PolyPid Ltd.

Greetings and welcome to Polypeed's second quarter 2025 conference call. At this time, participants are in a listen-only mode. As a reminder, this call is recorded. And I would now like to introduce your host for today's conference, Yuda Liebler from Arts Capital Market. Mr. Liebler, you may begin.

Thank you all for participating in Polypeed's second quarter 2025 earnings conference call. Joining me on the call today will be Dikla Chachkis-Axelbrod, Chief Executive Officer of PolyPID, Johnny Misalawin, PolyPID's Chief Financial Officer, and Ori Warschowski, Chief Operating Officer, U.S. of PolyPID. Earlier today, PolyPID released its financial results for the three months ended June 30th, 2025. A copy of the press release is available in the Investors section on the company's website, available at www.polypid.com. I'd like to remind you that on this call, management will make forward-looking statements within the meaning of the federal securities law. For example, management is making forward-looking statements when it discusses DPLEX 100's potential benefits, including its potential to address a significant unmet medical need and to substantially reduce the burden of surgical site infections, improve patient outcomes, and generate meaningful healthcare cost savings. The expected regulatory submissions and their timing, the aim of GLP-1 program and its potential to address significant unmet medical needs in the treatment of metabolic diseases, the company's expected cash runway, and the potential partnership opportunities for DPLEX 100. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the company's control, including the risks described from time to time in its SEC filings. The company's results may differ materially from these projections. These statements involve material risks and uncertainties that could 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 the SEC including, without limitation, the company's annual report on its Form 20F, filed on February 26, 2025, which identifies specific factors that may cause actual results or events to differ materially from those described in the foreign looking statements. OEP 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 13th, 2025. With the completion of those prepared remarks, it is my pleasure to turn the call over to Dikla Chachkis-Axelbrad, CEO of PolyPID. Dikla.

Thank you, Yuda. On behalf of our team at PolyPID, I would like to welcome everyone to our second quarter 2025 earnings conference call. The second quarter of 2025 was truly transformational for PolyPID, marked by the successful results of our SHIELD2 phase 3 trial, which demonstrated significant clinical benefits of DIPLEX-100 in preventing surgical site infections or SSI in abdominal colorectal surgeries. As announced in June 2025, the study showed a statistically significant reduction of 38% with a p-value below 0.005 in the primary endpoint, which, as a reminder, is the combination of deep and superficial SSIs, all-cause mortality, and surgical re-intervention. In addition, we demonstrated a robust 58% reduction in the rate of surgical site infection in patients treated with DPLEX-100 versus standards of care with a p-value below 0.005. including a significant reduction in deep surgical site infection with five cases of deep exercise representing approximately 14% out of all exercise in the standard of CAR arm versus zero in D-Plex100 arm with a p-value below 0.05. Importantly, we also saw in the study a clear and statistically significant 62% reduction of patients with an asepsis score over 20. The asepsis score reflects the severity of the wound infection appearance and the clinical consequences of the infection. So DIPLEX-100 not only markedly decreased the rate of superficial and deep SSIs, but even when SSIs occurred, in the DPLEX-100 arm, they were less severe and caused less medical burden, such as prolonged hospitalization or use of IV antibiotics. These robust results validated our conviction in DPLEX-100 potential to address a significant unmet medical need and have generated substantial interest from potential commercial partners. We are extremely encouraged by the enthusiastic reception from healthcare professionals, lead surgeons in different types of surgeries, as well as thought leaders in the field of surgical site infection. All recognize DIPLEX 100 potential to substantially reduce the burden of surgical site infection, improve patient outcomes, and generate meaningful healthcare cost savings. In addition, Farther analysis of the Phase III SHIELD II trial safety data revealed a good safety profile with no difference in serious treatment emergent adverse event between patients treated with DIPLEX-100 versus standard of care. This safety profile farther supports the DIPLEX-100 potential as a well-tolerated prophylactic treatment option for patients undergoing major abdominal surgeries. Following these positive phase three data, we are on track with our new drug application or FDA preparation. Our next steps include a pre-NDA meeting with the FDA planned by the end of this year, leveraging our fast track and breakthrough therapy designation to facilitate regulatory review. We anticipate submitting the NDA to the FDA in early 2026 and marketing authorization application or MAA submission in Europe shortly thereafter. Shifting gears, we recently made significant progress on our GLP-1 program, which leverages the company's extensive long-term experience. This initiative aims to deliver approximately 60 days no-burst GLP-1 receptor agonist peptides for improved patient compliance and enhanced therapeutic outcomes in the rapidly growing weight loss and diabetes market. We have formally unveiled this program early in the current quarter, and we believe it represents an exciting opportunity to expand our therapeutic footprint into the fast-growing metabolic disease market. Following the end of the quarter, yesterday, we announced the appointment of Dr. Ruth Weiser, MD, MBA, as chief medical officer of the company transitioning from a role on the board of directors. Dr. Kaiser's blacks bring extensive medical, R&D, and business development expertise to this executive position, strengthening the company's leadership team as it advances towards NDA submission and commercial preparation following the positive phase 3 shield to result. From a financial perspective, we have significantly strengthened our balance sheet through a successful warranted exercise in human transaction, extending our cash flow one way well into 2026. With that, I will now turn the call over to Ori, our COO of the U.S., to provide more details on our commercial preparations and partnering efforts for DIPLEX 100. Ori?

Thank you, Dipal. Following the successful completion of the Phase III results to trial positive efficacy data, we have intensified our commercial preparation activities and partnership discussions. We believe that the positive Phase III results have validated the substantial market opportunity for DPLEX-100. To reiterate, based on our QVC data, we believe the total addressable market for DPLEX-100 in the U.S. is just over $12 million. total surgeries annually, with approximately 4.4 million of those being abdominal surgeries and an additional 2.1 million abdominal procedures principally in gynecology and neurology. The 58% reduction in SSI demonstrated in the phase 3 trial is particularly significant when considering the substantial costs associated with SSI. As a reminder, SSI Size are estimated to cost the U.S. health care system up to $10 billion annually, extend hospital stay by 9.7 days on average, and increase hospitalization costs by more than $20,000 per patient admission. This 100% potential ability to significantly reduce these infection rates represent a compelling value proposition for health care systems, and most importantly, for patients. With respect to our partnership strategy, we continue to believe that identifying a U.S. partner with a dedicated hospital-focused sales force and significant resources will enable D-Plex 100 to maximize its sales potential in the U.S. Following the positive Phase 3 data announcement, we have seen increased interest on potential partners, and we are currently evaluating the relevant opportunities. of course, provide updates on these discussions as appropriate. For the European market, as we've mentioned previously, we already have an exclusive licensing agreement in place with Advance Pharma to commercialize D-Flex 100 across European countries. And we are actively working together to plan and implement pre-launch activities to maximize D-Flex 100's anticipated launch in Europe. And with that, I will now turn the call over to our CFO, Johnny, to review our financial results. Johnny?

Thank you, Lori. We are pleased to report our financial results for the second quarter of 2025, which reflect our continued investment in advancing our pipeline while maintaining fiscal discipline. Starting with our balance sheet, as of June 30, 2025, The company had cash and cash equivalents of $17.4 million and short-term deposits of $12 million for a total of $29.5 million. This represents a significant improvement from our cash position of $15.6 million as of December 31, 2024. The increase was primarily driven by the a successful warrant exercise inducement transaction that Declan mentioned earlier. We expect that our current cash balance will be sufficient to fund operations well into 2026. Now turning to our income statement for the three months ended June 30, 2025, research and development expenses were $6.2 million compared to $4.8 million in the same period of 2024. The increase was primarily due to activities related to the completion of the Shield 2 phase 3 trial and preparation for regulatory submissions. General and administrative expenses were $2.5 million compared to $1.1 million for the same period of 2024. The increase was primarily due to non- cash expenses related to performance-based options, or PSUs, following the successful SHIELD II phase three trial, which triggered the vesting of the PSUs. Marketing and business development expenses were $0.7 million, compared to $0.3 million for the same period of 2024. For the second quarter of 2025, the company had a net loss of $10 million or 78 cents per share, compared to a net loss of $6.3 million or $1.25 cents per share in the second quarter of 2024. For the six months ended June 30th, 2025, R&D expenses were $12.3 million, compared to $9.8 million for the same six-month period of 2024. G&A expenses were $3.7 million, compared to $2.1 million for the same period of 2024. Marketing and business development expenses were $1 million, compared to $0.5 million for the same period of 2024. The company had a net loss of $18.2 million, or $1.48 per share, compared to a net loss of $12.7 million, or $2.62 per share. And the six-month period ended June 30, 2024. Now open the call to your question.

Operator? Thank you.

If you wish to ask a question, please press star 1, 1 on your telephone, and wait for your name to be announced. To withdraw your question, please press star 1, 1 again. We will take our first question. The first question The next question comes from the line of Chase from Craig . Please go ahead. Your line is open.

Good morning. Thanks for taking the questions. Maybe just on the NDA filing. So if I think about what is going to be done between now and 1Q, can you kind of walk us through the larger items? And then particularly, obviously, on the CMC side, can you talk about your preparations as they continue to progress on knockout products, et cetera? preparing for that one key filing.

Sure. We are in the finalization stages of the CMC and the clinical module. Those will be the first that we will submit. There are some data points that are still being collected, and obviously the preparation itself and the finalization of the document is taking time. But there's documents have already been reviewed by our external FDA consultants as a first step. And we are now preparing, first of all, the CSR and all the package for pre-NDA meetings. And we would like to meet with the FDA before the end of this year for pre-NDA meetings to get an agreement while as we are prior to submitting the NDA, and then early 2026, the first quarter, to submit the NDA. In parallel to that, obviously, we are in preparation for the GMP PLI review. This is something that is ongoing. The facility... has been reviewed a couple of times already, both by the Israel Ministry of Health and European QP, but still there is always the rule to prepare further for an FDA review and get the facility ready for the commercialization stage. A pre-NDA meeting request, which we expect that will occur later in the year, an early QA

So early next year, Q1, we will submit the NDA.

Got it. Maybe just one on... Can you talk about kind of the path forward for the GLP-1 program as far as when we might see some data there and kind of, you know, early stage plans in that program? And then just second and last for me, if we think about the Advance Partnership, when... Should we expect some potential milestones from that kind of post-data? Is that mainly going to be regulatory, or will there be anything that triggers from the data itself in Phase 3?

Sure. So the GLP-1, which is a program that we're very excited, both because of the broader consequences of it having a peptide that is released, injected in a form that the support an average of 60 or about 60 days of constant and linear relief, but also as this being a field with so much unmet need and patients that still do not benefit from the current medication and endurance being quite harsh on these medications. So what we think is that Our main benefit is from both the prolonged, both the aspects that we can have a relatively longer than what is out there drug, and also the aspect of avoiding the burst that is characterized in current regimental treatment. In terms of the timeline, we are now going into more of a preclinical study where what What we would like to show is both in NPK to support the risk profile that we see in cells, in NPK studies, in the live stream. This is also very important for potential partners. At this stage, we see these programs, the semi-glutides, started with the GLP-1, but extended being pursued into the clinic with cooperation with one of the large players in this field.

And then just on the advanced partnership.

Yes, thank you. Thank you. I just wanted some housekeeping. We're getting some messages that the line is not great, so please tell us If you want me to repeat anything that was said earlier.

So regarding the partnership, we are in active and continuous. The partnership is active and continuous both through the clinical stage as well as now in preparation for the submission as part of the relationship will also be reviewing the MAAC mission. And the question was, where should we expect milestones? So definitely, there is a milestone that is expected. And more than three years has passed since we've signed with ADVANCE. Both ADVANCE and us think that there are some adjustments that need to be effected. doing now. I don't expect it to take long. And once there is anything to announce around that, we will obviously announce. But as I said before, we are very pleased with the relationship. I think there is a trust that has been built during the years and appreciation and advance are now starting to put more effort into the pre-launch activity.

Thank you.

Thank you.

We will take our next question. Please stand by. Please continue to stand by. Your conference will resume shortly.

Your next question comes from the line of Roy Buchanan from Citizens. Please go ahead. Your line is open.

Okay, great. Thanks. My line sounds much better now. I'm not sure if she's on the call or not, but I had a couple for Dr. Twizer's accent. If so, is she here? Can you guys hear me? Could you please repeat the question? Oh, I like that again. Yeah, I'll try to repeat it. So if Dr. Kweiser is on, I was going to ask, I guess the most compelling reason for joining the company's chief medical officer, you know, D-Plex 100 or the broader Plex platform, if she could Just comment on that. And then what she's going to focus on, I guess, most intently for the next 12 to 24 months.

Sure. So first of all, I think this is a really nice addition for our management team. It's nice because Dr. Norita has been on our board for almost two years. So she knows the team intimately. She knows the programs intimately. She knows the good and the bad and everything, and still, and obviously, she could choose also other positions, but she decided to join us, and we're very pleased, and I think she's going to be a great addition to the team. With regards to how we view the CMO position and what is going to be her role going forward, specifically looking at the company two years or so. We are now in a position to start to do some pre-launch activities, some pre-commercialization activities, as well as support all the regulatory efforts. We have a great safety data that we want to have it all in front of as much surgeon as possible. Data will obviously, we'd like to put it in the best peer-reviewed journal. It's part of a the preparation, maintaining a robust clinical advisory board to support broadening the label, as well as the projectivity. We have the pipeline, which is another point that we would like to send in directly. Our research team will always allow another doctors and quite experienced to lead this program.

Okay, great. Thank you.

I'm not getting feedback. You know, heading into the likely approval launch next year, undoubtedly you'd like to bolster the balance sheet further. I guess do you just have a preferred way to answer this with advance? But do you have a preferred way to do that, not diluted by a partnering or something else? Can you just comment on that?

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Heidi, can you hear us?

Hello, this is... Yes, I am able to hear you now.

Hello, can you hear us?

This is the operator. You can be heard.

Okay. Let's go back.

Sorry for that. I hope I heard most of the question. Feel free to ask it again if I missed any of the portions. With regards to the NDA submission and funding through the NDA submission. And we've indicated in today's press release we have sufficient funds to take the company well into 2026 and post NDA submission. So we are very confident on that. And this is based on the cash we have on hand. It doesn't take into consideration any other upfront amount of payment that we expect we'll get.

What was the second portion of the question? If you had a preferred way for bolstering the balance sheet beyond that, you know, for the launch and all of those expensive things.

So as we said for quite some time, we are also looking to collaborate around that. So a portion, obviously, of the effort will be financed and taken by our partners. And in terms of other activities, again, we do rely on payments that we expect will be coming both from our existing partners as well as new partners.

Okay, perfect. Thank you. Thank you. Thank you. We will take our next question. The next question comes from the line of Brandon Foulkes from HC Wainwright. Please go ahead. Your line is open. Brandon Foulkes, your line is open. Please ask your question. We shall move to the next question. Please stand by. And the question comes from the line of from Roth Capital. Please go ahead. Your line is open. And it looks like the line will be muted. Please stand by. Please continue to stand by. Brandon Phelps from HC Wainwright, your line is open. Please ask your question. Unfortunately, we do seem to have some technical issues. Please continue to stand by. If I could ask participants to please press star 1, 1 on their telephones if you wish to ask a question. Brandon, folks, your line is open. Please ask your question.

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