PolyPid Ltd. , a late-stage biopharma company aiming to improve surgical outcomes, announced today that the Company has entered into a secured loan agreement for up to $15 million with Kreos Capital VI (Expert Fund) LP (“Kreos”). Proceeds from the loan will be used to support global commercialization preparations for the launch of D-PLEX100 for the prevention of abdominal soft tissue surgical site infections (SSIs), as well as further advancement of PolyPid’s OncoPLEX development platform and general corporate purposes.
“This loan facility broadens our financing options and provides us with access, on a non-dilutive basis, to significant additional capital, which bolsters our ability to invest in our global commercial capabilities for D-PLEX100, as well as in our development activities for our promising OncoPLEX program,” stated Amir Weisberg, Chief Executive Officer of PolyPid. “Importantly, our cash runway is now extended into the second quarter of 2023.”
“PolyPid is approaching a critical juncture in its corporate evolution, as the late-stage clinical development of D-PLEX100 rapidly progresses and the Company advances its global commercial preparations,” said Sonia Benhamida, Principal, at Kreos. “We are excited to support PolyPid’s long-term growth initiatives with both D-PLEX100 and OncoPLEX.”
About the Loan Facility
The loan facility is comprised of three tranches in the amount of $10.0 million, $2.5 million, and $2.5 million, respectively, with a drawdown of the first tranche available upon the execution of the agreement. The second tranche of $2.5 million will be available subject to obtaining positive results from the planned unblinded interim analysis of PolyPid’s ongoing Phase 3 trial of D-PLEX100 for the prevention of abdominal soft tissue SSIs, SHIELD I, which will be conducted following the 30-day follow-up assessment for the recently enrolled 750th patient that is expected in the second quarter of this year. Drawdown of the third and final tranche of $2.5 million will be available subject to obtaining positive top-line results from the SHIELD I trial or if other conditions are met. Drawdowns of the second and third tranches can be made by December 31, 2022.
The loan agreement provides for interest-only repayments of the first tranche until December 31, 2022, followed by 36 equal monthly repayments of principal and interest. For the second and third tranches, if drawn, the Company will make repayments of interest only until August 31, 2023, followed by 33 equal monthly repayments of principal and interest. The senior secured loan initially bears interest at a rate of 9.25%, which may be reduced to 8.75% upon reaching certain milestones. The loan is prepayable in full, at any time at the option of PolyPid. The loan is secured by PolyPid’s owned equipment and intellectual property, and the Company will pay a customary fee to Kreos for the establishment of the loan. As part of the loan facility, PolyPid will issue to Kreos a 7 year warrant to purchase the Company’s ordinary shares equal to 8% of the amount of each tranche, if borrowed, with an exercise price of $5.135 per share. The loan agreement contains customary affirmative and restrictive covenants and representations and warranties.
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