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JMP Securities lowered its price target on PolyPid Ltd. (NASDAQ:PYPD) to $14 from $16 on Monday, while maintaining its Market Outperform rating on the stock. The micro-cap biotech company, currently valued at $37.4 million, has seen its stock surge over 46% in the past six months despite ongoing financial challenges.
The price target reduction reflects potential dilution from new warrants, though JMP remains positive on the company’s prospects following recent clinical trial results. The firm noted that financing risk had been a major headwind for shares after the positive Phase 3 SHIELD II results announced last week. According to InvestingPro data, the company faces significant financial challenges with a concerning current ratio of 0.71, indicating short-term obligations exceed liquid assets.
PolyPid announced on Sunday that it anticipates gross proceeds of $26.7 million from the exercise of 7.6 million existing warrants that have been re-priced to a $3.50 exercise price. The company is also issuing another 7.6 million warrants at $4.50. InvestingPro analysis indicates the company has been quickly burning through cash, with negative EBITDA of $27.73 million in the last twelve months.
JMP indicated that the new funding is expected to support operations beyond FDA approval of D-PLEX100, the company’s treatment for prevention of surgical site infections. The research firm expects this approval to come in the second half of 2026.
The warrant exercise has bolstered JMP’s confidence in the potential for D-PLEX100 to reach the market, as the financing addresses what had been considered the major obstacle following the positive clinical trial results.
In other recent news, PolyPid Ltd. announced positive Phase 3 trial results for its D-PLEX100 product, which aims to prevent surgical site infections in abdominal surgeries. The SHIELD II trial met its primary efficacy endpoint, showing a significant reduction in infections, and all key secondary endpoints were also achieved. This success sets the stage for a New Drug Application to the FDA in early 2026, followed by a Marketing Authorization Application in the European Union. The independent Data Safety Monitoring Board did not raise any safety concerns, enhancing investor confidence in the product’s future potential.
H.C. Wainwright has maintained a Buy rating on PolyPid stock with a price target of $11, highlighting the innovative PLEX technology that supports various therapeutics. The analysts believe that the market underestimates the potential success of D-PLEX100 and the broader PLEX platform, creating a favorable risk/reward profile. They anticipate the Phase 3 SHIELD II data read-out by the second quarter of 2025 as a catalyst for the company. Meanwhile, PolyPid’s chairman, Jacob Harel, will step down at the June 2025 shareholder meeting, concluding his tenure as chairman since 2017. The announcement is part of the company’s regular disclosure requirements and does not indicate further management changes.
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