Armata Pharmaceuticals Closes 2nd Tranche of $45 Million Private Placement With Innoviva

Edward Kim  |

Image source: Armata Pharmaceuticals

Armata Pharmaceuticals ( ARMP) announced Thursday that it has closed the second and final tranche of its previously announced private placement with Innoviva Strategic Opportunities, a wholly-owned subsidiary of Innoviva ( INVA

).

The company raised $26.9 million in gross proceeds in this tranche. Together with the $18.1 million raised in the first tranche in February 2022, Armata raised gross proceeds of $45 million from Innoviva.

Armata is developing targeted bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections.

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Innoviva is a $1.3 billion market cap company with a portfolio of royalties that include respiratory assets partnered with Glaxo Group.

Pipeline

Armata is focused on areas with significant unmet clinical need. Its initial candidate therapeutics are targeting respiratory infections (such as cystic fibrosis), bacteremia and prosthetic joint infection.

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Image source: Armata Pharmaceuticals

Investment thesis

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Armata was formed in 2019 from the merger of C3J Therapeutics and AmpliPhi Biosciences.

The company has largely gone unnoticed by investors, with barely 18,000 shares trading on a daily basis. After this private placement, Armata's market cap is only $175 million, or $280 million on a fully diluted basis.

While it may not be a high-profile antibody company, Armata's bacteriophage approach has significant potential to achieve therapeutic utility.

  • Phages are natural and rapid bacteria predators.
  • Armata is creating tailor-made bacteriophage cocktails to target acute and chronic infections.
  • The initial target markets represent enormous opportunity
    • Inhaled antibiotics for cystic fibrosis generate $1.4 billion annually
    • 300,000 hospitalizations per year due to Pseudomonas aeruginosa
    • $1.7 billion in healthcare costs attributable to MRSA infection
  • Partnerships with Cystic Fibrosis Foundation, Merck and the US Department of Defense
  • 15 patent families
  • Now well capitalized with the Q1 infusion of $45 million in gross proceeds.

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