BiomX (PHGE) risk factors, FY2024 10-K

Risks Related to Our Business, Technology and Industry

1. 01We are a clinical-stage company and have incurred losses since our inception. We anticipate that we will continue to incur significant expenses, and we will continue to incur significant losses for the foreseeable future
2. 02We will need to raise additional capital in the future to support our operations which may not be available at terms that are favorable to us and might cause significant dilution to our stockholders or increase our debt towards third parties
3. 03Our financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all
4. 04We are seeking to develop product candidates using phage technology, an approach for which it is difficult to predict the time and cost of development. To our knowledge, as of the date of this Annual Report, no bacteriophage has thus far been approved as a drug in the United States or in the European Union
5. 05Ongoing geopolitical instability have adversely affected and may continue to adversely affect our business, including our clinical trials
6. 06Changes in trade policy, including the imposition of tariffs, may adversely affect our business, results of operations and financial condition
7. 07We have never generated any revenue from product sales and may never be profitable or, if achieved, may not sustain profitability
8. 08We are seeking to develop product candidates to treat medical conditions related to the presence of certain bacteria. Our success is largely dependent on a broad degree of market acceptance, and in the case of drug products, physician adoption and use, which are necessary for commercial success
9. 09Obtaining high titers for specific phage cocktails necessary for our preclinical and clinical testing may be difficult and time-consuming
10. 10Results from preclinical studies of our product candidates may not be predictive of the results of clinical trials or later stage clinical development
11. 11If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
12. 12Delays in our clinical trials could result in us not meeting anticipated clinical milestones and could materially impact our product development costs and delay regulatory approval of our product candidates. Planned clinical trials may not be commenced or completed on schedule, or at all
13. 13Our current or future product candidates may cause adverse effects that could halt their clinical development, prevent their approval or marketing, limit their commercial potential or result in significant negative consequences
14. 14We have not completed composition development of our product candidates
15. 15We must continue to develop manufacturing processes for our product candidates, and any delay in doing so, or our inability to do so, would result in delays in our clinical trials
16. 16If our competitors are able to develop and market products that are more effective, safer or more affordable than ours, or obtain marketing approval before we do, our commercial opportunities may be limited
17. 17We may not be successful in our efforts to identify or discover additional product candidates
18. 18Legal requirements as well as ethical and social concerns about synthetic biology and genetic engineering could limit or prevent the use of our technologies and limit our revenues
19. 19We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success
20. 20There is a substantial risk of product liability claims in our business. If we do not obtain sufficient liability insurance, a product liability claim could result in substantial liabilities to us
21. 21Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
22. 22Our limited operating history compared to the long time it takes to develop phage based products may make it difficult to evaluate the success of our business to date and to assess our future viability
23. 23We may need to grow the size of our organization and may experience difficulties in managing this growth

Risks Related to Government Regulation and Government

1. 24Our product candidates are subject to significant regulatory approval requirements, which could delay, prevent or limit our ability to market or develop our product candidates
2. 25We may fail to obtain and maintain orphan drug designations from the FDA or equivalent foreign regulatory agencies for our current and future therapeutic product candidates, as applicable
3. 26Failure to comply with health and data protection laws and regulations could lead to claims, government enforcement actions (which could include civil or criminal penalties), regulatory actions, private litigation and/or adverse publicity and could negatively affect our operating results and business
4. 27The FDA and other equivalent foreign regulatory agencies may implement additional regulations or restrictions on the development and commercialization of products which act on the microbiome, which may be difficult to predict
5. 28We may conduct clinical trials for our product candidates outside the United States, and the FDA may not accept data from such trials
6. 29Any products that we may develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which could make it difficult for us to sell any product candidates or therapies profitably
7. 30Ongoing health care legislative and regulatory reform measures may have a material adverse effect on our business and results of operations

Risks Related to our Licensed and Co-Owned Intellectual Property

1. 31We are highly dependent on intellectual property licensed from third parties, and termination or limitation of any of these licenses could result in the loss of significant rights and materially harm our business
2. 32We are dependent on patents and proprietary technology. If we fail to adequately protect this intellectual property or if we otherwise do not have exclusivity for the marketing of our products, our ability to commercialize products could suffer
3. 33Some of our licensed rights could provide us with freedom to operate for aspects of our products and services. We may need to obtain additional licenses from others to advance our research, development and commercialization activities
4. 34If we do not prevail in such disputes, we may lose any or all of our rights under such license agreements
5. 35If we infringe the rights of third parties, we could be prevented from selling products, forced to pay damages and/or royalties, and forced to defend against litigation
6. 36We may not be successful in obtaining, through acquisitions, in-licenses or otherwise, necessary rights to our product candidates, proprietary product platform technologies or other technologies
7. 37We rely on our proprietary product platform to identify phage-based therapies. Our competitive position could be materially harmed if our competitors develop a similar platform and develop rival product candidates
8. 38We rely on trade secrets and other forms of non-patent intellectual property protection. If we are unable to protect our trade secrets, other companies may be able to compete more effectively against us
9. 39If we are sued for infringing intellectual property rights of third parties or if we are forced to engage in an interference proceeding, it will be costly and time-consuming, and an unfavorable outcome in that litigation or interference would have a material adverse effect on our business
10. 40We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business

Risks Related to Our Reliance on Third Parties

1. 41We continue to rely on third parties, such as contract research organizations, or CROs, and clinical investigators, to conduct and manage our clinical trials
2. 42Third-party relationships are important to our business. If we are unable to maintain our collaborations or enter into new relationships, or if these relationships are not successful, our business could be adversely affected
3. 43We may not be successful in maintaining or establishing collaborations, which could adversely affect our ability to develop and, if required regulatory approvals are obtained, commercialize our product candidates

Risks Related to Our Operations in Israel

1. 44Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel, including the recent war with Hamas and other terrorist organizations from the Gaza Strip
2. 45Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions, could harm our results of operations and the market price of our Common Stock, and could make it more difficult for us to raise capital
3. 46Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service
4. 47These restrictions will continue to apply even after we have repaid the full amount of royalties on the grants
5. 48Exchange rate fluctuations between the U.S. Dollar, the New Israeli Shekel, the Euro and other foreign currencies, may negatively affect our future expenses
6. 49Under applicable employment laws, we may not be able to enforce covenants not to compete
7. 50The tax benefits that are available to us if and when we generate taxable income require us to meet various conditions and may be prevented or reduced in the future, which could increase our costs and taxes

Risks Related to Manufacturing and Supply

1. 51We rely on third parties to manufacture our clinical supply of product candidates and we intend to rely on third parties to produce and process our products, if approved
2. 52Our product candidates rely on the availability of specialty raw materials, which may not be available to us on acceptable terms or at all

Risks Related to Our Common Stock

1. 53A significant number of shares of our Common Stock are subject to issuance upon exercise of outstanding warrants and options or conversion of our Convertible Preferred Stock, which upon such exercise or conversion, as applicable, may result in dilution to our security holders
2. 54As of March 20, 2025, and following the February 2025 SPA (as defined below), we had warrants outstanding to purchase an aggregate of up to 14,391,386 shares of Common Stock with a weighted average exercise price of $2.97
3. 55We have never paid dividends on our Common Stock, and we do not anticipate paying any cash dividends on our Common Stock in the foreseeable future
4. 56We may be unable to maintain the listing of our securities in the future
5. 57The market price of our Common Stock and other securities may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock
6. 58As a “smaller reporting company” we are permitted to provide less disclosure than larger public companies, which may make our Common Stock less attractive to investors
7. 59Our success depends, in part, on our ability to retain key executives and to attract, retain and motivate qualified personnel
8. 60Expectations relating to environmental, social and governance (ESG) programs may impose additional costs and expose us to new risks
9. 61If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks
10. 62Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security
11. 63We incur significant costs operating as a public company