Hello, everyone, and thank you all for joining us during the Lytham Partners Fall 2026 Investor Conference. My name is Ben Shamsian, Vice President of Lytham Partners. Today, Dikla Czaczkes Akselbrad, CEO of PolyPid, will be taking us through a brief slide presentation. PolyPid trades under PYPD. Let's get started. Dikla, welcome, and I will turn the floor over to you for your presentation.
Thank you, Ben, and good day, everyone. Happy to be here and introduce you to PolyPid. PolyPid is a biopharmaceutical company in a very interesting time in the life of the company. We have a PDUFA date very soon, November 28th, for our lead product and a pipeline of product based on our proprietary technology called Kynatrix, that allow for long-acting controlled release of a drug. The technology can be customized to any API, and we have started with surgical site infection, which I'll elaborate in a minute.
More than 170 patents already granted and approved around the platform and the pipeline product. Close to 90 employees. As Ben mentioned, we are traded under the symbol PYPD. What's the magic is all about? What is this Kynatrix platform? We are taking advantage of two very well-established technologies, polymer and lipid, which have been established for many years. There are drugs based on polymer, there are drugs that are based on lipids.
Up until now, no one has done or combined the two in the way that we have done, under a self-assembly condition, a self-assembly manner. We are creating a matrix of thousands of alternate layers. Think about the structure of an onion or a book, where the polymer are the backbone of this matrix, and in between, you have the drug surrounded by lipids, no chemical bond between the compound, just a matrix organized into the structure. Once the drug is released or applied in the tumor site and the incision site, gradually the drug is released layer by layer at the site, covering the area, in our case, the incision, for 30 days of antibiotic, of protection of the drug from infection.
This is really our flagship product, a drug that is pairing our platform, our Kynatrix platform, with doxycycline, covering the incision for 30 days. The 30 days is pre-designed to meet CDC definition of surgical site infection, which in most of the surgery refer to 30 days infection that can occur post-surgery. You could look at areas, in this case, in abdominal surgery with incident rate of 15%-25% surgical site incision infection. This is now in 2026, so there is a huge unmet need, and we are there to get this percentage closer to zero. The product has breakthrough therapy designation, Fast Track, three QIDPs, and it's under the 505(b)(2) path. That is now in the motion with a PDUFA date for the end of November.
A brief intro to the drug, how it's actually being used, w hat does this Kynatrix look like in the patient in the clinic? We are talking about, in this case, an abdominal surgery, open colorectal surgery. Most of these patients are cancer patients. They did their routine colonoscopy. The doctor identified something that requires additional biopsy. Post this biopsy, once there is a tumor, usually the first step is resection of the tumor, resection of part of the colon, resecting part of the colon.
In many of these cases, based on the size of the tumor, the patient condition, those could be with a relatively large incision, whether it is starting from 7 cm and even going up to an open procedure with 10 + cm . Dosing of our drug is based on the length of the incision. Up to 10 cm, one vial will be sufficient. 10 - 20 cm, the surgeon will apply two vials. Over 30 cm, the surgeon will apply three vials.
Each clinical vial product candidate contain about half an oral pill of oral antibiotic. You could say, "How could half an oral pill that is released over 30 days make a difference?" This is really the power of what we do. The drug is applied all along the incision, from all the abdominal wall, from the fascia to the skin, covering the incision. Due to our Kynatrix platform, we are supporting 30 days of coverage of the incision all along the abdominal wall, covering the incision. In 30 days, this meets the CDC definition of surgical site infection. The way that the drug is presented to the site, covering at the site, create a relatively high minimal inhibitory concentration, high MIC at the site. This is really what empowers us to see this level of result.
This is a phase III pivotal study, 1,000 patient, global study, showing prevention of surgical site infection in patients undergoing colorectal resection. This data was first published about a year ago, and after submitting an NDA package to the FDA several months ago, we are now with a PDUFA date, approval date, by the end of November. What we have here, we first have here on the left side, the primary efficacy endpoint, what the FDA required in order for the study to be successful.
What we are sharing or what we are comparing here is the standard of care arm, patient that got what is now customary, systemic antibiotics, mechanical bowel prep. There is a list of things that are done on a day-to-day basis with these patients, still getting us to 10% infection rate. We have also counted mortality and reoperation. You can see how this product got all of these parameters 40% lower, from 18% to 10.9%.
This was with a relative risk reduction P value of 0.0039, so very robust data. We also checked, and this was the most important thing for us, is to see what are the level of surgical site infection. On the standard of care arm, on the control arm, we had 10%, and we have reduced this to 60%. Again, very strong statistical data with a P value which is 0.0013. The FDA wants to see data in order for it to be considered a successful study, that is, with a P value lower than 0.05. T his is much lower than that.
The feedback that we have been getting from surgeons since we got this study is that we are taking an open colorectal resection operation, which they usually see 11%-12% infection rate, and we are getting it below the 5% that they expect to see in the minimally invasive procedure. This is better than what they see in the minimally invasive procedure. A bit about the market opportunity and our recent collaboration with Azurity Pharmaceuticals.
If you look at the overall relevant addressable market, we are looking at 12 million procedures in the U.S. Those are procedures that have some considerable level of surgical site infection, and also, once an infection occurs, the clinical and disability meaning of it could be quite brutal for the patient. We are looking at starting with abdominal surgery. Those are about 4 million procedures in the U.S. alone.
Our collaboration, we have been saying all along that our strategy for this product is to find a partner that will market the product in the U.S. We had a several months procedure of finding this partner and getting into an agreement. This was a competitive process, and we chose to sign with Azurity Pharmaceuticals. Azurity is a fully privately owned company that is focusing on drugs that are used in the hospital.
That is their main focus, and this is very synergistic with the sales force that is required to sell D-PLEX100. The deal structure was around U.S. and Canada only. All other territories are retained by PolyPid. Azurity is responsible for commercializing D-PLEX100 in the U.S., and we are responsible for manufacturing. We have our own GMP manufacturing facility, and we will jointly pursue expanding the label behind colorectal and abdominal surgery.
As I mentioned just before, you could see this going into other surgeries like hip, knee, women that are undergoing breast mastectomy and reconstruction, and many more surgeries where there is a high unmet need. Those will be pursued together, and Azurity will be funding this experiment. Financially-wise, we received $30 million in upfront and near-term milestones. Those were already secured based on the acceptance of the NDA. We have more than $190 million of development and sales milestones.
We have indicated that the development milestones are all relatively near-term and could be achieved in the first two years of the agreement. We have tiered royalties starting from mid-teens into mid-20s on each vial that is sold. The manufacturing that I have mentioned that we are the supplier is also part of the agreement, and there is a pre-negotiated transfer price or sales price for each vial.
All of these different compound, the upfront, the development milestones, the sales milestone, and the supply agreement, in addition to the royalties, create what we believe is a very strong financial economics for this transaction, and we look forward to start seeing sale in 2027. Azurity indicated that they are looking to launch the product early 2027. Some views about how this product will be fit or what is the demonstrated economic incentive to adopt a product like D-PLEX100.
There are many around the patient, around the data, just the data around the prevention of the infection makes a huge difference for an hospital that is getting paid on a total DRG. Most of these patients that I have shown you are getting around $40,000, their total DRG for the sale. There is also another incentive, and this is the NTAP program. The NTAP program that stands for New Technology Add-on Payment allows for the hospital to get up to 75% reimbursement on the cost of the drug for the first two to three years, and this could be an additional driver for adoption early on.
Before I turn the call back to Ben, I just want to mention that as part of the deal, we're very proud with our manufacturing facility that has been established to support both the development and the commercial activity. This is part of the strong economics that we presented in the licensing deal. To summarize, where are we in terms of the development?
Earlier this year, we have submitted the NDA. In July, the NDA was accepted, and we got a PDUFA date for November 28th. We are going to submit the NTAP this October, it's on the go, and w e have submitted with the EU for approval in Europe. Approval in Europe takes about a year, so our expectation is that this will be around a year from now. So a lot to expect, both in terms of approval in the U.S. and in Europe, and also in terms of additional expansion of the label to other territories and to other surgery. I look forward to catching up with you later this year and early next year. Ben, I will turn the floor again to you.
All right. Thank you, Dikla, and thank you to everyone for watching. If you have any questions or would like to schedule a meeting with PolyPid, please send me an email at shamsian@lythampartners.com, S-H-A-M-S-I-A-N @lythampartners.com. If you'd like to learn more about Lytham Partners, you can visit our website, lythampartners.com, or follow us on LinkedIn or YouTube, to stay connected about future events. We hope you all enjoyed the rest of the conference, and have a great day.