Shares in Israel biopharma company PolyPid (Nasdaq: PYPD) plunged 73.47% on Friday, giving the company a market cap of just $27 million, after a clinical trial of the company’s D-PLEX100 product failed to meet its primary endpoint. PolyPid is a developer of delayed release antibiotics administered after surgery, in the form of an implant that releases antibiotic material at the surgery site. In its Phase 3 trial, the company sought to demonstrate that its product reduced the incidence of surgical site infection (SSI) after abdominal surgery and prevented mortality, but no statistically significant difference was found in these outcomes between patients to whom its product was administered and the standard of care (SoC) control group.
PolyPid reports that it received a request from the US Food and Drug Administration (FDA) for analysis of a specific sub-group of patients who underwent surgical incisions of 20 centimeters or more. For this group, which the company had decided to examine even before the trial began, a statistically significant reduction in infection was observed. In general, retrospective analyses of sub-groups in unsuccessful trials are considered poor predictors of future success for a product, but since in this case the sub-group was selected for separate examination before the trial, the result could be significant.
The question is whether the company is able and willing to find the resources to carry out a further trial on this sub-group, and what the potential market is among this group. In an interview with "Globes" a month ago, PolyPid CEO Dikla Czaczkes Akselbrad said that the company had sufficient cash for a year, but that calculation did not take into account an additional trial.
The FDA does occasionally approve a product for sale on the basis of sub-group trial results, chiefly when it is a matter of a breakthrough therapy, and the FDA has defined PolyPid’s product as such. These cases are rare, however, and the FDA usually demands a further trial.
Following the trail, Czaczkes Akselbrad said, "While these top-line results did not meet our expectations following the highly compelling positive data generated in our Phase 2 study, we remain confident in the future potential of D-PLEX100. The SHIELD I study, while well-executed and balanced, had a significantly lower SSI rate in the SoC treatment arm of 6.3% percent, as compared to mid-teens percentage infection rate for colorectal surgeries according to published literature at the time of the study design. The overall infection rate in SHIELD I was meaningfully impacted by the COVID-19-related safety restrictions introduced in the surgical setting during that time, a factor that decreased the infection rate in surgical procedures during the COVID-19 pandemic. The low infection rate in the SoC treatment arm of the trial, significantly below historical infection rates consistent with colorectal cancer procedures, established a low baseline from which it was highly challenging to show a significant effect on SSIs.
"Looking ahead, we are encouraged by the data generated in the pre-specified subgroup analysis that evaluated the primary endpoint in subjects with incision lengths over 20 centimeters, which demonstrated a 54 percent reduction in SSI rates between the D-PLEX100 treatment arm and the control arm. We intend to further assess the collective results of SHIELD I and discuss the COVID-19 driven lower than anticipated overall infection rate in the study with the FDA."
The company is carrying out another trial of the same product for the same indication, meant as a validation trial for the current trial, on a broader range of patients. So far, 200 patients have been recruited for this trial. PolyPid will now discuss its future with the FDA.
In the two and a half months before publication of the trial results, PolyPid’s share price rose 40%, in anticipation of positive results, and after the company signed a commercialization agreement for its product in Europe with Advanz Pharma. PolyPid received an advance payment of $2.6 million, and was due to have received a further $12.5 million had the result been good, and another $110 million plus royalties if the product was registered for sale and succeeded in the market place.
PolyPid was founded in the Xenia Venture Capital incubator, and has so far raised $120 million. The main investors in PolyPid before its IPO were Morris Kahn's Aurum Ventures; CHealth Ventures, controlled by Chaim Hurvitz; the Friendly Angels Club group; Gary Leibler’s Shavit Capital; Vincent Tchenguiz’s Consensus Business Group; and Xenia Venture Capital. Another substantial investor is Leon Recanati's GlenRock. In the IPO in June 2020, the company raised $60 million at a post-money valuation of $272 million, meaning that it is now traded at less than 10% of its IPO valuation.
Czaczkes Akselbrad was appointed CEO of PolyPid in early July to lead the process of registration with the FDA and the transition of the company to the commercial stage. She previously served as CFO at several Nasdaq-listed companies, one of them being Compugen. PolyPid employs 80 people, mainly in Israel.
Published by Globes, Israel business news - en.globes.co.il - on September 5, 2022.
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