PolyPid Announces Private Placement for $16 Million in Gross Proceeds

Rhea-AI Summary

PolyPid Ltd. (Nasdaq: PYPD) announced a private placement financing (the “PIPE”) for $16.2 million in gross proceeds. The financing is led by leading U.S. life sciences-focused investors, DAFNA Capital Management and Rosalind Advisors. The investors have agreed to purchase 3,371,312 of the Company’s ordinary shares at a purchase price of $4.81 per share, with additional warrants to purchase up to 3,371,312 ordinary shares at an exercise price of $5.50 per share. The PIPE is expected to close on January 9, 2024, and the net proceeds will be used for the ongoing SHIELD II phase 3 clinical trial for the prevention of surgical site infections in patients undergoing abdominal colorectal surgery, working capital, and general corporate purposes.

Insights

Financial Analyst

The private placement financing announced by PolyPid Ltd. represents a strategic move to secure funding for the company's ongoing clinical trials, specifically the SHIELD II phase 3 clinical trial. The investment by life sciences-focused investors such as DAFNA Capital Management and Rosalind Advisors underscores confidence in PolyPid's potential to address surgical site infections, a significant concern in healthcare. The structure of the deal, including the warrants with an exercise price of $5.50, suggests an anticipation of stock price appreciation, which can be an indicator of investor confidence in the company's prospects.

From a financial perspective, the additional $18.5 million in potential gross proceeds from the full exercise of warrants could provide PolyPid with a substantial financial runway. This is essential for supporting ongoing trials and for covering general corporate expenses. However, investors should be aware of the dilutive effect of issuing additional shares, which could impact the value of existing shares. The use of a private placement, as opposed to a public offering, allows the company to raise capital more quickly and with potentially less regulatory scrutiny, but it limits the pool of potential investors to accredited investors and institutions.

Medical Research Analyst

The funding secured by PolyPid Ltd. is particularly significant for the advancement of their SHIELD II phase 3 clinical trial, which is a pivotal step in the development of D-PLEX100 for the prevention of surgical site infections in abdominal colorectal surgery. The positive recommendation by the Data Safety Monitoring Board, as mentioned, could lead to an early stop of the trial due to positive efficacy, which would be a substantial milestone for the company. Surgical site infections are a major postoperative complication and the development of effective prevention measures has the potential to improve patient outcomes and reduce healthcare costs.

Investors and stakeholders should note the potential impact of a successful trial on the company's valuation and market positioning. A breakthrough in this area could lead to significant commercial opportunities and partnerships, as well as an expanded pipeline for PolyPid. However, the inherent risks of clinical trials, including the possibility of not meeting the primary endpoints or facing regulatory hurdles, should be taken into account when considering the long-term implications of this investment.

Market Research Analyst

The investment landscape for life sciences companies remains robust, particularly for those with promising late-stage assets. PolyPid's successful fundraising through a private investment in public equity (PIPE) transaction reflects a trend where specialized investors are willing to provide capital to fund specific high-potential projects. The involvement of new U.S. life sciences-focused investors could be seen as a validation of PolyPid's research and market potential.

Market dynamics for products addressing surgical site infections are favorable, given the high cost to healthcare systems and the demand for innovative solutions. If D-PLEX100 proves effective, PolyPid could capture a significant share of this market. However, it is critical for investors to monitor the competitive landscape, as other companies may also be developing similar solutions. The timing of the trial's outcomes and subsequent regulatory approvals will be crucial in determining PolyPid's ability to capitalize on its research investments and secure a first-mover advantage.

Financing Led by Leading U.S. Life Sciences-focused Investors

PETACH TIKVA, Israel, Jan. 04, 2024 (GLOBE NEWSWIRE) -- PolyPid Ltd. (Nasdaq: PYPD) (“PolyPid” or the “Company”), a late-stage biopharma company aiming to improve surgical outcomes, today announced that it has entered into a securities purchase agreement for a private placement financing (the “PIPE”) for $16.2 million in gross proceeds priced at the 5-day volume weighted average price as of January 2, 2024 of $4.81 per share. The PIPE syndicate is comprised of new and existing investors, including participation from new U.S. life sciences-focused investors, DAFNA Capital Management and Rosalind Advisors.

Under the securities purchase agreement, the investors have agreed to purchase 3,371,312 of the Company’s ordinary shares, no par value per share (the “Ordinary Shares”), or pre-funded warrants in lieu thereof, at a purchase price of $4.81 per share (or pre-funded warrant). The investors will also receive warrants to purchase up to 3,371,312 Ordinary Shares at an exercise price of $5.50 per share. The warrants expire upon the earlier of two years from the date of issuance and 10 trading days following PolyPid’s announcement of the positive recommendation by Data Safety Monitoring Board regarding the Company’s unblinded interim analysis in its SHIELD II Phase 3 trial of D-PLEX₁₀₀ resulting in the stopping of the trial due to positive efficacy. Exercise of the warrants in full would result in an additional $18.5 million in gross proceeds to the Company.

The PIPE is expected to close on January 9, 2024, subject to the satisfaction of customary closing conditions. The Company intends to use the net proceeds from the sale of the securities for its ongoing SHIELD II phase 3 clinical trial for the prevention of surgical site infections in patients undergoing abdominal colorectal surgery, working capital and general corporate purposes.

JMP Securities, A Citizens Company, is acting as exclusive placement agent in the offering.

The offer and sale of the foregoing securities are being made in a transaction not involving a public offering and the securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. Pursuant to a registration rights agreement with the PIPE investors, the Company has agreed to file within 30 calendar days of closing one or more registration statements with the Securities and Exchange Commission (the "SEC") covering the resale of the Ordinary Shares and Ordinary Shares issuable upon exercise of the warrants and pre-funded warrants.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.

About D-PLEX₁₀₀

D-PLEX_100, PolyPid’s lead product candidate, is designed to provide local prolonged and controlled anti-bacterial activity directly at the surgical site to prevent surgical site infections (SSIs). Following the administration of D-PLEX₁₀₀ into the surgical site, the PLEX (Polymer-Lipid Encapsulation matriX) technology pairs with Active Pharmaceutical Ingredients, enabling a prolonged and continuous release of the broad-spectrum antibiotic doxycycline, resulting in a high local concentration of the drug for a period of 30 days for the prevention of SSIs, with additional potential to prevent SSIs caused by antibiotic-resistant bacteria at the surgical site. D-PLEX₁₀₀ received Breakthrough Therapy Designation from the U.S. Food and Drug Administration for the prevention of SSIs in patients undergoing elective colorectal surgery. D-PLEX₁₀₀  is currently in Phase 3 SHIELD II trial for the prevention of surgical site infections in patients undergoing open abdominal colorectal surgery with large incisions.

About PolyPid

PolyPid Ltd. (Nasdaq: PYPD) is a late-stage biopharma company aiming to improve surgical outcomes. Through locally administered, controlled, prolonged-release therapeutics, PolyPid’s proprietary PLEX (Polymer-Lipid Encapsulation matriX) technology pairs with Active Pharmaceutical Ingredients (APIs), enabling precise delivery of drugs at optimal release rates over durations ranging from several days to months. PolyPid’s lead product candidate D-PLEX₁₀₀ is in Phase 3 clinical trial for the prevention of abdominal colorectal surgical site infections. In addition, the Company is currently in preclinical stages to test the efficacy of OncoPLEX for the treatment of solid tumors, beginning with glioblastoma.

For additional Company information, please visit http://www.polypid.com and follow us on Twitter and LinkedIn.

Forward-looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. For example, the Company is using forward-looking statements when it discusses the gross proceeds received from the PIPE, intended use of proceeds from the PIPE, the anticipated closing date for the PIPE, and the anticipated gross proceeds from the exercise of warrants issued in the PIPE if such warrants are exercised in full. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the SEC, including, but not limited to, the risks detailed in the Company’s Annual Report on Form 20-F filed on March 31, 2023. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements.

References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. PolyPid is not responsible for the contents of third-party websites.

Contacts:
PolyPid Ltd. 
Ori Warshavsky
COO – US
908-858-5995
IR@Polypid.com

Investors:
Brian Ritchie
LifeSci Advisors
212-915-2578
britchie@lifesciadvisors.com

FAQ

What is the purpose of the private placement financing announced by PolyPid Ltd. (Nasdaq: PYPD)?

The purpose of the private placement financing is to raise $16.2 million in gross proceeds for the ongoing SHIELD II phase 3 clinical trial for the prevention of surgical site infections in patients undergoing abdominal colorectal surgery, working capital, and general corporate purposes.

Who are the leading U.S. life sciences-focused investors participating in the financing led by PolyPid Ltd. (Nasdaq: PYPD)?

The leading U.S. life sciences-focused investors participating in the financing are DAFNA Capital Management and Rosalind Advisors.

What is the purchase price of the ordinary shares offered in the private placement financing by PolyPid Ltd. (Nasdaq: PYPD)?

The purchase price of the ordinary shares offered is $4.81 per share.

What is the purpose of the warrants in the private placement financing by PolyPid Ltd. (Nasdaq: PYPD)?

The warrants are issued to purchase up to 3,371,312 ordinary shares at an exercise price of $5.50 per share.

When is the expected closing date of the private placement financing announced by PolyPid Ltd. (Nasdaq: PYPD)?

The private placement financing is expected to close on January 9, 2024.