effect in perpetuity, unless otherwise earlier terminated in accordance
with its terms.
Pursuant to the Third Amendment, all development and commercialization activities with respect to the Product in all markets other than the United
States (the “Cipla Territory”) will be conducted exclusively by Cipla at Cipla’s sole cost and expense, and Cipla shall
be entitled to all profits from the sale of the Product in the Cipla Territory, except that if Cipla successfully transfers manufacturing
of the Product for the Cipla Territory to a manufacturing site determined by Cipla, we will become entitled to a royalty equal to 2%
of net sales in the Cipla Territory.
We
and Cipla are each responsible for 60% and 40%, respectively, of our overhead costs and the time spent by our employees and consultants
on development of the Product (“Direct Costs”). We will share all other development costs with Cipla that are not Direct
Costs, such as the cost of clinical research organizations, manufacturing costs and other third-party costs, on a 50/50 basis.
Pursuant
to the Third Amendment, we and Cipla agreed to stop patient enrollment at 8 subjects in the ongoing Phase 2b clinical study. During the
period commencing on January 6, 2024 and ending July 30, 2024 (the “Wind Down Period”), we will complete all Phase 2b activities,
assign or license all patents to Cipla and their registration with the appropriate authorities in the Cipla Territory, complete a physical
and demonstrable technology transfer and secure all data from the Phase 2b study for inclusion in the safety database for the Cipla Territory.
We will share costs with Cipla during the Wind Down Period in the same proportions discussed above, but subject to a maximum reimbursement
amount by Cipla as approved by the joint steering committee.
After
the conclusion of the Wind Down Period, Pulmatrix will bear no further financial responsibility for the commercialization and development with respect to the Product in the Cipla Territory, with such commercialization and development expenses
of the Product in the Cipla Territory to be borne at Cipla’s sole cost and expense after January 6, 2024. We will
receive 2% royalties on any potential future net sales by Cipla outside the United States.
Intellectual
Property
Patents
and Patent Applications
We
protect our intellectual property by filing and advancing patent applications and maintaining granted patents on our iSPERSETM
platform technology and in-licensed kinase inhibitors, which includes claims to compositions of matter and methods of use for
our PUR3100, PUR1800, PUR1900 and other programs, as well as manufacturing processes, devices and packaging relevant to our iSPERSETM
platform and product candidates.
The
status of our patent portfolio changes frequently in the ordinary course of patent prosecution. As of December 31, 2023, our patent portfolio
related to iSPERSETM included approximately 143 granted patents, 19 of which are granted US patents, with expiration
dates from 2024 to 2037, and approximately 56 additional pending patent applications in the US and other jurisdictions. Our in-licensed
portfolio related to kinase inhibitors included approximately 276 granted patents, 33 of which are granted US patents, with expiration
dates from 2029 to 2035, and approximately 22 additional pending patent applications in the US and other jurisdictions. We have national
phase applications pending in Australia, Brazil, Canada, China, Europe, Israel, India, Japan, Korea, Mexico, New Zealand, Russia, and
the United States that cover certain formulations and methods of use relevant to our PUR3100 program.
There
can be no assurance that the patent applications will be granted. 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, the patent term is 20 years from the earliest date of
filing a non-provisional patent application. In the United States, the patent term of a patent that covers a FDA-approved drug may also
be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA
regulatory review process. The length of the patent term extension is related to the length of time the drug is under regulatory review.
Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only
one patent applicable to an approved drug may be extended. In the future, if and when our products receive FDA approval, we expect to
apply for patent term extensions on patents covering those products. Similar provisions are available in Europe and other foreign jurisdictions
to extend the term of a patent that covers an approved drug. We plan to seek patent term extensions to extend the patent coverage of
any of our products that received regulatory approval in any jurisdiction where these extensions are available. However, there is no
guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment on whether such extensions
should be granted, and if granted, the length of such extensions.
The
patent positions of biotechnology companies like ours are generally uncertain and involve complex legal, scientific and factual questions.
In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can
be reinterpreted after issuance. Consequently, we may not obtain or maintain adequate patent protection for any of our product candidates.
We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether
the claims of any issued patents will provide sufficient proprietary protection from competitors. Any patents that we hold may be challenged,
circumvented or invalidated by third parties.
Trade
Secrets
We
also rely on trade secret protection of our confidential and proprietary information, including the iSPERSETM
technology. Although we take steps to protect our proprietary information and trade secrets, including through contractual means with
our employees, consultants and others, 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. It is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors
to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These confidentiality
agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual
during the course of the individual’s relationship with us must be kept confidential and not disclosed to third parties except
in specific circumstances. Our confidentiality agreements with our employees also provide that all inventions conceived by the employee
in the course of employment with us or from the employee’s use of our confidential information are our exclusive property.
Manufacturing
We
do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates.
We have small-scale production capabilities and generally perform early process development for our product candidates to produce the
quantities necessary to conduct preclinical studies of our investigational product candidates. We do not have, and do not currently plan
to acquire or develop, the facilities or capabilities to manufacture bulk drug substance or drug product for use in human clinical studies.
We rely on contract manufacturing organizations (“CMOs”) and third-party contractors to manufacture drug substance and drug
product required for our clinical studies. We expect to continue to rely on CMOs to manufacture drug substances and drug products under
the appropriate current Good Manufacturing Practices (“cGMP”) conditions to perform clinical studies for the foreseeable
future. We also contract with CMOs for the labeling, packaging, storage and distribution of investigational drug products. These arrangements
allow us to maintain a more flexible infrastructure while focusing our expertise on researching and developing our products.
We
expect to continue to rely on contract manufacturers to produce sufficient quantities of our product candidates in accordance with the
appropriate cGMPs for the pertinent phase of clinical trials. cGMP compliance includes strict adherence to regulations for quality control,
quality assurance, and the maintenance of records and documentation. The manufacturing facilities that manufacture our approved drug
products, if any are approved in the future, must comply with the FDA’s cGMP regulation requirements and have acquired FDA or other
regulatory approval for the manufacturing of our commercial products. Our contract manufacturers may also be subject to inspections of
facilities by regulatory authorities to ensure compliance with applicable regulations. Contract manufacturers often encounter difficulties
involving production yields, quality control and quality assurance, as well as shortages of qualified personnel. We have little or no
direct control over our manufacturers’ compliance with these regulations and standards. Failure to comply with applicable regulatory
requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval, product seizure
or recall, or withdrawal of product approval. These actions could have a material impact on the availability of products.
Suppliers
We
also rely on third-party contract manufacturers to supply the APIs that are used to formulate our therapeutic candidates. We place purchase
orders with different contract manufacturers for the APIs required for PUR3100, PUR1800 and PUR1900. We additionally rely on third-party
vendors to supply raw materials for our APIs and drug products.
Research
and Development
For
fiscal years ended December 31, 2023 and 2022, we spent approximately $15.5 million and $18.2 million, respectively, on research and
development activities.
Government
Regulation
Pharmaceutical
companies are subject to extensive regulation by national, state and local agencies, such as the FDA, in the United States and the European
Medicines Agency in Europe. The manufacture, distribution, marketing, and sale of pharmaceutical products are subject to government regulation
in the United States and various foreign countries. Additionally, in the United States, we must follow rules and regulations established
by the FDA requiring the presentation of data indicating that our products are safe and efficacious and are manufactured in accordance
with cGMP regulations. If we do not comply with applicable requirements, we may be fined, the government may refuse to approve our marketing
applications or allow us to manufacture or market its products, and we may be criminally prosecuted. We and our manufacturers and clinical
research organizations may also be subject to regulations under other federal, state and local laws, including, but not limited to, the
U.S. Occupational Safety and Health Act, the Resource Conservation and Recovery Act, the Clean Air Act and import, export and customs
regulations as well as the laws and regulations of other countries. Pharmaceutical companies must ensure their compliance with the Foreign
Corrupt Practices Act and federal healthcare fraud and abuse laws, including the False Claims Act, and the U.S. government has increased
its enforcement activity regarding illegal marketing practices domestically and internationally.
These
regulatory requirements impact our operations and differ from one country to another, such that securing the applicable regulatory approvals
of one country does not imply the approval of another country. However, securing the approval of a more stringent body, e.g., the FDA,
may facilitate receiving the approval by a regulatory authority in a different country where the regulatory requirements are similar
or less stringent. The approval procedures involve high costs and are manpower intensive and usually extend over many years and require
highly skilled and professional resources.
FDA
Approval Process
The