PolyPid Ltd.

Thank you all for participating in PolyPib's fourth quarter and full year 2021 conference call. Joining me on the call today will be Amir Weisberg, Chief Executive Officer, and Dikla Choskits-Oxelbrod, Executive Vice President and Chief Financial Officer. Earlier today, the company released financial results for the three months and 12 months of December 31st, 2021. A copy of the press release is available in the investor section of the company's website, www.polypid.com. I'd like to remind you that on this call, management will make forward-looking statements in the meeting of the federal securities laws. For example, management is making forward-looking statements when it discusses the expected recruitment for trials, the interim analysis, its timing and its potential implications, 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 D-Plex 100 and Oncoplex, the company's potential partners, and the sufficiency of the company's 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 could cause actual results or events to materially differ. Accordingly, you should not place a new reliance on these statements. I encourage you to review the company's filings with the SEC, including without limitation the company's Form 20F, which identify specific factors which may cause actual results or events different materially from those described in the forward-looking statements. PolyPID disclaims any intention or obligation, except as required by law, to update or revise financial projections or forward-looking statements, whether because of new information, future events, or otherwise. The conference call contains time-sensitive information and speaks only as of the live broadcast today, February 9th, 2022. At 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 our team at PolyPID, I would like to welcome everyone to our fourth quarter and full year 2021 earnings call. I will begin today with some brief comments on a planned transition in our senior leadership team. Dikla will provide a detailed business update, and then she will review our financial results, after which we will open the call for your questions. As you know, we recently announced a planned CEO transition. This year, I will be reaching the formal retirement age which is typical for a company executive in Israel. So, effective on July 1st, 2022, I will retire as a CEO, a role in which I have fulfilled for over 11 years. It has been an honor to ever serve as a CEO of Polypid throughout the development phase of our company. Our board of directors has appointed Dikla as PolyPIT's chief executive officer effective July 1st, 2022. As we prepare for our next phase of growth, Dikla is the ideal future leader of the company. She brings clear focus on operations and proven track record on driving growth and innovation. She has also led our strategic and financial planning and capital raising efforts. including our IPO in 2020. I look forward to continuing to work closely with Dikla in order to ensure a smooth transition. I would also like to take a moment to acknowledge the planned retirement of Dr. Shaul Mukhtar, Chief Operating Officer, who will be retiring from the company next month. We would like to thank Shaul for successfully leading the scale-up of the manufacturing capabilities, which is now complete and advancing our clinical development programs. We believe that PolyPID is in the strongest operational position in its history, and we are well positioned for long-term success. We continue to strongly believe that our current balance sheet will be sufficient to complete the SHIELD-1 study and prepare for the submission of NMDA to the FDA, as well as further advance our OncoPlex development platform. With that, I will now turn the call over to Dikla to provide some further updates on our business. Dikla?

Thank you, Amir, and thank you all for joining us on the call. First, on behalf of the management team, We would like to thank Amir for his leadership of PolyPID for over a decade. His strong belief in our Plex technology and its potential benefit for patients has been a driving force at our company. He has recruited and built a strong management team, established our manufacturing base that lets us control these critical aspects of our business, and established our operation team in Israel and the U.S. It has been my privilege to work with Amir, and we look forward to his continued leadership and active involvement for the next several months. Next, I would like to express how grateful and proud I am to have the opportunity to lead PolyPib at this exciting time in our corporate evolution. You won't find many Israeli biopharma companies that have reached our current stage, where we are well on our way to complete a phase three pivotal trial with several hundreds of patients, and this is a milestone that we are approaching at a steady pace. I'm excited to continue working with our talented and passionate team to achieve further clinical and operational success and execute on the many opportunities that lie ahead for us. With that, I will now provide a brief update on the status of our pipeline. Most importantly, a few days ago, the FDA agreed to polypid's request for the addition of an unblinded interim analysis in SHIELD-1, a Phase III study evaluating DPLEX-100 for the prevention of abdominal soft tissue surgical site infection. Our request was based on the FDA's recently established guidance for pharmaceutical companies to address the impact of COVID-19 on meeting enrollment and study objectives for clinical trials conducted during the ongoing pandemic. The interim analysis is expected during the second quarter of 2022 once 750 patients complete their 30-day follow-up and will allow for early trial stopping due to efficacy, fertility, or for sample size reassessment. An early stop to the trial will occur if the efficacy result on the SSI rate is better than expected. This interim analysis is an exceptional opportunity for polypids to more precisely define the targeted patient enrollment range for the SHIELD1 studies. Also as planned, a recent blinded sample size reassessment was conducted following the completion of the 30-day follow-up period for the 500 patients enrolled, and it supports the continuation of SHIELD1 trials. Looking forward, the pace of enrollment in the SHIELD1 trials continues to be robust, and we expect this trend to continue in 2022. targeting 200 to 250 enrolled patients per quarter. We now have approximately 680 patients enrolled into the study across approximately 60 centers in the United States, Europe, and Israel. As such, we expect to reach the 750 enrolled patients for the interim analysis by the end of the first quarter. We are very pleased with the rate of enrollment, especially considering the holiday season and the disruption to hospitals caused by the surge of COVID-19 infections driven by the Omicron variant. From a financial standpoint, as discussed on our last call, because we only need to conduct Shield 1 to potentially receive FDA approval and do not need to ramp up enrollment in Shield 2, We continue to expect that our cash runway will be extended to the end of this year. SHIELD2 has currently over 200 patients enrolled, and as a reminder, it includes broader eligibility criteria, including minimally invasive procedures. Now let's switch gears to discuss commercialization. In terms of potential collaboration for the future commercialization, of DIPLEX 100 in the US, Europe, and Asia, we remain in dialogue with several large and mid-sized pharmaceutical companies that we believe would be ideal commercial partners for DIPLEX 100. As we have said previously, these companies are leaders in selling pharmaceutical products to the hospitals, often with current portfolio of marketed products have strong established commercial infrastructures, exhibit a deep understanding of clinical and pharmacoeconomic benefits in the hospital channels, and maintain strong relationships with the hospital medical and administrative staff. Importantly, there continues to be high level of interest in DPLEX 100 from these potential partners. While there is currently no formal timeline related to executing any potential partnership in the U.S. or other regions, our most critical objective is to maximize the value of DIPLEX 100 in any potential transaction. So if and when we do finalize partnership agreement, this will be the determining factor. As we continue to advance DIPLEX 100 in the clinic, execute on our commercial prep plan, and conduct partnering discussions, we also remain focused on building the significant body of evidence in support of the safety and efficacy of these promising product candidates. As such, we plan to have a number of peer-reviewed publications and data presentations at important medical meetings throughout 2022. This is obviously an important strategy for all of our key audience, physicians, payers, and potential partners. Now, I'd like to further elaborate on the status of Oncoplex, our intratumoral chemotherapy product candidate, initially targeting solid brain tumors, including those that are chemotherapeutic resistant. As a reminder, Oncoplex provides local prolonged and controlled exposure to DOSAT-XL in the intraoperative tumor resection setting. As you know, DOFAD Excel is one of the most widely used chemotherapy agents worldwide. Following a recent pre-investigational new drug meeting late last year, the FDA indicated that OncoPlex will be considered as part of a potential first-line combination therapy of patients newly diagnosed with GBM. This is very encouraging news for our company. We believe this is indicative of its significant potential to treat brain tumors and could have substantial commercial benefits if shown to be safe and effective in clinical trials and subsequently approved. We are now focused on working on the design of our planned Phase I-II trial of Oncoplex with our world-class oncology advisory board, for which we are thrilled to add two distinguished members to this group over the past few months. Dr. Frederick Klan is the Chairman of Neurosurgery at the University of Texas MD Anderson Cancer Center and is co-leading MD Anderson's Glioblastoma Moonshoot Initiative. This initiative is dedicated to saving the lives of patients throughout the development of new therapies and better treatment approaches. Dr. Lan is considered as one of the world's foremost experts in the treatment of brain tumors. Dr. Mitchell Berger is the Guggenheim Professor of the Department of Neurological Surgery at the University of California, San Francisco. He serves as the director of the UCSF Brain Tumor Research Cancer, a leader in translational research and is a principal investigator of a specialized program of research excellence in neuro-oncology funded by the National Cancer Institute. We are working enthusiastically with these world-renowned physicians and are excited to have the opportunity to leverage their vast experience and commitment to innovation in brain cancer. With that, I will now review our fourth quarter's financial results. Let's begin with PolyPitch balance sheet information. As of December 31, 2021, the company had cash, cash equivalents, and short-term deposits of $32.2 million as compared to $66.6 million as of December 31, 2020. Cash used in operations for the 12 months ended December 31, 2021, totaled $32.4 million. Now let's turn to our income statement. Research and development expenses for the three months ended December 31st, 2021 were $9.5 million compared to $5 million in the same three-month period of 2020. The increase in research and development expenses resulted from the increased cost and activities related to the ongoing Shield 1 and Shield 2 phase 3 clinical trials in abdominal surgery For the full year ended December 31st, 2021 and 2020, R&D expenses were $30.4 million and $17 million respectively. Marketing and business development expenses for the fourth quarter of 2021 were $1.1 million compared to $710,000 for the same period of 2020. The increase in marketing and business development expenses are due to initiating the prelaunch activities. General and administrative expenses for the fourth quarter of 2021 were $2.8 million, slightly higher than the $2.2 million recorded in the prior year period. For the fourth quarter of 2021, the company had a loss attributable to ordinary shares of $13.2 million as compared to $7.5 million in the prior year period. This was primarily driven by our solid rate of patient recruitment in the Shield 1 and Shield 2 Phase 3 clinical trials and the associated costs. For the year ended December 31, 2021, the company had a loss attributable to ordinary share of $42.3 million compared to a loss of $39 million in the full year 2020. We will now open the call to your questions. Operator?