On November 4, 2021 Beyond Air, Inc. (NASDAQ: XAIR), a clinical-stage medical device and biopharmaceutical company focused on developing inhaled nitric oxide (NO) for the treatment of patients with respiratory conditions, including serious lung infections and pulmonary hypertension, and ultra-high concentration nitric oxide (UNO) for the treatment of solid tumors, reported the separation of its oncology business into a new and independently managed, private company called Beyond Cancer, Ltd (Press release, Beyond Air, NOV 4, 2021, View Source [SID1234594627]). Beyond Air retains its respiratory business and will continue to focus on advancing the LungFit platform of nitric oxide generators and delivery systems to the market. Beyond Air’s preclinical oncology team and the exclusive right to the intellectual property portfolio utilizing UNO for the treatment of solid tumors now reside with Beyond Cancer.

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"The decision to spin off our oncology business was made in close collaboration with the Board of Directors and Beyond Air leadership as part of our overall strategy to maximize efficiency and drive value creation to achieve our goals for both patients and shareholders. After a careful assessment of our active portfolio management strategy, it became clear that our oncology business would be more productive as a separate, independently managed entity with its own leadership team and investor base," said Steve Lisi, Chairman and Chief Executive Officer of Beyond Air. "Beyond Air was founded on the promise of NO in respiratory diseases, and this separation will enable a greater focus on the transformational LungFit platform technology. This will also allow for investment into other respiratory diseases where we can have a significant impact on our patients. I am confident that through an ongoing, collaborative partnership, the new Beyond Cancer leadership team will be able to leverage our knowledge of ultra-high concentration NO to treat solid tumors. We are excited and energized to enter this new era of transformation and innovation, as Beyond Cancer takes on its own mission of creating the next generation of immuNO-oncology treatments."

Strategic Rationale
Beyond Air believes the spin-off of the oncology business will create long-term value for shareholders through the following:

Beyond Air’s focus remains advancing the LungFit platform to treat respiratory diseases, and the oncology program does not use LungFit given the ultra-high concentrations and direct delivery to the site of the tumor
After this financing, Beyond Air will retain at least 80% equity ownership in Beyond Cancer
Beyond Cancer will pay Beyond Air a single digit royalty on all future revenues
Beyond Cancer will benefit from Beyond Air’s NO expertise, IP portfolio, preclinical oncology team, and regulatory progress
Beyond Cancer can initially utilize Beyond Air’s infrastructure while having its own investor base and dedicated leadership team with clinical oncology experience to accelerate and enhance its solid tumor pipeline
Leadership and Governance
Selena Chaisson, M.D., is joining Beyond Cancer as Chief Executive Officer. Previously, Dr. Chaisson was the Director of Healthcare Investments at Bailard, where she spent 16 years focusing on highly specialized, emerging healthcare opportunities with more than one-third of her portfolio dedicated to investments in oncology-related companies.

"I am honored to lead Beyond Cancer as we move forward to unlock the possibilities of using ultra-high concentration NO as a new treatment modality for solid tumors," said Dr. Chaisson. "Immuno-oncology has been hailed as a breakthrough therapy for many cancer patients, especially those suffering from hematological malignancies, such as leukemia and lymphoma. However, solid tumors represent approximately 90% of human cancers, with metastatic disease causing the overwhelming majority of cancer-related deaths. Beyond Cancer’s goal is to be at the forefront of a completely novel approach in preventing metastatic disease by harnessing the power of ultra-high concentration NO. In preclinical studies, intra-tumoral delivery of UNO elicited an immunogenic response with potent antitumor activity in addition to the immediate cytotoxic effect of NO-mediated tumor ablation, while limiting off-target effects. As CEO, I am excited to have the opportunity to build a biotech company around such an innovative approach and bring on a seasoned leadership team to spearhead this effort. I will continue Beyond Air’s legacy of investing in NO and look forward to maintaining a close partnership."

Prior to Bailard, Dr. Chaisson held senior executive roles at RCM Capital Management and Tiger Management. RCM Capital Management was acquired and then merged with Allianz Global Investors U.S. in 2013. Dr. Chaisson received a BS in Microbiology in 1987 from Louisiana State University in Baton Rouge, LA, where she graduated summa cum laude. She earned her M.B.A. and M.D. from Stanford University in 1992 and 1993, respectively.

Hila Confino, Ph.D., is joining Beyond Cancer as Chief Scientific Officer from Beyond Air, where she served as Head of Research in Israel. At Beyond Air, Dr. Confino led the oncology preclinical team and conducted in vitro and in vivo studies for ultra-high concentration nitric oxide in solid tumors. Dr. Confino has over 12 years of experience in cancer immunology research in both the academic and industry settings. Her work has been featured in numerous scientific conferences and published in multiple peer-reviewed journals. She holds a Ph.D. and Master of Science in Cancer Immunology from Tel Aviv University. Dr. Confino received a BS in Biotechnology from Bar—Ilan University in Israel, where she graduated cum laude.

The complete Beyond Cancer Board of Directors, Scientific Advisory Board and headquarters will be announced as they are finalized. The Board of Directors is expected to consist of six members, four of whom include:

Steve Lisi, Chairman of the Board, and CEO and Chairman of the Board of Beyond Air
Selena Chaisson, M.D., Director, and CEO of Beyond Cancer
Amir Avniel, Executive Director, and President, COO and Co-Founder of Beyond Air
Robert Carey, Director, and Board Member of Beyond Air
Transaction Details
Beyond Cancer has secured commitments of $23.9 million in a concurrent private placement of common shares, not to exceed $30 million, providing the investors with up to 20% equity ownership. The funding is expected to be used to accelerate ongoing preclinical work including the completion of IND-enabling studies, completion of a Phase 1 study, expansion of preclinical programs for combination studies, hiring of additional Beyond Cancer team members, and optimization of the delivery system, as well as for general corporate purposes. The concurrent private placement is expected to close later in the fourth fiscal quarter.

The common shares to be sold in the private placement have been and are being offered only to certain institutional and/or accredited investors in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The common shares have not been registered under the Securities Act or any state or other securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state securities laws. The Securities and Exchange Commission has not passed upon the merits of or given its approval to the common shares, the terms of the private placement or the accuracy or completeness of any private placement materials. The common shares sold in the private placement are subject to legal and contractual restrictions on transfer.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification or otherwise under the securities laws of any such state or jurisdiction.

Hogan Lovells US LLP, Arthur Cox LLP and Conyers Dill & Pearman Limited serve as legal counsel to Beyond Air.

Upcoming Investor Events
Beyond Air management will provide more details on this news on Thursday, November 11, 2021, consistent with its scheduled time to report financial results for its second fiscal quarter ended September 30, 2021. Management will host a conference call and webcast at 4:30 pm Eastern Time the same day.

In addition, Steve Lisi, Chairman and Chief Executive Officer of Beyond Air, will participate in the Piper Sandler 33rd Annual Virtual Healthcare Conference being held from November 30 – December 2, 2021, and will be available for virtual one-on-one meetings.