MediWound - Earnings Call - Q2 2025

Transcript

Speaker 2

Welcome to MediWound's second quarter 2025 earnings conference call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your questions, please press star, then two. 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.

Speaker 0

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 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 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?

Speaker 4

Hi, thank you, Dan, and good morning everyone. In the second quarter, we continue to execute across our clinical, commercial, and operational objectives. The S-CoreX value phase retrial is actively enrolling patients, and with new collaboration established with ConvaTec and STT, 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 U.S. 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 S-CoreX, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment in the value phase restudy for venous leg ulcers is actively progressing.

This global trial aims to enroll 216 patients across 40 sites in the U.S. 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 STT and ConvaTec to support both the ongoing VLU trial and the planned DFU trial. Specifically, STT's Jobst medical compression therapy products are now included in the value trial protocol, and ConvaTec's Aquacell dressings will support the DFU study. Both of these category-leading partnerships complement our current relationships with Solventum, Mölnlycke, Kerasis, and MiMedx, and reinforce the broad validation of S-CoreX within the wound care ecosystem. In addition, a new post-hoc analysis from our earlier phase two 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 four times more likely to close. P-value was 0.0004. These data validate S-CoreX's potential to improve healing outcomes by accelerating wound bed preparation, which is the primary endpoint of our phase three study. While wound bed preparation has been recognized for nearly two decades as a core principle in chronic wound healing, this is the first time that this concept has been confirmed with robust clinical evidence. Now let's turn our attention to NexoBrid, our innovative enzymatic therapy for severe burns. In the U.S., adoption continues to expand.

Our partner Vericell 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 U.S.-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 U.S. 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 supplemental 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?

Speaker 1

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 a 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 S-CoreX value phase three 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 non-cash 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 S-CoreX.

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 operation, 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 these in-the-money warrants, provides us with the financial flexibility to advance our key program and support operational needs through upcoming milestones. That concludes my review of the financials. Ofer, back to you.

Speaker 4

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 S-CoreX value phase retrial towards enrollment targets, completing commissioning of our expanded manufacturing facility to meet anticipated demand, and building global recognition of S-CoreX 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?

Speaker 2

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Josh Jennings with TD Cowen. Please go ahead.

Speaker 6

Hi, good morning, Ofer, Hani, and Barry. It was great to see the post-hoc analysis from S-CoreX phase two trial published, and I wanted to just, I mean, providing another strong signal for success and value. 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? I 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.

Speaker 4

Hey, 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 the diabetic foot ulcer trials. We have data about that. Our motivation here is to gain a lot of appetite across relevant KOLs before we start the trial. There are some very important conferences, DF-Con, 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 S-CoreX directly to collagenase. This trial is on track. Our plan is to enroll 45 value patients and to split them between S-CoreX, placebo, and Santyl or Iruxol in Europe. Yes, this is still our plan.

Speaker 6

Excellent. 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 U.S. 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. I have another follow-up question on BARDA interactions too.

Speaker 4

Okay. This is definitely an important topic for us. Governments around the world took note of NexoBrid's impact during the Israel-Hamas war. In particular, the U.S. government showed interest in a domestic backup site. Apparently, they are not interested in being dependent on manufacturing in Israel. 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 U.S. government the funding of the facility as a whole. I hope I answered the question.

Speaker 6

You did. Thanks. BARDA has also published an RFP, a request for a proposal for enzymatic debridement products for 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. Thank you.

Speaker 4

Yeah. Around BARDA, again, they issued just recently an RFP that's covering three major elements: stockpiling of NexoBrid, room temperature stable formulation for non-surgical 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 Vericell disclosed in the last earnings call, they have initiated an RFP process. Vericell, they hold the U.S. 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.

Speaker 6

Thanks so much. Appreciate it.

Speaker 4

Thank you.

Speaker 2

Thank you. Next question comes from the line of Maya Iskandarani with H.C. Wainwright & Co. Please go ahead.

Speaker 5

Hello, folks. Congrats on the progress this quarter. My question is with respect to the addition of a new compression method for the phase three VALUE trial. I believe that brings the total up to five. Can you explain how you plan to distribute these? Would it just be physicians' choice of compression method across the 216 patients? Thank you.

Speaker 4

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

Speaker 3

Sure, of course. Hi, Maya. Good question. Actually, 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. These medical compression therapy products from Essity will be used for that subsegment of patients that have come to complete closure. 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. Essity, one of their big lines is Jobst. It's one of the leading lines of medical compression therapy. We're actually using two 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.

It'll be just for those patients that are in that have come to complete closure throughout the trial and are in that follow-up period.

Speaker 5

All right. Thank you. Can you confirm that timelines are similar, if not the same, as before the addition of the Jobst product for compression to the protocol?

Speaker 3

Yeah, it doesn't change the timelines at all. The follow-up period is a three-month period that's always been part of the study.

Speaker 5

Okay, thank you very much.

Speaker 4

Thank you.

Speaker 2

Thank you. Next question comes from the line of Michael Okunewitch with Maxim Group. Please go ahead.

Speaker 3

Hey, guys. Thank you so much for taking my questions today. Congrats on all the great progress.

Speaker 4

Hi, Michael. Thank you for joining us.

Speaker 3

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 is the trend going in a favorable way? Is it exceeding expectations? Could you give a bit more color on that?

Speaker 4

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. The enrollment is progressing well. In the U.S., most sites, almost all of them, are already active and recruiting patients. In Europe, the activation is a little bit slower due to regulatory timelines. While IND review in the U.S. typically takes 30 days, under the CTIS system in Europe, the process can extend up to 106 days because of multi-country coordination, etc. 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 U.S.

and in Europe. There are many patients, as you can imagine, and we are focusing on picking the right ones in order for this trial to be a success.

Speaker 3

Thank you for the additional color there. Now, also, you're now collaborating with basically all of the major wound care companies. My question is, will having six different products across both of the pivotal studies, is this going to basically demonstrate to physicians that S-CoreX can be used universally regardless of whatever preferred supportive products they have?

Speaker 4

Barry, do you want to address this question?

Speaker 3

Sure. Yeah. Hi, Mike. Good question. As we did for the CTP or skin substitutes, where for the VLU study, we're using EpiFix, and for the DFU, it's Kerasis, 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, to hit that exact goal that you stated, to just indicate that S-CoreX does not need to be used alongside 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. Yeah. Thank you. Great to hear. 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?

Speaker 4

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. The reason can be that all of them know that we are limited. Every territory wants to make sure that they have enough NexoBrid, so maybe they a little bit inflate the demand. As far as we are concerned, if you look at our guidance, we feel strongly that we can meet the guidance for the upcoming years. 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. 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.

Speaker 3

All right. Thank you very much. Once again, congrats on all the great progress you're making.

Speaker 4

Thank you.

Speaker 2

Thank you. Next question comes from the line of Chase Knickerbocker with Craig-Hallum Capital Group. Please go ahead.

Speaker 6

Good morning. Thanks for taking the questions. Maybe just to start on the DFU side of things, could you give us an update on the timelines as far as when and how you'll get that relevant feedback that you need from FDA to finalize the design? Could you give us an update on how you're thinking about the timelines there? Thanks.

Speaker 4

Hey, 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 then be ready to get ready for the trial. According to our guidance, we start in the second half of next year, and we are on track with that as well.

Speaker 6

Got it. Just a little bit more granular, maybe on the VLU side, can you give us an update on, of the 40 centers, how many are active at this point? Sorry if I missed it. 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 general thoughts on enrollments is kind of what I'm looking for, Ofer?

Speaker 4

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 general numbers, but we are getting to that target. We are very close to that, to open 40 centers, 50% of them in the U.S. The vast majority of the sites in the U.S., maybe one or two are not open. All of them are open, activated, and recruiting patients. In the U.S., we are where we expect it to be. As for Europe, it's too early to say. What we said is 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.

In Europe, in the phase three trial, according to our plans, we are in a good shape. As for competition, when you look at the competition of additional trials, of course, it is irrelevant for Europe because the vast majority of the trials of CTPs are now in the U.S. When we chose the trial, we did a process of validating sites that we feel are the best for our needs. We made sure that the trials are being done in places without competition. Of course, things vary and change from time to time. Currently, we don't see a big impact from CTPs. I'm not sure that a CTP trial can compete with a biological trial. Each patient in our trial costs 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're paying.

Speaker 6

Understood. 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 being proposed are a little bit different than before with the price cap that's being proposed. As we move into the final rule in November, we'll see how that shapes up. Can you give us any thoughts as far as how you think that impacts the industry and how it might relate to future utilization of S-CoreX?

Speaker 4

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

Speaker 3

Sure, of course, hey 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. You know, around these skin substitutes, there's been issues over the years, and 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. Within that changed local coverage determination document, there's also stipulation that the wounds need to be properly prepared. They need to be fully debrided and ready for application of a skin substitute prior to being eligible for reimbursement. Of course, especially given the publication that we've just announced today on the importance of wound bed preparation and how S-CoreX impacts that, this is a huge win for us.

This is what S-CoreX does well, and it will be well-suited as a tool for anyone on that side of the business that's looking to apply a CTP onto a patient. 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. We think, again, that that's going to be where S-CoreX provides impact because of its quick time to complete debridement and wound bed preparation.

Speaker 6

Great. Thanks, everyone.

Speaker 4

Thank you.

Speaker 2

Thank you. Next question comes from the line of Scott Henry with Alliance Global Partners. Please go ahead.

Speaker 3

Thank you. Good morning or afternoon, depending on your location. A couple 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 U.S.? I believe the EU is first. Thank you.

Speaker 4

Hey, Scott. Yeah, demand for NexoBrid is rising with those new launches and governmental interests and all the expanded indication that we are working on. 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 is that by the end of the year, everything will be completed and we will start submission to the regulatory authorities. Stability testing for Europe is three months and in the U.S. is six months. Our estimation is 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.

Speaker 3

Okay, great. Thank you for that color. 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 five quarters. Do you think there will be any room for expansion in the second half of 2025, or are you just limited by the ability to make the product?

Speaker 4

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 ramp-up in the revenue in the second half of the year is from development services and not from NexoBrid. The ramp-up in NexoBrid will be available only once we will get the first approval, M approval, for the new facility.

Speaker 3

Okay, great. I know you've talked about BARDA funding already on the call, and it seems like that's very much on track. Three months ago, six months ago, there was some concern about BARDA funding in general, given the political environment in the U.S. 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?

Speaker 4

This is a great question. In the previous quarter, we said that we had some delays in receiving revenue from both BARDA and the Department of Defense. This quarter, you see the opposite. You see that debriding burns or treating burns people or burns soldiers became kind of a priority. BARDA submitted an RFP. BARDA decided to support building a manufacturing facility in the U.S. The Department of Defense increased the award, the non-dilutive funding that they are granting us for the development of a room temperature stable formulation to be used in the battlefield. 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.

Speaker 3

Okay, great. 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-water mark? It was a little higher than the first quarter. Just trying to get a sense of the trends.

Speaker 1

Hi, Scott. Very good question. In respect to our operating expenses, I will expect it to increase a little bit in the second half. As Ofer mentioned before, in the U.S., most of the sites are already recruiting patients, but in Europe, there was a slight delay because of the regulatory process. 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. Hope I answered your question.

Speaker 3

That was great. Thank you. Thank you for answering the questions.

Speaker 2

Thank you. Next question comes from the line of Maya Iskandarani at H.C. Wainwright & Co. Please go ahead.

Speaker 5

Thank you for taking my additional question. My question is actually also related to FDA turnover and the possibility of delays. For the new NexoBrid facility, are inspection timelines on track, and otherwise, do you expect any changes to that timeline? Thank you.

Speaker 4

Hi, 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 U.S. As far as we understand, inspections that are not expected now, let's say they're expected in one or two quarters from now, no one sees any problem with those. 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.

Our estimation is that early or 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.

Speaker 5

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

Speaker 4

You're on spot. Importantly, BARDA has also expressed an interest in the program of the room temperature stable formulation that initially was funded by the Department of Defense. In the recent RFP that BARDA just published, you can see that room temperature stable formulation for non-surgical debridement is specifically highlighted as one of the areas 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. Yes, both agencies are very interested in this program.

Speaker 5

Okay, that does it for me. Thank you.

Speaker 4

Thank you, Maya.

Speaker 2

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

Speaker 4

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

Speaker 2

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