The phage was a virus genetically engineered by Dr. Carson Beckett's clone to destroy the Wraith pathogen that was infecting several members of the Atlantis expedition.
History
After Dr. Jennifer Keller was infected by the pathogen, the cloned Dr. Carson Beckett developed the phage and tested it on Lt. Colonel John Sheppard, who, like most of his team, was also infected by the pathogen but had not manifested any symptoms at that point. It successfully cured him.
Ronon Dex volunteered to go into the pathogen-covered isolation area and inject Keller with the virus because he was also infected and the pathogen would recognize its own DNA inside him and let him pass. This worked until he was forced to fire, making the tendrils choke him almost to death.
Sheppard then crashed a Puddle Jumper into the tower where Keller was being held, and managed to inject her. The tendrils attacked him and he was about to kill Keller when the pathogen died. Without the organism infecting her, Keller returned to normal. (SGA: "The Seed")