SCHEDULE 13D/A: Deerfield Funds Boost Stake in BiomX Inc. Through Warrant Exercise and New Agreements

Deerfield Management and its affiliated funds have increased their beneficial ownership in BiomX Inc. to 9.99% through the exercise of warrants and new agreements, injecting approximately $3 million into the company.

Summary

• Deerfield Private Design Fund V, L.P. and Deerfield Healthcare Innovations Fund II, L.P. (the 'Funds') each exercised Private Placement Warrants in respect of 1,611,864 shares of BiomX Inc. Common Stock.
• Each Fund paid approximately $1,500,000 in cash for this exercise, totaling approximately $3,000,000 in proceeds for BiomX Inc.
• The effective exercise price for the cash portion of the Private Placement Warrants was a reduced $0.9306 per share.
• Due to a 9.99% beneficial ownership limitation, each Fund immediately received 353,249 shares of Common Stock.
• For the remaining 1,258,614 shares per Fund that could not be immediately issued, the Private Placement Warrants were amended and restated.
• These Amended and Restated Warrants have a reduced exercise price of $0.0001 per share, with $0.9305 per share already pre-funded, and their expiration date was extended until fully exercised.
• In consideration for the warrant exercise, BiomX Inc. agreed to issue new warrants (the 'New Warrants') to each Fund, allowing them to purchase up to an additional 1,611,864 shares of Common Stock each at an exercise price of $0.9306 per share.
• The New Warrants are not currently exercisable and will only become exercisable upon requisite stockholder approval, with a term of five years from the Stockholder Approval Date.
• As of February 27, 2025, Deerfield Management Company, L.P. and James E. Flynn collectively beneficially own 15,558,445 shares of BiomX Inc. Common Stock, representing 9.99% of the class, subject to the beneficial ownership limitation.
• The beneficial ownership calculation is based on 18,176,661 shares outstanding as of February 10, 2025, plus 6,789,392 shares issued in connection with recent transactions.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While there's dilution and a reduced exercise price, the transaction brings a significant cash infusion to BiomX Inc. and demonstrates continued commitment from a major investor. The future potential for additional capital via new warrants, though contingent on approval, also adds a positive outlook.

Positives

• BiomX Inc. received approximately $3,000,000 in cash from the warrant exercises, providing a capital infusion.
• The transaction demonstrates continued investment and confidence from a significant institutional investor, Deerfield Management.
• The extension of the expiration date for the Amended and Restated Warrants provides long-term flexibility for the investor.

Negatives

• The exercise price for the warrants was reduced to $0.9306 per share, which is lower than the original $2.311 per share, potentially indicating a lower valuation or a need for capital at a discount.
• The issuance of New Warrants and the potential future issuance of shares upon their exercise could lead to further dilution for existing shareholders.
• The exercisability of the New Warrants is contingent on stockholder approval, introducing an element of uncertainty.

Risks

• The beneficial ownership limitation of 9.99% restricts the immediate conversion or exercise of all warrants and preferred stock into common shares, potentially limiting the investor's immediate control or liquidity.
• The New Warrants require stockholder approval to become exercisable; if not obtained, the investor will not be able to exercise these warrants.
• Future exercises of warrants and conversion of preferred stock will lead to dilution of existing common stockholders.

Future Outlook

The New Warrants issued to Deerfield Funds will become exercisable upon obtaining requisite stockholder approval, with a term of five years from that approval date. BiomX Inc. is required to file a resale registration statement for the shares underlying the New Warrants within 45 calendar days of the private placement consummation and use commercially reasonable efforts to have it declared effective within 45-75 calendar days.

Industry Context

This filing reflects a significant investment and financing activity within the biotechnology sector, where companies often rely on strategic investments and warrant exercises to secure capital for research, development, and operations. The structure involving beneficial ownership limitations and new warrant issuances is a common mechanism for institutional investors to manage their stake and provide staged financing while adhering to regulatory thresholds.

Corporate Governance

Related Party Transactions

• The exercise of Private Placement Warrants and the issuance of New Warrants and Amended and Restated Warrants involve Deerfield Funds, which are significant beneficial owners of BiomX Inc., making these related party transactions.

Stakeholder Impact

• Shareholders: Experience dilution from the issuance of new shares and potential future dilution from the New Warrants. However, the cash infusion strengthens the company's financial position.
• Company (BiomX Inc.): Receives immediate capital, which can be used for operations, research, or other strategic initiatives. Gains continued support from a key investor.
• Deerfield Funds: Increase their stake and potential future ownership in BiomX Inc. at a favorable exercise price, with extended terms and registration rights for liquidity.

Next Steps

• BiomX Inc. needs to obtain requisite stockholder approval for the exercisability of the New Warrants.
• BiomX Inc. is required to prepare and file a resale registration statement with the SEC for the shares underlying the New Warrants within 45 calendar days following the consummation of the Private Placement.
• BiomX Inc. must use commercially reasonable efforts to cause the 2025 Registration Statement to be declared effective by the SEC within 45 calendar days of the Filing Deadline (or 75 calendar days if the SEC reviews it).

Key Dates

Keywords

BiomX Inc., Deerfield Management, SEC Schedule 13D, Warrant Exercise, Common Stock, Beneficial Ownership, Private Placement Warrants, New Warrants, Series X Preferred Stock, Capital Raise, Dilution, Biotechnology, Investment