PolyPid Ltd. Price & Performance (PYPD)

A copy of the press release is available in the Investors section of the company's website www.polyp.com PolyPid. I'd like to remind you that on this call, management will make forward looking statements within the meaning of the federal securities laws. For example, management is making forward looking statements when it discusses the potential efficacy of Duplex-one hundred and the probability of success of the trial that the gross proceeds from the company's recent financing extend the company's cash runway beyond the expected top line results from Shield two the expected timing for completion of enrollment of the SHIELD two trial the expected timing for top line results from the SHIELD-two trial potential NDA submission accelerating preparations for regulatory submissions, and prelaunch activities. Potential clinical benefits of VPLEX-one hundred potential market size for DPLEX-one hundred in The United States, potential partnership opportunities, Potential benefits from the collaboration with Immunogenesis, that the exercise of the warrants from the pipe in full would result in additional 27,000,000 gross proceeds that proceeds of all warrants issued in the pipe if exercised, would provide the company with capital beyond NDA approval Opportunities for the use of Duplex-one hundred in additional procedures and the company's long term prospects.

Forward looking statements are subject to numerous risks and uncertainties. Many of which are beyond our control including the risks described from time to time in our SEC filings. The company's results may differ materially from those projections. These statements involve material risks uncertainties that could cause actual results or events to materially differ. Accordingly, you should not place undue reliance on these statements. I encourage you to review the company's filings with the Securities and Exchange Commission, including without limitation, the company's annual report on Form 20 F which identifies specific factors that may cause actual results or events to differ materially from those described the forward looking statements. PolyP disclaims any intention or obligation except as required by law, to update or revise any financial projections or forward looking statements, whether because of new information, future events or otherwise. And speaks only as of the live broadcast today February 12, 2025. With the completion of those prepared remarks, it is my pleasure to turn the call over to Deepa Chachkus Axelrad, CEO of PolyPete PolyPid. Thank you, Brian. On behalf of our team at PolyPED, I would like to welcome everyone to our fourth quarter and full year twenty twenty four earnings conference call.

We are very pleased with the recent critical advance most notably as it relates to the recommendation by the independent Dutch Safety Monitoring Board or DSMB To conclude the SHIELD-two Phase III trial assessing the efficacy of Duplex-one hundred, for the prevention of surgical site infections in patient undergoing abdominal colorectal surgery, upon enrollment of eight hundred patients. Number of patients. We view the DSMB's recommendation to conclude SHIELD-two upon the enrollment of eight hundred patients as a favorable outcome. As it is suggestive of positive efficacy signals from DIPLEX-one hundred. As a reminder, the data generated from SHIELD-two to date remain fully blinded to polypide and others outside of the DSMB until top line results are available. As previously reported, we concurrently announced that we entered into a led by existing institutional shareholders for $14,500,000 in gross profit. The gross profit from the financings extend Polypreet's cash runway into the third quarter of twenty twenty five beyond the expected top line result [indiscernible] More on this transaction in a moment. First, however, some further discussions around the DSMB recommendation and our planned next steps. Most importantly, the sample size reassessment is an opportunity to ensure the study has sufficient power to conclusively confirm Duplex 100 treatment benefit.

And we believe this increases the trial's overall probability of success. The study has enrolled over 700 patients to date. And at the current enrollment rate of roughly 20 patients per week, we expect to complete enrollment of SHIELD-two next month. We anticipate reporting top line results in the second quarter of twenty twenty five. Upon potential positive Phase three data, PolyPid expects to submit a new drug application or NDA with the advantages of fast track and breakthrough therapy designations. We are thrilled to welcome Mr. Itrak Jakobovich to the company's Board of Directors.

Mr. Jacobovich is a partner and a lead health care analyst at AIGH Capital Management and Affiliates, the lead investor from the December financing. Is also a Board member at Mayomo Inc. Mr. Jacobovich earned his MBA from John Hopkins University financial analyst.

We look forward to completing the trial and are focused on accelerating preparations for our regulatory submissions pre launch activities and expediting partnership discussions in and outside of The United States. I will now turn the call over to Ori to discuss discuss market potential, partnering efforts and our recently announced technology collaboration. Ori? Thank you, Vikla.

I would like to provide some additional color on our market potential for DIFFERENCE-one hundred and our related partnering discussions. We believe the total addressable market for Duplex100 in The U. S. Is just over 12,000,000 surgeries per year.

Based on IQVIA data.

The leading industry source on procedure and prescription data. There are approximately 4,400,000 abdominal soft tissue surgeries annually both open and minimally invasive procedures, principally comprised of hernia repair, appendectomy and colorectal surgeries. We also believe that there is an opportunity for the use of Duplex-one hundred in an additional 2,100,000 abdominal procedures in gynecology and urology, including hysterectomies and related procedures. Other Duplex100 potentially relevant surgeries which either have high SSI rates or have high clinical and financial costs if an infection develops includes sternotomy and joint replacements. According to the CDC, SSIs are a substantial cause of morbidity prolonged hospitalization and mortality. It is reported that SSI accounts for twenty percent of all hospital acquired infections. And is associated with a two to elevenfold increase in the risk of mortality with seventy five percent of SSI associated deaths directly attributable to the SSI. SSI is the most costly hospital acquired insect type with an estimated annual cost of $3,300,000,000 and extends hospital length of stay by nine point seven days. With cost of hospitalization increased by more than $20,000 admission.

A CDC report published in November 2024 tracking hospital acquired infections in over 3,000 hospitals, showed an increase of three percent in SSIs across all surgeries in 2023 as compared to 2022. The outcome of this report confirms what we have seen in our own clinical data a reduction in SSIs in the COVID years and subsequently an increase in SSI post COVID. Collectively, this market data reflects a large and broad unmet need and commercial opportunity for Duplex-one hundred in The U. S. Without even considering the more substantial global market. If approved, DIPLEX100 could potentially significantly transform the surgical landscape where Post Operative SSIs Remain A Costly Program. Turning To Our Partnering Efforts, We Remain In At For The Commercialization Of Duplex100 In Different Regions. With The U. S. Being our priority after the exclusive licensing agreement already signed with Advanced Pharma for Europe. Following the recent interim results, and DSMB recommendations, we have seen an uptick in discussions with potential partners and just as important, a positive shift in the tone of those conversation We are also focused on partnering efforts centered on our proprietary drug delivery technology that enables controlled and prolonged infratuminal drug delivery. As such, last December, And development collaboration focused on combining PolyPid technology with immunogenesis potent stimulator of interferon genes or steam agonist drug candidate to enhance treatment for solid tumors.

Ting agonists are very potent but have a short half life in the tumor microenvironment limiting their ability to shrink tumors when administered alone. This collaboration aims to take advantage of prolonged Drug release enabled by our delivery technology with the goal of enhanced STNG antitumor activity. This strategy could potentially overcome existing challenges of uneven distribution and limited exposure in dense tumor tissues. While enhancing immune cell infiltration and activation within the tumor microenvironment. [indiscernible] We believe this collaboration could create a cutting edge approach to immune oncology and will continue to explore additional opportunities to bring value through innovative partnerships. With that, it is my pleasure to now turn the call over to Johnny to review the financials. Johnny? Thank you, Ory. We are thrilled to advance each of our initiatives from a significantly enhanced financial position As of 12/31/2024, the company had cash and cash equivalents of $15,600,000 We expect that our current cash balance will be sufficient to fund operations into the third quarter of twenty twenty five. [indiscernible] Now let me briefly review the highlights of the private placement we recently entered into with existing events investors for $14,500,000 in gross proceeds. The investors also received warrants which will expire upon the earlier of nine months from the date of issuance and ten trading days following our announcement of top line results.

Exercise of the warrants in full would result in an additional $27,000,000 in gross proceeds. Proceeds of awards issued in this transaction if exercised, would provide the company with capital beyond NDA approval. We believe that the participation in this transaction from a leading group of life sciences focused existing investors is indicative of the substantial transformative potential of Deepak one hundred We are grateful for this continued demonstration of confidence Now let's turn to our income statement. Research and development expenses for the three months ended December 31, 2024, were $7,000,000 compared to $4,600,000 in the same three month period of 2023. R and D expenses in the most recently completed were driven by the ramp up of the ongoing Shield two Phase III trial. For the full year ended 12/31/2024, and 2023, R and D expenses were $22,800,000 and $16,100,000 respectively. Marketing and business development expenses for the fourth quarter of twenty twenty four were $200,000 compared to $200,000 during the prior year period. General and administrative expenses for the fourth quarter of twenty twenty four were $1,000,000 compared to $1,200,000 recorded in the same three month period of 2023. For the fourth quarter of twenty twenty four, the company had a net loss of $8,500,000 as compared to $6,400,000 in the fourth quarter of twenty twenty three.

For calendar year 2024, the company had a net loss of $29,000,000 compared to a net loss of $23,900,000 in the full year 2023. With that, we will now open the call to your questions. Operator? Thank you.

We will now take our first question.

From the line of Roy Buchanan from JMP. Please go ahead.

Hey, thanks for taking the question. I guess just just one to start. I guess can you just help us think about your expectations for the label, assuming the data is positive, which we expect. And then just I know, Ori, you went over the the TAM in pretty good detail, but just how you're expecting to target those different segments and your commercialization, readiness and plans? Thanks.

Good morning, Roy. Thank you. So we our expectation is that the first stage we will have both in U. S. And in Europe labeling that is in the area of the abdominal surgery. This is how we see ourselves launching the product.

With a general abdominal. It could be a more focused one on let's say, let's call it large incision or things like that. [indiscernible] this is where we stand in terms of our expectation and we have a very detailed plan on how to expand that. So that's with the label. You were asking about the commercialization and marketing effort.

Yes.

Paul, you want to take the second part?

Yes, yes, I'll take in.

Hey, Roy.

So So two kind of two parts to this to the sensor. I went over the numbers Like we said, about half of the total addressable market is related to to soft tissue abdominal, then gynecology, urology, some of the C section can go in there, breast And I think the point is from from our perspective is really finding strong partner that can drive these have these conversations both with surgeon, with pharmacy directors with disease specialist I think it's We understand that selling into the hospital is a complex task. And we need the right partner for that. And this is really kind of top of mind at least from for me and for all of us is to find the right partner for that that can really have these conversations.

So but it will be gradually, right? It's not day one all these 12,000,000 surgeries or even just the abdominal, we're starting our foot in the door in the colorectal and then expanding just like Vikla mentioned on the label gradually expanding. I can tell you anecdotally from my conversations with surgeons, what I heard is once the product is is on formulary, They understand that if an incision is made in the abdominal for a colorectal resection or an incision is made for appendectomy the same incision in a way.

Broadly speaking. And once it's on formulary, they will use it more broadly and get the experience with the product.

Okay, perfect. Thank you. I'll jump back. Thank you.

Thank you.

We will now take the next question from the line of Chase Nikkebroker from Craig Hallum. Please go ahead.

Good morning, everyone.

Thanks for the question. So I guess just to start, you give us a general idea of kind of how similar these kind of subsequent two seventy patients from a baseline kind of characteristic perspective like geographies of the facilities that are enrolling these patients [indiscernible] When you compare it to the four thirty that informed the interim analysis, just trying to get a sense of of kind of the the how similar these patients have been to the kind of interim analysis patient? From a baseline perspective?

Sure. Thank you for the question. So it is in line with our [indiscernible] We are blinded, so we don't really know how the infection rate is divided between the two arms. But in the sense that it is not in line with our expectation or what we've seen Up until now in the longer recruitment and in the interim. Again, Also the interim was blinded, but as an overall [indiscernible] And in terms of geography, again, it's very similar since all the centers were open and recruiting at the time that we recruited the patient for the interim data So we don't have new geographies or new centers This is also continuing. We are very pleased with the rate of the recruitment And I expect that within few weeks, we will be announcing last patient team.

Great.

So yes, on that those enrollment dynamics. So you kind of return to that, call it, 80 patients per month. And then just second after the kind of Christmas time slowdown and holiday time slowdown.

And then just second on the readout timing.

So just so we kind of understand on the primary obviously, a thirty day follow-up and then kind of post that, we should think a month or two for kind of data cleanup and and all the normal things. So, fairly confident if you you finish enrollment next month that we're talking to to call it late 2Q kind of readout on the top line?

Thank you.

Yes.

Yes, very confident. I would expect that we will be announcing in March hopefully, at the beginning at the March, last patient in. And from that point, exactly as you said, one two months for follow-up or one month for follow-up for the primary and some time for the cleanings of the data. So a quarter from the time that we announced last patient in, this is around the time that we will be announcing top line results.

Great. Thanks. Thank you, Chase.

Thank you. We will now take the next question. From the line of Ram Selvaraju from H. C. Wainwright and Co. Please go ahead.

Thanks so much for taking my questions.

Firstly, on the commercial front, I was wondering if you could give us some more insight into what you expect the properties of an ideal commercial partner to be specifically in The U. S. For Duplex 100. And also if you could give us some sense of if we think about a hypothetical ideal scenario, how that a responsibilities might be divided between yourselves and a potential commercial partner?

Would you expect to have any involvement in sales and promotional activities? If so, in what specific sales and promotional activities will be targeted to a specific subpopulation of to have sole control over the manufacturing and supply of DQLEX-one Hundred And The U. S. Market.

Sure. Thank you, Ram. Good morning. So the ideal partner is a partner that has presence in the surgery suite. And the hospital in the surgery suite that has frequent visits to the surgeon. And the broader the sales force within the surgery suite, within the hospital, the better. And you could look at the companies that has presence in this way, divided in a way into two arms, one the large pharma companies and the other are the large med device companies. Both are very good partner that can And speaking with them frequently, for the last few years, I can tell you that they're looking at the area of surgical site infection. Many of them, it's part of their strategy. It's part of the where they're looking to expand their pipeline And in general, when you look at the surgical site infection is a subsection of hospital acquired infection And when you look at the days post COVID, you see product that were approved drugs that were approved in this area of hospital acquired infection After many years where we didn't have any new drug there, And I can tell you that those are being adopted very nicely by clinics and hospitals And we see ourselves being the first in the area of surgical site infection alongside those new launches that that we're looking at other things, not necessarily of the portion of pesticides.

You were also asking about manufacturer So we definitely see ourselves manufacturing the product As part of partnership, we believe this is one of our strength bringing a full solution, bringing a product that is fully that being fully integrated biopharma company, and we spent a lot of efforts and time these days to get ready to this stage. Is something that we understand that requires efforts and investment in order to be ready for the commercial stage. We did about a year and a half ago A GMP review commercial stage GMP review by the European and Israeli healthcare and we are getting ready for the FDA. Inspection that obviously will be after we submit the NDA. And this is a in all of our discussions something that is in our advantage. And also one maybe important thing manufacture is very unique it's a septic, it's unique, there is a lot of know how around the manufacturer, and we think this is one of our strengths. Ori, you want to touch briefly on the aspect of what we believe will stay in our end and what will be part on the responsibility of the partners.

Yes, I'll take it. Hey, Ron, good morning. I think so first, I think a lot of this will depend on on the partner and what the capabilities the partner the partner brings. But I think in the ideal scenario in our pre scenario, everything that has to do with, say, the the day to day activities, the boots on the ground, right, the sales reps, the MSLs, the national accounts that go into the hospitals, or by the partner. And what we do is more a global view of the global activities meaning looking into expansion of indication, looking into global medical activities, publication, HEOR kind of global review. And looking forward that what else what else can be done with Deeplex beyond prevention of prevention of SDSI. There's Qualolite that can be done with the product. So kind of if you look at it in terms of a traditional pharma kind of the global the global marketing will stay with us, the global medical affairs with stay with us.

In the global HEUR and the day to day on the ground activity will be with the partner.

Thank you. That's very helpful. Just two other quick items, if I may, on the R and D front. Could you perhaps remind us of some of the existing for which you already have knowledge, data, evidence that your platform would be able to effectively reformulate potentially reposition and optimize those approved APIs? Beyond what is in DeepLEX-one hundred? And then also if you could just elaborate with respect to immunogenesis, the collaboration that you have there, what specific clinical development activities are currently ongoing with their candidate how you expect your technology to be integrated into the future development plans for that candidate?

And how broadly they expect to develop that asset and in combination with what [indiscernible] And you mentioned previously that staying agonist has historically been difficult to deploy as monotherapy because of the short half life.

But do you also think that potentially pairing Immunogenesis candidate with your platform would actually enable it to be more combinable with other existing approved for example, checkpoint inhibitor modalities for the treatment of solid tumors? Thank you.

Thank you. In terms of the Flex platform and other approved drugs that we have worked within the past, I and are working on. I can only relate to those that have been disclosed. We do have in our pipeline some new programs that were not disclosed yet around approved drug and known compound. But I can mention chemotherapy, that we've worked with and we have on complex with chemotherapy. We've been doing in the past some work with growth factors and steroids as well as with analgesics. All have been tested pre clinically in vivo, in vitro [indiscernible] I think the potential here is literally we've not even touched the beginning of what could be done around that. And this is the only thing that will disclose We are also some work with things that are not yet approved for example, siRNA, some peptides, proteins as well as bispecific So those are in terms of looking at the capability of the platform, we have all of that in our tool kit And there are some new things that we've been working on in the last two years and we are waiting for the top line to share this with investor and continue to develop that and hopefully also do that in some sorts of collaboration in areas that are very lucrative So that's in terms of the capability of the Plex.

In terms of the CING agonist, So [indiscernible] in general, has as you said, have short life but also tends to be deployed from the tumor very quickly. And we think that this together with the overall very pertinent immune response that the stink has Being able to deliver the drug Locally. At the tumor site. Avoiding most of the systemic exposure together with having it on a prolonged and continuous basis, could overcome those challenges. Both immunogenesis thought that this is a good approach to overcome those challenges and make the drug much more efficacious But that is always with our potentially will be also with other modalities and other therapeutic agents as good as the drug will be, I think patients will only benefit with something that [indiscernible] So that's definitely something that when we get to the preclinical stage, we will be looking on that as well together with Immunogenesis What's the best model to show the efficacy of the combined product.

Thank you so much.

Thank you. We will now take the next question from the line of Brandon Folkes from Rotman and Rancho. Please go ahead.

Hi, thanks for taking my questions and congratulations on all the progress.

Firstly for me, talked about the potential label language, right? Being sort of maybe just abdominal surgery or large incisions.

Can you just talk about the pushes and pulls that we should expect in terms of the different label language possibilities.

Is it just how comparing the Shield two results How much color do you think you get sort of post Shield two in terms of where that label mode may be going or how much partner may get post yield to you versus sort of this just being regular way submit the NDA for the broadest indication and sort of during regular way approval process kind of where you get the color So I'm not sure I [indiscernible] all your points. We had here some gap in the line. But if I missed anything, please, Brendan, repeat some of that. I think that the obviously the most important thing is the Phase three data. And how efficacious it will be If you recall, we also had in Shield one in this on this pre specified subgroup that is now the basis of SHIELD two and effect on reintervention and mortality [indiscernible] could also be influenced make an influence on the way the agency see the data We also have in this study as [indiscernible] that are not part of the primary endpoint, but that had smaller incision. So about one hundred and seventy patient out of Shield two that are not part of the primary, they are on top of the eight hundred that are the primary, had smaller incision So we'll need to look at the data together with the agency, but our plan is to immediately meet the FDA to pre NDA meeting.

And obviously, once we sit with the agency, we will also start the discussions around label and label expansion.

Thanks, Niklas. Very helpful.

I think maybe just secondly, just a bit more sort of strategically, Post the partnership, do we think about Polypud's capital allocation and development strategy? Obviously, we expect you to sort of deploy funds into future development of the indications across the platform, which you partner out. But Do you look to take those molecules through the approval process as you've done with 100?

Or do you look at perhaps a partnering strategy earlier stage given the validation that a DPLEX-one hundred approval would bring [indiscernible] Thank you.

We look at thank you. That's a very good question. And it's important to stress this We look at partnering earlier. Not just because obviously because of the validation that we have from DIPLEX100 but also because of the area that we are choosing for our next in line those that we've disclosed and those that we have not disclosed yet. That are in area where pharma companies partner are partnering at a much earlier stage. So we look to partner earlier and have most of the heavy lifting in terms of the pre of the clinical development than either by the partner or together with the partner.

Great. Very much and congrats on all the progress.

Thank you.

Thank you. I would now like to turn the conference back to the Clarksons Axel Brat for closing remarks. Thank you for joining Polypreet's fourth quarter and full year twenty twenty four earnings conference call. We remain highly confident in our long term prospects especially the potential of our promising late stage product candidate [indiscernible] and look forward to enrollment completion and top line results. As always, we are grateful to our team members, shareholder and all external partners. For their commitment to our mission and support in continuing to advance toward our goal of bringing DPF100 to healthcare providers and patients as quickly as possible. We look forward to speaking with you again on our next conference call.

This concludes today's conference call. Thank you for participating. You may now disconnect.