PolyPid Ltd.

Thank you all for participating in PolyPede's fourth quarter and full year 2023 earnings conference call. Joining me on the call today will be Dikla Chachkis-Axelbrad, Chief Executive Officer of PolyPede, Joni Misalawan, PolyPede's Chief Financial Officer, and Ori Warshawski, Chief Operating Officer of PolyPede. Earlier today, PolyPede released financial results for the three and 12 months ended December 31st, 2023. A copy of the press release is available in the investor section on the company's website, www.polypeed.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 timing for recruitment and top-line results from the SHIELD 2 trial and of the unblinded interim analysis, the planned new drug application submission for DPLEX 100, the potential impacts and uses for Oncoplex and the Plex platform, the company's expected cash runway, and the potential to receive additional funds if warrants are exercised. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including 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. you should not place undue reliance on these statements. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's Form 20F, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. PolyP 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, February 14th, 2024. With the completion of these prepared remarks, it is my pleasure to turn the call over to Digla Traskis Axelrod, CEO of Polypeed. Dikla?

Thank you, Brian. On behalf of our team at Polypeed, I would like to welcome everyone, including our new shareholders, to our fourth quarter and full year 2023 earning call. We are thrilled with the significant progress recently achieved throughout our business. As we expected, enrollment in our ongoing SHIELD2 pivotal trial for DIPLEX-100 for the prevention of abdominal colorectal surgical site infection has began to ramp up. We have also generated some new, highly compelling preclinical data with OncoPlex that demonstrates its potential in oncology. Moreover, in order to support our robust clinical development efforts, we successfully completed a $16 million financing that included participation from multiple new U.S. life sciences-focused investors. I will discuss all of this in greater detail shortly, but let's begin with the status of SHIELD2. The study has now enrolled more than 100 subjects, and approximately 40 centers are currently open. As a reminder, we intend to conduct an unblinded interim analysis once approximately 400 patients a planned total of 600 subjects complete the 30-day follow-up, which is expected to occur in mid-2024. Topline results are anticipated in the second half of this year. With respect to the expected recruitment rate, as we said on our last call, once the site is fully up and running, which takes several weeks following its being formally opened, we anticipate approximately one and a half patients being recruited into the trial per center per month, and we expect to have overall approximately 60 centers opened and recruiting patients. Moving on, to reiterate what we have said previously, we have a clear regulatory pathway for the potential NDA submission for DPLEX-100 in the U.S. Last year, the FDA acknowledged not only that the SHIELD1 result may provide supportive evidence of the safety and efficacy of DIPLEX100 in patients with large surgical incisions, but also confirmed that, if successful, SHIELD2 is sufficient to support a potential NDA submission. We continue to strongly believe that SHIELD2 is a de-risk phase retrial, giving the more focused patient population in which we have already generated highly positive data in Shield 1, and the fact that it will not be conducted within the tight COVID-related restrictions that were in place during the pandemic and throughout the duration of Shield 1, we are also leveraging key learning from Shield 1 related to the sites involved in the study. While we are targeting approximately 60 centers for Shield 2, around the same number as Shield 1, We now have firm knowledge of the best performing sites from Shield 1 in terms of recruitment, patient monitoring, and good clinical practice. We believe this to be essential in the execution of Shield 2. We have also enhanced our clinical operation team, another key step towards supporting a successful study. Moving on. I'm excited to report today some new preclinical data generated with our Oncoplex product candidate. We have recently demonstrated the ability of Oncoplex to be injected intratumorally while having effective and prolonged anti-tumor impact. A single intratumoral injection of Oncoplex significantly reduced tumor growth and increased survival in two well-established and commonly used tumor animal models, urine melanoma, and murine colon carcinoma. Oncoplex has now shown efficacy in all models it has been tested in and across the various therapeutic approaches, either as a neoadjuvant via intratumoral injection or as an adjuvant via post resection application in the tumor bed. To date, Oncoplex has been tested in six different models and applications. all with highly effective results. The effect of Oncoplex is attributable to the Plex technology's unique mechanism of action that allows constant and prolonged release of the therapeutic chemotherapeutic drug, docetaxel. The locality, combined with the prolonged and constant release rate, can promote deep penetration of the drug into the tumor with minimal systemic exposure to the chemotherapeutic agent. The intratumoral injection of the Plex platform could enable it to be used as an interventional oncology treatment, not only with docethexel, but also with additional chemotherapeutics or other types of molecules, such as antibodies, D-specifics, and nucleic acid. Shifting gears. We were pleased to recently significantly modify our balance sheet by successfully closing a private placement financing, or PIPE, for $16 million of gross proceeds. The PIPE syndicate was comprised of new and existing investors, including participation from U.S. life science-focused investors, Daphna Capital Management and Rosling Advisor. Due to the PIPE, the investor purchase $3,371,312 of the company's ordinary share, or pre-funded warrants in lieu thereof, at a purchase price of $4.81 per share for gross proceeds of $16 million and received warrants to purchase up to the same amount of shares of common stock with an exercise price a $5.5 per share for an overall exercise price of $19 million. The warrants expired upon the earlier of two years from the date of issuance and 10 trading days following PolyPID's announcement of a positive recommendation by the Data Safety Monitor Board regarding the company's unblinded interim analysis in its SHIELD II Phase III trials. of DPLEX 100, resulting in the stopping of the trial due to positive efficacy. The initial $16 million extended our cash one way until late in the third quarters of 2024 and behind the anticipated timing of SHIELD 2's planned unblinded interim analysis. If the results of the unblinded interim analysis are positive and all warrants issued in the financing are exercised, the additional $19 million would fund PolyPIT to the start of a planned new drug application submission for DPLEX-100. I'd like to take the opportunity to thank all of the investors who participated in this financing for their confidence and support. With that, it is my pleasure to turn the call over to Johnny. Johnny?

Thank you, Nicola. As of December 31st, the company had cash and short-term deposits of $5.3 million as compared to $12.6 million at the end of 2022. This does not include the net proceeds of approximately $15 million generated from the pipe financing closed in January 2024. As Dikla noted, that our pro forma cash balance will be sufficient to fund operations into late third quarter 2024. Now, let's turn to our income statement. Research and development expenses for the three months ended December 31st, 2023 were $4.6 million compared to $4.7 million in the same three-month period of 2022. R&D expenses in the most recently completed fourth quarter were driven by the ramp-up of the ongoing SHIELD II Phase III trial. For the full year ended December 31, 2023 and 2022, R&D expenses were $16.1 million and $28 million, respectively. Marketing and business development expenses for the fourth quarter of 2023 were $193,000 compared to $350,000 during the prior year period. General and administrative expenses for the fourth quarter of 2023 were $1.2 million compared to $1.6 million recorded in the same three-month period of 2022. For the fourth quarter of 2023, the company had a net loss of $6.4 million as compared to $6.6 million in the fourth quarter of 2022. For calendar year 2023, the company had a net loss of $23.9 million compared to a loss of $39.6 million in the full year 2022. Finally, we continue to execute well on our cost containment initiatives. As such, our net cash use in operating activities for full year 2023 decreased by $17 million as compared to calendar year 2022, from $34.3 million to $17.3 million. With that, we will now open the call to your questions. Operator?