Greetings and welcome to the PolyPid's First Quarter 2021 Conference Call. At this time, participants are in listen-only mode. As a reminder, this call is recorded and I would now like to introduce your host for today's conference, Mr. Bob Yedid from lifestyle advisors, Mr. Yedid, you may begin..

Thank you, and thank you all for participating in PolyPid's first quarter 2021 earnings conference call. Joining me on the call today will be Amir Weisberg, Chief Executive Officer and Dikla Czaczkes Akselbrad, Executive Vice President and Chief Financial Officer of PolyPid.

Earlier today, PolyPid released results for the three months ended March 31st, 2021. A copy of the press release is available on the Investors section of the company’s website. www polypid.com. 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 expected recruitment for trials, timing of trials and release of trial results thereof.

It's past [indiscernible] capacity of the company's manufacturing facility the potential benefits of PLEX and OncoPLEX, the sufficiency of the Company’s cash to fund future operations.

Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our filings of the Securities and Exchange Commission. Our results may differ materially from those projections.

These statements involve material risks and uncertainties that could cause actual results or events to differ materially. Therefore you should not place undue reliance on these statements.

I encourage you to review the company’s filings with the SEC, including, without limitation, the Company’s Forms F-1 and 6-K, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

PolyPid 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. This conference call contains time-sensitive information and speaks only as of the live broadcast today, May 12, 2021.

With that completion of those prepared remarks, it’s my pleasure to turn the call over to Amir Weisberg, CEO.

Amir?.

Thank you, Bob. On behalf of our team at PolyPid, I would like to welcome everyone to our first quarter 2021 earnings call. I will begin today with some brief introductory comments and then Dikla will provide the update on our business and they will review our financial results after which we will open the call for question.

I am very pleased with the recent focus we have achieved in advancing our development program and in continuing our evolution towards becoming a Commercial Company. As you know, we are currently in a large phase 3 program with our lead asset, D-PLEX100, for the prevention of surgical site infection or SSI.

Dikla, will provide further details on this program shortly, but I am excited to report today that our ongoing SHIELD I trial is proceeding as planned and we are having great success accelerating environment into this study.

Moreover, our second Phase 3 trial in abdominal surgery SHIELD II is also advancing as the expected with new site opening at the robust phase.

As a reminder, these two Phase 3 clinical trials will serve as the basis for PolyPid’s first new drug application, submission and we believe we will contribute to support a bold label for the prevention of SSI. Importantly, our board D-PLEX100 development program is supported by a vast patent portfolio.

In fact, we now have 101 patents granted and allow the worldwide for our platform and products. I am also pleased to report today that our manufacturing facility is now fully scale-up. This facility will be able to support the first 13 months of product demand worldwide.

As you can see, PolyPid has recently achieved important progress in all aspects of its business.

We also continue to be supported by a strong balance sheet, which we expect to be sufficient to complete the SHIELD I study to conduct you to and prepare for the submission of NDA as well as a further advance our OncoPLEX,development platform with the cash-on-hand.

I will now turn the call over to the Dikla to provide you with some further details on our business Dikla, please take it from here..

Thank you, Amir and thank you all again for joining us on the call. I would like to begin with a brief discussion on the status of our pipeline. The pace of enrollment in the SHIELD I trial has been strong-to-date and is expected to continue to accelerate.

The recruitment rate in the SHIELD I trial double in the last three weeks and we now have nearly 200 patient enrolled into the study. We believe the recruitment rate will continue to increase as several centers have been recently opened and new one will open throughout the current month.

Importantly, approximately 70% of the patient currently enrolled in SHIELD I have a colorectal cancer diagnosis, a rate similar to the 74% seen in our successfully completed phase 2 trial, meaning that we are talking about high priority surgical procedures that are less influenced by the COVID-19 pandemic worldwide.

Moreover, the data safety monitoring committee in the, in charge with the review of the cumulative safety data and study conduct for SHIELD I study, has now recommended for the second time to continue the study without modification, meaning that no safety issue related to the D-PLEX100 have been observed in SHIELD I to date.

Based on these collective data point, we continue to anticipate the availability of top-line data from SHIELD I, by the end of this year. As a reminder, our plan is enroll 600 to 900 patients within 60 centers in the us, EU and Israel.

Following the enrollment of 500 patients, the study design provides for blinded sample size re-estimation based on the overall infection rate observed in the study.

Moving on SHIELD II, which has brought her eligibility criteria, then SHIELD I, including minimally invasive surgical procedure, also continue to progress as planned, though our initial focus here remains on opening centers.

The second trial will enroll approximately 900 to 1400 patients across 60 hospitals different from the one participating in the SHIELD I study.

From a commercial perspective to reiterate what we have said previously, in order to maximize our commercial success in the us, we have began to establish our own footprint in the us to initiate commercial preparation activities, while also exploring potential partnering opportunities with leading pharmaceutical companies.

We recently completed a large U S market research project to ensure optimal positioning and coverage of the D-PLEX100 that included a total of approximately 90 in-depth one hour interviews, with pharmacy director and other hospital administrators and a mix of general cardiac and orthopedic surgeon.

The result of this work only strengthened our confidence in the U S commercial prospects for the D-PLEX100, especially in abdominal surgery.

Most interestingly, while both hospital administrators and surgeons reported a significant need for a product like D-PLEX100, the hospital administrators were especially enthusiastic, typically hospital administrators, pushback on your technologies, more so than surgeons. This does not appear to be the true for D-PLEX100.

We believe the view of hospital administrators is indicative of the significant cost burden of treating surgical site infection with associated long length of stay and affect that hospital re-admission of Medicare patient for SSIs are not reimbursed by CMS.

Ultimately, this market research will support our efforts to demonstrate favorable health economics for hospital to drive the commercial potential of a drug candidate. In parallel, we also remain in active discussion with potential partners for the U.S., EU and Asian market.

Before I move on to the rest of our pipeline, I'd like to take a moment to discuss manufacturing, another key area where we have recently made important focus. As Amir noted earlier, our manufacturing facility is now fully scaled and can produce the first 30 months of anticipated commercial demand for the D-PLEX100.

We recently ramped up our capacity by two and a half times to achieve this critical milestone. This is a key milestone in our vision to become a fully integrated bio-pharmaceutical company. Looking farther ahead, we are currently evaluating potential plans for additional manufacturing capabilities to address product demand beyond the first 30 months.

Now I'd like to elaborate on the status of OncoPLEX, our intratumoral chemotherapy product candidate for solid tumors, including tumors that are chemotherapeutic resistant, OncoPLEX provide prolong and controlled exposure to docetaxel. One of the most widely used chemotherapy agents in the intra-operative tumor resection setting.

The control over the prolonged resist at the tumor resected site, have critical impact to prevent local tumor recurrence and the potential spreading of cancer cells and ultimately improve the overall survival of cancer patients.

In addition, OncoPLEX is expected to significantly reduce the known toxic systemic exposure, one of the important attributes of successful local delivery in cancer therapy. You will recall that late in 2020 we announced positive preclinical data from this program.

In the syngeneic mouse model for solid tumors of colon carcinoma using cancer cells highly resistant to docetaxel among the most treatment resistant tumor cell type.

A single local application of OncoPLEX generated significantly better results compared to the group treated with six cycles of systemic docetaxel treatment in multiple key measures, including overall tumorial clearance, overall survival and overall tumor free survival.

Moreover, we recently generated additional compelling safety data in animal that we are excited about, including positive safety data in a promising solid tumor indication. We are also in parallel building a network of top expert and KOL around our OncoPLEX development program.

So to accompany us during the development stages, we continue to conduct other free clinical safety at the secrecy studies of OncoPLEX in various types of solid tumors and advancing towards the completion of a preclinical package for the filing of pre-IND request with the FDA later this year in order to potentially initiate the Phase 1 clinical trial next year.

We continue to believe that OncoPLEX has the potential to become part of the standard of care and with tumor resection surgical setting with multiple solid cancer types, including glioblastoma and prostate cancer, and head and neck cancer. With that I will now review our recent financial results.

Let's begin with PolyPid's balance sheet information as of March 31st, 2021, the Company had cash, cash equivalents, short-term deposit and long-term deposit of $61.4 million as compared to $66.6 million as of December 31st, 2020. Cash used in operations for the three months ended March 31st, 2021 totaled $5.6 million.

We continue to expect that our current cash runway will extend into 2022 and remain confident that this strong balance sheet will allow us to complete our first phase 3 trial SHIELD I in abdominal soft tissue infections to conduct the second abdominal surgery study SHIELD II and to prepare for the submission of an NDA for the D-PLEX100.

Now let's turn to our income statement, Research and Development expenses for the three months ended March 31st, 2021 were $6 million compared to $3.4 million in the same three months period of 2020.

As spending increased due to the ongoing SHIELD I and SHIELD II phase 3 clinical trials in abdominal surgery; Marketing and Business Development expenses for the first quarter of 2021 was $700,000 compared to $300,000 for the same period of 2020.

These expenses increased primarily due to an increase in marketing and business development personnel in our offices in New Jersey and an increase in market facing activities as we began building our commercial infrastructure.

General and Administrative expenses for the first quarter of 2021 were $2.1 million compared to $700,000 in the prior year period as cost increased due to being a publicly traded company with higher D&O insurance costs and an increase in non cashier based compensation.

For the first quarter of 2021, the company had a net loss attributable to ordinary share of $8.7 million as compared to $5.9 million in the prior year period.

We will now open the call for your question, operator?.

Thank you. [Operator Instructions] If you wish to ask a question, press the star and one on your telephone key. [inaudible].

Good morning. And thanks for the questions couple on SHIELD I. Could you remind us of how many sites have been activated you it's reassurance see the patient enrollment data, especially in the last three weeks.

Can we expect that this is likely to continue based on our earlier discussion, that sites are being activated and patient enrollment is going faster. So is this the trend that's going to be for Q2? And that means we would be going through a sample size raised formation in mid 20, 20 as planned earlier.

That's one, two do you have any updated thoughts around raising capital and that under what point you did your cash balance and said that is sufficient till end of 2022. But any thoughts around that would be appreciated. Thanks..

Thank you. Good morning again. So I'll start with the first question on the plan was to open that we now have about [inaudible] 40 results activated and running and opening and going pretty fast.

It was not that we're opening the last few weeks and additional is expected to be open and that is why we did increase in the recruitment and we expect it to continue.

As we said, we nearly recruited 200 patients, which would report to the plan and the timeline remain as, as we expected, meaning that we will have the sample size re-estimation [inaudible] of the patient [inaudible] but rather Q3 early Q3, probably so talking about [inaudible] and after that, we will be able to report [inaudible] so we are online with them, we are at this stage with some reporting that it will be shorten with regards to financing, so we say that we ended the quarter with over to date $1 million in cash and cash equivalents.

We are very strong positioned, with cash compensation to finance both [ph]SHIELD I and SHIELD II with our OncoPLEX oncology program, so we don't see any immediate need to raise money. And we think that a substantial raise will only be made after the top-line results..

Great. Thank you, Dikla Czaczkes. Just one follow-up maybe you called out interviews at hospitals and hospital administrators recently. So in terms of findings, how different were your takeaways from the earlier research that they are conducted around a year ago? Any incremental finding that was different from what you had done earlier? Thanks..

It was very similar which is again, reassuring.

I think what had was different in a way that the product is more mature, the clinical trials mature, we are now describing when describing to surgeons, we are describing a product with an actual positioning in terms of the added potential NDA, because we know what is the phase 3; how many patients, so this is based on something that is more mature in terms of the development program, but the, the aspects of a hospital administrators see their economic value of products is similar to what we've seen in the past.

Maybe before we've seen aspects of pricing was very similar, also price sensitivity was similar. So this is that this is for now, this is not a trend..

Answered, Thank you..

Your next question comes from the line of Gary Mattan from BMO capital markets..

Hi, good morning. Good to hear all the progress. So as you accelerate the rate of enrollment for SHIELD I, does that hold back the enrollment for shield to in any way? So, you know, just remind them how much overlap is there between the sites and those two studies.

And then also what's the average number of patients being enrolled per site at this point and SHIELD I.

And what number do you think you need to get to in order to get the data by the third quarter?.

Sure. So first of all, good morning, and thank you. Those are very good questions with regards to shoot, too. Those are different centers, as we said, actually the only there was only one centers and this is by a strategic decision. We want to have different centers in order to avoid competing between the two trials.

So those are totally different centers in different 60, the 60 that are insured. One SHIELD I, which is a point where it's the centers of massive capacity of recruitment per center, we can transfer them, but there won't be any overlap during the trial. And you were also asking about the, how the patients are distributed between the centers.

So it's, it's still early to say, because we are in 200 patients of the expected 600 patients. And some centers have been open since the beginning of the trial and some are open for one, but we see a very nice distribution and we expect it to be divided in a more or less similar way if not between centers, but between countries.

So depending on the number of centers we don't see patients coming from one country or from one sensor over the other. So yes, there is some differentiation between, but then it's quite similar in terms of having several patients getting center of average assumption as we said in the past.

Centers will recruit in average, along the trial one patient per month per center. And this is, we're seeing, we're seeing this [inaudible] So we expect to this to continue. And this way the statistic will be more or less the same between center.

You were also talking about the, the overall number of patients, so if you recall the trial is designed on an adaptive design and allow us to recruit between 616 to 900 patients. And we can make the decision on this range after having recruiting 500 patients with sample size estimation. Our assumptions are based on the 600 patients.

But again, at that stage, if we would decide to add few patient, a few dozen patients, it shouldn't be more than a one to nine at the time, because at the end of the opening and the recruitment, we have all the sensors up and running. So we are at this stage recruiting more than one patient, the center.

This is an average along the life of the trial, but it's not the equivalent during the older time..

Okay. that's very helpful. And then just to follow up on OncoPLEX, so just, what are the gaining factors to starting a phase 1 study? Is it just resources? It sounds like you're confident you'll have the pre-IND meeting before the end of the year. What and you're collecting a lot of data here, preclinical data.

So just maybe talk a little bit more about what you think that package is going to look like, and just your confidence that you'll be able to have that meeting before the end of the year, and then starting the phase1, what point next year will you be able to do that? Thanks..

Sure. So father, we are very excited with this program. We see how they experienced this.

We've gained with the 6,100 with the development, with the PLEX platform, how we are able at this stage to shorten the development, things that have taken up several years for D-PLEX100 for example, CFC processes and preclinical patches are going in, are taking place in a matter of months.

So this is a very exciting program within the company, our ability to use all the knowledge that we have been gained with the D-PLEX100, whether it's regarding regulatory, regarding manufacturing, pre-clinical, it's taking place in this for where we are confident that we can meet the, get to the pre-IND.

Of course we are -- we don't know what will be raised in that. Our assumption is that we should be in a position to start first in math next year, based on our understanding of what will be required for pre-IND, but we'll need to [inaudible] from the FDA and see if they agree with our plan.

We will also be in a position to share more information with investors on these programs, in terms of safety and efficacy in pre-clinical stuff.

So I think we will be able to update on this program along the year, as we get closer to the beginning of the backstage, we'll also have some additional because we started using in animals, but for now we are confident that this, this is doable..

Okay, great. Thank you very much. Thank you..

Your next question comes from the line of Kelly [ph] Schaeffer at Raymond James..

Thank you. Good morning, or good afternoon. Good to hear your voice and thoughts are with you and your families and these very difficult times. My first question, just one, basically want to ask a up question on the OncoPLEX programs. I was like, there's been a lot of progress in a very short period of time.

When, what might we expect, additional data points, publications, et cetera, anything we might see before the end of the year on that program in reading the public domain.

And I guess, as you think about initial first in man trials, are you thinking about a specific tumor type at this point, or would you expect to initiate trials in the range of tumors that you outlined earlier?.

So that's all thank you for your kind words. We have made progress and we do expect to be able to share more around this program during this year in terms of both safety, as well as indication and, and plan as well as efficacy, which we got to the specific indication. This is the process, what we're looking at.

Of course, we do have some thoughts here and we are, there are things that we think that are more likely, but we want to make sure with animal study that things are looking as expected before we make a final decision and submit that to the FDA. And we'll make the decision again, based on the data. So we'll review the data and make a decision.

It makes more sense to start with one indication and approve the product first and take it first to first thing that in this one, indication and have more of a bundle type of the submission, but I don't want to give that to say anything before we actually see today.

I bet, again, I'm saying this again, we expect to be able to share this data before the end of six years before we meet FDA for the prevention, with regards to additional efficacy, you could see data and safety..

Okay. And I had a question with respect to the market research study or project that you mentioned earlier it's encouraging obviously to hear the favorable feedback from hospital administrators.

Obviously they, they kind of get it in terms of the incremental costs, but curious if is there any good share in terms of their impressions of some of the price points that you have talked about for the product earlier, assuming that that data to some extent was shared with them, if there's anything that you could convey to us in terms of their, their receptivity around some of the price points that the company had been previously considering, and then with respect to the, the commercial side or, or, you know, feedback from surgeons, anything that you learned thus far from that study that maybe is somewhat different in terms of what you were previously thinking about with respect to commercial positioning of the product?.

So couple of points here with regards to pricing, we got reassured there's a thinking of pricing and is valid, and this is how they view that in terms of sensitivity that we, I think we could even say that our assumptions that were presented based on 50% reduction of infection, [inaudible] and if the overall of secrecy in the phase 3 than that, we could even consider higher price than we initially thought.

But again, this is too early willing to see what comes up from the phase 3 and make final decisions.

I think another thing that we clearly see both from this study by open discussions with opening centers that there is a [inaudible] needed colorectal resection, abdominal in general but specification on the rectal resection, a lot of their patients have infections.

And this is not just holding back this, the surgeon in terms of additional specialization days, readmission, it's also hurting the patient from the aspect of most of the surgery, oncology surgery of the patients coming to the hospital for colorectal resection doing that due to cancer tumors. And this is holding them back on their oncology protocol.

They should go to the either radiation or chemotherapy a few weeks after surgery, if they have an infection this delays the process and this jeopardize their oncology treatment, their cancer treatment. So there is a lot of benefit here in terms of patient health, as well as the health economics.

And this is quite clear from the market research [inaudible] ..

Okay. And then just last question, basically, if there's obviously there's been some incremental spend tied to commercialization efforts in the U S but anything specifically you can share in terms of in terms of key hires or what exactly the investment has been targeted towards? Thanks..

So we are very cautious here in terms of budgeting and expenses. We are looking at what is that the main route that is needed to meet the timelines for commercialization, this market research that we have died. And we are looking to build a plan to commercial. There are discussions that we are having in parallel.

So we do have the people that are working, and this is something that we are cautiously progressing on, especially with aspects of things that are critical in the past for commercialization whether it goes to packaging and naming and things that needs to be done today in order to hold us.

Amir, would you like to add to that?.

I just want to, it's about the research market. I think this is more clear to us in this research by comparing to the previous one; it was very little need and we heard it from the doctors and from the administration, and this was a very good support for our board.

And give us to understand that sometimes activities like the supportive and very happy to see these kinds of products in the market..

[Operator Instructions] we have no further questions if you wish to continue..

Yes. Thank you for joining our first quarter of 2021 earnings conference call. I would like to repeat how excited we are about the focus we have achieved to-date as well as the compelling opportunities that lay ahead of us.

We will remain grateful to our team members, also our external partners for their strong commitment to our mission and their collaboration to ensure we continue to advance by achieving our goals of bringing D-PLEX100 to healthcare providers and patients as quickly as possible. Thank you very much..

And can you, that does conclude your conference for today. Thank you all for participating and you may now disconnect..