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What changed in Pulmatrix, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Pulmatrix, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+447 added−278 removedSource: 10-K (2025-03-21) vs 10-K (2024-03-28)

Top changes in Pulmatrix, Inc.'s 2024 10-K

447 paragraphs added · 278 removed · 226 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

78 edited+24 added−10 removed144 unchanged
Biggest changeWe expect to continue to incur substantial expenses and operating losses for at least the next several years based on our drug development plans and in connection with our ongoing activities, as we: ● Pursue further clinical studies for PUR3100, an orally inhaled dihydroergotamine (“DHE”) including a Phase 2 clinical study for the treatment of acute migraine.
Biggest changeThereafter, if development of such product candidates were to be continued and successfully advanced (of which there can be no assurance), it would be necessary to seek and obtain marketing approval to commercialize such product candidates, which could be expected to require the expenditure of significant additional resources and expenses related to regulatory, product sales, medical affairs, marketing, manufacturing and distribution. 3 Contingent on securing additional funding and continuing development of these candidates, we would expect to continue to incur substantial expenses and operating losses for at least the next several years, as we would: ● Pursue further clinical studies for PUR3100, an orally inhaled dihydroergotamine (“DHE”) including a Phase 2 clinical study for the treatment of acute migraine.
We analyzed data from the completed Phase 1b clinical study of PUR1800 for AECOPD and presented study results at the American Academy of Allergy, Asthma & Immunology (AAAAI) conference in the first quarter of 2023. The results indicated PUR1800 was safe and well tolerated with no observed safety signals.
We analyzed data from the completed Phase 1b clinical study of PUR1800 for AECOPD and presented study results at the American Academy of Allergy, Asthma & Immunology (AAAAI) conference in the first quarter of 2023. The results indicated PUR1800 was safe and well tolerated with no observed safety signals.
PUR1900 On April 15, 2019, we entered into a Development and Commercialization Agreement (the “Cipla Agreement”) with Cipla for the co-development and commercialization, on a worldwide, except for the Cipla Territory defined below, exclusive basis, of PUR1900, our inhaled iSPERSE ™ drug delivery system (the “Product”) enabled formulation of the antifungal drug itraconazole, which is only available as an oral drug, for the treatment of all pulmonary indications, including ABPA in patients with asthma.
On April 15, 2019, we entered into a Development and Commercialization Agreement (the “Cipla Agreement”) with Cipla for the co-development and commercialization, on a worldwide, except for the Cipla Territory defined below, exclusive basis, of PUR1900, our inhaled iSPERSE ™ drug delivery system (the “Product”) enabled formulation of the antifungal drug itraconazole, which is only available as an oral drug, for the treatment of all pulmonary indications, including ABPA in patients with asthma.
Performance across flow rates provides reliable dose delivery across patient populations and reduces patient-to-patient variability. ● Delivery of macromolecules and biologics . iSPERSE ™ powders can be used with an array of dry powder inhaler technologies and can be formulated with a broad range of therapeutic compounds ranging from small molecules to proteins for both local and systemic drug delivery applications. ● Homogenous combinations of multiple drugs . iSPERSE ™ creates homogenous particles including excipients and API, which allow for the consistent delivery of multiple APIs in a product.
Performance across flow rates provides reliable dose delivery across patient populations and reduces patient-to-patient variability. 5 ● Delivery of macromolecules and biologics . iSPERSE ™ powders can be used with an array of dry powder inhaler technologies and can be formulated with a broad range of therapeutic compounds ranging from small molecules to proteins for both local and systemic drug delivery applications. ● Homogenous combinations of multiple drugs . iSPERSE ™ creates homogenous particles including excipients and API, which allow for the consistent delivery of multiple APIs in a product.
The clinical study, performed at the Medicines Evaluation Unit in Manchester, UK, was a randomized, three-way crossover double-blind study with 14 days of daily dosing which includes placebo and one of two doses of PUR1800, and included a 28-day follow-up period after each treatment period. A total of 18 adults with stable COPD were enrolled.
The clinical study, performed at the Medicines Evaluation Unit in Manchester, UK, was a randomized, three-way crossover double-blind study with 14 days of daily dosing, which included placebo and one of two doses of PUR1800, and included a 28-day follow-up period after each treatment period. A total of 18 adults with stable COPD were enrolled.
We believe that local lung delivery by inhalation of our iSPERSE ™ formulation could provide convenient, effective and safe management of the debilitating and often life-threatening lung infections that are not currently addressed by inhaled therapies. Competition and Market Opportunities Current treatments of pulmonary fungal infections highlight the limitations of oral or intravenous anti-infective treatments for lung infections.
We believe that local lung delivery by inhalation of our iSPERSE ™ formulation could provide convenient, effective and safe management of the debilitating and often life-threatening lung infections that are not currently addressed by inhaled therapies. 9 Competition and Market Opportunities Current treatments of pulmonary fungal infections highlight the limitations of oral or intravenous anti-infective treatments for lung infections.
However, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment on whether such extensions should be granted, and if granted, the length of such extensions. The patent positions of biotechnology companies like ours are generally uncertain and involve complex legal, scientific and factual questions.
However, there is no guarantee that the applicable authorities, including the FDA in the United States, will agree with our assessment on whether such extensions should be granted, and if granted, the length of such extensions. 12 The patent positions of biotechnology companies like ours are generally uncertain and involve complex legal, scientific and factual questions.
We have national phase applications pending in Australia, Brazil, Canada, China, Europe, Israel, India, Japan, Korea, Mexico, New Zealand, Russia, and the United States that cover certain formulations and methods of use relevant to our PUR3100 program. 9 There can be no assurance that the patent applications will be granted.
We have national phase applications pending in Australia, Brazil, Canada, China, Europe, Israel, India, Japan, Korea, Mexico, New Zealand, Russia, and the United States that cover certain formulations and methods of use relevant to our PUR3100 program. There can be no assurance that the patent applications will be granted.
In limited circumstances, the FDA may approve a competing product if the product shows clinical superiority over a product with orphan drug designation exclusivity. Foreign Regulation In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of its products.
In limited circumstances, the FDA may approve a competing product if the product shows clinical superiority over a product with orphan drug designation exclusivity. 17 Foreign Regulation In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of its products.
A member state may approve a specific price for the medicinal product, or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. We expect that there will continue to be a number of federal and state proposals to implement governmental pricing controls.
A member state may approve a specific price for the medicinal product, or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. 18 We expect that there will continue to be a number of federal and state proposals to implement governmental pricing controls.
Reimbursement In the United States and other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payers, including government payers, managed care providers, private health insurers and other organizations.
Reimbursement In the United States and other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors, including government payors, managed care providers, private health insurers and other organizations.
Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payers.
Moreover, while the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment that results from the MMA may result in a similar reduction in payments from non-governmental payors.
To add additional inhaled therapeutics to our development pipeline and facilitate additional collaborations, we are leveraging our iSPERSE ™ technology and our management’s expertise in inhaled therapeutics and particle engineering to identify potential product candidates. ● Invest in protecting and expanding our intellectual property portfolio and file for additional patents to strengthen our intellectual property rights.
To add additional inhaled therapeutics to our development pipeline and facilitate additional collaborations, we are leveraging our iSPERSE™ technology and our expertise in inhaled therapeutics and particle engineering to identify potential product candidates. 4 ● Invest in protecting and expanding our intellectual property portfolio and file for additional patents to strengthen our intellectual property rights.
A generic version of roflumilast, a phosphodiesterase inhibitor approved by the FDA for use in managing COPD exacerbations, became available in 2022. 6 Non-Clinical Development We conducted two 28-day GLP toxicology studies in rats and dogs.
A generic version of roflumilast, a phosphodiesterase inhibitor approved by the FDA for use in managing COPD exacerbations, became available in 2022. 8 Non-Clinical Development We conducted two 28-day GLP toxicology studies in rats and dogs.
Current treatments for migraine include oral, intranasal, IV or subcutaneous formulations of triptans, DHE, and calcitonin gene-related peptide (“CGRP”) antagonists (gepants). Studies show that people with migraines are underdiagnosed, undertreated, and experience substantial decreases in functioning and productivity, which translates into diminished quality of life for individuals, and financial burdens to patients, health-care systems, and employers.
Current treatments for migraine include oral, intranasal, IV or subcutaneous formulations of triptans, DHE, and calcitonin gene-related peptide (“CGRP”) antagonists (gepants). Studies show that people with migraines are underdiagnosed, undertreated, and experience substantial decreases in functioning and productivity, which translates into diminished quality of life for individuals, and financial burdens to patients, healthcare systems, and employers.
Safety and tolerability, as well as systemic PK were evaluated. PUR1800 was well tolerated and there were no observed safety signals. The PK data indicate that PUR1800 results in low and consistent systemic exposure when administered via oral inhalation.
Safety and tolerability, as well as systemic pharmacokinetics (“PK”) were evaluated. PUR1800 was well tolerated and there were no observed safety signals. The PK data indicate that PUR1800 results in low and consistent systemic exposure when administered via oral inhalation.
Third-party payers are increasingly examining the medical necessity and cost effectiveness of medical products and services in addition to safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of newly approved therapeutics.
Third-party payors are increasingly examining the medical necessity and cost effectiveness of medical products and services in addition to safety and efficacy and, accordingly, significant uncertainty exists as to the reimbursement status of newly approved therapeutics.
Competition and Market Opportunities There are 18 million moderate-to-severe episodes of AECOPD in the U.S. each year. AECOPD are sudden onset increases in symptoms, including increased dyspnea, sputum purulence and volume, and wheezing, coughing, and shortness of breath that require medical intervention and can lead to hospitalization.
Competition and Market Opportunities There are 18 million moderate-to-severe episodes of AECOPD in the US each year. AECOPD are sudden onset increases in symptoms, including increased dyspnea, sputum purulence and volume, and wheezing, coughing, and shortness of breath that require medical intervention and can lead to hospitalization.
Each third-party payer may have its own policy regarding what products it will cover, the conditions under which it will cover such products, and how much it will pay for such products.
Each third-party payor may have its own policy regarding what products it will cover, the conditions under which it will cover such products, and how much it will pay for such products.
During the period commencing on January 6, 2024 and ending July 30, 2024 (the “Wind Down Period”), we will complete all Phase 2b activities, assign or license all patents to Cipla and their registration with the appropriate authorities in the Cipla Territory, complete a physical and demonstrable technology transfer and secure all data from the Phase 2b study for inclusion in the safety database for the Cipla Territory.
We agreed that during the period commencing on January 6, 2024 and ending July 30, 2024 (the “Wind Down Period”), we would complete all Phase 2b activities, assign or license all patents to Cipla and their registration with the appropriate authorities in the Cipla Territory, complete a physical and demonstrable technology transfer and secure all data from the Phase 2b study for inclusion in the safety database for the Cipla Territory.
Business Strategy Our goal is to develop breakthrough therapeutic products that are safe, convenient, and more effective than the existing therapeutic products for respiratory and other diseases where iSPERSE ™ properties are advantageous.
Business Strategy Our goal has been to develop breakthrough therapeutic products that are safe, convenient, and more effective than the existing therapeutic products for respiratory and other diseases where iSPERSE ™ properties are advantageous.
Successful completion of the Phase 1/1b clinical study enabled us to initiate a Phase 2 clinical study in 2019, entitled: “A Randomized, Double-Blind, Multicenter, Placebo-Controlled, Phase 2 Study to Evaluate the Safety, Tolerability, and Pharmacokinetics of Itraconazole Administered as a Dry Powder for Inhalation (PUR1900) in Adult Asthmatic Patients with ABPA.” This clinical study was terminated in July 2020 due to the impact of the COVID-19 pandemic on patient enrollment and clinical study conduct.
All endpoints from the Phase 1/1b clinical study were successfully met. 10 Successful completion of the Phase 1/1b clinical study enabled us to initiate a Phase 2 clinical study in 2019, entitled: “A Randomized, Double-Blind, Multicenter, Placebo-Controlled, Phase 2 Study to Evaluate the Safety, Tolerability, and Pharmacokinetics of Itraconazole Administered as a Dry Powder for Inhalation (PUR1900) in Adult Asthmatic Patients with ABPA.” This clinical study was terminated in July 2020 due to the impact of the COVID-19 pandemic on patient enrollment and clinical study conduct.
FDA Approval Process The steps required to be taken before a new drug may be marketed in the United States generally include: ● Completion of preclinical laboratory and animal testing; ● The submission to the FDA of an IND application, which must be evaluated and found acceptable by the FDA before human clinical trials may commence; ● Performance of adequate and well-controlled human clinical trials in accordance with FDA’s IND regulations to establish the safety and efficacy of the proposed drug for its intended use; and ● Submission and approval of an NDA.
FDA Approval Process The steps required to be taken before a new drug may be marketed in the United States generally include: ● Completion of preclinical laboratory and animal testing; ● The submission to the FDA of an IND application, which must be evaluated, for safety and quality of scientific evaluation, and found acceptable by the FDA before human clinical trials may commence; ● Performance of adequate and well-controlled human clinical trials in accordance with the protocols described in the accepted IND, as well as FDA’s IND regulations to establish the safety and efficacy of the proposed drug for its intended use; and ● Submission and approval of an NDA.
Our in-licensed portfolio related to kinase inhibitors included approximately 276 granted patents, 33 of which are granted US patents, with expiration dates from 2029 to 2035, and approximately 22 additional pending patent applications in the US and other jurisdictions.
Our in-licensed portfolio related to kinase inhibitors included approximately 281 granted patents, 33 of which are granted US patents, with expiration dates from 2029 to 2035, and approximately 17 additional pending patent applications in the US and other jurisdictions.
Our in-licensed portfolio related to kinase inhibitors included approximately 276 granted patents, 33 of which are granted US patents, with expiration dates from 2029 to 2035, and approximately 22 additional pending patent applications in the US and other jurisdictions.
Our in-licensed portfolio related to kinase inhibitors included approximately 281 granted patents, 33 of which are granted US patents, with expiration dates from 2029 to 2035, and approximately 17 additional pending patent applications in the US and other jurisdictions.
The status of our patent portfolio changes frequently in the ordinary course of patent prosecution. As of December 31, 2023, our patent portfolio related to iSPERSE ™ included approximately 143 granted patents, 19 of which are granted US patents, with expiration dates from 2024 to 2037, and approximately 56 additional pending patent applications in the US and other jurisdictions.
The status of our patent portfolio changes frequently in the ordinary course of patent prosecution. As of December 31, 2024, our patent portfolio related to iSPERSE ™ included approximately 149 granted patents, 19 of which are granted US patents, with expiration dates from 2024 to 2037, and approximately 50 additional pending patent applications in the US and other jurisdictions.
The status of our patent portfolio changes frequently in the ordinary course of patent prosecution. As of December 31, 2023, our patent portfolio related to iSPERSE ™ included approximately 143 granted patents, 19 of which are granted US patents, with expiration dates from 2024 to 2037, and approximately 56 additional pending patent applications in the US and other jurisdictions.
The status of our patent portfolio changes frequently in the ordinary course of patent prosecution. As of December 31, 2024, our patent portfolio related to iSPERSE™ included approximately 149 granted patents, 19 of which are granted US patents, with expiration dates from 2024 to 2037, and approximately 50 additional pending patent applications in the US and other jurisdictions.
We additionally rely on third-party vendors to supply raw materials for our APIs and drug products. Research and Development For fiscal years ended December 31, 2023 and 2022, we spent approximately $15.5 million and $18.2 million, respectively, on research and development activities.
We additionally rely on third-party vendors to supply raw materials for our APIs and drug products. 13 Research and Development For fiscal years ended December 31, 2024 and 2023, we spent approximately $7.2 million and $15.5 million, respectively, on research and development activities.
ITEM 1. BUSINESS. Overview We are a clinical-stage biopharmaceutical company focused on the development of novel inhaled therapeutic products intended to prevent and treat respiratory and other diseases with important unmet medical needs using our patented iSPERSE ™ technology.
ITEM 1. BUSINESS. Overview We are a biopharmaceutical company that has focused on the development of novel inhaled therapeutic products intended to prevent and treat migraine and respiratory diseases with important unmet medical needs using our patented iSPERSE ™ technology.
Our current pipeline is aligned to this goal as we develop iSPERSE ™ -based therapeutic candidates which target the prevention and treatment of a range of diseases, including CNS disorders and pulmonary diseases.
Our current pipeline of clinical assets is aligned to this goal and includes iSPERSE ™ -based therapeutic candidates which target the prevention and treatment of a range of diseases, including CNS disorders and pulmonary diseases.
RISK FACTORS—Risks Related to Our Business”. PUR1800 Reduced responsiveness to corticosteroids represents an important barrier to effective treatment of COPD and AECOPD and provides a clear rationale to seek novel medicines to treat these respiratory diseases.
PUR1800 Reduced responsiveness to corticosteroids represents an important barrier to effective treatment of COPD and AECOPD and provides a clear rationale to seek novel medicines to treat these respiratory diseases.
Compliance with Environmental Laws Compliance with applicable environmental requirements during the years ended December 31, 2023 and 2022 has not had a material effect upon our capital expenditures, earnings or competitive position. Employees As of December 31, 2023, we had 22 full-time employees, 19 of whom were engaged in full-time research and development activities.
Compliance with Environmental Laws Compliance with applicable environmental requirements during the years ended December 31, 2024 and 2023 has not had a material effect upon our capital expenditures, earnings or competitive position. Employees As of December 31, 2024, we had two full-time employees, both of whom were engaged in full-time administrative activities.
Satsuma Pharmaceuticals, a subsidiary of Shin Nippon Biomedical Laboratories (“Satsuma”), has developed a dry powder formulation of DHE for intranasal dosing and has completed two Phase 3 clinical studies (ClinicalTrials.gov: NCT03901482 and NCT04940390).
Migranal and Trudhesa are the two currently FDA approved intranasal formulations of DHE. Satsuma Pharmaceuticals, a subsidiary of Shin Nippon Biomedical Laboratories (“Satsuma”), has developed a dry powder formulation of DHE for intranasal dosing and has completed two Phase 3 clinical studies (ClinicalTrials.gov: NCT03901482 and NCT04940390).
The requirements governing drug pricing vary widely from country to country. For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
Despite failure of both clinical studies to achieve primary endpoints, Satsuma filed an NDA in the first quarter of 2023 based on post-hoc analysis showing benefit in secondary endpoints. In January 2024, the FDA declined to approve the treatment, citing manufacturing concerns. Satsuma plans to work with the FDA to determine possible paths to resubmit the NDA.
Despite failure of both clinical studies to achieve primary endpoints, Satsuma filed an NDA in the first quarter of 2023 based on post-hoc analysis showing benefit in secondary endpoints. In January 2024, the FDA declined to approve the treatment, citing manufacturing concerns. Satsuma resubmitted its NDA in November 2024.
After the conclusion of the Wind Down Period, Pulmatrix will bear no further financial responsibility for the commercialization and development with respect to the Product in the Cipla Territory, with such commercialization and development expenses of the Product in the Cipla Territory to be borne at Cipla’s sole cost and expense after January 6, 2024.
As such, we no longer bear further financial responsibility for the commercialization and development with respect to the Product in the Cipla Territory, with such commercialization and development expenses of the Product in the Cipla Territory to be borne at Cipla’s sole cost and expense after January 6, 2024.
Department of Health and Human Services to negotiate the price of a set number of high Medicare spend drugs starting in 2026, requires rebates from manufacturers who increase their drug prices above inflation, and makes several changes to the Medicare Part D benefit that will increase manufacturer liability for drug costs previously borne by the government and beneficiaries under the program. 14 In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.
Department of Health and Human Services to negotiate the price of a set number of high Medicare spend drugs starting in 2026, requires rebates from manufacturers who increase their drug prices above inflation, and makes several changes to the Medicare Part D benefit that will increase manufacturer liability for drug costs previously borne by the government and beneficiaries under the program.
Data from clinical studies are not always conclusive and the FDA and/or any advisory committee it appoints may interpret data differently than the applicant. 12 After the FDA evaluates the NDA and inspects manufacturing facilities where the drug product and/or its API will be produced, it will either approve commercial marketing of the drug product with prescribing information for specific indications or issue a complete response letter indicating that the application is not ready for approval and stating the conditions that must be met in order to secure approval of the NDA.
After the FDA evaluates the NDA and inspects manufacturing facilities where the drug product and/or its API will be produced, it will either approve commercial marketing of the drug product with prescribing information for specific indications or issue a complete response letter indicating that the application is not ready for approval and stating the conditions that must be met in order to secure approval of the NDA.
These actions could have a material impact on the availability of products. 10 Suppliers We also rely on third-party contract manufacturers to supply the APIs that are used to formulate our therapeutic candidates. We place purchase orders with different contract manufacturers for the APIs required for PUR3100, PUR1800 and PUR1900.
Suppliers We also rely on third-party contract manufacturers to supply the APIs that are used to formulate our therapeutic candidates. We place purchase orders with different contract manufacturers for the APIs required for PUR3100, PUR1800 and PUR1900.
We believe the iSPERSE ™ dry powder technology offers enhanced drug loading and delivery efficiency that outperforms traditional lactose-blend inhaled dry powder therapies. We were incorporated in 2013 as a Delaware corporation.
We believe the iSPERSE ™ dry powder technology offers enhanced drug loading and delivery efficiency that outperforms traditional lactose-blend inhaled dry powder therapies.
A protocol for each clinical study and any subsequent protocol amendments must be submitted to the FDA as part of the IND application.
A protocol for each clinical study and any subsequent protocol amendments must be submitted to the FDA as part of the IND application and, subsequently adhered to in conducting clinical trials, if the IND application is accepted.
The topline data, along with the results from chronic toxicology studies, support the continued development of PUR1800 for the treatment of AECOPD and other inflammatory respiratory diseases. ● Terminate the PUR1900 Phase 2b study and seek to monetize PUR1900 in the United States.
The topline data, along with the results from chronic toxicology studies, support the continued development of PUR1800 for the treatment of AECOPD and other inflammatory respiratory diseases. PUR1900 We are currently exploring opportunities to monetize PUR1900 within the United States.
Lung exposure, as measured by sputum induction and analysis, was approximately 50-fold higher and plasma exposure was approximately 85-fold lower following inhalation of 20 mg of PUR1900 compared to 200 mg of oral Sporanox ® . All endpoints from the Phase 1/1b clinical study were successfully met.
Lung exposure, as measured by sputum induction and analysis, was approximately 50-fold higher and plasma exposure was approximately 85-fold lower following inhalation of 20 mg of PUR1900 compared to 200 mg of oral Sporanox ® .
We believe that an iSPERSE formulation of DHE can provide the positive rapid onset and long-lasting efficacy seen in the MAP0004 data by enabling a similar pharmacokinetic profile while eliminating the manufacturing and device issues which led to the MAP0004 FDA complete response letters.
PUR3100, the iSPERSE ™ formulation planned by Pulmatrix, is anticipated to deliver DHE to the lung with efficacy and tolerability that compares favorably with MAP0004, while avoiding the device-related issues of MAP0004 by delivering PUR3100 as an iSPERSE ™ dry powder. 6 We believe that an iSPERSE formulation of DHE can provide the positive rapid onset and long-lasting efficacy seen in the MAP0004 data by enabling a similar pharmacokinetic profile while eliminating the manufacturing and device issues which led to the MAP0004 FDA complete response letters.
Failure to comply with applicable regulatory requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval, product seizure or recall, or withdrawal of product approval.
Failure to comply with applicable regulatory requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval, product seizure or recall, or withdrawal of product approval. These actions could have a material impact on the availability of products.
We entered into an amendment to the Cipla Agreement on November 8, 2021 (the “Second Amendment”) and a subsequent amendment on January 6, 2024 (the “Third Amendment”). All references to the Cipla Agreement herein refer to the Cipla Agreement, as amended. The Cipla Agreement will remain in effect in perpetuity, unless otherwise earlier terminated in accordance with its terms.
We entered into an amendment to the Cipla Agreement on November 8, 2021 (the “Second Amendment”) and a subsequent amendment on January 6, 2024 (the “Third Amendment”). All references to the Cipla Agreement herein refer to the Cipla Agreement, as amended.
Securing FDA approval for new indications is similar to the process for approval of the original indication and requires, among other things, submitting data from adequate and well-controlled studies that demonstrate the product’s safety and efficacy in the new indication. Even if such studies are conducted, the FDA may not approve any change in a timely fashion, or at all.
Securing FDA approval for new indications is similar to the process for approval of the original indication and requires, among other things, submitting data from adequate and well-controlled studies that demonstrate the product’s safety and efficacy in the new indication.
While references to nonclinical and clinical data not generated by the applicant or for which the applicant does not have a right of reference are allowed, all development, process, stability, qualification and validation data related to the manufacturing and quality of the new product must be included in an NDA submitted under Section 505(b)(2). 13 To the extent that the Section 505(b)(2) applicant is relying on the FDA’s conclusions regarding studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book publication.
While references to nonclinical and clinical data not generated by the applicant or for which the applicant does not have a right of reference are allowed, all development, process, stability, qualification and validation data related to the manufacturing and quality of the new product must be included in an NDA submitted under Section 505(b)(2).
Itraconazole is one of the most commonly prescribed therapies for treating Aspergillus infections in patients with asthma and CF. Itraconazole is available commercially as Sporanox ® in both a capsule and oral solution form.
Itraconazole is one of the most commonly prescribed therapies for treating Aspergillus infections in patients with asthma and CF. Itraconazole is available commercially as Sporanox ® in both a capsule and oral solution form. Itraconazole is metabolized in the liver by CYP3A4 and coadministration with a large number of drugs is contraindicated due to the potential for severe drug-drug interactions.
The IND includes a Phase 2 clinical protocol where safety and preliminary efficacy of PUR3100 will be investigated in patients with acute migraine. 8 PUR1800 We completed a Phase 1b safety, tolerability, and pharmacokinetics clinical study of PUR1800 for subjects with stable moderate-severe COPD and received topline data from the Phase 1b clinical study in the first quarter of 2022.
We completed a Phase 1b safety, tolerability, and pharmacokinetics clinical study of PUR1800 for subjects with stable moderate-severe COPD and received topline data from the Phase 1b clinical study in the first quarter of 2022.
In Phase 1 clinical studies, the product is tested in a small number of patients with the target condition or disease or in healthy volunteers.
A fourth, or post approval, phase may include additional clinical studies. The phases are generally as follows: Phase 1 . In Phase 1 clinical studies, the product is tested in a small number of patients with the target condition or disease or in healthy volunteers.
Given the oral inhaled route of delivery, PUR3100 is anticipated to provide relief from the rapid onset of migraine symptoms and provide a favorable tolerability profile. 4 Competition and Market Opportunities The American Migraine Foundation estimates that at least 39 million people in the United States and 1 billion people worldwide live with migraine, but because many people are not diagnosed or do not receive the treatment they need, the actual number may be higher.
Competition and Market Opportunities The American Migraine Foundation estimates that at least 39 million people in the United States and 1 billion people worldwide live with migraine, but because many people are not diagnosed or do not receive the treatment they need, the actual number may be higher.
Our partner Cipla plans to continue clinical development outside the United States and is currently conducting a Phase 2 study in India. Should Cipla successfully market PUR1900 outside the United States, Pulmatrix will receive 2% royalties on any potential future net sales by Cipla outside the United States.
Our partner Cipla has continued clinical development outside the United States and has advised us that they have completed their Phase 2 study in India. Should Cipla successfully market PUR1900 outside the United States, Pulmatrix will receive 2% royalties on any potential future net sales by Cipla outside the United States.
The IND includes a Phase 2 clinical protocol where safety and preliminary efficacy of PUR3100 will be investigated in patients with acute migraine. Based on the rapid systemic exposure in the therapeutic range and the improved side effect profile relative to IV dosing, we believe the PUR3100 formulation of DHE may differentiate from approved DHE products or those in development.
Based on the rapid systemic exposure in the therapeutic range and the improved side effect profile relative to IV dosing, we believe the PUR3100 formulation of DHE may differentiate from approved DHE products or those known to be in development.
Itraconazole is metabolized in the liver by CYP3A4 and coadministration with a large number of drugs is contraindicated due to the potential for severe drug-drug interactions. 7 We have demonstrated that PUR1900 achieves higher local lung itraconazole concentrations with lower systemic exposure relative to oral dosing, thus allowing for the potential to improve upon both the efficacy and safety profiles observed with oral itraconazole.
We have demonstrated that PUR1900 achieves higher local lung itraconazole concentrations with lower systemic exposure relative to oral dosing, thus allowing for the potential to improve upon both the efficacy and safety profiles observed with oral itraconazole.
Assuming completion of all required testing in accordance with all applicable regulatory requirements, detailed information on the product candidate is submitted to the FDA in the form of an NDA, requesting approval to market the product for one or more indications, together with payment of a user fee, unless waived.
To comply with cGMP requirements, manufacturers must continue to spend time, money and effort to meet requirements relating to personnel, facilities, equipment, production and process, labeling and packaging, quality control, recordkeeping and other requirements. 15 Assuming completion of all required testing in accordance with all applicable regulatory requirements, detailed information on the product candidate is submitted to the FDA in the form of an NDA, requesting approval to market the product for one or more indications, together with payment of a user fee, unless waived.
We rely on contract manufacturing organizations (“CMOs”) and third-party contractors to manufacture drug substance and drug product required for our clinical studies. We expect to continue to rely on CMOs to manufacture drug substances and drug products under the appropriate current Good Manufacturing Practices (“cGMP”) conditions to perform clinical studies for the foreseeable future.
We expect to continue to rely on CMOs to manufacture drug substances and drug products under the appropriate current Good Manufacturing Practices (“cGMP”) conditions to perform clinical studies for the foreseeable future. We also contract with CMOs for the labeling, packaging, storage and distribution of investigational drug products.
Twenty-six healthy subjects were enrolled and each of the four groups contained at least six subjects. 5 On January 4, 2023, we announced topline results.
Twenty-six healthy subjects were enrolled and each of the four groups contained at least six subjects. On January 4, 2023, we announced topline results. We presented the Phase 1 study data at the American Headache Society 65th Annual Meeting in June 2023.
Within the United States, we and Cipla will seek to monetize PUR1900 for indications where an orally inhaled antifungal may provide a therapeutic benefit or fulfill an unmet medical need. Business Development PUR3100 In September 2023, we announced the FDA’s acceptance of an IND application for PUR3100 and receipt of a “study may proceed” letter for a Phase 2 study.
Within the United States, we and Cipla will seek to monetize PUR1900 for indications where an orally inhaled antifungal may provide a therapeutic benefit or fulfill an unmet medical need. Business Development PUR3100 We are currently exploring opportunities to monetize PUR3100.
Pursuant to the Third Amendment, all development and commercialization activities with respect to the Product in all markets other than the United States (the “Cipla Territory”) will be conducted exclusively by Cipla at Cipla’s sole cost and expense, and Cipla shall be entitled to all profits from the sale of the Product in the Cipla Territory, except that if Cipla successfully transfers manufacturing of the Product for the Cipla Territory to a manufacturing site determined by Cipla, we will become entitled to a royalty equal to 2% of net sales in the Cipla Territory.
The Cipla Agreement will remain in effect in perpetuity, unless otherwise earlier terminated in accordance with its terms. 11 Pursuant to the Third Amendment, all development and commercialization activities with respect to the Product in all markets other than the United States (the “Cipla Territory”) will be conducted exclusively by Cipla at Cipla’s sole cost and expense, and Cipla shall be entitled to all profits from the sale of the Product in the Cipla Territory, except that we will receive 2% royalties on any potential future net sales by Cipla outside the United States.
We rely, and expect to continue to rely, on third parties for the manufacture of clinical and future commercial, quantities of its therapeutic candidates. Future FDA and state inspections may identify compliance issues at these third-party facilities that may disrupt production or distribution or require substantial resources to correct.
Future FDA and state inspections may identify compliance issues at these third-party facilities that may disrupt production or distribution or require substantial resources to correct.
In all the countries that are signatories of the Helsinki Declaration, the prerequisite for conducting clinical trials on human subjects is securing the preliminary approval of the competent authorities of that country to conduct medical experiments on human subjects in compliance with the other principles established by the Helsinki Declaration.
In all the countries that are signatories of the Helsinki Declaration, the prerequisite for conducting clinical trials on human subjects is securing the preliminary approval of the competent authorities of that country to conduct medical experiments on human subjects in compliance with the other principles established by the Helsinki Declaration. 14 The clinical testing of a product candidate (also commonly referenced as a “drug product candidate” or a “therapeutic product candidate”) generally is conducted in three sequential phases prior to approval, but the phases may overlap or be combined.
We also contract with CMOs for the labeling, packaging, storage and distribution of investigational drug products. These arrangements allow us to maintain a more flexible infrastructure while focusing our expertise on researching and developing our products.
These arrangements allow us to maintain a more flexible infrastructure while focusing our expertise on researching and developing our products.
Third-party reimbursement adequate to enable us to realize an appropriate return on our investment in research and product development may not be available for our products.
Without adequate coverage and reimbursement from third-party payors, patients and providers are unlikely to use or prescribe any products for which we receive regulatory approval for commercial sale and may not enable us to realize an appropriate return on our investment in research and product development may not be available for our products.
Within the United States, we and Cipla will seek to monetize PUR1900, our inhaled iSPERSE ™ formulation of the antifungal drug itraconazole for indications where an orally inhaled antifungal may provide a therapeutic benefit or fulfill an unmet medical need. ● Capitalize on our proprietary iSPERSE ™ technology and our expertise in inhaled therapeutics and particle engineering to identify new product candidates for prevention and treatment of diseases, including those with important unmet medical needs .
We will receive 2% royalties on any potential future net sales by Cipla outside the United States. Within the United States, we and Cipla will seek to monetize PUR1900, our inhaled iSPERSE ™ formulation of the antifungal drug itraconazole for indications where an orally inhaled antifungal may provide a therapeutic benefit or fulfill an unmet medical need.
We have small-scale production capabilities and generally perform early process development for our product candidates to produce the quantities necessary to conduct preclinical studies of our investigational product candidates. We do not have, and do not currently plan to acquire or develop, the facilities or capabilities to manufacture bulk drug substance or drug product for use in human clinical studies.
We have historically maintained small-scale production capabilities and performed early process development for our product candidates to produce the quantities necessary to conduct preclinical studies of our investigational product candidates.
We intend to capitalize on our iSPERSE ™ technology platform and our expertise in inhaled therapeutics to identify new product candidates for the prevention and treatment of diseases, including those with considerable unmet medical needs and to build our product pipeline beyond our existing candidates.
The topline data, along with the results from chronic toxicology studies, support the continued development of PUR1800 for the treatment of AECOPD and other inflammatory respiratory diseases. ● Capitalize on our proprietary iSPERSE™ technology and our expertise in inhaled therapeutics and particle engineering to identify new product candidates for prevention and treatment of diseases, including those with important unmet medical needs.
We will share all other development costs with Cipla that are not Direct Costs, such as the cost of clinical research organizations, manufacturing costs and other third-party costs, on a 50/50 basis. Pursuant to the Third Amendment, we and Cipla agreed to stop patient enrollment at 8 subjects in the ongoing Phase 2b clinical study.
For the duration of the Wind Down Period, we and Cipla were each responsible for 60% and 40%, respectively, of our Direct Costs. We shared all other development costs with Cipla that are not Direct Costs, such as the cost of clinical research organizations, manufacturing costs and other third-party costs, on a 50/50 basis.
The Phase 1 study data was presented at the American Headache Society 65 th Annual Meeting in June 2023. 2 In September 2023, we announced the FDA’s acceptance of an IND application for PUR3100 and receipt of a “study may proceed” letter for a Phase 2 study.
In September 2023, we announced the FDA’s acceptance of an IND application for PUR3100 and receipt of a “study may proceed” letter for a Phase 2 study. The IND includes a Phase 2 clinical protocol where safety and preliminary efficacy of PUR3100 will be investigated in patients with acute migraine.
We will share costs with Cipla during the Wind Down Period in the same proportions discussed above, but subject to a maximum reimbursement amount by Cipla as approved by the joint steering committee.
Reimbursements from Cipla to us for these costs were subject to a maximum reimbursement amount as approved by the joint steering committee. We completed all Phase 2b wind down activities in the third quarter of 2024.
To the best of our knowledge, there are no other orally inhaled DHE formulations currently in development or on the market. Migranal and Trudhesa are the two currently FDA approved intranasal formulations of DHE.
Vectura Inc. is developing an orally inhaled powder formulation of DHE for the acute treatment of migraines in adults. Vectura completed a Phase 1 clinical trial in 2024, with results pending. To the best of our knowledge, there are no other orally inhaled DHE formulations currently in development or on the market.
Oral inhalation of PUR3100 achieved peak exposures in the targeted therapeutic range at all doses and the T max occurred at five minutes after dosing.
The study showed that PUR3100 achieved peak exposures in the targeted therapeutic range and time to maximum concentration occurred at five minutes after dosing at all dosing levels. The PUR3100 dose groups also showed a lower incidence of nausea and no vomiting compared to observations of nausea and vomiting in the IV administered DHE dose group.
This study had been ongoing since the first quarter of 2023. We expect to complete all Phase 2b activities by the third quarter of 2024.
We completed all Phase 2b wind down activities in the third quarter of 2024.
We moved into our headquarters during the third quarter of 2023. The lease has an initial noncancellable term of ten years. We terminated our previous lease, as planned, for our previous headquarters in Lexington, Massachusetts, also during the third quarter of 2023.
We assigned our previous lease, for our previous headquarters in Bedford, Massachusetts, during the third quarter of 2024 to MannKind Corporation.
None of our employees are represented by any collective bargaining unit. We believe that we maintain good relations with our employees. Properties Our corporate headquarters is located in Bedford, Massachusetts. We currently lease approximately 20,000 square feet of office and lab space in Bedford, Massachusetts under a lease that was originally executed on January 7, 2022.
None of our employees are represented by any collective bargaining unit. We believe that we maintain good relations with our employees. Properties We are a virtual company and do not lease or own any physical space. We maintain a mailing address at 945 Concord Street, Suite 1217, Framingham, Massachusetts 01701.
PUR3100 was well-tolerated and there was a lower incidence of nausea in PUR3100 dose groups compared to IV DHE, and we presented the Phase 1 study data at the American Headache Society 65 th Annual Meeting in June 2023. In contrast to IV DHE, no vomiting was observed in any of the PUR3100 dose groups.
The Phase 1 study data was presented at the American Headache Society 65th Annual Meeting in June 2023. In May 2024, we announced a peer-reviewed publication of Phase 1 clinical results in the publication Headache: The Journal of Head and Face Pain .
We anticipate that this Phase 2 clinical study will initiate once financing or partnership arrangements have been made. Clinical study starts may be affected by conditions related to the COVID-19 pandemic and its ongoing effects with respect to clinical study conduct and patient enrollment. For more discussion of risks related to the COVID-19 pandemic, please see “Item 1A.
We anticipate that this Phase 2 clinical study will initiate once financing or partnership arrangements have been made.
In order to advance our clinical programs, we may seek partners or licensees in areas of pharmaceutical and clinical development. 3 iSPERSE ™ Technology We use simple, safe excipients, including proprietary cationic salt formulations, to create a robust and flexible dry powder platform technology that can accommodate a wide range of drug loads in highly dispersible particles.
Continue our cost saving measures which have included the wind down of the Phase 2b study for PUR1900 and the assignment of our long-term lease of our Bedford facility pursuant to those certain agreements by and between us, MannKind Corporation (“MannKind”) and Cobalt Propco 2020, LLC (the “MannKind Transaction”) to conserve our cash resources as we consider strategic alternatives for the Company. iSPERSE ™ Technology We use simple, safe excipients, including proprietary cationic salt formulations, to create a robust and flexible dry powder platform technology that can accommodate a wide range of drug loads in highly dispersible particles.
Removed
In order to advance clinical trials for our therapeutic candidates and leverage the iSPERSE ™ platform to enable delivery of partnered compounds, we intend to form strategic alliances with third parties, including pharmaceutical and biotechnology companies or academic or private research institutes.
Added
We were incorporated in 2013 as a Delaware corporation. 2 After a comprehensive review of strategic alternatives, including identifying and reviewing potential candidates for a strategic transaction, on November 13, 2024, Pulmatrix entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), by and among Pulmatrix, PCL Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Pulmatrix (“Merger Sub I”), PCL Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Pulmatrix (“Merger Sub II” and together with Merger Sub I, “Merger Subs”) and Cullgen Inc., a Delaware corporation (“Cullgen”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, among other things, Merger Sub I will merge with and into Cullgen, with Cullgen surviving the merger as the surviving corporation (the “First Merger” and the effective time of the First Merger, the “First Effective Time”) and as part of the same overall transaction, Cullgen will merge with and into Merger Sub II, with Merger Sub II continuing as a wholly owned subsidiary of Pulmatrix and the surviving corporation of the merger (the “Second Merger” and together with the First Merger, the “Merger”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks and uncertainties include, but are not limited to, the following: ● We have a history of net losses and may experience future losses; ● We will need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests; ● We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management; 15 ● We are a clinical development stage biopharmaceutical company and have never been profitable; ● All of our product candidates are still under development, and there can be no assurance of successful commercialization of any of our products; ● Drug development is a long, expensive , and inherently uncertain process with a high risk of failure at every stage of development, and results of earlier studies and trials may not be predictive of future trial results; ● If our collaborators are not successful, we may not effectively develop and market some of our therapeutic candidates; ● We may not be able to attract, retain, or manage highly qualified personnel, which could adversely impact our business; ● We face substantial competition in the development of our product candidates and may not be able to compete successfully, and our product candidates may be rendered obsolete by rapid technological change; ● If the third parties on which we rely to conduct our clinical trials, to manufacture clinical trial materials, and to assist us with preclinical development do not perform as contractually required or expected, we may not be able to obtain regulatory clearance or approval for, or to commercialize, our products; ● Our failure to successfully acquire, develop and market additional drug candidates or approved drug products could impair our ability to grow; ● We may be subject to claims that our employees, independent consultants or agencies have wrongfully used or inadvertently disclosed confidential information of third parties; ● Market and economic conditions may negatively impact our business, financial condition and share price; ● The COVID-19 pandemic and its ongoing effects have caused interruptions or delays of our clinical studies and may continue to have a substantial adverse effect on our business; ● Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations; ● Our business is subject to cybersecurity risks. ● Our product candidates must undergo rigorous nonclinical and clinical testing, and we must obtain regulatory approvals, which could be costly and time-consuming and subject us to unanticipated delays or prevent us from marketing any products; ● We cannot be certain that any of our current and future product candidates will receive regulatory approval, and without regulatory approval we will not be able to market our product candidates; ● We have limited experience in filing and pursuing applications necessary to gain regulatory approvals, which may impede our ability to obtain timely approvals from the U.S.
Biggest changeRisks Related to Our Business ● We have a history of net losses and may experience future losses; ● We will need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests; ● We have historically been a clinical development stage biopharmaceutical company and have never been profitable; ● All of our product candidates are still under development, and there can be no assurance of successful commercialization of any of our products; ● Drug development is a long, expensive, and inherently uncertain process with a high risk of failure at every stage of development, and results of earlier studies and trials may not be predictive of future trial results; ● If our collaborators are not successful, we may not effectively develop and market some of our therapeutic candidates; ● We may not be able to attract, retain, or manage highly qualified personnel, which could adversely impact our business; 21 ● We face substantial competition in the development of our product candidates and may not be able to compete successfully, and our product candidates may be rendered obsolete by rapid technological change; ● If the third parties on which we rely to conduct our clinical trials, to manufacture clinical trial materials, and to assist us with preclinical development do not perform as contractually required or expected, we may not be able to obtain regulatory clearance or approval for, or to commercialize, our products; ● We rely on third-party contract vendors to manufacture and supply us with high quality active pharmaceutical ingredients and manufacture our therapeutic candidates in the quantities we require on a timely basis; ● Supply chain and shipping disruptions may result in shipping delays, a significant increase in shipping costs, and could increase product costs and result in lost sales and reputational damage, which may have a material adverse effect on our business, operating results and financial condition; ● We may not be successful in negotiating for an appropriate price in a future sale or assignment of our rights related to our current drug candidates; ● Our failure to successfully acquire, develop and market additional drug candidates or approved drug products could impair our ability to grow; ● Our business strategy may include entry into additional collaborative or license agreements.
The market price of our common stock may fluctuate as a result of, among other factors: ● the announcement of new products, new developments, services or technological innovations by us or our competitors; ● actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in our business, operations or prospects; ● announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by us or our competitors; ● conditions or trends in the biotechnology and pharmaceutical industries; ● changes in the economic performance or market valuations of other biotechnology and pharmaceutical companies; ● general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition (including, for example, the coronavirus outbreak, the conflicts in Ukraine and Israel, supply chain and recent inflationary pressures); ● purchase or sale of our common stock by stockholders, including executives and directors; ● volatility and limitations in trading volumes of our common stock; 32 ● our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our human clinical trials, and other business activities; ● any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our planned preclinical and clinical trials; ● ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of our common stock by stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● our inability to enter into new markets or develop new products; ● reputational issues; ● analyst research reports, recommendations and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigation related to intellectual property rights, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
The market price of our common stock may fluctuate as a result of, among other factors: ● the announcement of new products, new developments, services or technological innovations by us or our competitors; ● actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in our business, operations or prospects; ● announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by us or our competitors; ● conditions or trends in the biotechnology and pharmaceutical industries; ● changes in the economic performance or market valuations of other biotechnology and pharmaceutical companies; ● general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition (including, for example, the coronavirus outbreak, the conflicts in Ukraine and Israel, supply chain and recent inflationary pressures); ● purchase or sale of our common stock by stockholders, including executives and directors; ● volatility and limitations in trading volumes of our common stock; ● our ability to obtain financings to conduct and complete research and development activities including, but not limited to, our human clinical trials, and other business activities; ● any delays or adverse developments or perceived adverse developments with respect to the FDA’s review of our planned preclinical and clinical trials; ● ability to secure resources and the necessary personnel to conduct clinical trials on our desired schedule; ● failures to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of our common stock by stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● our inability to enter into new markets or develop new products; ● reputational issues; ● analyst research reports, recommendations and changes in recommendations, price targets, and withdrawals of coverage; 51 ● departures and additions of key personnel; ● disputes and litigation related to intellectual property rights, proprietary rights, and contractual obligations; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
The amount of additional funds we need will depend on a number of factors, including: ● rate of progress and costs of our clinical trials and research and development activities, including costs of procuring clinical materials and operating our manufacturing facilities; ● our success in establishing strategic business collaborations or other sales or licensing of assets, and the timing and amount of any payments we might receive from any such transactions we are able to establish; 27 ● actions taken by the FDA and other regulatory authorities affecting our products and competitive products; ● our degree of success in commercializing any of our product candidates; ● the emergence of competing technologies and products and other adverse market developments; ● the costs of preparing, filing, prosecuting, maintaining and enforcing patent claims and other intellectual property rights or defending against claims of infringement by others; ● the level of our legal expenses; and ● the costs of discontinuing projects and technologies.
The amount of additional funds we need will depend on a number of factors, including: ● rate of progress and costs of our clinical trials and research and development activities, including costs of procuring clinical materials and operating our manufacturing facilities; ● our success in establishing strategic business collaborations or other sales or licensing of assets, and the timing and amount of any payments we might receive from any such transactions we are able to establish; ● actions taken by the FDA and other regulatory authorities affecting our products and competitive products; ● our degree of success in commercializing any of our product candidates; ● the emergence of competing technologies and products and other adverse market developments; ● the costs of preparing, filing, prosecuting, maintaining and enforcing patent claims and other intellectual property rights or defending against claims of infringement by others; ● the level of our legal expenses; and ● the costs of discontinuing projects and technologies.
These transactions may entail numerous operational and financial risks, including: ● exposure to unknown liabilities; ● disruption of our business and diversion of our management’s time and attention in order to develop acquired products, product candidates or technologies; ● incurrence of substantial debt or dilutive issuances of equity securities to pay for such transactions; ● higher-than-expected transaction and integration costs; ● write-downs of assets or goodwill or impairment charges; ● increased amortization expenses; ● difficulty and cost in combining the operations and personnel of any acquired businesses or product lines with our operations and personnel; ● impairment of relationships with key suppliers or customers of any acquired businesses or product lines due to changes in management and ownership; and ● inability to retain key employees of any acquired businesses.
These transactions may entail numerous operational and financial risks, including: ● exposure to unknown liabilities; ● disruption of our business and diversion of our management’s time and attention in order to develop acquired products, product candidates or technologies; ● incurrence of substantial debt or dilutive issuances of equity securities to pay for such transactions; 46 ● higher-than-expected transaction and integration costs; ● write-downs of assets or goodwill or impairment charges; ● increased amortization expenses; ● difficulty and cost in combining the operations and personnel of any acquired businesses or product lines with our operations and personnel; ● impairment of relationships with key suppliers or customers of any acquired businesses or product lines due to changes in management and ownership; and ● inability to retain key employees of any acquired businesses.
Later discovery of previously unknown problems with any therapeutic candidate, manufacturer or manufacturing process, or failure to comply with rules and regulatory requirements, may result in actions, including but not limited to the following: ● restrictions on such therapeutic candidate, manufacturer or manufacturing process; ● warning letters from the FDA or other foreign regulatory authorities; ● withdrawal of the therapeutic candidate from the market; ● suspension or withdrawal of regulatory approvals; ● refusal to approve pending applications or supplements to approved applications submitted by us or our commercial partners; ● voluntary or mandatory recall; ● fines; ● refusal to permit the import or export of our therapeutic candidates; ● product seizure or detentions; ● injunctions or the imposition of civil or criminal penalties; or ● adverse publicity.
Later discovery of previously unknown problems with any therapeutic candidate, manufacturer or manufacturing process, or failure to comply with rules and regulatory requirements, may result in actions, including but not limited to the following: ● restrictions on such therapeutic candidate, manufacturer or manufacturing process; ● warning letters from the FDA or other foreign regulatory authorities; ● withdrawal of the therapeutic candidate from the market; ● suspension or withdrawal of regulatory approvals; 42 ● refusal to approve pending applications or supplements to approved applications submitted by us or our commercial partners; ● voluntary or mandatory recall; ● fines; ● refusal to permit the import or export of our therapeutic candidates; ● product seizure or detentions; ● injunctions or the imposition of civil or criminal penalties; or ● adverse publicity.
For example, the drug may: ● be shown to be ineffective or to cause harmful side effects during preclinical testing or clinical trials; ● fail to receive regulatory approval on a timely basis or at all; ● be difficult to manufacture on a large scale; ● not be economically viable; ● not be prescribed by doctors or accepted by patients; ● fail to receive a sufficient level of reimbursement from government, insurers or other third-party payors; or ● infringe on intellectual property rights of any other party.
For example, the drug may: ● be shown to be ineffective or to cause harmful side effects during preclinical testing or clinical trials; ● fail to receive regulatory approval on a timely basis or at all; 33 ● be difficult to manufacture on a large scale; ● not be economically viable; ● not be prescribed by doctors or accepted by patients; ● fail to receive a sufficient level of reimbursement from government, insurers or other third-party payors; or ● infringe on intellectual property rights of any other party.
Furthermore, the introduction of government price controls or other price-reducing regulations may affect the prices we obtain on our product candidates, if approved and commercialized. We have limited experience in filing and pursuing applications necessary to gain regulatory approvals, which may impede our ability to obtain timely approvals from the FDA or foreign regulatory agencies, if at all.
Furthermore, the introduction of government price controls or other price-reducing regulations may affect the prices we obtain on our product candidates, if approved and commercialized. 40 We have limited experience in filing and pursuing applications necessary to gain regulatory approvals, which may impede our ability to obtain timely approvals from the FDA or foreign regulatory agencies, if at all.
We cannot be certain when or if any of our product candidates will obtain the required regulatory approval. 17 We have never been profitable and have incurred net losses each year since our inception. Our losses are principally a result of research and development and general administrative expenses in support of our operations.
We cannot be certain when or if any of our product candidates will obtain the required regulatory approval. We have never been profitable and have incurred net losses each year since our inception. Our losses are principally a result of research and development and general administrative expenses in support of our operations.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize product(s), which would materially adversely affect our commercial development efforts. Risks Related to Our Common Stock The price of our common stock is subject to fluctuation and has been and may continue to be volatile.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize product(s), which would materially adversely affect our commercial development efforts. 50 Risks Related to Our Common Stock The price of our common stock is subject to fluctuation and has been and may continue to be volatile.
The failure of one or more of our iSPERSE ™ -based drug candidates could have a material adverse effect on our business, financial condition, and results of operations. 18 In addition, the results of preclinical studies and clinical trials of previously published iSPERSE ™ -based products may not necessarily be indicative of the results of our future clinical trials.
The failure of one or more of our iSPERSE ™ -based drug candidates could have a material adverse effect on our business, financial condition, and results of operations. In addition, the results of preclinical studies and clinical trials of previously published iSPERSE ™ -based products may not necessarily be indicative of the results of our future clinical trials.
If we are unable to compete successfully with these and other potential future competitors, we may be unable to grow or generate revenue. The rapid rate of scientific discoveries and technological changes could result in one or more of our product candidates becoming obsolete or noncompetitive.
If we are unable to compete successfully with these and other potential future competitors, we may be unable to grow or generate revenue. 35 The rapid rate of scientific discoveries and technological changes could result in one or more of our product candidates becoming obsolete or noncompetitive.
The disclosure to, or independent development by, a competitor of any trade secret, know-how or other technology not protected by a patent could materially adversely affect any competitive advantage we may have over any such competitor. 30 To the extent that any of our employees, advisors, research collaborators, contractors or consultants independently develop, or use independently developed, intellectual property in connection with any of our products, disputes may arise as to the proprietary rights to this type of information.
The disclosure to, or independent development by, a competitor of any trade secret, know-how or other technology not protected by a patent could materially adversely affect any competitive advantage we may have over any such competitor. 48 To the extent that any of our employees, advisors, research collaborators, contractors or consultants independently develop, or use independently developed, intellectual property in connection with any of our products, disputes may arise as to the proprietary rights to this type of information.
Any cyber incident could have a material adverse effect on our business, financial condition and results of operations. 23 Risks Related to Regulatory Matters Our product candidates must undergo rigorous nonclinical and clinical testing, and we must obtain regulatory approvals, which could be costly and time-consuming and subject us to unanticipated delays or prevent us from marketing any products.
Any cyber incident could have a material adverse effect on our business, financial condition and results of operations. 39 Risks Related to Regulatory Matters Our product candidates must undergo rigorous nonclinical and clinical testing, and we must obtain regulatory approvals, which could be costly and time-consuming and subject us to unanticipated delays or prevent us from marketing any products.
We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition and cause further dilution to our stockholders. We are a clinical development stage biopharmaceutical company and have never been profitable.
We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition and cause further dilution to our stockholders. We have historically been a clinical development stage biopharmaceutical company and have never been profitable.
The obligations of being a public reporting company require significant expenditures, including costs resulting from public company reporting obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Nasdaq Capital Market.
The obligations of being a public reporting company require significant expenditures, including costs resulting from public company reporting obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Nasdaq.
We cannot guarantee that we will be able to successfully conduct the preclinical studies of the identified potential product candidates as anticipated. 21 Our business strategy may include entry into additional collaborative or license agreements. We may not be able to enter into collaborative or license agreements or may not be able to negotiate commercially acceptable terms for these agreements.
We cannot guarantee that we will be able to successfully conduct the preclinical studies of the identified potential product candidates as anticipated. 37 Our business strategy may include entry into additional collaborative or license agreements. We may not be able to enter into collaborative or license agreements or may not be able to negotiate commercially acceptable terms for these agreements.
False claims laws prohibit anyone from knowingly and willfully presenting or causing to be presented for payment to third-party payers, including government payers, claims for reimbursed drugs or services that are false or fraudulent, claims for items or services that were not provided as claimed, or claims for medically unnecessary items or services.
False claims laws prohibit anyone from knowingly and willfully presenting or causing to be presented for payment to third-party payors, including government payors, claims for reimbursed drugs or services that are false or fraudulent, claims for items or services that were not provided as claimed, or claims for medically unnecessary items or services.
Law enforcement authorities are increasingly focused on enforcing these laws, and if we are challenged under of one of these laws, we could be required to pay a fine and/or penalty and could be suspended or excluded from participation in federal or state health care programs, and our business, results of operations and financial condition may be adversely affected.
Law enforcement authorities are increasingly focused on enforcing these laws, and if we are challenged under of one of these laws, we could be required to pay a fine and/or penalty and could be suspended or excluded from participation in federal or state healthcare programs, and our business, results of operations and financial condition may be adversely affected.
Under the Health Insurance Portability and Accountability Act of 1996, we are prohibited from knowingly and willfully executing a scheme to defraud any health care benefit program, including private payers, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services.
Under the Health Insurance Portability and Accountability Act of 1996, we are prohibited from knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private payors, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines, penalties and/or exclusion or suspension from federal and state health care programs such as Medicare and Medicaid and debarment from contracting with the U.S. government.
Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines, penalties and/or exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S. government.
We expect to incur additional losses in the future and may never be profitable. We are a clinical development stage biopharmaceutical company. We have not commercialized any product candidates or recognized any revenues from our product sales.
We expect to incur additional losses in the future and may never be profitable. We have historically been a clinical development stage biopharmaceutical company. We have not commercialized any product candidates or recognized any revenues from our product sales.
We are likely to issue additional equity securities in the future, which are likely to result in dilution to existing investors. We may seek the additional capital necessary to fund our operations through public or private equity offerings, debt financings, and collaborative and licensing arrangements.
We may issue additional equity securities in the future, which could result in dilution to existing investors. We may seek the additional capital necessary to fund our operations through public or private equity offerings, debt financings, and collaborative and licensing arrangements.
Ultimately, we could be prevented from commercializing a product candidate or be forced to cease some aspect of our business operations if, as a result of actual or threatened patent infringement or other claims, we are unable to enter into licenses on acceptable terms. This inability to enter into licenses could harm our business significantly.
Ultimately, we could be prevented from commercializing a product candidate or be forced to cease some aspect of our business operations if, as a result of actual or threatened patent infringement or other claims, we are unable to enter into licenses on acceptable terms.
Cases have been brought under false claims laws alleging that off-label promotion of pharmaceutical products or the provision of kickbacks has resulted in the submission of false claims to governmental health care programs.
Cases have been brought under false claims laws alleging that off-label promotion of pharmaceutical products or the provision of kickbacks has resulted in the submission of false claims to governmental healthcare programs.
Based upon our current expectations, we believe that our existing capital resources will enable us to continue planned operations for at least 12 months following the filing date of this Annual Report.
Based upon our current expectations, we believe that our existing capital resources will enable us to continue planned operations for at least 12 months following the filing date of this Annual Report on Form 10-K.
Further, an aggregate of 344,306 shares of our common stock could be delivered upon the exercise or conversion of outstanding stock options or restricted stock units under the Incentive Plan and other equity incentive plans we previously assumed.
Further, an aggregate of 34,046 shares of our common stock could be delivered upon the exercise or conversion of outstanding stock options or restricted stock units under the Incentive Plan and other equity incentive plans we previously assumed.
Competitors may also be able to design around our patents. Other parties may develop and obtain patent protection for more effective technologies, designs or methods. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets by consultants, vendors, former employees and current employees.
Other parties may develop and obtain patent protection for more effective technologies, designs or methods. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets by consultants, vendors, former employees and current employees.
However, it may be difficult for us to raise additional funds on reasonable terms or at all. Since inception, we have incurred losses each year and have an accumulated deficit of $287.6 million as of December 31, 2023, which may raise concerns about our solvency and affect our ability to raise additional capital.
However, it may be difficult for us to raise additional funds on reasonable terms or at all. Since inception, we have incurred losses each year and have an accumulated deficit of $297.2 million as of December 31, 2024, which may raise concerns about our solvency and affect our ability to raise additional capital.
Our long-term capital requirements are expected to depend on many potential factors, including, among others: ● the number of product candidates in development; ● the regulatory clarity and path of each of our product candidates; ● the progress, success and cost of our clinical trials and research and development programs, including manufacturing; ● the costs, timing and outcome of regulatory review and obtaining regulatory clarity and approval of our product candidates and addressing regulatory and other issues that may arise post-approval; ● the costs of enforcing our issued patents and defending intellectual property-related claims; ● the costs of manufacturing, developing sales, marketing and distribution channels; ● our ability to successfully commercialize our product candidates, including securing commercialization agreements with third parties and favorable pricing and market share; and ● our consumption of available resources more rapidly than currently anticipated, resulting in the need for additional funding sooner than anticipated. 28 We may engage in strategic transactions that could impact our liquidity, increase our expenses and present significant distractions to our management.
Our long-term capital requirements are expected to depend on many potential factors, including, among others: ● the number of product candidates in development; ● the regulatory clarity and path of each of our product candidates; ● the progress, success and cost of our clinical trials and research and development programs, including manufacturing; ● the costs, timing and outcome of regulatory review and obtaining regulatory clarity and approval of our product candidates and addressing regulatory and other issues that may arise post-approval; ● the costs of enforcing our issued patents and defending intellectual property-related claims; ● the costs of manufacturing, developing sales, marketing and distribution channels; ● our ability to successfully commercialize our product candidates, including securing commercialization agreements with third parties and favorable pricing and market share; and ● our consumption of available resources more rapidly than currently anticipated, resulting in the need for additional funding sooner than anticipated.
Compliance with such requirements also places demands on management’s time and attention. 33 In the foreseeable future, we do not intend to pay cash dividends on shares of our common stock so any investor gains will be limited to the value of our shares.
Compliance with such requirements also places demands on management’s time and attention. In the foreseeable future, we do not intend to pay cash dividends on shares of our common stock, except the potential Cash Dividend in connection with the Merger, so any investor gains will be limited to the value of our shares.
As of December 31, 2023, we had an accumulated deficit of $287.6 million. We expect to incur additional operating losses for the foreseeable future. There can be no assurance that we will be able to achieve sufficient revenues throughout the year or be profitable in the future.
As of December 31, 2024, we had an accumulated deficit of $297.2 million. We expect to incur additional operating losses for the foreseeable future. There can be no assurance that we will be able to achieve sufficient revenues throughout the year or be profitable in the future.
Our failure, or the failure of our third-party manufacturers, to comply with applicable laws, regulations and guidelines could result in the imposition of sanctions on us, including fines, injunctions, civil penalties, refusal of regulatory authorities to grant marketing approval of our therapeutic candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of our therapeutic candidates, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect regulatory approval and supplies of our therapeutic candidates, and materially and adversely affect our business, financial condition and results of operations. 25 Even if we obtain regulatory approvals, our therapeutic candidates will be subject to ongoing regulatory review.
Our failure, or the failure of our third-party manufacturers, to comply with applicable laws, regulations and guidelines could result in the imposition of sanctions on us, including fines, injunctions, civil penalties, refusal of regulatory authorities to grant marketing approval of our therapeutic candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of our therapeutic candidates, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect regulatory approval and supplies of our therapeutic candidates, and materially and adversely affect our business, financial condition and results of operations.
For continued listing on Nasdaq, we will be required to comply with the continued listing requirements, including the minimum market capitalization standard, the minimum stockholders’ equity requirement, the corporate governance requirements and the minimum closing bid price requirement, among other requirements.
Our common stock is listed on Nasdaq. For continued listing on Nasdaq, we will be required to comply with the continued listing requirements, including the minimum market capitalization standard, the minimum stockholders’ equity requirement, the corporate governance requirements and the minimum closing bid price requirement, among other requirements.
Risks Related to Our Business We have a history of net losses and may experience future losses. We have yet to establish any history of profitable operations. We reported a net loss of $14.1 million and $18.8 million for the fiscal years ended December 31, 2023 and 2022, respectively.
Risks Related to Our Business We have a history of net losses and may experience future losses. We have yet to establish any history of profitable operations. We reported a net loss of $9.6 million and $14.1 million for the fiscal years ended December 31, 2024 and 2023, respectively.
The scientific, research and development personnel upon whom we rely to operate our business have expertise in certain aspects of drug development and clinical development, and it may be difficult to retain or replace these individuals.
The scientific, research and development personnel upon whom we have historically relied to operate our business have expertise in certain aspects of drug development and clinical development, and it may be difficult to replace these individuals.
The start or end of a clinical trial, such as our Phase 2b trial for PUR1900 and future trials, can often be delayed or halted due to changing regulatory requirements, manufacturing challenges, required clinical trial administrative actions, slower than anticipated patient enrollment, changing standards of care, availability or prevalence of use of a competitor drug or required prior therapy, clinical outcomes, or financial constraints of us and our partners.
The start or end of a clinical trial can often be delayed or halted due to changing regulatory requirements, manufacturing challenges, required clinical trial administrative actions, slower than anticipated patient enrollment, changing standards of care, availability or prevalence of use of a competitor drug or required prior therapy, clinical outcomes, or financial constraints of us and our partners.
In addition, the exercise or conversion of outstanding options or warrants to purchase shares of capital stock may result in dilution to our stockholders upon any such exercise or conversion. In addition, as of March 25, 2024, 470,800 shares remained available to be awarded under our Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan (the “Incentive Plan”).
In addition, the exercise or conversion of outstanding options or warrants to purchase shares of capital stock may result in dilution to our stockholders upon any such exercise or conversion. In addition, as of March 17, 2025, 963,666 shares remained available to be awarded under our Amended and Restated 2013 Employee, Director and Consultant Equity Incentive Plan (the “Incentive Plan”).
The results of this ongoing review may result in the withdrawal of a therapeutic candidate from the market, the interruption of the manufacturing operations and/or the imposition of labeling and/or marketing limitations.
The results of this ongoing review may result in the withdrawal of a therapeutic candidate from the market, the interruption of the manufacturing operations and/or the imposition of new product labeling (such as warnings) and/or marketing limitations.
Our third-party manufacturers and suppliers have experienced, and may continue to experience, supply chain disruption and shipping disruptions, including disruptions or delays in loading container cargo in ports of origin or off-loading cargo at ports of destination, as a result of the COVID-19 pandemic and its ongoing effects, congestion in port terminal facilities, labor supply and shipping container shortages, inadequate equipment and persons to load, dock and offload container vessels and for other reasons.
Our third-party manufacturers and suppliers have experienced, and may continue to experience, supply chain disruption and shipping disruptions, including disruptions or delays in loading container cargo in ports of origin or off-loading cargo at ports of destination, congestion in port terminal facilities, labor supply and shipping container shortages, inadequate equipment and persons to load, dock and offload container vessels and for other reasons.
We may be at risk of securities class action litigation. This risk is especially relevant due to our dependence on positive clinical trial outcomes and regulatory approvals. In the past, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.
This risk is especially relevant due to our dependence on positive clinical trial outcomes and regulatory approvals. In the past, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.
We conduct our operations at our facilities in Bedford, Massachusetts, within the greater Boston area, and this region is headquarters to many other biopharmaceutical, biotechnology, pharmaceutical, and medical technology companies, as well as many academic and research institutions, and, therefore, we face increased competition for technical and managerial personnel in this region.
We have previously conducted our research and development operations within the greater Boston area, and this region is headquarters to many other biopharmaceutical, biotechnology, pharmaceutical, and medical technology companies, as well as many academic and research institutions, and, therefore, we face increased competition for technical and managerial personnel in this region.
We may be subject to other patent-related litigation or proceedings that could be costly to defend and uncertain in their outcome. In addition to infringement claims against us, we may in the future become a party to other patent litigation or proceedings before regulatory agencies, including interference, re-examination inter partes review, or post grant review proceedings filed with the U.S.
In addition to infringement claims against us, we may in the future become a party to other patent litigation or proceedings before regulatory agencies, including interference, re-examination inter partes review, or post grant review proceedings filed with the U.S.
We cannot predict the impact on our business, financial condition nor results of operations of any changes in these laws. Any state or federal regulatory review of us, regardless of the outcome, would be costly and time-consuming.
The scope and enforcement of these laws are uncertain and subject to change in the current environment of healthcare reform. We cannot predict the impact on our business, financial condition nor results of operations of any changes in these laws. Any state or federal regulatory review of us, regardless of the outcome, would be costly and time-consuming.
If we are not able to find stable, affordable, high quality, or reliable supplies of the APIs, or if we are unable to maintain our existing or future third-party manufacturing arrangements, we may not be able to produce enough supply of our therapeutic candidates or commercialize any therapeutic candidates on a timely and competitive basis, which could adversely affect our business, financial condition or results of operations.
Similarly, replacing our manufacturers could cause us to incur added costs and experience delays in identifying, engaging, qualifying and training any such replacements. 36 If we are not able to find stable, affordable, high quality, or reliable supplies of the APIs, or if we are unable to maintain our existing or future third-party manufacturing arrangements, we may not be able to produce enough supply of our therapeutic candidates or commercialize any therapeutic candidates on a timely and competitive basis, which could adversely affect our business, financial condition or results of operations.
If we fail to comply with continuing U.S. and applicable foreign laws, regulations and guidelines, we could lose those approvals, and our business would be seriously harmed.
Even if we obtain regulatory approvals, our therapeutic candidates will be subject to ongoing regulatory review. If we fail to comply with continuing U.S. and applicable foreign laws, regulations and guidelines, we could lose those approvals, and our business would be seriously harmed.
A sustained labor shortage or increased turnover rates within our employee base, caused by the COVID-19 pandemic and its ongoing effects or as a result of general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business.
A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business.
In addition, there is a risk that one or more of our current and future service providers, manufacturers, suppliers, hospitals and other medical facilities, our third-party payors, and other partners could be negatively affected by difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives.
In addition, there is a risk that one or more of our current and future service providers, manufacturers, suppliers, hospitals and other medical facilities, our third-party payors, and other partners could be negatively affected by difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives. 38 If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business and investors’ views of us.
We anticipate that our expenses will remain at a high level as we terminate our PUR1900 Phase 2b trial and pursue development of PUR3100 and PUR1800 or other iSPERSE ™ -based product candidates, and/or pursue development of iSPERSE ™ -based pharmaceuticals in additional indications.
Contingent on securing additional funding, we anticipate that our expenses would remain at a high level as we pursue development of PUR3100 and PUR1800 or other iSPERSE ™ -based product candidates, and/or pursue development of iSPERSE ™ -based pharmaceuticals in additional indications.
As a company, we have no experience in late-stage regulatory filings, such as preparing and submitting NDAs, which may place us at risk of delays, overspending and human resources inefficiencies.
As a company, we have no experience in late-stage regulatory filings, such as preparing and submitting NDAs, which may place us at risk of delays, overspending and human resources inefficiencies. Any delay in obtaining, or inability to obtain, regulatory approval could harm our business.
We could experience a delay in conducting clinical trials of or obtaining regulatory approval for PUR3100, PUR1800, PUR1900 or our other drug candidates and incur additional costs if we changed API suppliers for any reason. Similarly, replacing our manufacturers could cause us to incur added costs and experience delays in identifying, engaging, qualifying and training any such replacements.
We could experience a delay in conducting clinical trials of or obtaining regulatory approval for PUR3100, PUR1800, PUR1900 or our other drug candidates and incur additional costs if we changed API suppliers for any reason.
An overall labor shortage, lack of skilled labor, increased turnover or labor inflation, caused by the COVID-19 pandemic or as a result of general macroeconomic factors, could have a material adverse impact on our operations, results of operations, liquidity or cash flows.
An overall labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows.
Post-issuance oppositions are not uncommon and we or our development and/or commercialization partners will be required to defend these opposition procedures as a matter of course.
Post-issuance oppositions are not uncommon and we or our development and/or commercialization partners will be required to defend these opposition procedures as a matter of course. Opposition procedures may be costly, and there is a risk that we may not prevail, which could harm our business significantly.
The terms of any securities issued by us in future financing transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding.
Any additional capital raised through the sale of equity or equity backed securities will dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities. 32 The terms of any securities issued by us in future financing transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding.
The loss of the services of any of our executive officers or our other key employees and our inability to find suitable replacements could potentially harm our business, financial condition and prospects.
The loss of the services of any of our executive officers or our other key employees and our inability to find suitable replacements could potentially harm our business, financial condition and prospects. We do not maintain “key man” insurance policies on the lives of these individuals or the lives of any of our other employees.
We have adopted a Code of Business Conduct, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risk. 26 If we fail to comply with federal or state “fraud and abuse” laws, the failure to comply with these laws may adversely affect our business, financial condition and results of operations.
We have adopted a Code of Business Conduct, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risk.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and result in a decline in the market price of our common stock.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business and result in a decline in the market price of our common stock. 52 In the event that we fail to satisfy any of the listing requirements of Nasdaq, our common stock may be delisted, which could affect our market price and liquidity.
In the event that we fail to satisfy any of the listing requirements of Nasdaq, our common stock may be delisted, which could affect our market price and liquidity. Our common stock is listed on Nasdaq.
For risks related to a delisting from the Nasdaq Capital Market, see “ -In the event that we fail to satisfy any of the listing requirements of Nasdaq, our common stock may be delisted, which could affect our market price and liquidity ,” in this Annual Report.
We do not maintain “key man” insurance policies on the lives of these individuals or the lives of any of our other employees. 19 We face substantial competition in the development of our product candidates and may not be able to compete successfully, and our product candidates may be rendered obsolete by rapid technological change.
We face substantial competition in the development of our product candidates and may not be able to compete successfully, and our product candidates may be rendered obsolete by rapid technological change.
We also may seek to raise additional capital by pursuing opportunities for the licensing or sale of certain intellectual property and other assets. We cannot offer assurances, however, that any strategic collaborations, sales of securities or sales or licenses of assets will be available to us on a timely basis or on acceptable terms, if at all.
We cannot offer assurances, however, that any strategic collaborations, sales of securities or sales or licenses of assets will be available to us on a timely basis or on acceptable terms, if at all.
We are also subject to the terms of such co-development agreements that may affect our ability to develop and manufacture our therapeutic candidates. As a result of such limitations, we may be unable to pursue the most efficient or profitable path in developing our therapeutic candidates.
We are also subject to the terms of such co-development agreements that may affect our ability to develop and manufacture our therapeutic candidates.
We will be subject to extensive regulation by U.S. federal and state and foreign governments in each of the markets where we intend to sell our product candidates if and after we are approved. If we fail to comply with applicable regulations, including the FDA’s pre-or post-approval cGMP requirements, then the FDA or other foreign regulatory authorities could sanction us.
Any failure by us to comply with existing or future regulations could harm our reputation and operating results. We will be subject to extensive regulation by U.S. federal and state and foreign governments in each of the markets where we intend to sell our product candidates if and after we are approved.
We will need to raise additional capital to meet our business requirements in the future and such capital raises may be costly or difficult to obtain and could dilute our stockholders’ ownership interests. Our current capital will be sufficient to enable us to continue operations for at least 12 months following the filing date of this Annual Report.
We will need to raise additional capital to meet our business requirements in the future and such capital raises may be costly or difficult to obtain and could dilute our stockholders’ ownership interests.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. Moreover, the COVID-19 pandemic and its ongoing effects have resulted in significant financial market volatility and uncertainty since March 2020.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
Many APIs require significant lead time to manufacture. There can also be challenges in maintaining similar quality or technical standards from one manufacturing batch to the next.
While there may be several alternative suppliers of API in the market, changing API suppliers or finding and qualifying new API suppliers can be costly and can take a significant amount of time. Many APIs require significant lead time to manufacture. There can also be challenges in maintaining similar quality or technical standards from one manufacturing batch to the next.
From time to time, we may consider strategic transactions, such as acquisitions of companies, business combinations, asset purchases and out-licensing or in-licensing of products, product candidates or technologies. Additional potential transactions that we may consider include a variety of different business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments.
Additional potential transactions that we may consider include a variety of different business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments.
We are not permitted to market our product candidates in the United States until we receive approval of an NDA from the FDA. Obtaining approval of an NDA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval. The FDA review processes can take years to complete and approval is never guaranteed.
Obtaining approval of an NDA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval. The FDA review processes can take years to complete and approval is never guaranteed. We cannot be certain that any of our submissions will be accepted for filing and review by the FDA.
The degree of future protection to be afforded by our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. 29 Furthermore, the issuance of a patent, while presumed valid and enforceable, is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products.
Furthermore, the issuance of a patent, while presumed valid and enforceable, is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products. Competitors may also be able to design around our patents.
Opposition procedures may be costly, and there is a risk that we may not prevail, which could harm our business significantly. 31 Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements.
Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements.
If these suppliers or manufacturers are incapable or unwilling to meet our current or future needs at our standards or on acceptable terms, if at all, we may be unable to locate alternative suppliers or manufacturers on acceptable terms, if at all, or produce necessary materials or components on our own. 20 While there may be several alternative suppliers of API in the market, changing API suppliers or finding and qualifying new API suppliers can be costly and can take a significant amount of time.
If these suppliers or manufacturers are incapable or unwilling to meet our current or future needs at our standards or on acceptable terms, if at all, we may be unable to locate alternative suppliers or manufacturers on acceptable terms, if at all, or produce necessary materials or components on our own.
Moreover, the establishment of other funding facilities may impose restrictions on our operations. These restrictions could include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock or make investments.
These restrictions could include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem our stock or make investments. 45 We also may seek to raise additional capital by pursuing opportunities for the licensing or sale of certain intellectual property and other assets.
We may not be able to attract, retain, or manage highly qualified personnel, which could adversely impact our business. Our future success and ability to compete in the biopharmaceutical industry is substantially dependent on our ability to identify, attract, and retain highly qualified key managerial, scientific, medical, and operations personnel.
Our future success and ability to compete in the biopharmaceutical industry is substantially dependent on our ability to identify, attract, and retain highly qualified key managerial, scientific, medical, and operations personnel. The market for key employees in the biopharmaceutical, pharmaceutical and biotechnology industries is competitive.
Even if a drug is FDA-approved, regulatory authorities may impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-marketing studies.
If we fail to comply with applicable regulations, including the FDA’s pre-or post-approval cGMP requirements, then the FDA or other foreign regulatory authorities could sanction us. Even if a drug is FDA-approved, regulatory authorities may impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-marketing studies.
Furthermore, it is not possible to know the scope of claims that will be allowed in published applications and it is also not possible to know which claims of granted patents, if any, will be deemed enforceable in a court of law.
Furthermore, it is not possible to know the scope of claims that will be allowed in published applications and it is also not possible to know which claims of granted patents, if any, will be deemed enforceable in a court of law. 47 We have not pursued or maintained, and may not pursue or maintain in the future, patent protection for our product candidates in every country or territory in which we may sell our products, if approved.
In addition, the number of shares available for future grant under our equity compensation plans may be increased in the future, as our equity compensation plan contains an “evergreen” provision, pursuant to which additional shares may be authorized for issuance under the plan each year. 34 Anti-takeover provisions under Delaware corporate law may make it difficult for our stockholders to replace or remove our board of directors and could deter or delay third parties from acquiring us, which may be beneficial to our stockholders.
In addition, the number of shares available for future grant under our equity compensation plans may be increased in the future, as our equity compensation plan contains an “evergreen” provision, pursuant to which additional shares may be authorized for issuance under the plan each year.
Changing laws, regulations and standards might also create uncertainty, higher expenses and increase insurance costs. We and our third-party manufacturers are, and will be, subject to regulations of the FDA and other foreign regulatory authorities.
Changing laws, regulations and standards might also create uncertainty, higher expenses and increase insurance costs. 41 While we believe we understand the current laws and regulations to which our products are and will be subject, laws and regulations are constantly changing, as are administrative interpretations of laws and regulations.
If our relationships with these collaborators terminate, we believe that we would be able to enter into arrangements with alternative third parties. However, replacing any collaborator could delay our clinical trials and could jeopardize our ability to obtain regulatory approvals and commercialize our product candidates on a timely basis, if at all.
However, replacing any collaborator could delay our clinical trials and could jeopardize our ability to obtain regulatory approvals and commercialize our product candidates on a timely basis, if at all. We may not be able to attract, retain, or manage highly qualified personnel, which could adversely impact our business.
Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for, or purchase, order or recommendation of, goods or services reimbursed by any source, not just governmental payers. The scope and enforcement of these laws are uncertain and subject to change in the current environment of healthcare reform.
In addition, private individuals have the ability to bring actions on behalf of the government under the federal False Claims Act as well as under the false claims laws of several states. 43 Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for, or purchase, order or recommendation of, goods or services reimbursed by any source, not just governmental payors.
Approval of a product by the FDA does not ensure approval of the same product by the health authorities of other countries, or vice versa.
Foreign regulatory approval processes include essentially all of the risks associated with the FDA approval processes. Some of those agencies also must approve prices of the products. Approval of a product by the FDA does not ensure approval of the same product by the health authorities of other countries, or vice versa.
We have not pursued or maintained, and may not pursue or maintain in the future, patent protection for our product candidates in every country or territory in which we may sell our products, if approved. The laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
The laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
Food and Drug Administration (“FDA”) or foreign regulatory agencies, if at all; ● We and our third-party manufacturers are, and will be, subject to regulations of the FDA and other foreign regulatory authorities; ● We may be unable to adequately protect or enforce our rights to intellectual property, causing us to lose valuable rights.
Food and Drug Administration (“FDA”) or foreign regulatory agencies, if at all; ● Any failure by us to comply with existing or future regulations could harm our reputation and operating results; 22 ● We and our third-party manufacturers are, and will be, subject to regulations of the FDA and other foreign regulatory authorities; ● Even if we obtain regulatory approvals, our therapeutic candidates will be subject to ongoing regulatory review.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFollowing these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
Biggest changeThe program outlines governance, policies and procedures, and technology we use to oversee and identify risks from cybersecurity threats and is informed by previous cybersecurity incidents we have observed in our industry. 54 Following these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
ITEM 1C. CYBERSECURITY. We operate in the biopharmaceutical industry, which is subject to various cybersecurity risks that could adversely affect our business, financial condition, and results of operations, including intellectual property theft, fraud, extortion, harm to employees or customers, violation of privacy laws and other litigation and legal risk, and reputational risk.
ITEM 1C. CYBERSECURITY. CYBERSECURITY We operate in the biopharmaceutical industry, which is subject to various cybersecurity risks that could adversely affect our business, financial condition, and results of operations, including intellectual property theft, fraud, extortion, harm to employees or customers, violation of privacy laws and other litigation and legal risk, and reputational risk.
Our board of directors administers its cybersecurity risk oversight function directly as a whole, as well as through the audit committee. 35 To date, no cybersecurity incident (or aggregation of incidents) or cybersecurity threat has materially affected our results of operations or financial condition.
Our board of directors administers its cybersecurity risk oversight function directly as a whole, as well as through the audit committee. To date, no cybersecurity incident (or aggregation of incidents) or cybersecurity threat has materially affected our results of operations or financial condition.
In addition, our cyber liability insurance policy may not cover all claims made against us, and defending a suit, regardless of its merit, could be costly and divert management’s attention from our business and operations. For further information regarding risks from cybersecurity threats, please refer to “Item 1A. RISK FACTORS—Risks Related to Our Business”.
In addition, our cyber liability insurance policy may not cover all claims made against us, and defending a suit, regardless of its merit, could be costly and divert management’s attention from our business and operations. For further information regarding risks from cybersecurity threats, please refer to “Item 1A. RISK FACTORS—Risks Related to Our Business.”
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The program outlines governance, policies and procedures, and technology we use to oversee and identify risks from cybersecurity threats and is informed by previous cybersecurity incidents we have observed in our industry.

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. PROPERTIES. Our corporate headquarters is located at 36 Crosby Drive, Suite 100, Bedford, Massachusetts. We currently lease approximately 20,000 square feet of office and lab space in Bedford, Massachusetts under a lease that was originally executed on January 7, 2022. We moved into our headquarters during the third quarter of 2023.
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ITEM 2. PROPERTIES. We are a virtual company and do not lease or own any physical space. We maintain a mailing address at 945 Concord Street, Suite 1217, Framingham, Massachusetts 01701. We assigned our previous lease, for our previous headquarters in Bedford, Massachusetts, during the third quarter of 2024 to MannKind Corporation.
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The lease has an initial noncancellable term of ten years. We terminated our previous lease, as planned, for our previous headquarters in Lexington, Massachusetts, also during the third quarter of 2023.
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We believe that our facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms for our future growth.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of the date of this filing, we are not aware of any material legal proceedings to which we or our subsidiary is a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or proceedings known to be contemplated by governmental authorities.
Biggest changeAs of the date of this filing, we are not aware of any material legal proceedings to which we or our subsidiaries are a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or proceedings known to be contemplated by governmental authorities.
There are no material proceedings in which any of our directors, officers or affiliates or any registered or beneficial stockholder of more than 5% of our common stock, or any associate of any of the foregoing, is an adverse party or has a material interest adverse to our interest. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 36 PART II
There are no material proceedings in which any of our directors, officers or affiliates or any registered or beneficial stockholder of more than 5% of our common stock, or any associate of any of the foregoing, is an adverse party or has a material interest adverse to our interest. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 55 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock trades on The Nasdaq Capital Market under the symbol “PULM”. Stockholders As of March 25, 2024, there were approximately 43 stockholders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock trades on The Nasdaq Capital Market under the symbol “PULM”. Stockholders As of March 17, 2025, there were approximately 43 stockholders of record of our common stock. Dividends We have not paid dividends to our stockholders since inception.
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Dividends We have not paid dividends to our stockholders since inception and do not plan to pay cash dividends in the foreseeable future. Any future declaration of dividends will depend on our earnings, capital requirements, financial condition, prospects and any other factors that our board of directors deems relevant, as well as compliance with the requirements of state law.
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Pursuant to the terms of the Merger Agreement, Pulmatrix may declare and pay a special cash dividend to Pulmatrix stockholders of record prior to the Merger.
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In general, as a Delaware corporation, we may pay dividends out of surplus capital or, if there is no surplus capital, out of net profits for the fiscal year in which a dividend is declared and/or the preceding fiscal year. We currently intend to retain earnings, if any, for reinvestment in our business. Unregistered Sales of Securities None.
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The Cash Dividend will be up to an amount equal in the aggregate to Pulmatrix’s reasonable, good faith approximation of the amount by which Pulmatrix’s Net Cash will exceed the Cash Dividend Amount, provided, that if the Closing Pulmatrix Net Cash is greater than $7,000,000, the Cash Dividend Amount shall not exceed (x) $4,500,000 plus (y) an amount equal to (A) 0.5 multiplied by (B) the Closing Pulmatrix Net Cash in excess of $7,000,000.
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Issuer Purchases of Equity Securities Not applicable. ITEM 6. RESERVED.
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There is no guarantee that the Pulmatrix Net Cash will exceed $2,500,000. The amount of the Cash Dividend is currently uncertain, pending the determination of Pulmatrix’s outstanding obligations and net cash position as of the Closing.
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Other than such potential special cash dividend in connection with the Closing, Pulmatrix does not currently anticipate declaring or paying cash dividends on its capital stock in the foreseeable future. Unregistered Sales of Securities None. Issuer Purchases of Equity Securities Not applicable. ITEM 6. RESERVED.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table sets forth our results of operations for each of the periods set forth below (in thousands): Year Ended December 31, 2023 2022 Change Revenues $ 7,298 $ 6,071 $ 1,227 Operating expenses: Research and development 15,518 18,240 (2,722 ) General and administrative 6,520 6,778 (258 ) Total operating expenses 22,038 25,018 (2,980 ) Loss from operations (14,740 ) (18,947 ) 4,208 Other income (expense): Interest income 867 309 558 Other expense, net (248 ) (198 ) (50 ) Net loss $ (14,121 ) $ (18,836 ) $ 4,715 Revenues — Revenues were $7.3 million for the year ended December 31, 2023, as compared to $6.1 million for the year ended December 31, 2022, an increase of $1.2 million.
Biggest changeTo date, our estimates have not been materially different than amounts actually incurred. 62 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table sets forth our results of operations for each of the periods set forth below (in thousands): Year Ended December 31, 2024 2023 Change Revenues $ 7,806 $ 7,298 $ 508 Operating expenses: Research and development 7,166 15,518 (8,352 ) General and administrative 7,785 6,520 1,265 Loss on MannKind Transaction 2,618 - 2,618 Total operating expenses 17,569 22,038 (4,469 ) Loss from operations (9,763 ) (14,740 ) 4,977 Other income (expense): Interest income 467 867 (400 ) Fair value adjustment of warrants (67 ) - (67 ) Other expense, net (196 ) (248 ) 52 Net loss $ (9,559 ) $ (14,121 ) $ 4,562 Revenues — Revenues were $7.8 million for the year ended December 31, 2024, as compared to $7.3 million for the year ended December 31, 2023, an increase of $0.5 million.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for the research and development of our preclinical and clinical candidates, and include: ● employee-related expenses, including salaries, benefits and stock-based compensation expense; ● expenses incurred under agreements with CROs or CMOs, and consultants that conduct our clinical trials and preclinical activities; ● the cost of acquiring, developing and manufacturing clinical trial materials and lab supplies; 40 ● facility, depreciation and other expenses, which include direct and allocated expenses for rent, maintenance of our facility, insurance and other supplies; ● costs associated with preclinical activities and clinical regulatory operations; and ● consulting and professional fees associated with research and development activities.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for the research and development of our preclinical and clinical candidates, and include: ● employee-related expenses, including salaries, benefits and stock-based compensation expense; ● expenses incurred under agreements with CROs or CMOs, and consultants that conduct our clinical trials and preclinical activities; ● the cost of acquiring, developing and manufacturing clinical trial materials and lab supplies; ● facility, depreciation and other expenses, which include direct and allocated expenses for rent, maintenance of our facility, insurance and other supplies; ● costs associated with preclinical activities and clinical regulatory operations; and ● consulting and professional fees associated with research and development activities.
We believe the iSPERSE ™ dry powder technology offers enhanced drug loading and delivery efficiency that outperforms traditional lactose-blend inhaled dry powder therapies. 37 We believe the advantages of using the iSPERSE ™ technology include reduced total inhaled powder mass, enhanced dosing efficiency, reduced cost of goods, and improved safety and tolerability profiles.
We believe the iSPERSE ™ dry powder technology offers enhanced drug loading and delivery efficiency that outperforms traditional lactose-blend inhaled dry powder therapies. We believe the advantages of using the iSPERSE ™ technology include reduced total inhaled powder mass, enhanced dosing efficiency, reduced cost of goods, and improved safety and tolerability profiles.
We have no material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
We have no material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
PUR1900 On April 15, 2019, we entered into a Development and Commercialization Agreement (the “Cipla Agreement”) with Cipla Technologies LLC (“Cipla”) for the co-development and commercialization, on a worldwide, except for the Cipla Territory defined below, exclusive basis, of PUR1900, our inhaled iSPERSE ™ drug delivery system (the “Product”) enabled formulation of the antifungal drug itraconazole, which is only available as an oral drug, for the treatment of all pulmonary indications, including ABPA in patients with asthma.
On April 15, 2019, we entered into a Development and Commercialization Agreement (the “Cipla Agreement”) with Cipla for the co-development and commercialization, on a worldwide, except for the Cipla Territory defined below, exclusive basis, of PUR1900, our inhaled iSPERSE ™ drug delivery system (the “Product”) enabled formulation of the antifungal drug itraconazole, which is only available as an oral drug, for the treatment of all pulmonary indications, including ABPA in patients with asthma.
Based on the rapid systemic exposure in the therapeutic range and the improved side effect profile relative to IV dosing, we believe the PUR3100 formulation of DHE may differentiate from approved DHE products or those in development.
Based on the rapid systemic exposure in the therapeutic range and the improved side effect profile relative to IV dosing, we believe the PUR3100 formulation of DHE may differentiate from approved DHE products or those known to be in development.
During the period commencing on January 6, 2024 and ending July 30, 2024 (the “Wind Down Period”), we will complete all Phase 2b activities, assign or license all patents to Cipla and their registration with the appropriate authorities in the Cipla Territory, complete a physical and demonstrable technology transfer and secure all data from the Phase 2b study for inclusion in the safety database for the Cipla Territory.
We agreed that during the period commencing on January 6, 2024 and ending July 30, 2024 (the “Wind Down Period”), we would complete all Phase 2b activities, assign or license all patents to Cipla and their registration with the appropriate authorities in the Cipla Territory, complete a physical and demonstrable technology transfer and secure all data from the Phase 2b study for inclusion in the safety database for the Cipla Territory.
Given the oral inhaled route of delivery, PUR3100 is anticipated to provide relief from the rapid onset of migraine symptoms and provide a favorable tolerability profile. A total of three 14-day good laboratory practice toxicology studies have been completed with PUR3100 to support single-dose clinical studies. We are planning to conduct a chronic toxicology study to support long-term dosing.
Given the oral inhaled route of delivery, PUR3100 is anticipated to provide relief from the rapid onset of migraine symptoms and provide a favorable tolerability profile. 58 A total of three 14-day GLP toxicology studies have been completed with PUR3100 to support single-dose clinical studies. We are planning to conduct a chronic toxicology study to support long-term dosing.
Our goal is to develop breakthrough therapeutic products that are safe, convenient, and more effective than the existing therapeutic products for respiratory and other diseases where iSPERSE ™ properties are advantageous.
Our goal has been to develop breakthrough therapeutic products that are safe, convenient, and more effective than the existing therapeutic products for respiratory and other diseases where iSPERSE ™ properties are advantageous.
We received Food and Drug Administration (“FDA”) acceptance of our Investigational New Drug Application (“IND”) and a “study may proceed” letter in September 2023, positioning PUR3100 as Phase 2-ready for potential financing or partnership discussions. ● Pursue partnership or other alternatives to monetize or advance PUR1800, focusing on the development of an orally inhaled kinase inhibitor for treatment of AECOPD. ● Terminate the PUR1900 Phase 2b study and seek to monetize PUR1900 in the United States. ● Capitalize on our proprietary iSPERSE ™ technology and our expertise in inhaled therapeutics and particle engineering to identify new product candidates for prevention and treatment of diseases, including those with important unmet medical needs . ● Invest in protecting and expanding our intellectual property portfolio and file for additional patents to strengthen our intellectual property rights. ● Seek partnerships and license agreements to support the product development and commercialization of our product candidates.
We received Food and Drug Administration (“FDA”) acceptance of our Investigational New Drug Application (“IND”) and a “study may proceed” letter in September 2023, positioning PUR3100 as Phase 2-ready for potential financing or partnership discussions. ● Pursue partnership or other alternatives to monetize or advance PUR1800, focusing on the development of an orally inhaled kinase inhibitor for treatment of AECOPD. ● Capitalize on our proprietary iSPERSE™ technology and our expertise in inhaled therapeutics and particle engineering to identify new product candidates for prevention and treatment of diseases, including those with important unmet medical needs. ● Invest in protecting and expanding our intellectual property portfolio and file for additional patents to strengthen our intellectual property rights. ● Seek partnerships and license agreements to support the product development and commercialization of our product candidates. ● Position the Company to be able to consider strategic alternatives.
We expect that our existing cash and cash equivalents as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months following the date of this Annual Report on Form 10-K and into the first quarter of 2026.
We expect that our existing cash and cash equivalents as of December 31, 2024, will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months following the date of this Annual Report on Form 10-K.
Wainwright and Co., LLC (“HCW”) to act as our sales agent with respect to the issuance and sale of up to $20,000,000 of our shares of common stock, from time to time in an at-the-market public offering (the “ATM Offering”).
Wainwright and Co., LLC (“HCW”) to act as the Company’s sales agent with respect to the issuance and sale of up to $20.0 million of the Company’s shares of common stock, from time to time in an at-the-market public offering (the “ATM Offering”).
The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including the uncertainties of future clinical and preclinical studies, uncertainties in clinical trial enrollment rates and changing government regulation.
The duration, costs and timing of our future clinical trials and development of our product candidates will depend on a variety of factors, including the selected development path and uncertainties associated with clinical and preclinical studies, clinical trial enrollment rates and changing government regulation.
HCW acts as our sales agent on a commercially reasonable efforts basis, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of Nasdaq. If expressly authorized by us, HCW may also sell our common stock in privately negotiated transactions.
HCW acts as the Company’s sales agent on a commercially reasonable efforts basis, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The Nasdaq Capital Market (“Nasdaq”). If expressly authorized by the Company, HCW may also sell the Company’s common stock in privately negotiated transactions.
Overview We are a clinical-stage biopharmaceutical company focused on the development of novel inhaled therapeutic products intended to prevent and treat respiratory and other diseases with important unmet medical needs using our patented iSPERSE ™ technology.
Overview We are a biopharmaceutical company that has focused on the development of novel inhaled therapeutic products intended to prevent and treat migraine and respiratory diseases with important unmet medical needs using our patented iSPERSE ™ technology.
Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, including those discussed in Item 1 of this Annual Report on Form 10-K, entitled “Business,” under “Forward-Looking Statements” and Item 1A of this Annual Report on Form 10-K, entitled “Risk Factors.” References in this discussion and analysis to “us,” “we,” “our,” or our “Company” refer to Pulmatrix, Inc., a Delaware corporation, and our subsidiary, Pulmatrix Operating Company, Inc., a Delaware corporation.
Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, including those discussed in Item 1 of this Annual Report on Form 10-K, entitled “Business,” under “Forward-Looking Statements” and Item 1A of this Annual Report on Form 10-K, entitled “Risk Factors.” References in this discussion and analysis to “us,” “we,” “our,” or our “Company” refer to Pulmatrix, Inc., a Delaware corporation, and our subsidiaries, Pulmatrix Operating Company, Inc. and PCL Merger Sub, Inc., both Delaware corporations, and PCL Merger Sub II, LLC, a Delaware limited liability company.
Currently DHE is only available as subcutaneous, intravenous infusion or intranasal delivery. If approved for commercialization, PUR3100 has the opportunity to be the first orally inhaled DHE treatment for acute migraine and be an alternative to other acute therapies.
In 2020, we developed PUR3100, the iSPERSE ™ formulation of DHE, for the treatment of acute migraine. Currently DHE is only available as subcutaneous, intravenous infusion or intranasal delivery. If approved for commercialization, PUR3100 has the opportunity to be the first orally inhaled DHE treatment for acute migraine and be an alternative to other acute therapies.
Our current pipeline is aligned to this goal as we develop iSPERSE ™ -based therapeutic candidates which target the prevention and treatment of a range of diseases, including CNS disorders and pulmonary diseases.
Our current pipeline of clinical assets is aligned to this goal and includes iSPERSE ™ -based therapeutic candidates which target the prevention and treatment of a range of diseases, including CNS disorders and pulmonary diseases.
Sales of common stock under the Sales Agreement are made pursuant to an effective shelf registration statement on Form S-3, which was filed with the SEC on May 26, 2021, and subsequently declared effective on June 9, 2021 (File No. 333-256502), and a related prospectus.
Sales of common stock under the Sales Agreement are made pursuant to an effective shelf registration statement on Form S-3, which was filed with the SEC on May 17, 2024, and subsequently declared effective on May 30, 2024 (File No. 333-279491), and a related prospectus.
Net cash used in operating activities for the year ended December 31, 2022 was $19.4 million, which was primarily the result of a net loss of $18.8 million and $3.2 million in cash outflows associated with changes in operating assets and liabilities, partially offset by $2.7 million of net non-cash adjustments.
Net cash used in operating activities for the year ended December 31, 2023 was $16.0 million, which was primarily the result of a net loss of $14.1 million and $4.3 million in cash outflows associated with changes in operating assets and liabilities, partially offset by $2.4 million of net non-cash adjustments.
Net cash provided by financing activities for the year ended December 31, 2022 resulted from proceeds from the issuance of common stock, net of issuance costs, under the Sales Agreement (as defined below), partially offset by the payment of preferred stock issuance costs from a registered direct offering in December 2021. 43 Financings In May 2021, we entered into an At-The-Market Sales Agreement (the “Sales Agreement”) with H.C.
Net cash provided by financing activities for the year ended December 31, 2023 resulted from proceeds from the issuance of common stock, net of issuance costs, under the Sales Agreement (as defined below). 64 Financings In May 2021, the Company entered into an At-The-Market Sales Agreement (the “Sales Agreement”) with H.C.
Estimating the expense incurred with CROs and CMOs involves significant uncertainty because these service providers may invoice us several months in arrears, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments.
Prior to the completion of the wind down of the Phase 2b study for PUR1900, estimating the expense incurred with CROs and CMOs involved significant uncertainty because these service providers may invoice us several months in arrears, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments.
The following table sets forth the major sources and uses of cash for each of the periods set forth below (in thousands): Year Ended December 31, 2023 2022 Net cash used in operating activities $ (15,985 ) (19,356 ) Net cash used in investing activities (676 ) (86 ) Net cash provided by financing activities 53 1,230 Net decrease in cash, cash equivalents, and restricted cash $ (16,608 ) (18,212 ) Net cash used in operating activities Net cash used in operating activities for the year ended December 31, 2023 was $16.0 million, which was primarily the result of a net loss of $14.1 million and $4.3 million in cash outflows associated with changes in operating assets and liabilities, partially offset by $2.4 million of net non-cash adjustments.
The following table sets forth the major sources and uses of cash for each of the periods set forth below (in thousands): Year Ended December 31, 2024 2023 Net cash used in operating activities $ (10,716 ) (15,985 ) Net cash used in investing activities (398 ) (676 ) Net cash provided by financing activities - 53 Net decrease in cash, cash equivalents, and restricted cash $ (11,114 ) (16,608 ) Net cash used in operating activities Net cash used in operating activities for the year ended December 31, 2024 was $10.7 million, which was primarily the result of a net loss of $9.6 million and $4.8 million in cash outflows associated with changes in operating assets and liabilities, partially offset by $3.6 million of net non-cash adjustments.
After the conclusion of the Wind Down Period, Pulmatrix will bear no further financial responsibility for the commercialization and development of PUR1900 in the Cipla Territory, with such commercialization and development expenses of the Product in the Cipla Territory to be borne at Cipla’s sole cost and expense after January 6, 2024.
As such, we no longer bear further financial responsibility for the commercialization and development with respect to the Product in the Cipla Territory, with such commercialization and development expenses of the Product in the Cipla Territory to be borne at Cipla’s sole cost and expense after January 6, 2024.
Other general and administrative expenses include travel expenses, expenses related to being a publicly traded company and professional fees for consulting, auditing and tax services.
Other general and administrative expenses include travel expenses, expenses related to being a publicly traded company, professional fees for consulting, auditing and tax services, and expenses related to the Company’s exploration of strategic alternatives, including the Merger.
Net cash used in investing activities Net cash used in investing activities for the years ended December 31, 2023 and 2022 was due to purchases of property and equipment.
Net cash used in investing activities Net cash used in investing activities for the years ended December 31, 2024 and 2023 was due to purchases of property and equipment. Net cash provided by financing activities No net cash was used in or provided by financing activities for the year ended December 31, 2024.
Pursuant to the Third Amendment, all development and commercialization activities with respect to the Product in all markets other than the United States (the “Cipla Territory”) will be conducted exclusively by Cipla at Cipla’s sole cost and expense, and Cipla shall be entitled to all profits from the sale of the Product in the Cipla Territory, except that if Cipla successfully transfers manufacturing of the Product for the Cipla Territory to a manufacturing site determined by Cipla, we will become entitled to a royalty equal to 2% of net sales in the Cipla Territory.
Pursuant to the Third Amendment, all development and commercialization activities with respect to the Product in all markets other than the United States (the “Cipla Territory”) will be conducted exclusively by Cipla at Cipla’s sole cost and expense, and Cipla shall be entitled to all profits from the sale of the Product in the Cipla Territory, except that we will receive 2% royalties on any potential future net sales by Cipla outside the United States.
General and administrative expenses — General and administrative expenses were $6.5 million for the year ended December 31, 2023, as compared to $6.8 million for the year ended December 31, 2022, a decrease of approximately $0.3 million.
General and administrative expenses — General and administrative expenses were $7.8 million for the year ended December 31, 2024, as compared to $6.5 million for the year ended December 31, 2023, an increase of approximately $1.3 million.
While the program is currently in development for treatment of acute exacerbation of COPD, these positive toxicology study results could expand potential indications and value of the program.
While the program is currently in development for treatment of acute exacerbation of COPD, these positive toxicology study results could expand potential indications and value of the program. PUR1900 We are currently exploring opportunities to monetize PUR1900 within the United States.
We believe the following are our critical accounting estimates which involve a significant level of uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations. 41 Revenue Recognition Our principal source of revenue during the years ended December 31, 2023 and 2022 was derived from the Cipla Agreement.
We believe the following are our critical accounting estimates which involve a significant level of uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations.
We design and develop inhaled therapeutic products based on our proprietary dry powder delivery technology, iSPERSE ™ , which enables delivery of small or large molecule drugs to the lungs by inhalation for local or systemic applications.
Our product candidates are based on our proprietary engineered dry powder delivery platform, iSPERSE ™ , which seeks to improve therapeutic delivery to the lungs by optimizing pharmacokinetics and reducing systemic side effects to improve patient outcomes. 56 We design and develop inhaled therapeutic products based on our proprietary dry powder delivery technology, iSPERSE ™ , which enables delivery of small or large molecule drugs to the lungs by inhalation for local or systemic applications.
The decrease was primarily due to decreased spend of $2.7 million in costs related to our PUR3100 program, $1.0 million of employment costs, and $0.7 million in costs related to our PUR1800 program, partially offset by an increase of $1.3 million in costs related to our PUR1900 program and $0.4 million of other operating costs.
The decrease was primarily due to decreased spend of $3.9 million in costs related to our PUR1900 program, $2.2 million of lab facilities, contractors and other operating costs, $1.4 million of employment costs, and $0.8 million in costs related to our PUR3100 program.
We have financed our operations since inception primarily through the sale of preferred and common stock, the issuance of convertible promissory notes, term loans, and collaboration and license agreements. Our total cash and cash equivalents balance as of December 31, 2023 was $19.2 million.
We have financed our operations since inception primarily through the sale of preferred and common stock, the issuance of convertible promissory notes, term loans, and collaboration and license agreements.
General and Administrative Expenses General and administrative expenses consist principally of salaries, benefits and related costs such as stock-based compensation for personnel and consultants in executive, finance, business development, corporate communications and human resource functions, facility costs not otherwise included in research and development expenses, patent filing fees and legal fees.
In addition, the probability of success for each product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability. 61 General and Administrative Expenses General and administrative expenses consist principally of salaries, benefits and related costs such as stock-based compensation for personnel and consultants in executive, finance, business development, corporate communications and human resource functions, facility costs not otherwise included in research and development expenses, patent filing fees and legal fees.
HCW is entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of our common stock pursuant to the Sales Agreement.
HCW is entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of the Company’s common stock pursuant to the Sales Agreement. During the year ended December 31, 2024, no shares of the Company’s common stock were sold under the Sales Agreement.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. 38 Therapeutic Candidates PUR3100 In 2020, we developed PUR3100, the iSPERSE ™ formulation of DHE, for the treatment of acute migraine.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. Therapeutic Candidates PUR3100 We are currently exploring opportunities to monetize PUR3100.
We have completed several interactions with the FDA, and they have confirmed that, in addition to the planned Phase 2 and Phase 3 studies, long-term safety should be assessed in a minimum of one hundred patients for six months of dosing and fifty patients for twelve months of dosing.
Based on discussions with the FDA, this would complete the non-clinical requirements to support an NDA. Our interactions with the FDA have indicated that, in addition to the planned Phase 2 and Phase 3 studies, long-term safety should be assessed in a minimum of one hundred patients for six months of dosing and fifty patients for twelve months of dosing.
We utilize a combination of internal and external efforts to advance product development from early-stage work to clinical trial manufacturing and clinical trial support. External efforts include work with consultants and substantial work at CROs and CMOs. We support an internal research and development team and facility for our pipeline and other potential development programs.
We have utilized a combination of internal and external efforts to advance product development from early-stage work to clinical trial manufacturing and clinical trial support. External efforts have included work with consultants and substantial work at CROs and CMOs.
As we identify opportunities for iSPERSE ™ in additional indications, we anticipate additional headcount, capital, and development costs will be incurred to support these programs. Because of the numerous risks and uncertainties associated with product development, however, we cannot determine with certainty the duration and completion costs of these or other current or future preclinical studies and clinical trials.
Because of the numerous risks and uncertainties associated with product development, however, we cannot determine with certainty the duration and completion costs of these or other current or future preclinical studies and clinical trials.
The FDA also confirmed that it will be necessary to perform a safety study administering PUR3100 to otherwise healthy patients with asthma before an NDA is submitted.
The FDA also confirmed that it will be necessary to perform a safety study administering PUR3100 to otherwise healthy patients with asthma before an NDA is submitted. On September 26, 2022, we announced the completion of patient dosing in a Phase 1 clinical study, performed in Australia.
The increase is related to higher activity under the Cipla Agreement during the period. Research and development expenses — Research and development expenses were $15.5 million for the year ended December 31, 2023, as compared to $18.2 million for the year ended December 31, 2022, a decrease of approximately $2.7 million.
Research and development expenses — Research and development expenses were $7.2 million for the year ended December 31, 2024, as compared to $15.5 million for the year ended December 31, 2023, a decrease of approximately $8.4 million.
Revenue is recognized for the Cipla Agreement over the period of performance using a measure of progress based on costs incurred to date relative to the total expected costs (i.e., cost-to-cost method). A significant level of judgment is necessary to estimate the total expected costs.
Revenue Recognition Our principal source of revenue during the years ended December 31, 2024 and 2023 was derived from the Cipla Agreement. Revenue is recognized for the Cipla Agreement over the period of performance using a measure of progress based on costs incurred to date relative to the total expected costs (i.e., cost-to-cost method).
Such projections reflect the Third Amendment with Cipla and operational efficiencies and prioritization of spending implemented in the second quarter of 2023 and the first quarter of 2024. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.
These kinases play a critical role in chronic inflammation and airway remodeling. We completed the Phase 1b safety, tolerability, and pharmacokinetics clinical study of PUR1800 for patients with stable moderate-severe COPD. Topline data was delivered in the first quarter of 2022.
We completed a Phase 1b safety, tolerability, and pharmacokinetics of PUR1800 for patients with stable moderate-severe COPD. Topline data was delivered in the first quarter of 2022 and presented at the American Academy of Allergy, Asthma and Immunology conference in the first quarter of 2023.
The decrease was primarily due to decreased spend of $0.7 million in employment costs, partially offset by an increase of $0.4 million in legal and professional services costs. 42 Liquidity and Capital Resources Through December 31, 2023, we incurred an accumulated deficit of $287.6 million, primarily as a result of expenses incurred through a combination of research and development activities related to our various product candidates and general and administrative expenses supporting those activities.
Liquidity and Capital Resources Through December 31, 2024, we incurred an accumulated deficit of $297.2 million, primarily as a result of expenses incurred through a combination of research and development activities related to our various product candidates and general and administrative expenses supporting those activities.
The study design was a double-dummy, double-blinded trial to assess the safety, tolerability, and pharmacokinetics of three dose levels of single doses of inhaled PUR3100 with intravenous (“IV”) placebo, as compared to IV DHE (DHE mesylate injection) with inhaled placebo. Twenty-six healthy subjects were enrolled and each of the four groups contained at least six subjects.
The Phase 1 trial was a randomized, double-dummy, double-blinded design to assesses the safety, tolerability, and pharmacokinetics (PK) of three dose groups treated with inhaled PUR3100 with intravenous (IV) placebo, compared to a single dose of IV DHE (DHE mesylate injection) with inhaled placebo in healthy volunteers.
We anticipate that we will continue to incur losses over the next several years due to development costs associated with our iSPERSE ™ pipeline programs. We expect that we will need additional capital to fund our operations as we continue to incur research and development and general and administrative expenses.
Contingent on securing additional funding and continuing development of our program candidates, we anticipate that we would continue to incur losses over the next several years due to development costs associated with our iSPERSE ™ pipeline programs.
We anticipate that this Phase 2 clinical study will initiate once financing or partnership arrangements have been made. PUR1800 PUR1800 is a Narrow Spectrum Kinase Inhibitor, engineered with our iSPERSE ™ technology, being developed for the treatment of acute exacerbations in chronic obstructive pulmonary disease (AECOPD). PUR1800 targets p38 MAP kinases (p38MAPK), Src kinases, and Syk kinases.
PUR1800 We are currently exploring opportunities to monetize PUR1800. 59 PUR1800 is a Narrow Spectrum Kinase Inhibitor, engineered with our iSPERSE ™ technology, being developed for the treatment of acute exacerbations in chronic obstructive pulmonary disease (AECOPD). PUR1800 targets p38 MAP kinases (p38MAPK), Src kinases, and Syk kinases. These kinases play a critical role in chronic inflammation and airway remodeling.
The amount of revenue recognized in a given period is dependent on the accuracy of our estimate of the total expected costs.
Prior to the completion of the wind down of the Phase 2b study for PUR1900, a significant level of judgment has been necessary to estimate the total expected costs. The amount of revenue recognized in a given period is dependent on the accuracy of our estimate of the total expected costs.
In contrast to IV DHE, no vomiting was observed in any of the PUR3100 dose groups. Oral inhalation of PUR3100 achieved peak exposures in the targeted therapeutic range at all doses and the T max occurred at five minutes after dosing.
The study showed that PUR3100 achieved peak exposures in the targeted therapeutic range and time to maximum concentration occurred at five minutes after dosing at all dosing levels. The PUR3100 dose groups also showed a lower incidence of nausea and no vomiting compared to observations of nausea and vomiting in the IV administered DHE dose group.
We have shared all other development costs with Cipla that are not Direct Costs, such as the cost of clinical research organizations, manufacturing costs and other third-party costs, on a 50/50 basis. Pursuant to the Third Amendment, we and Cipla agreed to stop patient enrollment at 8 subjects in the ongoing Phase 2b clinical study.
For the duration of the Wind Down Period, we and Cipla were each responsible for 60% and 40%, respectively, of our Direct Costs. We shared all other development costs with Cipla that are not Direct Costs, such as the cost of clinical research organizations, manufacturing costs and other third-party costs, on a 50/50 basis.
We will receive 2% royalties on any potential future net sales by Cipla outside the United States. Financial Overview Revenues To date, we have not generated any product sales. The 2023 and 2022 revenues were primarily generated from the Cipla Agreement as related to our PUR1900 program.
Financial Overview Revenues To date, we have not generated any product sales. Revenues for the years ended December 31, 2024 and 2023 were primarily generated from the Cipla Agreement as related to our PUR1900 program, for which wind down activities have been completed.
On January 4, 2023, we announced topline results. PUR3100 was well-tolerated and there was a lower incidence of nausea in PUR3100 dose groups compared to IV DHE, and we presented the Phase 1 study data at the American Headache Society 65 th Annual Meeting in June 2023.
Twenty-six healthy subjects were enrolled and each of the four groups contained at least six subjects. On January 4, 2023, we announced topline results. We presented the Phase 1 study data at the American Headache Society 65th Annual Meeting in June 2023.
We will share costs with Cipla during the Wind Down Period in the same proportions discussed above but subject to a maximum reimbursement amount by Cipla as approved by the joint steering committee.
Reimbursements from Cipla to us for these costs were subject to a maximum reimbursement amount as approved by the joint steering committee. 60 We completed all Phase 2b wind down activities in the third quarter of 2024.
The topline data, along with the results from chronic toxicology studies, was delivered in the first quarter of 2022 and presented at the American Academy of Allergy, Asthma & Immunology (AAAAI) conference in the first quarter of 2023 and support the continued development of PUR1800 for the treatment of AECOPD and other inflammatory respiratory diseases.
The topline data, along with the results from chronic toxicology studies, support the continued development of PUR1800 for the treatment of AECOPD and other inflammatory respiratory diseases. These data will inform the design of a potential Phase 2 study in the treatment of AECOPD. Toxicology studies in rats and dogs, with durations of six and nine months respectively, are complete.
We may raise such capital through a combination of equity offerings, debt financings, other third-party funding and other collaborations and strategic alliances. We are currently exploring financing or partnership arrangements to develop and initiate a potential Phase 2 clinical study for PUR3100.
We expect that we will need additional capital to fund our operations as we continue to incur research and development and general and administrative expenses. We may raise such capital through a combination of equity offerings, debt financings, other third-party funding and other collaborations and strategic alliances.
On September 26, 2022, we announced the completion of patient dosing in a Phase 1 clinical study, performed in Australia, designed to assess not only safety, tolerability, and pharmacokinetics of PUR3100 in humans, but also provide preliminary comparative bioavailability data to support the use of the 505(b)(2) pathway for marketing authorization.
The study design was a double-dummy, double-blinded trial to assess the safety, tolerability, and pharmacokinetics of three dose levels of single doses of inhaled PUR3100 with IV placebo, as compared to IV DHE (DHE mesylate injection) with inhaled placebo. This study may also provide preliminary comparative bioavailability data to support the use of the 505(b)(2) pathway for marketing authorization.
Removed
Our product candidates are based on our proprietary engineered dry powder delivery platform, iSPERSE ™ , which seeks to improve therapeutic delivery to the lungs by optimizing pharmacokinetics and reducing systemic side effects to improve patient outcomes.
Added
After a comprehensive review of strategic alternatives, including identifying and reviewing potential candidates for a strategic transaction, on November 13, 2024, we entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), by and among Pulmatrix, PCL Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary of (“Merger Sub I”), PCL Merger Sub II, LLC, a Delaware limited liability company and our wholly owned subsidiary (“Merger Sub II” and together with Merger Sub I, “Merger Subs”) and Cullgen Inc., a Delaware corporation (“Cullgen”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, among other things, Merger Sub I will merge with and into Cullgen, with Cullgen surviving the merger as the surviving corporation (the “First Merger”) and as part of the same overall transaction, Cullgen will merge with and into Merger Sub II, with Merger Sub II continuing as wholly owned subsidiary and the surviving corporation of the merger (the “Second Merger” and together with the First Merger, the “Merger”).
Removed
We intend to capitalize on our iSPERSE™ technology platform and our expertise in inhaled therapeutics to identify new product candidates for the prevention and treatment of diseases, including those with considerable unmet medical needs, and to build our product pipeline beyond our existing candidates.
Added
The Merger Agreement was unanimously approved by our board of directors (the “Board” or “board of directors”), which resolved to recommend approval of the Merger Agreement to our stockholders.
Removed
In order to advance clinical trials for our therapeutic candidates and leverage the iSPERSE ™ platform to enable delivery of partnered compounds, we intend to form strategic alliances with third parties, including pharmaceutical and biotechnology companies or academic or private research institutes.
Added
The closing of the Merger is subject to approval by our stockholders and Cullgen stockholders, as well as other customary closing conditions, including the effectiveness of a registration statement filed with the SEC in connection with the transaction, Nasdaq’s approval of the listing of the shares of our common stock to be issued in connection with the Merger, and approval from the China Security Regulatory Commission.
Removed
We expect to continue to incur substantial expenses and operating losses for at least the next several years based on our drug development plans.
Added
If the Merger is completed, the business of Cullgen will continue as the business of the combined company. We are currently seeking opportunities to monetize our existing clinical assets. Our future operations are highly dependent on the success of the Merger and there can be no assurances that the Merger will be successfully consummated.
Removed
We expect our expenses and capital requirements will increase substantially in connection with our ongoing activities, as we: ● Pursue further clinical studies for PUR3100, an orally inhaled dihydroergotamine (“DHE”) including a Phase 2 clinical study for the treatment of acute migraine.
Added
There can be no assurance that the strategic review process or any transaction relating to a specific asset, including the Merger and any asset sale, will result in the Company pursuing such a transaction, or that any transactions, if pursued, will be completed on terms favorable to the Company and its stockholders in the existing Pulmatrix entity or any possible entity that results from a combination of entities.
Removed
Based on discussions with the FDA, this would complete the non-clinical requirements to support a new drug application (“NDA”).
Added
If the strategic review process is unsuccessful, and if the Merger is not consummated, the Pulmatrix board of directors may decide to pursue a dissolution and liquidation of the Company.
Removed
We completed all data analysis to inform a study design for a potential Phase 2 efficacy and safety study, treating subjects with AECOPD. We plan to pursue an appropriate partner as a path forward to advance PUR1800 into a Phase 2 clinical trial. 39 Toxicology studies in rats and dogs, with durations of six and nine months respectively, are complete.
Added
We are exploring opportunities to monetize these clinical assets in connection with the Merger. Continued development of these candidates, if that were to occur, would be contingent on securing additional funding and would require significant expenditures to advance.
Removed
We continued to develop PUR1900 pursuant to the Cipla Agreement during 2023. We and Cipla were each responsible for 60% and 40%, respectively, of our overhead costs and the time spent by our employees and consultants on development of the Product (“Direct Costs”).
Added
Thereafter, if development of such product candidates were to be continued and successfully advanced (of which there can be no assurance), it would be necessary to seek and obtain marketing approval to commercialize such product candidates, which could be expected to require the expenditure of significant additional resources and expenses related to regulatory, product sales, medical affairs, marketing, manufacturing and distribution. 57 Contingent on securing additional funding and continuing development of these candidates, we would expect to continue to incur substantial expenses and operating losses for at least the next several years, as we would: ● Pursue further clinical studies for PUR3100, an orally inhaled dihydroergotamine (“DHE”) including a Phase 2 clinical study for the treatment of acute migraine.
Removed
To move these programs forward along our development timelines, a large portion (approximately 86%) of our staff are research and development employees. In addition, we maintain an office and research and development facility which includes capital equipment for the manufacture and characterization of our iSPERSE ™ powders for our development efforts.
Added
We anticipate that this Phase 2 clinical study will initiate once financing or partnership arrangements have been made.
Removed
In addition, the probability of success for each product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability.
Added
On May 15, 2024, we announced publication of, “Safety, tolerability, and pharmacokinetics of a single orally inhaled dose of PUR3100, a dry powder formulation of dihydroergotamine versus intravenous dihydroergotamine: A Phase 1 randomized, double-blind study in healthy adults” in the peer-reviewed publication Headache: The Journal of Head and Face Pain .
Removed
We anticipate that our general and administrative expenses will increase in the future as they relate to audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and Securities and Exchange Commission (“SEC”) requirements, director and officer liability insurance, investor relations costs and other costs associated with being a public company.
Added
We believe that in this trial, PUR3100 demonstrated the potential for rapid pain relief and improved DHE tolerability versus IV DHE.
Removed
Additionally, if and when we believe a regulatory approval of a product candidate appears likely, we anticipate an increase in staffing and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates.

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