Armata Reports Net Income on Convertible Loan Gain

The Tip Desk · November 13, 2026 · 3 min read

The bacteriophage developer posted $54.9 million of third-quarter net income, or $1.15 a share, after a $69.6 million fair-value gain on its convertible loan.

Armata Pharmaceuticals, Inc. (ARMP), a late clinical-stage biotechnology company developing pathogen-specific bacteriophage therapeutics, reported net income of $54.9 million, or $1.15 a share on a basic basis, for the three months ended September 30, 2026, compared with a net loss of $26.7 million, or $0.74 a share, a year earlier. The company said the result was driven primarily by a $69.6 million gain from the change in fair value of its convertible loan. On a diluted basis it recorded a loss of $0.24 a share.

Other income, net, was approximately $62.2 million, versus other expense, net, of approximately $18.9 million in the year-ago quarter. That swing included the $69.6 million convertible-loan gain against a $14.6 million loss a year earlier.

Grant and award revenue rose to $3.2 million from $1.2 million in the comparable 2025 period. The company said the amount represented the Medical Technology Enterprise Consortium’s share of costs incurred for its AP-SA02 program for the treatment of complicated Staphylococcus aureus bacteremia.

Research and development expenses were approximately $6.8 million, compared with approximately $5.8 million a year earlier. General and administrative expenses were approximately $3.7 million, versus approximately $3.1 million. Loss from operations narrowed to approximately $7.4 million from a loss of approximately $7.8 million.

Unrestricted cash and cash equivalents were approximately $18.3 million as of September 30, 2026, compared with $8.7 million as of December 31, 2025. As of November 6, 2026, 37,192,632 common shares were outstanding.

The company continued preparations for a planned Phase 3 superiority study of AP-SA02, an intravenously administered multi-phage candidate for adjunct treatment of complicated SAB caused by methicillin-sensitive or methicillin-resistant S. aureus. Chief Executive Officer Dr. Deborah Birx said Armata had progressed from planning to establishing the operational infrastructure needed to execute a large pivotal study, with manufacturing capabilities well established and clinical trial preparations progressing.

In the third quarter the company submitted protocol revisions in response to FDA feedback, submitted responses to all clinical, CMC and regulatory comments in the FDA’s End-of-Phase 2 written response, and completed four engineering runs of AP-SA02 at its in-house cGMP facility in Los Angeles. Production of clinical trial material for the planned Phase 3 study was underway, with one cGMP production run and vialing of AP-SA02 drug product completed in the third quarter of 2026. The second-quarter update had listed Phase 3 clinical-material production as the next manufacturing step after those engineering runs. The company also advanced qualification and validation of quality control release assays, completed validation of critical utilities, executed contracts with clinical research organizations, and continued negotiating clinical trial agreements with an initial group of U.S. sites.

The Phase 3 study remained expected to initiate in the second half of 2026, with exact timing depending on when the FDA concurs with the protocol. The company said the study is designed to support a future Biologics License Application.

AP-SA02 received FDA Breakthrough Therapy designation for adjunct treatment of complicated bacteremia caused by MSSA or MRSA, joining existing Fast Track and Qualified Infectious Disease Product designations. The company also obtained FDA agreement on an Initial Pediatric Study Plan, with pediatric studies deferred pending safety and efficacy data from the planned adult Phase 3 program.

Armata received $3.7 million in additional non-dilutive funding from the U.S. Department of War, the first funds received specifically for AP-SA02 Phase 3 execution under a previously announced award. Cumulative non-dilutive DoW funding under the award was approximately $32.4 million, including $28.7 million previously provided.

The company presented new AP-SA02 data at the 20th International Symposium on Staphylococci and Staphylococcal Infections and announced two U.S. patents covering its bacteriophage programs.