BiomX Enters Merger Agreement With Adaptive Phage Therapeutics & Concurrent $50-Million Financing

BiomX Inc. recently announced it has entered into a definitive merger agreement with Adaptive Phage Therapeutics, Inc. Immediately after the effective time of the acquisition, and before giving effect to the concurrent private placement the former stockholders of BiomX will own approximately 55% and the former stockholders of APT will own approximately 45% of the consolidated entity of BiomX and APT. The acquisition is expected to close within the next 30 days, subject to the satisfaction of the closing conditions described in the definitive merger agreement.

Concurrently with entering into the definitive merger agreement, BiomX entered into a definitive purchase agreement for the sale of shares of newly created non-voting convertible preferred stock (Series X Preferred Stock) and warrants to purchase shares of BiomX common stock in a private placement to certain institutional accredited investors led by affiliates of Deerfield Management Company and the AMR Action Fund, and additional investors including the Cystic Fibrosis Foundation, OrbiMed, and Nantahala Capital. The private placement is expected to result in gross proceeds to BiomX of $50 million before deducting placement agent and other offering expenses. The proceeds from the private placement are expected to provide funding through the results from a planned Phase 2b trial that will evaluate BiomX’s lead product candidate, BX004, for the treatment of chronic pulmonary infections caused by Pseudomonas aeruginosa (P. aeruginosa) in CF patients expected in the third quarter of 2025 and Phase 2 results from APT’s clinical-stage product candidate, now named BX211, for the treatment of Staphylococcus aureus (S. aureus) infections in DFO patients expected in the first quarter of 2025. The private placement is expected to close substantially concurrently with, and subject to the closing of, the acquisition.

“BiomX’s acquisition of APT will create a leading phage company with diverse technologies and an advanced clinical pipeline,” said Jonathan Leff, Partner and Chairman of the Deerfield Institute at Deerfield Management. “With important data readouts for two programs expected in 2025, the funding from this transaction is designed to provide multiple opportunities to create stockholder value by reaching critical inflection points in each program’s clinical development.”

“Today’s announcement sends a clear vote of confidence from leading biotechnology investors who led this transaction that phage technology holds significant potential to treat serious infections with significant unmet need and limited treatment options,” added Jonathan Solomon, Chief Executive Officer of BiomX. “In the case of CF, BX004 has the potential to improve lung function in patients with chronic and potentially deadly pulmonary infections.”

“APT’s phage therapy for DFO holds the potential to prevent amputations associated with intractable infections that have penetrated into the bone in patients with diabetic foot ulcers,” said Greg Merril, Founder and Board Director of APT. “With the combined intellectual and financial resources coming from this acquisition, we now have a clear line of sight towards applying this ground-breaking technology to reach multiple data readouts in CF and DFO over the next 12-24 months.”

 BiomX will continue to be led by its current management team, with the addition of Michael Billard from APT as General Manager, US. Following the transaction, the BiomX board of directors will be comprised of Dr. Russell Greig, Chair of the Board of Directors, and the following members of the board of directors – Dr. Jesse Goodman, Jonathan Leff, Dr. Alan Moses, Greg Merril, Eddie Williams and Jonathan Solomon, BiomX’s Chief Executive Officer.   

The acquisition is structured as a stock-for-stock transaction whereby all outstanding equity interests of APT will be exchanged in a merger for 9,164,967 shares of BiomX common stock, 40,471 shares of Series X Preferred Stock convertible into 40,471,000 shares of BiomX common stock and warrants (Merger Warrants) exercisable for 2,166,497 shares of BiomX common stock. Following the consummation of the Acquisition, a successor-in-interest of APT will become a wholly-owned subsidiary of BiomX. The Merger Warrants will be exercisable at any time after the date of the receipt of stockholder approval at an exercise price of $5.00 per share and will expire on January 28, 2027. The definitive merger agreement is subject to various closing conditions, including, among other conditions, receiving cash of not less than $50 million from the private placement.

Concurrently with the entry into the definitive merger agreement with APT, BiomX entered into a definitive purchase agreement for a private placement investment with existing and new investors to raise $50 million, in which the investors have agreed to purchase an aggregate of 216,417 shares of Series X Preferred Stock and warrants (“Private Placement Warrants”) to purchase up to an aggregate of 108,208,500  shares of BiomX common stock, at a combined purchase price of $231.10 per share of Series X Preferred Stock and an accompanying Private Placement Warrant to purchase 500 shares of common stock. The Private Placement Warrants will be exercisable any time after the date of the receipt of BiomX stockholder approval, at an exercise price of $0.2311 per share, and will expire on the 24-month anniversary of the initial exercisability date. The closing of the private placement offering is subject to the satisfaction of customary closing conditions, including but not limited to the consummation of the acquisition.

Subject to BiomX stockholder approval, each share of Series X Preferred Stock issued in the Acquisition and the private placement initially will be convertible into 1,000 shares of BiomX common stock, and subject to certain beneficial ownership limitations set by each holder not to exceed 19.99%. The definitive merger agreement was approved by the Board of Directors of BiomX and the Board of Directors and stockholders of APT. The closing of the Acquisition will not be subject to the approval of BiomX stockholders.

In connection with the execution of the definitive merger agreement, certain stockholders of BiomX (including its directors and officers), together holding on as converted basis over 50% of the outstanding shares of common stock of BiomX, have agreed to vote their shares in favor of the conversion of the Series X Preferred Stock.

RBC Capital Markets and Laidlaw & Company (UK) Ltd. acted as placement agents for the private placement.  Haynes and Boone, LLP is serving as legal counsel to BiomX. Cooley LLP is serving as legal counsel to APT.  McDermott Will & Emery LLP is serving as legal counsel to Deerfield Management.  Wilmer Cutler Pickering Hale and Dorr LLP is serving as legal counsel to the placement agents.

The securities to be sold in the private placement have not been registered under the Securities Act of 1933, as amended (the Securities Act), or applicable state securities laws, and may not be offered or sold in the US except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions’ securities laws. BiomX has agreed to file a registration statement (the Resale Registration Statement) with the Securities and Exchange Commission (the SEC) registering the resale of the shares of BiomX common stock issued pursuant to the acquisition, the shares of BiomX common stock issuable upon conversion of the Series X Preferred Stock purchased in the private placement, the shares of common stock issuable upon exercise of all warrants issued in connection with the Acquisition and the private placement, the Series X Preferred Stock issued pursuant to the Acquisition and purchased in the private placement and all  warrants issued in connection with the Acquisition and the private placement (collectively, the Resale Securities). Additional details regarding the private placement are contained in BiomX’s Current Report on Form 8-K filed with the SEC on March 6, 2024.

BiomX is developing BX004, a fixed multi-phage cocktail, for the treatment of CF patients with chronic pulmonary infections caused by P. aeruginosa, a main contributor to morbidity and mortality in patients with CF. In November 2023, BiomX announced positive topline results from Part 2 of the Phase 1b/2a study where BX004 demonstrated   improvement in pulmonary function associated with a reduction in P. aeruginosa burden compared to placebo in a predefined subgroup of patients with reduced lung function.

BiomX expects to initiate a randomized, double blind, placebo-controlled, multi-center Phase 2b study in CF patients with chronic P. aeruginosa pulmonary infections in the fourth quarter of 2024. The study is designed to enroll approximately 60 patients randomized at a 2:1 ratio to BX004 or placebo. Treatment is expected to be administered via inhalation twice daily for a duration of 8 weeks. The study is designed to monitor the safety and tolerability of BX004 and is designed to demonstrate improvement in microbiological reduction of P. aeruginosa burden and evaluation of effects on clinical parameters such as lung function measured by FEV1 and patient reported outcomes. Study results are expected in the third quarter 2025. The US FDA has granted BX004 Fast Track designation and Orphan Drug Designation.

BX211 is a personalized phage treatment developed by APT for the treatment of DFO associated with S. aureus. The personalized phage treatment tailors a specific phage selected from a proprietary phage-bank according to the specific strain of S. aureus biopsied and isolated from each patient. DFO is a bacterial infection of the bone that usually develops from an infected foot ulcer and is a leading cause of amputation in patients with diabetes.

The ongoing randomized, double-blind, placebo-controlled, multi-center phase 2 study investigating the safety, tolerability, and efficacy of BX211 for subjects with DFO associated with S. aureus is expected to enroll approximately 45 subjects randomized at a 2:1 ratio to BX211 or placebo. BX211 or placebo is designed to be administered weekly, by topical and IV route at Week 1 and by the topical route only at each of Weeks 2-12. Over the 12-week treatment period, all subjects are expected to continue to be treated in accordance with standard of care which will include antibiotic treatment as appropriate. A first readout of study topline results is expected at week 13 evaluating healing of the wound associated with osteomyelitis, followed by a second readout at week 52 evaluating amputation rates and resolution of osteomyelitis based on X-ray, clinical assessments, and established biomarkers (ESR and CRP). These readouts are expected in the first quarter of 2025 and the first quarter of 2026, respectively.

APT is a clinical-stage company advancing therapies to treat multi-drug resistant infections. APT’s approach uniquely leverages an ever-growing library of systematically discovered, selected, catalogued, and curated phages, which collectively provide broad coverage against many of the world’s highest priority antibiotic-resistant bacteria. APT’s technology was originally developed at the National Institutes of Health (NIH) by APT co-founder Carl R. Merril, MD CAPT USPHS (ret) and further advanced within a biodefense program of US Department of Defense.

BiomX is a clinical-stage company developing both natural and engineered phage cocktails designed to target and destroy bacteria in the treatment of chronic diseases. BiomX discovers and validates proprietary bacterial targets and customizes phage compositions against these targets. For more information, visit www.biomx.com.