Q2 2023 PolyPid Ltd Earnings Call
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Yeah.
Greetings and welcome to the Poly peak second quarter 2023 conference call. At this time all 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 lifestyle advisors, Mr. Ritchie you may begin.
Thank you all for participating in today's <unk> second quarter 2023 earnings Conference call. Joining me on the call today will be Greg <unk> actual Brad Chief Executive Officer of Poly, Pete Johnny Miss, allowing poly Peach, Chief financial officer and already workshops.
Chief operating officer of Poly Pete earlier today, <unk> released financial results for the three and six months ended June 30th 2023, a copy of the press release is available in the investors section on the company's website.
W. W. Don.
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 it discusses recruitment of additional piece into shield to total recruitment time into the study and the timing of the car.
Line results there from its attention to conduct an unblinded interim analysis once a total of approximately 400 patients complete their 30 day follow up the potential NDA submission for <unk> 100 in the U S. What's your expectation to have 20 centers opened in the U S Europe and Israel by the end of the current quarter.
Factors essential and the execution of shield to flex technology positioning the company well to potentially pursue a number of compelling strategic opportunities.
<unk> business plans prospects and objectives.
<unk> explained objective to formalized two partnerships in 2023, and the potential of <unk> 100, and addressing the persistent challenge of surgical site infections and the company's expectations regarding its cash balance forward looking statements are subject to numerous risks and uncertainties many of which are beyond.
And our control include.
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 not place any undue reliance on these statements.
Courage you to review the company's filings with the Securities and Exchange Commission, including without limitation, the company's 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 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.
Speaks only as of the live broadcast today August nine 2023.
The completion of those prepared remarks. It is my pleasure to turn the call over to <expletive> let Josh gets actual Brad CEO of poly Pete equally.
Thank you Brian on behalf of our teammates quality I would like to welcome everyone to our second quarter 2023 earnings call.
To begin we are thrilled with the recent progress we have achieved in the advancement of our promising lead product candidate <unk> 100.
This may we announced that the FDA agreed to our shield two phase III trials, he's done evaluating duplex 100 for the prevention of abdominal colorectal surgical site infection.
The revised trial includes only patients undergoing open colorectal abdominal surgery with large infusion.
Importantly, you will recall that we previously generated very positive data in.
In shield one from this more focused patient population specifically this patient population showed a highly statistically significant reduction of.
54% in surgical site infection in shield one we.
We intend to enroll an estimated 550 additional patients beyond the 40 patients already recruited into Q2.
Total recruitment time into this study is anticipated to be approximately 12 months and topline results are expected in mid 2024.
We also intend to conduct an unblinded interim analysis once a total of approximately 400 patients complete the 30 days follow up.
In late June the first patient was recruited in the revised Q2 trial multiple countries have now approved the trial protocol and several recruiting centers, where we've recently opening we expect to have 20 centers opened in the U S Europe and Israel by the end of the current.
Quarter.
As a reminder, we have a clear regulatory pathway for the potential NDA submission for <unk> 100 in the U S earlier.
Earlier this year the FDA acknowledged not only that shield one results may provide supportive evidence of the safety and efficacy of duplex 100, inpatient with large surgical incision, but also confirmed that its successful show two is sufficient to support.
Or to a potential NDA submission.
We have said previously we strongly believe the tier two is a derisk phase III trial.
Given the more focused patient population in which we have already generated highly positive data in shield, one and the fact that it will not be conducted within the tight coffee related restrictions that were in place during the pandemic and through I'll get duration shared one.
We are also leveraging key learning from shield one related to the sites involved in the study.
While we are targeting approximately 50 centers for shield to around the same numbers shipped one we now have firm knowledge of the best performing sites from shield one in terms of recruitment patient monitoring and good clinical practice.
We believe this to be essential in the execution of shield two.
We have also enhanced our clinical operations team and another key step towards supporting a successful study.
Moving on we also continue to progress our business development initiatives. As previously mentioned, we are focused on two key areas.
We are targeting additional strong partners to deploy 100 in different geographies like the U S and Asia.
And we are pursuing flex platform related collaborations that would be focused on specific therapeutic area such as oncology.
Proprietary flex technology positions us well to potentially pursue a number of compelling strategic opportunities.
Over the last quarter, we have significantly ramped up our business development activities across both biotech and big pharma, we are at varying levels of discussions with more than 20 company whether to partner in duplex 100, or two evaluate co development partnership opportunities related to the <unk>.
X technology.
In addition, we recently retained at business development focused consulting firm to foreign strengthens the company capabilities and support the company's coal in this key area.
As we have said previously our planned objectives is to formalize two partnerships in 2023, although the exact pace of partnership discussion is inherently difficult to predict.
Why do we brought in our business development activities. We also continue to augment the published research in support of depicts 100 more.
Most recently a paper highlighting the patent antibacterial activity of <unk> 100, and its potential as an effective prophylactic drug against the most prevalent exterior, causing surgical site infections, including resistant strains was published in the European Journal of pharmaceutical.
<unk> Sciences.
This paper highlighted the tremendous potential of duplex 100 in addressing the persistent challenge of surgical site infections, especially in an era of increased multi drug resistant bacteria.
The data showed a significant antibacterial activity steeped X 100 in preclinical and phase III clinical studies against a wide range of bacteria tested including resistant ones. Finally, while Germany will be a few of our current financials momentarily I'd like.
To highlight our cost containment efforts throughout the business in 2023.
Including in clinical operations G&A and manufacturing.
Most significantly in a challenging inflationary environment, we have generated over $1 million in cost savings year to date.
Moreover, our net cash used in operating activities decreased by 59% in the first six months of the year as compared to the first six months of 2022.
With that it is like pleasure to turn the call over to Johnny Johnny.
Thank you <expletive> Schiller as of June 32023, the company had cash and short term deposits of $16 1 million.
We continue to expect that our cash balance will be sufficient to fund operations into late first quarter of 2024.
Now, let's turn to our income statement.
Research and development expenses for the three months ended June 32023 were $4 million.
Compared to $8 4 million in the same three months period of 2022.
The decrease in R&D expenses.
Primarily from the completion of the shield, one phase III clinical trial.
Reflects the impact of the cost reduction plan that was executed in the fourth quarter of 2022.
Marketing and business development expenses for the second quarter of 2023.
$357000.
Decrease from the $923000 during the prior year three month period.
General and administrative expenses for the second quarter of 2023.
$1 5 million.
Impaired to the $2 2 million.
Recorded in the same three month period of 2022.
For the second quarter of 2023, the company had a net loss of $5 8 million as compared to $11 8 million in the second quarter of 2022.
Finally, as declared noted we are executing well on our cost containment initiatives.
As such our net cash used in operating activities for the first six months of 2023 decreased by $12 million.
Compared to the same period in 2022.
$23 million to $8 3 million.
With that we will now open the call to your questions operator.
Thank you as a reminder to ask a question you will need to press star one and one on your telephone and wait.
For your name to be announced two.
Two weeks to your question. Please press star one.
Okay.
Please standby, while we compile the Q&A roster.
We will take our first question.
Another question comes from the line of <unk> Prasad from Barclays. Please go ahead. Your line is open.
Good morning. This is Michele <unk>. Thanks for taking our question. So can you speak up some partnership and licensing opportunities that you're pursuing whether across the technology all the product candidates.
Hey, guys good morning.
In terms of in terms of partnerships.
There are a few things we are that are in discussion one on the duplex side.
A number of.
Conversations in different stages looking both the U S Latin America and Asia.
And I think what what is interesting is some of the some of the conversations.
They're more advanced unless some are looking.
Waiting to see more data in May and Tom are really.
I'd say more and more.
Thanks, something now it hadn't ahead of data I think when we look at the structures.
Any deal that is finally for the topline results.
We would look at a deal that is similar to the advance.
Type of deal that we that we sign which is.
Milestone base really backloaded, some sort of.
And the initial payment just to align incentives and ensure that both the both sides are really committed for the product and then most of the.
The milestone payments will be based on on a regulatory and sales milestones so very similar to the to.
To the advance team.
On the platform side.
It was quite a lot that's happening from anywhere from.
A conversation with the with pharma companies looking at the innovative products.
Delivery.
Wherever local delivery.
And then I can highlight that I think I mentioned this in the past.
Increased interest in the RNA delivery right.
The buzzword of the day and we do have.
Data both bench data in animal data in the in RNA delivery.
Nucleic acid in general not just RNA, we have patents around that delivery. So this is something that's where we're looking to push on theirs.
With any new with any new.
Let's take the technology there is always this window, where we're.
It's open and companies are open to learn more and see more and I think this is where we are with with RNA. So.
As the company will try to push as much as we can on the RNA delivery.
In addition, the <unk>.
Our conversations around on complex local delivery of on complex weather.
Intra tumoral injection or.
Post resection adjuvant the delivery into the into the.
Tumor bed.
Yeah.
I think good morning, Sean.
Without going into <unk>.
We entered into specific and obviously we cannot commit.
On the timeline that I think what's important for investors.
And what we were trying in today's prepared remarks to emphasize.
It's probably a problem for the firm.
First on <unk>.
The lack of policy, we are experienced such assets.
Robust interest so many companies that are in parallel discussions.
And this is I think is something that is new.
And we still believe that will lead to agreement this year.
Got it very helpful. Thank you.
Thank you.
We will take our next question please standby.
Okay.
The next question comes from the line of will it be coming from JMP. Please go ahead. Your line is open.
Okay, great. Thanks for taking the questions I guess the first one can we expect enrollment progress updates for <unk> two each quarter.
What about the blinded infection rates or can you at least inform us if the rate is meeting your expectations after going through the trial and can you remind us what you expect for that.
Baseline infection rate based on the design of the trial.
So hi, good morning, thanks for joining us.
We could expect that we will be updating on recruitment program.
Probably every quarter and definitely.
Expect that we will issue a press release in the next milestone in our lives, which is 100 patients.
And I hope that we will be able to report this.
Either around before around the first quarter.
So this is the next milestone we can judge this at the next quarterly call.
We have reached it.
At this point.
In terms of overall infection rate. This is something that we will not be able to share because obviously, we do not want to in any way jeopardize the unwinding of the trial what I can tell you Ken tell your desks.
Yes.
Based on an assumption that we are experiencing shelved one.
This focused patient population.
This is generally okay. Now this is lower than what we've seen in literature. So for example, the infection rate.
And in all of our corporate presentation, but you're right that.
We are presenting around.
Patient with open large open abdominal incision that was experienced in shield. One is nine 7%. So this is what we are looking at as the baseline and that we expect to see substantial reduction our assumption is that as we've seen in the phase two and as we have.
<unk> seen in this.
Patient population in the phase III, it should be at least 50% reduction.
Okay, Great and then can you I know you guys did have quite a bit of market research had a shield one.
<unk> seen that continuing can you just remind us what that suggests.
About usage in settings, maybe like smaller incisions outside of that concessions above 20 centimeters and potentially beyond colorectal surgery, and how would reimbursement work.
In the event that you get a limited label to let's say large institution.
Well I'll take the first part and our year on my side will take the second part so that our market research showed very clearly that 40% of the open colorectal and other open abdominal surgery.
The criteria of high risk surgery either.
Patient risk factor or to surgery related risk factor. So this is quite substantial.
Minder.
Sure one we had.
977 patients and 423 out of those were.
With lodging C. J, if you look at patient with one or more risks personnel risk factor. This was even 70% of the trial.
This is supportive also without showed too soon as one data.
Yes.
I would add to that and before I get to the reimbursement.
When when we asked I'm going back a few a few calls ago, but when we ask surgeons when we show them the TPP of the product in App.
That's the way, we would get used in which patients would you would you start.
Using duplex and really across the board data pointing to these high risk patients.
And then the next question is okay. So tell us how many of your patients at high risk patients and we split it into colorectal surgery general surgery, gynecology, and so on and really the numbers a varied anywhere from 35% to 45% of all vein of surgery.
<unk>.
When you think about it is it really mix it meet the what.
What we know of the general population in terms of a high BMI instead of diabetics in terms of smokers that kind of fits with these numbers. So as a starting point for all the product across all abdominal surgeries I think that this is a good assumption.
In terms of reimbursement so mainly two things so first.
This is an inpatient product the <unk>.
Conversation is really with the hospital and not with the payers payers a hospitals get paid a lump sum paired the DRG.
And then in a way if they if they are efficient if they're if they if they're a.
If the surgery went as planned and the patient leaves on time, then the hospital makes money if theres an infection and now the hospital patient stays in the hospital for another 10 days.
Hospital loses money so our conversation is really showing the hospital.
Additional preventative measures to reduce infection.
<unk> has.
Has that patient a patient outcome.
Patient outcome piece here, but there is also an economic base here.
That said because we have a queue IDP qualified infectious disease product designation, we are eligible for the <unk> new technology add on payment and we went through the process and we fit all the criteria for <unk> and the ends up.
It gives.
A separate reimbursement from CMS to the hospital up to 75% of the cost of the drop so although we are we don't have direct conversations with the payers and the hospital can get reimbursed for the product.
Okay, Great. That's very helpful. And then one last maybe.
Yes. Thank you.
The interim it sounds like you're probably on track for a <unk> interim announcement is that.
Good assumption I think on the last call you are waiting for FDA feedback around maybe the nature of the interim and what the implications were such as upsizing. The trial do you have anything you can share about a FDA feedback around the interim thanks.
Sure, yes, so so you're totally correct, we were waiting for feedback from an approval actually from the FDA on the overall protocol and we received this approval by the end of the play amongst after that by the end of June we have recruited the first patient in.
At that point, we are.
Getting approval in multiple countries and opening centers with the.
Target to have 20 centers by the end of the current quarter. So I would expect to see as we progress.
Investor seeing quite an increase in inpatient patient recruitment.
On the aspect of the entry Daydream is one we recruit 400 patient we expect to recruit the 4000 risk patient during the first quarter of next year.
And about a month and a half after that we should have it.
Feedback from the DSM V Committee.
So either end of first quarter or early Q2, we should have the interest.
Again, just for everyone to remember.
<unk> one data was around 400 patient 400 patient in this patient population and we have there.
Bus statistical significance it couldn't meet criteria for an interim analysis. This was part of the reason to set the number of around 400 patients and also the interim is quite.
I would say in line of what you would expect in terms of the statistical analysis of the industry and could.
Obviously suggests an aristocracy.
Okay. Thank you.
Thank you that seems to be no further questions I would like to hand back to Chuck.
For closing remarks.
Thank you for joining politics second quarter 2023, earning conference call. We remain highly confident in our long term prospects, especially the potential of a promising late stage product candidate <unk> 100, and as always we are grateful to our team members.
Shareholder 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 our next call.
And throughout the second half of the year.
Thank you that does conclude our conference for today. Thank you for participating you may now disconnect.
Okay.
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