Mediwound Ltd (MDWD) 2024 Q4 法說會逐字稿

Good day, and welcome to MediWound's sports quarter and full year 2024 earnings conference call (Operator Instructions) Please note today's event is being recorded.

I would now like to turn the conference over to Dan Ferry, LifeSci Advisors. Please go ahead.

Thank you, operator, and welcome everyone. Earlier today, pre-market opened. MediWound issued a press release announcing financial results for the fourth quarter and full year ended December 31, 2024. You may access this press release on the company's website under the investors tab. I would ask you to review the full text of our forward-looking statements within this morning's press release. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to MediWound's statements as defined under the Private Securities Litigation Reform Act of 1,995.

These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations that are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today. The MediWound assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events, or otherwise.

This conference call is the property of MediWound, and any recording or rebroadcast is expressly prohibited without the written consent of MediWound. With us today are Ofer Gonen, Chief Executive Officer of MediWound, Hani Luxenburg, Chief Financial Officer; and Barry Wolfenson, Executive Vice President of Strategy and Corporate Development. Following our prepared remarks, we will open the call for Q&A.

Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound.

Thank you, Dan, and good morning, everyone. 2024 was a pivotal year for MediWound, marked by strong execution, significant progress in clinical development, commercial expansion, and strategic partnerships. These achievements have strengthened our position, enabling us to drive continued growth and innovation in 2025 and beyond. I'll begin with [EscharEx], our next generation is thematic therapy for chronic wounds.

In early 2024, we reported compelling results from our head-to-head analysis against [sample]. Currently, the only FDA approved is dramatically brightened product in the United States, generating approximately $370 million annually. The data demonstrated EscharEx superiority over sample across key clinical endpoints, including higher incidence of complete debridement, faster time to complete debridement, more rapid and effective wound bed preparation, and faster time to wound closure.

Clinicians surveyed across diverse recognize these superior clinical benefits and the substantial value they provide. In fact, recently conducted market research estimates EscharEx's peak sales potential at approximately $725 million for its primary indications venous leg ulcers and diabetic foot ulcers. These clinical benefits also make EscharEx well positioned for upcoming changes in wound care reimbursements.

Starting next month, MediWound's new LCD policy will require full wound debridement and ventilation tissue formation before covering cellular and tissue-based products. This shift strengthen EscharEx access opportunity as a major commercial opportunity for our company. EscharEx now in history, we recently launched the Global Phase 3 trial to evaluate EscharEx for venous leg ulcers and holding 216 patients across 40 sites in the United States and Europe.

The co-primary endpoints of the trial are the incidents of complete bribe and the incidence of wound closure. This program is strategically the building on the strong results of our Phase 2 studies with key modifications to maximize the likelihood of success, modification that includes a larger patient sample size to strengthen statistical power. An interim analysis at 65% enrollment, allowing for adaptive adjustment and standardized treatment protocols to minimize variability and ensure consistency.

It is also important to note that EscharEx shares the same active pharmaceutical ingredient NexoBrid, which is FDA approved for a nearly identical indication Eschar removal. The interim assessment, a significant milestone, is anticipated in mid-2026 with full trial completion expected by year end 2026. To further strengthen our BLA submission and enhance commercial readiness, we are planning a 45 patients randomized prospective Phase 2 head-to-head comparison of Eschar versus collagenase scheduled to begin in 2025.

The study will include both SANTYL and the European collagenase product [EscharEx], generating critical comparative data that will be instrumental in supply market access and pricing strategies. The VLU program is supported by strategic research collaborations with leading wound care companies Solventum, Molnlycke, and MIMEDX. These partners will provide advanced wound care products for our trials, ensuring optimized patient outcomes and standardized wound management across all sites.

Additionally, earlier in 2024, we secured EUR16.5 million in funding from the European Innovation Council to accelerate the development of EscharEx for diabetic foot ulcers. The Phase 2, Phase 3 BFU clinical trial is planned for 2026, and we are pleased to announce a new strategic research collaboration agreement with Kerecis, a subsidiary of Coloplast, to support this effort. Kerecis, which is a global leader in winter solutions, will be supplying its fish skin graft for active closure in this trial.

Additionally, we anticipate securing another collaboration with a major industry leader to supply the market leading advanced wound care dressings. With these partnerships, [Mary won] will be working alongside all the relevant key players in advanced wound care, reinforcing our strong industry positioning. Now let's move to next of breed, our innovating enzymatic therapy for severe burns. Before we discuss our product with progress with next of breed, I want to take a moment to highlight its critical real-world impact.

This past weekend, a devastated nightclub fire in North Macedonia claimed 59 lives and injured at least 155 people. A medical delegation from Israel equipped with NexoBrid immediately flew in to provide support and treatment. We are grateful that NexoBrid could play such a vital role in this tragedy. With that said, in 2024, we achieved significant progress in expanding NexoBrid commercial reach, generating annual revenue of $20.2 million driven by robust global demand.

Moving forward, we anticipate continuous strong growth with projected revenue of $24 million in 2025 capped only by our manufacturing capabilities. This growth will be driven by expanding sales in key markets. Europe, when NexoBrid is now available in more than 90 burn centers, Japan, where our partner Kerecis and pharmaceutical has achieved a remarkable adoption with 400 plus medical facilities using NexoBrid.

And the United States with very strong commercialization efforts yielded a 42% increase in hospital orders in Q4 2024. NexoBrid markets potential was further expanded with FDA approval for pediatric patient’s newborn to 18 years old. The pivotal Phase 3 pediatric study data supporting the approval were recently published in Burns, the peer reviewed journal of the International Society for burned Injuries. Another potential indication expansion emerged during the Israeli Hamas war where dozens of patients with blast injuries were treated with NexoBrid.

The outcomes were remarkable, and the data from these cases will be presented at the upcoming American Burn Association conference. Additionally, we reported the positive results from the expanded access protocol, which evaluated 239 patients across 29 US burn centers. The study confirmed NexoBrid of safety and efficacy in SA removal, as well as its significant reduction in the need for surgical procedures for burn patients.

Operationally we successfully completed the construction of our state-of-the-art GMP manufacturing facility, which remains on track to reach full operational capacity by late 2025. Commercial availability will depend on regulatory approvals from FDA EMA, which are expected in 2026. This facility will significantly expand our production capabilities, allowing us to meet the growing demand, -- the growing global demand and sustain long term revenue growth.

This year we also strengthen our balance sheet with a strategic $25 million pipe financing round led by Molnlycke . This reflects industry confidence in our strategy and provides additional resources to execute our clinical and commercial growth plans. With a robust cash runway of approximately $44 million MediWound is well positioned to deliver on its critical, clinical, operational, and commercial objectives.

Now I'd like to turn the call to Hani, to review our financial performance in greater detail.

Thank you, Ofer, and good morning, everyone. I will now take you through our financial results for the first quarter and full year of 2024. Starting with the fourth quarter, we reported a revenue of $5.8 million compared to $5.3 million in the same period last year. Gross profit came in at $0.9 million with gross margin of 15.5%, up from $0.7 million and a 13.5% margin in Q4 2023.

R&D expenses were $3 million compared to $1.8 million in the prior year quarter, primarily due to costs related to the escalate value Phase 3 trial. SG&A expenses total $4 million compared to $2.8 million in Q4 2023, mainly reflecting higher share-based compensation expenses.

This resulted in an operating loss of $6.1 million compared to $3.9 million last year. Net loss for the quarter was $3.9 million or $0.36 per share compared to $1.7 million or $0.19 per share in Q4 2023. On a non-GAAP basis, adjusted EBITDA loss was $4.9 million compared to $3.2 million in the same period last year. Now moving to a full year, we reported total revenue of $20.2 million compared to $18.7 million in 2023. The increase was primarily driven by higher revenue for Vericel, a new contract with the US Department of Defense.

Gross profit for the year was $2.6 million, with a growth margin of 13% compared to $3.6 million and a 19.1% margin in the prior year. The decline was mainly due to changes in the revenue mix and higher fixed costs associated with scaling our production. R&D expenses came in at $8.9 million compared to $7.5 million in 2023, primarily due to costs related to EscharEx value Phase 3 right. SG&A expenses were $13.1 million compared to $11.6 million in 2023, mainly reflecting higher share-based compensation costs.

Our operating loss for the year was $19.4 million compared to $15.3 million in 2023. Net loss for the year was $30.2 million or $3.03 per share, compared to $6.7 million or $0.75 per share in the prior year. The $23.5 million increase was primarily due to financial expenses, mainly from the revaluation of warrants following a 75% increase in our share price in 2024. Non-GAAP adjusted EBITDA loss for the year was $14.8 million compared to $12.3 million in 2023.

(technical difficulty) balance sheet, we ended the year with $43.6 million in cash equivalent and deposit, compared to $42.1 million at the end of 2023. During the year we successfully raised $25 million through a PIPE offering, received $1.2 million from the exercise of CSA warrant and secured $1.2 million grants from the European Commission. We also fully settle our liability with Teva. In total, we used $22.9 million to fund operation, including all $6.8 million allocated to capital expenditure, primarily for scale of our manufacturing facility.

That concludes my financial review Ofer, back to you.

Thank you, Hani. So in summary, 2024 was a transformative year for MediWound defined by significant clinical, commercial, and strategic achievements. Our strong execution, expanding pipeline, and key partnerships position us for sustained growth and long-term value creation.

As we continue to advance our programs, expand market adoption, and drive innovation, our focus remains on delivering meaningful improvements in patient care. We look forward to providing further updates in our progress in the coming quarters. And with that, I will now turn the call back to the operator to open the line for questions. Operator?

Thank you. Yes.

(Operator Instructions) Joshua Jennings, TD Cowen.

Hi, good morning, good afternoon. Thanks for. Taking the questions and congratulations on the initiation of the of the value study. Appreciate all the review of the trial design and the path forward. one follow up with you have some powerful wound care collaborators in the study.

So [MediWound], and was just wondering, what is outside of supplying their wound care products for the study, what else are they doing in terms of enhancing study execution? Just wanted to get that under our belt.

Hi Josh and thank you for the question. Barry, do you want to address it?

Yes, thanks, Josh, for the question. Generally speaking, having standardized products across these three key categories the moist wound dressings, the compression bandaging, and the tissue substitute. Will help just to make sure that all variability is minimized throughout the study, which of course will optimize the outcomes as far as the companies themselves are concerned, aside from the products that they'll be supplying, they'll also be supplying training.

So in fact, this weekend in Philadelphia we have our investigators meeting and they'll be training of all the sites. Those companies will be involved and on an ongoing basis if there are any questions related specifically to their products, they'll provide that education and training.

Excellent. Thanks for that. And I wanted to ask about the DFU study. Expected to begin in 2026. Maybe funding is in place is to, --two-part question. I mean one, should we expect it to be a global trial with the EU funding similar to the VLU study, the value study.

And then to maybe just outline, what's required in just a similar pathway that you took for VLU in terms of getting trial design approved by the FDA and EMA, love to just hear you walk us through that again, sorry to make you review it.

So the Phase 3 study with DFU patients will be as close as we can to the Phase 2 study of the VLU patients. The only difference is that we have less data that we have for VLU patients. So in order for the agencies to agree, to that structure of the study, we need to get their sign off. Our plan is to approach both FDA and EMA in the second half of this year with a protocol that is based on the data that we have to date.

We have a few dozens of patients that we treated with DFU patients, and the data looks basically similar to what we have with. But we need to have it approved. This is why when we guide about the study, we say a Phase 2, Phase 3 study, because maybe we need a kind of an interim assessment and shift into a Phase3 down the road.

Having said that we need to get clearance from the agencies before we can give a lot of details. Our thoughts about how the study will look like is currently posted on our website, and it looks quite similar to the VFU trial. With this trial we will also have strategic collaborations the same as we have with the VLU trial, but it will be with different partners.

Excellent. And just one last one on NexoBrid, yes, I made great progress in terms of doing the state-of-the-art GMP manufacturing facility in place and ramping up capacity this year. Understand that regulatory approvals are necessary for the product to be commercially available, which is when's the earliest that regulators can get in to do the inspection and move forward with clearance? I know you don't have any control over the timing, but when's the earliest that they could start that process. It sounds like you're expecting approvals in '26.

So currently our guidance for the revenue are reflecting the fact that we will get in the beginning of 2026 approval in Europe and by mid-2026 we'll get FDA approval. The thing that we need to have in place in order for those approvals to take place. Is that we need to make sure that we are able to manufacture products with the same quality and the same characteristic of the current manufacturing facilities that we have which is quite smaller.

After we finish proving that we can do the same, we need to manufacture. A few batches of both meri for the United States and for Europe. Europe demands three months of stability. After that, they can come for an inspection. This is why we expect the European approval to be early. And the US FDA, the guidelines is that we need to wait six months of stability. So these are the timelines, and this is why we guided in the beginning and in the middle of 2026 both approvals.

Thanks, Ofer. Thanks, Barry. Appreciate it.

Thank you.

Francois Brisebois, Oppenheimer & Co

Hi, thanks for the questions and congrats on the progress this year in '24. I was just wondering if you can touch base. You started your call talking about the Medicare update. You just, remind us of when that came in place and how, just a little more color on how do you think that is a positive for MediWound.

And then the second question is more on the interim analysis, just a reminder, I think you mentioned it on the timing of that. For the trials of Phase 3 and what are the different kind of outcomes that can come out of this interim analysis. Thank you.

Okay, thank you for the question. Barry, can you step in to address the first question and I will answer the interim assessment one. .

Sure, of course. So with regard to the Medicare question, recently, as you're likely aware, the seven local Macs, the Medicare administrator contractors posted final changes to what's called an LCD, a local coverage determination policy related to the usage of cellular and or tissue-based products, CTPs. This category has exploded in the last several years to as high as $3 billion in the US, and while several dramatic changes were written into the draft policy, as it turns out, the final policy ended up not really too different than the current one. \

This new policy becomes active in less than a month on April 13th, 2025. One key change is the slight limitation on the number of applications of tissue that could be put in place on a patient during one complete episode. That number has gone down from 10 previously to four, but it does have the ability to do an additional four if the wound situation warrants additional applications.

And for these additional four, the sites must complete, some additional paperwork, but that extra work is not deemed to be too time consuming to keep them from doing so. That's the bigger change that the industry will focus on. From a MediWound perspective and how it relates to EscharEx. Another meaningful change from this new LCD is the increased attention to documentation.

Required showing that the wound is completely debrided and covered in granulation tissue prior to application of any tissues substitute to the wound. And given that this is what EscharEx does so well, it debrides, and it gets wound the wounds prepared, this will position our drug as the optimal product of choice when surgery or sharp debridement is not deemed to be the best option.

Okay, Barry, I have nothing to add to that. Thank you for answering. As for the interim assessment, as I said in my in my prepared remarks, this program is strategically the risks. Many succeeded in 14 out of 14 clinical studies, and we have no plans to fail in the most significant study that we are conducting. So we plan an interim assessment after 65% of the patients in the study, which is 140 patients, are treated. And there are two outcomes to this assessment. One, 90% there is a 90% probability of success.

The 90% power for success is maintained, and in this case, we are stopping the enrollment of the study, by then more than 200 patients will be already included in the study. And then we just are waiting for the follow up and the study is done. If we see that the likelihood of success is less than 90%, let's say 77%, we have some flexibility in the protocol to include additional few dozens of patients in order to maintain the 90% probability of success.

If everything goes as we planned. The interim assessment should be by mid-2026, and the study completion, assuming that 90% probability of success is maintained, the study completion is by the end of 2026. I hope I answered the question.

Yeah, thank you.

Swayampakula Ramakanth, HC Wainwright

Thank you. Good afternoon, Ofer and Hani and good morning, Barry. A couple of questions, Barry, thanks for explaining the LCD, the new LCDs, that was, that's going to become. Official, in a month. So based on what you're saying regarding the granulation of the tissue, is there a way where you at least, if you can compare for us, how SANTYL, performs, versus what we should expect from SRX, and, based on that as EscharEx has. Has potential to be better than what SANTYL does right now.

So Barry, do you want to address it?

Sure. Well, a couple of things. Firstly, and thank you, RK for the question. As we announced the results from the head-to-head Phase 2 study earlier this year, and EscharEx was shown above SANTYL all the key endpoints, whether that was time to complete debridement, incidents of complete debridement, and also a time to wound closure.

With regard to the, -- so right there off the bat if you're a treating physician and you have a wound that comes in and you want to get towards a CTP for active closure, you're going to know that the data suggests that EscharEx can get to that CTP with only a couple of weeks that the average is going to be five to six applications within a couple of weeks.

And the published data even outside of for SANTYL even outside of our Phase 2 analysis suggests that it's more along the lines of six to eight, if not even more weeks. So there's going to be an incentive to use EscharEx because it will get to that CTP application much, much more quickly than would sample.

But thank you for that. And then also a quick question on the VLU, the ongoing VLU study. Is there any possibility for this study to enroll, quicker than expected. So that, we can expect data, earlier, whether it's the interim or the final complete data set later next year.

Yeah, so hi and thank you for this question. It's a great question because I was asked about it again and again by my board yesterday. I wouldn't expect a quicker enrollment that many patients, we are in the largest centers in the United States and Europe. There are a lot of patients that are available, but we are making sure that we are recruiting the right patients.

I want patients with chronic wounds. I don't want patients with a wound which is not that severe, and even a placebo will do something. So we're spending a lot of time and a lot of effort in screening and making sure that no patient is getting into the study unless he has a real chronic wound, a real help with wound, because our intention is that placebo will do nothing to it. I don't mind waiting another month, another two months.

I'm not incentivizing centers to recruit as many patients as they can as quickly as they can. On the contrary and just making sure it's a very lucrative study. Everyone wants to get to be treated with the ancillaries that we are getting the most expensive dressings, the most effective pressure garments. We know that we will have a there is a lot of demand to participate in this trial. Our motivation is to make sure that it is done adequately, and I would not expect a quicker enrollment.

Thanks for that. And then on the collaboration with BARDA in terms of identifying a US facility and trying to trying to plan and design a facility in the United States. What is the status there, and also can you give us any call as to how you're going to manage these big projects like you just got done with the Israeli facility.

And what's the timeline you know if you saw this site and identify a specific site in the United States and how does it play into the expansion of NexoBrid, from what you're, yet to accomplish, that's already been, signed up for.

So the facility in Israel that is going to be in full capacity scale by the end of this year and getting the approval by mid next year. We will have the capacity to support the foreseeable market of NexoBrid in the United States and globally. Having said that, the US government recognized the need to having a backup facility in the United States. So we are now in the pool, so we got some funding to identify a location for NIB location for such a facility.

We are planning such a facility. We are having additional indications such as the temperature table formulation and additional indication that we are working on that this facility will need to support. So we have the funding for that hopefully by the end of this year we will know exactly what is required in order to finalize building such a facility. I would expect a three year (technical difficulty).

It will not have any impact on our revenue guidance because we are speaking now on 2027, 2028, but we will have a lot of additional capacity. Either to manufacture more Sex or to manufacture the military use indication, et cetera. So it's a project which is very important for us, but it won't have any impact on the next four years other than getting funding from the US government.

Perfect. Thank you very much. Thanks for taking my questions.

Thank you.

Chase Knickerbockerm, Craig-Hallum.

Good morning. Thanks for taking my questions. Just a couple on the VLU study around enrollment. So can you just, kind of cue us in on what you're hearing from perspective centers as far as what they think enrollment rates that are feasible are? And then how are the early site activation activities going?

And everything is planned so far and then along those lines and with the LCD, there's a number of skin sub trials going on as a result of the clinical evidence requirements in that LCD we were referencing. Are you watching out for any competition for patients or kind of what are you hearing from these centers? Sorry for the multi-part. Thanks.

Hi, Chase, and I hope I remember all the part of the question. Let's start with the end because this is how my memory works. We, -- when we did the feasibility study, feasibility testing about which sites to pick, we chose sites that do not have competing trials. Having said that, we might have one or two competing in specific sites, but none of them can com compete financially in our trial.

We are much complicated trial. We are paying much more money for each patient per center around $1,00,000 per patient, which is at least three or four times more than they are getting from simpler CTP trials, so we do not identify it as an issue. This is the last part of your question. As for the rates, we are aiming for the same rates that we had in the previous chronic study, which is half a patient per center per month.

Very feasible. It is also based on the experience of the CLO that we are working on in this Phase three study, and it looks something that all our calculations are based on these numbers. It can be a little bit quicker, but as I as I answer to, I think, okay, I don't, we are not pushing to, we are not, -- we are focusing on the quality of the trial. And not in trying to recruit as many patients as possible quicker because the patients are there. Did I miss any part of the [question]

And then just kind of on the site activation side, that was all very helpful. And just on the site activation side has everything kind of happened to plan, anything that's going better or, anything that's taken a little bit longer? I know it's early days.

Currently we are well prepared. We were well prepared to start the study. So we have the agreements in place and the sites are very enthusiastic and we don't see any delays. On the contrary, we again, -- we just started in the United States. So at least something like 50% of the sites will open in the next couple of months. But we are in a very good place and in the United States there is a lot of enthusiasm on this trial.

Good. And then maybe one for Hani if we think about R&D spend this year as the VLU trial ramps up, is that kind of per patient as they're enrolled the right kind of way for us to think about it and model R&D? Are there other kind of startup expenses we should be thinking about maybe just kind of any way you can help us think about R&D spending '25. Thank you.

I think that in 2025 our R&D expenses will increase compared to 2024. Of course it derives from, as I said, per patient, the cost will be around $1,00,000, so. As we aiming to enroll around 100 patients this year, you can do the calculation, and the result is that we will the R&D cost will increase substantially compared to 2024.

Very helpful. Thanks for the question.

Thank you.

Michael Okunewitch, Maxim Group

Hey guys, thank you.

So much for taking my questions today. Congrats on all the good progress. I guess first off, I'd just like to ask you a little bit about on the DFU study, you talk about the rationale for partnering with Paris and does this replace the memetics graphs, or is it a different type of graph?

So, the rationale is that we want to work with the best products and we don't want to be associated with a specific advanced wound care company. So if you look at the CTP, the best data as far as we know in legs are [medicare], and this is why we signed with them. The best results that we see in diabetic foot ulcers are of Kerecis, Coloplast. This is why we picked them.

As you can imagine and based on the environment and the CPP and the LCD and the reimbursement, all of them are interested to participating in such trials to generate more data and to be used by as many sites as possible. So we have the ability to choose, and we are happy with those specific two partners that we picked.

Okay. And then let me look here, 2025 revenue guidance, could you help us understand where that $4 million and incremental growth comes from if we are expecting the EMA approval on the facility to come in early 206.

So as I'm saying, We do not expect to sell more next breed units, -- not substantial more next breed units in 2025, but a couple of two or three weeks more that we can manufacture due to all kinds of activation efforts that we had last year. So we have a few more weeks of manufacturing, and also, we increased the price a little bit where we could.

And we are shifting territories. There are more profitable territories/ So the numbers, according to the current plan, and the math shows that the revenue will increase quite substantially. But again, it is still based on the same capacity, maybe another two or three weeks more and higher prices.

Okay, thank you very much for the additional color.

Thank you.

Thank you. This concludes our question-and-answer session. I'd like to turn the conference back over to management for closing remarks.

So thank you everyone for joining us today. We enjoyed it. We look forward to continuing our dialogue and updating you on our progress during the next quarterly call. Bye bye.

Thank you. This includes today's conference call. We thank you all for your participation and you may now disconnect your lines. Have a wonderful day.

Thank you.