What changed in this filing

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Item 1. Business

2022-03-17 compared with 2021-03-18 · 224 added, 228 removed, 779 unchanged (37% of the section changed)

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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.

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 that 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 practice regulations (“cGMP”) compliant manufacturing capabilities to advance a broad pipeline of high-quality bacteriophage product candidates.

We believe that synthetic phage, engineered using advances in sequencing and synthetic biology techniques, represent a promising means to advance phage therapy, including phage-based diagnostics and improving upon the ability of natural phage to treat bacterial infections, especially those that have developed resistance to current antibiotic therapies, including the multidrug-resistant or “superbug” bacterial pathogens.

We are developing and advancing our lead clinical phage candidate for Pseudomonas aeruginosa (“ P.

aeruginosa ”), AP-PA02.

On October 14, 2020, we received the approval to proceed from the FDA for our Investigational New Drug application for AP-PA02.

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 which 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 practice regulation (“cGMP”) manufacturing capabilities to advance a broad pipeline of high-quality bacteriophage product candidates.

We believe that synthetic phage, engineered using advances in sequencing and synthetic biology techniques, represent a promising means to advance phage therapy, including improving upon the ability of natural phage to treat bacterial infections, especially those that have developed resistance to current antibiotic therapies, including the multidrug-resistant or “superbug” bacterial pathogens.

We are developing and advancing our lead clinical phage candidate for Pseudomonas aeruginosa .

On October 14, 2020, Armata received the approval to proceed from the U.S.

Food and Drug Administration (“FDA”) for its Investigational New Drug application for AP-PA02.

We plan to continue to advance the “SWARM- P.a.

” study – a Phase 1b/2a, multicenter, double-blind, randomized, placebo-controlled, single ascending dose (SAD) and multiple ascending dose (MAD) clinical trial to evaluate the safety and tolerability of inhaled AP-PA02 in subjects with cystic fibrosis (“CF”) and chronic pulmonary P.

aeruginosa infection, provided that the impacts of COVID-19 do not impede our ability to enroll subjects in this clinical trial.

This study is supported by the Cystic Fibrosis Foundation (“CFF”), which granted us a Therapeutics Development Award of up to $5.0 million (“CFF Award”).

We are also developing a phage product candidate for Staphylococcus aureus (“ S.

aureus ”) for the treatment of S.

aureus bacteremia, AP-SA02.

On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we will receive a $15.0 million grant and entered into a three-year program administered by the DoD through MTEC with funding from the Defense Health Agency and Joint Warfighter Medical Research Program.

We expect to use the grant to partially fund a Phase 1/2, multi-center, randomized, double-blind, placebo- controlled dose escalation study that will assess the safety, tolerability, and efficacy of AP-SA02 for the treatment of adults with complicated S.

aureus bacteremia in 2021.

However, the COVID-19 outbreak may delay or prohibit the enrollment of patients in our clinical trials.

In partnership with Merck & Co., known as Merck Sharp & Dohme outside of the United States and Canada (“Merck”), we are developing proprietary synthetic phage candidates to target undisclosed infectious disease agents.

” study – a Phase 1b/2a, multicenter, double-blind, randomized, placebo-controlled, single ascending dose (“SAD”) and multiple ascending dose (“MAD”) clinical trial to evaluate the safety and tolerability of inhaled AP-PA02 in subjects with CF and chronic pulmonary P.

aeruginosa infection, provided that the impacts of COVID-19 do not further impede our ability to enroll subjects in this clinical trial.

This study is supported by the CFF, which granted us a Therapeutics Development Award of up to $5.0 million.

As discussed in more detail below, in October 2021, we issued and sold 909,091 shares of newly issued commons stock to CFF at a per share price of $3.30 pursuant to a private placement transaction.

We are also developing a phage product candidate for Staphylococcus aureus for the treatment of S.

aureus bacteremia.

On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we expect to receive a $15.0 million grant and entered into a three-year program administered by the U.S Department of Defense (“DoD”) through MTEC with funding from the Defense Health Agency and Joint Warfighter Medical Research Program.

We expect to use the grant to partially fund a Phase 1b/2a, multi-center, randomized, double-blind, placebo-controlled dose escalation study (“diSArm” study), that will assess the safety, tolerability, and efficacy of AP-SA02, a phage-based candidate for the treatment of adults with S.

aureus bacteremia .

On November 17, 2021, Armata announced that it had received the approval to proceed from the FDA for its Investigational New Drug application for AP-SA02.

We plan to initiate the “diSArm” study provided that the impacts of COVID-19 do not impede our ability to enroll subjects in this clinical trial.

In addition to our more advanced pipeline programs, we have phage development efforts underway to target other indications including non-cystic fibrosis bronchiectasis (“NCFB”), prosthetic joint infections (“PJI”) and hospitalized pneumonia.

Our proprietary phage engineering platform serves to enhance the clinical and commercial prospects of phage therapy.

These attributes include expanded host range, improved potency which is a fundamental drug property that can translate into improved clinical efficacy, and importantly, biofilm disruption, which is a critical aspect of serious infections that needs to be addressed.

In addition to our more advanced pipeline programs, we have phage discovery efforts underway to target other major pathogens of infectious disease (including Enterococcus faecium , S.

aureus , Klebsiella pneumoniae , Acinetobacter baumannii , P.

aeruginosa , and Enterobacter species , or “ESKAPE pathogens”) and preventable infectious disease of the microbiome.

We are committed to conducting randomized controlled clinical trials required for FDA approval in order to move toward commercialization of alternatives to traditional antibiotics and provide a potential method of treating patients suffering from drug-resistant bacterial infections.

Corporate History and Reorganization

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Business Update Regarding COVID-19

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin.

In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.

In March 2020, the World Health Organization (“WHO”) declared COVID-19 a global pandemic and the United States declared a national emergency with respect to COVID-19.

The COVID-19 pandemic has directly and indirectly impacted our business, results of operations and financial condition and is expected to continue to impact our business.

For example, the COVID-19 pandemic has resulted in delays in our clinical trials due to the implementation of COVID-19 protocols at investigator sites, which resulted in longer than anticipated site identification and initiation activities.

In addition, while we currently do not anticipate any interruptions in our supply chain, it is possible that the COVID-19 pandemic and response efforts may have a future impact on our third-party suppliers and partners.

It is possible that due to the increasing emphasis on the development of vaccines for COVID-19, certain basic supply chain materials such as resins, vessels, vials and stoppers may be in high demand by the pharmaceutical companies developing vaccines and our ability to obtain these materials for our development activities could be negatively impacted.

We have experienced some delays of this nature in the fourth quarter of 2020 and in early 2021.

The full extent of the COVID-19 pandemic impact will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact, the development and distribution of vaccines and the economic impact on local, regional, national and international markets.

In addition, while we currently do not anticipate any interruptions in our supply chain, it is possible that the COVID-19 pandemic and the continuing response efforts may have a future impact on our third-party suppliers and partners.

It is possible that due to the continued development and manufacturing of vaccines for COVID-19, certain basic supply chain materials such as resins, vessels, vials and stoppers may be in high demand by the pharmaceutical companies developing and manufacturing vaccines and our ability to obtain these materials for our development activities could be negatively impacted.

Although we have experienced some delays of this nature during 2021, such delays have not had a material adverse impact on our business, results of operations or financial condition .

The full extent of the COVID-19 pandemic impact continues to depend on future developments that remain highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact, the identification and spread of COVID-19 variants such as the Delta and the Omicron variants, the distribution of vaccines, the acceptance of vaccines and the implementation of vaccine mandates, and the economic impact on local, regional, national and international markets.

Management continues to actively monitor the developments regarding the pandemic and the impact that the pandemic could have on our financial condition, liquidity, ability to enroll patients in our contemplated clinical trials, manufacturing and research and development operations, suppliers to our operations and suppliers to our outside clinical trial organizations, biotech industry overall, and importantly the health and safety of our workforce.

Given the continuing evolution of the COVID-19 outbreak and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 outbreak on our results of operations, financial condition, or liquidity for fiscal year 2021 or 2022.

Any recovery from negative impacts to our business and related economic impact due to the COVID-19 outbreak may also be slowed or reversed by a number of factors, including but not limited to multiple variants of the COVID-19 virus, a resurgence in COVID-19 infections, and the seasonal flu.

Given the continued volatility of the COVID-19 pandemic and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 pandemic on our results of operations, financial condition, or liquidity for 2022.

Any recovery from negative impacts to our business and related economic impact due to the COVID-19 pandemic may also be slowed or reversed by a number of factors, including the current widespread resurgence in COVID-19 infections attributable to the Omicron variant, combined with the seasonal flu.

Recent Developments

On January 26, 2021, we entered into a securities purchase agreement (the “2021 Securities Purchase Agreement”) with Innoviva Strategic Opportunities LLC, a wholly-owned subsidiary of Innoviva, Inc.

INVA) (collectively, “Innoviva”), pursuant to which we agreed to issue and sell to Innoviva, in a private placement, up to 6,153,847 newly issued shares (the “Shares”) of our common stock, par value $0.01 per share (“common stock”) and warrants (the “Common Warrants”) to purchase up to 6,153,847 shares of common stock, with an exercise price per share of $3.25 (the “2021 Private Placement”).

Each Share was sold together with one Common Warrant, and the per-unit purchase price is $3.25.

The 2021 Private Placement occurred in two tranches.

On January 26, 2021 and concurrently with entering into the 2021 Securities Purchase Agreement, we completed the first tranche (the “First Closing”) of the 2021 Private Placement.

At the First Closing, Innoviva purchased 1,867,912 Shares and Common Warrants to purchase 1,867,912 shares of common stock, in compliance with any and all applicable laws and without the requirement for the prior receipt of the stockholders’ approval under the listing requirements of the NYSE American, for an aggregate purchase price of approximately $6.1 million.

We received shareholder approval for the second closing (“Second Closing”) on March 16, 2021, and the Second Closing was completed on March 17, 2021, when Innoviva purchased 4,286,935 shares of Shares and Common Warrants for an aggregate purchase price of $13.9 million.

We received aggregate gross proceeds from the 2021 Private Placement of approximately $20.0 million, before deducting transaction expenses, and excluding proceeds (if any) received in connection with the exercise of any warrants.

As part of the First Closing, we entered into an amended and restated investor rights agreement (the “A&R IRA”), which amended and restated in its entirety that certain Investor Rights Agreement, dated February 12, 2020, with Innoviva, Inc.

Pursuant to the A&R IRA, for so long as Innoviva and its affiliates hold at least 12.5% of the outstanding shares of common stock on a fully-diluted basis, Innoviva shall have the right to designate two (2) directors to our board of directors and for so long as Innoviva and its affiliates hold at least 8%, but less than 12.5%, of the outstanding shares of common stock on a fully-diluted basis, Innoviva shall have the right to designate one (1) director, subject to certain conditions and qualifications set forth in the A&R IRA.

The A&R IRA also provides Innoviva with certain subscription rights in the event of any new issuances.

As part of the First Closing, we also entered into a registration rights agreement (the “Registration Rights Agreement”) with Innoviva.

Pursuant to the Registration Rights Agreement, we must file a registration statement on Form S-1 or Form S-3 (the “Shelf Registration Statement”) covering the resale of the securities issued and sold pursuant to the 2021 Securities Purchase Agreement with the U.S.

Securities and Exchange Commission (the “Commission”) on a continuous basis pursuant to Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), or if Rule 415 is not available for offers and sales of such securities, by such other means of distribution of such securities as Innoviva may reasonably specify.

We must use commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event (i) no later than the fifteenth (15th) day following the filing of the Shelf Registration Statement in the event of no “review” by the Commission, (ii) no later than the sixtieth (60th) day following the filing of the Shelf Registration Statement in the event of “limited review” by the Commission, or (iii) in the event of a “review” by the Commission, the one hundred and twentieth (120th) day following the filing of the Shelf Registration Statement, subject to certain exceptions.

We also entered into a Voting Agreement with Innoviva (the “Voting Agreement”), pursuant to which Innoviva agreed not to vote or take any action by written consent with respect to shares of common stock held by Innoviva or any of its subsidiaries which represent, in the aggregate, more than 49.5% of the total number of shares of common stock issued and outstanding as of any given record date for voting (such shares, the “Excess Shares”) on the matters related to the election of directors or removal of directors from our board of directors (“Board Matters”) presented at any meeting of the our stockholders (or any adjournment or postponement thereof) or for their action by written consent, in each case, unless the board of directors authorizes Innoviva to vote such Excess Shares with respect to Board Matters.

NCFB Investigational New Drug (“IND”) Approval

On February 22, 2022, we announced that the U.S.

FDA has cleared Armata's IND application to initiate a clinical trial of its optimized lead therapeutic candidate, AP-PA02, in a second indication, NCFB.

The company plans to initiate a Phase 2 trial in 2022.

February 2022 Private Placement

On February 9, 2022, we entered into a securities purchase agreement to sell our common stock and warrants to Innoviva Strategic Opportunities LLC, a wholly ‐ owned subsidiary of Innoviva, Inc.

INVA) (collectively, "Innoviva"), our largest shareholder.

The gross proceeds from the transaction are expected to be $45 million, before deducting estimated offering expenses.

Pursuant and subject to the terms and conditions of the securities purchase agreement and related agreements, Innoviva will purchase 9,000,000 newly issued shares of our common stock, at a price of $5.00 per share, and warrants to purchase up to 4,500,000 additional shares of our common stock, with an exercise price of $5.00 per share.

The stock purchases are expected to occur in two tranches.

Upon execution, Innoviva purchased 3,614,792 shares of common stock and warrants to purchase 1,807,396 shares of common stock for an aggregate purchase price of $18.1 million.

At the closing of the second tranche, upon our stockholders voting in favor of the transaction, Innoviva will purchase 5,385,208 shares of common stock and warrants to purchase 2,692,604 shares of common stock for an aggregate purchase price of $26.9 million.

Subject to the satisfaction of certain closing conditions, including the approval of our stockholders, the second closing contemplated by the securities purchase agreement is expected to occur near the end of the first quarter of 2022.

October 2021 Private Placements

On October 28, 2021, we entered into a securities purchase agreement (the “October 2021 Securities Purchase Agreement”) with the Cystic Fibrosis Foundation, a Delaware corporation (“CFF”), our partner for the lead Phase 1b/2a clinical development program, and Innoviva for the private placement of newly issued shares of our common stock, par value $0.01 per share (“Common Stock”).

Pursuant to the October 2021 Securities Purchase Agreement, we issued and sold 909,091 shares to CFF and 1,212,122 shares to Innoviva, each at a per share price of $3.30 (the “October 2021 Private Placements”).

We received aggregate gross proceeds from the October 2021 Private Placements of approximately $7.0 million, before deducting transaction expenses.

2021 Lease Agreement

On October 28, 2021, we entered into a lease for office and research and development space under a non-cancellable lease in Los Angeles, CA (the “2021 Lease”).

The leased space comprises approximately 56,000 square feet.

The 2021 Lease payment start date is May 1, 2022 and the total lease term is for 16 years and runs through 2038.

Monthly rent for 2022 and 2023 will be fully or partially abated while we and the lessor complete planned tenant improvements to the facility.

Base monthly rent will be approximately $0.25 million in 2024.

We are entitled to receive an allowance for tenant improvements of up to $7.3 million.

The following chart summarizes the status of our phage product candidate development programs and partners.

Our strategy is to demonstrate safety, tolerability and efficacy of multiple phage products in randomized controlled clinical trials required for FDA approval and to support commercialization in multiple indications of high unmet medical need, including bacterial infections caused by multidrug-resistant and difficult-to-treat pathogens.

Our fully integrated product development capabilities from bench to clinic enables discovery of optimal product candidates, efficient process development and manufacturing, rigorous clinical trials.

Our strategy is to demonstrate the safety, tolerability and efficacy of multiple phage products in randomized controlled clinical trials required for FDA approval and to support commercialization in multiple indications of high unmet medical need, including bacterial infections caused by multidrug-resistant and difficult-to-treat pathogens.

Our fully integrated product development capabilities from bench to clinic enable the discovery of optimal product candidates, efficient process development and manufacturing, and rigorous clinical trials.

Our microbiological surveillance and synthetic biology capabilities drive long-term product life cycle management.

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aeruginosa infections such as non-cystic fibrosis bronchiectasis (“NCFB”) and hospitalized pneumonia.

● Initiate and advance clinical trials of AP-SA02 in patients with complicated S.

● Initiate and advance clinical trials of AP-SA02 in patients with S.

aureus bacteremia.

● Develop AP-SA02 for the treatment of other antibiotic-resistant and difficult-to-treat S.

aureus infections such as periprosthetic joint infections.

Because a study in PJI may use a different route of administration from the bacteremia study, it is possible, pending FDA concurrence, that we could initiate a study in this indication prior to obtaining safety data from the AP-SA02 bacteremia study.

● Advance our partnership with Merck to develop synthetic phage utilizing our phage engineering platform to improve natural phage characteristics, such as host range, biofilm disruption and antimicrobial activity.

● Develop phage-based diagnostics to drive clinical success and market adoption.

aureus infections such as periprosthetic joint infections (“PJI”).

The Need for New Anti-Infective Therapies

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aureus (“MRSA”), in the United States occurred in 1968.

A void in the discovery of new classes of antibiotics lasting approximately 30 years drove the emergence and spread of antibiotic-resistant bacteria, including vancomycin-resistant enterococci (VRE), and pandrug-resistant strains of Acinetobacter baumannii , P.

A void in the discovery of new classes of antibiotics lasting approximately 30 years drove the emergence and spread of antibiotic-resistant bacteria, including

vancomycin-resistant enterococci (“VRE”), and pandrug-resistant strains of Acinetobacter baumannii , P.

aeruginosa , Escherichia coli and Klebsiella pneumoniae .

The dramatic and continuous emergence of antibiotic-resistant bacteria, and the lack of new antibiotics in the pipeline, has prompted calls to action from many of the world’s major health bodies such as The Centers for Disease Control and Prevention (the “CDC”), and the WHO, who warn of an “antibiotic cliff” and a “post-antibiotic era.” A growing list of infections – such as pneumonia, tuberculosis, bacteremia/septicemia, gonorrhea, and foodborne diseases – are becoming harder, and sometimes impossible, to treat as antibiotics become less effective.

In 2009, the European Antimicrobial Resistance Surveillance System concluded that “the loss of effective antimicrobial therapy increasingly threatens the delivery of crucial health services in hospitals and in the community.” This conclusion was reinforced by The Antimicrobial Availability Task Force of the Infectious Diseases Society of America (the “IDSA”), and the European Centre for Disease Prevention and Control in conjunction with the EMA.

The IDSA and WHO regard antimicrobial resistance as one of the greatest threats to human health worldwide.

Centers for Disease Control and Prevention (the “CDC”), and the World Health Organization (the “WHO”), who warn of an “antibiotic cliff” and a “post-antibiotic era.” A growing list of infections – such as pneumonia, tuberculosis, bacteremia/septicemia, gonorrhea, and foodborne diseases – are becoming harder, and sometimes impossible, to treat as antibiotics become less effective.

The IDSA and the WHO regard antimicrobial resistance as one of the greatest threats to human health worldwide.

The Review on Antimicrobial Resistance, a global project commissioned by the British government and the Wellcome Trust, reports that at least 700,000 people die each year of drug resistance in illnesses that include bacterial infections.

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The market opportunity for antibiotics is large, with the market estimated to exceed $58 billion in annual sales globally by 2027.

Almost one in every five deaths worldwide occurs as a result of infection and, according to the WHO, many bacterial infections will become difficult or impossible to cure as the efficacy of current standard-of-care antibiotics wanes.

antibiotics wanes.

Despite the advances in antimicrobial and vaccine development, infectious diseases still remain the third-leading cause of death in the United States and the second-leading cause of death worldwide.

The number of new antibiotics approved by the FDA, and other global regulatory authorities has declined consistently over the last two decades.

According to an April 2020 report from PEW Charitable Trusts, only 41 new antibiotics (all small molecules that act systemically) with the potential to treat serious or life-threatening bacterial infections are in global clinical development.

According to a March 2021 report from PEW Charitable Trusts, only 41 new antibiotics (all small molecules that act systemically) with the potential to treat serious or life-threatening bacterial infections are in global clinical development.

This is compared with more than 1,100 new product candidates in the drug pipeline for cancer.

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There are hundreds of cases published in the scientific and medical literature describing the use of phage therapy in human medicine over more than 90 years, mostly in the former Soviet Union and Eastern Europe.

Phage therapy is still commonly used today in Russia, Poland and Georgia, with numerous reports of success in treating infectious diseases

caused by many pathogenic bacterial species.

Phage therapy is still commonly used today in Russia, Poland and Georgia, with numerous reports of success in treating infectious diseases caused by many pathogenic bacterial species.

However, the safety and effectiveness of these therapies have not been conclusively established due to the lack of randomized controlled clinical studies.

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aeruginosa otitis treated with a cocktail of six natural phages.

Since 2016, there have been a number of Compassionate Use cases in which patients suffering from various serious or life-threatening infections have been treated with phage therapy under physician-sponsored Emergency Investigational New Drug (“Emergency IND”) Applications with high rates of success and no adverse effects attributable to the therapy.

Since 2016, there have been a number of “compassionate use” cases in which patients suffering from various serious or life-threatening infections have been treated with phage therapy under physician-sponsored Emergency Investigational New Drug (“EIND”) Applications with high rates of success and no adverse effects attributable to the therapy.

Most notable was the well-documented case in 2016 of Tom Patterson, whose disseminated multidrug-resistant Acinetobacter baumannii infection was successfully treated with phage-based therapeutic cocktails administered intravenously and intraperitoneally.

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NCFB patients frequently become chronically colonized with multidrug-resistant strains of P.

aeruginosa because of the need for repeated courses of antibiotic treatment.

There are currently no approved antibiotics to manage chronic P.

aeruginosa infection in NCFB patients.

aeruginosa because of the need for repeated courses of

antibiotic treatment.

There are currently no approved inhaled antibiotics for the treatment of NCFB patients with chronic P.

aeruginosa respiratory infections.

Hospitalized Pneumonia

Hospital-acquired pneumonia and ventilated-associated pneumonia is one of the most common causes of death among all hospital‐acquired infections, with approximately 300,000 hospitalization each year in the United States due to Pseudomonas .

Infection with Pseudomonas results in mortality rates ranging as high as 35‐50%, drives considerable healthcare costs (excess of $40,000 per patient), and accounts for around 50% of all intensive care unit antibiotics.

Infection with Pseudomonas results in mortality rates ranging as high as 35‐50%, drives considerable healthcare costs (in excess of $40,000 per patient), and accounts for around 50% of all intensive care unit antibiotics.

Staphylococcus aureus Infections

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develop bacteremia each year.

aureus is the most commonly identified pathogen in both hospital- and community-acquired blood stream infections.

aureus is the most commonly identified pathogen in both hospital- and community-acquired bloodstream infections.

Annually in the U.S.

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aureus bacteremia (“SAB”).

Despite conventional antibiotics, mortality in SAB results in death of up to 40% of all cases and 57% of patients over the age of 85.

Despite conventional antibiotics, mortality in SAB results in the death of up to 40% of all cases and 57% of patients over the age of 85.

Patients with comorbidities such as alcoholism, malignancy, diabetes, end-stage renal disease requiring hemodialysis, and immunosuppression are at even higher risk for death when SAB develops.

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The total number of prosthetic joint infection (“PJI”)-related revision surgeries is expected to more than double from 70,000 in 2020 to 144,000 in 2040 in the United States and European Union Five (France, Germany, Italy, Spain, United Kingdom), at an annual growth rate of 5.6% due to a growing elderly population.

The United States is the largest market for PJI, accounting for 61% of PJI-related revision surgery in 2020 (71% by 2040) each estimated to cost $150,000.

The United States is the largest market for PJI, accounting for 61% of PJI-related revision surgery in 2020 (estimated to be 71% by 2040) each estimated to cost $150,000.

aureus PJI infections are among the most commonly observed, accounting for up to 47% of all infections.

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These powerful natural phages can be purposely engineered to be more efficient killers.

The use of synthetic biology tools enables us to precisely engineer natural phages in ways that further improve their pharmacological properties and antimicrobial activity, with the potential to create supercharged synthetic phages that, once marketing authorization is obtained, can be deployed in the clinic as highly effective weapons in the fight against multidrug-resistant bacterial infections.

The use of synthetic

biology tools enables us to precisely engineer natural phages in ways that further improve their pharmacological properties and antimicrobial activity, with the potential to create supercharged synthetic phages that, once marketing authorization is obtained, can be deployed in the clinic as highly effective weapons in the fight against multidrug-resistant bacterial infections.

Engineering natural phages may broaden their host range, minimize resistance and improve efficacy through the expression of beneficial moieties such as biofilm-degrading enzymes and antimicrobial peptides.

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We are committed to developing novel phage therapies, with drug development expertise and product development capabilities that span bench to clinic, including in-house phage-specific cGMP manufacturing.

Our phage discovery

platform in which we screen panels of clinically-relevant isolates against our extensive phage library utilizing proprietary methods that identify phage combinations with superior attributes, together with our phage-specific cGMP compliant manufacturing facilities, uniquely enables us to efficiently identify optimal product candidates.

Our phage discovery platform in which we screen panels of clinically-relevant isolates against our extensive phage library utilizing proprietary methods that identify phage combinations with superior attributes, together with our phage-specific cGMP compliant manufacturing facilities, uniquely enables us to efficiently identify optimal product candidates.

Our microbiological surveillance and synthetic biology capabilities drive long-term product life cycle management.

Our therapeutic phage candidates aim to address areas of significant unmet medical need, by targeting key drug-resistant bacteria, including those on the World Health Organization’s global priority pathogens list, and the priority pathogens list issued by the Centers for Disease Control and Prevention.

Our therapeutic phage candidates aim to address areas of significant unmet medical need, by targeting key drug-resistant bacteria, including those on the WHO’s global priority pathogens list, and the priority pathogens list issued by the CDC.

The long-term potential for phage therapy is broad reaching, including potential use as front-line therapy.

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aeruginosa , with its mucoid and multidrug-resistant strains, is a dominant culprit in chronic respiratory infections in CF and NCFB patients as well as acute pneumonias in hospitalized patients;

aureus , with its heteroresistant and methicillin-resistant S.

aureus (MRSA) strains, has been implicated in systemic (e.g., bacteremia) as well as prosthetic-related infections.

aureus , with its heteroresistant and MRSA strains, has been implicated in systemic (e.g., bacteremia) as well as prosthetic-related

By advancing randomized controlled clinical trials using P.

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Historical Background

AP-PA02 is being developed as a replacement for its predecessor AP-PA01 (previously known as AB-PA01).

AP-PA02 is being developed as a next-generation replacement for AP-PA01 (previously known as AB-PA01).

A total of 10 patients with serious or life-threatening P.

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Another success with AP-PA01, used to treat a 77-year-old with ventilated-associated pneumonia and empyema, was published in November 2019, in the American Journal of Respiratory and Critical Care Medicine.

We no longer offer AP-SA01 through any expanded access program.

We no longer offer AP-PA01 through any expanded access program.

In August 2018, we held a Type B pre-IND meeting with the U.S.

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Feedback from the pre-IND meeting has been insightful for the regulatory path required for phage therapeutics in general, and specifically for a phage product candidate intended for respiratory infection.

We therefore have leveraged our experiences with AP-PA01 to derive a development plan for AP-PA02.

We, therefore, have leveraged our experiences with AP-PA01 to derive a development plan for the next-generation product candidate, AP-PA02.

Preclinical Development of AP-PA02

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aeruginosa phage product candidate, AP-PA01.

A series of selection criteria and different methods were deployed, including bioinformatics and comparative genomics, in order to identify optimal attributes for a product candidate.

We have engaged in preclinical studies to determine pharmacological and toxicological parameters to confirm therapeutic potential in the clinic.

The phages that comprise AP-PA02 were selected with desired attributes for a product candidate targeting P.

aeruginosa lung infections.

Different methods were deployed, including microbiological, bioinformatics and comparative genomics, in order to identify optimal attributes for the product candidate.

Susceptibility, killing kinetics, and biofilm eradication, was assessed using P.

aeruginosa isolates from CF patients to determine antimicrobial activity and potency of AP-PA02.

Viability in relevant biological fluids, and compatibility with current standard of care therapies for CF patients was verified to confirm suitability of AP-PA02 for clinical use in this patient population.

Immune stimulation was assessed to assure the lack of inflammatory impact by AP-PA02.

Animal studies were conducted to provide insight into safe and efficacious dose levels that would support the expectation of pharmacological activity (i.e.

antimicrobial potential of phage) in the lung compartment following an inhaled route of administration.

In parallel, we initiated manufacturing feasibility and process optimization efforts with the goal of achieving high-quality phage product free of endotoxin and host cell proteins whilst maintaining adequate phage titers.

AP-PA02 is comprised of a cocktail of natural P.

aeruginosa phages originating from distinct families and subfamilies, targeting multiple receptor classes, functioning with compatibility (i.e., the phages don’t interfere with one another) and cooperativity (i.e., the phages work together for a better outcome), and further characterized by being highly potent and having a broad host range and overlap.

AP-PA02 demonstrates broad coverage against approximately 90% of tested clinical isolates.

aeruginosa phages originating from distinct families and subfamilies, targeting multiple receptor classes, functioning with compatibility (i.e., the phages don’t interfere with one

another) and cooperativity (i.e., the phages work together for a better outcome), and further characterized by being highly potent and having a broad host range and overlap.

Prior to initiating the SWARM- P.a.

trial (described below), our clinical isolate screening and phage collections yielded a three-phage AP-PA02 cocktail with compelling host-range coverage.

We subsequently modified AP-PA02 to include additional phage genera that increase potency and broaden coverage of strains of P.

aeruginosa found in CF patients.

The optimized five-phage AP-PA02 cocktail provides coverage against at least 90% of tested CF clinical isolates and has shown superior in vitro potency as well as improved efficacy in an animal model of infection.

The improvements in AP-PA02 reflect our core strategy of utilizing clinical isolate surveillance data to drive enhancement of product composition.

Preclinical highlights of AP-PA02 include:

● Significantly reduced P.

aeruginosa biofilm mass in vitro within 4 hours of a low-dose application;

● Persisted in the lung after intranasal instillation;

● Systemic exposure after intranasal instillation is limited;

aeruginosa biofilm mass in vitro ;

● Persistence of active phage particles in the lung;

● Limited systemic and off-target organ distribution;

● Significantly decreased mortality in a murine model of acute P.

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● Components maintain activity in the presence of other CF therapies.

We have developed AP-PA02 as a sterile liquid formulation, suitable for delivery by inhalation and intravenous administration.

Clinical trial material of AP-PA02 is manufactured under cGMP at our production facility in Marina del Rey, California, to support the required regulatory filing(s) for clinical entry in the United States.

Potency of drug substance currently supports doses up to approximately 1x10 11 PFU (plaque forming units) per mL, and endotoxin levels are well within specifications for an intravenous product.

We have developed AP-PA02 as a sterile liquid formulation, suitable for delivery by inhalation.

Clinical trial material of AP-PA02 is currently manufactured under cGMP at our production facility in Marina del Rey, California.

Clinical Development of AP-PA02 in Cystic Fibrosis

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On October 14, 2020, Armata received approval for the study to proceed from the FDA for its Investigational New Drug (“IND”) to initiate the “SWARM- P.a.

” study – a Phase 1b/2a, multi-center, double-blind, randomized, placebo-controlled, single ascending dose (“SAD”) and multiple ascending dose (“MAD”) clinical trial to evaluate the safety and tolerability of inhaled AP-PA02 in subjects with CF and chronic pulmonary P.

aeruginosa infection.

” study – a Phase 1b/2a, double-blind, randomized, placebo-controlled, single ascending dose (“SAD”) and multiple ascending dose (“MAD”) clinical trial to evaluate the safety, tolerability and phage recovery profile of AP-PA02 administered by inhalation in subjects with cystic fibrosis and chronic pulmonary Pseudomonas aeruginosa infection.

Primary Endpoints (SAD and MAD) will include incidence and severity of treatment-emergent, adverse events.

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We will look at clinical parameters as a part of exploratory endpoints for the SAD and MAD cohorts.

The study is designed to include a total of approximately 48 subjects in multiple U.S.-based sites.

We anticipate generating topline data from the MAD portion of the study in 2022.

The enhanced five-phage AP-PA02 cocktail (described

above) was advanced through manufacturing and regulatory review for introduction into the MAD component of the SWARM- P.a.

The SWARM- P.a.

study is designed to include a total of approximately 32 subjects in multiple U.S.-based sites.

We anticipate generating topline data from the SWARM- P.a.

study in 2022.

The SWARM- P.a.

study is supported by the CFF, which in March 2020 granted us a Therapeutics Development Award of up to $5.0 million.

With positive outcomes from this first study, SWARM- P.a.

, we plan to initiate follow-on studies that will investigate the efficacy of AP-PA02 in chronically-infected patients and patients with primary/early intermittent infections.

, we plan to initiate follow-on studies that will investigate the efficacy of AP-PA02 in chronically-infected patients and potentially other CF patient populations.

Our ultimate goal is to bring AP-PA02 to the CF community at large as a new FDA-approved novel therapy to treat airway P.

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aeruginosa Phage Product Candidates

In addition to pursuing lung infections in CF patients, we have begun charting the appropriate clinical and regulatory paths for other respiratory infections with high unmet clinical need, such as in NCFB patients as well as acute pneumonias in hospitalized patients.

We intend to optimize P.

aeruginosa phage product candidates for the treatment of each of these indications.

Our clinical candidate for pneumonia, AP-PA03, took advantage of our collection of relevant P.

aeruginosa clinical isolates and our expanded phage library.

AP-PA03 is comprised of a cocktail of natural P.

aeruginosa phages originating from distinct genera, targeting multiple receptor classes, functioning with compatibility and cooperativity, and further characterized by being highly potent and having a broad host coverage against approximately 90% of tested clinical isolates.

We expect AP-PA03 to enter process development in the first half of 2021.

We do not anticipate clinical development of AP-PA02 for NCFB until such time that we can evaluate the results of the CF SWARM- P.a.

We plan to obtain regulatory approval to initiate clinical studies for NCFB and/or for pneumonia in 2021 or 2022.

aeruginosa isolates from people diagnosed with NCFB revealed that the five-phage AP-PA02 cocktail offers broad coverage and robust potency in this indication as well.

In 2022, we received regulatory approval to a initiate Phase 2 clinical trial for NCFB using AP-PA02.

The Company plans to initiate a Phase 2 trial during 2022.

Conversely and representing the different physiology of acute pneumonia lung infections as compared to chronic CF and NCFB respiratory infections, a novel cocktail is in development for the clinical indication of acute hospitalized pneumonia.

We have deployed our extensive clinical isolate collection and phage library to identify a candidate phage cocktail, AP-PA03, that is entering manufacturing with a regulatory filing expected in 2022 or 2023.

Staphylococcus aureus Phage Product Candidate, AP-SA02

Historical Background

AP-SA02 is being developed as a more advanced version of its predicate AP-SA01 (previously known as AB-SA01).

AP-SA02 is being developed as a more advanced version of AP-SA01 (previously known as AB-SA01).

The therapeutic potential of AP-SA01 has been demonstrated through:

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We no longer offer AP-SA01 through any expanded access program.

Human exposure through treatment of single patients with AP-SA01 under the expanded access program has been helpful in demonstrating the promise of phage therapy and warrants further study to support safety and efficacy through randomized controlled trials required to support registration.

randomized controlled trials required to support registration.

Feedback from a Type B pre-IND meeting with the FDA in August 2018 has been insightful for the regulatory path required for phage therapeutics in general, and specifically for a phage product candidate intended for systemic delivery.

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Development of AP-SA02

AP-SA02 is a novel biologic product candidate comprising natural lytic phages that target the problematic pathogen, S.

AP-SA02 is a novel biologic product candidate comprised of a cocktail of natural lytic phages that target the problematic pathogen, S.

Preclinical highlights of AP-SA02 include:

● Coverage of more than 90% of clinical isolates tested, including against drug-resistant isolates (MRSA:

● Potent antimicrobial activity against approximately 95% of S.

aureus clinical isolates tested, including drug-resistant isolates (MRSA:

methicillin-resistant S.

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vancomycin-resistant S.

● Efficiency of plating and plaque morphology reflect strongly potent component phages.

Potency further demonstrated by the failure of attempts to obtain phage-resistant bacteria;

● Component phages are stable and retain infectivity after exposure to relevant biological fluids (blood and plasma);

● Penetrates pre-existing biofilms;

● Additive, indifferent, or synergistic effects in combination with vancomycin;

no antagonistic effects noted;

● Maintains activity in the presence of current standard-of-care anti-staphylococcal antibiotics.

● Unique mechanism of action offers synergistic or additive benefit with standard of care antibiotics;

● Component phages are stable and retain infectivity after exposure to relevant biological fluids;

● Penetrates pre-existing S.

aureus biofilms.

We have developed AP-SA02 as a sterile solution, suitable for delivery by intravenous administration.

Feasibility batches of AP-SA02 have been completed meeting all intended specifications.

Verification batches are advancing with quality control data expected to support regulatory filings.

Potency of drug substance supports doses up to at least 1x10 9 PFU (plaque forming units) per phage, and endotoxin levels are well within specifications for an intravenous product.

Clinical trial material of AP-SA02 will be manufactured under cGMP at our production facility in Marina del Rey, California, to support the required regulatory filing(s) for clinical entry in the United States and ex-U.S.

Clinical trial material of AP-SA02 is currently manufactured under cGMP at our production facility in Marina del Rey, California to support the required regulatory filing(s) for clinical entry in the United States and ex-U.S.

Clinical Development of AP-SA02 in Bacteremia

We plan to file an IND application with the FDA in 2021, and, upon regulatory clearance, initiate a first-in-man Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled, multiple-ascending dose escalation study of the safety, tolerability, and efficacy of intravenous AP-SA02 as an adjunct to best available antibiotic therapy compared to best available antibiotic therapy alone for the treatment of adults with complicated bacteremia due to S.

On November 17, 2021, Armata received approval for the study to proceed from the FDA for its Investigational New Drug (“IND”) to initiate the “diSArm” study – a Phase 1b/2a, randomized, double‐blind, placebo‐controlled, multiple ascending dose escalation study of the safety, tolerability, and efficacy of intravenous AP‐SA02 as an adjunct to best available antibiotic therapy compared to best available antibiotic therapy alone for the treatment of adults with bacteremia due to Staphylococcus aureus .

The objectives of this study are to:

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(ii) evaluate optimal dosing through safety, pharmacokinetics and microbial efficacy;

and (iii) explore efficacy through

evaluation of key meaningful endpoints.

We anticipate conducting the study at sites in the United States and also at sites abroad.

and (iii) explore efficacy through evaluation of key meaningful endpoints.

The study will be conducted at sites in the United States and also at sites abroad.

The Phase 1b/2a study will be partially funded by a $15.0 million award from the DoD through the Medical Technology Enterprise Consortium (“MTEC”) with funding from the Defense Health Agency and Joint Warfighter Medical Research Program.

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aureus (“MRSA").

Merck Partnered Program

Proprietary synthetic phage candidates designed to target an undisclosed infectious disease agent are being developed in partnership with Merck, a collaboration that reflects the pharmaceutical industry’s growing interest in phage therapy.

Pursuant to the terms of the Amended and Restated Research Collaboration and Option to License Agreement between Armata and Merck (the “Research and Option Agreement”) we are engaged in the research and development of engineered phage, or a combination of two or more engineered phages, that infect specific bacteria, pursuant to the criteria set forth in the research plan.

We intend for the phage to be engineered for a wide host range, and to express anti-biofilm and antimicrobial payloads.

We will be entitled to milestone payments tied to the achievement of product development and regulatory milestones, and royalty payments based on net sales of products developed pursuant to the Research and Option Agreement.

We are responsible for our costs and expenses in connection with the research program.

Unless the Research and Option Agreement is terminated by Merck, it will continue in full force and effect until one or more products developed thereunder has received marketing authorization and, thereafter, until expiration of all royalty obligations thereunder.

Upon expiration of the Research and Option Agreement, Merck’s licenses pursuant to the Research and Option Agreement will become fully paid-up, perpetual licenses.

An amendment to the Research and Option Agreement with a revised research plan was agreed to by the parties in December 2019.

Engineered Phage-Based Diagnostic

We are developing a diagnostic test that, once fully developed, will help us to rapidly and accurately identify patients for future clinical trials and we believe will be useful in the commercialization of our phage product candidates.

These tests are deigned to drive early use of our therapeutic phage in a treatment paradigm by identifying patients who are most likely to benefit.

For example, those patients who are infected with a bacterial isolate that is sensitive to our particular therapeutic phage, and to monitor response to treatment with our particular therapeutic phage.

The test is designed to be highly sensitive and to identify colonized patients even before a diagnosis of infection has been given by the treating physician .

A regulatory filing for AP-SA02 in this indication is expected in 2022.

Discovery Research

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Klebsiella pneumoniae phage, for example, is a potentially important addition to treatment options for serious lung infections.

An outbreak of ventilator-associated pneumonia caused by a new emerging hypervirulent K.

pneumoniae strain led to the death of five patients in the intensive care unit of a hospital in China (Lancet Infect.

Volume 18:1, Jan 2018).

Furthermore, our team of microbiologists and synthetic biologists hunt for natural phages and evaluate the suitability of these phages for engineering using our proprietary synthetic phage platform.

We continue to make advancements in the engineering of super fit phage, incorporating the best attributes from a phage family to expand host range and increase burst size, and improving bactericidal and biofilm activity through the expression of heterologous proteins.

Furthermore, our team of microbiologists and synthetic biologists hunt for natural phages and evaluate the suitability of these natural phages for engineering using our proprietary synthetic phage platform.

These powerful natural phages can be purposely engineered to be more efficient killers.

The use of synthetic biology tools enables us to precisely engineer natural phages in ways that further improve their pharmacological properties and antimicrobial activity, with the potential to create supercharged synthetic phages that can be deployed in the clinic as highly effective weapons in the fight against multidrug-resistant bacterial infections.

Attributes of engineered phages can include expanded host range, improved potency which is a fundamental drug property that can translate into improved clinical efficacy, and importantly, biofilm disruption, which is a critical aspect of serious infections that needs to be addressed.

On our own, and in partnership, we are developing proprietary synthetic phage candidates designed to target pathogens such as Pseudomonas aeruginosa , as well as undisclosed infectious disease agents.

Manufacturing

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This facility, which serves as our headquarters, has approximately 35,500 square feet of laboratory and office space, including 5,600 square feet of cGMP laboratory space, designed to produce clinical quantities of each of our product candidates and to perform in-house Quality Control testing.

We operate in-house process development activities through to production, purification, formulation, and release of our therapeutic phage cocktails for use in human clinical trials.

We operate in-house process development activities through to the production, purification, formulation, and release of our therapeutic phage cocktails for use in human clinical trials.

Our facility is licensed by the California Department of Public Health (“CDPH”) for drug manufacturing and is subject to periodic, unannounced inspections for compliance with cGMP and other state and federal laws and regulations.

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Our facility is staffed with an independent Quality Unit and Manufacturing and Facilities personnel trained under cGMPs.

We believe this facility will be sufficient to meet our manufacturing needs through our Phase 3 clinical trials.

Our current formulations for our P.

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We also rely on trademarks, trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position.

We also depend upon the skills, knowledge, experience

and know-how of our management and research and development personnel, as well as that of our advisors, consultants and other contractors.

We also depend upon the skills, knowledge, experience and know-how of our management and research and development personnel, as well as that of our advisors, consultants and other contractors.

To help protect our proprietary processes and know-how, which is not patentable, and for inventions for which patents may be difficult to enforce, we currently and will in the future rely on trade secret protection and contractual obligations with third parties to protect our interests and to develop and maintain our competitive position.

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Bacteriophage Patent Portfolio

As of January 14, 2021, we owned or had exclusive license rights to a total of 121 patents and applications:

As of December 31, 2021, we owned or had exclusive license rights to a total of 131 patents and applications:

patents, 10 U.S.

non-provisional patent applications, 2 U.S.

provisional applications, 62 foreign patents, and 39 foreign patent applications, with nominal expiration on various dates between 2024 and 2041.

patent applications, 65 foreign patents, and 45 foreign patent applications, with nominal expiration on various dates between 2024 and 2041.

Patent term adjustments or patent term extensions could result in later expiration dates.

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There are a handful of small biotechnology companies developing bacteriophage products to treat human diseases.

To our knowledge, several biotechnology companies in the United States and Europe, including Adaptive Phage Therapeutics, Pherecydes Pharma, BiomX Inc., Intralytix, Inc., Locus Biosciences, Inc., PhagoMed Biopharma GmbH, TechnoPhage, SA, Felix Biotechnology, as well as academic institutions, have discovery stage or clinical programs utilizing naturally occurring phages or synthetic biology approaches to genetically modify bacteriophages to remove or input genes to improve therapeutic properties such as increases to the bacterial host range to infect a larger number of bacterial strains and decrease the need for using multiple phages in a product.

To our knowledge, several biotechnology companies in the United States and Europe, including Adaptive Phage Therapeutics, Pherecydes Pharma, BiomX Inc., Intralytix, Inc., Locus Biosciences, Inc., TechnoPhage, SA, Felix Biotechnology, as well as academic institutions, have discovery stage or clinical programs utilizing naturally occurring phages or synthetic biology approaches to genetically modify bacteriophages to remove or input genes to improve therapeutic properties such as increases to the bacterial host range to infect a larger number of bacterial strains and decrease the need for using multiple phages in a product.

Our bacteriophage programs may compete with or be synergistic with currently approved antibiotics, and experimental approaches such as novel antibiotics, antimicrobial peptides, antimicrobial vaccines, metals, antisense, monoclonal antibodies and possibly microbiome manipulation.

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We have not yet established a sales, marketing or product distribution infrastructure because our lead candidates are still in early clinical development.

Subject to receiving marketing approvals, or earlier we intend to either partner the commercial rights to our products with existing companies that have the wherewithal and resources to commercialize explore building the necessary marketing and sales infrastructure to market and sell our current product candidates.

Subject to receiving marketing approvals, or earlier we intend to either partner the commercial rights to our products with existing companies that have the wherewithal and resources to commercialize

explore building the necessary marketing and sales infrastructure to market and sell our current product candidates.

We also intend to explore the use of a variety of distribution agreements and commercial partnerships in those territories where we do not establish a sales force for any of our product candidates that obtain marketing approval.

Material Agreements

License Agreements

Amended and Restated Research Collaboration and Option to License Agreement with Merck

Pursuant to the terms of the Research and Option Agreement, we are engaged in generating broad host range synthetic bacteriophage candidate(s) targeting an undisclosed infectious disease agent(s), pursuant to the criteria set forth in the research plan.

We granted to Merck an exclusive, worldwide license in our patent rights, and our interest in any joint patent rights, with the right to grant and authorize sublicenses, for any and all uses of any product candidates, or products, developed through the research plans set forth in the Research and Option Agreement in a specific field of use.

Further, we granted

to Merck an exclusive, worldwide license, with the right to grant and authorize sublicenses, in our background intellectual property and know-how, solely to make, have made, use, import, offer to sell and sell (but not genetically modify) the product candidates, or products, developed through the research plans set forth in the Research and Option Agreement in the specific field of use.

Each party to the Research and Option Agreement is responsible for its costs and expenses in connection with the research program.

Upon termination of the Research and Option Agreement, Merck’s licenses pursuant to the Research and Option Agreement will become fully paid-up, perpetual licenses.

License Agreement with United Kingdom Secretary of State for the Department of Health

In January 2011, upon completion of our acquisition of Biocontrol Ltd., we assumed a license agreement entered into in March 2007 between Biocontrol Ltd.

and the Health Protection Agency, Centre for Emergency Preparedness and Response, to use certain intellectual property rights to develop treatments for bacterial biofilm infections.

The agreement was subsequently assigned to the United Kingdom Secretary of State for the Department of Health (“DoH”).

Under the license agreement, we have obtained exclusive rights to a patent portfolio related to the use of bacteriophages combined with biofilm-disrupting agents in treating biofilm infections.

In consideration for the exclusive license, we may be required to pay to the DoH certain milestone payments in the aggregate of up to £10,000 per product, as well as single digit percentage royalty on net sales of products incorporating licensed intellectual property.

The license agreement will remain in effect until the expiration of the last patent exclusively licensed under the license agreement.

If we default on any milestone or royalty payments, or upon breach by us of certain other terms of the license agreement, the DoH may either terminate the license agreement immediately upon written notice or modify the license to be non-exclusive upon 30 days’ written notice.

Strategic Alliances and Research Agreements

On June 15, 2020, we entered into a Research Project Award agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we will receive a $15.0 million grant and entered into a three-year program administered by the DoD through MTEC with funding from the Defense Health Agency and Joint Warfighter Medical Research Program.

We plan to use the grant to partially fund a Phase 1b/2, randomized, double-blind, placebo-controlled, dose escalation clinical study of Armata's therapeutic phage-based candidate, AP-SA02, for the treatment of complicated S.

We plan to use the grant to partially fund a Phase 1b/2a, randomized, double-blind, placebo-controlled, dose-escalation clinical study of Armata's therapeutic phage-based candidate, AP-SA02, for the treatment of S.

aureus bacteremia infections.

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CFF Therapeutics Development Award

On March 13, 2020, we entered into an award agreement (the “Agreement”) with CFF, pursuant to which we received a Therapeutics Development Award of up to $5.0 million (the “Award”).

The Award will be used to fund a portion of our Phase 1b/2 clinical trial of the P.

On March 13, 2020, we entered into an award agreement (the “Agreement”) with the CFF, pursuant to which we received a Therapeutics Development Award of up to $5.0 million (the “Award”).

The Award will be used to fund a portion of our Phase 1b/2a clinical trial of the P.

aeruginosa phage candidate, AP-PA02, as a treatment for P.

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The first payment under the Agreement, in the amount of $1.0 million, became due upon signing the Agreement and was received in April 2020.

The remainder of the Award will be paid to us incrementally in installments upon the achievement of certain milestones related to the development program and progress of the Phase 1b/2 clinical trial of AP-PA02, as set forth in the Agreement.

The remainder of the Award will be paid to us incrementally in installments upon the achievement of certain milestones related to the development program and progress of the Phase 1b/2a clinical trial of AP-PA02, as set forth in the Agreement.

If we cease to use commercially reasonable efforts directed to the development of AP-PA02, or any other Product (as defined in the Agreement), for a period of 360 days (an “Interruption”) and fails to resume the development of the Product after receiving from CFF notice of an Interruption, then we must either repay the amount of the Award actually received by the Company, plus interest, or grant to CFF (1) an exclusive (even as to Armata), worldwide, perpetual, sublicensable license under technology developed under the Agreement that covers the Product for use in treating infections in CF patients (the “CF Field”), and (2) a non-exclusive, worldwide, perpetual, sublicensable license under certain background intellectual property covering the Product, to the extent necessary to commercialize the Product in the CF Field.

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Our payment obligations survive the termination of the Agreement.

License Agreements

Amended and Restated Research Collaboration and Option to License Agreement with Merck

Further, we granted to Merck an exclusive, worldwide license, with the right to grant and authorize sublicenses, in our background intellectual property and know-how, solely to make, have made, use, import, offer to sell and sell (but not genetically modify) the product candidates, or products, developed through the research plans set forth in the Research and Option Agreement in the specific field of use.