UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
10-K
(Mark One)
FOR THE FISCAL YEAR ENDED MARCH 31, 2025
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, 2024, 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 $24.9 million based on the last reported sale price of the registrant’s common
stock on the Nasdaq Capital Market.
There were 92,794,777 shares of
common stock of the registrant, par value $0.0001 per share, outstanding as of June 19, 2025.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Beyond Air, Inc.
TABLE OF CONTENTS
FORM 10-K
For the Year Ended March 31, 2025
INDEX
PART I 6
Item 1. Business 6
Item 1A. Risk Factors 31
Item 1B. Unresolved Staff Comments 73
Item 1C. Cybersecurity 73
Item 2. Properties 74
Item 3. Legal Proceedings 74
Item 4. Mine Safety Disclosures 74
Item 6. (Reserved) 75
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 82
Item 8. Financial Statements and Supplementary Data 82
Item 9A. Controls and Procedures 83
Item 9B. Other Information 83
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 83
PART III 84
Item 10. Directors, Executive Officers and Corporate Governance 84
Item 11. Executive Compensation 91
Item 14. Principal Accountant 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;
- our expectation to incur losses for the next year;
- 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. The Company’s 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 September 2022, we commenced marketing LungFit®
PH in the United States for PPHN as a medical device.
On November 26, 2024, the Company received European
CE mark approval of the LungFit PH® system for the following:
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 of
NO at concentrations > 100 parts per million (ppm) 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. The Company’s other areas of focus with the LungFit® platform beyond PPHN are
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 Bermuda Limited (“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 is currently in 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”). On June 15, 2023, the Company announced that it has entered
into an agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, LTD. (the “University”)
to acquire the commercial rights for nNOS inhibitors being developed for the treatment of ASD and other neurological conditions. Currently,
there are no FDA-approved therapies specifically for the treatment of ASD. Under the terms of the agreement, Beyond Air shall pay to the
University compensation for pre-clinical work over the three-year period from the date of the agreement. Also, the Company will pay to
the University a low single-digit royalty on net sales and certain one-time payments based on clinical, regulatory and sales milestones.
The Company expects this program to progress from preclinical to a phase 1 first-in-human clinical trial by the end of 2026.
On March 24, 2025, Beyond Air
reorganized its neurology business into a new private company called NeuroNOS Limited (“NeuroNOS”). Beyond Air’s infrastructure,
for example regulatory, quality, legal, etc, will continue to support the NeruoNOS team. Beyond Air has 88.2% ownership in NeuroNOS.
Our approved product and active
pipeline of product candidates is shown in the tables below:
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 logistics and 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.
On November 26, 2024, the company received European
CE mark approval of the LungFit PH® system for the following:
LungFit® PH is
the inaugural device from the LungFit® platform of NO generators that use patented ionizer technology and is the first
FDA-approved and CE Marked 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. According to the
most recent year-end report from Mallinckrodt Pharmaceuticals (“Mallinckrodt”), sales of NO were $261.4 million in 2024
(down from $303.2 million in 2023) 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 relative sales than in the U.S. We
believe the U.S. sales potential of LungFit® PH to be approximately $350 million and worldwide sales potential to be
approximately $700 million or greater. 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. We recently entered the final phase
of our launch process where we will equip our commercial organization to become the market leader in the U.S. in a few years. Since
receiving CE Mark in late November, 2024, we have received regulatory approvals in Australia, New Zealand, Hong Kong and Thailand
with our partner Getz Healthcare and are awaiting approvals in several other countries in South East Asia. Additionally, we have
signed new distribution agreements covering France, Italy, Turkey, India, Saudi Arabia, and Morocco,
among others. We anticipate significant contribution to revenues in fiscal 2026 and beyond from these and future partnerships.
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. 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 COVID-19 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. 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). 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), 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 2022 American College of Chest Physicians (“CHEST”) annual meeting, 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, pending funding, 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.
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 benefits 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.
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. On December 13, 2022, 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.
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 was
approved by the Israeli Ministry of Health (IMOH) in December 2024. This trial will enroll up to 15 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.
Both safety and efficacy will be evaluated. Completion of enrollment is anticipated by the end of calendar 2025.
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 shall pay to the University compensation for pre-clinical
work over the two-year period from the date of the agreement. Also, we will pay a low single-digit royalty on net sales and certain one-time
payments based on clinical, regulatory and sales milestones.
In the first
calendar quarter of 2025, NeuroNos, our majority-owned affiliate, raised $2.0 million in a private placement of common shares. The
investors purchased a 11.8% equity ownership in NeuroNos, while Beyond Air maintained 88.2% equity ownership. The private placement
remains open to investment at this time. The funding is being used to accelerate ongoing preclinical work, including IND-enabling studies as well as for general corporate purposes.
Work is currently being done by the University in
a preclinical setting. We expect this program to progress from preclinical to a phase 1 first-in-human clinical trial by the end of 2026.
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 that we believe will be
immediately familiar to medical staff. Our LungFit® system has been manufactured at commercial scale with a contract manufacturer.
When programmed for lung infections,
the LungFit®, is designed to specifically deliver NO at concentrations of 150 ppm and higher. We believe that the LungFit®
has a number of advantages over other NO formulation delivery systems. For example, it is:
● designed to be used by the patient, thus convenient and portable; and
We believe that our solution has
the potential for a number of additional benefits and opportunities, as follows:
NitricGen License
On January 31, 2018, the Company
entered into a definitive agreement to acquire a global, exclusive, perpetual, transferable license to the eNOGenerator and associated
critical assets including intellectual property, know-how, trade secrets and confidential information (the “License”) from
NitricGen Inc. (“NitricGen”). The eNOGenerator is a novel and precise delivery system that uses NO generated from ambient
air with a novel NO generator.
The Beyond Air LungFit®
system, which incorporates the eNOGenerator, has been designated as a medical device by the FDA. The eNOGenerator can generate NO on demand
for delivery to the lungs at concentrations ranging from 0.5 to 400 ppm. With the License, the Company expects that it will be able to
target all conditions requiring NO at any concentration, regardless of the need for intermittent or continuous dosing.
Under the terms of the License,
the Company agreed to pay NitricGen an aggregate of $2 million in up-front, clinical, and regulatory milestone payments, with the majority
pertaining to regulatory milestones, as well as royalties on net sales of the delivery system containing the eNOGenerator at a percentage
in the low-single digits. As partial consideration for the License, we issued to NitricGen warrants to purchase 100,000 shares of our
common stock at an exercise price of $6.90 per share. To date, $1.7 million has been paid for milestones that were earned. As of March
31, 2025 the remaining future milestone payments totaled $0.3 million.
Strategies
Our objective is to build a leading
medical device and biopharmaceutical company that develops and commercializes patented and proprietary products for the treatment of respiratory
infections and diseases, with an initial focus on the treatment of PPHN, NTM and severe infections in COPD patients, among others.
We are exploring and testing the effects of NO on solid tumors through our subsidiary, Beyond Cancer. Additionally, we are exploring the
development of nNOS inhibitors for the treatment of ASD and other neurological conditions. If our clinical trials for our product candidates
are successful, we expect to seek certification or marketing approval from the FDA and other worldwide authorities and notified regulatory
bodies.
Our Clinical Results to Date
We have conducted several clinical
trials to assess our 150-250 ppm NO inhalation-treatment in various indications. These trials include:
Date Study Indication Primary Results
2011 Pilot Safety (n=10) All comers Safety No SAEs
Cystic Fibrosis and NTM Clinical Development
In 2011, a prospective, open label,
controlled, single-center pilot safety study was conducted on ten healthy adults between 20 and 62 years of age. The data were published
in the Journal of Cystic Fibrosis in 2012. Subjects received 160 ppm NO for 30 minutes, five times a day, for five consecutive days via
direct inhalation to the lungs using a prototype delivery system. The primary objective of the study was to determine the effect of inhaled
160 ppm NO on pulmonary function tests and characterize the relationship between high-concentration NO administration and MetHb –
a form of hemoglobin that is a biproduct of NO and hemoglobin that cannot bind oxygen – and establish a MetHb safety threshold level
to assess adverse events associated with the treatment. Secondary objectives of the study were to assess the changes in cytokine levels.
Multiple safety markers were continuously monitored including: NO levels, NO2 (a biproduct of NO and O2 that can
be toxic at high concentrations), FiO2, as well as MetHb and oxygen saturation (“SaO2”). Vital signs,
lung function, blood chemistry (including nitrite/nitrates), hematology, prothrombin time, inflammatory cytokine/chemokines levels and
endothelial activation (angiopoietin ratio) were also closely monitored. All individuals tolerated the NO formulation treatment courses
well. No SAEs occurred. The maximum amount of air one can forcefully exhale in one second, known as forced expiratory volume in one second
(“FEV1”) and other lung function parameters, serum nitrites/nitrates, prothrombin, pro-inflammatory cytokine and chemokine
levels did not differ between baseline and day 5, while MetHb increased during the study period by an average of 0.9%, as expected. These
data suggest that inhalation of 160 ppm NO for 30 minutes, five times a day, for five consecutive days is well tolerated in healthy individuals.
In 2014, we completed a pilot
open label, multi-center study in nine CF patients (≥10 years old). Patients received intermittent (30 minutes, three times a day)
inhalation of 160 ppm NO formulation, five days a week, over a two-week period. The study was performed in two centers, Soroka Medical
Center and Schneider Children’s Medical Center of Israel. The primary endpoints of the study were to determine the MetHb percentage,
adverse events associated with inhaled NO and the percentage of subjects who prematurely discontinued the study due to adverse events
(“AEs”) and/or SAEs, or for any other reason. AEs were reported by five (55.5%) subjects. There were no SAEs related to NO