PolyPid Unveils Private Placement for Up to $14M

PolyPid Ltd., a late-stage biopharmaceutical company, has announced a significant financial development aimed at extending its operational runway and supporting its ongoing clinical trials. The company has entered into a securities purchase agreement for a private placement financing (PIPE), raising $8.1 million in gross proceeds. The PIPE involves both new and existing investors who have agreed to purchase 2,235,457 ordinary shares or pre-funded warrants at a price of $3.61 per share. The investors will also receive warrants to purchase up to 1,676,588 additional ordinary shares at the same price. 

These warrants will expire either two years from the date of issuance or 10 trading days after PolyPid receives a recommendation from the Data Safety Monitoring Board regarding its ongoing SHIELD II Phase 3 trial. If the warrants are exercised fully, the company could gain an additional $6.1 million in gross proceeds.

The PIPE is scheduled to close on August 6, 2024, subject to customary closing conditions. The company plans to use the net proceeds from the PIPE to support its ongoing SHIELD II Phase 3 clinical trial, which aims to prevent surgical site infections in patients undergoing abdominal colorectal surgery. The funds will also be allocated to working capital and general corporate purposes. The gross proceeds from this financing are expected to extend PolyPid’s cash runway into the first quarter of 2025, surpassing the anticipated completion of patient enrollment in the SHIELD II trial.

As of now, PolyPid has enrolled over 300 patients in the SHIELD II Phase 3 trial. An unblinded interim analysis will be conducted once approximately 400 patients complete their 30-day follow-up, which is expected to occur in the fourth quarter of 2024. JMP Citizen is serving as the exclusive placement agent for this offering.

In addition to the PIPE financing, PolyPid has also restructured its existing secured loan agreement with Kreos Capital VI (Expert Fund) LP. This restructuring involves over $2 million of deferred repayments, which will commence from April 2025, aligning with the expected timing for the top-line results from the SHIELD II Phase 3 trial.

D-PLEX100, PolyPid’s lead product candidate, is designed to provide localized, controlled, and prolonged antibacterial activity directly at the surgical site to prevent infections. The technology pairs the Polymer-Lipid Encapsulation matriX (PLEX) with Active Pharmaceutical Ingredients, enabling a continuous release of the antibiotic doxycycline at high concentrations for up to 30 days. This approach is intended to prevent surgical site infections, including those caused by antibiotic-resistant bacteria. D-PLEX100 has received Breakthrough Therapy Designation from the U.S. Food and Drug Administration specifically for preventing surgical site infections in patients undergoing elective colorectal surgery. The product is currently in Phase 3 of the SHIELD II trial, targeting patients undergoing open abdominal colorectal surgery with large incisions.

PolyPid Ltd. focuses on improving surgical outcomes through its proprietary PLEX technology, which enables the precise delivery of drugs over durations ranging from several days to months. While D-PLEX100 is its most advanced product, the company is also in preclinical stages for OncoPLEX, aimed at treating solid tumors starting with glioblastoma.

The securities involved in this transaction have not been registered under the Securities Act of 1933 and cannot be resold in the United States without an effective registration statement or an applicable exemption. PolyPid has agreed to file registration statements with the Securities and Exchange Commission within 30 days of closing to cover the resale of these securities. 

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