ARMATA PHARMACEUTICALS, INC. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes contained elsewhere in this Annual Report. Some of the information contained in this discussion and analysis are set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. See "Special Note Regarding Forward-Looking Statements." Our actual results may differ substantially from those referred to herein due to a number of factors, including but not limited to risks described in the section entitled "Risk Factors" and elsewhere in this Annual Report.
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Our common stock is traded on the NYSE American exchange under the symbol "ARMP." We are headquartered in Marina del Rey, CA, in a 35,000 square-foot research and development facility built for product development with capabilities spanning from bench to clinic. In addition to microbiology, synthetic biology, formulation, chemistry and analytical laboratories, the facility is equipped with two licensed current good manufacturing practice ("cGMP") drug manufacturing suites enabling the production, testing and release of clinical material.
Statements contained in this Annual Report that are not statements of historical
fact are forward-looking statements within the meaning of the
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expected market opportunity for our products, the use of bacteriophages and synthetic phages to kill bacterial pathogens, having resources sufficient to fund our operations into the thrid quarter of 2023, future funding sources, general and administrative expenses, clinical trial and other research and development expenses, costs of manufacturing, costs relating to our intellectual property, capital expenditures, the expected benefits of our targeted phage therapies strategy, the potential market for our products, tax credits and carry-forwards, and litigation-related matters. Words such as "believe," "anticipate," "plan," "expect," "intend," "will," "goal," "potential" and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements necessarily contain these identifying words. These statements are subject to risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under Item 1A, "Risk Factors" and elsewhere in this Annual Report on Form 10-K. These forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statements.
Overview
We are a clinical-stage biotechnology company focused on the development of pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using our proprietary bacteriophage-based technology. Bacteriophages or "phages" have a powerful and highly differentiated mechanism of action that enables binding to and killing specific bacteria, in contrast to traditional broad-spectrum antibiotics. We believe that phages represent a promising means to treat bacterial infections, especially those that have developed resistance to current standard of care therapies, including the so-called multidrug-resistant or "superbug" strains of bacteria. We are a leading developer of phage therapeutics and are uniquely positioned to address the growing worldwide threat of antibiotic-resistant bacterial infections.
We are combining our proprietary approach and expertise in identifying, characterizing and developing both naturally-occurring and engineered (synthetic) bacteriophages with our proprietary phage-specific current good manufacturing price regulations compliant ("cGMP") manufacturing capabilities to advance a broad pipeline of high-quality bacteriophage product candidates.
We are developing and advancing our lead clinical phage candidate
for Pseudomonas aeruginosa ("P. aeruginosa"). On
We are also developing a phage product candidate for Staphylococcus aureus ("S.
aureus") for the treatment of S. aureus bacteremia, AP-SA02. On
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We are committed to conducting randomized controlled clinical trials required for FDA approval in order to move toward the commercialization of alternatives to traditional antibiotics and provide a potential method of treating patients suffering from drug-resistant and difficult-to-treat bacterial infections.
The following chart summarizes the status of our phage product candidate development programs and partners.
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We have generally incurred net losses since our inception and our operations to
date have been primarily limited to research and development and raising
capital. As of
We currently expect to use our existing cash and cash equivalents for the continued research and development of our product candidates and for working capital and other general corporate purposes. We expect to continue to incur significant and increasing operating losses at least for the next several years. We do not expect to generate product revenue unless and until we successfully complete development and obtain marketing approval for at least one of our product candidates.
We may also use a portion of our existing cash and cash equivalents for the
potential acquisition of, or investment in, product candidates, technologies,
formulations or companies that complement our business, although we have no
current understandings, commitments or agreements to do so. Our existing cash
and cash equivalents will not be sufficient to enable us to complete all
necessary development of any potential product candidates. Accordingly, we will
be required to obtain further funding through one or more other public or
private equity offerings, debt financings, collaboration, strategic financing,
grants or government contract awards, licensing arrangements or other sources.
Our ability to raise additional capital may be adversely impacted by potential
worsening global economic conditions and potential disruptions to, and
volatility in, financial markets in
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bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.
Impact of COVID-19
The healthcare challenge and other impacts surrounding the COVID-19 pandemic that emerged in late 2019 have presented significant business uncertainty and had a dramatic impact on businesses globally, including ours. As the COVID-19 pandemic reaches an endemic state, the extent to which it may affect our clinical trials, business operations, financial condition and results of operations remains dependent on future developments, which are highly uncertain and cannot be predicted at this time. Although COVID-19 infection rates and severity have decreased recently, the occurrence, spread, severity and duration of any new outbreaks or resurgences, including the emergence and spread of new variants of COVID-19, actions taken to contain the resurgences or variants, and economic repercussions of the virus remain uncertain. We continue to evaluate the nature and extent to which COVID-19 may impact our business and operations.
Recent Events
2023 Credit Agreement
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The Credit Agreement provides that if a Qualified Financing, as defined in the
Credit Agreement, occurs, the outstanding principal amount of, and all accrued
and unpaid interest on, the Loan shall be converted into shares of our common
stock, at a price per share equal to a 15.0% discount to the lowest price per
share for our common stock paid by investors in a Qualified Financing (which
price paid by investors in a Qualified Financing may not be less than a 15.0%
discount to the closing price of our common stock immediately prior to the
consummation of a Qualified Financing event). The Credit Agreement also requires
us to file a registration statement (the "Registration Statement") for the
resale of all securities issued to the lender in connection with any conversion
under the Credit Agreement. After the Registration Statement has been declared
effective by the
PJI IND Approval
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NCFB IND Approval
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Pursuant and subject to the terms and conditions of the securities purchase
agreement and related agreements, Innoviva agreed to purchase 9,000,000 newly
issued shares of our common stock, at a price of
Executive Transition
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