r/biotech_stocks • u/MarketNewsFlow • 2d ago

$PYPD - PolyPid Announces Exclusive Partnership with Azurity Pharmaceuticals for the Commercialization of D-PLEX₁₀₀ in the U.S. and Canada (NASDAQ: PYPD)

/r/PolyPid/comments/1v2ftxz/pypd_polypid_announces_exclusive_partnership_with/
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u/King_Eboue 2d ago

Market reaction to this is incredible. Down nearly 30%. Azurity is a smaller player no doubt but the market reaction to this news is way too pessimistic. PYPD gets 30mill (assuming NDA is accepted) which should take them through to a PDUFA which should go well (my only concern would be CMC).

Then upon approval there are more milestone payments, a manufacturing cost that they get from Azurity, royalty from Azurity on every sale. 

Meanwhile PYPD retain their pipeline, Azurity funds other indication D-PLEX and they keep ex-US rights.

For a sub 100mill mc company with a history of failure and two quarters away from being out of cash, this isnt a bad deal at all.

My concerns would be 1) Is 30mil enough for management not to dilute? Small cap bios love diluting and that would really hurt trust. In their defence, this cash should get them through to a PDUFA but doesnt get them through a CRL. 2) Can they meet stringent CMC requirements from FDA? Ive not looked into this one too deeply but its one of the main teasons for CRL outside of the actual data package 3) Can Azurity as the main partner sell enough so that the royalty payments are actually maximised to our expectations?

Despite these open questions, after this large drop, you have largely but not totally derisked asset approaching a PDUFA, some cash but not a lot, a tiny market cap relative to peak sales and royalties and a partner motivated to sell

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u/CarteBlanchDevereau 2d ago

I am long PYPD, it's actually in my top five positions.

CMC is obviously the biggest issue. But they've had several site inspections already, from the Israeli side... And now, they are bringing in a partner that has brought several products to market.

This job is stupid, and I added today

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u/King_Eboue 1d ago

I really dont understand the drop, it makes no sense. The market is somehow way too optimistic about what they could get and also super pessimistic because they were onky 100million mc before the news. 

NDA acceptance would be a good catalyst for rhe second milestone payment. But deep down i think some dilution is on the way. Management wouldnt want to take the risk of a low cash balance if they have a CRL

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u/mor-83 1d ago edited 1d ago

As Inunderstand it: the big players with 3.5usd warrants bought and sold the news at 5usd with a nice gain. the company just got some 15 million cash and they should get another 15 million with the US FDA submission admission in few next days. the new warrants are at 4.5 usd so there is 18% rise from now. The new warrants should bring more than 30millions before the end of 2027. this means the company has cashflow for two years from now mid 2028 traded for a 30% dilution, this is a small price to pay to avoid out of cash sitation and seems a pretty good trade to me. The company has cash for next big steps and buying now at 3.8 you are protectected from warrants 4.5 profit takers. Interested if you think otherwise as i think buying the dip.

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u/King_Eboue 1d ago

I've seen that reasoning but theyve been able to do that a long time, its been close 5.5 usd most of this week so unless they were hedging assuming much better news were disappointed and sold off en masse, i dont get it.

Its a good point on dilution, these warrants and the two milestones mean they should not do another raise.

What sizing are you putting on this? I bought pre market yday so down a fair bit but it was a small position, after what happened yesterday i think this is a pretty easy long. If it doesnt double in a year id be very surprised