Business Overview and History
Pulmatrix was incorporated in 2013 as a Delaware corporation, with a mission to advance the treatment of respiratory and other diseases through the development of its proprietary iSPERSE™ dry powder delivery platform. The iSPERSE™ technology is engineered to produce small, dense particles with highly efficient dispersibility and delivery to the airways, making it suitable for formulating a wide range of drug substances, including small molecules and biologics.
Over the years, Pulmatrix has built a pipeline of therapeutic candidates leveraging the iSPERSE™ platform. Key programs include PUR3100 for the treatment of acute migraine, PUR1800 for the treatment of acute exacerbations of chronic obstructive pulmonary disease (AECOPD), and PUR1900 for the treatment of allergic bronchopulmonary aspergillosis (ABPA) in patients with asthma and cystic fibrosis (CF).
In April 2019, Pulmatrix entered into a development and commercialization agreement with Cipla Technologies LLC (Cipla) for the co-development and commercialization of PUR1900 on a worldwide exclusive basis, excluding the Cipla Territory. This agreement has since been amended, with the most recent amendment in January 2024 defining the Cipla Territory to include all markets outside of the United States. Under the terms of the agreement, Pulmatrix and Cipla have been working to advance the PUR1900 program, with Cipla responsible for all commercialization and development activities and expenses in the Cipla Territory.
In 2020, Pulmatrix developed PUR3100, an iSPERSE formulation of dihydroergotamine (DHE) for the treatment of acute migraine. The company completed preclinical studies and a Phase 1 clinical study for PUR3100, which demonstrated that the formulation achieved peak exposures in the targeted therapeutic range and showed a lower incidence of nausea and no vomiting compared to intravenous DHE. Based on these results, Pulmatrix received acceptance of an Investigational New Drug (IND) application from the FDA and a study may proceed letter, positioning PUR3100 as Phase 2-ready.
In May 2024, Pulmatrix executed certain agreements with MannKind Corporation (MannKind) that closed in July 2024. These transactions included the assignment of Pulmatrix's rental facility in Bedford, Massachusetts, along with the transfer of related leasehold improvements, laboratory equipment, and other personal property, to MannKind. Additionally, Pulmatrix and MannKind entered into a cross-license agreement, granting each other certain exclusive and non-exclusive rights to develop and commercialize various iSPERSE™-based formulations and delivery devices.
Financial Performance
Pulmatrix's financial performance has been characterized by recurring losses and negative cash flows from operating activities as the company has focused on developing its pipeline of inhaled therapeutic candidates. For the year ended December 31, 2023, the company reported total revenue of $7.30 million, net loss of $14.12 million, and negative operating cash flow of $15.99 million. The company also reported negative free cash flow of $16.66 million for the same period.
In the first nine months of 2024, Pulmatrix reported total revenue of $7.80 million, a net loss of $7.57 million, and negative operating cash flow of $9.46 million. The increase in revenue compared to the prior-year period was primarily due to a contract modification with Cipla, which resulted in a cumulative catch-up adjustment recorded during the first quarter of 2024. The decrease in net loss and operating cash outflow was driven by lower research and development expenses, particularly related to the wind-down of the PUR1900 Phase 2b clinical trial, as well as decreased employment and other operating costs following the MannKind transaction.
For the most recent quarter (Q3 2024), Pulmatrix reported revenue of $366,000, a net loss of $2.59 million, and negative operating cash flow of $3.06 million. The company also reported negative free cash flow of $3.06 million for the quarter. The decrease in revenue compared to the prior year quarter was primarily due to fewer expenses eligible for reimbursement under the Cipla agreement as the PUR1900 Phase 2b clinical trial was winding down. The decreases in net loss, operating cash flow, and free cash flow were primarily due to the wind down of the PUR1900 program and reduced operating costs following the MannKind transaction.
Liquidity and Capital Resources
Pulmatrix has financed its operations primarily through the sale of equity securities, the issuance of convertible promissory notes, term loans, and collaboration and license agreements. As of September 30, 2024, the company had $10.78 million in cash and cash equivalents, which management believes will be sufficient to fund its operations into Q4 2026.
The company's liquidity position is reflected in its financial ratios. As of September 30, 2024, Pulmatrix reported a debt-to-equity ratio of 0, indicating no long-term debt on its balance sheet. The current ratio and quick ratio both stood at 19.4, suggesting a strong short-term liquidity position.
Pulmatrix has been exploring financing or partnership arrangements to support the continued development of its pipeline, particularly the PUR3100 program for the treatment of acute migraine. The company is also considering strategic alternatives to further leverage its iSPERSE™ technology and optimize the potential of its product candidates.
The successful execution of financing or partnership agreements will be a key factor in the company's future growth and development. Pulmatrix's ability to secure additional funding or strategic partnerships will be critical in determining its capacity to advance its clinical programs and execute on its strategic initiatives.
Recent Developments and Strategic Positioning
In July 2024, Pulmatrix completed the previously announced transactions with MannKind, which included the assignment of the company's Bedford, Massachusetts facility and the execution of a cross-license agreement. These transactions validated the potential value of Pulmatrix's iSPERSE™ technology and have allowed the company to focus its resources on exploring strategic alternatives to further leverage this platform.
As part of the MannKind transaction, Pulmatrix terminated and MannKind hired the majority of the company's research and development employees, representing approximately two-thirds of Pulmatrix's workforce at the time. This shift in the company's operating model has enabled Pulmatrix to significantly reduce its general and administrative expenses related to supporting its internal research and development activities.
Moving forward, Pulmatrix is pursuing strategic alternatives to optimize the potential of its product candidates, particularly PUR3100 for the treatment of acute migraine. The company is actively exploring financing or partnership arrangements to support the continued development of PUR3100, which has demonstrated promising results in its Phase 1 clinical trial and is now Phase 2-ready.
In addition to PUR3100, Pulmatrix continues to advance its PUR1800 program for the treatment of AECOPD. The company completed a Phase 1b safety, tolerability, and pharmacokinetics study of PUR1800 in patients with stable moderate-to-severe COPD. The topline data indicated that PUR1800 was well-tolerated and demonstrated low and consistent systemic exposure when administered via oral inhalation. These results, along with data from chronic toxicology studies, support the continued development of PUR1800 for AECOPD and other inflammatory respiratory diseases.
Regarding the PUR1900 program, Pulmatrix and Cipla have completed the wind-down of the ongoing Phase 2b clinical trial. As per the recent amendment to their agreement, Cipla will now be responsible for the further development and commercialization of PUR1900 in all markets outside the United States, with Pulmatrix entitled to a 2% royalty on potential future net sales by Cipla.
Conclusion
Pulmatrix's focus on developing innovative inhaled therapies using its proprietary iSPERSE™ technology has positioned the company as a key player in the respiratory and CNS disease treatment landscape. The recent strategic transactions with MannKind have streamlined the company's operations and unlocked the potential value of its technology platform.
As Pulmatrix navigates the next phase of its evolution, the successful execution of financing or partnership agreements will be critical in determining the company's ability to advance its pipeline and capitalize on the opportunities presented by its iSPERSE™ technology. The company's current cash position, which is expected to fund operations into Q4 2026, provides a runway for Pulmatrix to pursue strategic alternatives and potential partnerships.
Investors will closely monitor Pulmatrix's ability to secure the necessary resources to drive the development of its promising product candidates, particularly PUR3100 for acute migraine and PUR1800 for AECOPD. The company's success in leveraging its iSPERSE™ technology and advancing its clinical programs will be key factors in creating long-term value for shareholders.