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spk01: Thank you all for participating in PolyPede's Second Quarter 2021 Earnings Conference Call. Joining me on the call today will be Amir Weisberg, Chief Executive Officer, and Digla Chaskas-Oxelbrod, Executive Vice President and Chief Financial Officer of PolyPede. Earlier today, PolyPede released financial results for the three and six months into June 30th, 2021. A copy of the press release is available on the investor's section of the company's website, www.polypd.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 of trials, timing of trials, and release of the results thereof. the capacity of the company's manufacturing facility, the company's pipeline, the potential benefits of Plex and Oncoplex, the company's potential partners and sufficiency of 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 SEC filings. Our results may differ materially from those projections. These statements involve material risks and uncertainties that can 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 Securities and Exchange Commission, including without limitation the company's forms 20F and 6K, which identifies factors that may cause actual results or events to differ materially from those described in these forward-looking statements. PolyPede 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. August 11th, 2021. And with the completion of those prepared remarks, it's my pleasure to turn the call over to Amir Weisberg, CEO. Amir?
spk03: Thank you, Bob. On behalf of the PolyP team, I would like to welcome everyone to our second quarter 2021 earnings call. I will begin today with some brief introductory comments and then Declare will provide a delayed business update and review of our financial results. After that, we will open the call for your questions. We have recently achieved significant progress in advancing our many development programs and in continuing our progress toward becoming a commercial company. As you know, We are currently in a large phase three program with our lead asset, DPLEX-100, for the prevention of surgical site infections, or SSIs. SSI accounts for around 20% of all hospital-acquired infections in the U.S., resulting in extended hospital stay and readmissions, and adding up to $10 billion in annual medical costs. The CLAW will provide further details on this program shortly, but I am excited to report today that our ongoing SHIELD-1 trial in abdominal surgery continues to proceed as planned, and we are succeeding in accelerating enrollment into this study. Importantly, following a Type B meeting request to the FDA in the second quarter, we received a written response from the agency regarding our development plan for DPLEX-100. The FDA indicated that to provide our results are adequate, our proposal for a single phase three pivotal study, SHIELD-1, would present enough evidence of clinical efficacy and safety to support approval of DPLEX-100 for the prevention of SSI in colorectal surgeries. We are very happy that our proposed development plan for the potential approval of DPLEX-100 has been accepted. This will reduce the anticipated cost for the program and provide us with additional financial flexibility overall. Shield 2, our second phase three trial in abdominal surgery, offer broader eligibility criteria including minimally invasive surgical procedures. This trial is also advancing as expected with new sites continuing to open on an ongoing basis. I am also pleased to report that our promising Oncoplex development platform in oncology continues to progress quickly. To this end, I am excited to announce today that our initial target in indication for Oncoplex will be brain tumors. where local delivery can be a game changer. ICLA will provide further details on the status and plan next step for OncoPlex shortly. As you can see, PolyPID has recently achieved important progress throughout our business. We also continue to be supported by a strong balance sheet, which we expect to be sufficient to complete the Shield 1 study, to conduct Shield 2, and prepare for the submission of NDA to the FDA, as well as further advance our OncoPlex development platform. I will now turn the call over to Dikla to provide you with some further updates on our businesses. Dikla, please take it from here.
spk06: 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-1 trial has been strong to date and is expected to continue to accelerate. We now have over 300 patients enrolled into the study, and based on the current environment, we believe that their recruitment rate will continue to gain momentum in the months to come. Approximately 70% of the patients currently enrolled in Shield 1 have a colorectal cancer diagnosis, a rate similar to the 74% seen in our successfully completed Phase 2 trial. Importantly, the high priority nature of the surgical procedures makes them less influenced by the ongoing COVID-19 pandemic worldwide. Other reasons for colorectal surgery include mainly Crohn's disease and inflammatory bowel disease, as was also seen in our completed Phase II abdominal trials. Moreover, the Data Safety Monitoring Committee, in charge with the review of accumulating safety data and study conduct for the SHIELD-1 study, has twice recommended to continue the study without modification. meaning that no major safety issues related to DPEX100 have been observed in SHIELD1 to date. As a reminder, our plan is to enroll 616 to 900 patients within 60 centers in the US, EU, and Israel. Once 500 patients have completed the first month follow-up and have been evaluated for the primary endpoint, the study design provides for a blinded sample size re-estimation based on the overall infection rate observed in the study. Assuming only the low end of around 650 patients plan to be enrolled is necessary, we continue to anticipate the availability of top line data from the SHIELD-1 at the end of this year. Moving on, as Amir indicated, While only positive results from SHIELD1 are needed for FDA approval, we continue to move forward with SHIELD2, which has broader eligibility criteria than SHIELD1, including minimally invasive surgical procedures. SHIELD2 also continues to progress as planned, and although our focus here remains on opening centers, we are pleased with the current rate of enrollment in this study as well. Total enrolled patients in Shield 1 and Shield 2 collectively is now approaching 400 patients. Moreover, we have recruited in just the last year during the pandemic approximately the same number of patients that were enrolled into all five prior clinical trials conducted by the company since incorporation. Now, I'd like to further elaborate on the status of OncoPlex. are intratumoral chemotherapy product candidate for solid tumors, including tumors that are chemotherapeutic resistant. As a reminder, OncoPlex provides local, prolonged, and controlled exposure to dosatexel, one of the most widely used chemotherapy agents in the intraoperative tumor resection setting. The controlled and prolonged release of dosatexel at the residual tumor site may have a critical impact on the prevention of local tumor reoccurrence and the potential spreading of cancer cells, and ultimately improve the overall survival rate of cancer patients. You will recall that we generated compelling data in animals that we are excited about in different solid tumor indications. In addition, we expect OncoPlex to significantly reduce the known toxic systemic exposure to chemotherapy, one of the important attributes of successful local delivery in cancer therapy. And our various animal models to date have indeed shown a very promising safety profile versus systemic chemotherapy. As Amir noted earlier, we are disclosing today that brain tumors have been selected as the initial indication for the Oncoplex intratumoral therapy program. There is currently almost no meaningful treatment option for brain tumors, primarily due to the limited ability of existing approaches to penetrate the blood-brain barrier. Due to the localized nature of Oncoplex, we believe it is highly beneficial as compared to systemic treatments in this specific indication. In addition, its ability to produce the controlled delivery of aggressive drug generating a high local concentration over weeks may further enhance on complex significant potential. Importantly, we expect the availability of additional on complex preclinical data in brain tumors shortly. We believe these results will further support our work towards the completion of our preclinical package for the filing of our pre-IND request with the FDA in the coming months to potentially initiate a phase one clinical trial next year. We also continue to expand our network of top experts and KOLs around our OncoPlex development program to support our efforts in this promising area. We firmly believe that OncoPlex has the potential to become part of the standard of care in the tumor resection surgical setting within multiple solid cancer types. Going back to DIPLEX-100, from a commercial perspective, we have developed a launch plan that details all of the activities that will occur from now until launch for the various functions at Polyped including sales, marketing, market access, and medical. In addition, a resource plan has been developed to assess the hiring needs and timing for each of the different functions, as well as the infrastructure that will be needed in preparation for launch. We are currently in discussions with a number of launch excellence service providers to support the commercial launch. In parallel, we also remain in discussions with multiple large and mid-sized strategic partners, all with significant presence and experience selling in hospital and operating rooms for potential collaboration in Europe and Asia. In the U.S., we are in contact with several large and mid-sized pharmaceutical and medical service companies that we believe will be ideal commercial partners for DPLEX-100. These companies are leaders in commercializing pharmaceutical products and medical devices, have strong established commercial infrastructure, demonstrate a detailed understanding of clinical and pharma economic benefits in the hospital channel, and maintain strong relationships with the hospital's clinical, medical, and administrative staff. We are progressing with these companies and are quite pleased with the high level of interest in DPLEX 100. Before I move on to our recent financial results, I'd like to take a moment to discuss the recent registration statement we filed with the SEC, as it is an important strategic element related to the development of our pipeline. This shelf filing provides us with critical leverage around our commercial partnership discussion, many of which are occurring with companies of much larger size than PolyP. Moreover, this shelf filing allows for further flexibility regarding the structure of a potential partnership agreement. While we have no immediate plans to utilize this shelf filing, we believe it to be a prudent financial tool to have in place. Finally, I'd like to welcome Dr. Anthony J. Senegor to politics. Dr. Senegor will serve as senior medical director and will be responsible for developing our medical infrastructure in the United States and will contribute to the company's NDA submission and commercial launch of DIPLEX-100. Dr. Senegor is a colorectal surgeon with a long track record of academic surgery practice and has significant experience at healthcare startup companies. His background as a practicing surgeon and biopharmaceutical innovator, as well as his unique understanding of the budgeting process within hospital systems, will prove invaluable for our pursuit of reducing the clinical and financial burden of SSI. With that, I will now review our recent financial results. Let's begin with Polipi's balance sheet information. As of June 30, 2021, the company had cash, cash equivalents, short-term deposit, and long-term deposit of $52.9 million, as compared to $66.6 million as of December 31, 2020. Cash used in operations for the three months ended June 30, 2021, totaled $8 million. We expect that our current cash runway will extend into the second half of 2022 and remain confident that this strong balance sheet will allow us to complete our first Phase III trial, Shield 1, in abdominal soft tissue infection to prepare for the submission of an NDA for DIPLEX-100 and further advance our OncoPlex program towards Phase I trials. Now let's turn to our income statements. Research and development expenses for the three months ended June 30, 2021, were $7.4 million, compared to $4.3 million in the same three-month period of 2020, a standing increase due to the ongoing Shield 1 and Shield 2 Phase 3 clinical trials in abdominal surgery. Marketing and business development expenses for the second 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 the market-facing activities as we continue to build our commercial infrastructure. General and administrative expense for the second quarter of 2021 were $2.4 million compared to $2.6 million in the prior year period. The decrease in general and administrative expenses were due to lower non-cash share-based compensation expenses. For the second quarter of 2021, the company had a net loss attributable to ordinary share of $10.5 million as compared to $19.1 million in the prior year period. We will now open the call to your question. Operator?
spk04: Thank you. As a reminder, ladies and gentlemen, if you wish to ask a question, press the star and one on your telephone keypad and wait for your name to be announced. Your first question today comes from the line of Brandon Foulkes from Cantor Fitzgerald.
spk08: Hi, thanks for taking my questions and congratulations on all the progress. Maybe just Firstly, on the potential for label expansion, in your discussions with the FDA, have they given any color in terms of whether this is going to have to be a sort of indication by indication label expansion, or there is potential maybe for Shield 2 to drive broad label expansion? And then secondly, maybe just as we go forward, do you intend to focus on SHIELD2 and Oncosec, any color and prioritization there, or should we expect that they will both continue as expected? Thank you.
spk06: Thank you, Brandon, and it's good to have you on this call. With regards to label expansion, it is clear to us from our discussions with the FDA that it's going to be indication by indication. That's quite definite already from our discussions with regarding general abdominal from the colorectal trial, it's clear that this is something that could be done. And in some of our correspondence and also QIDP, we got a broader abdominal, general abdominal indication versus colorectal. So it's clear that it's not going to be indication by indication. Of course, you know, at the end of the day with the FDA, I can tell you that with the European authorities, when we've aligned the requirement and discussed with them the phase three, they recognize that colorectal resection is the worst case of abdominal, and this could serve the general abdominal as a trial that can serve an abdominal indication. And later on, when we will be reinitiating our STORM trial, and starting to get data on bone-related surgery, we believe we could use that to expand to bone-related indication. Whether we'll need some additional safety data, it is not clear, but this is something that will be discussed in full when we have the phase three data. But clearly, it's not going to be an indication by indication. Your second question was regarding our priority and how we are looking at SHIELD2 versus the oncology. So first of all, our highest priority and our main focus and enthusiasm is going through SHIELD1. Now that we got the breakthrough therapy designation and from this discussion and understanding that one trial is sufficient to get an NDA, We put all the efforts on that and all the resources. And then second in line are exactly SHIELD2 and cancer programs. So the cancer program is still at preclinical stage, so the resources that are required for the coming two years are relatively modest. So it's high priority. We see a lot of value. We're going to be publishing soon additional preclinical data. in brain cancer, and we are very excited about this program. SHIELD2, as it is not a limiting factor for the approval, is going at a more modest pace to allow us to balance the resources, but still, it is a priority. We are opening centers, and our assumption is that once we finalize SHIELD1, we will have resources that could be diverse to SHIELD2. And this is exactly the plan. But we are not holding on the trial at this stage.
spk08: Great. Thank you very much. That was very helpful.
spk04: Thank you. Your next question comes from the line of Gary Natchman from BMO Capital.
spk07: Hi. Good morning. First, for Shield 1 and the pace of enrollment, you're over 300 patients enrolled. What's the pace to get to 500? So when do you think you'll have the results from the sample size re-estimation? I think you had previously said 3Q. And it seems like it could be tough to have the top line data by the end of the year, even if you're going to be at the low end at around 650, like you said, Zikla. And maybe just comment also, you know, how many of the 60 sites have been activated? I think it was two-thirds on the last call. And then also, it sounds like to commercialize D-Plex 100, you're leaning more towards partners at this point, is there still a chance you would commercialize on your own? So just talk a little bit more about how far along you are with partnership discussions and maybe how soon you could announce that and if that would provide some non-dilutive capital for you.
spk06: Right, right. So with regards to the pace of enrollment, so as we said, we've passed the 300 for Shield 1 and we are almost at 400 with both Shield 1 and 2. And the last few months have been quite strong and are getting even stronger. We did not disclose how many of the 60 are open, besides from the two-thirds, and we haven't updated yet. But we are happy with the level of opening centers and also the level of recruitment within those centers. And the 500 still remains where we were thinking that it will happen, which is the end of end of September, early October, this is the timeline for the 500. With this timeline of end of September, early October, for the 500, we still believe we should be in line if we stop at the lower end for the end of the year. Saying that, of course, you know, there is still some COVID starting to show again, and we will need to see how this will affect some of the centers. Up until now, we haven't seen any effect, but again, the numbers are changing quite rapidly over the world, so we will evaluate that as we go, but we are still very confident with regards to the 500 at the end of September, early Q4, and with that, getting to the 600 by the end of the year. You were also asking with regards to commercialization. So maybe I'll go one step backward. We are still, and we, to start with, we were leaning towards licensing out of U.S. And the discussions that we have are out of U.S. Far East, and this is something that we have no intention on commercializing on our own in those territories, so we are quite pleased with those discussions. Of course, those processes take a while, and we cannot evaluate what will be the exact timing for it. With regards to the U.S., we clearly said that we want to have our boots on the ground, and this is why we We made the investment on putting a plan for commercialization, what is required in terms of resources, timeline, hiring. This is what we've done in the previous quarter. And we have a very detailed plan that was done for us with a service provider. And we are also evaluating some potential co-promotional. We do not see ourselves losing control on the product that we have invested so much for almost 10 years now.
spk07: Okay, great. And then just one more on the Oncoplex. So it makes a lot of sense that you're going after brain tumors first. Maybe you could describe how it would be administered with tumor resection. Would it be the same as for SSIs? So, you know, would you need a different formulation or would it be a similar formulation as what you have with D-Plex 100? And also, will you consider other indications to evaluate over the next year or we're really just going to focus on brain tumors for the time being? Thanks.
spk06: Great. Thanks. Thanks for raising that. So, we mentioned that briefly in today's prepared remarks. We've started working with different KOLs and part of those are neurosurgeons to evaluate and see how exactly OncoPlex is going to be administrated and discussed. It seems quite fairly easy to be administrated at this stage. The actual administration is going to be fairly simple. Once the tumor is resect, because we are talking about brain tumor, there is a residual tumor that is left, and at that area there is a quite significant gap that D-Plex will be administrated at that area, releasing the chemotherapy for several weeks. Your second question was regarding the formulation. So OncoPlex is a novel formulation, of course. We do have some similarity, but it's a novel formulation with novel chemotherapy. We spent several months to years to come up with this formulation. It's now quite advanced with the preclinical stage, and this is why we are confident and comfortable sharing data and timelines on its development program. But it's a different novel formulation, which of course is patented separately from all our 101 patents that are already there.
spk07: Okay. And will you look at anything else besides brain tumors or that's just the focus for now?
spk06: Thanks. So we've already done some work with other solid tumors. We are focusing initially on solid tumors and seeing very nice preclinical data. We think that for us at this stage, it makes more sense to be more focused, to get some progress, to get to the FDA. Later on, when we get some additional data we'll see in terms of prioritization and focus what makes sense in terms of expanding because we do believe that OncoPlex could be using more than one indication, but for now we are focusing to move ahead to the clinics.
spk07: Okay, great. Thanks for the additional color.
spk06: Thank you, Gary.
spk04: Thank you. Your next question comes from the line of Balaji Prasad from Barclays.
spk05: Hi, good morning, and thanks for taking the questions. Great to see the progress. Couple of questions, maybe just going back to Gary's question on brain tumor. Were there any other reasons for you to select this indication apart from the fact that this is a very challenging tumor to treat systemically? I'm asking because I just want to think about how we thought about other tumors which are much more common, like breast or prostate, and why did you rule them out? So that's one. And secondly, on the progress in SHIELD1, from some updates that I've seen, it looks like you've activated 46 sites currently out of the 60. Please correct me if I'm wrong, and thanks.
spk06: Thanks, thanks Bhaji. I'll start with the first question, but just I couldn't hear you well. How many centers you mentioned?
spk05: I thought we had activated 46 out of 60 centers. So is this right? And when are the other 14 going to be activated?
spk06: Okay. So I'll start with OncoPlex. And this is a great question because I think it's... also demonstrate the power of our approach. So, of course, we went through to brain cancer because it's an unmet need, maybe the highest unmet need in cancer today, but it fits so nicely to our approach. One of the challenges with brain tumor is the brain blood barrier. It's the BBB. It's prevent from majority of the drugs out there, systemic drugs, to reach the brain. Drugs that if they could have reached the brain, maybe they would have been effective, but they are not able to reach. And what's nice about PolyP's approach, about the PLEX approach, that it's getting where it needs to be. There is no need to use the systemic administration. We are just there. So we have the ability to release the chemotherapy where it's needed. That's one aspect. The other aspect is the fact that we have the ability to have a prolonged release. There have been attempts to use chemotherapy locally. Different attempts in the past. There are some drugs, not so successful drugs that are having, none of them had the prolonged local control release that we are suggesting. And this could be a real game changer, as Amir mentioned. So those are the two main reasons to pursue grain tumor in addition to the fact that it's a huge unmet need. Your second question was regarding the number of centers that are open. So we didn't disclose the exact number, but it's a higher number than the 46. I don't want to go into the exact number because this is not something that we updated. We did update on the actual patient, which is, of course, the most important number in these days.
spk05: Thank you, Dilpa. I think that's helpful on both the questions.
spk06: Thank you.
spk04: Thank you. Your next question comes from the line of Elliott Wilbur from Raymond James.
spk02: Hi, guys. This is actually Michael Parlarion for Elliott. Thanks for taking my questions. So first one, I guess, piggybacking off of the prior partnership discussion, just wondering how – nature of discussions have kind of changed now that the FDA indicated that a single phase three trial might be sufficient to file an NDA. And then also wondering if you guys have any potential plans for expanding your manufacturing capabilities to address the higher expected demand, you know, after the first 30 months of launch. Thank you.
spk06: Thank you. So I'll start with your second question. We do have plans on expanding the manufacturer. It's more than plan. We are evaluating different options as well as starting to plan for that. And this is quite progress. We are not going to take any financial committees at this stage, but we are looking on options that could be utilized quickly once we have the green light for the data. So this is something that a lot of hours has been put into, evaluating the requirements, evaluating the property that is needed, doing some planning, as well as understanding what kind of machinery will be needed for the full-scale manufacturing. The data is there and we have the ability now relatively in a short time to implement this plan. With regards to your second question, which was on what effect had the breakthrough therapy and the fact that we need only one phase three, I think it's open additional discussions. That's one thing that we didn't have prior to that. But it also gave confidence to everyone that this is something that needs to, that the discussions need to be on a relatively fast track if we want to get them to the end point prior to data. If it's going to be, if we're going to sign after the data, then it's a different terms and a different type of agreement.
spk02: Okay, thanks. And then one more quick one just on the indicated cash runway out to the second half of 2022. This seems a little bit more favorable than your prior commentary. Just wondering if that is solely because of the single phase three trial indication from the FDA or if there are other moving parts that are affecting the cash runway. Thanks.
spk06: That's exactly that. It's because of the one phase three. It gave us some more flexibility.
spk02: Okay, perfect. Thanks for taking my questions, guys.
spk06: Thank you. Thank you very much.
spk04: Thank you. Your final question at this time comes from the line of Jim Malloy from Allowance Global Partners.
spk09: Hey, guys. Thanks for taking my question. I was wondering if you could speak a little bit to, I mean, you alluded to it on the call, of the Delta variant. I know it's been an issue in Israel in particular, and it's really hitting the U.S. currently. Can you speak a little bit to the Delta variant and how that may be impacting the Shield 1? It just, some of the questions as well, it seems like it might be pushing the first quarter 22 for the data, seeing that you're at, you know, just over 300, you need to get to five or six for the phase, for the first phase three for Shield 1. You can speak to that. I don't think pushing back a quarter is that big a deal, but what are your thoughts on when you think you might have a better insight if that might happen?
spk06: Sure, sure. So for now we don't see an impact. It doesn't mean that, you know, we've been with this pandemic for long enough to understand that it's changing quickly and you cannot really predict what will be the situation in the days to come. But for now, we don't see an impact on recruitment rate. Probably one of the favorable things in that regard is that most of our patients are cancer patients. And this is deemed to be a priority surgery, and those surgeries are not delayed, at least not at this stage of the pandemic. With regards to the timelines, we said also in our recent shelf registration that if we are at the lower end, we still think that this will be happening this year. If we decide we want to go for a larger sample population, patient population, that will extend the study, but we don't see any, as you said, we don't expect anything dramatic. We will be able to give more exact timelines when we reach the 500 and evaluate the exact number of patients required.
spk09: Okay, a quick follow-up. Could you put any color around the commentary from the FDA, provided the study results are adequate? Any parameters you can put around that for us looking out, looking from the outside, looking in on what will be adequate versus what might not be?
spk06: So that's what we have presented in the protocol. That's what it means adequate. It means that what we presented in terms of our statistical plan, we meet the statistical plan that was presented. There's no need for higher bar than what was presented to the FDA and approved.
spk09: All right, great. Thank you. Final question then. Any thoughts on timing on when you might, I know partnerships are hard to put time on. Do you think it's post the Shield 1 data for announcing potential partners ex-U.S. or even in the U.S.?
spk06: It's hard to say at this stage. We wouldn't want to commit at this stage what will be the timeline, whether those will be signed after the data or prior to the data. But as we said already, we are pleased with the discussion and the level of interest that D-Plex 100 is getting. Great.
spk09: Thank you for taking the questions.
spk06: Thank you, Jim. Thank you very much.
spk04: Thank you. I'd now like to hand back to Amir for any closing comments.
spk03: Thank you for joining our second quarter 2021 Hermann Conference call. I would like to retreat how excited we are about the progress we have achieved today, specifically in our DPLEX-100 clinical program, as well as the significant opportunities that lie ahead of us. We remain grateful to our team members and all our external partners for their firm commitment to our mission and their support in continuing to advance efficiently of bringing D-Plex 100 and OncoPlex healthcare providers and patients as fast as possible.
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