Armata Pharmaceuticals Announces $35 Million Secured Credit Agreement with Innoviva
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The secured credit agreement between Armata Pharmaceuticals and Innoviva, involving a $35 million term loan at a 14.0% interest rate, represents a significant financial event for Armata. The interest rate, substantially higher than the average for secured loans, reflects the risk profile associated with biotechnology firms, particularly those in the clinical trial phase. Stakeholders should note the loan's relatively short maturity date of June 4, 2025, which indicates a near-term cash infusion with a swift repayment expectation. This capital injection is pivotal for Armata's ongoing Phase 2 trials and preparation for Phase 3 trials. However, the use of the company's assets as collateral and the guarantee by domestic subsidiaries suggest a considerable risk if Armata fails to meet its repayment obligations or if the clinical trials do not yield the expected results.
Armata's focus on advancing phage-based therapeutics, particularly AP‐PA02 and AP‐SA02, is a noteworthy endeavor in the fight against antibiotic-resistant bacteria. The reference to 'high purity' and specificity indicates that these phages are likely engineered to target specific bacterial strains, minimizing off-target effects and potentially reducing adverse reactions. The therapeutic 'cocktail' approach, designed to mitigate resistance development, is also significant. It suggests a strategy that combines different phages, each targeting a unique aspect of the bacteria, which could enhance the treatment's effectiveness. As these trials move into later stages, the safety and efficacy data will be critical in determining the potential impact on the treatment landscape for bacterial infections like Pseudomonas aeruginosa and Staphylococcus aureus, which are notorious for their resistance to conventional antibiotics.
The strategic partnership with Innoviva, Armata's largest shareholder, underscores investor confidence in Armata's clinical development. This financial backing could position Armata favorably against competitors in the bacteriophage therapy space, a niche but growing segment of the biotech industry. The successful progression of AP‐PA02 and AP‐SA02 through clinical trials and eventual FDA approval could disrupt the antibiotics market, particularly for treating antibiotic-resistant infections. Market dynamics may shift as healthcare providers seek new solutions and Armata's proprietary technology could capture significant market share if proven effective. However, the market's response will heavily depend on trial outcomes and the ability of Armata to navigate the regulatory landscape and scale production to meet potential demand.
Proceeds to be used to continue to advance rigorously designed clinical trials of Armata's high purity phage-based therapeutic candidates
Proceeds from the
"Innoviva has been an invaluable partner to Armata over the years, and we view this latest financing as further evidence of their confidence in our mission, our clinical development progress, and our team," stated Dr. Deborah Birx, chief executive officer of Armata. "Our phage candidates are highly differentiated through their purity and specificity for their bacterial targets, and our 'cocktail' approach continues to demonstrate a favorable safety and tolerability profile, allowing us to continue to evaluate higher doses and longer durations of treatment in advance of registrational Phase 3 trials. This financing will enable Armata to fully enroll both ongoing Phase 2 trials, one in acute bacteremia and one in non-cystic fibrosis bronchiectasis, and prepare the Company for two pivotal trials. I would like to thank the team at Innoviva for their continued support."
The credit agreement provides for a secured term loan facility in an aggregate amount of
About Armata Pharmaceuticals, Inc.
Armata is a clinical-stage biotechnology company focused on the development of pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using its proprietary bacteriophage-based technology. Armata is developing and advancing a broad pipeline of natural and synthetic phage candidates, including clinical candidates for Pseudomonas aeruginosa, Staphylococcus aureus, and other pathogens. Armata is committed to advancing phage with drug development expertise that spans bench to clinic including in-house phage-specific cGMP manufacturing.
Forward Looking Statements
This communication contains "forward-looking" statements, including, without limitation, statements related to Armata's bacteriophage development programs, Armata's ability to set up or operate R&D and manufacturing facilities, Armata's ability to meet expected milestones, Armata's future success or failure, Armata's ability to be a leader in the development of phage-based therapeutics, Armata's expected receipt of grant funding, and statements related to the timing and results of clinical trials, including the anticipated results of clinical trials of AP-PA02 and AP-SA02, and Armata's ability to develop new products based on natural bacteriophages and synthetic bacteriophages. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based upon Armata's current expectations. Forward-looking statements involve risks and uncertainties. Armata's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the ability of Armata's lead clinical candidates, AP-PA02 and AP-SA02, to be more effective than previous candidates; that the top line results are indicative of the final data; Armata's ability to expedite development of AP-PA02 and AP-SA02; Armata's ability to advance its preclinical and clinical programs and the uncertain and time-consuming regulatory approval process; Armata's ability to develop products based on bacteriophages and synthetic phages to kill bacterial pathogens; the Company's expected market opportunity for its products; Armata's ability to sufficiently fund its operations as expected, including obtaining additional funding as needed, and to refinance, repay or restructure its debt; and whether Armata will incur unforeseen expenses or liabilities. Additional risks and uncertainties relating to Armata and its business can be found under the caption "Risk Factors" and elsewhere in Armata's filings and reports with the SEC, including in Armata's Annual Report on Form 10-K, filed with the SEC on March 16, 2023, and in its subsequent filings with the SEC.
Armata expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Armata's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Media Contacts:
At Armata:
Pierre KymeArmata Pharmaceu
ticals, Inc.
ir@armatapharma.com
310-665-2928 x234
Investor Relations:
Joyce Allaire
LifeSci Advisors, LLC
allaire@lifesciadvisors.com
212-915-2569
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SOURCE Armata Pharmaceuticals, Inc.
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