2023 Q4 Form 20-F Financial Statement

#000121390024020424 Filed on March 06, 2024

View on sec.gov

Income Statement

Concept 2023 Q4 2023
Revenue
YoY Change
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $1.411M $6.719M
YoY Change -27.9% -38.36%
% of Gross Profit
Research & Development $4.588M $16.15M
YoY Change -1.44% -42.31%
% of Gross Profit
Depreciation & Amortization $912.0K $1.822M
YoY Change 5.87%
% of Gross Profit
Operating Expenses $5.999M $22.87M
YoY Change -9.27% -18.3%
Operating Profit -$22.87M
YoY Change -41.2%
Interest Expense -$348.0K -$929.0K
YoY Change -448.0% -216.13%
% of Operating Profit
Other Income/Expense, Net -$929.0K
YoY Change 72.04%
Pretax Income -$6.347M -$23.80M
YoY Change -2.53% -160.16%
Income Tax $9.000K $69.00K
% Of Pretax Income
Net Earnings -$6.356M -$23.87M
YoY Change -3.21% -39.67%
Net Earnings / Revenue
Basic Earnings Per Share $16.99
Diluted Earnings Per Share -$3.84 -$16.99
COMMON SHARES
Basic Shares Outstanding 1.654M shares 1.404M shares
Diluted Shares Outstanding 1.421M shares

Balance Sheet

Concept 2023 Q4 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $5.309M $5.309M
YoY Change -57.85% -57.85%
Cash & Equivalents $5.309M $5.309M
Short-Term Investments $0.00 $0.00
Other Short-Term Assets $758.0K $758.0K
YoY Change -52.63% -44.31%
Inventory
Prepaid Expenses
Receivables
Other Receivables
Total Short-Term Assets $6.067M $6.067M
YoY Change -57.26% -57.26%
LONG-TERM ASSETS
Property, Plant & Equipment $9.218M $9.218M
YoY Change -0.31% -21.07%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $87.00K $87.00K
YoY Change -12.12% -12.12%
Total Long-Term Assets $9.305M $9.305M
YoY Change -20.99% -20.99%
TOTAL ASSETS
Total Short-Term Assets $6.067M $6.067M
Total Long-Term Assets $9.305M $9.305M
Total Assets $15.37M $15.37M
YoY Change -40.81% -40.81%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $772.0K $772.0K
YoY Change -32.34% -32.34%
Accrued Expenses $2.511M $2.511M
YoY Change 101.52% -25.53%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change -100.0% -100.0%
Long-Term Debt Due $4.003M $4.003M
YoY Change -0.52%
Total Short-Term Liabilities $7.286M $7.286M
YoY Change -14.81% -14.81%
LONG-TERM LIABILITIES
Long-Term Debt $6.379M $6.379M
YoY Change -15.78% -15.78%
Other Long-Term Liabilities $3.803M $3.803M
YoY Change 23668.75% -5.28%
Total Long-Term Liabilities $10.18M $10.18M
YoY Change 63537.5% -12.14%
TOTAL LIABILITIES
Total Short-Term Liabilities $7.286M $7.286M
Total Long-Term Liabilities $10.18M $10.18M
Total Liabilities $17.47M $17.47M
YoY Change 103.85% -13.28%
SHAREHOLDERS EQUITY
Retained Earnings -$238.3M
YoY Change 11.13%
Common Stock $0.00
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity -$2.096M -$2.096M
YoY Change
Total Liabilities & Shareholders Equity $15.37M $15.37M
YoY Change -40.81% -40.81%

Cashflow Statement

Concept 2023 Q4 2023
OPERATING ACTIVITIES
Net Income -$6.356M -$23.87M
YoY Change -3.21% -39.67%
Depreciation, Depletion And Amortization $912.0K $1.822M
YoY Change 5.87%
Cash From Operating Activities -$8.956M -$17.24M
YoY Change -49.77%
INVESTING ACTIVITIES
Capital Expenditures -$4.000K $196.0K
YoY Change -88.91%
Acquisitions
YoY Change
Other Investing Activities $11.67M $4.000M
YoY Change -78.19%
Cash From Investing Activities $11.66M $3.804M
YoY Change -77.05%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $2.618M
YoY Change 551.24%
Cash From Financing Activities -1.004M $9.976M
YoY Change -39.27%
NET CHANGE
Cash From Operating Activities -8.956M -$17.24M
Cash From Investing Activities 11.66M $3.804M
Cash From Financing Activities -1.004M $9.976M
Net Change In Cash 1.704M -$3.456M
YoY Change 163.01%
FREE CASH FLOW
Cash From Operating Activities -$8.956M -$17.24M
Capital Expenditures -$4.000K $196.0K
Free Cash Flow -$8.952M -$17.43M
YoY Change -51.69%

Facts In Submission

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CY2022 us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
4423000 usd
CY2022 us-gaap Proceeds From Issuance Of Long Term Debt
ProceedsFromIssuanceOfLongTermDebt
11711000 usd
CY2023 us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
2618000 usd
CY2022 us-gaap Repayments Of Long Term Debt
RepaymentsOfLongTermDebt
402000 usd
CY2023 us-gaap Payments Of Debt Issuance Costs
PaymentsOfDebtIssuanceCosts
125000 usd
CY2023 pypd Proceeds From Issuance Of Prefunded Warrants Net
ProceedsFromIssuanceOfPrefundedWarrantsNet
3987000 usd
CY2022 us-gaap Proceeds From Issuance Of Warrants
ProceedsFromIssuanceOfWarrants
588000 usd
CY2023 us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
9976000 usd
CY2022 us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
16428000 usd
CY2021 us-gaap Net Cash Provided By Used In Financing Activities
NetCashProvidedByUsedInFinancingActivities
1034000 usd
CY2023 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Excluding Exchange Rate Effect
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseExcludingExchangeRateEffect
-3456000 usd
CY2022 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Excluding Exchange Rate Effect
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseExcludingExchangeRateEffect
-1314000 usd
CY2021 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Period Increase Decrease Excluding Exchange Rate Effect
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseExcludingExchangeRateEffect
5548000 usd
CY2022Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
9142000 usd
CY2021Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
10456000 usd
CY2020Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
4908000 usd
CY2023Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
5686000 usd
CY2022Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
9142000 usd
CY2021Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
10456000 usd
CY2023 us-gaap Interest Paid Net
InterestPaidNet
1038000 usd
CY2022 us-gaap Interest Paid Net
InterestPaidNet
734000 usd
CY2023 us-gaap Income Taxes Paid
IncomeTaxesPaid
18000 usd
CY2022 us-gaap Income Taxes Paid
IncomeTaxesPaid
8000 usd
CY2023Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
5309000 usd
CY2022Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
8552000 usd
CY2021Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
9819000 usd
CY2023Q4 us-gaap Restricted Cash And Cash Equivalents At Carrying Value
RestrictedCashAndCashEquivalentsAtCarryingValue
300000 usd
CY2022Q4 us-gaap Restricted Cash And Cash Equivalents At Carrying Value
RestrictedCashAndCashEquivalentsAtCarryingValue
511000 usd
CY2021Q4 us-gaap Restricted Cash And Cash Equivalents At Carrying Value
RestrictedCashAndCashEquivalentsAtCarryingValue
397000 usd
CY2023Q4 us-gaap Restricted Cash And Cash Equivalents Noncurrent
RestrictedCashAndCashEquivalentsNoncurrent
77000 usd
CY2022Q4 us-gaap Restricted Cash And Cash Equivalents Noncurrent
RestrictedCashAndCashEquivalentsNoncurrent
79000 usd
CY2021Q4 us-gaap Restricted Cash And Cash Equivalents Noncurrent
RestrictedCashAndCashEquivalentsNoncurrent
240000 usd
CY2023Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
5686000 usd
CY2022Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
9142000 usd
CY2021Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents
10456000 usd
CY2022 us-gaap Capital Expenditures Incurred But Not Yet Paid
CapitalExpendituresIncurredButNotYetPaid
100000 usd
CY2021 us-gaap Capital Expenditures Incurred But Not Yet Paid
CapitalExpendituresIncurredButNotYetPaid
941000 usd
CY2022 pypd Property And Equipment Paid For In Prior Periods
PropertyAndEquipmentPaidForInPriorPeriods
340000 usd
CY2021 pypd Property And Equipment Paid For In Prior Periods
PropertyAndEquipmentPaidForInPriorPeriods
395000 usd
CY2023 us-gaap Right Of Use Asset Obtained In Exchange For Operating Lease Liability
RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability
241000 usd
CY2022 us-gaap Right Of Use Asset Obtained In Exchange For Operating Lease Liability
RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability
3528000 usd
CY2023 pypd Credit Line Derivative
CreditLineDerivative
127000 usd
CY2023 pypd Modification Of Warrants
ModificationOfWarrants
31000 usd
CY2023 us-gaap Stock Issued1
StockIssued1
1020000 usd
CY2022 us-gaap Stock Issued1
StockIssued1
1259000 usd
CY2023 us-gaap Basis Of Accounting
BasisOfAccounting
<table cellpadding="0" cellspacing="0" style="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.75in; text-align: left">NOTE 1:-</td><td style="text-align: justify">GENERAL</td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.75in"></td><td style="width: 0.25in">a.</td><td style="text-align: justify">PolyPid Ltd. (the “Company”) was incorporated under the laws of Israel and commenced operations on February 28, 2008. The Company is a Phase 3 biopharmaceutical company focused on developing targeted, locally administered, and prolonged-release therapeutics using its proprietary PLEX (Polymer-Lipid Encapsulation matriX) technology. The Company’s product candidates are designed to address unmet medical needs by delivering active pharmaceutical ingredients, or APIs, locally at predetermined release rates and durations over extended periods ranging from days to several months. The Company is initially focused on the development of its lead product candidate, D-PLEX<sub>100</sub>, which incorporates an antibiotic for the prevention of surgical site infection in bone and soft tissue. Through December 31, 2023, the Company has been primarily engaged in research and development.</td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The Company’s wholly owned subsidiaries include a subsidiary in the United States of America (the “US Subsidiary”) and a subsidiary in Romania. The US Subsidiary’s operation focuses on marketing and business development of the Company’s operation in the United States of America.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">On June 30, 2020, the Company closed its initial public offering (“IPO”) whereby 143,750 Ordinary shares were sold by the Company to the public (inclusive of 18,750 Ordinary shares pursuant to the full exercise of an overallotment option granted to the underwriters). The aggregate net proceeds received by the Company from the offering were $62,757, net of underwriting discounts and other offering costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.75in"></td><td style="width: 0.25in">b.</td><td style="text-align: justify">On September 18, 2023, the Company’s board of directors approved 1-for-30 reverse share split. No fractional shares were issued, and no cash or other consideration was paid as a result of the reverse share split. Instead, the Company issued one additional whole share of the post-reverse share split Ordinary share to any shareholder who otherwise would have received a fractional share as a result of the reverse share split. The amount of authorized Ordinary shares was not affected. All issued and outstanding share and per share amounts included in the accompanying consolidated financial statements have been adjusted to reflect this reverse share split for all periods presented.</td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -28.35pt"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.75in"></td><td style="width: 0.25in">c.</td><td style="text-align: justify">The Company’s activities since inception have consisted of performing research and development activities. Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations is dependent on future events, including, among other things, its ability to secure financing; obtain marketing approval from regulatory authorities; access potential markets; build a sustainable customer base; attract, retain and motivate qualified personnel; and develop strategic alliances. The Company’s operations are funded by its shareholders and research and development grants and the Company intends to seek further private or public financing as well as make applications for further research and development grants for continuing its operations.</td></tr></table> <p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">Although management believes that the Company will be able to successfully fund its operations, there can be no assurance that the Company will be able to do so or that the Company will ever operate profitably.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.7pt; text-align: justify; text-indent: 0in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">In September 2022, the Company announced top-line results from the Surgical site Hospital acquired Infection prEvention with Local D-PLEX<sub>100</sub> (“SHIELD”) I Phase 3 trial. SHIELD I did not achieve its primary endpoint of reduction in Surgical Site Infections (“SSIs”), re-interventions due to SSIs and mortality: in the Intent to Treat (“ITT”) population, the local administration of D-PLEX<sub>100</sub> and standard of care (“SoC”), (n=485) resulted in a decrease in the primary endpoint of 23 percent compared to SoC alone (n=489) (p=0.1520).</p><p style="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">That said, in a pre-specified subgroup ITT analysis requested by the United States (“U.S.”) Food and Drug Administration (“FDA”) of a total of 423 subjects with large incisions (&gt;20 centimeters), the local administration of D-PLEX<sub>100 </sub>resulted in a significant reduction of 54 percent in the primary endpoint, compared to SoC alone (p=0.0032). Within the first 30 days post-surgery, SSIs decreased from 9.7% in the SoC treatment arm (n=211), as compared to 4.4% in the D-PLEX<sub>100</sub> treatment arm (n=212).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">In November 2022, the Company provided the FDA with available data from the SHIELD I study as part of a Type D meeting request. Following positive Type D meeting communication with the FDA, which took place in January 2023, on the SHIELD I Phase 3 data, the Company now has a clear regulatory pathway towards a potential new drug application (“NDA”) submission. Based on the data, particularly the 54% reduction observed in the primary endpoint in complex surgeries in a pre-specified subgroup analysis of patients with large open incisions (p=0.0032, n=423) compared to SoC, the FDA acknowledged that the SHIELD I results may provide supportive evidence on this population and recommended that the Company conduct an additional study to support a potential NDA submission. The FDA stated that the ongoing SHIELD II study could potentially serve as such a study. The FDA also recognized that D-PLEX<sub>100</sub>’s proposed indication is for the prevention of infection and has the potential for wide use.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The Company resumed recruitment into the SHIELD II trial in June 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -28.35pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The Company expects to continue to incur substantial losses over the next several years during its clinical development phase. To fully execute its business plan, the Company will need to complete phase 3 clinical studies and certain development activities as well as manufacture the required clinical and commercial production batches in the pilot manufacturing plant. Further, the Company’s product candidates will require regulatory approval prior to commercialization and the Company will need to establish sales, marketing and logistic infrastructures. These activities may span many years and require substantial expenditures to complete and may ultimately be unsuccessful. Any delays in completing these activities could adversely impact the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">As of December 31, 2023, the Company had cash and cash equivalents in the total amount of $5,309. During the year ended December 31, 2023, the Company incurred a net loss of $23,865 and had negative cash flows from operating activities of $17,236. In addition, the Company had an accumulated deficit of $238,309 at December 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The Company’s future operations are highly dependent on a combination of factors, including (i) completion of all required clinical studies; (ii) the success of its research and development activities; (iii) manufacture of all required clinical and commercial production batches; (iv) marketing approval by the relevant regulatory authorities; and (v) market acceptance of the Company’s product candidates. There can be no assurance that the Company will succeed in achieving the clinical, scientific and commercial milestones as detailed above.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> Based on the abovementioned, as of the approval date of these consolidated financial statements, the Company has not raised the necessary funding in order to continue its activity for a period of at least one year after the date of the filing of this annual report on Form 20-F. Therefore, these factors raise a substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that might result should the Company be unable to continue as a going concern.</p>
CY2023 us-gaap Stockholders Equity Reverse Stock Split
StockholdersEquityReverseStockSplit
the Company’s board of directors approved 1-for-30 reverse share split
CY2023 pypd Description Administration
DescriptionAdministration
the Company announced top-line results from the Surgical site Hospital acquired Infection prEvention with Local D-PLEX100 (“SHIELD”) I Phase 3 trial. SHIELD I did not achieve its primary endpoint of reduction in Surgical Site Infections (“SSIs”), re-interventions due to SSIs and mortality: in the Intent to Treat (“ITT”) population, the local administration of D-PLEX100 and standard of care (“SoC”), (n=485) resulted in a decrease in the primary endpoint of 23 percent compared to SoC alone (n=489) (p=0.1520).That said, in a pre-specified subgroup ITT analysis requested by the United States (“U.S.”) Food and Drug Administration (“FDA”) of a total of 423 subjects with large incisions (>20 centimeters), the local administration of D-PLEX100 resulted in a significant reduction of 54 percent in the primary endpoint, compared to SoC alone (p=0.0032). Within the first 30 days post-surgery, SSIs decreased from 9.7% in the SoC treatment arm (n=211), as compared to 4.4% in the D-PLEX100 treatment arm (n=212).In November 2022, the Company provided the FDA with available data from the SHIELD I study as part of a Type D meeting request. Following positive Type D meeting communication with the FDA, which took place in January 2023, on the SHIELD I Phase 3 data, the Company now has a clear regulatory pathway towards a potential new drug application (“NDA”) submission. Based on the data, particularly the 54% reduction observed in the primary endpoint in complex surgeries in a pre-specified subgroup analysis of patients with large open incisions (p=0.0032, n=423) compared to SoC, the FDA acknowledged that the SHIELD I results may provide supportive evidence on this population and recommended that the Company conduct an additional study to support a potential NDA submission. The FDA stated that the ongoing SHIELD II study could potentially serve as such a study. The FDA also recognized that D-PLEX100’s proposed indication is for the prevention of infection and has the potential for wide use.
CY2023Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
5309000 usd
CY2023 us-gaap Net Income Loss
NetIncomeLoss
-23865000 usd
CY2023 us-gaap Net Cash Provided By Used In Operating Activities
NetCashProvidedByUsedInOperatingActivities
-17236000 usd
CY2023Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-238309000 usd
CY2023 us-gaap Use Of Estimates
UseOfEstimates
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.75in"></td><td style="width: 0.25in">a.</td><td style="text-align: justify">Use of estimates:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.</p>
CY2023 pypd Estimated Useful Lives Description
EstimatedUsefulLivesDescription
Over the shorter of the term of the lease or its useful life
CY2023 us-gaap Other Research And Development Expense
OtherResearchAndDevelopmentExpense
83000 usd
CY2022 us-gaap Other Research And Development Expense
OtherResearchAndDevelopmentExpense
738000 usd
CY2021 us-gaap Other Research And Development Expense
OtherResearchAndDevelopmentExpense
542000 usd
CY2023 pypd Received Total Amount
ReceivedTotalAmount
7290000 usd
CY2023Q4 us-gaap Royalty Guarantees Commitments Amount
RoyaltyGuaranteesCommitmentsAmount
4888000 usd
CY2023 pypd Nonroyalty Bearing Grants Amount
NonroyaltyBearingGrantsAmount
1675000 usd
CY2023 pypd Out Of Received Amount
OutOfReceivedAmount
97000 usd
CY2023 pypd Nonroyalty Bearing Grants
NonroyaltyBearingGrants
727000 usd
CY2023 us-gaap Increase Decrease In Prepaid Expenses Other
IncreaseDecreaseInPrepaidExpensesOther
0 usd
CY2022 us-gaap Increase Decrease In Prepaid Expenses Other
IncreaseDecreaseInPrepaidExpensesOther
12000 usd
CY2023Q4 pypd Tax Benefit Percentage
TaxBenefitPercentage
0.50 pure
CY2023 us-gaap Revenue Recognition Allowances
RevenueRecognitionAllowances
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.75in"></td><td style="width: 0.25in">r.</td><td style="text-align: justify">Revenue Recognition:</td></tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The Company recognizes revenue from contracts with customers under ASC No. 606, “<i>Revenue from Contracts with Customers</i>”. Accordingly, the Company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">At contract inception, the Company assesses the goods or services agreed upon within each contract and assesses whether each good or service is distinct to determine the performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">On August 2, 2022, the Company entered into a license, distribution and supply agreement (the “Agreement”) with Mercury Pharma Group Limited, under the trade name Advanz Pharma Holdings (the “Customer”), with respect to the Company’s product, the D-PLEX<sub>100</sub> (the “Product”), for the prevention of (i) post abdominal surgery incisional infection; and/or (ii) post cardiac surgery sternal infection.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The term of the Agreement is until the later of December 31, 2035, or 10 years after the first commercial sale of the Product. The Agreement can also be terminated by either party under certain limited circumstances. Pursuant to the Agreement, the Customer was granted an exclusive license to market, commercialize, and distribute the Product in the European Economic Area and in the United Kingdom. Under the Agreement, the Company will carry out all activities required to obtain marketing authorization in each territory, approving the commercial sale of the Product in that territory. Once marketing authorization will be granted in a territory, the Customer will be required to achieve minimum sales requirements for that territory.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">Under the terms of the Agreement, the Company received a non-refundable, one-time payment of €2.5 million (approximately $2,548). The Company is also entitled to receive additional development-related milestones payments for a total of up to €23 million. In addition, the Company will be entitled to receive up to additional €87 million upon achievement of certain commercial sale milestones.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The Company has concluded that the Agreement includes a single performance obligation. The Company has concluded that the license and development are not distinct from the manufacturing since the Customer could not use, consume, or sell the license and development services on their own or with resources readily available to the Customer because of the Company’s specialized knowledge and the associated manufacturing know-how and because currently, and in the foreseeable future, there are no other parties that could manufacture the Product. As such, the transaction price was fully allocated to the single performance obligation. Since it is not probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the milestone payments is resolved, the Company estimated the transaction price at €2.5 million (approximately $2,548).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">As of December 31, 2023, the Company has yet to satisfy its performance obligation under the Agreement and, therefore, no revenues were recognized. Accordingly, the upfront payment amount was classified as a long-term deferred revenue in the Company’s consolidated balance sheet as of December 31, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in"> </p>
CY2023 pypd Agreement Term
AgreementTerm
P10Y
CY2023 pypd Non Refundable Amount
NonRefundableAmount
2500000 eur
CY2023 pypd Non Refundable Amount
NonRefundableAmount
2548000 usd
CY2023 pypd Additional Developmentrelated Milestones Payments
AdditionalDevelopmentrelatedMilestonesPayments
23000000 eur
CY2023 pypd Additional Amount Of Commercial Sale Milestones
AdditionalAmountOfCommercialSaleMilestones
87000000 eur
CY2023Q4 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
2500000 eur
CY2023Q4 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
2548000 usd
CY2023 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.75in"></td><td style="width: 0.25in; text-align: left">s.</td><td style="text-align: justify">Concentration of credit risks:</td> </tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and short-term deposits.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">Cash, cash equivalents, restricted cash and short-term deposits are deposited in major banks in Israel and in the United States of America. Such investments may be in excess of insured limits or not insured. Generally, cash and cash equivalents may be redeemed upon demand and, therefore, bear minimal risk.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">The Company utilizes option and forward contracts to protect against the risk of overall changes in exchange rates. The derivative instruments hedge a portion of the Company’s non-dollar currency exposure. Counterparties to the Company’s derivative instruments are all major financial institutions.</p>
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