PolyPid Ltd.

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?

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.

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?