UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
10-K
(Mark
One)
FOR
THE FISCAL YEAR ENDED MARCH 31, 2024
OR
Commission
file number: 001-38892
BEYOND
AIR, INC.
(Exact
name of registrant as specified in its charter)
(Address of principal executive offices) (Zip Code)
516-665-8200
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class: Trading Symbol Name of each exchange on which registered:
Common Stock, par value $0.0001 per share XAIR The Nasdaq Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act:
None
Indicate
by a check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
Indicate
by a check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934.
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. ☐
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 ☒
As
of September 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market
value of the registrant’s voting stock held by non-affiliates was approximately $66.9 million based on the last reported sale price
of the registrant’s common stock on the Nasdaq Capital Market.
There
were 45,900,821 shares of common stock outstanding as of June 24, 2024.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
Beyond
Air, Inc.
TABLE
OF CONTENTS
FORM
10-K
For
the Year Ended March 31, 2024
INDEX
PART I 6
Item 1. Business 6
Item 1A. Risk Factors 31
Item 1B. Unresolved Staff Comments 74
Item 1C. Cybersecurity 74
Item 2. Properties 75
Item 3. Legal Proceedings 75
Item 4. Mine Safety Disclosures 75
Item 6. (Reserved) 76
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 83
Item 8. Financial Statements and Supplementary Data 83
Item 9A. Controls and Procedures 84
Item 9B. Other Information 84
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 84
PART III 85
Item 10. Directors, Executive Officers and Corporate Governance 85
Item 11. Executive Compensation 92
Item 14. Principal Accounting Fees and Services 99
Item 15. Exhibits and Financial Statement Schedules 100
References
in this Annual Report on Form 10-K (this “Annual Report”) to the “Company,” “Beyond Air,” “we,”
“our,” or “us” mean Beyond Air, Inc. and its subsidiaries except where the context otherwise requires.
FORWARD-LOOKING
STATEMENTS AND MARKET DATA
This
Annual Report contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions
for forward-looking statements contained in Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section
21E of the Securities Exchange Act of 1934 (the “Exchange Act”). All statements other than statements of historical facts
contained in this Annual Report, including statements regarding our future results of operations and financial position, business strategy,
approved product and product candidates, certifications or approvals, timing of our clinical development activities, research and development
costs, our commercialization plans and the expected timing thereof, timing and likelihood of success, and the plans and objectives of
management for future operations and future results of anticipated products are forward-looking statements. These statements involve
known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In
some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,”
“expect,” “plan,” “anticipate,” “expect,” “could,” “intend,”
“target,” “project,” “contemplate,” “believe,” “estimate,” “predict,”
“potential,” or “continue” or the negative of these terms or other similar conditional expressions. The forward-looking
statements in this Annual Report are only predictions. We have based these forward-looking statements largely on our current expectations
and projections about future events and financial trends that we believe may affect our business, financial condition and results of
operations. These forward-looking statements speak only as of the date of this Annual Report and are subject to a number of important
factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described
under the sections in this Annual Report titled “Risk Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” as well as the following:
-
our ability to successfully commercialize our LungFit® PH system in the U.S.;
-
our ability to obtain a CE Certificate of Conformity to CE mark LungFit® in the European Union (the “EU”);
-
our expectation to incur losses for the next few years;
-
our ability to predict accurately the demand for our products, and products under development and to develop strategies to address markets
successfully;
-
the possibility that products may contain undetected errors or defects or otherwise not perform as anticipated;
-
the anticipated development of markets we sell our products into and the success of our products in these markets;
-
our future capital needs and our need to raise additional funds;
-
our ability to build a pipeline of product candidates and develop and commercialize our approved products;
-
our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary certifications
or regulatory approvals;
-
our ability to maintain our existing or future collaborations or licenses;
-
our ability to protect and enforce our intellectual property rights;
-
federal, state, and foreign regulatory requirements, including the U.S. Food and Drug Administration (“FDA”) regulation of
our approved product and product candidates;
-
our ability to obtain and retain key executives and attract and retain qualified personnel; and
-
our ability to successfully manage our growth, including as a commercial-stage company.
Moreover,
we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management
to predict all risk factors and uncertainties.
You
should read this Annual Report and the documents that we reference in this Annual Report completely and with the understanding that our
actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary
statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained
herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Beyond
Air, Inc., the Beyond Air logo, and other trademarks or service marks of Beyond Air, Inc. appearing in this Annual Report are the property
of Beyond Air, Inc. This Annual Report also includes trademarks, tradenames and service marks that are the property of other organizations.
Solely for convenience, trademarks and tradenames referred to in this Annual Report may appear without the ® and TM
symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable
law, our rights, or that the applicable owner will not assert its rights, to these trademarks and tradenames.
MARKET,
INDUSTRY AND OTHER DATA
This
Annual Report contains estimates, projections, market research and other information concerning our industry, our business, markets for
LungFit® PH and our product candidates and the size of those markets, the prevalence of certain medical conditions, LungFit®
PH market access, prescription data and other physician, patient and payor data. Unless otherwise expressly stated, we obtain this
information from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry,
medical and general publications, government data and similar sources as well as from our own internal estimates and research and from
publications, research, surveys and studies conducted by third parties on our behalf. Information that is based on estimates, projections,
market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially
from events and circumstances that are reflected in this information. As a result, you are cautioned not to give undue weight to such
information.
SUMMARY
OF PRINCIPAL RISK FACTORS
This
summary briefly lists the principal risks and uncertainties facing our business, which are only a select portion of those risks. A more
complete discussion of those risks and uncertainties is set forth in Part I, Item 1A of this Annual Report, entitled Risk Factors. Additional
risks not presently known to us or that we currently deem immaterial may also affect us. If any of these risks occur, our business, financial
condition or results of operations could be materially and adversely affected.
Our
business is subject to the following principal risks and uncertainties:
Risks
Related to our Financial Position and Capital Requirements
Risks
Related to Commercialization of our Approved Product or Product Candidates
Risks
Related to the Discovery and Development of Our Product Candidates
Risks
Related to our Reliance on Third Parties
Risks
Related to our Intellectual Property
Risks
Related to our Business Operations
● Conditions in Israel may materially and adversely affect our business.
Risks
Related to the Ownership of our Common Stock
Risks
Related to Employee Matters
● Our employees may engage in misconduct or other non-compliant activities.
General
Risk Factors
PART
I
ITEM
1. BUSINESS
Business
Overview
We are a commercial-stage medical device and biopharmaceutical company developing a platform of nitric oxide (“NO”) generators
and delivery systems (the “LungFit® platform”) capable of generating NO from ambient air. Our first device,
LungFit® PH received premarket approval (“PMA”) from the FDA in June 2022. The NO generated by the LungFit®
PH system is indicated to improve oxygenation and reduce the need for extracorporeal membrane oxygenation in term and near-term
(>34 weeks gestation) neonates with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary
hypertension in conjunction with ventilatory support and other appropriate agents. This condition is commonly referred to as persistent
pulmonary hypertension of the newborn (“PPHN”). The LungFit® platform can generate NO up to 400 parts per
million (“ppm”) for delivery to a patient’s lungs directly or via a ventilator. LungFit® can deliver
NO either continuously or for a fixed amount of time at various flow rates and has the ability to either titrate dose on demand or maintain
a constant dose. In July 2022, we commenced marketing LungFit® PH in the United States for PPHN as a medical device.
LungFit®
can be used to treat patients on ventilators that require NO, as well as patients with chronic or acute severe lung infections
via delivery through a breathing mask or similar apparatus. Furthermore, we believe that there is a high unmet medical need for patients
suffering from certain severe lung infections that the LungFit® platform can potentially address. Our current areas of
focus with LungFit® are PPHN, viral community-acquired pneumonia (“VCAP”) including COVID-19, bronchiolitis
(“BRO”), nontuberculous mycobacteria (“NTM”) lung infection and those with various severe lung infections with
underlying chronic obstructive pulmonary disease (“COPD”). Our current product candidates will be subject to premarket reviews
and approvals by the FDA, certification through the conduct of a conformity assessment by a notified body in the EU for the product to
be CE marked, as well as comparable foreign regulatory authorities.
With
Beyond Air’s focus on NO and its effect on the human condition, there are two additional programs that do not utilize our LungFit®
system. Through our majority-owned affiliate Beyond Cancer, Ltd. (“Beyond Cancer”), NO is used to target solid tumors.
The LungFit® platform is not utilized for the solid tumor indication due to the need for ultra-high concentrations of
gaseous nitric oxide (“UNO”). A proprietary delivery system has been developed that is designed to safely deliver UNO in
excess of 10,000 ppm directly to a solid tumor. This program has advanced to phase 1 clinical trials.
On
November 4, 2021, Beyond Air reorganized its oncology business into a new private company called Beyond Cancer. Beyond Air’s preclinical
oncology team and the exclusive right to the intellectual property portfolio utilizing UNO for the treatment of solid tumors now reside
with Beyond Cancer. Beyond Air has 80% ownership in Beyond Cancer.
The
second program, which does not utilize the LungFit® platform, partially inhibits neuronal nitric oxide synthase (“nNOS”)
in the brain to treat neurological conditions. The first target indication is autism spectrum disorder (“ASD”). ASD is a
serious neurodevelopmental and behavioral disorder, and one of the most disabling conditions and chronic illnesses in children. ASD includes
a wide range of developmental disorders that share a core of neurobehavioral deficits manifested by abnormalities in social interactions,
deficits in communication, restricted interests, and repetitive behaviors. In 2023, the CDC reported that approximately 1 in 36 children
in the U.S. is diagnosed with an ASD. The cost of caring for Americans with autism had reached $268 billion in 2015 and would rise to
$461 billion by 2025 in the absence of more-effective interventions and support across the life span. We expect this program to progress
from preclinical to a phase 1 first-in-human clinical trial in 2025. Beyond Air has formed a wholly owned subsidiary called NeuroNOS
which is responsible for pre-clinical and clinical development.
Our
approved product and active pipeline of product candidates is shown in the tables below:
Our
programs represent large market opportunities:
All
figures are Company estimates for peak year sales: Global sales potential includes U.S. sales potential.
LungFit®
PH is the first FDA-approved system using our patented plasma pulse technology to generate on-demand NO from ambient air and, regardless
of dose or flow, deliver it to a ventilator circuit. The device uses a medical air compressor to drive room air through a plasma chamber
in the center of the unit where pulses of electrical discharge are created between two electrodes. The system uses the power equivalent
to a 60-watt lightbulb to ionize the nitrogen and oxygen molecules, which then combine as NO with low levels of nitrogen dioxide (“NO2”)
created as a byproduct. The products are then passed through a Smart Filter, which removes the toxic NO2 from the internal
circuit. With respect to PPHN, the novel LungFit® PH is designed to deliver a dosage of NO to the lungs that is consistent
with current guidelines for delivery of 20 ppm NO with a range of 0.5 ppm – 80 ppm (low concentration NO) for ventilated patients.
We
believe the ability of LungFit® PH to generate NO from ambient air provides us with many competitive advantages over the
current standard of NO delivery systems in the U.S., the EU, Japan and other markets. For example, LungFit® PH does not
require the use of a high-pressure cylinder, does not require cumbersome purging procedures and places less burden on hospital staff
in carrying out safety procedures.
Our
novel LungFit® platform can also deliver a high concentration (>150 ppm) of NO directly to the lungs, which
we believe has the potential to eliminate microbial infections including bacteria, fungi and viruses, among others. We believe that current
FDA-approved NO vasodilation treatments would have limited success in treating microbial infections given the low concentrations of NO
being delivered (<100 ppm). Given that NO is produced naturally by the body as an innate immunity mechanism, at a concentration of
200 ppm, supplemental high dose NO should aid in the body’s fight against infection. Based on our preclinical studies and clinical
trials, we believe that 150 ppm is the minimum therapeutic dose to achieve the desired pulmonary antimicrobial effect of NO. To date,
neither the FDA nor comparable foreign regulatory agencies in other countries or regions have approved any NO formulation and/or delivery
system for >80 ppm NO.
LungFit®
PH for the treatment of Persistent Pulmonary Hypertension of the Newborn (PPHN)
In
June 2022, the FDA approved LungFit® PH to improve oxygenation and reduce the need for extracorporeal membrane oxygenation
in term and near-term (>34 weeks gestation) neonates with hypoxic respiratory failure associated with clinical or echocardiographic
evidence of pulmonary hypertension in conjunction with ventilatory support and other appropriate agents. LungFit® PH is
the inaugural device from the LungFit® platform of NO generators that use patented ionizer technology and is the first
FDA-approved product for Beyond Air.
We
submitted a PMA supplement to the FDA in November 2023 for the expansion of the label to include certain cardiac surgeries and we expect
to receive CE mark under the Medical Device Regulation (“MDR”) in the EU during the second half of calendar 2024. According
to the most recent year-end report from Mallinckrodt Pharmaceuticals (“Mallinckrodt”), sales of NO were $298.2 million in
2023 (down from $339.7 million in 2022) for the United States, Canada, Japan, Mexico and Australia, with ~90% in the United States. Outside
of the U.S. there are multiple market participants which translates to considerably lower sales than in the U.S. We believe the U.S.
sales potential of LungFit® PH in PPHN to be approximately $350 million and worldwide sales potential to be approximately
$700 million. We initiated the first phase of our commercial launch in July 2022 (the limited launch phase to introduce Lungfit PH and
Beyond Air to hospitals), and entered into phase 2 (target initial market share gains in certain geographies) with an expanded commercial
presence during the spring of 2023 in the U.S. and will continue to work toward a potential launch in the EU and globally in 2024 and
beyond.We anticipate entering the final phase of our launch process in calendar 2025 where we will equip our commercial organization
to become the market leader in the U.S. in a few years.
LungFit®
PRO for the treatment of viral lung infections in hospitalized patients
Viral
Community-Acquired Pneumonia (including COVID-19)
Viral
pneumonia in adults is most commonly caused by rhinovirus, respiratory syncytial virus (“RSV”) and influenza virus. However,
newly emerging viruses (including SARS-CoV-1, SARS-CoV-2, avian influenza A, and H1N1 viruses) have been identified as pathogens contributing
to the overall burden of adult viral pneumonia. COVID-19 is an infectious disease caused by SARS-CoV-2, that resulted in a global pandemic,
causing millions of hospitalizations and over 6.6 million deaths worldwide as of January 2023 according to the World Health Organization.
Excluding the pandemic, there are approximately 350,000 annual viral pneumonia hospitalizations in the U.S., and up to 16 million annual
viral pneumonia hospitalizations globally. For the broader annual viral pneumonia hospitalizations, we believe U.S. market potential
to be greater than $1.5 billion and worldwide market potential to be greater than $3 billion.
We
initiated a pilot clinical trial in late 2020 using our novel LungFit® PRO system at 150 ppm to treat patients with VCAP. The trial
was a multi-center, open-label, randomized clinical trial in Israel, including patients infected with COVID-19. Patients were randomized
in a 1:1 ratio to receive either inhalations of 150 ppm NO given intermittently for 40 minutes four times per day for up to seven days
in addition to standard supportive treatment (“NO+SST”) or standard supportive treatment alone (“SST”). Endpoints
related to safety (primary endpoint), oxygen saturation and ICU admission, among others, were assessed.
We
presented results from the pilot clinical trial at the 32nd European Congress of Clinical Microbiology & Infectious Diseases
(ECCMID 2022), which took place from April 23, 2022 through April 26, 2022 as a hybrid event both onsite in Lisbon, Portugal and online.
At the time of the data cut off, the trial enrolled a total of 40 patients hospitalized for VCAP (SARS-CoV-2, n=39; other viruses n=1).
The intent-to-treat population included 35 patients with 16 patients in the inhaled NO group and 19 patients in the control group. The
primary COVID-19 treatments used during the clinical trial were Remdesivir (>30%) and Dexamethasone (>65%). Safety data from the
clinical trial show that inhaled NO treatment was well tolerated overall with no treatment related adverse events as assessed by the
investigators. There were two serious adverse events (“SAEs”) reported in the group receiving inhaled NO along with SST,
which were determined to be related to underlying conditions and unrelated to clinical trial drug/device. From an efficacy perspective,
results show a trend of shortening length of stay (“LOS”) by a factor 1.8 in favor of inhaled NO treatment. Duration of oxygen
support, measured in-hospital and at home, was significantly shorter (p=0.0339) for inhaled NO treated patients. Patients with unstable
oxygen saturation during hospitalization, 66.7% of the inhaled NO treatment group, reached stable saturation of ≥93% during hospital
stay as compared to 26.7% in the SST group.
Following
completion of the clinical trial and the 180-day follow-up period, incremental data were provided in a poster presentation at IDWeek
2022 held from October 19, 2022, through October 23, 2022 in Washington, D.C. In addition to the positive clinical results provided at
ECCMID 2022, the poster showed a larger decline in c-reactive protein (“CRP”) from baseline for patients treated with NO
+ SST compared to the control group. Analysis of the data provides compelling evidence that high concentration NO delivery with the LungFit®
PRO generator and delivery system can be a powerful tool against any type of pneumonia, especially COVID-19. The Company commenced a
clinical trial in the second half of calendar 2023 in the United States and has made the decision to pause this study pending future funding.
Bronchiolitis
(BRO)
Bronchiolitis
is the leading cause of hospital admission in children less than 1 year of age. The incidence is estimated to be 150 million new cases
a year worldwide, with 2-3% (over 3 million) of them severe enough to require hospitalization. Worldwide, 95% of all cases occur in developing
countries. In the U.S., there are approximately 120,000 annual bronchiolitis hospitalizations and approximately 3.2 million annual child
hospitalizations globally. Currently, there is no approved treatment for bronchiolitis. The treatment for acute viral lung infections
that cause bronchiolitis in infants is largely supportive care and is based primarily on prolonged hospitalization during which the infant
receives a constant flow of oxygen to treat hypoxemia, a reduced concentration of oxygen in the blood. In addition, systemic steroids
and inhalation with bronchodilators are sometimes utilized until recovery, but we believe that these treatments do not successfully reduce
hospital LOS. We believe the U.S. market potential for bronchiolitis to be greater than $500 million and worldwide market potential to
be greater than $1.2 billion.
The
pivotal clinical trial for bronchiolitis was originally set to be performed in the winter of 2020/21 but was delayed due to the pandemic.
We have completed three successful pilot studies for bronchiolitis. A further analysis of the three previously reported pilot studies
was presented at the ATS International Conference 2021, which was held virtually from May 14, 2021 through May 19, 2021. Analysis across
the studies (n=198 infants, mean age 3.9 months) showed that 150 ppm – 160 ppm NO administered intermittently was generally safe
and well tolerated with adverse event rates similar among treatment groups with no reported treatment-related serious adverse events.
The short course of treatments with intermittent high concentration inhaled NO was effective in shortening hospital LOS and accelerating
time to fit for discharge – a composite endpoint of clinical signs and symptoms to indicate readiness to be evaluated for hospital
discharge. This treatment was also effective in accelerating time to stable oxygen saturation – measured as SpO2 ≥ 92% in room
air. Additionally, NO at a dose of 85 ppm NO showed no difference compared to control for all efficacy endpoints, while 150 ppm NO showed
statistical significance when compared to control.
Additionally,
long-term safety data for high concentration inhaled NO in bronchiolitis was presented at the Pediatric Academic Societies Meeting 2022
(PAS 22), which was held in Denver, Colorado from April 21, 2022 through April 25, 2022. A total of 101 infants from the three prior
pilot studies for bronchiolitis (n=198) participated in the long-term follow-up clinical trial. Clinical trial endpoints for the long-term
safety clinical trial included percentage of patients re-hospitalized for bronchiolitis related reasons, such reasons included wheezing
episodes, pneumonia, and asthma and the percentage of patients re-hospitalized for any reason. Data from the clinical trial showed the
re-hospitalization rate per 100 Patient Exposure Years (PEY) due to bronchiolitis related reasons trended favorably for the inhaled NO
group. In addition, the long-term patient re-hospitalization rate for any reason was similar between inhaled NO and control groups. As
such, the clinical trial concluded that the treatment of hospitalized infants with acute bronchiolitis by intermittent high dose inhaled
NO shows a favorable long-term safety profile.
We
believe that the entirety of data at 150 ppm – 160 ppm NO in both adult and infant patient populations supports further development
of LungFit® PRO in a pivotal clinical trial for patients hospitalized with VCAP or bronchiolitis.
LungFit®
GO for the treatment of Nontuberculous mycobacteria (NTM)
NTM
lung infection is a rare and serious pulmonary disease associated with increased morbidity and mortality. Patients with NTM lung disease
may experience a multitude of symptoms such as fever, weight loss, cough, lack of appetite, night sweats, blood in the sputum and fatigue.
Patients with NTM lung disease, specifically Mycobacterium abscessus (M. abscessus) representing 20% to 25% of all NTM
and other forms of NTM that are refractory to antibiotic therapy, frequently require lengthy and repeated hospital stays to manage
their condition. There are no treatments specifically indicated for the treatment of M. Abscessus lung disease in North America,
Europe or Japan.
There
are approximately 50,000 to 90,000 people with NTM infections in the U.S. In Asia, the number of patients suffering from NTM surpasses
what is seen in the U.S. There is one inhaled antibiotic approved for the treatment of refractory Mycobacterium avium complex
(“MAC”). Current guideline-based approaches to treat NTM lung disease involve multi-drug regimens of antibiotics that may
cause severe, long lasting side effects, and treatment can be longer than 18 months. Median survival for NTM MAC patients is approximately
13 years while median survival for patients with other variations of NTM is typically 4.6 years. The prevalence of human disease attributable
to NTM has increased over the past two decades. In a clinical trial conducted between 2007 and 2016, researchers found that the prevalence
of NTM in the U.S. is increasing at approximately 7.5% per year. M. abscessus treatment costs are estimated to be more than double
that of MAC. A 2015 publication by co-authors from several U.S. government departments stated that cases in 2014 alone cost the U.S.
healthcare system approximately $1.7 billion. For this indication, we believe U.S. sales potential to be greater than $1 billion and
worldwide sales potential to be greater than $2.5 billion.
In
December 2020 we began a 12-week, multi-center, open-label clinical trial in Australia intended to enroll approximately 20 adult patients
with chronic refractory NTM lung disease. We received a grant of up to $2.17 million from the Cystic Fibrosis Foundation (“CFF”)
to fund this clinical trial and advance the clinical development of inhaled NO to treat NTM pulmonary disease. The trial enrolled both
cystic fibrosis (“CF”) and non-CF patients infected with MAC, M. abscessus or any strain of NTM. The clinical trial
consisted of a run-in period followed by two treatment phases. The run-in period provided a baseline for the efficacy endpoints. The
first treatment phase took place over a two-week period and began in the hospital setting where patients were titrated from 150 ppm NO
up to 250 ppm NO over several days. During this phase patients received NO for 40 minutes, four times per day while Methemoglobin (“MetHb”)
levels were monitored. Patients were also trained to use LungFit® GO and subsequently discharged to complete the remaining
portion of the two-week treatment period at their home at the highest tolerated NO concentration. For the second treatment phase, a 10-week
maintenance phase, the administration was twice daily. The clinical trial evaluated safety, quality of life, physical function, and bacterial
load among other parameters.
At
the American Thoracic Society International Conference 2022 (ATS 2022), which was held in San Francisco from May 13, 2022 through May
18, 2022, we presented positive interim data from the ongoing clinical trial. At the time of data cutoff on April 4, 2022, a total of
15 patients were enrolled in the pilot clinical trial. The mean age of patients was 62.1 years (range: 22 – 82 years) with the
majority female (80%), a distribution consistent with real-world NTM disease. All 15 patients were successfully titrated to 250 ppm NO
in the hospital setting, and no patients required dose reductions during the subsequent at-home portion of the clinical trial. Patients
were followed up for 12 weeks after the 12-week treatment period was completed.
After
completion of the clinical trial, we presented positive results at the American College of Chest Physicians (“CHEST”) annual
meeting, held from October 16, 2022 through October 19, 2022, further supporting development of intermittent high dose NO for the treatment
of NTM. The clinical trial demonstrated that high dose NO treatment was well-tolerated in both the home and hospital settings. During
the 10-week at-home treatment period of the clinical trial, a total of 2,492 inhalations were self-administered with overall high treatment
compliance (>90%). There were no SAEs related to treatment discontinuations reported over the 12-week treatment or 12-week follow
up periods. Key efficacy endpoints showed strong results with improvement seen in the majority of quality-of-life domains. Respiratory
function and physical function were maintained during treatment and follow-up. Trends in the reduction of microbial load were observed
and one patient achieved culture conversion with three consecutive negative sputum samples. We anticipate commencing a pivotal clinical
trial in calendar year 2026 following discussions with the FDA.
Our
program in COPD is in the preclinical stage and will move forward subject to obtaining additional financing.
Ultra-High
Concentration NO (UNO) in solid tumors through majority-owned affiliate Beyond Cancer, Ltd.
In
the fourth calendar quarter of 2021, Beyond Cancer, our majority-owned affiliate, raised $30.0 million in a private placement of common
shares. The investors purchased a 20% equity ownership in Beyond Cancer, while Beyond Air maintained 80% equity ownership. The funding
is being used to accelerate ongoing preclinical work, including the completion of IND-enabling studies, completion of a Phase 1 clinical
trial, expansion of preclinical programs for combination studies, hiring of additional Beyond Cancer team members, and optimization of
the delivery system, as well as for general corporate purposes.
Beyond
Cancer will benefit from Beyond Air’s NO expertise, IP portfolio, preclinical oncology team, and regulatory progress, and will
pay Beyond Air a single-digit royalty on all future revenues. Beyond Cancer is being led by a seasoned leadership team with experience
in emerging healthcare companies and clinical oncology.
Selena
Chaisson, MD, currently serves as Beyond Cancer’s Chief Executive Officer. Previously, Dr. Chaisson was the Director of Healthcare
Investments at Bailard, where she spent 16 years focusing on highly specialized, emerging healthcare opportunities with more than one-third
of her portfolio dedicated to investing in oncology companies. Prior to Bailard, Dr. Chaisson held senior executive roles at RCM Capital
Management and Tiger Management. RCM Capital Management was acquired by Dresdner Bank in 1996 and then subsequently acquired by Allianz
Global Investors U.S. in 2001. Dr. Chaisson received a BS in microbiology in 1987 from Louisiana State University in Baton Rouge, LA,
where she graduated summa cum laude. She earned her MBA and MD from Stanford University in 1992 and 1993, respectively.
The
Beyond Cancer Board of Directors consists of six members:
● Selena Chaisson, MD, Director, and Chief Executive Officer of Beyond Cancer
● Robert Carey, Director, and Board Member of Beyond Air
● David Dvorak, Director
● Gregory Berk, MD, Director
UNO
has shown anticancer properties in preclinical trials by eliciting an immune response from the host. We have released preclinical data
at several medical/scientific conferences showing the promise of delivering NO directly to tumors at concentrations of 20,000 ppm –
200,000 ppm. Results showed that local tumor ablation with NO conveyed anti-tumor immunity to the host. In April 2022, we presented in
vivo and in vitro preclinical data at the American Association for Cancer Research (“AACR”) 2022 annual meeting.
The in vivo study assessed the mode of action following a single 5-minute gaseous NO (“gNO”) treatment which provided
data showing an effect on the primary tumor 14 days post-treatment. These data showed that intratumoral injections of concentrations
of gNO at 20,000 and 50,000 ppm led to increased recruitment of T cells, B cells, macrophages, and dendrocytes to the primary tumor.
An elevated number of T cells and B cells were also detected in the spleen and blood 21 days following gNO treatment. In addition, at
the same time point, a marked reduction in the number of myeloid-derived suppressor cells was observed in the spleen. Results from the
in vitro study showed that exposure of six different cancer cell lines – including human ovarian and pancreatic and mouse
lung, melanoma, colon, and breast – to UNO ranging from 10,000 ppm to 100,000 ppm for up to 10 minutes resulted in a dose-dependent
cytotoxic response. The higher concentration doses of gNO led to near-instant cell death, while the lower concentration doses required
a longer exposure period to elicit cell death. Cell viability was assessed using two assays: XTT and clonogenic assay. After one minute
of exposure to 25,000 ppm gNO, less than 10% viability was observed in all cell lines.
The
second half of calendar year 2022 was a time of significant progress for Beyond Cancer. On August 23, 2022, we announced that the first
patient was treated in a first-in-human Phase 1 clinical trial to assess the safety and immune biomarkers of UNO therapy. In November,
at the annual meeting of the Society for Immunotherapy of Cancer (“SITC”), we presented new in vivo combination data that
support the potential of our novel UNO therapy to treat various types of solid tumors in combination with immune checkpoint inhibitor
(“ICI”) therapies, including anti-PD-1. The data presented at SITC appears to indicate that UNO in combination with anti-PD-1
treatment may lead to higher tumor regression rates and prolonged survival. Also in 2022, on December 13, we announced the publication
of preclinical data in the peer-reviewed journal Cancer Cell International (CCI), which showed that our proprietary tumor ablation technology
utilizing UNO induced a potent innate and adaptive immune response that prevented metastases and resulted in a statistically significant
survival benefit.
Calendar
year 2023 began with the announcement of Beyond Cancer’s entry into a sponsored research agreement with Stanford School of Medicine
and the appointment of Frederick M. Dirbas, MD, Associate Professor of Surgery, Division of Surgical Oncology, Stanford School of Medicine,
and Mark D. Pegram, MD, the Suzy Yuan-Huey Hung Endowed Professor of Medical Oncology at the Stanford School of Medicine, to the Beyond
Cancer Scientific Advisory Board (“SAB”). In addition to the research agreement, Dr. Dirbas was named as Chair of the SAB,
which provides guidance for ongoing preclinical studies as well as ongoing and planned future clinical trials in the use of UNO to treat
solid tumors. The newly appointed members of the SAB will work to provide input on the clinical development of Beyond Cancer’s
UNO technology, particularly as it relates to the U.S. regulatory submission.
In
April 2023, Beyond Cancer presented additional preclinical data for UNO therapy in solid tumors during the AACR 2023 annual meeting.
Data showed a statistically significant survival benefit for repeat dosing of UNO compared to anti-mCTLA-4 as monotherapy and repeat
doses of UNO prolonged survival in combination with anti-PD-1 compared to gNO alone. With regard to tumor volume, statistically significant
reductions were observed with repeat dosing of UNO versus anti-mPD-1 as a monotherapy and in combination with anti-CTLA-4 versus anti-CTLA-4
alone. Additionally, the data shows that short exposures between 10 seconds to one minute of tumor cells to UNO at increasing concentrations
of 25,000 ppm to 100,000 ppm NO significantly upregulate mPD-L1 expression in a dose and time-dependent manner. Also, in vivo experiments
exhibited a statistically significant day 1 increase in M1 macrophages, decrease in Tregs, and reduction in tumor cell viability was
directionally maintained through day 5. We believe that together with the known ability of NO to activate and recruit the immune system,
the data presented at this year’s AACR annual meeting appears to indicate that repeat dosing of UNO is feasible and may be effective
even in difficult-to-treat, non-immunogenic tumor types.
In
October 2023, Beyond Cancer presented positive pre-clinical data at the EORTC International Conference on Molecular Targets and Cancer
Therapeutics, demonstrating a statistically significant survival benefit in mice treated with UNO plus anti-PD1 versus anti-PD1 alone.
This was a pooled analysis of multiple studies done with 50,000 or 100,000 ppm NO for a single administration of 5 or 10 minutes. Additionally,
Beyond Cancer’s second manuscript was published in the Cells Journal in an article titled “Intratumoral Administration
of High-Concentration Nitric Oxide and Anti-mPD-1 Treatment Improves Tumor Regression Rates and Survival in CT26 Tumor-Bearing Mice.”
In
late December 2023, the Company’s safety review committee completed its review of the first 6 human subjects treated with UNO and
reported that there were no dose limiting toxicities at the 25,000 ppm NO concentration and the study may progress to the next concentration
of 50,000 ppm NO.
In
June 2024 at the American Society of Clinical Oncology (ASCO), the Company presented single agent treatment in relapsed or refractory
unresectable, primary or metastatic cutaneous and subcutaneous malignancies at UNO doses of 25,000 and 50,000 parts per million. The
immune biomarker data at Day 21, following a single 5 minute dose of UNO 50,000 ppm, demonstrated increases in dendritic cells, cytotoxic
T-cells, central memory T-cells and a favorable increase in the M1/M2 ratio. Myeloid Derived Suppressor Cells (MDSCs) also showed a 54%
decrease. In the 25,000 ppm cohort, the same stimulatory immune biomarkers were upregulated. UNO was generally well tolerated with primarily
Grade 1 related toxicities. One Grade 3 adverse event was deemed a dose limiting toxicity in the 50,000 ppm cohort resulting in the expansion
of the cohort to six total subjects.
The
Company also reported a case of relapsed/refractory Triple Negative Breast Cancer (TNBC) in which the subject showed no evidence of malignancy
in a satellite lesion 21 days following UNO treatment and a corollary, rapid and durable clinical resolution of radiation-induced dermatitis.
A
Phase 1b trial protocol has been submitted to the Israeli Ministry of Health (IMOH) and upon regulatory approval, this trial will enroll
up to 20 subjects with prior exposure to anti-PD-1 antibody that have either progressed, not achieved a response, or have prolonged stable
disease ( 12 weeks) on single agent anti-PD-1 without radiographic evidence of continued tumor reduction. Subjects enrolled in the Phase
1b trial will be treated with the UNO + anti-PD-1 combination upon completion of the Phase 1a trial.
Selective
neuronal nitric oxide synthase (nNOS) inhibitor for the treatment of neurological conditions in collaboration with Hebrew University
of Jerusalem
On
June 15, 2023, we announced that we had entered into an agreement with Yissum Research Development Company of the Hebrew University of
Jerusalem, LTD. (the “University”) to acquire the commercial rights for neuronal nitric oxide synthase (nNOS) inhibitors
being developed for the treatment of autism spectrum disorder (“ASD”) and other neurological conditions. Currently, there
are no FDA-approved therapies utilizing nNOS inhibitors specifically for the treatment of ASD. Under the terms of the agreement, Beyond
Air will make payments to the University over the two-year period from the date of the agreement for preclinical work. Also, we will
pay a low single-digit royalty on net sales and certain one-time payments based on clinical, regulatory and sales milestones.
Work
is currently being done by the University in a preclinical setting. We expect the program to progress into a phase 1 first-in-human clinical
trial in calendar year 2025.
Background
and NO Mechanism of Action
NO
is recognized as a vital molecule involved in many physiological and pathological processes. NO is naturally produced by the body’s
immune system to provide a first line of defense against invading pathogens. It is a powerful molecule with a short half-life of a few
seconds in the blood, enabling it to be cleared rapidly from the body. NO has been shown to play a critical role in the function of several
body systems. For example, as vasodilator of smooth muscles, NO enhances blood flow and circulation. In addition, NO is involved in regulation
of wound healing and immune responses to infection. The pharmacology, toxicity and other data for NO in humans is generally well known,
and its use has been approved by the FDA as a vasodilator. The precise effect of inhaled NO is dependent on concentration, oxidation
state and type of pathogen.
NO
has multiple immunoregulatory and antimicrobial functions that are likely to be of relevance to inhaled NO therapy. In vitro studies
suggest that NO possesses anti-microbial activity against common bacteria, gram positive and gram negative, as well as mycobacteria,
fungi, yeast, parasites and helminths. It has the potential to eliminate multi-drug resistant strains of the above. Anti-viral activity
covers respiratory viruses such as influenza, corona viruses, RSV and others. In healthy humans, NO has been shown to stimulate mucociliary
clearance, and low levels of nasal NO correlate with impaired mucociliary function in the human upper airway. Unlike other inhaled drugs,
NO is also a smooth muscle relaxant and avoids the concomitant bronchial constriction often associated with inhaled antibiotics and mucolytics.
A potential benefit of these multiple mechanisms may be that in addition to treating lung infections in CF patients, this suggests that
NO may be useful in directly treating the mucus caused by CF, which is the principal manifestation of the disease.
Nitric
Oxide and Infection
NO
possesses broad-spectrum anti-microbial activity acting against bacteria, fungi and viruses. NO is produced at high output as part of
the innate immune response. NO and its by-products (for example, reactive nitrogen species (“RNS”)) are responsible for the
process of killing microorganisms within white blood cells called macrophages and in organs such as the lungs and other mucolytic tissues.
More
than a decade ago, several research groups showed that NO and RNS possess anti-viral activity and affect several viruses including coxsackievirus,
RSV, influenza, severe acute respiratory syndrome (SARS), coronavirus, rhinovirus, herpes simplex virus, Epstein-Barr virus (EBV), and
others. NO has also been shown to be useful in preventing bacterial growth on surfaces.
Continuous
exposure to 150 ppm NO and above, especially in the lungs, may have side effects and cause damage to host cells. Intermittent exposure
to NO in cycles retains NO anti-microbial activity both in vitro and in animal model of infection. Exposure of bacteria to concomitant
30-minute treatments with 160 ppm NO resulted in a significant reduction in bacterial load. A similar dose has been shown to reduce viruses
(common influenza) by 30-100% in a canine kidney infection model. In vivo, in a pneumonia model in rats, inhaled 160 ppm NO, for 30 minutes,
every 4 hours, resulted in significant reduction in bacteria counts in the lungs, without affecting the body’s defense mechanisms,
and without any other adverse effect. In addition, we believe a daily dose of 160 ppm of NO can treat bovine respiratory disease (BRD)
in cattle.
Importantly,
several studies report synergy between NO and antibiotic drugs. Adjunctive treatment combining NO together with inhaled tobramycin antibiotics
or other anti-microbial agents has been shown to greatly enhance the efficacy of the antibiotics in dispersing P. aeruginosa biofilms
and to increase their ability to elicit anti-microbial activity. These studies suggest that adjuvant treatment combining NO with antibiotics
might have a beneficial role by reducing bacterial infectivity, and therefore reduce the dependency on antibiotics.
Beyond
Air Technology
We
have developed the Beyond Air NO generator and delivery system which we call LungFit®, a novel and precise delivery system
that uses NO generated from ambient air with a novel NO generator, the ionizer. Our system provides continuous monitoring and control
of the gaseous content administered during intermittent and continuous NO inhalation treatments, as well as a precise and reliable monitoring
system that is able to monitor patient status and alert medical staff to any adverse effects.
The
LungFit® system is innovatively designed to provide patients with a gaseous dose of NO (ranging from 0.5 ppm up to 400
ppm) combined with ambient air. The gaseous blend is supplied to the patient via a ventilator, face mask, or similar apparatus. LungFit®
is designed to minimize the time that NO is mixed with oxygen and air. The system is also designed to continuously monitor inhaled
NO concentration, NO2 concentration and oxygen. A dedicated screen allows for monitoring of the gas mixture. Further, our
approved product and product candidates resemble other inhalation systems, making them user friendly, with operation and maintenance