Mediwound Ltd (MDWD) 2025 Q3 法說會逐字稿

Good morning, everyone, and welcome to the MediWound's third-quarter 2025 earnings call. (Operator Instructions) Please also note today's event is being recorded. And at this time, I'd like to turn the floor over to Dan Ferry of 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 third quarter ended September 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 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; and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Corporate Development, is also participating on today's call. Following our prepared remarks, we will open up the call for Q&A.

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

Hi, thank you, Dan, and good morning, everyone. The third quarter was another strong period for MediWound, as we executed across our strategic clinical and operational objectives and continue to position the company for its next phase of growth.

The three strategic priorities I'd like to emphasize today are our EscharEx VLU trial, our NexoBrid manufacturing expansion, and our ability to fund our strategy. We have made meaningful progress on all those fronts.

Let's start with an update on EscharEx, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment in the VALUE Phase 3 trial in venous leg ulcers continues to progress, with a target of 216 patients across roughly 40 sites in the United States and Europe. US site activation proceeded as planned, while several EU sites required additional adjustments to meet ancillary-related regulatory requirements.

Overall, the majority of sites are now active and enrolling. At this stage, we cannot yet assess whether these EU-related adjustments will impact the overall study timeline. We are actively monitoring enrollment trends, and we'll update our guidance, if needed, as visibility improves.

The trial's co-primary endpoints are the incidence of complete debridement and the facilitation of wound closure, both measures in which EscharEx demonstrated strong results in previous Phase 2 studies. A prespecified interim sample size assessment will be conducted after 65% of patients complete the treatment.

We have also made progress on the diabetic foot ulcer program. We have received positive FDA feedback, and we are now awaiting EMA scientific advice. The company plans to initiate the study in the second half of 2026. As our VLU and DFU programs move forward, the market around us is also shifting in ways that highlights EscharEx's potential.

Medicare recently lowered reimbursement rates of skin-substitute products, which is expected to put significant pressure on that category and close a long-standing payment loophole. In contrast, EscharEx is a biologic regulated under the BLA pathway and aims to enter the enzymatic debridement segment, where a single legacy product generates roughly $370 million annually.

Together, these market changes makes EscharEx increasingly attractive to potential strategic partners. To quantify this opportunity, we completed an updated US market access and pricing assessment with an independent global consulting firm, incorporating also input from healthcare professionals and payers.

The analysis supports a higher potential US price per course of therapy and estimates annual peak sales of about $831 million. These updated estimates reflect EscharEx's robust clinical data, along with modeled health economic benefits derived from earlier wound closure. So with the VALUE study advancing a clear regulatory path for DFU and strong commercial validation, EscharEx is positioned to drive MediWound to the next phase of growth.

Now let's turn the attention to NexoBrid, our innovative enzymatic therapy for severe burns. Most notably, we completed the commissioning of our expanded NexoBrid manufacturing facility, a major milestone that strengthens our ability to meet the rising global demand and maintain reliable supply.

The process was not simple. We worked through a two-year war, drafted personnel, and import delays on specialized equipment. But the result is transformative. Our production capacity is now six times larger, providing a strong foundation for future growth. We expect to reach full operational capacity by year-end 2025, with regulatory review and approval determining the timing of commercial output.

In the United States, our partner, Vericel, reported NexoBrid's record quarterly revenue since launch, up 38% year over year and 26% sequentially. Vericel noted broad utilization across more than 60 burn centers and plans to pursue a permanent CPT code, which would take effect in 2027.

Internationally, the TGA in Australia approved NexoBrid for use in both adult and pediatric patients, bringing the total number of approval market to 45 countries worldwide. This approval, together with NexoBrid's prominent presence at the recent European Burns Association Congress, where it was featured in 36 scientific presentations, highlight its expanding clinical recognition and global momentum.

Regarding the collaboration with BARDA on an RFP covering stockpiling, development of room-temperature stable formulation, and evaluation of an enzymatic debridement product for trauma and blast injury indications, this multiyear program was scheduled to begin on October 1.

As Vericel noted in their recent earnings call, the government shutdown caused all related activities to pause. Now that the shutdown has ended, we expect BARDA to resume normal operations and move forward with the planned development and procurement activities. The pause also created some uncertainty around the exact timing of BARDA and DoD-related revenue in Q4.

We are actively working on these components. But the final outcome will depend on how activities progress through the remainder of the year. Overall, the advancements we have made with NexoBrid position us to a durable and meaningful growth driver for MediWound.

From a corporate standpoint, we recently strengthened our balance sheet with $30 million of equity financing from high-quality healthcare investors. This transaction provides us with the resources and flexibility to execute on our long-term growth strategy with focus and momentum.

Given the discussion around the recent financing, this is a perfect point to transition the call to the financials. Hani?

Thank you, Ofer, and good morning, everyone. Let's turn to our financial results for the third quarter of 2025. Revenue for the quarter was $5.4 million, up 23% year over year compared to $4.4 million for the same period in 2024. The increase was primarily driven by higher development services revenue, including additional contracts with DoD.

Gross profit for the quarter was $0.9 million or 16.5% of revenue compared to $0.7 million or 15.5% in the prior-year period. R&D expenses were $3.5 million versus $2.5 million in the third quarter of 2024, reflecting increased investment in the EscharEx VALUE Phase 3 study and related clinical activities.

SG&A expenses totaled $4 million compared to $3.2 million in the same period last year. The increase was primarily due to marketing authorization holder expenses. Operating loss for the quarter was $6.5 million compared to $5.1 million in the third quarter of 2024.

Net loss was $2.7 million or $0.24 per share compared to a net loss of $10.3 million or $0.98 per share in the prior-year period. The improvement was mainly driven by noncash financial income from the revaluation of warrants this quarter compared to noncash financial expenses from warrant revaluation in the third quarter of last year. Adjusted EBITDA loss was $5.4 million compared to a loss of $3.7 million in the third quarter of 2024.

Looking at our performance for the first nine months of the year, revenue for the period was $15.1 million compared to $14.4 million in the same period of 2024. Gross profit was $3 million or 19.7% of revenue compared to $1.7 million or 12% in the first nine months of last year.

The margin improvement was driven by a more favorable revenue mix. R&D expenses were $9.8 million compared to $5.9 million in the same period of 2024. SG&A expenses were $10.6 million versus $9.1 million in the first nine months of 2024. Operating loss for the period was $17.5 million compared to $13.3 million last year.

Net loss for the first nine months of 2025 was $16.7 million or $1.53 per share compared to $26.3 million or $2.72 per share in the same period of 2024. The reduction in net loss was primarily driven by noncash financial income from the revaluation of warrants in 2025 compared to noncash financial expenses from revaluation of warrants in the same period of 2024. Adjusted EBITDA loss for the first nine months was $13.9 million compared to $9.9 million in the prior-year period.

Now turning to our balance sheet, as of September 30, 2025, we had $60 million in cash, cash equivalents, and short-term deposits compared to $44 million at year-end 2024. During the first nine months of the year, we used $15.8 million in cash to fund our operating activities.

In addition, our balance sheet reflects the completion of a $30 million registered direct offering and $3.5 million in proceeds from Series A warrant exercises. We believe our current cash position provides the financial flexibility needed to advance our key programs and continue executing on our strategic priorities.

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

Thank you, Hani. To summarize, the third quarter was defined by consistent execution and strategic progress across our programs and operations, clinical advancements with EscharEx, commercial expansion with NexoBrid, and operational readiness for manufacturing infrastructure.

With these accomplishments and a solid financial foundation, MediWound is well positioned for 2026. Operator?

(Operator Instructions) Josh Jennings, TD Cowen.

Hi. Thanks, Ofer and Hani. Congrats on continued progress. Just two questions on EscharEx. Just first on the new peak sales assumption, I believe, in the US of $830 million-plus, that's up from prior assumptions. And I know you have a third-party working on this.

Any help just thinking through what's changed just volumes in --?

I'm sorry, Josh. Am I the only one who can't hear you well?

I'm sorry. Am I coming through better now?

Yeah, now it's better. I'm sorry. (multiple speakers)

Thanks for taking the questions. Congrats on the continued progress. I have two questions on EscharEx. Just first on the -- just new US, I think, peak sales estimate $830 million range, up from $725 million. Can you just share any more details just in terms of some assumptions that are baked in there? Is any pricing changes or, I guess, just volumes or patient opportunity assumption deltas from the prior calculation?

Yeah. So, hi, Josh. Really good to speak to you. Barry, can you address that?

Yeah. Hi, Josh. Thanks for the question. So this analysis that we did was more market access-focused. So the respondents are skewed more towards payers than they did healthcare providers as opposed to the previous assessment that we did. Because of that, the focus was really specifically on pricing.

So nothing changes with regard to the number of patients, the adoption rates. None of that changes in the model; it all remains the same. The only thing is the pricing. And really, what we focused on was incremental pricing that we would be able to take relative to HEOR benefits.

So in the initial assessment that we did where we landed at $725 million for revenues, the price that we used was the baseline price, which was a 15% increase over SANTYL. And we had heard that previously. We had heard it [earlier], and we heard it in this most recent market research as well that that base case, without any HEOR benefits of 15% over SANTYL, would stand. When we add in the HEOR benefits, however, it changes a bit.

And what we found is that the max could go up to as much as 50% over the price of SANTYL. And this is the price of the total cost of therapy per patient. And what we've done is basically taken what we consider to be a conservative kind of slice of it, somewhere in between the base case and the top case. And when we put that into the model, it yields this $831 million of peak sales.

Understood. Thanks for that. And the DFU study looking to kick off enrollment in the second half of next year, you mentioned over some constructive feedback from the FDA. And anything to share just on any nuanced design -- trial design updates? And will the same centers that are enrolling the VLU study be investigator sites for the DFU study? Thanks for taking both questions.

Yeah. So let me address that. So we are not -- the easy part is that we are not addressing the same centers. We are working on centers that are specializing with -- for VLU. And there are centers for DFU that -- we are looking at different ones.

As for the protocol, as I said in my prepared remarks, we are waiting for EMA feedback with the scientific advice. And we will ultimately ensure alignment in both regulators as we finalize the study design. We expect it to happen in weeks. And therefore, we will be able to update about that in the next call.

Understood. Thanks again.

Thank you.

R.K., H.C. Wainwright.

Good morning. This is R.K. from H.C. Wainwright. Good afternoon, Ofer and Hani. So I'll go back to the question Josh asked a minute ago, but a little of a different nuance.

So of that $830 million that you're projecting now, just trying to understand the breakdown between DFU and VLU opportunities, so that we and the market understand what -- how much weightage you're giving to each of these two indications. Then I have a couple more questions.

So, Barry, maybe you will start with that, and let's see what R.K. has else to ask.

Sure. Hi, R.K. There are more diabetic foot ulcers than there are venous leg ulcers. But the reason why we're doing venous leg ulcers was first is, frankly, because of the pain issue. They're very, very painful, and it makes it so that they're less likely to be debrided with surgical debridement. And so our alternative provides a really good solution.

We do believe, even though DFUs could be debrided with surgical debridement and they more often than not have peripheral neuropathy and so the pain is not an issue, that because EscharEx reduces the time to complete debridement dramatically versus the enzymatic debrider that's in the market right now, that there will be share gain there as well. I think if you look at the split with the puts and the takes, it comes out to roughly even, with a little bit of an advantage -- a little bit of a weighting on the venous leg ulcer side.

Thank you for that. Then, Ofer, in your remarks, at least the way I understood your commentary on the RFP with BARDA, is it looks like you're almost met with success, or it has been successful. Is that true? And then now I understand the US government has not been helpful, having had the shutdown. But is there any indication as to how soon this could start for you folks?

And then the last question for me is on the CPT code itself. Any nuances you can give us about how not having a CPT code -- is it impacting any adoption at all? Or this just adds more help once you get the CPT code on board?

So let me break down the answer into two parts. I will start with BARDA, and Barry will speak on the code. So in BARDA, I'll tell you the maximum that I'm allowed to share. So as you all know that in August 2025, BARDA issued an RFP covering stockpiling, room-temperature stable formulation, and trauma blast injury solutions.

We were ready to start the program on October 1. It's a program that is supposed to extend for up to 10 years. Vericel holds the commercial rights of NexoBrid in the United States. So they are leading the effort in the United States, and MediWound is providing a full support for that.

Now when the shutdown ends, we expect BARDA to resume the normal operations and move forward with the planned development and procurement activities. Other than that, I cannot tell you a time, hopefully very soon. And, Barry, do you want to speak about -- yeah.

Yeah. From a CPT code perspective, R.K. I guess, first, let me preface this by saying that Vericel, while they mentioned the fact that, A, they have a temporary CPT code that went into effect, I think it was July 1 and that based on the utilization that they're having, which has been strong, they believe that they'll be able to, in 2026, apply for a permanent CPT code that would then be activated in 2027, if all goes well.

They haven't really talked about what those benefits are and provided those nuances that you're looking for. So these are just our thoughts on it, how those could be helpful. And I guess, what I would say is, generally speaking, we all know that these procedures are done in-patient, which is through the DRG.

But CPT codes do help in a couple of different areas, really about providing legitimacy. One is, it provides legitimacy nationally, at the national level, which can drive physician adoption. And what I mean by legitimacy, it provides those CPT codes provide a standardized language for the procedure.

It helps with internal approval pathways, credentialing frameworks, and also just with workflow legitimacy. All of that, this legitimacy, boosts physician acceptance. And so when the physicians are more confident that they could do a procedure and that it's going to have the right coding associated with it, it could increase patient use, again, even though the payment mechanism is DRG-based.

Secondly, it drives institutional acceptance. So having these CPT codes in place -- I mean, without them, institutions might hesitate to put on contract any new technologies. And so they're helpful, having them in place with the P&T committees, the value analysis, EMR pathway creation.

And so having the CPT codes just makes it easier for burn centers to approve NexoBrid. I know that Vericel talked about 60-plus burn centers. And there are around 100 of these sort of grade A burn centers that they're targeting.

So there's a little bit more to go. And maybe as they get a permanent CPT code, it will just make things easier to get the laggards on board and have NexoBrid on contract. So that's the way that we see it, is they've got a temporary but a more permanent CPT code just adds to that legitimacy and would help drive both physician adoption and institutional acceptance.

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

Thank you.

Jeff Jones, Oppenheimer.

Good afternoon, guys, and thanks for taking the question. A couple from us. Is -- can you provide any additional visibility on the breakdown of the $5.4 million in revenue? You noted increased margin based on Vericel sales, I assume. But just the breakdown between product, services, and revenues.

Hi, Jeff. Thank you for the question. So in the third quarter, we only give the press release with the condensed numbers of P&L. We do not give a full financial statement, only in the second quarter and of course, at the end of the year. So I cannot tell you more than that.

But anyway, I can tell you that the gross margin is a much -- as you know, the gross margin this quarter was around 20%. It was up from 12% last year. This improvement is reflecting a more favorable change in our revenue mix. And in any way, our gross margin also is affected by a mix of revenue from product sales and the R&D services. And we expect that our gross margin to move, as you know, gradually towards the 25% in full capacity.

Great. Appreciate that, Hani. Two additional questions. Just on the US government contract discussions, with BARDA, obviously, that is with Vericel. Just for clarity, the BARDA contract hasn't been awarded, correct? (multiple speakers) --

Yeah. There was an RFP for a 10-year contract covering stockpiling, room-temperature stable formulations, and trauma blast injury solutions. Vericel disclosed in their previous earnings call that they've submitted a proposal to the US government. And we are waiting for the contract to be signed.

Great. And look forward to finding out about base options and sort of period of work there. Just any update on the commercialization plans and expansion into Europe?

So currently, as you know, we are capped by our ability to manufacture. We have much more demand that we can basically manufacture and ship towards the territories.

Having said that, we expect that by year-end 2025, our manufacturing facility will be fully, fully operational. And we can start actually manufacturing for the markets. As the demand is extremely higher, we believe that after that, we can disclose our commercial plans for that.

Great. Thank you very much, guys.

Thank you.

(Operator Instructions) Michael Okunewitch, Maxim Group.

Hey, guys, thank you so much for taking my questions today. I guess, to start off, I just wanted to follow up on some of the previous questions around the pricing and the new health economic analysis. And in particular, what endpoints are most relevant to the health economic benefit? And then are there any specific thresholds in the Phase 3 that we should look to that could justify that upside pricing?

Hi, Michael, and thank you for joining the call. I see that Barry wants to answer that. Right, Barry?

Yes. That's a great couple of questions there. So let me do the best I can to answer. The -- basically, all the HEOR that we've looked at in this assessment or that, frankly, the payers guided us to really think about, is this benefit that will be associated with early wound closure.

And so when you think about it, if you've got a wound that's open for 6 to 10 weeks longer, whatever the timeframe is, there's all sorts of whether it's the nursing time, physician time, the product time, and then all the risks that are associated with it, infection, hospitalization, anything else that needs to be done, any kind of corrective treatments that come up due to the wound not progressing well.

So all of those costs bundled together represent some amount of savings. There's already a pretty good publicly available published information on what is considered to be the average cost per week of an open venous leg ulcer.

And so between what we generate in our -- from our endpoint of early closure data that we generate -- because we will look to create our own set of data around the cost of an open leg ulcer. That, in combination with what's already been published, will drive this total amount.

As far as the cap is concerned, I will say that consistent feedback that we got from payers is that the product that's -- the legacy product in the market right now, SANTYL, has taken a price increase very consistently. I don't know that it's been every year. But it's been somewhat consistently such that, for example, a 30-gram tube has gone from roughly, again, an estimate around $100 for a 30-gram tube to around $300 over the course of these last 10-plus years.

And so there was some feedback that there would be a cap at this roughly 50% premium over SANTYL even though that additional amount might only be a small portion of the actual HEOR benefits that are derived. So that's how we're modeling it.

And again, what I said earlier is we're taking a conservative approach to that even. And for our own modeling and this number that we've pushed out at $831 million, it really isn't that top price. It's a price that's in between that top price of 50% premium over SANTYL and the 15% premium over SANTYL.

Thank you for that. And then just one more for me, and I'll hop back into the queue. Just in light of the recent updates to your market research, I want to ask a bit of an opposite question. We all on this call know the significant benefits that would draw converts over to EscharEx.

But what are the factors that would lead people to -- or lead physicians to opt for other methods like sharp or autolytic? I'm trying to understand if there are any hard limits for EscharEx in this setting beyond that 22.3% conversion estimate that you use?

So, Barry, take this as well.

Yeah. Yeah, thanks. Listen, I think that there are still going to be situations, in particular, as I mentioned earlier, due to peripheral neuropathy in the diabetic foot ulcer segment, where it just might be easier for physicians to clean up a wound once or twice with a knife as opposed to several days of drug application.

So on the sharp side, it is the standard of care now. We do estimate taking around 10% of that of the utilization from sharp debridement. But there's still going to be a market for sharp debridement. This is not as one-to-one analogous as NexoBrid is in -- with burns where it can completely obviate the need for surgery.

This is a little more soft in the chronic wound space. And so again, that's why I say we estimate around 10% on the sharp side. On the autolytic side, it's just -- autolytic debridement is so much less expensive that it depends on the setting, the case situation, the patient's insurance. There's still going to be a market for autolytic debridement.

Again, we believe that we're going to take a significant share from current autolytic debridement. Right now, the legacy product relative to autolytic debridement, you can look it up in the published literature, whether there's an advantage or not, but there's certainly a significant pricing differential.

We believe on that sort of ratio of price per clinical efficacy that we're going to hit a sweet spot and that it's going to encourage much more widespread adoption. But there'll still be a market for autolytic.

Thank you. I really appreciate the additional insights. Once again, congrats on all the progress this quarter.

Thank you, Michael.

And ladies and gentlemen, with that, we'll be ending today's question-and-answer session. I'd like to turn the floor back over to Ofer Gonen for closing remarks.

So thank you, everyone, for joining us today. And we look forward to updating you again on our next quarterly call.

And with that, ladies and gentlemen, we'll be concluding today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.