Form 4: BiomX Inc. Sees Investment from OrbiMed Funds Through Private Placement

OrbiMed Israel BioFund GP Limited Partnership and related entities acquired Series X Preferred Stock and warrants in BiomX Inc. via a private placement, convertible into common stock subject to certain ownership limitations.

Summary

• OrbiMed Israel BioFund GP Limited Partnership, along with related entities, filed a Form 4 detailing changes in beneficial ownership of BiomX Inc. [PHGE] securities.
• The transactions occurred on March 15, 2024, and involve the purchase of Series X Non-Voting Convertible Preferred Stock and warrants through a private placement.
• 4,327 shares of Series X Preferred Stock were acquired, each convertible into 1,000 shares of common stock upon stockholder approval or at the holder's option after a specified date.
• The conversion is subject to a Beneficial Ownership Limitation, restricting conversion if it results in the holder exceeding 19.9% ownership of common stock.
• Additionally, 2,163,500 warrants were purchased, exercisable for common stock following stockholder approval, also subject to the Beneficial Ownership Limitation, and expiring 24 months after they are first exercisable.
• The warrants have an exercise price of $0.2311.
• The securities are held by OrbiMed Israel Partners Limited Partnership (OIP), with OrbiMed Israel BioFund GP Limited Partnership (OrbiMed BioFund) as its general partner, and OrbiMed Israel GP Ltd. (OrbiMed Israel) as the general partner of OrbiMed BioFund.
• Carl L. Gordon and Erez Chimovits, as part of the investment committee, exercise investment and voting power over these securities.
• The reporting persons disclaim beneficial ownership except to the extent of their pecuniary interest.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The investment from OrbiMed is a positive signal, but the restrictions on conversion and potential dilution temper the outlook.

Positives

• The private placement represents a significant investment in BiomX Inc. by OrbiMed funds.
• The investment could provide BiomX with additional capital to fund its operations and research.
• The conversion feature of the preferred stock and the exercise of warrants could increase the number of outstanding shares, potentially improving liquidity.

Negatives

• The conversion of preferred stock is subject to stockholder approval, which introduces uncertainty.
• The Beneficial Ownership Limitation could restrict the extent to which OrbiMed can convert its preferred stock into common stock.
• The exercise of warrants will dilute existing shareholders.

Risks

• The conversion of the Series X Preferred Stock is contingent on stockholder approval.
• The Beneficial Ownership Limitation could prevent OrbiMed from fully converting its preferred stock.
• The exercise of warrants will dilute existing shareholders.
• The value of the warrants is dependent on the future price of BiomX's common stock.

Future Outlook

The future beneficial ownership of OrbiMed is dependent on stockholder approval for the conversion of the Series X Preferred Stock and the exercise of warrants, both subject to a Beneficial Ownership Limitation.

Management Comments

• Carl L. Gordon and Erez Chimovits exercise investment and voting power through an investment committee.
• Each of OrbiMed Israel, OrbiMed BioFund, Carl L. Gordon, and Erez Chimovits disclaims beneficial ownership of the securities reported herein for purposes of Rule 16a-1(a) under the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), except to the extent of his or its pecuniary interest therein, if any.

Industry Context

Private placements are a common method for biotech companies like BiomX to raise capital. Investment from established funds like OrbiMed can signal confidence in the company's prospects.

Comparison to Industry Standards

• Similar private placements in the biotech industry often involve convertible preferred stock and warrants to attract investors.
• The 19.9% Beneficial Ownership Limitation is a common provision to avoid triggering certain regulatory thresholds.
• The warrant exercise price and expiration date are typical terms for such instruments.

Stakeholder Impact

• Shareholders may experience dilution if the preferred stock is converted and warrants are exercised.
• The investment could benefit the company's employees by providing financial stability.
• The capital raise could enable BiomX to advance its research and development programs, potentially benefiting patients.

Next Steps

• BiomX stockholders will need to approve the conversion of the Series X Preferred Stock.
• OrbiMed will decide when and to what extent to convert the preferred stock and exercise the warrants, subject to the Beneficial Ownership Limitation.

Key Dates