PolyPid Ltd. (PYPD) Earnings Call Transcript & Summary

Balaji, we are live.

Thanks. Hi, good morning, everyone, and thank you for dialing into the Barclays Global Healthcare Conference, and this is same virtual one. So it's a pleasure to have PolyPid’s management kick start the specialty pharma track of our Global Healthcare Conference. And from PolyPid, we have Dikla Akselbrad, EVP and CFO. With this we'll kickstart proceedings. The format will be around 10 minutes of presentation and 15 minutes of fireside Q&A. And with that, Dikla would like to start the presentation.

Thank you, Balaji, and good morning, everyone. Thank you for the opportunity to being in this track. Now the slide are on. So PolyPid is a late-stage biopharmaceutical company, running now 2 Phase III, first one is going to read out by the end of this year with the aim to show superiority in reducing surgical site infection. And we are now at the level of running those Phase III. The company has about 70 employees. Majority of them are in Israel and a small portion in Summit, New Jersey. With 96 patent already granted around our platform and our pipeline and additional patents that are still in process. Before going into the pipeline and the level of results that we have, you can see here what's the platform is all about, what we have created. So we have used fairly, 2 well-known technologies, polymer and lipids that have been used in different products along the years. And now we are first one to combine the two into a very unique platform that allows for prolonged local delivery. And when we are talking about for prolonged local delivery, we were actually thinking about time frame that goes for weeks, if needed. The way the platform is structured is that polymer are creating the backbone of the metrics, you can think about the structure of an onion or a book, with thousands of alternate layers. And in between, you have the drugs, surrounded by the lipids, protecting it from abrasion and enzyme. Once the drug is administrated [indiscernible] at the tumor resection environment, body fluids disintegrate the outer layer and the drug will be spent again and again and again, thousands of times. Our lead product D-PLEX100 is pairing D-PLEX technology with the antibiotic with doxycycline, supporting 4 weeks of local administration of the drug in a linear manner along the time frame. And what we've done about 6 years ago, we focused our pipeline, initially focusing on surgical site infection and just recently, introducing our next in line product OncoPLEX, which is pairing the PLEX platform with chemotherapy. Here, you can see how the products looks like in reality. This is how it goes to the clinic, to the surgery room. And there you have it in a clear glass very fine powder. And in a second, you'll see how it's actually used in the clinic. So what you can see here is one of our Phase II patients. This is the last stages of an open heart surgery, the surgeon [indiscernible] the D-PLEX100 -- it becomes almost like a paste, very easily applied all over the sternum bone and the soft tissue, could be either applied with an applicator or the [ blood ]. All the white material that we can see here, this is our drug, this is D-PLEX100. And this is will gradually release them the [ other open wounds ]. [indiscernible] 4 weeks is very important, but equally important is our ability to release the drug in a manner that creates high local concentration. And this is really the advantage, and this is really what brings the superiority of our product over solutions that are out there. The ability to cover the incision for 4 weeks on 1 hand. And on the other hand, create very high local concentration. And here, you can say what we are illustrating what do we mean by high level concentration. So in a clinical vial, diagram 1, we have about half an [ oral pill ] for antibiotic, that's all, 54.6 milligram, that is the least of 4 weeks. Dosing is determined based on the length of the incision, up to 10 centimeters the surgeon will use 1 vial and over 10 centimeters, he'll use -- they will use between 2 to 3. Overall, up to 1.5 [indiscernible] creating 10 to 30 times the mix needed to put the [indiscernible]. Let's focus for a second on the level of efficacy that we've seen up until today and then go on to running phase III trial. So this is our most recent trial. This was 200-patient colorectal resection trial. The reason that we chose colorectal resection as the model to show the efficacy of D-PLEX100 is because the colon resection surgery has the highest infection level. We're talking about double-digit infection rate, and all over the world in open procedure and high single-digit in minimal invasive procedures. And this trial was designed to show reduction of infection and mortality within 30 days from the surgery. 30 days is the point that CDC defined as surgical site infection that occurred around the incision. Again, 30 days from the surgery is considered surgical site infection. We also followed those patient for additional 30 days for safety and we have of course, the blinded trial, double arm with standard of care in both arms. Before covering the actual resort, it's important to point out that most of the patients that undergo colorectal resection are cancer patients, over 70%. And also in our trial, 74% of the patients were cancer patients. Additional 13 were Crohn's disease and the rest are for different reasons, so this is quite severe situation. We also see that in today's environment, in the COVID, that those are the types of procedures that are not delayed. Anyway, here's the top line results. So on the left side, you could observe the intention to treat analysis, we've observed 24% infection and mortality in the standard of care versus 10% in the treated arm. This represents 59% reduction in infection and mortality, which is what we expect all our -- our trial are designed to show over 50% reduction. What was quite encouraging in our eyes is to see such a low p value in our Phase II trial. Also, I would note here aspect of mortality. Overall, we have observed 5 deaths within 60 days of the surgery in the standard of care arm versus none in the treated arm. Again, this was statistically significant. And with these encouraging results in addition to the results that we've seen in other trials in open heart surgery, in CABG surgery and open fractures. Again, in all of these trials, showing [ over ] 50% reduction in infection [ nonunion ] as well as very significant health economic measurements that are also monitored as part of our trial, we've decided to go on to a Phase III program for approval. Overall, we've conducted 5 clinical trials with about 400 patients up until today. We've seen in those patients, very good efficacy signs as well as we haven't seen any sort of adverse events relating to the product. So the safety profile was very well tolerated. And we are running a Phase III and plan for broad labeling initially, 2 in abdominal colorectal. First one is [ project ] 2 months ago, recruiting 600 patients. We've just reported 2, 3 weeks ago that we passed the first 100. And we indicated that we expect to have top line results on these trial by the end of the year. The second trial sold end of last year, December. It is -- they are all similar to the Phase II trial, both in terms of population, design, primary endpoint. The difference between those 2 Phase III is that in the SHIELD II we allow for a more balanced ratio of minimum invasive procedure. And this is why this is the 900 patient product. Post-approval, we intend to submit a CABG surgery, an open heart surgery with hope that this will allow us to get broad labeling from the FDA. Before covering aspects that are relating to commercialization and market access, I want to cover our situation with the FDA and what is the potential with regards to the value that rates from the recognition that we got. End of last year, December, we got Breakthrough Therapy. The Breakthrough Therapy, in addition to the fact that it gives us more frequent and more similar guidance from the FDA to develop the program is based on clinical data. This was the first time that the FDA gave us a destination that is based on clinical data. Actually, the Phase II that I've just covered few slide ago. And also, we think it's important because when you analyze this kind of product, that got Breakthrough Therapy, it's very rare to see product in the anti-infective space and in the surgical recombinant environment. So this is quite unique. And in our eye, it can support the level of interest that we see in this promoting this product and bringing it faster to the market. The Breakthrough Therapy was granted in addition to 2 QIDPs that were granted earlier during the development program. Those 2 designation allows for additional 5 years exclusivity. Overall, [indiscernible] use exclusivity with the path that we are. And we also have 2 Fast Track designation that can promote the approval and potentially shorten the time for approval. To summarize, we are now running the D-PLEX100 in 2 Phase III, which get us into FDA approval, NDA. The open heart surgery, we look to submit a post-approval as an expansion of indication. Top line results are expected from the first Phase III by the end of this year. By the way, European authorities have agreed to register the product based on 1 Phase III. So there is a potential earlier adoption [indiscernible] and we have our oncology program, which we indicated, we should be able to give -- [ Phase III aI/II ] next year with FDA [indiscernible]. So looking on the market opportunity. [indiscernible] a very large market opportunity here with regards to large and major surgery. The product and disease can be applied in almost any surgery but as a marked target on if you were looking at what we refer to as major surgery. And those are surgery that either have higher frequency of infection. For example, abdominal and especially the open abdominal listed here some of the gynecology and urology surgery, mainly associated with cancer and oncology. But also surgeries that once infection occur, the clinical meaning and the level of mobility and mortality are quite high. And this is mainly the cardiac, in open heart surgery, the CABG, and in orthopedic, hip, knee replacements, spine fusion and, of course, all the tibial fractures. This is our market opportunity, if you look at the numbers, there are about 14 million operation in this pool. So this is quite a large market opportunity, both in terms of savings to the hospital and here, I would urge you to look at the CMS program that are promoting reduction of infection, reduction of readmission. There are 2 programs that are directly, saving money to the hospital beside the actual saving per patient that will not be infected and the number here could be very high. And this is not something that only hospitals that are lower rate are dealing with. This is recent simply published articles about hospital that are in the top ranking in the U.S. and still, they had to take penalty. Just one example that is listed here. You look at Weill Cornell Medical center in Manhattan. They had to pay $9 million for readmission as well as HAS. This is penalties that are taken from their total DRG pay. It's not just for the specific patient that got infected and the cost of treating him can even get to $100,000, depending on the type of surgery and the level of infection. So to summarize, we are looking into strategy of building a fully integrated biopharmaceutical company starting from the research and the development the regulatory, clinical. And also, a few years ago, we built our own manufacturing facility, state-of-the-art 10,000 square feet, that is suitable to produce for clinical needs that we are now having and also support our commercial demand for the first few years. Thank you. Balaji, I think you are on mute.

Yes, thank you. So for the Q&A part of the session, we have around 8 minutes and I have a pleasure of also introducing our Amir Weisberg, the CEO, who has joined us. So thanks for joining us, Amir. A couple of quick questions from me. You did speak about broad labeling indications expectations. Can you discuss your -- the degree of confidence that you have -- just getting a broad label and one of the supporting factors that we have towards this.

So this is a very good point. There are couple of things to look here. First, you could look at other post-surgical solution and what was the requirement and what was the path for them. And here, I can mention the post-surgical pain companies, they clearly got guidance from the FDA that by showing Phase III data in bone related surgery and Phase III data in soft tissue-related surgery, they could get a broad labeling. Because to our understanding and this was proven with their product, when you have a product that is administrated in one area, and in the other area, and it's effective in both areas. It should be effective also in other soft tissues along the body, so that's one thing. The other thing there are specific guidelines in the area of the anti-infective, showing that when you have Phase III data around the 1 bacteria and another bacteria, you get the two. Now that we have the Breakthrough Therapy, we are planning to meet the FDA this year for a [ type III ] meeting and discuss that, discuss the ability to shorten the path to development, whether they will consider proving the product based on 1 Phase III and having the second one is post approval. This is one of the point. The other point will be the broad label and what will be required to get there.

Great. As we look out here, around a couple of quarters since you've been a public-listed company and you are a few quarters away from being a commercial company, so can you take us through the key milestones that you've been anticipating now from here on until actual launch of the product.

Sure. Sure. So first, I would mention here, this is exactly the reason why we established our office in Summit, New Jersey with 3 people now, they're managing the processes of launching commercialization, branding, pricing and all the activity that needs to be done prior to the launching. But in terms of time line, so in order to get to NDA approval, as I said before, in Europe, we need 1 Phase III. We expect that it takes [indiscernible] to have top line result by the end of the year. So we will be able to submit it relatively few months after that, there are some packages that still need to be updated with CMC, and all the other materials that are required for [indiscernible]. The FDA indicated that generally they ask for 2 Phase III. But depending on the robustness of the data, they will consider approving the product based on one. So our assumption is for planning and budgeting, that we will need 2. And this is how we plan also our public offering to support this through. The first one will read by the end of the year, and we've indicated it a second one will read during 2022. Once it has been more established in terms of centers on recruitment of patients, we can be more specific. And after that, we are ready to submit for NDA and with the fast track designation, we can do that in a rolling submission. We do not need to wait until we have all the material. And also, the FDA has shorter time to review this one.

Great. That's very helpful, Dikla. So maybe a bit more as we -- you recently announced that you have enrolled around 100 patients in the SHIELD I study, Phase III. So what's the status now on SHIELD II? What's the enrollment progress and how is it trending relative to your expectation and so on [indiscernible] on SHIELD II?

So SHIELD II started in December. The first few months are usually more focused on opening the centers. And then we start to see recruitment ramping up. This was the case in SHIELD I. And we expect the SHIELD II to be the same. What we have done and I think up until now, it's proven itself to be right move. We've done a couple of things in that respect. First, we've decided to increase the number of centers before we've been starting the trial. We started the trial with this mid- last year, COVID was already out there. So we knew we need additional centers in order to deal with COVID, and we decided to open 6 centers to each trials. And by the way, not the same centers. we don't want to be in a position of 1 trial compete on -- with the on the treatment. So this separation, I think, is going to prove itself. And up until now, which I think its proven itself. And it's going as planned in terms of recruitment. Again, most of the patients in our trial are cancer patients and this colorectal resection surgery is deemed to be high priority. So we don't see patient delay in this trial, and we don't see hospital sending patients home, even with COVID. The trial -- and this is a surgery that needs to be done immediately.

Great. So just a question on pipeline. One of the questions that I get from investors, and we discussed in the past, is the OncoPLEX program and it's [ granted ] that you're still in an early stage around this. But there is something, which I think could be materially inflecting for the company and the shares of you. So can you take us to what activity is going through right now? And how are you approaching on to initiate a Phase II trial by next year as you've stated, and this is something that we'll...

So first, maybe I'll give a few words because, as you said, it's relatively new program, and it's worth elaborating on this -- but [indiscernible] for everyone. What we've done with the OncoPLEX, we've paired our PLEX platform with chemotherapy. With the idea to have local administration of chemotherapy for several weeks. And the idea is to initially, please look at solid tumor and have the administration of the OncoPLEX as part of the intra-tumoral, intraoperative environment post resection. And we are now -- we've shown the published very nice with clinical data on that, and we are now progressing with additional fixed preclinical data and safety. With the plan to meet the FDA for pre-IND meeting a few months' time this year. Post pre-IND meeting, we will be able to if needed, add additional materials to the FDA for an IND and then give more specific details on the trial that is planned and the first n[ enrollment ] for the Phase I/II, probably next year. But we are also, as a, we are also very excited with this program. We see a lot of value with the ability to have patients with cancer exposed to high concentration of chemo therapy on common therapy on one hand, with minimal to no systemic exposure. [indiscernible] really be a revolution in the treatment in oncology space.

Okay. Dikla, I'll have quite a few other questions to ask, we're at the end of our 25 minutes period. And for those who are dialed in, I would also suggest listening into the export panel that Barclays has posted along with the KOLs for the drug and the management of PolyPid. So I think that's a very comprehensive 1 hour discussion, those who are interested call up. But with that, I would like to thank you, Dikla, and Amir for joining us, and I wish you a productive conference, and well -- have a good day.

Thank you very much. Thank you, Balaji. Bye-bye.