Craig-Hallum bullish on PolyPid, initiates with a Buy

As previously reported, Craig-Hallum initiated coverage of PolyPid (PYPD) with a Buy rating and $10 price target The firm believes investors have completely forgotten about PolyPid, which has quietly pivoted following a late 2022 Phase 3 failure for its lead asset, D-PLEX100. PolyPid is nearing a pivotal Phase 3 data set that Craig-Hallum thinks will support approval for prevention of surgical site infection in colorectal/abdominal surgeries. Further, the firm believes this is a $1.5B market in high-risk patients undergoing open procedures, and that the stock is currently pricing in a 15% chance of success in the ongoing Phase 3, SHIELD 2 trial. At the very least, Craig-Hallum thinks probability of success is no worse than a typical Phase 3 trial, and models 50% POS.