Polypid Ltd Stock

Greetings, and welcome to the PolyPid's Second Quarter 2026 Conference Call. As a reminder, this call is recorded.

And I would now like to introduce your host for today's conference, Yehuda Leibler, from Arx Investor Relations. Mr. Liebler, you may begin.

Thank you, operator, and thank you all for joining PolyPid's Second Quarter 2026 Earnings Conference Call.

Joining me on the call today will be Dikla Czaczkes Akselbrad, Chief Executive Officer of PolyPid; Jonny Missulawin, PolyPid's Chief Financial Officer; and Ori Warshavsky, Chief Operating Officer, U.S., of PolyPid.

Earlier today, PolyPid released its financial results for the 3 and 6 months ended June 30, 2026. A copy of the press release is available on the Investors section of the company's website at www.polypid.com.

I'd like to remind you all 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's discussing the company's exclusive commercialization partnership with Azurity Pharmaceuticals for the United States and Canada.

These forward-looking statements include the partnership's economic structure, including the potential milestone payments, tiered royalties and transfer price, the joint development activities and label expansion program contemplated under the agreement, the expected timing and progress towards potential U.S. Food and Drug Administration or FDA approval of D-PLEX100, including the assigned Prescription Drug User Fee Act or PDUFA goal date and the FDA's grant of Priority Review.

Additional forward-looking statements include the company's engagements with the European Medicines Agency, including meetings with the Rapporteur and Co- Rapporteur regarding the planned Marketing Authorization Application, or MAA, and the anticipated timing thereof, the expected commercial launch of D-PLEX100 by Azurity in the United States in early 2027.

Further forward-looking statements include the company's manufacturing readiness and preparation for the FDA pre-approval inspection, the potential clinical and economic value of D-PLEX100, the company's Kynatrix technology and additional pipeline opportunities, growth drivers and the expectation that the company's existing cash resources will be sufficient to fund operations into 2028 and through several significant upcoming potential milestones.

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 the company's Securities and Exchange Commission filings. Accordingly, you should not place undue reliance on these statements.

I encourage you to review the company's filings with the SEC, including the company's annual report on Form 20-F filed on February 25, 2026.

PolyPid disclaims any intention or obligation, except as required by law, to update or revise any forward-looking statements. This conference call contains time-sensitive information and speaks only as of the live broadcast today, August 12, 2026.

With that, it's my pleasure to turn the call over to Dikla Czaczkes Akselbrad, the CEO of PolyPid. Dikla?

Thank you, Yehuda. And thank you all for joining us today.

The second quarter of 2026 was a defining quarter for PolyPid. During and shortly after the quarter, we accomplished two transformative milestones that together fundamentally reshaped the profile of our company: first, the FDA's acceptance for filing of our new drug application, or NDA, for D-PLEX100 with Priority Review; and second, the signing of an exclusive commercialization partnership with Azurity Pharmaceuticals for the United States and Canada.

Starting with regulatory progress. During the second quarter, we completed the NDA submission for D-PLEX100 for the prevention of surgical site infection, or SSI, in patients undergoing abdominal colorectal surgery.

Subsequent to quarter end on July 27, 2026, the FDA formally accepted our NDA for filing. This acceptance came ahead of our own internal timeline, reflecting what we see as the strength of the underlying submission package and the collaborative interactions we had with the agency during and prior to filing. Importantly, in the acceptance itself, the FDA identified no filing review issues in our submission. We view this as a meaningful positive signal.

In parallel with the acceptance, the FDA granted the NDA of D-PLEX100 a Priority Review. This is a designation the agency reserves for drug candidate that in its judgment has the potential to represent a significant improvement in the safety or effectiveness of the treatment, diagnosis or prevention of serious conditions. Practically, Priority Review shortens the standard review period from 10 months to 6 months, and it sets our PDUFA goal date to November 28, 2026.

Taken together and ahead of schedule acceptance, no filing review issues, and the grant of Priority Review, represent three outcomes that we believe form a robust starting point to the NDA review process and reflect the strength of the clinical and regulatory foundations we have built with D-PLEX100 over the last several years.

Turning to our commercial partnership. On July 17, 2026, we entered into an exclusive commercialization agreement with Azurity Pharmaceuticals for D-PLEX100 in the United States and Canada. We are very pleased with this partnership. The selection of Azurity reflects not only its proven commercial capabilities, but also its reputation as a long-term strategic partner capable of unlocking the full value of differentiated specialty pharmaceutical assets.

Ori will provide some color in a moment on why we are so excited about having Azurity as our commercial partner, including the competitive business development process behind our selection. At a high level, we view the economic structure of this partnership as exceptionally strong for a commercialization deal at this stage.

We already secured a total of $30 million in upfront and near-term milestone payments. In addition, we are eligible to receive over $290 million in additional regulatory launch and sales milestones. I want to be clear that these milestones are structured around specific corporate, regulatory and commercial events that align directly with the D-PLEX100 operational and launch plans. We believe that these milestones are achievable during the term of the agreement and are not a stacked structure designed to inflate the headline number.

In addition to this milestone payment, PolyPid is entitled to tiered royalties on Azurity sales in the U.S. and Canada, ranging from mid-teens to mid-20s percentages. PolyPid will manufacture and supply the product, generating an additional agreed transfer price on every unit supplied to Azurity. Unlike most licensing deals in our industry where the licensor participates only through royalties, we made a strategic choice several years ago to retain manufacturing globally. That choice now positions PolyPid to potentially capture a meaningful share of the ultimate end product economics.

I want to make one broader point about the deal economics. A partnership structure like this one with multiple components can be complex. And we recognize that some observers may focus on any single component in isolation. Taken as a whole, however, we believe the combination of secured upfront event-driven milestones, tiered royalties, agreed transfer price on every manufactured unit and an Azurity-funded label expansion pathway, represent unusually strong economics for a company at our stage in commercialization partnership of this kind.

Jonny will walk you through this architecture and its balance sheet implications in more detail shortly.

In preparation for the upcoming launch, we continue to advance our manufacturing and inspection preparations. Our facility has already passed four consecutive successful good manufacturing practice, or GMP inspections, including the most recent one by the Israeli Ministry of Health in September 2025.

During the commercial evaluation process, prospective commercial partners conducted on-site diligence at our site in Israel, providing external validation of our manufacturing readiness posture. Our team continues to work closely with experienced external consultants and have conducted multiple mock inspections in preparation for the FDA pre-approval inspection that will follow. We are entering this process from a position of strength and are highly focused on getting it right at first time.

Turning to Europe. During the second quarter, we held meetings with the Rapporteur and Co- Rapporteur, the European regulatory authorities designated to lead the assessment of our planned MAA for D-PLEX100. These meetings were productive and positive, and we currently plan to submit the MAA to the European Medicine Agency in the third quarter of this year under the Centralized Procedure, which, if approved, will enable the product to be marketed across all EU member states.

Before I hand the call over to Ori, I want to briefly summarize the key upcoming milestones that investors should be tracking over the coming quarters: first, the FDA pre-approval inspection of our manufacturing facility following NDA acceptance; second, our goal date under PDUFA of November 28, 2026; third, our planned MAA submission to the European Medicine Agency in the third quarter of this year; and fourth, the expected commercial launch of D-PLEX100 by Azurity in the United States in early 2027.

With that, I will now turn the call over to Ori. Ori?

Thank you, Dikla. I would like to spend a few minutes on Azurity on the joint launch preparation now underway, on the progress we have made around D-PLEX100 this quarter, and finally, on our broader Kynatrix technology opportunities beyond the Azurity partnership.

Beginning with Azurity. The partnership process that we have discussed on prior quarterly calls many times was focused on identifying a partner with the capabilities, focus and infrastructure to make D-PLEX100 a successful commercial trial. This was a rigorous process, and importantly, it was a highly competitive one. We engaged with multiple potential commercial partners, all with robust hospital infrastructure, and several of those discussions progressed to very advanced stages.

In our judgment, Azurity emerged as the partner best positioned to lead the U.S. and Canada launch of D-PLEX100. Azurity is an established specialty pharmaceutical company with a first-in-class commercial model and a portfolio of over 50 medicines spanning 10 therapeutic areas. Azurity is backed by QHP Capital, a health care-focused private equity investor.

Beyond capital, we believe several elements of Azurity's track record position them uniquely well to commercialize D-PLEX100. Azurity has an antibiotic on the market which gives them established credibility with infectious disease specialist. The core audience for D-PLEX100, Azurity also markets bowel prep products in the exact same colorectal surgery call point that D-PLEX100 initially target, giving them existing relationship with the same prescribers.

And with more than 10 additional hospital administered products already on the market, Azurity brings the GPO infrastructure, hospital contracting expertise and institutional relationships that reach over 1,700 leading hospitals and academic institutions in the U.S., a footprint that takes years to build.

With over 200 U.S. commercial-facing colleagues, just under 1,000 employees worldwide and a specialty pharma orientation across hospital and surgical channels, we believe Azurity is uniquely positioned to reach the surgeons, infection specialists, hospital pharmacy directors and value analysis committees who will drive D-PLEX100 adoption. Their dedicated hospital-facing and surgical-facing sales capabilities align directly with the way D-PLEX100 will be prescribed and administered in a way that few counterparties in our process could match. In short, Azurity brings the scale, focus and execution capability that we believe D-PLEX100 needs at launch.

Beyond the initial license territories, Azurity has established commercial operations and partnerships spanning more than 50 countries. While the current agreement is focused on the U.S. and Canada, Azurity's international infrastructure and experience launching specialty medicines creates strategic optionality when additional geographic opportunities are pursued in the future.

The joint work between our teams to prepare for launch is now well underway. We have established joint forums to align on medical, regulatory and commercial preparation. Azurity is leading on-the-ground commercial activities, including sales force build-out, national account planning, medical affairs and pharmacy channel work, while PolyPid retains responsibility for global manufacturing and global regulatory strategy. This division of labor plays to each part of the strength.

The partnership also includes a joint development framework funded by Azurity to pursue label expansion opportunities of D-PLEX100 in additional indications beyond the abdominal indication. D-PLEX100's mechanism and platform supports broader use across other SSI relevant surgical settings and Azurity's willingness to fund that expansion work is a strong signal of the commercial opportunity.

Finally, I want to spend a moment on how we think about PolyPid's growth drivers in the near and midterm. The first growth driver is D-PLEX100 label expansion to additional surgical site infection indications beyond prevention of SSI in abdominal surgery, significantly expanding the total addressable market to other areas of unmet need such as C-section surgery and joint replacement. This label expansion will be funded by Azurity through the joint development framework.

The second growth driver is expanding D-PLEX100 to other territories outside the U.S. and Canada, which are under Azurity partnership.

And finally, the third growth driver is the expansion of the pipeline under our Kynatrix technology, over which PolyPid retains full ownership and which is where we see even broader significant long-term potential as we grow as a company.

In terms of our pipeline, we are now exploring exciting areas that go beyond prevention and into treatment applications. Our long-acting metabolic program is one such area we have previously discussed. We are also exploring high-value areas where we believe we can advance programs relatively quickly to the clinic by leveraging the clinical, manufacturing and safety foundation we have already built for D-PLEX100.

In many of these cases, we believe that the mechanistic and CMC platform we built around D-PLEX100 can materially compress the path to meaningful clinical stages for programs that would otherwise require years of de novo formulation and preclinical work. We look forward to sharing more on specific pipeline products as those plans evolve.

With that, I will now turn the call over to Jonny to review our financial performance for the quarter. Jonny?

Thank you, Ori. I will now walk through our financial results for the second quarter ended June 30, 2026, and highlight the material developments impacting our balance sheet.

Starting with the Azurity partnership, as Dikla noted, we have already secured $30 million in aggregate upfront and near-term milestones from our partnership with Azurity and are eligible for over $290 million in additional regulatory, launch and sale milestones.

On top of these payments following commercial launch, we expect to generate two additional ongoing revenue streams: tiered royalties on Azurity sales in the United States and Canada in the range from mid-teens to mid-20s percentages; and a transfer price on every unit we manufacture and supply to Azurity. The label expansion program under the joint development agreement is funded by Azurity and expands the addressable base for both revenue streams over time without requiring incremental PolyPid capital.

Turning to our income statement for the quarter. Research and development expenses for the second quarter of 2026 were $6.1 million compared to $6.2 million in the second quarter of 2025.

R&D activity in the second quarter of 2026 primarily reflects ongoing NDA-related activities and continued commercial readiness preparation.

General and administrative expenses were $1.3 million compared to $2.5 million in the prior year period. The decrease was primarily due to the decrease of noncash expenses related to performance-based options following the positive Phase III SHIELD II topline results, which triggered the vesting of those options.

Marketing and business development expenses were $0.5 million compared to $0.7 million in the prior year period.

Net loss for the second quarter of 2026 was $7.8 million or $0.35 per share compared to a net loss of $10 million or $0.78 per share in the second quarter of 2025. For the first 6 months of 2026, net loss was $15.6 million compared to $18.2 million in the first 6 months of 2025.

Turning to the balance sheet. As of June 30, 2026, PolyPid had $6.6 million in cash and cash equivalents compared to $12.9 million of cash, cash equivalents and short-term deposits at December 31, 2025.

Subsequent to quarter end, our capital position has been further strengthened by $15 million upfront payment from Azurity at signing and the additional $15 million as a result of the FDA acceptance of the NDA filing.

Looking at our remaining warrant position, the only warrants outstanding are the warrants issued in June 2025, of which approximately $7.3 million remain outstanding with an expiration date in June 2027. These warrants are by their terms stapled to the shares issued in June 2025, meaning that if a holder sells or transfer those shares prior to exercise of the new warrants, the corresponding new warrants are forfeited. We view this structure as a meaningful alignment mechanism with our long-term shareholder base.

Taken together, we believe this puts the company in a materially stronger financial position today than at any prior point in the D-PLEX100 development journey, while also providing a streamlined and healthier capital structure for PolyPid and our shareholders.

Based on our current plans and assumptions, we expect our existing cash resources, together with the expected proceeds from our recently announced commercialization agreement as well as future potential proceeds will be sufficient to fund operations into 2028 and through several significant upcoming potential milestones. And we do not have immediate financing needs in the near future.

With that, we will now open the call for questions. Operator?

[Operator Instructions] Your first question comes from Chase Knickerbocker from Craig-Hallum.

Congrats on all the progress here. Maybe just first for me on kind of upcoming expected inspection. Has FDA communicated anything to you as it relates to the potential timing of your pre-approval inspection? And then, as a part of the deal with Azurity, would love to hear the sort of work that went into them getting comfortable on the CMC side, do they -- did they do a fairly strenuous kind of mock audit kind of series as a part of the due diligence?

So with regards to our communication with the FDA, since we submitted the NDA, we had several back-and-forth communication in different aspects, including things that are relating to the different audits that are expected as part of the NDA review. I don't think it makes sense to go into more detail, but I could say that we see the process as very effective and efficient, as you would expect from a Priority Review, which leaves both the agency and the sponsor a relatively short time to review everything.

So we are super cooperative with any request that is coming from the FDA to meet the timeline. And I wouldn't go into specific dates on specific request. But as I said, we had several communication from the time that we have submitted, including communication relating to the different audits that are expected.

With regards to the CMC, that's something we tried to highlight in the formal portion by highlighting both the work that we did with Azurity, but also with other potential partner that we had at the time. And as Ori mentioned, we had on-site due diligence in the Israeli site by the Azurity team and by others that were competing for this asset to see both the facility, the CMC processes, the package, everything that could give a potential partner the comfort that this product will be approved and we as a partner could manufacture on a commercial scale and support the launch of the product.

So from that perspective we are very confident that we had several, you could say, external validation, both from other regulatory inspection that we did, the potential partner including -- partners including Azurity as well as mock inspection that we have performed with external advisers.

Got it. And maybe just last for me. I would just like to understand kind of the level of overlap that existing Azurity reps have into that kind of colorectal and general surgeon call point. How many reps are kind of calling on those physicians today in their kind of hospital-focused segment?

And do you have any idea at this stage how many of those 200 customer-facing representatives that you mentioned will have D-PLEX in the bag at launch?

Yes, I can take some of that. So we can't really break down the Azurity sales team. But they do already call -- as we said, they do already call upon colorectal surgeons and in other areas in the hospital. That's kind of one part of it. The other part is they have a significant buildup to expand the capabilities that they have in preparation for the launch and buildup in the market access piece and the contracting piece and on the medical team. So they are putting a lot of efforts ahead of this launch.

Like I mentioned earlier, they are already in 1,700 hospitals and academic centers. That's their target. Obviously, not all on day 1. There will be a gradual hospital-by-hospital and IDN-by-IDN kind of a stepwise approach, but this is the coverage that they're going for.

Your next question comes from Jason Butler from Citizens.

A couple on the Azurity partnership. On the commercial side, obviously, it's only been a short period of time, but what are you already doing with Azurity to get them ready for the launch? You've obviously done a lot of pre-commercial work. What are they now doing to prepare for the D-PLEX100 launch?

And then second, on the development side, how are you thinking about the initial label expansion efforts? And how quickly under this collaboration could additional trials begin for additional indications?

I'll take the...

You take the first -- yes.

The first piece. So a few points here. First, Azurity has been planning -- we've been in conversation with them for a period of time now, and they -- they've not started -- they haven't filed just 3 weeks ago. They have been thinking about this for a while now. And so they're really hitting the ground running on taking ownership of a lot of these activities.

So we've transferred a lot of the knowledge, studies that were done, market research, pricing, KOLs that were done, assessments of NTAP and so on. So this was handed over, and they have their own plans in place to take and expand. So we know NTAP is coming. That's one thing. We know we're building a network of KOL. The American College of Surgeons Conference is this week, Azurity is there. IDWeek is in a couple of months, Azurity will be there trying to build this network.

And some of the activities that can be done before approval, some of the prior approval, access conversations and after approval, MSLs on the ground, reaching out to PIs and reaching out to KOLs and start kind of discussing and introducing the product. So all these plans are in place. The marketing team is in place. The contracting team is in place. And so that's really -- Like I said, we're not starting at step zero. We're starting at step 4.

With regards to the label expansion, the joint development framework work is scoped around D-PLEX100 and additional surgical site infection indication behind the initial abdominal indication, obviously. And we will first need to see with the FDA what will be the final indication. But what I can say is that the indication commonly identified as our top target is consistent with the way Azurity sees it.

So what we have discussed really publicly for years, think about cardiac procedure, specifically CABG, orthopedic, including hip and knee and breast mastectomy and reconstruction. Those are the top indication that we view and Azurity view as a few of the top that should be pursued.

Your next question comes from the line of Boobalan Pachaiyappan from ROTH Capital Partners.

Maybe can you discuss the key KPIs you would use internally to track the D-PLEX100 launch success? Let's say, are you going to track -- obviously, you're going to track formulary events, but ultimately, what are the key KPIs that you wanted to like target, activation of hospitals, surgeon users? Can you elaborate more on that?

So there are a couple of things here that will be reviewed. Some of it is coming from looking at the collaboration and the partnership that we have and some of the Azurity commitments that is in the agreement that -- and the minimums that are part of the structure of the agreement. So this is obviously something that we will monitor.

There will be also aspects relating to hospital and specifically within the hospital P&T committees, a number of hospitals that are approving or adding to their -- to the pharmacy the drug. And you should also think about things that are part of a drug like this, things like NTAP, and progress around the reimbursement and the conversation with payers. This is the third compound.

Ori, would you want to add anything?

[indiscernible] view -- So obviously, as Dikla mentioned, the stepwise approach seeing month by month how many hospitals get -- are added, where P&T reviews are review the product and then if there's pilot studies that are done and doctor's usage. Yes, I think those will be the initial ones to see really how successful, let's say, the first 12 months from launch this will be in the main benchmark.

Let's say, the drug is indeed launched in first quarter '27. Can you discuss when would this revenue be recognized?

So we indicated that it's early 2027. And we will be recognizing revenue quite immediately because as you probably remember, one of the compounds of the structure of the deal is the pre-negotiated transfer price per vial. So every vial that we will sell we will -- to Azurity, we will recognize revenues there. There will be the second compound on royalties and milestone, and those will be recognized as they come.

Okay. Maybe one final question from me. So you indicated that the EMA submission is targeted in third quarter '26. So can you maybe provide us a sense of the receptivity to the clinical package during your dialogue with them? Are there any concerns that they have raised about clinical or statistics for safety and things like that?

So it was very -- First, thank you for this question. I think it's very important also when, again, looking at the strength of our regulatory package. We had two meetings during the quarter with the Rapporteur and the Co-Rapporteur. Those meetings are the equivalent to a pre-NDA meeting at the FDA. And the purpose of the meeting was similar to a pre-NDA meeting, to align the requirement, to align the timeline.

For us, it was very productive. We had, I wouldn't say changes, but more -- each regulatory arm has their own sensitive area where they want to see additional or where they put the focus, and this was very helpful for us to accommodate. But you could understand from the timeline of the fact that we met them towards the end of June, and we are submitting the package before the end of this quarter, that nothing there was major that required any additional data or changes to the package that will delay the submission time frame.

[Operator Instructions] We will take our next question and your question comes from the line of Brandon Folkes from H.C. Wainwright.

Congrats on all the progress. Maybe just two from me. Can you just talk about the earlier PDUFA date and what that does in terms of ability to supply the market or launch date? Do you still expect a 1Q launch?

And then similarly, with the November PDUFA date, any impact on the NTAP process there in terms of when it could come online for D-PLEX100?

So first, as you can imagine, since we knew that the product has a breakthrough therapy designation and could be eligible for a Priority Review, we prepared for both scenarios. We prepared for before end of the year approval PDUFA date and early 2027 PDUFA date. So we prepared both in terms of NDA submission, getting ready for all the audits, whether it's the GCP or the GMP, as well as launch.

So from our perspective, having the PDUFA date earlier than anticipated doesn't change anything. And we were very happy with that. I think it again shows the strength of the package and the potential that the product has to improve both the effectiveness and safety of the treatment.

As for the QIDP, there are a couple of things -- in the NTAP, sorry, I said...

Yes. Let me take that. So the NTAP, first, the product does not need to be approved to submit the NTAP. It just needs to be under review with the FDA. So from that point, we have no issue. And Azurity is working the -- to get the -- to be on the next year's financial year -- governmental financial year, the deadline is October, and this is what Azurity is working towards.

Brandon, anything else?

As there seems to be no response, this concludes today's question-and-answer session. I will now hand back for closing remarks.

Thank you for joining PolyPid's second quarter 2026 earnings conference call. This has been a defining quarter for PolyPid, and we are highly confident in our long-term prospects, especially the potential of D-PLEX100 in the hands of Azurity as our commercial partner in the United States and Canada and the broader Kynatrix technology behind it.

As we look ahead to the November 28 PDUFA goal date and the expected commercial launch of D-PLEX100 in early 2027, we are grateful for our team members, shareholders and all external partners for their commitment to our mission and support in continuing to advance toward our goal of bringing D-PLEX100 to health care providers and patients as quickly as possible.

We look forward to speaking with you again on our next conference call.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Greetings, and welcome to PolyPid's First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is recorded. And I would now like to introduce your host for today's conference, Yehuda Leibler from ARX Investor Relations. Mr. Leibler, you may begin.

Thank you, operator, and thank you all for joining PolyPid's First Quarter 2026 Earnings Conference Call. Joining me on the call today will be Dikla Czaczkes Akselbrad, Chief Executive Officer of PolyPid; Jonny Missulawin, PolyPid's Chief Financial Officer; and Ori Warshavsky, Chief Operating Officer, U.S. of PolyPid.

Earlier today, PolyPid released its financial results for the 3 months ended March 31, 2026. A copy of the press release is available on the Investors section of the company's website 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 laws.

For example, management is making forward-looking statements when discussing the company's regulatory strategy, including the expected completion of the rolling New Drug Application or NDA submission for D-PLEX100. Management may also discuss the company's planned engagements with the European Medicines Agency, or EMA, including meetings with the Rapporteur and Co-Rapporteur regarding the planned marketing authorization application, or MAA, and the anticipated timing thereof. In addition, management may discuss the company's ongoing U.S. commercial strategic partnership discussions, its belief that those discussions are in late stages and expected launch plans and timing.

Other forward-looking statements may relate to the potential clinical and economic value proposition of D-PLEX100. The company's preparations for potential commercialization, the potential for 2026 to be a transformative year for PolyPid and the expectation that current cash resources will be sufficient to fund operations into the second half of 2026 and from several significant upcoming potential milestones. 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 the company's Securities and Exchange Commission filings.

Accordingly, you should not place undue reliance on these statements. I encourage you to review the company's filings with the SEC, including the company's annual report on Form 20-F filed on February 25, 2026. PolyPid disclaims any intention or obligation, except as required by law, to update or revise any forward-looking statements. This conference call contains time-sensitive information and speaks only as of the live broadcast today, May 13, 2026. With that, it is my pleasure to turn the call over to Dikla Akselbrad, the CEO of PolyPid. Dikla?

Thank you, Yehuda, and thank you all for joining us today. The first quarter of 2026 was a defining transition for PolyPid. We moved from late-stage clinical development to final NDA regulatory submission, our U.S. commercial strategic partnership discussion advanced to what we believe are their late stages, and we continue to build the foundation for what we expect will be a transformative year. Our focus remains on two priorities: advancing D-PLEX100 towards potential FDA approval and finalizing a U.S. strategic partnership that will execute commercial launch in the first quarter of 2027. Starting with our regulatory progress.

On March 30, 2026, we initiated our NDA submission to the FDA. As a reminder, D-PLEX100 is our lead product candidate for the prevention of surgical site infections, or SSI, in patients undergoing abdominal colorectal surgery. With this initial filing, we submitted the CMC and nonclinical modules as well as other more administrative modules. We expect to submit the remaining components, including the clinical module imminently. This will complete the full NDA submission. Once the FDA accepts our submission and given our Fast Track and breakthrough therapy designation, the product is eligible for priority review. If received, this would shorten the standard review period from 10 months to 6 months.

In parallel, in March 2026, we received a small business waiver from the FDA for the PDUFA fee. This waiver was approximately $4.3 million, and it allows us to focus our resources on commercialization preparation as we move closer to potential approval. Turning to Europe. We have scheduled meetings in this quarter with the Rapporteur and Co-Rapporteur, which are the European regulatory authorities designated to lead the assessment of our planned MAA for D-PLEX100. The purpose of these meetings is to align on the content and structure of the submission. Importantly, the MAA will be submitted to the EMA under the centralized procedure on the basis of the therapeutic innovation. The centralized procedures allows the submission of a single marketing application to the EMA that, if approved, enables the product to be marketed in all EU member states. Subject to the outcome of these meetings, we currently plan to submit the MAA in the third quarter of this year.

On the commercial front, our strategic partnership discussions with potential U.S. partner have continued to progress. We believe they are now in their late stages as the due diligence and evaluation work that defined earlier phases of this discussion is well behind us, and we are currently focused on the active negotiation of definitive agreement terms. Another important area of commercial readiness is our manufacturing and inspection preparations. Once the FDA accepts our NDA submission, the agency is expected to inspect our manufacturing facility. This is a critical step on the path to potential approval, and we are devoting significant resources to these preparations.

We are working closely with experienced external consultants, including industry quality veterans with robust FDA experience who provide us with valuable guidance regarding FDA expectations. We have also conducted multiple mock inspections to ensure our site is ready, the team is prepared and the FDA inspection passes without any major issues. As a reminder, our facility has already passed four consecutive successful GMP inspections, including the most recent one by the Israeli Ministry of Health. We are entering the FDA inspection process from a position of strength, and we are highly focused on getting it right for first time. We have also continued to advance our engagement with the scientific community surrounding the SHIELD II phase III results with two important data presentations this quarter.

In early May 2026, at the 45th Annual Meeting of the Surgical Infection Society, we presented an analysis of SHIELD II Asepsis score data, a clinical measure of wound infection severity. The results showed a 64% relative risk reduction in patients with an asepsis score greater than 20, which is the threshold for clinically significant wound infection. What this tells us is that even among patients in the D-PLEX arm who did experience wound events, severity was meaningfully reduced. Ori will speak in a moment to what this potentially means commercially.

In April 2026, at the European Society of Clinical Microbiology and Infectious Diseases, also known as ESCMID, we presented new pharmacokinetic or PK data providing further evidence that D-PLEX100 delivers sustained controlled release of doxycycline for approximately 30 days. This result in our largest human data set to date support the core mechanistic premise of our technology. With that, I will now turn the call over to Ori Warshavsky, our Chief Operating Officer, U.S. Ori?

Thank you, Dikla. I would like to spend a few minutes on the broader commercial readiness work underway. Alongside the partnership process and manufacturing readiness, we are continuing with our commercial readiness activities across several other fronts. Picking up on the asepsis data Dikla just referenced, those results have meaningful potential commercial implications.

A 64% relative risk reduction with a P value of 0.0103 in severe wound events translates directly to fewer wound complications, less reliance on intravenous antibiotics, the potential for earlier hospital discharge and lower hospital resource utilization. That is exactly the language hospital P&T committees and payers respond to, and we believe that this is central to the health economics work we are now accelerating. Alongside this, we are expanding our presence at major surgical and infectious disease conferences, advancing additional planned scientific publications and continuing to engage leading clinical voices in the field.

As part of these efforts, we hosted a roundtable discussion with KOLs earlier this month at the Surgical Infection Society annual meeting, which was chaired by the president of the society. There were a lot of good insights during that meeting, including an open discussion on the fact that infection rates are often underreported to avoid penalties and that growing obesity rates are impacting infection rates in abdominal surgeries. At the general assembly of the conference, there was a call from the stage to see how the society can, and I quote, "Help move practice forward with a really novel product." Together, these efforts build the awareness and the evidence base that will support a successful launch.

I would also like to briefly address the broader environment in which D-PLEX100 would be launched. Two converging trends are shaping that environment in important ways. The first is the growing focus across U.S. hospital systems on infection prevention, antimicrobial stewardship and reducing the use of systemic antibiotics. The second is the evolving reimbursement landscape. Under Medicare's new Transforming Episode Accountability model known as TEAM, hospitals are now financially accountable for inpatient and outpatient complications occurring throughout the 30 days following certain surgical procedures, including colorectal surgery.

This represents a significant shift as the 30-day window for SSI is no longer just a clinical concern, it is increasingly tied to how hospitals are reimbursed. We believe D-PLEX100 is well-aligned with both trends. By delivering high concentration of broad-spectrum antibiotic directly at the surgical site rather than relying on systemic antibiotic load, D-PLEX100 supports the same antimicrobial stewardship goals hospital systems are increasingly being asked to advance.

Just as important, D-PLEX100 is designed to provide antibiotic protection for approximately 30 days, the same window which hospitals are now financially accountable for. We expect this convergence, clinical data on one side, policy-driven economic incentives on the other to be an increasingly important part of D-PLEX's position with hospital system and payers as we move towards potential commercialization. With that, I will now turn the call over to Jonny to review our financial performance for the quarter. Jonny?

Thank you, Ori. I will now walk through our financial results for the first quarter ended March 31, 2026. Starting with operating expenses, research and development expenses for the first quarter of 2026 were $5.8 million compared to $6.1 million in the first quarter of 2025. This decrease primarily reflects the completion of the SHIELD II phase III trial and our ongoing transition towards regulatory submission and commercial readiness activities. General and administrative expenses for the quarter were $1.6 million compared to $1.2 million for the same period in 2025.

Marketing and business development expenses were $0.4 million compared to $0.3 million in the prior year period. Net loss for the first quarter of 2026 was $7.7 million or $0.35 per share compared to a net loss of $8.3 million or $0.70 per share in the first quarter of 2025. Turning to the balance sheet, as of March 31, 2026, PolyPI'd had $10.9 million in cash -- cash equivalents and short-term deposits compared to $12.9 million on December 31, 2025. The modest decrease approximately $2 million reflects continued operating activities, partially offset by proceeds from warrant exercises during the quarter. Subsequent to quarter end, our balance sheet has been further strengthened by an additional development. In early May 2026, we completed the full repayment of our remaining loan facility originally entered into in April 2022.

As a result, the company has fully repaid its outstanding debt obligations and has no remaining loan-related liabilities as of the date of today's earnings release, further strengthening our balance sheet ahead of potential commercialization. Based on our current plans and assumptions, we believe that our existing cash resources will be sufficient to fund operations into the second half of 2026 and through several significant upcoming potential milestones. With that, we will now open the call for questions. Operator?

[Operator Instructions] We will take our first question and the first question comes from the line of Chase Knickerbocker from Craig-Hallum.

Maybe just to start, a couple on the filing. Just as we kind of think about that CMC module, maybe talk about the work that you've done with consultants internally to kind of submit that module with confidence, I think, particularly around kind of the process validation portions with your differentiated drug product, which obviously also comes with some novel aspects being that it is differentiated, right?

So maybe just speak to kind of the work you've done with consultants and the confidence you've kind of gained there. And then secondly, I'll just ask both upfront. As you think about kind of the inspection readiness, you had several mock audits at this point. Maybe just talk to us a little bit about how those have progressed, how your findings from those have progressed and again, kind of increase your confidence in the positioning of your filing.

Thank you, Chase. So I'll start with the first portion on the CMC. Obviously, there is the aspect of consultants and regulatory consultant. But I think the most reassuring portion here is that we took advantage of -- or we used the Breakthrough Therapy Designation, which allows us to have more frequent communication with the FDA.

And we really communicate prior to submission the NDA with the FDA on different processes on different methods as well as submitting the development report and everything that we thought could be risky, and we wanted the agency feedback ahead of submitting an NDA, we did that. So yes, there is a portion of getting advised and reviews, and we have a very experienced team in the CMC aspect from the development stage up to the actual operational aspect.

But we also used -- communicate with the FDA multiple times to make sure that we are aligned with what they are expecting to see. So that's on the module -- the CMC module. On the preparation for the inspection, there are a couple of things that I think we've done from the start. The first one being the fact that we have built our own manufacturing facility. So it's not a CMO. We have full control of the processes on the method, regulation, all the implementation methods internally, both in terms of our employees as well as our QA.

It's all internal. And that's, I think, a good thing and strengthen our position. The other thing is really working from day one with the eyes to the FDA expectation, always staying up to date to see what is the FDA expectation, what is the most recent expectation -- and this is why we were able to pass this inspection, which are also, by the way, qualified for the European authorities. So that's an ongoing. And now as we get closer to the pre-approval inspection, obviously, we are even tightening those processes, even tightening what is needed, working with very veteran quality person that really been on almost on a weekly basis part of FDA inspection, so we could really know what the FDA is focusing on these days.

Now you were asking about specifically if anything came out of this mock inspection that can put this in danger. I'm very freely, I can say that we don't think so that obviously, there is -- when there is an inspection, there are comments, there are suggestions, there are reviews, but all of it is things that either have already been implemented and corrected or things that are ongoing, but nothing that we viewed as major. And also the -- for the matter of the Israeli Ministry of Health did not see those as major or critical.

Your next question comes from Jason Butler from Citizens JMP.

First one for me. Just can you speak to any dialogue that you've had with FDA since submitting the first modules of the NDA? Have you had any questions or information requests from FDA yet?

So as we showed previously -- again. So not something formal, nothing formal at this stage, but we've not completed the NDA submission. So we don't really expect to get anything. But the NDA submission is -- or the completion is expected imminently. So I'm sure we'll start to get that immediately after.

Great. And then you've spoken in the past about what you're looking for from a commercial partnership or collaboration. Can you just speak to -- as you continue those discussions, have those priorities shifted at all? Or are your goals the same out of any partnership?

So no, they have not shifted. We are still focused and we think that the main objective is to have a partner with good presence in the hospital and capabilities to build and expand on a sales force that is in the hospital. That's what we are looking at. And we're very pleased so far.

Your next question comes from the line of Boobalan Pachaiyappan from ROTH Capital Partners.

A couple from us. Maybe to start with, I was wondering if you could talk about the tariff rate for drugs that are manufactured in Israel and commercialized in the U.S. and other countries. Is it like a flat tariff rate regardless of indications? Any color on that, please?

Ori, do you want to take this one regarding the U.S.?

Yes. So the question -- just so I understand the question is regarding tariffs on products from Israel to the U.S.

Yes, for drug products that are manufactured in Israel and commercialized in the U.S. and other countries.

That's a good question. As far as I know, and we can follow up on this later, there's a flat tariff rate be negotiated between the government of the U.S. and Israel on all incoming goods coming from Israel to the U.S. We can follow up on this with the rates.

All right. That's helpful. And in light of the ongoing conflict in the Middle East area region, can you maybe talk about the time line or the impact of this conflict on the inspection procedure to be conducted by the FDA? How are you thinking about it? And if you expect the inspection time line to be sort of -- is there -- at what point do you think you will have more clarity on whether or not the inspection will take place in second half of '26?

So thank you for this question, Boobalan. Obviously, if we knew this answer, we would have been -- we could use it in many, many other aspects. But seriously, we know that the FDA was inspecting two facilities in Israel this last March. Obviously, since March, they were not here. We do not expect this to have an effect. The FDA has many means to inspect the facility, either from -- COVID was here 2 years almost and drugs were approved. So I think both companies and the agency find ways to get drugs approved.

So we do not expect it to change anything. We are operating in a normal course of business. You can see both in terms of the time line, we were committed to submitting the NDA before the end of the first quarter, which was done. We are now very shortly, we'll finalize this submission. And the team here is fully committed to all of these processes. And on a personal note, I hope that it will come and there won't be any issues.

All right. Maybe one last one. I understand D-PLEX100 will be commercialized by the strategic partner. So just curious, I mean, do you still need to hire some employees to sort of internally track the progress? And can you also talk about the impact of this on G&A spend?

So I'll let Jonny add on that. But specifically on G&A, I don't see any major impact. We do think that there will be some increase later on as we expand the commercialization and sales increase, we'll need more employees on the operational front, obviously. And once we can discuss more clearly on next step, we will also lay out the development plan as we see it.

No, I agree. So for the whole G&A part, we wouldn't expect such a big increase, but there will be some increase. And as Dikla said, the bigger increase will be in the operational part.

[Operator Instructions] We will take our next question, and the question comes from Brandon Folkes from H.C. Wainwright.

Congrats on the progress. Maybe just two for me. Can you talk about how broad of a development pipeline you would consider once you do execute on a commercial transaction? Are you envisioning a singular product development focus going forward? Or could we sort of see a pretty broad pipeline? And then secondly, you remain very disciplined on the SG&A line. So can you just talk about if you envision PolyPid itself doing any market awareness this year ahead of an approval and ahead of a potential partnership?

Thank you. Thank you, Brandon. So I'll start with the first portion of your question. In terms of -- or maybe let's start with the latter. We do see PolyPid doing some prelaunch activities. Everything that was done up until now was done by us, whether it is around packaging names, scientific conference, all of that is done with us, and we'll see some of it also continues. We are hoping to publish the manuscript of the SHIELD I -- the SHIELD II data in a peer-reviewed journal soon.

All of this is the more scientific clinical assets are managed by us and we'll be able to again say more how much of it will be managed by us or the partner. On other geographies, it's to be seen depending on the arrangement that we will get to. But generally, for D-PLEX, we do not see ourselves marketing the product on our own. In terms of our pipeline, this is a very important question. We envision the pipeline, and this is work that is done already and some of those are communicated to investors, but I think once we have a partner that could be even further reassessed and strengthened, we envision three paths.

One is obviously -- and this was discussed quite intensively expanding D-PLEX behind abdominal indication. There is a high need in many other surgeries, and this will be done with the partner. The other is expanding our PLEX platform to other indications. And we also have our younger program in the metabolic health. So I envision and we envision multiple products that some are late stage and some are more early stage.

There seems to be no further questions. I will now hand the call back to Dikla for closing remarks.

Thank you all for joining us today. The first quarter of 2026 marked a critical transition for PolyPid. Our rolling NDA submission is well underway with completion expected imminently. Our U.S. strategic partnership discussions are in their late stages. Our European regulatory strategy is advancing toward an MAA submission later this year, and our balance sheet has been meaningfully strengthened.

Together, these milestones mark what we believe is the most consequential phase in our company's history. We continue to believe that 2026 has the potential to be a transformative year for PolyPid, and we look forward to providing further updates as these milestones unfold. Thank you. Operator, you may now close the call.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Greetings and welcome to PolyPid's Fourth Quarter and Full Year 2025 Conference Call. [Operator Instructions] As a reminder, this call is recorded. And I would now like to introduce your host for today's conference, Yehuda Leibler from ARX Investor Relations. Mr. Leibler, you may begin.

Thank you, operator, and thank you all for joining PolyPid's Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining me on the call today will be Dikla Czaczkes Akselbrad, Chief Executive Officer of PolyPid; Jonny Missulawin, PolyPid's Chief Financial Officer; and Ori Warshavsky, Chief Operating Officer, U.S. of PolyPid.

Earlier today, PolyPid released its financial results for the 3 and 12 months ending December 31, 2025. A copy of the press release is available in the Investors section on the company's website 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 laws.

For example, management is making forward-looking statements when it discusses the company's regulatory strategy and the anticipated timing and structure of the planned new drug application or NDA submission for D-PLEX100, including the rolling submission, the potential regulatory and commercial pathways for D-PLEX100, the company's ongoing partnership discussions, commercialization readiness, transition from a primarily R&D and clinically focused organization into one that is preparing for commercialization, the potential for 2026 to be a transformative year for the company, benefits and advantages of D-PLEX100 that Kynatrix represents a broader long-term opportunity for PolyPid and the expectation that current cash resources will be sufficient to fund operations into the second half of 2026.

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 the company's SEC filings. The company's 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 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 Form 20-F filed on February 26, 2025, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. PolyPid 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 11, 2026.

With the completion of those prepared remarks, it is my pleasure to turn the call over to Dikla Czaczkes Akselbrad, the CEO of PolyPid. Dikla?

Thank you, Yehuda, and thank you all for joining us today. 2025 was a pivotal year for PolyPid. Over the course of the year, we successfully completed the SHIELD II Phase III trial and announced positive results with D-PLEX100 meeting its primary endpoint and all key secondary endpoints and demonstrating a meaningful reduction in surgical site infection. Building on that momentum, we advanced D-PLEX100 into the final stages of regulatory preparation, marking an important transition point for the company. In parallel, we continue to advance our broader platform efforts, including our long-acting GLP-1 Receptor Agonist program.

As we continue executing against our strategy, our progress is focused on 2 priorities: advancing the regulatory pathway for D-PLEX100 and advancing our commercial U.S. partnership discussions. Starting with regulatory progress. We recently received positive written feedback from the FDA following the pre-NDA meeting communication. Importantly, the agency supported our plan to pursue a rolling NDA review for D-PLEX100. We expect to begin the rolling NDA submission by the end of the first quarter of 2026. The FDA also agreed that the company's existing clinical data package, including results from the Phase III SHIELD II trial appears adequate to support NDA submission and review.

This feedback provides meaningful clarity on the structure and expectations for our submission and further validates the regulatory pathway we have been preparing for. In parallel with our regulatory efforts, we made significant progress on the commercial front. Following our positive Phase III results and the advancement of our regulatory strategy, we have moved into advanced stages of partnership discussions in the United States. These discussions reflect growing recognition of D-PLEX100's strong clinical profile, its differentiated value proposition and the significant unmet need it addresses. I'm glad to share that we are very pleased with the progress we made throughout the quarter in our U.S. partnership discussions.

These conversations have continued to move forward to advanced stages, which Ori will expand on later in the call. During the quarter, we also participated in a virtual key opinion leader webinar featuring Dr. Steven D. Wexner, a globally recognized leader in colorectal surgery. The discussion focused on the real-life clinical and economic burden of surgical site infections and why prevention remains a major unmet need in abdominal colorectal procedures. Importantly, the conversation reinforced what we believe is the core opportunity of D-PLEX100, a differentiated, long-acting localized approach that can significantly reduce infection while fitting naturally into the surgical workflow.

As Dr. Wexner noted, this is truly new. This is a paradigm shift for us. We view this type of external clinical engagement as an important part of building awareness and readiness as we prepare the market for approval and launch. A link to the recording of the webinar is on our website under the Investors section. I invite all of you to listen to Dr. Wexner insights. Looking ahead, we believe 2026 has the potential to be a transformative year for PolyPid. With the rolling NDA submission expected to begin by the end of this quarter, partnership discussions continue to advance and an organization increasingly oriented towards commercial execution, we are entering a new chapter for the company.

I also want to highlight an important corporate update. In December 2025, we appointed Ms. Brooke Story as Chairman of our Board of Directors. Brooke brings extensive leadership experience in medical technology and surgical solutions, including senior executive role at Becton, Dickinson and Medtronic. As we transition toward commercialization and engage with large strategic partners, we believe her background and perspective will be highly valuable in helping guide PolyPid throughout this next chapter. We look forward to providing updates as these developments continue to unfold.

With that, I will now turn the call over to Ori Warshavsky, our Chief Operating Officer, U.S., who will discuss how we are approaching commercialization readiness and partner engagement, our refreshed corporate brand and the introduction of our Kynatrix technology. Ori?

Thank you, Dikla. As Dikla mentioned, we continue to advance discussions during the quarter with potential U.S. commercial partners that have demonstrated experience in hospital-based commercialization and a strong presence within the surgical ecosystem. As these discussions have progressed, they have become increasingly detailed and operational in nature, reflecting both the maturity of the opportunity following our Phase III results and the progress we have made on our regulatory front.

Turning now to our refreshed corporate brand. As you might have noticed in this morning's press release, PolyPid has a new brand look, which aims to reflect that PolyPid as a company looks different today than it did even a year ago. The 3 brands come at a very intentional moment in the company's life cycle as we transition from a primarily R&D and clinically focused organization into one that is preparing for commercialization and engaging more broadly with external stakeholders. Our audience is expanding. In addition to clinician and investigators, we are increasingly engaging with surgeons, pharmacists, hospital administrators, value committee members and potential commercial partners.

The refresh brand is designed to support the more external safety conversations and to clearly communicate who we are as a company at this stage. Importantly, the new visual language is meant to convey precision, intention, reliability and control, core attributes of how our technology is engineered to perform. It reflects a more confident, mature and credible organization as we move closer to potential commercialization. I encourage investors and partners to visit our new website and review our updated corporate material, which reflects this evolution and our long-term vision. Closely related to this evolution is an important update on our technology. Over the past several years, we have significantly expanded our technological capabilities beyond what the original PLEX platform was designed to do.

As a result, we are formally introducing Kynatrix as the name of our next-generation technology. Kynatrix brings together the broader set of controlled release and delivery capabilities along with the growing intellectual property portfolio we have developed over time. While PLEX remains foundational, our technology is no longer limited to local to local delivery of small molecules such as antibiotics. One clear example of these expanded capabilities is our move into metabolic disease, starting with our ultra-long-acting GLP-1 Receptor Agonist program.

This program serves as the first step case for extending our technology beyond localized delivery towards addressing systemic therapeutic needs, and we continue to evaluate additional modalities where these capabilities may be applied. While Kynatrix represents a broad long-term opportunity for PolyPid, it is important to emphasize that D-PLEX100 remains firmly at the center of our near-term execution and commercial focus. Taken together, our continued progress in partnership discussions, our brand evaluation, the formal introduction of the Kynatrix technology and growing engagement with clinical leaders all reflect the company that is actively preparing for its next phase of growth.

With that, I'll now turn the call over to Jonny to review our financial performance for the quarter and the full year. Jonny?

Thank you, Ori. I'll now walk through our financial results for the fourth quarter and full year ended December 31, 2025. Starting with the fourth quarter, research and development expenses were $6.2 million compared to $7 million in the same period last year. This decrease primarily reflects the completion of the SHIELD II Phase III trial and our transition towards regulatory submission and preparation activities. General and administrative expenses for the quarter were $1.8 million compared to $1 million in the fourth quarter of 2024. Marketing and business development expenses were $0.6 million for the quarter compared to $0.2 million in the prior year period.

Net loss for the fourth quarter was $8.5 million or $0.41 per share compared to a net loss of $8.5 million or $1.13 per share in the fourth quarter of 2024. Turning to the full year results. Research and development expenses for 2025 totaled $23.8 million compared to $22.8 million in 2024. The increase was primarily driven by continued activities related to the completion of the SHIELD II Phase III trial as well as regulatory preparation efforts and advancement of our development programs. General and administrative expenses for the full year were $7.2 million compared to $4.3 million in 2024.

This increase was primarily due to noncash expenses relating to the vesting of performance-based options following the successful completion of the SHIELD II Phase III trial. Marketing and business development expenses for the year were $2 million compared to $0.9 million in 2024, reflecting increased business development and commercial preparation efforts as we move closer to potential commercialization. Net loss for the full year ended December 31, 2025, was $34.2 million or $2.09 per share. compared to a net loss of $29 million or $4.91 per share in 2024. From a balance sheet perspective, as of December 31, 2025, PolyPid had $12.9 million in cash, cash equivalents and short-term deposits.

Subsequent to the end of the quarter, several long-time shareholders exercised warrants ahead of their expiration at prices ranging between $3.61 and $4.5 per share, generating $3.7 million in additional gross proceeds, further strengthening our balance sheet. Based on our current plans and assumptions, we believe that our existing cash resources will be sufficient to fund operations into the second half of 2026 and through several significant upcoming milestones.

With that, we will now open the call for questions. Operator?

[Operator Instructions]

We will take our first question -- and the question comes from the line of Chase Knickerbocker from Craig-Hallum.

Maybe just a couple around the pre-NDA minutes that you received in December. Depo, would you be willing to share kind of how those discussions around the scope of the label sort of progressed? And just kind of generally, what your current expectations are as you kind of look to your proposed label as far as what we're thinking around kind of colorectal kind of specific versus a broader kind of abdominal label? And then kind of the same question around what kind of investor expectation should be potentially for some sort of risk factor or size of incision that could be on a proposed label.

Thank you. With regards to label, based on our discussion with the FDA we are targeting an initial label for the prevention of surgical site infections in prevention in patients undergoing abdominal colorectal surgery. This indication is directly supported by the SHIELD II Phase III data and is also our breakthrough therapy designation. We also expect that there may be an opportunity to evaluate potential label expansion into broader abdominal surgical application as we pursue -- as we go through the review process in a parallel. And the main rationale around it is as colorectal is the worst SSI prevalence in abdominal surgery. And obviously, there are other, but that's just as a high level. So that's our baseline assumption.

This is how we built all of our planning and models. We do not expect on that regard anything that will narrow this. We think that this is a very conservative assumption, and this is why this is our baseline assumption. And as you referred to, we also met the FDA towards the end of last year as part of an NDA process, actually had a pre-IND communication with the FDA, where the purpose of this communication was really to align the requirement around the NDA submission, both in terms of time lines as well as in terms of having the FDA agreed that the Phase III data is adequate for NDA submission, both in terms of efficacy and safety.

Got it. Maybe just along those lines, it may be somewhat dependent on kind of partnership discussions as well, but any kind of formal thoughts on kind of plans as far as what may be required for a broader label and/or kind of further expansion opportunities for D-PLEX100 specifically. Maybe a little bit too early for that question, but any additional thoughts?

Yes. Maybe I think what I can say is that we have as part of our planning time frame that we plan to meet with the FDA to discuss this.

Got it. And just maybe last one for me on kind of future applications for the platform. Can you kind of help shape our thinking a little bit for kind of where you may go next? Obviously, you've announced that metabolic program, but -- and how these kind of future formulations may differ from what we've seen you do thus far?

So first, as you rightly referred to, we have the opportunity to expand D-PLEX into other indications, and that's the first and probably the most advanced pipeline expansion that we look, which is specifically on D-PLEX. But with regards to other pipeline, so I'm saying that because it's important for investors to understand that our near-term focus remains firmly on execution, the regulatory and commercialization pathway of D-PLEX. So that is where the vast majority of our intention, our resources are directed. But as we move forward with the NDA submission and approval, we are expanding into specifically, as you all know, around the GLP-1 and metabolic health.

I expect that we will see during this year, we'll get additional data. I would even say around midyear. This program is still at preclinical development but with the underlying technology platform that provides long-term opportunity -- sorry, long-term exposure of 60-plus or around 60 days and the ability to support it in a linear way, this is very lucrative in this area.

The next question comes from Jason Butler at Citizens.

Congrats on the progress. Dikla, can you just talk about the work that you're doing or will be doing this year to get ready for a potential approval of D-PLEX100, both in terms of building awareness as well as getting ready with payers. Just the work that needs to be done before approval.

Sure, sure. So some of it, we've shared with -- in previous calls and some of it is also Ori referred to in our new branding and website. This is all part of getting ready for the commercial stage. Some of it is already out there like the website and the new branding. But also there is work that is done around packaging for D-PLEX, its commercial name that we will obviously expose later on once we are in the approval process.

And in addition to that, we have been doing a lot of work, not just now, but in the last 2 years. And Ori, please feel free to add to that. whether it is in terms of market research of pricing, creating awareness, you'll start to see many more abstracts and article coming from our front during this year, building a KOL network. Just the beginning of it was with our KOL event with doctor -- or well, it was actually our KOL event, but the ROTH Group KOL event with Professor Steven D. Wexner. Ori, do you want to add anything to that?

I would just add that the main work right now is really, like you said, Jason, kind of putting the data out there and making sure that people are aware of the data of the product. So conferences will be a big part of it. publication will be a big part of it. A lot of the health economics piece is something that is kicking off now because, as you said, for market access, this is a driver. But also some of the on the ground kind of boots on the ground market preparation will be dependent on the partner, and we are expecting that the partner will have sufficient time, and we are -- and that's why our conversations are with kind of experienced global partners that will kind of get running immediately after signing can go on and start doing all the prior approval meetings in the hospitals and really get the access piece going almost immediately.

Great. And then just one more for me. On the GLP-1 program, how do you think about strategically when and what data you can generate yourself versus when a partner might make sense to bring on board? And just longer term, how you think about positioning and differentiation in this market?

Sure, sure. So our GLP-1 program leverages our new Kynatrix technology for approximately 60 days of sustained release and we are targeting improved patient compliance. Our vision for this program is to partner at a relatively early stage. What we are building now is more robust preclinical efficacy and [ PK ] sets of data that support this attribute, this sustained release, no spike as you see the burst release that you see -- that is seen with current weekly delivered molecules.

So we are targeting to have this more robust efficacy and PK studies. We are already along the development of this program, have been speaking with different groups, but we believe that once we have this set of data, this could be very interested for partner, especially since we have -- this is coming after a validated program. D-PLEX100 has validated our approach in a very robust way, both in terms of manufacturing, CMC as well as PK and our ability to deliver and develop our technology forward into drugs.

We will take our next question -- your next question comes from the line of Boobalan Pachaiyappan from ROTH Capital Partners.

So first, I wanted to talk about the progress you highlighted in the press release about the potential U.S. partnership. So without getting into the confidential information, is it reasonable to assume the potential partner should also have a presence in ex-U.S. regions? And also assuming the significant interest post-NDA filing, what factors could play a pivotal role in closing in the partnership? And I have some follow-ups.

Great. thank you for that. So I'll start with the first portion. In terms of other geographies. So we are very focused now on U.S. We think that's our highest priority. That said, there might be interest to other geographies as well as part of those discussions and other discussions that we have. But our first priority is U.S. Also, since in terms of the time line, when you look at our NDA submission that is expected by the end of this quarter and European submission is expected later on about a quarter -- around the quarter after we finalize the FDA submission. So it makes more sense. And your second portion was?

So I was asking about what factors might play a role in identifying the final partner.

So Ori, feel free to add to that. But we have been saying for quite some time that the ideal partner and also the partner that we are discussing with are with broad hospital-based capabilities and present in the surgical suite, in the hospital. And this is what's really needed to market a product like D-PLEX100. So I don't see the -- what could go wrong in that respect because I think that the interest and there is an alignment between the interest and the need. Ori, do you want to add to that?

I would just add that we are -- we keep saying we're advancing, but we are advancing from a high-level discussion. The due diligence is going on and becomes more and more in the details. And I think that's a sign that we're heading in the right direction here.

All right. That's helpful. And then you mentioned about the KOL call. Obviously, during my call with Dr. Wexner, she mentioned that the Phase III study was well designed, adequately controlled with balanced characteristics and the patients, they reflect the real-world scenario. So I was wondering if you could comment on whether the FDA took a similar view based on your pre-NDA meeting communications.

I think the fact that the positive -- the feedback was positive and there is an alignment on that and the FDA confirm both the NDA pathway as well as indicated that the existing clinical data package is sufficient to support an NDA submission. I think that's -- it says it all..

All right. Maybe one final question from us. So we have done some research. It looks like there's approximately 900 integrated delivery networks in the U.S., and they manage roughly 6,000 to 7,000 hospitals. So I was wondering, assuming this is indeed the case, what percentage of potential target IDNs would reasonably likely to include D-PLEX on formulary within the first 12 months after approval?

Ori, do you want to take this.

Yes, I can take this. I think the process -- first, I would say that, of course, this would be a mission for the U.S. commercial partner. And this is the reason why we are discussing the commercialization activities with partners that understand the ins and outs of the IDNs that have relationship from the surgeon to the pharmacist to the IDN level to the GPOs to really ensure kind of uptake as fast as we can. Specifically about 1 month, I think it really -- it depends -- it's a hospital-by-hospital or network-by-network decision.

There are a number of steps, and I think we discussed this in the past, there are a number of steps to get the product used in the hospital starts with finding the right champions, which this is a process that will be done even before launch to start educating from a medical perspective, educating the surgeons on the need. Then the product needs to come to a P&T review. And in this P&T review, there will be discussions both on the clinical benefit, the end economic benefits. All of that are topics that we have strong information on and the partners will have all the tools they will need to make the case.

And then likely, the hospital or the IDN will ask for some sort of maybe a small pilot study, a handful of patients just really to see how this product works in the operating room and then an update to the electronic systems within the hospital. So all to say a little bit of a long answer to say that it's -- the uptake will take a little while. It's not a day 1 peak of sales, probably a few months before we'll start seeing a meaningful uptake. But I think the flip side of that is once there is -- once the product is on a formulary and there is usage, it's a relatively sticky process, meaning the products are rarely getting taken off formulary, assuming the product works and there are no issues. So we can see once the product is on formulary, volume growing steadily and usage growing steadily month after month.

We will take our next question -- and the question comes from the line of Brandon Folkes from H.C. Wainwright.

Congrats on all the progress. Maybe just 2 from me. Maybe firstly, any color on when you expect to complete the rolling submission? And then maybe secondly, can you just elaborate on the differences between the Kynatrix platform and D-PLEX technology platform? And just how much early-stage work do you need to do on the Kynatrix platform? Or how much can you leverage from your experience with D-PLEX?'m just thinking about sort of how we should think about timing of moving products forward on the new platform?

Thank you. Thank you, Brandon. So with regards to the time line, as we said, we expect to submit the NDA by the end of the first quarter. We will first submit the CMC and nonclinical module followed by the clinical module. And the gap between those 2 submission is not more than a couple of months. It is very close to one another. From that point, since we have a Fast Track and breakthrough therapy designation that support the use of a rolling submission priority review, we expect that the NDA review will be shortened to 6 months from the regular 10 months. Ori, do you want to give a bit of difference?

Yes, I can take that question. So Brandon, first, I think it's important to understand that it's not that one day we were on PLEX and the next day, it was Kynatrix. Kynatrix really is collecting under one umbrella, a lot of the work that has been done over the past several years that is not -- that was not under PLEX and under the PLEX IP umbrella, meaning to say there's no gap here. The work has been going on for -- as a continuous work.

What you see under Kynatrix is now a way for us to collect some of the IP on peptide release on intratumoral injection on the STING agonist partnership that we had. All these activities coming under this umbrella and helping us build new IP and in a way, allowing us to discuss this more freely without the limitations of PLEX. So it's a new name, but the work in the R&D team and the development has been going on continuously forever. Does that make sense, Brandon?

Yes. Very helpful, I appreciate it and congrats again.

This concludes today's question-and-answer session. I'll now hand the call back for closing remarks.

Thank you all for joining us today. 2025 marked an important turning point for PolyPid, and we enter 2026 with momentum across regulatory, commercial and organizational fronts. With the rolling NDA review expected to begin shortly, continued progress in partnership discussion and a clear strategic vision for the company's future, we believe PolyPid is well positioned for the next phase of growth. We appreciate the continued support of our shareholders, partners and employees, and we look forward to providing further updates as the year progresses. Thank you. And operator, you may now close the call.

This concludes today's conference call. Thank you for participating. You may now disconnect.

All right. Good morning, everyone. My name is Boobalan. I'm a Managing Director and Senior Biotech analyst at ROTH Capital Partners. I specialize in emerging companies in the SMid-cap space, particularly in the pharma and biotech sectors. So I'm delighted to welcome Dr. Steven Wexner to this KOL webinar. So before that, I just wanted to invite PolyPid team as well. Just as a disclosure, PolyPid is a $78 million market cap company. They have a product which is called D-PLEX100, which we'll discuss in detail today.

And then just in case, I cover PolyPid and my recommendation is a buy rating. My 12 months price target is $9 per share. So why don't we start with introductions First, Dr. Wexner, maybe you can give us a high-level introduction. I think you can do better justice to yourself than me.

Sure, sure. So my name is Steve Wexner. I was at the Cleveland Clinic, Florida for 38 years as Chair of the Department of Colorectal Surgery and Director of the Ellen Leifer Shulman and Steven Shulman Digestive Disease Center, past President of the American Society of Colorectal Surgeons, past President of the Society of American Gastrointestinal Endoscopic Surgeons, past Vice Chair of the Board of Regent for the American College of Surgeons and a variety of other things, Editor and Chief of Surgery, one of the most important surgical journals. As of November 1, I'm the Executive Director and System Chief at MedStar Health, Georgetown University Hospital, the 10 hospital system in the Maryland and D.C. area.

Great. Can you also tell us your core practice area and number of patients you treat every year, just to give some idea.

Well, typically, I would be doing about 250 or so major operations annually. That's considering that I'm gone about 1/3 or more of the year traveling, lecturing and teaching, but in the 2/3, I'm there, about 250 major cases, actively participating in research. My main areas of interest in clinical practice and in research are rectal cancer, ulcerative colitis, Crohn's disease.

My practice is largely almost exclusively referral from out of state overseas. And a lot of those patients are for reoperative surgery because they've had other surgeries that haven't, shall we say, had the end result as initially desired. With those operations, I train surgeons from all over the world. I've trained probably a little more than 800 surgeons by now, about 200 from U.S. and about 600 from other countries.

Fantastic. And we also have PolyPid team on the call. So maybe, Dikla and Ori, can you please introduce yourselves?

Sure. So I'm Dikla, Dikla Czaczkes Akselbrad. I'm the company's CEO. I'm with the company now for 11 years in different C-level position, the last 4 as the CFO. Prior to joining PolyPid, I was the CFO of Compugen for many years which is an Israeli cancer immunotherapy company. Ori?

And I'm Ori Warshavsky, Chief Operating Officer. Just about 5 years with PolyPid. Before that, 10 years with Teva Pharmaceuticals. I'm mainly responsible for the U.S. activities for PolyPid, whether it's the commercial side, the investor side and some other activities as well.

All right. Great. Thanks, Dr. Wexner, and thanks, PolyPid for the introduction. So the way we are thinking about this particular event is this will be a fireside style question-and-answer. And obviously, if you have a question you can always submit it in the text box or you can send it to me by e-mail, which is [email protected]. So it's the first letter of my first name and my entire last name at ROTH.com. So all right. Now let's get into the fireside style webinar.

So for the ease of clarity, we have segmented this discussion into 5 broad topics. So first, we wanted to spend some time set this ground for SSI. So people who are not familiar with the topic, they can understand or learn more about this. We'll essentially discuss the symptoms and potential risk factors. And secondly, we will dive deeper into how -- why SSIs are relevant for hospitals, in fact, even for physicians. I think this will be very important because we have an expert in this, and he is going to provide some high-level overview on this.

And thirdly, we will dive deeper into D-PLEX100. This is PolyPid's agent that is designed for the treatment of surgical site infections. So we will spend a little bit time talking about the clinical data generated to date. And we'll also, of course, get some opinion from Dr. Wexner, what he thinks about the data and whether he would be inclined to prescribe these agents, assuming this gets approved.

And fourth, we will speak to PolyPid management. They will guide us in terms of what are the expected next steps, including potential time lines for filing and approval. And finally, we will get some preliminary insights about PolyPid's commercialization plans, particularly in the U.S. and ex-U.S. setting.

So again, if you like to submit your questions, you can submit to my e-mail or provide this in the chat box below. So let's start with topic 1, which is background on SSIs. So Dr. Wexner, can you maybe provide us a high-level overview of what is an SSI and what are some of the signs and symptoms that we are -- you are actually seeing when a patient has SSI? And what risk factors could make this more impactful?

So surgical site infection, which is SSI is a major cause of morbidity prolonged hospitalization, even in some cases, mortality. For what I do for colorectal surgeon, it's particularly high because of working on the bowel, although it can occur with any kind of surgery, including joint replacement surgery and lung surgery and the rest of it, but it's particularly notorious when we're working on the bowel because no matter what we do to try and cleanse the bowel prior to surgery with cathartic laxatives, with oral antibiotics, intravenous antibiotics, it's not -- nothing is infallible.

So we end up with a surgical site infection despite our best efforts. Surgical site infection can cause anywhere from double to an order of magnitude, like 11-fold increase in mortality and is indeed life-threatening. Surgical site infection can be superficial as shown here, where it's a little redness of the incision or maybe there's a little fluid that's seeping out and -- of the incision, the incision opens a little bit. That can cause cosmetic disfiguration later with a wider, broader scar. It can prolong hospitalization, certainly increase cost because of the need to manage that wound.

But when we start getting into the deep incision, the entire wound can open up and the strong connective tissue holding the abdomen closed can open up, which is, of course, a disaster or we get into even deeper infections within the pelvis or within the abdominal cavity, which starts to cost in the U.S. alone, something over $3 billion and increases hospital stay by estimates of up to around 10 days or so and increased cost of admission. It can double the cost of admission.

So one of the major, major Achilles heels of what we do in abdominal surgery and colorectal surgery is surgical site infection, something that we absolutely want to avoid at all costs. And I don't just mean cost of dollar cost, but there's the morbidity. People lose time from work, people go home requiring antibiotics, maybe even intravenous antibiotics at home. That has its own set of complications. Time is lost from work. I'm not sure that's factored in these financial calculations of $3 billion to $10 billion. I think that's health care system cost that doesn't count disability to the patient.

So it is a real, real major problem that we want to avoid. We take precautions, as I say, but there's no panacea, protecting the edges of the wound, all manner of things, irrigating. Until this trial came out, there really was nothing that was paradigm shifting that was moving the needle for us.

Great. Are there certain organs that are more prone to SSI risks or certain surgeries that are more prone to SSI risk versus others? Just curious. For instance, you talked about abdominal surgeries. Of course, there are some cardiac surgeries, there could be some gynecological and all that. So how does this SSI risk varies as you shift from one surgery to the other?

Well, again, I'm limited to colorectal surgery and is very high in colorectal surgery because it's what called clean contaminated surgery. By definition, it's contaminated. So if you had an operation like a joint replacement that is clean surgery, totally clean. There should be absolutely nothing to do with any bacteria. And in fact, if that happens, the patient loses the replace -- can lose the replaced joint. That's a much lower risk of infection.

Gynecology is not quite the same magnitude of colorectal, but it's also concerning because generally, depending what they're doing if the gynecologists are working just on the ovaries, that's intra-abdominal, but if they're taking out the uterus, then they're dividing across the vagina, which also is latent with organisms that can cause problems.

Then there's other abdominal surgery that's a bit cleaner, liver or gallbladder, but all of these operations lend themselves to the potential of infection. So colorectal is really at the top of the list, but that accounts for about 500,000 operations a year, give or take, in the U.S., worldwide, obviously much more. Within colorectal surgery, though, and the other operations, certain patients are at much higher risk, patients with diabetes, patients who've had radiation or recent chemotherapy, patients who are immunocompromised either by an underlying disease or because they're taking medicines to keep them immunocompromised to keep the disease from flaring like arthritis, for example. So there are many, many patients who are even higher risk than the baseline.

Okay. So because you mentioned about colorectal surgery, so maybe I'll restrict my next question, focusing only on colorectal surgery. Can you talk about what's the current standard of care for SSI prevention in colorectal surgery or colorectal setting? And if you can talk about what's the antibiotic you use and what kind of special precautions you take, if you can talk about all of that that would be great.

Yes. So it varies a little bit around the world, and it's kind of like a pendulum that keeps swinging. But where it seems to have settled at least in the U.S. is patients' bowels before surgery, the patient cleanses their bowels with cathartics like somebody would for colonoscopy. Adding to that our oral insoluble antibiotics that deliberately stay in the intestinal tract to try and neutralize the bacteria in the colon.

On top of that, then there's intravenous antibiotics when the patient comes to the hospital, usually a single dose. And it's going to depend what's on formulary at the given hospital, but it's a broad spectrum antibiotic. One of the things I didn't mention in trying to prevent wound infection giving those antibiotics can cause an infection. They can cause antibiotic-induced diarrhea or clostridium difficile, which in and of itself is problematic. It's highly contagious and has a lot of morbidity.

So giving the antibiotics to try to prevent infection can cause infection, ironically enough, at least the way they're typically given intravenously and orally. In addition, what we do to cleanse the bowel may have problems with the joint up healing, the anastomosis healing. And there's a lot of data on the microbiome now from a variety of laboratories around the world, showing that if you really do sterilize the colon, you're also killing the good bacteria, and that's problematic.

So the solutions we have now are not ideal because you're just -- it's taking the shotgun at the fly, if you will, and you're giving all these antibiotics, which risks overly sterilizing the bowel, if you will, possibly having problems with the joint up healing, possibly causing antibiotic-induced diarrhea. We also, during surgery, are very meticulous the way we handle the bowel, and we use wound protectors so that we -- when things are removed or handled, there's no direct contact with the tissue of the patient between the fascia, the strength layer of the abdominal wall closure around the skin.

All right. Great. So with that as a background, let's dive deeper into the impact of SSI on hospitals. So let's just imagine a situation where a patient walks in or gets admitted to the hospital for a colorectal surgery. He gets the surgery done, returns home only to find or he's experiencing SSI. And then he comes back to the hospital. So what are the steps he can take? And how does him coming back impact his own setting? Or how does it impact the hospitals and then we can take things from there.

Yes. So there's the financial impact, which you're showing here, so much so that the DRG may go up because of complications. The hospital is actually getting more money, but then they're being penalized for readmission. In addition, as an individual surgeon, you're having to explain to the patient why the patient has an infection, which is never a pleasant conversation, even though it's part of the informed consent prior to surgery.

On top of that, you're having to present it at the morbidity and mortality conference. So you're having to explain again why the patient got this infection. And depending on the severity of the infection, you may be reoperating on the patient, which the hospital just loses all that money because it's an unanticipated reoperation. So there's a lot of downsides besides the financial CMS penalty, there's a lot of downsides emotionally, psychologically to the surgeon and the patient and physically to the patient.

Okay. So in the interest of time, what I wanted to do is I wanted to spend some time on the middle table that I highlighted, talking about HACRP penalties. So just to get to speed, so this was a retrospective study that was done that analyzed approximately 3,100 hospitals, which participated in the HACRP program. So HACRP stands for Hospital-Acquired Condition Reduction Program. So this analysis identified approximately 25% of hospitals that were included in the study, which is roughly 771, they were penalized by CMS.

The finding that whatever the authors have found out, notably Florida and New York, for instance, they performed poorly, as you can see in the highlighted green box in overall rankings versus other states. And what is even more interesting, if you look at the table on the right side, some of the hospitals that have been known for their excellent service providing capabilities, including those that were chosen by U.S. News's best hospitals on this role, including Weill Cornell and then Stanford, they were also -- were under penalty.

So this scenario, technically, it highlights the needs for U.S. hospitals to increase their service failing to do so, they will be in the bottom 25th percentile, and it will incur approximately, I think, 1% penalty. So with this as a background, I wanted to ask some follow-up questions. So how does SSI impact star rating for the hospitals? What are the implications of a lower rating? If you can maybe elaborate more on that, and then we can take things from there.

Yes. I'm not sure there's a lot more to elaborate beyond that other than we're all pulling in the same direction to limit surgical site infections, which in turn limits morbidity, mortality, readmission, financial penalties, reoperations for patients. And sometimes, quite honestly, permanent long-term adverse sequelae, that's something we've not discussed nor is that information captured in these dollar amounts.

And what I mean specifically is if the patient gets a superficial and certainly a deep surgical site infection involving the fascia, the strong tissue that holds the belly closed at surgery or strong tissue that holds the belly closed without surgery, with fascia, that fascia can open up. And if that fascia opens up or even weakens, the patient ends up with an incisional hernia. And that now may cause problems in the hernia itself.

The patient can get intestine, stuck in that hernia and up with an emergency surgery. Or more likely that's not going to happen, but the hernia grows and is unsightly and the patient ends up having to have the hernia fixed. So now there's another operation that's occurring outside of that immediate 30-day period, maybe outside of the first 12 months, that's additional morbidity potential complications from that surgery. Now maybe the patient has to have mesh implanted at a later date, plus the patients being exposed to the entire gamut of potential complications from a hernia operation. And that's all courtesy of that initial surgical site infection.

Great. And then maybe switching from hospitals to physicians, are surgeons personally impacted by or having -- or reporting high infection rates? How does it impacts the bonuses or ranking, thinking beyond the patient impact here.

Yes. I mean it's going to depend upon the health care system because some surgeons may be working fee-for-service, others may be full-time salaried, some in a hybrid position. But the common denominator is wherever you work, whoever is looking at the data is going to share with you your infection rates. And if your SSI rates are outliers, either good or bad. If it's really good, somebody is going to say, we want to share your best practice. If it's high, somebody is going to say, you need a best practice, what's going on here?

So you're going to be called out for that in a negative way. How the metrics are measured by the various Newsweek and U.S. News & World Report and all the other Castle Connolly and all of these other reporting agencies, it changes all the time. So I'm not exactly sure where in their various algorithms, SSIs are captured. But I can tell you that they do play a role because it's your outcomes, right? It's part of your outcomes. And if the outcomes aren't as good, you're less likely to be cited in the top tier of providers.

Okay. So you mentioned that having an SSI is -- the conversation is not going to be pleasant between a physician and a doctor. In fact, there are some reports saying that patients have legal rights to sue hospitals if they have SSI. So with this as a backdrop, I wanted to ask this question, is every documented SSI qualifies a medical negligence?

I don't personally think so at all. I mean I'm not speaking on behalf of any society or institution, but I think that would be a pretty heavy hand to say that it's somehow malfeasance. It is a recognized problem and that's something that's part of the informed consent in the patient. But I don't believe by any stretch of the imagination, it's what you're potentially suggesting it could be. No, it's not at all. It's an unwanted problem, but it's not an unexpected problem.

Okay. Nicely said. All right. We'll switch gears and talk about D-PLEX100. Maybe I can bring in PolyPid team for this discussion. So maybe Dikla or Ori, can you give us a high-level overview, the genesis of D-PLEX100, because you're -- essentially you're formulating a known drug, which is doxycycline with polymers and lipids. Obviously, doxycycline is known -- it's been in use for more than 50 years. So I'm pretty sure others might have thought about it and maybe they have failed to come up with a formulation similar to yours. So if you can talk about what attracted you about D-PLEX100 the most?

Well, so -- sorry...

Yes, go ahead please.

No, I thought it was for me. Sorry.

We'll come back to you in a minute. Take a minute.

So first, it was very interesting. I must admit, Dr. Wexner, you pointed out some things we, same as you in a way, breathe and -- breathe day and night the aspect of SSI and specifically abdominal SSI, but it was nice to hear your perspective. So thank you. PolyPid has invested over a decade developing our technology, our platform technology that allows for extended prolong coverage of the drug.

And a couple of years ago, probably around 6, 7 years ago, we decided and understood that utilizing the platform into the area of surgical site infection could really make it different, could really bring innovation into area where there is none to very little innovation and not just bring innovation, but potentially bring something that could be transformational in terms of the level of infection that have been accepted for over a decade.

And I agree with Dr. Wexner, and we heard that very often from surgeon that SSI is in a way the cost of doing business. It's not that you could -- whatever you'll do and even we -- although we are getting very close to that, no one will claim that they have 0 infection rate or that they can get infection level to 0 because the bacteria is out there. It's out there every day on a day-to-day basis. But what we are trying to do by covering, draining incision for 30 days, which is in most of the surgery, the way CDC defines surgical site infection.

So CDC defines surgical site infection as infection that occurs within 30 days from the index surgery and covering the incision deep and superficial, including the fascia for 30 days could really make a difference. So time is of essence here. And the other aspect is the way we are presenting the drug to the site. The fact that it is at the open or where the bacteria could go in from the outer to the inner, although with colorectal, we are also bearing the risk from the inner to the higher, this is why we see a much higher infection rate than in other surgeries, allows us to enhance the antibiotics to create local minimal inhibitory concentration that probably cannot be achieved without very significant side effect in a systemic manner.

Dr. Wexner, do you have any thoughts on that? What attracted you the most about D-PLEX100?

Yes. So I had the privilege of chairing the Data Safety Monitoring Board. I was not an investigator, but I was immediately attracted to the concept of eliminating -- potentially eliminating some of the other types of prep that are used. And in fact, the majority of cases, cases were not done in the U.S. and the majority of cases were not done with the triple preparation as we did -- as we do in the U.S. with oral cathartics, oral antibiotics, intravenous antibiotics, which is great news because maybe we're overkilling.

And maybe instead of trying to do things in all different directions, we just focus on the incision itself with this long-acting potential, and we can get rid of some of the potential adverse sequelae of oral antibiotics, of intravenous antibiotics. I mean even bowel prep itself, giving patients cathartics can cause significant dehydration, it can cause kidney dysfunction, acute kidney injury. We'd like to avoid those things, obviously.

And this is a totally novel way to deliver, as was mentioned earlier, an agent that's been around for a very, very long time that we wouldn't typically pick. This wouldn't be a drug we would use for much of anything. But now suddenly, it has a role. So I was very intrigued by this as being something really in my entire career that's new for SSI prevention. This is truly new. This is a paradigm shift for us. It represents a different direction. And that's what attracted me to it.

Also, when I heard the size of the study, that was also very attractive because sometimes people have underpowered studies, and I'm not interested in participating in underpowered studies because they're not going to tell much. But this is a very, very robustly powered study. And I thought that was a second very appealing factor to me. If I'm going to get involved in research, I want it to be meaningful research.

Fantastic. All right. So let's dive deeper into the D-PLEX100 clinical program. Maybe, Dikla, you can just give us a high-level overview. What are some of the goals you have set prior to launching this program? And obviously, you have done Phase I, Phase II and you have done multiple Phase III studies, and it worked for the third time. I think SHIELD II was very -- the lessons you have learned from the past that you kind of like implemented in SHIELD II that led you to success? And then we can talk more about endpoints in a bit.

Sure. So maybe just as an overview, the SHIELD II and all of our abdominal studies were designed to show reduction of infection within 30 days from the surgery. We also follow the patient for additional 30 days for safety, so overall 60 days. Obviously, all the study were prospective, multinational, randomized, controlled double-arm and blinded studies.

With the Phase III studies based on the feedback from the FDA, from the agency, we also added to the primary endpoint measuring mortality rates, as well as reoperation, which is a common problem, specifically in colorectal resection. And this was our primary. SHIELD II was focusing on open colorectal resection, large incision, although in addition to the 800 patients that were the intention to treat population, we also added about 200 patients that had laparoscopy procedure in -- specifically in colorectal resection, those are having still a relatively large incision of 7 centimeters for the portion of the resected colon. So still high risk of infection even in a laparoscopy procedure.

Can you talk about the endpoints of this study? And what would make the study successful at that point when you launched the program?

So this is a very interesting question because we were obviously looking to show a substantial reduction of infection. We wanted to show -- we said we are giving the surgeon another tool to their toolkit, what we believe is a very powerful tool. We would expect to see fewer infection.

But the other thing that we were set to show is that when you evaluate infection versus infection, yes, in the D-PLEX treated arm, there are much less infection versus the standard of care, but we also thought that we should see milder infection. So we were looking for a dual effect in a way to see fewer infection in the treated arm, but also milder. And I think we -- I'm very pleased to say, and we are all very pleased to say that we've been showing that in this Phase III in the most robust way possible.

Okay. Great. And then Dr. Wexner, here's -- I'm showing you the demographics and surgery characteristics. These are from SHIELD II data. So I wonder, obviously, there's a D-PLEX arm, the standard of care arm. Is there anything that is striking out from this slide? Or do you feel the population or the patients that were enrolled in SHIELD II, they're reflective of real-world population. Can you provide some broader thoughts on that?

Firstly, yes, it's everyday practice for most surgeons around the world in terms of distribution of cases. But secondly, very importantly, the groups are well balanced. And again, that has to do with the statistical design of the study. So the stratification was appropriate. We don't end up with morbidly obese patients in one group and aesthetic patients in the other group or one group very heavily weighted towards inflammatory bowel disease where they'd be immunosuppressed. There's small percentages in both groups. So I think it's well -- it's well designed. It's well balanced, and it is representative of standard practice.

All right. Great. So I'm showing you here the primary efficacy endpoint. So Dikla, when you launched this program, what was your expected SSI rate for the placebo or the standard of care, sorry? And what is that you wanted to show in the treatment arm? And how does the results satisfy your expectations?

So we were thinking about a 10% infection rate in the standard of care arm. And we were hoping to show more than 40% reduction in surgical site infection. What we see here is the primary endpoint, which is combined with mortality and reoperation. So you see that the standard of care arm have 18% of the 3 together.

So patient can have a surgical site infection and they can end up having a reoperation to try to treat the surgical site infection, and they can even die at the end of that process. So we have more than one risk factor or major risk factor that is attributed to surgical site infection among other things, and those were the numbers in the standard of care versus 40% reduction with the D-PLEX arm.

If you move on to the next slide on the key secondary endpoint, I think that is really looking just on surgical site infection, where we believe D-PLEX have a major role in reducing the numbers, and we've seen that all along the way. And you can see here, 60% reduction from almost 10% infection rate to less than 4% infection rate with a p-value that is lower than 0.005, so very robust. I must say, and I'm curious to hear Dr. Wexner's opinion on that, from the time that we had this Phase III data, we shared this with [indiscernible] with surgeon.

And we were getting 2 observations, which we all found interesting. The first one, most of them, if not all of them said that the 9.5 is lower than what they see in practice in their clinic for patients with open large incision. And to that, our response was that it makes perfect sense. This is a clinical study. We cannot enroll patients that undergo emergency surgery. It's very hard to have them sign a consent or patients that are very unstable. So it makes perfect sense that this is a bit lower than the 11%, 12% they expect in this patient.

And the other observation was that with D-PLEX in large open colorectal resection, we have less than 4%, 3.9%, which is usually lower than what surgeons see in laparoscopy procedure. So that was something that we've heard quite frequently, and we found quite interesting.

Okay. Can you also talk a little bit about incision length greater than 7 centimeter, because I think this will potentially help you to broaden the label opportunity. So if you can provide some thoughts on that.

Yes. And this was the purpose of having this almost 200 patients, 177 patients to have a broader patient population. This patient population gets the study to close to 1,000. It is over the intention-to-treat population. And you can see that we maintained the same overall level of efficacy close to 40% in the primary endpoint and very robust, again, p-value, which is lower than 0.005.

Okay. Can you also talk about the safety profile of D-PLEX100 from SHIELD II data?

Sure. So -- and maybe Dr. Wexner would want to add to that. From the perspective of the study ongoing, we found the data, first of all, very robust. We have now overall more than 1,000 patients that have been treated with D-PLEX in different studies. We haven't seen anything that could suggest that there are adverse event at a higher rate in the D-PLEX arm, if at all, lower. So we found that the study is very appealing in terms of the safety aspect.

Okay. Maybe I'll turn to Dr. Wexner. Dr. Wexner, what are your thoughts on SHIELD II data? If you can specifically talk about the primary endpoint and the secondary endpoints, including the ASEPSIS score that is shown on this slide, a little bit on safety, that would be helpful.

Well, in terms of safety, I can tell you, again, having the privilege of chairing the Data Safety Monitoring Board is safe. Safety was not a consideration. We had multiple opportunities to stop the trial if there are any concerns, and there were none. And at the end of the day, there are none. So I think it is very safe. And I think even just logically, intuitively, delivering antibiotics directly to the tissue rather than through the mouth or through the vein is going to be a safer way to do it. I mean, without having any PhD in microbiology, anything like that, it just seems a better mousetrap.

Secondly, in terms of the efficacy, so safety is fine, efficacy, I think that I've only participated maybe one -- firstly, just to preface, I have over 1,200 peer-reviewed publications, okay? So I'm an active researcher. I would say once a decade, I participate in a study as an investigator or the study author, in this case, the DSMB, where there's more than a 50% improvement over the control group. Very often, it's as was hoped. You get a marginal improvement and then you're trying to justify, is it worth it.

This is great. I mean this is, again, a rare finding that you have more than a 50% improvement in efficacy. So I think surgeons are going to be very pleased and non-surgeons, too. I mean, probably the infectious disease doctors are going to say, why are you giving all these other antibiotics by mouth and by vein when you can just use something that you put in a surgery in the wound and it's good for 30 days, and we know that it works and it's safe. So I'm impressed. It's rare to see this degree of efficacy in a trial.

Okay. Can you also talk about potential applicability to other surgeries, let's say, gynecology or urology and other surgeries based on the data you've seen in the colorectal surgery setting? I know you are a colorectal surgeon, so you're limited in terms of what you can say.

Well, in terms of what I do, but in terms of what I've supervised in my years, 12 years as Chief of Staff, and I've served as Chief of Surgery and other things. So -- and being, again, editor in chief of one of the major surgical journals, I am familiar with other fields.

I just don't perform surgery in them. It has applicability anywhere an incision is made. I mean there's probably -- I don't know, there may be applicability in oral surgery for dentists, maybe veterinarians. I really don't know, but one would guess that anywhere an incision is made, there is the potential for a market to try to decrease SSIs because they are problematic in every type of surgery. The mouth is another area just off the top of my head.

So I see this going in a couple of directions. I see it broadening. And again, surgeons are just always try and improve outcomes for patients. So something comes out and the label says something and somebody says, well, I'm going to do an investigation and see if I can push the limits and do this in some other areas. So it says 7 centimeters, but I'm going to do a study and look at some other number.

So people are going to start doing creative things is my guess because that's human nature. Secondly, I think there's the entire arena that's not yet explored of laparoscopic and robotic surgery. So you mentioned urology and prostates, that's robotic. Port sites get infected, too. Extraction sites get infected. So I believe that there is going to be an expansion of utilization as people also try to prevent port site infections and infections of these little specimen extraction sites. So that's not anything official because it's not labeled. I'm just telling you what I think.

Okay. This is a highly upbeat view. That's good. All right. So we'll move on to topic 4, which is D-PLEX100 next steps. Obviously, we want PolyPid management to answer some questions. So Dikla, so you had your sort of pre-NDA meeting discussion, but not necessarily an in-person meeting, which is actually a good news. So can you walk us through like what happened from the time you released SHIELD II data until now? And then what are your next steps? What can we expect to see from PolyPid?

Yes. Thank you. So we were very pleased to report a week ago on the outcome of the pre-NDA process. We reached out and we were preparing a pre-NDA package to get to an agreement with the FDA on the NDA, and we are very happy with collaborative and the answer that we got from the preliminary meeting correspondence, which got us to the understanding that we have an agreement with the agency on the NDA submission and that maybe the most important thing is that they found that the SHIELD II data is sufficient for an NDA submission and initiating review.

We plan to submit the NDA early 2026. Everyone in the company is very focused on that. We are preparing for that for a couple of months now, if not more than a couple of months. And the plan is to submit the NDA early next year. The product has breakthrough therapy designation, so -- and 3Q IDPs and Fast Track designation. So we are eligible for the priority review, which is 6 months plus 2 for acceptance. So we expect that towards the end of 2026, early 2027, we should have a PDUFA date.

Along this time, we also expect the FDA to come and do a pre-approval inspection in our manufacturing facility. This is also part of our planning and preparation these days. And in parallel, we are going also to submit with the European authorities with a short gap from the FDA, probably something around a quarter post finalizing the submission to the FDA.

Okay. Great. So there are a lot of questions I wanted to ask, you already answered in advance, so which makes my job a little bit easier. But let's dive into the most important one, potential for advisory committee meeting. Obviously, this is a technology that is -- I don't know whether -- I wouldn't call it necessarily new, but there were some polymer-based or lipid-based products that are approved by the FDA. So what are the chances of having an advisory committee meeting for D-PLEX100? I also wanted to get some thoughts from Dr. Wexner for the same question. So maybe you can go, Dikla first and then we'll have...

Yes. So I think that we -- and this is, again, part of the benefit of having the breakthrough therapy designation, we and our team have been in contact with the FDA along the years, meaning many of the aspects of CMC, of preclinical, whatever we could get to an agreement with the agency prior to the process, this has been already done.

I don't know to tell you specifically about an advisory committee at this stage. I think that there is a process that is in place. We are very confident with our filing and with our NDA and hopeful that this will be something that will go smoothly. In terms of the platform itself, -- at this stage, the way we're looking at it, I mean, we are a 505(b)(2). So the drug is a known drug. And the platform is unique, but in a way that we are using known excipients. So it's hard to say at this stage.

Okay. Dr. Wexner, same question, thoughts on AdCom.

Yes. I think it is paradigm shifting. It is truly innovative revolution. And I personally hope it's going to be fast tracked and I should think it would be. Again, in my almost 40 years of doing this, most of the applications are for something incremental. It's something a little bit slightly different flavor of ice cream or something, but it's not a new substance. This is a totally new delivery method.

And I think the FDA -- remember, the FDA, CMS, these are all government agencies, which have the same view. They want to improve outcomes. They want to decrease the cost of health care. They want to give access to patients for the best possible tools and therapies. And I personally believe this is in that book of definitions. So I'm optimistic and on a personal level, hopeful because I'd like to be using it in my patients.

Okay. So Dikla, let's go back to the filing process again. So you're planning to do it on a rolling basis, and there's 5 modules. And you said the earliest module might go out in the -- the first module might go out in the first quarter '26. So when do you expect to sort of wrap up the filing process? I mean, what's your assumed completion date? Do you think end of '26 is -- I mean, you can still get approval by end of next year? Is it still a chance?

So as I said before, we are targeting early 2026 for submission. We do not expect more than a 2 months gap between the first model and the last one. This is something that we've already discussed with the FDA as part of the pre-NDA process.

Okay. Right. So meaning assuming you get everything done by first quarter of next year, there's still a chance that you could get the approval by fourth quarter of next year?

Yes. So this is why I said that we think that the PDUFA, the approval, we should look at end of 2026, early 2027. I want to be more realistic and...

Are there anything special steps you have to take to make sure you pass the FDA on-site inspection, if you can talk a little bit on your manufacturing capabilities, especially there is this domestic push towards producing everything in the U.S. So if you can talk about some of the challenges because you're based in Israel, any potential challenges, that will be helpful.

Well, I think that the fact that we built our own manufacturing facility 6, 7 years ago to make sure that we have the capability to manufacture these large clinical studies as well as later on for commercial stage gave us the opportunity to build a lot of experience around the manufacture to establish very robust CMC processes. We are as part of the European regulation and the Israeli regulation are regularly audited and reviewed for GMP. So this will not be the first time that we are audited. Having our own manufacturing facility that is dedicated for D-PLEX, the facility does not manufacture anything else. It's not a CMO that has several clients is also in our benefit. So all of that makes this facility very, very focused on D-PLEX, very focused on the GMP processes for D-PLEX. But that said, we don't take this inspection lightly. We are engaging a lot of -- we have a very detailed plan, including several mock inspection to be prepared for the inspection.

Okay. And then maybe Dr. Wexner, I have a question to ask. Assuming D-PLEX100 gets approved, can you maybe talk about any challenges for hospitals or physicians to adopt this product? I mean, do you see the surgeon making the decision? Or do you see any infectious disease specialists in the hospital in this decision-making process, whether or not to adopt D-PLEX100?

I think health care situation and certainly in the U.S., and I believe around the world has changed. It used to be that a surgeon wanted something and said, I want this and it would appear. That's no longer the case. Everything has to go through a formulary committee. Everything is going to be subject to analysis. Is it -- if it's a substitution for something, it's easier than if it's a new product.

Having said that, if it's a product that's going to save money, that's certainly favored. And this one would because it may save readmissions, which are penalized. It will save time in hospital, which is a financial loss to the institution and all the other things we discussed earlier. So it will have to go through that process of a formulary committee, which is often chaired by someone in infectious disease, not always, but it has a variety of people on it. It may have surgeons of different disciplines. It may have internist. It will have administrative people and a decision will be made.

And the case has to be made both to the surgeons and to the administration that it's a cost-effective, efficacious, safe product. But I believe that all of those data exists, and I think it's going to be fairly compelling. In terms of the surgeon then using it, I think once it's in the hospital then it's going to be very easy for people to say. And I think surgeons are going to resoundingly say, yes, I'd like to reduce SSIs in my patients. And since it's on the shelf, I want to use it.

Okay. So do you also see surgeons sort of expanding the label, meaning like even though the first indication would be colorectal surgery or abdominal surgery greater than 20 centimeter, do you see surgeons like using this product for other surgeries where SSI could be a risk because the drug is already on formulary, assuming that?

I mentioned that earlier. I think surgeons are always looking for best outcomes for patients. And if you look at things like aspirin is not labeled per se to reduce myocardial infarctions or to prevent blood clots when you're flying on planes and people use it. And people use all manner of different drugs, vitamin C to try and prevent colon polyps. There's lots of things floating around out there. So the answer is yes. In my opinion, people will try to offer the benefit in a variety of scenarios.

Okay. Maybe in the last 5 minutes or so, I wanted to spend a little bit on commercialization strategy. So Dikla or Ori, maybe you guys can take the question. So obviously, 4.5 million abdominal surgeries in the U.S., roughly 600,000 cases belong to colorectal surgeries. So you -- I mean your partnership discussions are happening. What is that you're looking for in a potential U.S. partner, assuming the drug gets approved on time, how are you planning to expand on the D-PLEX use?

Yes. Maybe I can take that. So the product, because it is a hospital product and because as we just heard, there's specific knowledge that is needed to get the product on the P&T committee, we are looking for partners, and we are advancing our discussions with potential partners for the commercialization of D-PLEX. The partner needs to be a partner that knows the hospital, kind of knows its way through how to get product on P&T committee, how to talk to infectious disease specialists, how to talk to surgeons. So it's a very specific type of partner. We already have a partner in Europe for the product, Advance Pharma, which is responsible for all the commercial activities in Europe. And we are looking to do the same both in the U.S. and in other major markets as well.

I just got a question from audience. It says, does Dr. Wexner anticipate colorectal surgeons would readily replace current triple therapy ABX Prep with D-PLEX? Or is it more likely to be treated as an [indiscernible] intervention?

No. Well, it's a prophylaxis, it's not a treatment. So it's not a rescue agent. It's prophylactic. So I think that it's going to be a mix. I think some people are going to say like belt and braces, I'm going to do everything I'm doing plus add this. But for those people, and there are many of them who think, well, I don't really need the mechanical bowel prep or I don't need the oral antibiotics. I think it will be a substitute instead.

So I think it's going to be a mix. I can't guess the percentages, but it's going to be a mix. For some people, it's going to be another add-on, but others are going to substitute. And I think what's going to happen over time is it's going to become a replacement therapy for the others. I think people are going to realize you really don't need all of these systemic agents because you've got something that works locally. There'll be exceptions. But I think in many cases, it's going to be a replacement therapy.

Okay. And Ori, maybe you can tell us a little bit about the market research study that you have done recently and maybe highlight a couple of high-level takeaways.

Yes. Yes. So this market research is really trying to independent in a way, validate what we just heard from Dr. Wexner. We asked surgeons. We showed them the data on a blinded basis and asked them first, and this is what you see on the left side here is kind of to help us understand what are the patient population that are -- that fit for this product. And they highlighted the risk factors, just as Dr. Wexner mentioned, the obese, the uncontrolled diabetes, the transplant patients, colorectal, of course, because that's where the study is.

And also large open incision, incisions greater than 10 centimeters is almost, by definition, is a risk factor for -- or increases the risk for infection. So that's what was highlighted. And then what you see on the right here, we asked -- if you can just switch back for just 1 second. What you see on the right here is we asked about the willingness to use the product. And we ask if the product -- the yellow boxes, if the product is on formulary and is talked, the surgeons say that -- 80% of them said that they were extremely likely to use the product.

The next slide talks about similar questions, but from the pharmacy director perspective, those who chair and lead the formulary review process. We ask them first, and this is on the left here, what is the -- how the review and acceptance process will happen in the hospital. And as they mentioned, a multidisciplinary team, surgeons, IDs, finance, all looking at the different benefits of -- and risks of D-PLEX.

They would likely ask for a pilot study to really make sure that the product works as we claim it is, and then there will be a formulary decision as well. I will say that once -- it is a long process, but once the product is on formulary, it's a very sticky product. And just like Dr. Wexner said, people will start using it, word to mouth goes around the hospital, so we can see quite a broad use of it.

On the right here, and this is very critical, we ask the pharmacy directors, how likely are you to put this product on formulary. And you can see the 90% here. So 90% of the people asked said they are extremely likely to put it on formulary. And then we added if you get this additional reimbursement from the NTAP program, this number, this 90% actually go as high as 100%, we'll put it because the financial benefits here with the clinical benefits are almost a no-brainer for coverage.

What is the sample size for your market research study?

Yes. So this was a qualitative research. There were 10 surgeons from different disciplines and 10 pharmacy directors. And really, the idea was to get a sense of where the hospitals are.

Okay. We also have a question from audience. I think this is probably the final question. What is the expected pricing for D-PLEX100? Is this something you can talk about?

So we...

Sorry, go ahead.

The pricing. So we -- in the past, we spoke about around $600 per vial. Without going specifically into the details, we tested -- the numbers that you see here, we tested a higher number than $600 per vial. And still, you see the numbers for -- both for usage and for having a formulary is high as you see.

I would just add that the feedback was even higher once the product has NTAP.

All right. So we are running out of time. I think this is a great discussion and Dikla and Ori and Dr. Wexner, great talking to you. Thanks, everybody, for dialing in. Hopefully, we can talk again in some other appropriate time. Bye-bye. Thank you.

Thank you.

Thank you. Thank you very much. Thank you.

Thank you for having us.

Greetings, and welcome to PolyPid's Third Quarter 2025 Conference Call. [Operator Instructions] As a reminder, this call is recorded.

And I would now like to introduce your host for today's conference, Yehuda Leibler from ARC Investor Relations. Mr. Liebler, you may begin.

Thank you all for participating in PolyPid's Third Quarter 202 Earnings Conference Call. Joining me on the call today will be Dikla Czaczkes Akselbrad, Chief Executive Officer of PolyPid; Jonny Missulawin, PolyPid's Chief Financial Officer; and Ori Warshavsky, Chief Operating Officer, U.S. of PolyPid.

Earlier today, PolyPid released its financial results for the 3 months ended September 30, 2025. A copy of the press release is available in the Investors section on the company's website 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 laws. For example, management is making forward-looking statements when it discusses the anticipated timing of the pre-new drug application or NDA meeting of the U.S. Food and Drug Administration or FDA, the planned NDA submission for D-PLEX100, the expected submission of the European marketing authorization application, the potential regulatory and commercial pathways for D-PLEX100, including leveraging its fast track and breakthrough therapy designations, the company's ongoing partnership discussions, market adoption, reimbursement assumptions, the company's commercial manufacturing readiness, U.S. market access studies and utilization of D-PLEX100, regulatory inspection readiness and the expected cash runway to fund operations well into 2026.

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 those 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 Form 20-F filed on February 26, 2025, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

PolyPid 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, November 12, 2025.

With the completion of those remarks, it is my pleasure to turn the call over to Dikla Czaczkes Akselbrad, CEO of PolyPid. Dikla?

Thank you, Yehuda. On behalf of our team at PolyPid, I would like to welcome everyone to our Third-Quarter 2025 Earnings Conference Call.

The past quarter was significant for PolyPid as we progress with our objective to bring D-PLEX100, our late-stage product candidate for the prevention of surgical site infection, to the market. We are pleased to report that our pre-NDA meeting with the FDA is scheduled for early December and is expected to be held as an in-person meeting at the FDA office. This important meeting is designed to align with the agency on the data package format and requirements for our NDA submission, representing a key milestone in our path to regulatory approval. We remain on track to submit the NDA for D-PLEX100 in early 2026, leveraging both our Fast Track and breakthrough therapy designation.

In parallel, we are preparing for submission of the European marketing authorization application, which is expected to follow the NDA. During the quarter, we successfully completed the Israeli Ministry of Health Good Manufacturing Practice, or GMP inspection, marking our fourth consecutive successful inspection and an important step forward in achieving commercial manufacturing readiness for D-PLEX100.

The successful completion of this inspection ensures we can manufacture commercial products for the European market once D-PLEX100 is approved in Europe, as well as serve as a real-life test of our readiness for an FDA inspection of our facility, which we expect will follow the NDA submission. We continue to advance our strategic discussions with potential U.S. partners with an established hospital sales infrastructure, building also on the strong momentum of our positive Phase III SHIELD II trial results announced in the second quarter. These discussions have progressed during the third quarter.

We also recently completed a new U.S. market access study based on the presentation of the successful SHIELD II results. The study provided important validation of D-PLEX100's commercial potential. The results were very encouraging, confirming strong interest from both surgeons and hospital pharmacy directors. Taken together, the third quarter marked continued progress across all fronts, regulatory, commercial, and manufacturing, as we move steadily towards the next phase of PolyPid's growth, including our innovative pipeline in oncology, obesity, and diabetes.

With that, I will now turn the call over to Ori Warshavsky, our Chief Operating Officer, U.S., who will provide additional insights on the market access study findings and our commercial readiness efforts.

Thank you, Dikla.

As Dikla noted, this quarter was pivotal in strengthening our commercial readiness for D-PLEX100. The completion of the GMP inspection and our ongoing work with hospital stakeholders brings us closer to launch readiness. Last month, our medical team participated and presented data in 2 major U.S. medical conferences, the 2025 American College of Surgeons Clinical Congress, which gathers surgeons from multiple disciplines across the U.S. and internationally; and IDWeek, the key annual conference for infectious disease specialists. The response from both surgeons and infectious disease specialists was remarkably consistent. Both groups expressed the need for innovation and new tools to prevent SSI and were impressed by the SHIELD II trial design and the 58% reduction in surgical site infection demonstrated by D-PLEX100.

As Dikla mentioned, we also recently completed a new U.S. market access study that included both surgeons and hospital pharmacy directors from leading academic and community hospitals who are contributing members or heads of the Pharmacy and Therapeutic Committee, also known as P&T Committee review process at their respective hospitals. The results were very encouraging and in line with our expectations in terms of both clinical perception and commercial potential. I'd like to share a few key highlights from the study.

Among surgeons, D-PLEX100 was viewed as more valuable than currently available SSI prevention measures, primarily due to its strong efficacy, safety profile, and ease of use in the operating room. Most surgeons indicated that their hospitals are likely to add D-PLEX100 to formulary at launch, with 80% saying they are extremely likely to use it for their next eligible patients once available, and an average expected utilization of approximately 6 out of every 10 eligible cases, particularly for high-risk patients undergoing colorectal or abdominal surgeries or those with comorbidities like obesity or diabetes.

Hospital pharmacy directors echo this enthusiasm. Based on the clinical profile, 70% reported a high likelihood to add and stop D-PLEX100. When asked if a new technology add-on payment or NTAP designation, which provides extra reimbursement to hospitals, would change their response, the pharmacy directors anticipated that the formulary coverage would be even higher, and the overall hospital adoption outlook will look even more favorable. D-PLEX100 was widely seen as a promising new SSI prevention agent addressing a significant unmet need. Altogether, we believe these results are a significant vote of confidence and tangible support for both the clinical and economic potential of D-PLEX100.

With that, I will now turn the call over to Jonny Missulawin, our Chief Financial Officer, to review our financial performance.

Thank you, Ori. Turning to our financial results for the third quarter of 2025. Research and development expenses totaled $5.3 million, down from $6.2 million in the second quarter of 2025 and $6 million in the same quarter last year. This decrease reflects the completion of the SHIELD II Phase III trial. General and administrative expenses came in at $1.8 million compared to $1.2 million in the third quarter of 2024, while marketing and business development expenses were $0.4 million, up from $0.2 million in the same period last year.

The net loss for the quarter was $7.5 million or $0.37 per share, an improvement from the net loss of $7.8 million or $1.22 per share in the third quarter of 2024.

Looking at the 9 months ended September 30, 2025, R&D expenses totaled $17.6 million compared to $15.8 million in the prior year period. G&A expenses increased to $5.4 million from $3.3 million last year, and marketing and business development expenses rose to $1.4 million from $0.7 million last year. The increase in G&A and marketing, and business development expenses were primarily due to noncash expenses related to performance-based options or PSUs, following the successful SHIELD II Phase III trial, which triggered the vesting of the PSUs.

Net loss for the 9-month period was $25.7 million or $1.72 per share compared to $20.5 million or $3.82 per share for the same period in 2024. From a balance sheet perspective, as of September 30, 2025, PolyPid had $18.8 million in cash, cash equivalents, and short-term deposits, up from $15.6 million at year-end 2024. We continue to expect that our current cash balance will fund operations well into 2026. Notably, during the quarter, we made significant progress reducing our debt by decreasing current maturities from $6.5 million to $2.4 million. We remain focused on maintaining financial discipline while advancing our key strategic initiatives towards NDA submission and commercial readiness.

With that, we will now open the call to your questions. Operator?

[Operator Instructions] And your first question comes from the line of Chase Knickerbocker from Craig-Hallum.

Maybe just first on the Israeli Ministry of Health's successful inspection. Could you maybe just walk us through any findings that you did see there? And I would just like kind of to get your thoughts on your general confidence heading into that likely FDA inspection next year, now that you've had multiple successful inspections from several regulatory bodies. I mean, just kind of walk us through kind of your confidence in any additional items that you do need to address before the FDA inspection, or anything else that they would look for that wouldn't be a part of these prior inspections?

Thank you. So yes, we've passed this Ministry of Health inspection. Actually, this was the fourth consequence of inspection that we had. The Israeli Ministry of Health is recognized by the European authorities. So this is also served as commercial validation for the European authorities. And once we'll get the approval, we can start selling. As in every GMP inspection, obviously, there are always comments and things that are suggesting for improvement. And this is -- this has been, and this is an ongoing focus of us to always improve our facility, always improve our QC laboratory, and the way that we are managing this process.

There isn't anything that I can point out specific that I can point out that we were -- we got a comment in specific area. It was an ongoing discussion, nothing that is critical, obviously, otherwise, we wouldn't have passed. But we are very confident on our ability to pass. We have here people with overall years of experience working in GMP facilities, in aseptic facilities. But to be honest, having confidence in this aspect [Audio Gap] and from that, there is a list of things that the team is working on to make sure that we pass this at first. And this is a really important effort for us. So we are highly confident, but this is an ongoing effort. We have to maintain this high standard all along, not just for the inspection, but also afterwards for the actual commercial manufacturing.

Maybe just ahead of that FDA, the pre-NDA meeting in December, any specific items that you can call out there, particularly?

Chase, I can hear you. I'm taking the call from a different location. Please ask again, you were asking about the pre-NDA meeting?

Yes, just out of the pre-NDA meeting, anything--

Can you recap your question because we weren't able to hear it? So if you can ask it again, please?

Yes. Just anything specific that you're -- is particularly crucial to reach alignment with the agency ahead of that -- ahead of the NDA filing that you'd call out for investors?

So we expect to review the data package, the submission format, the label scope. And our goal is to get agreement with the current clinical CMC data support NDA filing and clarity on any remaining requests before the rolling submission. A successful meeting will set the stage for an early 2026 submission, obviously, with priority review potential under our designation. So there's nothing specific, but the regular clearance that you would want to get from the FDA for an NDA.

And then just last for me. Now that you've been able to do quite a bit more survey work. and speak with relevant stakeholders in the market. Any additional thoughts on pricing as we look forward?

Yes, I can take that one. So we've done -- over the last month or so, we had quite a lot of touch points with stakeholders, both formally to market research and less formally in the conferences, and really across the board, very strong interest in the product from the point of view that they really -- there's a need. There's a need for innovation. There is a need for something new to reduce the infection rates from where they are. We tested -- as I mentioned before, we tested both the willingness to prescribe, the willingness to put product on formulary, whether it's on formulary and stocked, or not stocked, and the impact on NTAP. And across the board, it sounds like premium pricing is something that we can reach to.

I don't want to give specific numbers because we are in discussion with partners, and this is all kind of part of the activities that are ongoing on the partnership front. But from the prices that we tested before and we've seen, we see now that we can stretch that even higher. There is room and willingness to use this. There's a very strong understanding of the impact of SSI, what it does from just direct cost of length of stay, but also I heard recently of surgeons that have in their annual review and in the kind of the bonus payment infections or reduction in infection as part of it. So there's really a nice driver there, which will allow us to stretch higher the pricing piece.

Your next question comes from the line of Brandon Folkes from H.C. Wainwright.

Congrats on the progress. Maybe just sort of at a high level, post the partnership, how quickly do you expect to grow the PolyPid pipeline with you being -- well with your manufacturing D-PLEX, can you just help us think through the evolution of PolyPid in 2026 and 2027 through being a manufacturing partner, but then also redeploying capital into the pipeline going forward? And maybe just one more for me. In terms of the FDA filing in early 2026, anything that you need or any sort of answers coming out of that -- the pre-NDA meeting that could extend that timeline? Just sort of how are you feeling about that meeting, and sort of anything that may come out of that versus that guidance?

Thank you, Brandon. So I'll start with the -- with your second question. In terms of our readiness for submission and where we stand, so all the modules are ready for submission. The CMC and the nonclinical modules are finalized, and the clinical modules is -- we are integrating SHIELD II and trial data to bring complete -- to being completed. We will incorporate, obviously, any FDA feedback after the December meeting and then start the rolling submission early 2026. Do not expect anything in particular. I can tell you that in the last year or so, we had a handful of correspondents with the FDA on specific aspects that we wanted to clear specific questions that we wanted to make sure that we are on the right path.

But obviously, having the meeting early December and us wanting to submit in early 2026, there will be some things that will need to be incorporated based on the feedback and the meeting, but we do not expect this to be substantial. We will obviously update once we get the FDA minutes that on the actual meeting, whatever we can update at this point. But there's nothing that we expect on that.

As to your question on -- I would even broaden it a little bit our vision for PolyPid and our vision for the PLEX platform. The way we see it, obviously, a U.S. partner on the abdominal indication is very important. But our platform and our SHIELD II is a validation to our approach and to our ability to bring product in that format. We have our younger program, which obviously will need to accelerate on this, and we've already been working on them, whether it's in the oncology space or in the obesity diabetes space. But we also see D-PLEX growing further behind the abdominal indication. And that's also something that is a potential growth.

Your next question comes from the line of Boobalan Pachaiyappan from ROTH Capital.

So firstly, with respect to market research, you just described, it's pretty exciting. And I just need some additional thoughts on that. So firstly, can you talk to us what's the sample size of your market research study? And then in that specifically, what percentage of those who participated in the research, they were involved in the decision-making process? And within that market research question, I also wanted to know whether you had an option to sort of assess the preliminary thoughts on utilizing D-PLEX100 to the gynecology and urology. Yes. And then what pricing point would make them comfortable to utilize D-PEX100 in the U.S. formulary? That's the first question.

Yes. So -- thanks, Boobalan. All good questions. So in terms of the study itself, first, it's a qualitative study. The study was split into 2. There were 10 surgeons, general surgeons, colorectal and gynecology surgeons. That's one. And then there were 10 pharmacy directors, both from a stand-alone hospital and network hospitals. All of them -- everyone participated in the study was either running the PMT process or contributing member to the process. So that was by design. The purpose of the study was to have people who are on formulary. And then you were asking about -- sorry, you're asking about the -- ask the second part again. I lost my thought.

Maybe before that, I would just add that, that this is not our first market access study. We've done several in the past. And besides for the pricing that was -- we saw a higher price in this and a premium and reference to the NTAP, all were much in line. Now it is very detailed. It's actually -- we use the actual data that we saw in SHIELD II. Obviously, everything is blinded. They did not know the actual product, but it was very detailed in terms of referring to the specific product and the specific results that we had in SHIELD II.

And then second, I understand you are advancing your partnership discussions in the U.S., and this may be some sort of hypothetical questions, or sort of I'm just thinking out loud. So I wanted to know, let's just say there's a global firm, they want to commercialize D-PLEX100 in the U.S. as well as in the ex-U.S. regions. And obviously, your an existing arrangement with Advanced Pharma. So I wanted to know if this existing arrangement would, in any way, provide some sort of barriers or impediments for a partnership with a global player? And will there be any sort of like a buyback clause with the Advanced Pharma agreement?

So no, there's nothing in the advanced agreement. Advance is our exclusive partner for Europe, but nothing out of that is part of this arrangement. U.S. Canada, all the rest of the world, it's not covered by this arrangement. If one of the partners, if it's a global partner that would want to include Europe as part of the discussion, we'll need to see if this is feasible. But it's not something that we plan on pursuing at this stage.

And one final question from us. Obviously, D-PLEX100 will be manufactured in Israel. And as you are well aware, there is a push within the U.S. for domestic manufacturing and also its connection with most-favored-nation pricing. So maybe can you talk to us potential challenges or barriers that PolyPid needs to overcome to commercialize D-PLEX100 in the U.S.

So yes, first, I should mention that our current facility, and we've indicated this along the years, is not our end goal facility. This will -- it will not be sufficient for the peak sales. We -- this facility is built in a way that it should be sufficient for the first 5 years of commercial launch -- from commercial launch. And we've already started planning and evaluating what should be our next facility or expanded facility, and we're taking this into consideration. So the trend in the U.S. around local manufacturing is something that we are taking into consideration. We're thinking about the expansion of the facility.

There seems to be no further questions. I will now hand back to Dikla for closing remarks.

Thank you for joining PolyPid's Third Quarter 2025 Earnings Conference Call. This has been a highly productive period as we execute on our regulatory strategy and move closer to our goal of bringing D-PLEX100 to patients and clinicians worldwide. With our pre-NDA meeting scheduled for early December and our NDA submission on track for early 2026, we are confident in our path forward. At the same time, we are making important progress in partnership discussions and commercial partnerships while advancing our manufacturing readiness to support a successful launch upon approval.

We look forward to sharing further updates on our regulatory and commercial milestones in the months ahead. As always, we thank our team members, partners, and shareholders for their ongoing support and commitment to our--