Mediwound Ltd (MDWD) 2025 Q2 法說會逐字稿

Good day, and welcome to MediWound second-quarter 2025 earnings conference call. (Operator Instructions) Please note, this event is being recorded.

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

Thank you, operator, and welcome, everyone. Earlier today, pre-market open, MediWound issued a press release announcing financial results for the second quarter ended June 30, 2025. 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 expected future performance, future business prospects or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today, and MediWound assumes no obligation to update or supplement any forward-looking statements, whether 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; and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Corporate Development, is also participating in today's call. 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. Ofer?

Thank you, Dan, and good morning, everyone. In the second quarter, we continued to execute across our clinical, commercial and operational objectives. The EscharEx VALUE Phase III trial is actively enrolling patients and with new collaboration established with Convatec and Essity, all the relevant global wound care leaders are now engaged in our clinical programs.

At the same time, NexoBrid continues to gain traction in the US market and the commissioning of our manufacturing scale-up remains on track for completion by year-end. As a result of these activities, we are in a strong position to achieve several key milestones over the next 12 months that are expected to advance our strategic and financial objectives.

Now let's begin with an update on EscharEx, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment in the VALUE Phase III study for venous leg ulcers is actively progressing. This global trial aims to enroll 216 patients across 40 sites in the United States and Europe. Once 65% of those patients have completed treatment in the VALUE trial, we will perform an interim sample size assessment. We expect this readout to take place by mid-2026.

During this quarter, we further strengthened our network of research partners. We established new collaborations with Essity and Convatec to support both the ongoing VLU trial and the planned DFU trial. Specifically, Essity's JOBST medical compression therapy products are now included in the VALUE trial protocol and Convatec's AQUACEL dressings will support the DFU study. Both of these category-leading partnerships complement our current relationships with Solventum, Mölnlycke, Kerecis and MIMEDX and reinforce the broad validation of EscharEx within the wound care ecosystem.

In addition, a new post-hoc analysis from our earlier Phase II study was published yesterday in advances in wound care. It's a leading peer-reviewed journal. The analysis confirms that wound bed preparation is a key predictor of healing in venous leg ulcers and that without it, chronic wounds rarely heal. Wounds that failed to achieve wound bed preparation had a 90% probability of not healing in the study, while those that achieved it were 4 times more likely to close. P-value was 0.0004.

These data validate EscharEx potential to improve healing outcomes by accelerating wound bed preparation, which is the primary endpoint of our Phase III study. While wound bed preparation has been recognized for nearly 2 decades as a core principle in chronic wound healing, this is the first time that this concept has been confirmed with a robust clinical evidence.

Now let's turn our attention to NexoBrid, our innovative enzymatic therapy for severe burns. In the United States, adoption continues to expand. Our partner, Vericel, reported 52% year-over-year revenue growth for NexoBrid in the second quarter, driven by increases in both hospital unit orders and number of ordering centers. Operationally, the commissioning of our new manufacturing facility remains on track towards completion by year-end with regulatory authority review and approval determining the timing of enabling the commercial output. Capacity expansion is critical for us in order to support our global growth.

We also continued planning for future US-based manufacturing as part of our collaboration with BARDA. In parallel, we were awarded an additional $3.6 million in non-dilutive funding from the US Department of Defense to support the development of a room temperature-stable formulation for NexoBrid, bringing the total program funding to $18.2 million. This supplementing funding will enable expansion of our CMC activities, enhancement of in-house manufacturing capabilities and initial preparations for the clinical trial.

Now I'd like to turn the call over to Hani to review our financial performance in more detail. Hani?

Thank you, Ofer, and good morning, everyone. Let's turn to our financial results for the second quarter of 2025. Second quarter revenue grew 43% sequentially and also increased year-over-year. The growth reflects higher product sales and more favorable revenue mix. Total revenue was $5.7 million, up from $5.1 million in the second quarter of 2024. Gross profit for the quarter was $1.3 million or 23.5% of revenue compared to $0.4 million or 8.8% in the prior year period. The margin increase reflects a more favorable revenue mix.

Research and development expenses were $3.5 million compared to $1.9 million in the second quarter of 2024, driven by continuing investment in the EscharEx VALUE Phase III study. SG&A expenses totaled $3.6 million versus $3 million last year, primarily due to increased share-based compensation. Operating loss was $5.7 million compared to $4.5 million in Q2 2024. Net loss was $13.3 million or $1.23 per share compared to a net loss of $6.3 million or $0.68 per share in the same period last year. The increase was mainly driven by $6.6 million in noncash financial expenses in the second quarter of 2025, reflecting the revaluation of our warrants. Adjusted EBITDA loss was $4.5 million compared to $3.4 million in the second quarter of 2024.

Looking at our performance for the first half of the year, total revenue was $9.7 million compared to $10 million in the first half of 2024. The slight decrease was primarily due to lower BARDA funded development revenue as NexoBrid R&D program nears completion.

Gross profit was $2.1 million or 21.5% of revenue compared to $1.1 million or 10.5% in the prior year period. R&D expenses rose to $6.4 million from $3.4 million last year, driven by clinical investment in the EscharEx. SG&A expenses were $6.6 million compared to $5.9 million in the same period of 2024.

Operating loss for the first half was $10.9 million compared to $8.2 million last year. Net loss for the period was $14 million or $1.30 per share versus $16 million or $1.73 per share in the prior year period. Adjusted EBITDA loss was $8.5 million compared to $6.2 million in the first half of 2024.

Now turning to our balance sheet. As of June 30, 2025, we had $32.9 million in cash, cash equivalents and deposits compared to $43.6 million at year-end 2024. During the first half of the year, we received $0.7 million from the exercise of Series A warrants and used $11.9 million to fund our operations, including $2.3 million in CapEx, primarily related to our new manufacturing facility. An additional $1.8 million in warrant exercise proceeds was received after the quarter end.

As of today, the exercise of outstanding Series A warrants could provide us with up to $32 million in proceeds. These warrants have an exercise price of $13.47 per share and may exercise through November 2026. We believe our current cash position, together with potential proceeds from this in-the-money warrants provide us with the financial flexibility to advance our key programs and support operational needs through upcoming milestones.

That concludes my review of the financials. Ofer, back to you.

Thank you, Hani. To close, the first half of 2025 reflects disciplined execution in line with our strategic priorities. We remain focused on three core objectives: advancing the EscharEx VALUE Phase III trial through -- towards enrollment targets, completing commissioning of our expanded manufacturing facility to meet anticipated demand and building global recognition of EscharEx through clinical collaborations and peer-reviewed publications. Progress across these areas is on track, positioning MediWound for a meaningful milestone in the months ahead. With that, I will now turn the call back to the operator to open the line for questions. Operator?

(Operator Instructions)

Josh Jennings, TD Cowen.

Ofer, Hani, and Barry, it was great to see the post-hoc analysis from EscharEx Phase II trial published. And I wanted to just -- I mean, providing another strong signal for success of VALUE. But I wanted to just check in and see, are there any other publications that we should have on our radar that are coming up in the back half of 2025 or into 2026. And then also just wanted an update on the head-to-head trial versus SANTYL and just making sure that, that's still on the docket for this year to kick off.

Josh, it's great to have you with us, as always. Addressing your first question regarding publications, indeed, there are a few other publications that we are not discussing at this stage, but the focus will turn towards diabetic foot ulcer trials. We have data about that, that will -- our motivation here is to gain a lot of appetite across relevant KOLs before we start the trial.

There are some very important conferences, DFCon, SAWC that are upcoming. I would expect to see additional publications around those conferences. As for the head-to-head trial, we are launching a randomized study at the second half of 2025 to compare EscharEx directly to collagenase. This trial is on track. Our plan is to enroll 45 VLU patients and to split them between EscharEx placebo and SANTYL or IRUXOL in Europe. Yes, this is still our plan.

Excellent. And BARDA seems to be stepping up. I was hoping you could just give us a review. I know you've done this in the past, but just of the US facility and BARDA funded planning and design, maybe just help us, I guess, remember or just better understand the funding there? Is it fully funded? Will MediWound have control of that manufacturing facility once it's completed? Maybe just review the details there. And then I have another follow-up question on BARDA interactions, too.

Okay. This is definitely an important topic for us. So governments around the world took note of NexoBrid impact during the Israel- Hamas war. In particular, the US government showed interest in a domestic backup site. Apparently, they are not interested in being dependent on manufacturing in Israel. So we started planning and site selection in the United States. The funding of this process is 100% done by BARDA, and we are now getting ready for the second part once we know the prices, the cost, location, we can discuss with the US government, the funding of the facility as a whole. I hope I answered the question.

You did. And BARDA has also published an RFP, a request for a proposal for enzymatic debridement products for the treatment of deep and full thickness severe burn injuries. Maybe just review the elements of that RFP and any progress and how you expect that to play out for MediWound and the NexoBrid franchise.

Yes. So around BARDA, again, they issued just recently an RFP that's covering 3 major elements: stockpiling of NexoBrid, room temperature-stable formulation for nonsurgical debridement agent and trauma and blast injury solutions. The program is expected to start in the fourth quarter of 2025, and it's a contract that should be for 10 years.

As Vericel disclosed in the last earnings call, they've initiated an RFP process. Vericel, they hold the US commercial rights of NexoBrid. So they're the leader in this effort in the United States. Of course, as MediWound, since we have a lot of interest in that, we are providing full support. Hopefully, in the next quarter's call, we will be able to elaborate further about the outcome.

Maya Iskandarani, H.C. Wainwright.

Congrats on the progress this quarter. My question is with respect to the addition of a new compression method for the Phase III VALUE trial. So I believe that brings the total up to 5. Can you explain how you plan to distribute these? Would it be physicians' choice of compression method across the 216 patients?

Maya, thank you for joining the call. Barry, can you step in and address that?

Sure, of course. Maya, good question. Actually, so the FDA in these wound healing studies always looked for a follow-up period after the wounds have come to complete closure just to assess the durability of that closure. So these compression -- medical compression therapy products from Essity will be used for that subsegment of patients that have come to complete closure. And what we wanted to do, as we've done with the rest of the products is to standardize it so that all the patients are getting the same level of treatment.

And so Essity, one of their big lines is JOBST. It's one of the leading lines of medical compression therapy, and we're actually using 2 different versions of it. One is a custom product depending on if the patient has very particular and oddly shaped legs and the other one is a more standardized product. But it will be just for those patients that are in -- that have come to complete closure throughout the trial and are in that follow-up period.

All right. And can you confirm that time lines are similar, if not the same as before the addition of the JOBST product for compression to the protocol?

Yes, it doesn't change the time lines at all. The follow-up period is a 3-month period. That's always been part of the study.

Michael Okunewitch, Maxim Group.

So I guess just to start out, on the VALUE study, has the patient recruitment and enrollment process matched your expectations? I know you haven't given specific numbers, but I guess just is the trend going in a favorable way? Is it exceeding expectations? Could you give a bit more color on that?

As you can -- as I said, one of the main focuses of MediWound is executing on this trial. As you know, we succeeded in 14 out of 14 clinical trials in the past. Our main objective is to succeed in this most important trial. So the enrollment is progressing well. In the United States, most sites almost all of them are already active and recruiting patients. In Europe, the activation is a little bit slower due to regulatory time lines. While IND review in the United States typically takes 30 days under the CTIS system in Europe, the process can extend up to 106 days because of multi-country coordination, et cetera.

But all these steps are complete and the European sites are being activated. It's too early to say if we are going to meet the expectation. But currently, so far, so good. We feel that the trial itself generates a lot of interest both in the United States and in Europe. There are many patients, as you can imagine, we are focusing on picking the right ones in order for this trial to be a success.

Now also, you're now collaborating with basically all of the major wound care companies. So my question is, will having six different products across both of the pivotal studies, is this going to basically demonstrate to physicians that EscharEx can be used universally regardless of whatever preferred supportive products they have?

Barry, do you want to address this question?

Sure. Yes. Mike, good question. As we did in the -- for the CTP or skin substitutes where for the VLU study, we're using EPIFIX and for the DFU, it's Kerecis Coloplast. This is why for the moist wound -- the advanced wound dressings, we're using Mölnlycke in the VLU and now we're going with Convatec for the DFU is to hit that exact goal that you stated just to indicate that EscharEx does not need to be used alongside of any particular CTP or wound dressing or kind of compression therapy, but it could be used with any product that would be considered standard of care.

Yes. Great to hear. And then just one last one for me before I hop into the queue. What areas currently are particularly underserved for NexoBrid? Are there any particular regions where you expect the excess demand will fill as your new manufacturing comes online?

It's as if you participated in our internal meetings because we are discussing it internally quite thoroughly. The demand is quite substantial these days across all the regions. But the reason can be that all of them know that we are limited. So every territory wants to make sure that they have enough NexoBrid or maybe they a little bit inflate the demand.

As far as we are concerned, once we have the -- if you look at our guidance, we feel strongly that we can meet the guidance for the upcoming years. And if we will have a positive surprise in a certain territory, that will just serve us. Other than that, we just know that we have additional demand. We are not spending energies at all on marketing. And I believe that next year, after the facility is completed and approved by FDA and EMA, I think we will have better color on that.

Chase Knickerbocker, Craig-Hallum.

Maybe just to start on the DFU side of things. Could you give us an update on kind of the time lines as far as when and how you'll get that relevant feedback that you need from FDA to kind of finalize design? And then just can you give us an update on kind of how you're thinking about the time lines there?

Chase, great to have you with us again today. As for the DFU, we guided that in the second half of the year, which means as we speak, we are approaching the FDA in order to get feedback on the protocol for the next study. These processes typically take around 90 days. I think we will be then ready to get ready for the trial. But according to our guidance, we'll start in the second half of next year, and we are on track with that as well.

Got it. And then just a little bit more granular maybe on the VLU side. Can you give us an update on kind of the 40 centers, how many are active at this point? Sorry if I missed it. And then there's -- at some wound care centers, there's some competition for patients for some of these skin sub trials. Can you speak to if you're seeing any sort of competition for patients from some of those trials or just kind of general thoughts on enrollment is kind of what I'm looking for. Ofer?

Again, this is a great question that keeps us awake at night. There are around 50% of the centers. We aim to open around 40 centers. We are not giving granular numbers, but we are getting to that target. We are very close to that to open 40 centers, 50% of them in the United States. The vast majority of the sites in the United States, maybe 1 or 2 are not open. All of them are open, activated and recruiting patients. So in the United States, we are where we expect it to be.

As for Europe, it's too early to say. What we said that by the end of the third quarter, we think that the majority of the sites will be open there. And I think that we will meet this guidance as well. I strongly believe that we will meet this guidance as well. So in Europe -- so in the Phase III trial, according to our plans, we are in a good shape.

As for competition, when you -- the competition of additional trials, of course, is irrelevant for Europe because the vast majority of the trials of CTPs are now in the United States. When we chose the trial, we did a process of validating sites that we feel that are the best for our needs. We made sure that the trials are being done in places without competition.

Of course, things varies and changes from time to time. Currently, we don't see a big impact from CTPs. I'm not sure that the CTP trial can compete with a biological trial. Each patient in our trial cost around $100,000. I'm not sure that these are the numbers that CTP trials that are much simpler. I'm not sure that this is the number that they are paying.

Understood. And then just last for me. I had gotten your thoughts on -- we had gotten your thoughts on this previously. But the CTP skin sub reimbursement kind of changes that are now kind of being proposed are a little bit different than before with that -- with the price cap that's being proposed as we move into the final rule in November, we'll see how that shapes up. But can you kind of give us any thoughts as far as how you think that impacts the industry and how it might relate to future utilization of EscharEx?

Yes. Sure. This is also something that we are into many details about it. Barry, do you want to step in?

Sure, of course, Chase, as far as the question on how it's going to shape the industry, my frank belief is it will help to clean up the industry. There's -- around these skin substitutes, there's been issues over the years. And this -- a couple of these changes will really help to clean things up. One of them being that only those products that have demonstrated good clinical evidence will be eligible for Medicare reimbursement. And within that changed local coverage determination document, there's also stipulation that the wounds need to be properly prepared. So they need to be fully debrided and ready for application of a skin substitute prior to being eligible for reimbursement.

And of course, especially given the publication that we've just announced today, on the importance of wound bed preparation and how EscharEx impacts that this is a huge win for us. This is what EscharEx does well, and it will be well suited as a tool for anyone in the -- on that side of the business that's looking to apply a CTP onto a patient.

And then the second part of it is a cleanup of the pricing loophole, which will bring everything back down to a similar level, and it will allow really the better products to flourish and for physicians to look for ways to more quickly get to use these CTPs. And we think, again, that that's going to be where EscharEx provides impact because of its quick time to complete debridement and wound bed preparation.

Scott Henry, AGP.

A couple of questions. First, you did reiterate that the manufacturing expansion is on track, operational capacity by the end of the year 2025. Could you talk about when you would expect to file in the EU and in the US, I believe the EU is first.

So yes, demand for NexoBrid is rising with those new launches and governmental interest and all the expanded indication that we are working on. So capacity is one of the biggest issues that we are addressing because it is critical to support the global growth. The commissioning process, all the validations and everything that is required in order to be done is progressing well. What we guided that by the end of the year, everything will be completed, and we will start submission to the regulatory authorities.

Stability testing in the -- for Europe is 3 months and in the United States is 6 months. So our estimation that in the first half of 2026, we will get approval from EMA. And in the second half of 2026, we will get approval from the FDA. The guidance of the revenue that we are presenting reflects those estimates.

And then with regard to NexoBrid, given the capacity you have currently, we did see some growth from first quarter to second quarter, but the level is somewhat limited for the past kind of 5 quarters. Do you think -- will there be any room for expansion in the second half of '25? Or are you just limited by the ability to make the product?

So again, we have a guidance of $24 million revenue in 2025. We are able to meet this guidance. The surplus of the revenue will not come from additional NexoBrid. NexoBrid, we have zero inventory. Everything which is manufactured immediately is being sold. The additional -- the ramp-up in the revenue in the second half of the year is from development services and not from NexoBrid. The ramp-up with NexoBrid will be available only once we will get the first approval, EMA approval for the new facility.

And I know you've talked about BARDA funding already in the call, and it seems like that's very much on track. But 3 months ago, 6 months ago, there was some concern about BARDA funding in general, given the political environment in the US. How is that environment currently? Are you back to kind of normal operations? Has it eased? Or is there any overhang left from that political environment?

So this is a great question. In the previous quarter, we said that we had some delays in receiving revenue from both BARDA and DoD. And this quarter, you see the opposite. You see that debriding burns or treating burns people or burns soldier became kind of a priority. BARDA submitted an RFP. BARDA decided to support building a manufacturing facility in the United States. The Department of Defense increased the award the non-dilutive funding that they are granting us for development of room temperature-stable formulation to be used in the battlefield. So as far as we see, these projects are considered a priority around the Department of Defense and the Ministry of Health of the United States, and we are, of course, satisfied with that.

Okay. Great. And perhaps a final question for Hani. Expenses in the quarter, I believe, roughly $7 million operating expenses. Would you expect that to increase in the second half? Or is that kind of a high watermark? It was a little higher than the first quarter. Just trying to get a sense of the trends.

Scott, very good question. So in respect to our operating expenses, I will expect it to increase a little bit in the second half. As also mentioned before, in the United States, most of the sites already recruiting patients. But in Europe, there was a slight delay because of the regulatory process. And those steps are now completed in Europe and European sites are being activated. This will result in higher R&D expenses in the second half of 2026. I hope I answered your question.

Maya Iskandarani, H.C. Wainwright.

My question is actually also related to FDA turnover and the possibility of delays. So for the new NexoBrid facility, are inspection time lines on track? And otherwise, do you expect any changes to that time line?

Maya, again, this question is we are participating in all kinds of seminars and trying to understand exactly how FDA -- what the plans are for inspecting facilities that are not in the United States. As far as we understand, inspections that are not expected now, let's say, they are expected in 1 or 2 quarters from now, no one sees any problem with those.

And since the FDA inspection is only expected in the second half or in the end of the first half of 2026, we don't see any issue with that. Having said that, if you look at the guidance of our revenue, it is mainly determined by the approval of EMA, and there are no issues with approving our facility by the EMA because the inspectors are Israelis. So our estimation is that early or by half -- by mid-2026, the new facility will be able to manufacture substantial amounts and to send it to territories that are substantial like Europe and other countries that are linked to the EMA.

Okay. And a quick follow-up question. Are the BARDA RFP and new DoD funding both able to be used for the development of the room temperature-stable formulation?

You are on spot. Importantly, BARDA has also expressed an interest in the program of the room temperature-stable formulation that initially was funded by the DoD. In the recent RFP that BARDA just published, you can see that room temperature-stable formulation for nonsurgical debridement is specifically highlighted as one of the area of focus. As you can imagine, NexoBrid that is stable in room temperature can be used not only for soldiers or not only for military uses, also a lot of civilian scenarios are relevant. So yes, both agencies are very interested in this program.

This concludes our question-and-answer session. I would now like to turn the conference back over to Ofer Gonen for closing remarks.

Thank you, everyone, for joining us today. We look forward to updating you again on our next quarterly call.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.