Business Overview
Beyond Air, Inc. is a commercial-stage medical device and biopharmaceutical company dedicated to harnessing the power of nitric oxide (NO) to improve the lives of patients suffering from respiratory illnesses, neurological disorders, and solid tumors. The company's innovative technology platforms have the potential to revolutionize various areas of healthcare, positioning Beyond Air as a rising force in the industry.
Company History and Development
Beyond Air, Inc. was incorporated on April 28, 2015, under Delaware law. Initially named AIT Therapeutics, Inc., the company changed its name to Beyond Air, Inc. on June 25, 2019. The company's core focus has been on developing a platform of nitric oxide (NO) generators and delivery systems called the LungFit platform. In January 2018, Beyond Air made a significant move by entering into an agreement with NitricGen, Inc. to acquire a global, exclusive, transferable license and associated assets, including intellectual property, know-how, trade secrets, and confidential information related to the LungFit technology. This agreement involved milestone payments and the issuance of warrants to purchase the company's common stock to NitricGen.
The company's journey has not been without challenges. In 2019, Beyond Air terminated an agreement with Circassia Limited and its affiliates for commercial rights for PPHN and future related indications. This led to a settlement agreement in 2021, where Beyond Air agreed to pay Circassia $10.5 million in installments. Additionally, the company has faced legal proceedings, including a lawsuit filed by Empery Asset Master, Ltd. et al. in 2023, which was subsequently resolved. These challenges required the company to allocate resources towards resolving legal disputes, potentially impacting its product development and commercialization efforts.
Products and Technology
Beyond Air's flagship product, the LungFit PH system, received premarket approval (PMA) from the U.S. Food and Drug Administration (FDA) in June 2022, marking a significant milestone in the company's history. The LungFit PH system is designed to generate NO from ambient air and deliver it to patients with hypoxic respiratory failure associated with persistent pulmonary hypertension of the newborn (PPHN), a life-threatening condition.
The LungFit platform can generate NO up to 400 parts per million (ppm) for delivery to patients' lungs directly or via a ventilator. Beyond Air believes the LungFit PH provides several competitive advantages over current standard NO delivery systems, such as not requiring the use of high-pressure cylinders or cumbersome purging procedures. The company estimates the addressable U.S. market for the LungFit PH to be approximately $350 million, with a worldwide market potential of around $700 million.
Beyond Air's expertise in NO technology extends beyond the LungFit PH system. The company's pipeline includes the LungFit PRO, which utilizes high concentrations of NO to target viral lung infections, including COVID-19 and viral community-acquired pneumonia (VCAP). The company estimates the U.S. market potential for VCAP to be greater than $1.5 billion and the worldwide market potential to be over $3 billion. Beyond Air plans to advance the LungFit PRO into a pivotal clinical trial, pending future funding.
The LungFit GO is being developed for the treatment of nontuberculous mycobacteria (NTM) lung infection, a rare and serious pulmonary disease. Beyond Air plans to commence a pivotal clinical trial for the LungFit GO in 2026 following discussions with the FDA. The estimated U.S. sales potential for NTM is greater than $1 billion, with a worldwide sales potential of over $2.5 billion.
Furthermore, through its majority-owned affiliate, Beyond Cancer, Ltd., the company is exploring the use of ultra-high concentration NO (UNO) to target solid tumors, a potentially groundbreaking approach in the field of cancer therapy. In the fourth quarter of 2021, Beyond Cancer raised $30 million in a private placement, with Beyond Air maintaining an 80% equity ownership. The funding is being used to accelerate the oncology program, including the completion of IND-enabling studies, a Phase 1 clinical trial, and the expansion of preclinical programs for combination studies.
Financials
Financially, Beyond Air has navigated the challenges of a commercial-stage company. For the fiscal year 2024, the company reported annual revenue of $1.16 million, annual net income of -$60.24 million, annual operating cash flow of -$56.01 million, and annual free cash flow of -$61.76 million.
The company's quarterly financial performance has shown mixed results. In the most recent quarter (Q2 2025), Beyond Air reported revenue of $798,000, representing a year-over-year growth of 234.3%. However, the company continues to experience net losses, with a quarterly net income of -$13.36 million, operating cash flow of -$13.35 million, and free cash flow of -$14.52 million.
Beyond Air's gross margins have been under pressure due to one-time upgrade costs and depreciation. However, the company expects gross margins to turn positive in the March 2025 quarter and is targeting 60-65% gross margins on their first-generation product by the end of calendar year 2025.
Liquidity
As of September 30, 2024, Beyond Air had cash, cash equivalents, and marketable securities of $28.4 million, excluding the $5.83 million held by Beyond Cancer. The company's debt-to-equity ratio stands at 0.398, with a current ratio of 5.76 and a quick ratio of 5.38, indicating a relatively strong short-term liquidity position.
To strengthen its financial position, Beyond Air recently completed a $20.6 million private placement offering with healthcare-focused institutional investors and company insiders. Additionally, the company reached an agreement with Avenue Capital to extinguish its $17.5 million senior secured term loan, eliminating $12 million in scheduled debt payments through June 2026. Further, Beyond Air entered into an $11.5 million royalty funding agreement with an insider-led investor group, providing additional capital to support its commercial and R&D initiatives.
The company expects to have sufficient cash for about 18 months as they ramp up their global commercial execution plan. Beyond Air also anticipates a reduction in cash burn in Q3 by at least one-third compared to the current quarter.
Growth Strategy and Future Prospects
Beyond Air's growth strategy is centered on expanding the commercial footprint of its LungFit PH system in the United States and exploring opportunities for international expansion, including the pursuit of CE marking in the European Union. The company has also made strategic partnerships to broaden its reach, such as the collaboration with Healthcare Links to expand access to the LungFit PH system through group purchasing organizations and integrated delivery networks.
The company's pipeline advancements are also a key focus, with the LungFit PRO and LungFit GO programs progressing through clinical development. Additionally, Beyond Cancer's UNO therapy has generated promising preclinical data and advanced into a Phase 1a first-in-human clinical trial, demonstrating the potential of this innovative approach to solid tumor treatment.
Beyond Air expects to file a PMA supplement to the FDA for their next-generation LungFit PH system before the end of the March 2025 quarter and plans to demonstrate this system at the AARC Annual Meeting in Orlando. The company also anticipates signing new ex-U.S. agreements over the next 6-12 months and beginning to ship systems overseas in the first half of calendar 2025.
Risks and Challenges
Risks facing Beyond Air include regulatory uncertainties, competition from established players in the nitric oxide therapy market, and the challenge of commercializing its products in a highly competitive healthcare landscape. The company's reliance on third-party suppliers and the potential for manufacturing issues also pose risks to its operations.
Conclusion
Despite these challenges, Beyond Air's commitment to innovation and its track record of regulatory approvals and clinical progress position the company as a promising player in the medical device and biopharmaceutical industries. As the company continues to execute its strategic initiatives, investors will closely monitor its ability to drive revenue growth, improve profitability, and capitalize on the expanding market opportunities for its nitric oxide-based technologies. The company's focus on expanding its commercial footprint, advancing its pipeline, and improving its financial position suggests a potentially bright future for Beyond Air in the evolving healthcare landscape.