PolyPid Ltd. Q1 2023 Earnings Call
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Greetings and welcome to the Poly Pete first quarter 2023 conference call.
Participants are in a listen only mode. As a reminder, this call is recorded and I would now like to introduce your host for today's conference Brian Ritchie from Life Science Advisors. Mr. Ritchie you may begin.
Thank you all for participating in <unk> first quarter 2023 earnings conference call joining me on the call today will be equal.
Scott just actual Brian <unk>, Chief Executive Officer of Poly, Pete Johnny Miss, allowing <unk>, Chief Financial Officer, and Ari Schatsky Chief operating officer earlier today <unk> released financial results for the three months ended March 31 2023.
A copy of the press release is available in the investors section on the company's website Www Dot Polly P Dot 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 he discusses the expected resumption of recruitment for the shield two phase III trial, and the timing of topline results therefrom.
Potential MAA and NDA submissions the expected timing of the completion of the commercial manufacturing process and packaging validation for duplex 100.
Potential partnering and collaboration opportunities and the company's expectations regarding its cash balance and additional compelling financing opportunities.
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 our results may differ materially from those projections. These statements involve material risks and uncertainties that could cause actual results or events to materially differ.
Accordingly, you should place no undue reliance on these statements.
I encourage you to review the Companys filings with the Securities and Exchange Commission, including without limitation. The Companys form 20-F, which identify specific factors that may cause actual results or events to differ materially from those described in the forward looking statements <unk> disclaims any.
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 10 2023.
With the completion of these prepared remarks. It is my pleasure to turn the call over to deep <unk>.
<unk> CEO of Poly Pete <unk>.
Okay.
Thank you Brian .
The alpha team its policy I would like to welcome everyone to our first quarter 2023.
To begin we are thrilled with the recent progress we have achieved throughout our business.
<unk> the significant strengthening of our balance sheet, which I will review of this nature.
From a clinical perspective, we have submitted a revised protocol a shift to the FDA and await feedback.
No major comments from the agency, we expect very soon to be in a position to begin recruiting patients.
Patient into share too.
Which to date has enrolled approximately 40 target patients.
A reminder, we now have a clear regulatory pathway for the potential FDA submission for duplex 100 in the U S.
Earlier this year the FDA acknowledged that the shield one results may provide supportive evidence.
Safety and efficacy of <unk> 150 patients surgical incision greater than 20 centimeters.
Agency also commended that the company conducts an additional study this focused patient population to support a potential NDA submission.
The Q2 could surface such a study.
To reiterate what we said on our last call we intend to recruit a total of approximately 600 patients.
An additional 550 subjects.
Beyond the 40 patients already recruited into shifts.
Outside of recruitment into the study is expected to be approximately 12 months from the time, we resume shield.
To anyone.
Topline results are expected mid next year.
Also plan to conduct an unblinded interim analysis.
A total of approximately 100 education complete 30 days as we prepare to resume recruiting a shield to one of the key learnings from shield. One is on the sites involved in this time.
While we are targeting approximately 50 centers.
Around the same numbers shields, one we now have firm knowledge.
Right.
<unk> one in terms of recruitment patient monitoring and good clinical practice.
We believe this to be essential in the execution of share too. We also have a nice clinical operations team.
And another key step towards supporting a successful study.
While we have made modest modifications to the protocol based on the shift one results.
If you think of the <unk> two trial is very similar to the shows one study in terms of primary and secondary.
Patient is the intervention.
Received eplex 100 on top of standard of care.
And subject to the controller will receive standard of care alone.
The primary endpoint of the trial will be a combination of exercise, we intervention and mortality rate 30 day post index century as defined in the CDC guidelines.
Got it.
Patient safety will be monitored for an additional 30 days and the study will take place in the U S Europe and use that as.
As we have said previously I would like to emphasize that we view <unk> as a derisk phase III trial, giving the more focused patient population.
We have already generated highly positive one.
One.
And the fact that it will not be conducted within the tight coffee related restriction.
Were in place during the pandemic and throughout the duration of shield. One. In addition, as I noted a moment ago. We are leveraging the key lending shows one study in Europe , We recently received feedback and a national scientific advice meeting.
Swedish medical products Agency Swedish MPA. This was in line with Pacific received something SBA following the type deal.
Specifically similar to the FDA the Swedish MTA acknowledged that the shows one result.
<unk> supportive evidence and patient with large surgical incision and recommended that the company confirmed the result, which an additional phase III study to support an MAA submission. The Swedish MPA also noted that clinical safety data obtained to date.
Is sufficient for an MAA submission importantly, we continue to work closely with our European partner advanced pharma with respect to the European development pathway and are fully aligned on the regulatory strategy for this region, including the preparation surrounding us.
Meeting with the Swedish MTA I should add that we expect to complete the commercial manufacturing process and packaging validation for duplex 100 in the next few months, we continue to expect to have the CMC and preclinical data.
To support an NDA submission.
In advance of the topline in regard to our financial strength, we completed a series of financial transaction late in the first quarter further solidified our financial position.
First we closed on an underwritten public offering that included the full exercise of the underwriters option to purchase additional ordinary shares.
And a concurrent private placement of a pre funded warrants with search.
Existing shareholder for total gross proceeds of approximately $11 $4 million. In addition, we have instructed our existing secured loan agreement with <unk> coffee time, resulting in over $3 million of deferred repayments, which will be paid from August two.
2014.
Onwards in line with the expected timing of our topline results function to the proceeds from the financing transaction combined with the loan repayments itself.
And our cash runway into late Q1 of next year.
Looking ahead, we anticipate having a number of additional compelling financing opportunities to further enhance our balance sheet later in 2023 in order to function to successful completion.
With that said we are grateful for the continued support shown by our largest institutional shareholders.
Well as our new investors, who participated in the March public offering moving on we also continue to advance our business development initiatives.
As a reminder, we are focused on two key areas first we are targeting additional.
Strong partner duplex 100 different geographies like the U S and Asia.
Second we are pursuing flex platform related collaboration.
Are becoming more focused in nature.
Specific therapeutic areas such as oncology.
As we said on our last call. Our plan objective is to formalize two partnerships in 2023.
Although the exact pace of partnership discussion is inherently difficult to predict.
With that it is my pleasure to turn the call over to Gianni to review our current financials Johnny.
Plus.
As of March 31, 2023.
Company had cash cash equivalents and short term deposit of <unk>.
$86 million.
Including the $6 2 million.
Net proceeds from the underwritten public offering in April 2023.
To reiterate what <unk> previously stated.
Our cash balance will be sufficient to fund operations.
Into late first quarter of 'twenty 'twenty four.
Now, let's turn to our income statement.
Research and development expenses for the three months ended March 31, 2023 were $3 8 million compared.
Compared to $8 7 million.
In the same three month period of 2022.
The decrease in R&D expenses.
Without that primarily from the completion of shield one eight clinical trial.
Reflecting the cost reduction plan that was executed in Q4 2022.
Marketing and business development expenses for the first quarter of 2023 were $385000 a decrease from the $775000 during the prior year period.
General and administrative expenses.
For the first quarter of 2023 were $1 6 million.
Impairs to $2 5 million recorded in the same three months period of 2022.
For the first quarter of 2023, the company had a net loss of $6 1 billion.
Prepared to $11 9 million.
In the first quarter of 2022.
With that I will turn the call back over to the cloud.
The cloud.
Thank you Johnny before opening the call to your question I would like to discuss some recent updates to our board and senior leadership team.
First we are excited to welcome Youll see them run as an independent director on our board you'll see is the highly accomplished senior leader in the biopharmaceutical industry, having spent over 30 years in commercial operation.
He previously served as an SVP and President of American call, Europe , Russia Africa, and Middle East region.
$4 billion business with 10000 employees in multiple divisions in more than 100 countries.
In this role Youll see less back from the fifth position to market leader in pharmaceutical sales in this region.
As we approach the potential commercialization of <unk> 100.
We are thrilled to add youll see any significant commercial expertise.
Our board.
Also as it relates to deport hi, Harvey and member of our board since 2016 will no longer serve as a director on behalf of everyone at Palatin I would like to thank Chaim.
A significant contribution to our company over the years, we are grateful for his dedication to quality finally, I am pleased to announce the Johnny we shall not be somehow.
SVP finance has been promoted to Chief Financial Officer, We will now open the call to your question.
Later.
Thank you if you wish to ask a question you will need to press star one and one on your telephone and wait.
For your name to be announced.
To withdraw your question. Please press star one and one again.
Please standby, while we compile the Q&A roster.
Good morning, Glenn.
We will take our first question.
Another question comes from the line of Brandon Folkes from Cantor Fitzgerald. Please go ahead. Your line is open.
Hi, Thanks for taking my questions and congratulations on the progress during the quarter.
And let me just start with firstly in the part D meeting was there any discussion in terms of what label may or may not be food should be successful in the trial and.
Under the new protocol.
Kind of thought there.
Hi, Good morning, Thank you for that I, Brian .
Brendan the word specific discussion on label and what the label should be it was focused more on all of the clinical pathway and what's needed for an NDA, but we did have in the past some.
Communication.
Regarding labeling both in Europe , and with the FDA.
It leads us to believe that we will be starting with some indication around them Domino and from that we can expand later on.
As we gather more information and more safety data.
Great. Thanks, and then maybe just switching gears to Europe .
Can you talk about if there were any.
Any differences that the Swedish MTA ask will compare to the FDA I know you did say pretty similar there.
And then just staying on Europe .
Quick question I guess I'll ask the call at point, but how do we think about the Swedish authority.
The Swedish authority any feedback with regards to the rest of Europe do you think you still have to be discussed.
The regulatory agencies in Europe , I think similarly.
There's been talk about sort of antibiotic expenses again coming out of Europe .
Anything in there for products, such as duplex and just.
Given sort of the active ingredient.
Thank you.
So with regards to Europe .
So everyone will remember we have a partner there advanced pharma.
At a hospital specialty pharma base.
European Company. So obviously all of our strategy. There is in line with our partner and we believe that the Swedish authority to do it.
It would be representative of what we should expect from the MAA our European authorities in general we do not think we need additional advice obviously.
Any regulatory agency, they can think differently when adult konzo win.
Can you speak with a different division or a different countries, but we sense that the feedback was very clear.
So we do not think we will need additional.
Consultation there and with regards to differences I really.
Comp point out to them.
Hmm.
Major differences because I think that does the overall feedback was similar first they acknowledge the daytime said it can be supportive. This is similar to the FDA. They requested that we will perform another trial again.
Yeah.
It's the same as the FDA I think they were more clear with regard to the safety data already generated but other than that I really don't see.
Anything to point out from that.
Well I think there is a level of.
Confidence and clarity of the data that we have both agency Thomas with similar feedback.
We enforce what needs to be done.
Our next.
Alright, Thank you very much sounds very positive.
Thats It for me and congrats study on the English and close it.
Thank you so much.
Thank you we will take our next question.
Please standby.
Your next question comes from the line of Belo Prasad from Barclays. Please go ahead. Your line is open.
Hi, Good morning. This is self apalachi. Thanks, I'll take I'll pass it just a quick one on your business development plans you mentioned that you will focus on opportunities on the platform itself. So just wondering like have you ever consider alternative uses of your platform.
Areas such as animal health. Thank you.
Hi, John Good morning, this is <unk>.
The quick answer is yes, so animal health is one of it is one of the things we're looking into.
But it's even there's much more that can be done with the platform and where.
We're starting to hear this more and more for example.
Yeah.
There is some some level of conversations around delivery delivery of RNA and know the RNA is the hottest topic known in the industry.
So there is some some discussions around that some discussions around.
Steady mix.
As we can use.
The pipeline for prolonged believe someday.
<unk>.
Pillar is SaaS.
Melting assets and so on so these are all these are all kind of venues that we are looking into it so.
Let's keep it let's keep it at that it's still all very very early in the conversations, but there's definitely more than just the antibiotics.
Got it very helpful. Thank you.
Thank you we will take our next question.
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Please standby.
Okay.
Your next question comes from the line of Roy Buchanan from J P. Morgan. Please go ahead. Your line is open.
Not not quite JMP securities maybe yes.
Anyway.
Thanks for taking the question.
Trying to gauge timing for the unblinded interim can we assume linear enrollment from when you start the trial the 550 patients.
And then is there an option to upsize. The trial can you talk about how big the trial could get if there is.
And then can you talk a little bit about the powering and your assumptions for infection rates.
Sure so.
First of all good morning, Thank you of our proactive or.
In any venue that used to be.
Uh huh.
I'll start with the first question.
With regards to the number.
Of patience and the interest so so the interest is that a 400 patient.
Additional 550 patients and as we said, we expect to be able to finalize the recruitment for the <unk>.
During the first quarter, so less than a year ago.
Overall 12 months for recruitment for an additional 550 that gets us to the 600, we do have an auction to upside I think we as we are still awaiting FDA feedback it makes more sense to discuss this once we get the feedback.
But.
Very much goes in line with your next question on the.
On the underlying assumption.
This is all obviously all driven from the underlying assumption that I think the underlying assumptions are very important.
For investors for analyst.
Going to the.
Chairman where poverty.
And what are the the.
The value driver for US. This is one of the major value drivers effective at this.
Phase III is de risked from the strength of the underlying assumption.
All the underlying assumption were taken from shield one from the phase <unk> from the group with the larger infusion. This is all public information.
Formation, because these published all this topline so infection rate, which was the <unk>.
97% is what we're taking is the underlying assumption for the infection in the standard of care.
Mortality again is taken from the standard of care arm and.
And we intervention all of this is taken although those were.
Data in those words this was a situation that reflected quite that significantly sticks gains that were used during carpet.
Fair to assume that.
Today, when we do not have those restrictions.
Personnel.
And hospital base as well as the overall reduction in patient.
Going to the hospital.
And they are going to colonoscopy.
Should be a higher infection rate, but still this is our assumption.
I hope this time period.
Yeah No. That's that's very helpful. Just to make sure I'm clear. So you are expecting the interim in <unk> 2024 is that what I heard.
Yeah, Yeah, Okay got it okay, and so will you be in a position do you think to have the NDA submitted in the second half of next year and I expect youre going to announce when you start restart enrollment of shield two.
And yet we will announce when when we start enrollment and.
This is a very fine refinement.
We still stick to not steal we stick to all the dates that we said in terms of 12 months and all of that like we could be filing date I think it's very reasonable that we will start submitting the NDA package in the second half of next year.
Okay, Great and then just one more on that on the sites that are <unk>.
Being changed can you just give us a sense of how many sites are chain are being changed from shield field wanted to have 10% 90%.
So this.
This is something that is hard for me to say in terms of percentage because.
Not all of the centers ours are yet to open their opening the center right now so once we have.
All of the centers I can tell you in percentage wise, what's changed I can tell you that we are.
Going after all of the countries and most of the centers that we worked with to want to participate in.
We would pursue.
Forming the trial the shield wandering around 50 centers. This is this is the plan for this trial as well.
Overall, we had also in shield one we had we have opened around 60 centers in <unk>.
50, we're actually recruiting and this is the plan now.
And many of the centers that we're active in shield. One will also be insured in Q2 until we have all of them.
Before we open it it's hard to say what level has changed.
But it sounded like a minority of the sites are going to be not included in shield two is that fair to assume.
Hard to say.
Yes.
No I think that it's all it's easier for us to say that most of the centers that we're in shield one are going to be in shield two.
Okay.
But we can Oh. This is interesting so we will keep investors updated on that.
Okay. Thanks for taking the questions.
Thank you.
That seems to be no further questions. So I would like to hand back for closing remarks.
Thank you for joining politics first quarter 2023 earnings call constant.
We remain highly confident in our long term prospects, especially the potential of a promising late stage product candidates <unk> 100, that's always we are grateful to our team members.
Existing and new shareholders and all of our external partners for their commitment to our mission and their support and continuing to advance toward achieving our goal of bringing <unk> 102 health care providers and patients as quickly as possible. We look forward to speaking with you.
Again on a net.
Paul and throughout the year.
This concludes today's conference call. Thank you for participating you may now disconnect.
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