MediWound Ltd. (MDWD) Q4 FY2025 Earnings Call Transcript & Summary

Good day, everyone, and welcome to MediWound's Fourth Quarter and Full Year 2025 Earnings Call. Today's conference call is being recorded. At this time, I would like to turn the conference call over to Gaia Shamis 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 fourth quarter and full year ended December 31, 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?

Hi, and thank you, Gaia. 2025 was a pivotal year for MediWound. We ended the year with 2 significant growth drivers firmly in place, a Phase III VALUE trial advancing as planned and an operational expanded manufacturing facility for NexoBrid, positioning us for long-term commercial growth. At the same time, we strengthened our balance sheet and outlined a multiyear revenue trajectory. Despite the ongoing conflict with Iran, we at MediWound are fully prepared and will continue operating with resilience and discipline that have guided us through similar challenges in recent years. Our team remains focused on our clinical milestones and commercial objectives while continuing to support patients and partners worldwide. Let me walk you through the progress. Let's start with an update on EscharEx, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment is ongoing in the global Phase III VALUE study in venous leg ulcers, with the majority of sites active and enrolling. We are targeting enrollment of 216 patients across approximately 40 sites in the United States and Europe, and we expect both prespecified interim assessment and enrollment completion by year-end 2026. Importantly, we are expanding the EscharEx clinical program beyond just VLUs. We have aligned with both the FDA and EMA on the Phase II protocol in diabetic foot ulcers and plan to initiate the study in the second half of 2026. In addition, a prospective investigator-initiative study in pressure ulcers is also expected to begin in the second half of 2026. This expansion broadens the clinical footprint of EscharEx across the 3 major chronic wound indications. We continue to see meaningful industry validation. B. Braun has joined the EscharEx clinical development program through a research collaboration agreement and will take part in the planned Phase II study in diabetic foot ulcers. This adds to the existing collaborations with Coloplast, ConvaTec, Essity, Molnlycke, Solventum and MiMedx. Taken together, continued clinical execution, regulatory alignment, expansion into additional indications and industry engagement support the advancement of EscharEx as a long-term growth driver for MediWound. Now turning to NexoBrid. Our expanded manufacturing facility is now operational, increasing the production capacity sixfold to support growing global demand. Commercial availability from this site remains subject to regulatory approvals, which we expect in 2026. In the United States, adoption continues to expand, with utilization across more than 70 burn centers representing the majority of Vericel's approximately 90 target accounts. To illustrate the driver of demand, here are some of the latest examples. Recently published real-world data from the Israel Defense Forces covering nearly 5,000 documented combat casualties showed that NexoBrid was clinically applicable in 71% of war-related injuries. In addition, a 15-year military analysis across multiple conflicts demonstrated a 50% increase in the proportion of severe burns among wounded soldiers. In parallel, we reported peer-reviewed prospective data showing that NexoBrid reduced embedded particles in abrasion and blast injuries by more than 90%, supporting the role in acute trauma care. More recently, survivors in the tragic bar fire in Crans-Montana, Switzerland were treated with NexoBrid in medical centers across Switzerland, Italy and Germany, underscoring the importance of pre-deployment of advanced burn therapy for mass casualty events. Taking all this together, growing clinical evidence from both military and civilian settings reinforces NexoBrid's role in the treatment of severe burns. Following regulatory clearance of our expanded facility, we intend to prioritize support for national preparedness initiatives, including stockpiling and collaboration with military and emergency response systems. With that overview, I will now turn the call over to Hani. Hani?

Thank you, Ofer, and good morning, everyone. Let's turn to our financial results for the fourth quarter and full year of 2025. Revenue for the fourth quarter was $1.9 million, compared to $5.8 million in the fourth quarter of 2024. The decrease was primarily driven by lower development services revenue, mainly attributable to U.S. government shutdown, which delayed budget approval and the initiation of new contractual agreements. Gross profit for the quarter was $0.3 million or 14.9% of revenue, compared to $0.9 million or 15.5% in the prior year period. R&D expenses were $4.5 million compared to $3 million in the fourth quarter of 2024, reflecting continued investment in the EscharEx VALUE Phase III study. SG&A expenses totaled $3.6 million, compared to $4 million in the same period last year, mainly reflecting lower marketing and share-based compensation expenses. Operating loss for the quarter was $7.8 million, compared to $6.1 million in the fourth quarter of 2024. Net loss was $7.2 million or $0.56 per share, compared to a net loss of $3.9 million or $0.36 per share in the prior year period. The increase was primarily attributable to lower noncash financial income from the revaluation of warrants. Adjusted EBITDA loss was $6.5 million, compared to a loss of $4.9 million in the fourth quarter of 2024. Looking at our performance for the full year 2025. Revenue for the year was $17 million, compared to $20.2 million in 2024. The decrease was primarily attributable to the U.S. government shutdown and lower product sales to Vericel. Gross profit was $3.3 million or 19.2% of revenue, compared to $2.6 million or 13% in 2024. The margin improvement reflects a more favorable revenue mix. R&D expenses increased to $14.3 million, compared to $8.9 million in 2024, driven by investment in the EscharEx VALUE Phase III trial. SG&A expenses were $14.2 million, versus $13.1 million in 2024, mainly reflecting higher marketing authorization holder expenses. Operating loss for the year was $25.3 million, compared to $19.4 million last year. Net loss for 2025 was $23.9 million or $2.10 per share, compared to $30.2 million or $3.03 per share in 2024. The reduction in net loss was primarily driven by $2.2 million of noncash financial income from the revaluation of warrants in 2025, compared to $10.7 million of noncash financial expenses in 2024. Adjusted EBITDA loss was $20.3 million, compared to $14.8 million in 2024. Turning to our balance sheet. As of December 31, 2025, we had $53.6 million in cash, cash equivalents and deposits, compared to $43.6 million at year-end 2024. During 2025, we used $21.4 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 continued execution on our strategic priorities. That concludes my review of the financials. Ofer, back to you.

Thank you, Hani. So before we conclude, let me briefly address our outlook. We reaffirm our revenue guidance of $24 million to $26 million for 2026, $32 million to $35 million for 2027 and $50 million to $55 million for 2028. This guidance assumes continued support from BARDA and the U.S. Department of War. And the 2028 outlook includes a potential initial contribution related to EscharEx subject to regulatory approval. These projections reflect the foundation we've built in 2025 and in the milestones ahead. In summary, 2025 was a year of infrastructure build-out and clinical advancement. We advanced our Phase III program towards key milestones. We completed and commissioned our expanded manufacturing facility. And we strengthened our balance sheet and established a multiyear revenue framework. As we move into 2026, we are focused on disciplined execution, advancing EscharEx towards pivotal milestones, securing regulatory approvals for our expanded facility and converting our operational progress into meaningful long-term value creation. Operator?

[Operator Instructions] Our first question today comes from Josh Jennings from TD Cowen.

I hope everyone at MediWound team is safe, and we're thinking about you, guys. I wanted to start with just a question on NexoBrid and the manufacturing expansion project that's been successful. Maybe just review both the pent-up demand in international regions and the timing. I think you baked this all into your multiyear guidance forecast, and just the timing of MediWound filling that demand over the next 12, 18, 24 months.

Josh, good speaking with you. So our expanded manufacturing facility is now operational and capacity now increased sixfold. The commercial output in this site remains subject to regulatory approvals that are expected later in 2026. Once we're approved by EMA or FDA, the products that are manufacturing during the validation process that we are doing now can be released to the market. Our guidance that we have, they assume regulatory approval clearance in the second half of 2026. I think it's an assumption that we believe is reasonable given where we stand today. As for the demand, it's much larger than we can actually manufacture across the territories. Having said that, I don't know if it will be the case once we can manufacture. Therefore, we guided according to what we expect, and I hope it will be better going forward.

Congratulations on the pace of the VALUE trial, and it sounds like things are going well there. I wanted to ask about the pressure ulcer trial. It's my understanding that just in terms of your team's assessment of the peak sales in the U.S. down the line for EscharEx does not include contributions from the pressure ulcer indication. Maybe just talk about -- review, I think you've talked about this before, but just review the size of that opportunity in the U.S. and how that will be unlocked with this trial.

So I have to admit that I didn't hear anything. Is it because of my line or because of yours? Do you hear me?

I'm sorry. It may have been because of my line. Can you hear me now?

I don't hear you. Operator, is it his line? Should they reconnect?

He is being heard into the conference. I am hearing both of you. Are you able to hear me?

Yes, I hear you loud and clear. Josh, can you speak again?

Certainly. Can you hear me now?

Yes. Can you repeat the question? I didn't hear anything.

Sorry for the tech difficulty, maybe that was on my line. Yes, I was just saying that you guys are making nice progress on the VALUE trial. It sounds -- which is a good signal. I just wanted to dive a little bit deeper into the pressure ulcer indication. It's my understanding that that's not included in your team's assessment or forecast of peak sales in the U.S., which is a little bit of conservatism there. But just wanted you to review just that pressure ulcer indication and the kickoff of this pressure ulcer study later this year.

Okay. Barry, do you want to take on this one?

Sure, absolutely. As you know, we're going to start an investigator-led pressure ulcer study this year. And along with that, we'll have a third-party market research project initiated that will replicate what we did with regard to diabetic foot ulcers and venous leg ulcers. And so ultimately, those peak sales, as you mentioned, will increase. I think from a back-of-the-envelope perspective, I would say to think about pressure ulcers as the third of the big 3 ulcer types, along with the DFUs and the VLUs. There's probably more pressure ulcers than there are the other 2. We still need to do the work to see how many of them require debridement and would be applicable to EscharEx. But back of the envelope, I would anticipate that it's going to be roughly 1/3 of -- when all is said and done, it will be roughly 1/3 of the business.

Our next question comes from Jeff Jones from Oppenheimer.

To echo Josh, I hope everyone is safe there. You mentioned in the 2026 revenue guide that this assumed continued support from BARDA and DOW. Can you clarify how much of that is based on new contracts that aren't currently committed versus the award that you're anticipating? And perhaps give us an update on what you know there.

Jeff, so good to have you on as well. Let's start with BARDA. In August 2025, BARDA issued an RFP covering stockpiling, room temperature stable formulation, and trauma and blast injury indications. Vericel, which holds the U.S. commercial rights to NexoBrid, is leading the process in the United States. We will provide full technical and development support. Now with federal operations normalized, we expect BARDA to resume progress on this RFP and related development and procurement activities, subject, of course, to standard government processes. I cannot add more to that. As for our collaboration with the Department of War, as you know, NexoBrid room temperature stable formulation is being developed for nonsurgical burn treatment for the U.S. Army. We have been awarded to date a total of $18.2 million in nondilutive funding from the U.S. Department of War to support this development. We are moving forward. So part of the revenue is supposed to be from BARDA and part of it from the Department of War.

Okay. You mentioned the B. Braun research collaboration in the context of the DFU study, I believe. Can you speak in a little more detail about what some of these collaborators are providing and how that guides to sort of your long-term strategy in VLU, DFU and beyond?

Okay. Barry, do you want to speak on this?

Sure. I mean as you mentioned in your -- in the call, between the VLU and the DFU study, at this point, we have 7 of these research collaborations, all with market-leading advanced wound care companies. They include Coloplast through their acquisition of Kerecis, Essity, Solventum, Molnlycke, ConvaTec, MiMedx, and now the most recent one being B. Braun. Just a little bit about B. Braun. They're one of the world's leading privately-held medical tech companies. They're headquartered in Germany, founded in 1839. They generate over $9 billion in annual revenue, operating in over 60 countries and employing more than 60,000 people globally. They're known for products that are used daily across hospitals, surgical centers, dialysis clinics and outpatient settings. So they're a perfect partner when it comes to wound care. They have a big wound care franchise. Specifically with B. Braun, they're taking part in the DFU Phase II study. As with the other collaborators, they will be supplying one of the key products that's necessary for optimal care of wounds, which will be used in both arms of the study. Specifically, they're supplying their market-leading antimicrobial wound cleanser, Prontosan, to be used during dressing changes. So each of these collaborators are putting in one kind of product, whether it be a wound dressing -- in the VLU study, compression therapy is required. Post wound healing, there's a different kind of compression device that keeps everything in place. So they all supply things that are needed for the standard of care in wound care, and it allows for the study design to be that only one thing needs to be changed between the 2 arms, and that's the active and the control. And so it reduces any sort of variability in the study and we get cleaner results. For the companies, the collaborators, they get the benefit of having their product used as standard of care in these very, very large, hopefully successful studies. And it also provides the opportunity for relationship-building between MediWound and these collaborators. So as we get closer to the product making it to the market, and if there is any partnering transactions to consider, all these companies will be up to date with the program, know the details of it intimately and it will just facilitate conversations at that time.

Our next question comes from Swayampakula Ramakanth from H.C. Wainwright.

This is RK from H.C. Wainwright. Ofer and Hani, glad to hear your voice. And just a couple of quick questions. On the VLU trial, which is -- which includes the provision of adaptive adjustment that you could do at a 65% enrollment mark. So what clinical scenarios would there be if you had to increase your sample size? And if you end up doing that, what sort of an impact would it have on your time line?

RK, thank you for joining. Yes, as you mentioned, the prespecified interim sample size assessment will be conducted after approximately 65% of the patients complete the treatment. Based on this assessment, the study may continue as planned, which means that the sample size stays 216 patients. The sample size may increase if necessary. We want to preserve the approximately 90% statistical power. As you know, in MediWound, we succeeded in all the 14 clinical trials that we conducted and all the 2 Phase II -- the 3 Phase II studies that we conducted with EscharEx. So we have no intention not to make it to the finish line in this study as well. So the outcome could be the study, we should finish the enrollment as planned, which means 216 patients. And as we guided, it will be by the end of this year, the end of 2026. If, let's say, we are at 80% statistical power, not good enough, we will increase the number of patients. If it's increasing by 20, 40 patients, it means adding another couple of months to the study and another few millions of dollars, which is not a drama. If the outcome is that we need to increase it by 100 patients, it will be at least 6 months, and it will cost us another $10 million. Let's hope that the data will be very similar to what we saw in the Phase II studies and we will be able to finish the enrollment by the end of this year.

And then the question on -- I have a question on supply chain for the clinical studies. As we understand how things are in and around Israel at this point because of what's going on in the geopolitical world, is that impacting anything in terms of supplying clinical product to the various centers? And if so, how are you managing it?

So it's a great question because we just had a discussion about it this morning. We checked, and across the sites in Europe and in the United States, there is enough EscharEx that can support continuation of the trial for the next at least 6 months. So we're in a good place. On top of that, the other ancillaries are from global companies, so all of them should be in the sites. So we don't anticipate any issue regarding supply chain that will impact the clinical study.

Okay. And then the last question from me is the revenues for 2025 were below what was expected, and is that partially stocking issue through Vericel? Or is it the pull-through in some of these active burn centers?

RK, so the revenue for 2025 totaled $17 million, as you said, less than the $24 million that was expected. The decrease was primarily due to the U.S. government shutdown, which delayed, as you imagine, the budget approval and the initiation of new contractual agreement. There was a small part of -- that belonged to the sales to Vericel, but the main part is the U.S. government shutdown.

So can I ask a quick follow-up? So when you say that, I was just wondering about the 2026 revenue guidance. How much of that -- how much of the BARDA RFP award expectation is in that -- in the $24 million to $26 million that you were talking about?

We are not sharing the split. We have potential of getting from BARDA, potential from -- or indirectly by Vericel. We have potential to get it from the DOW, and we have revenue from product. We feel comfortable of achieving the $24 million to $26 million, but we are not giving the split.

Our next question comes from Chase Knickerbocker from Craig-Hallum.

This is Jake on for Chase. I was wondering if you could provide a little bit more color and just further discuss the decision to move forward with the Phase II for DFU rather than the adaptive Phase II/III design as previously planned? Like what kind of feedback from the FDA did you receive that indicated that this was the best path forward?

Chase, good to have you with us. So our main program, as you know, is the DFUs, and we decided to expand the program into 2 additional chronic indications, as said, DFU and pressure ulcers. There are some changes in the administration. We are not certain that it will be required to execute a very large Phase III study in order to have an approval for DFU indication. We, consultant with the -- we didn't get any clearance about that, but we discussed with the agencies, both with EMA, FDA, asked them what they are expecting to see in order to see the advantage of EscharEx in treating DFU patients. And the outcome was this study with 50 patients as we detailed in our corporate deck.

And then same type of question on pressure ulcers.

And if I may add, it's a 50-patient study, which is the kind of Phase II. And if we see that we need to have additional, I don't know, 100, 150-study to finalize the Phase III, we will do it study after study. So we don't -- it's a kind of a timing impact, but we are not certain that it should be -- that it will be done before the product is approved.

Appreciate that color, Ofer. That's helpful. And then same type of question on the pressure ulcers. Is it your understanding that the pressure ulcer would require a separate Phase III to get future...

Barry, do you want to speak about -- yes.

On the potential EscharEx label?

Barry, do you want to address it?

Yes. Thank you for the question. As Ofer intimated in his answer with regard to DFUs, there is a change in the what we'll call stance of this administration with regard to the FDA and how they are trying to make it, let's say, easier for drugs to be approved. The most notable thing being that they're moving from the need to do 2 well-designed, well-controlled Phase III studies in order to get approval, and they're moving that to needing only 1. And when we look at that, and we also look at -- if you recall, at the end of last year, the FDA agreed that our second primary endpoint would be the facilitation of wound closure, which basically takes the onus of the closure portion away from EscharEx and puts it into the hand of already approved products like CTP or an autograft, we intend to have a discussion with the FDA around the necessity of these large-scale Phase III studies for each and every indication, i.e., DFU, pressure ulcers or any other chronic wound indication that's out there. The necrotic material on these wounds is all very similar from wound to wound to wound. We have excellent data and a growing base of data that EscharEx works on all of that necrotic material, owing to its several different enzymes that are in the API and multi-different targets towards the necrotic material. And we believe in the end that it would be likely sufficient to have a, as we're doing in the DFU study, a well-designed Phase II study complemented by post-marketing real-world data to expand the pack insert to include additional indications.

Our next question comes from Michael Okunewitch from Maxim Group.

I guess to start off, I would like to ask a little bit about the pressure ulcer program and, in particular, the strategic considerations around prioritization in chronic wounds. We know about the prioritization between VLUs and DFUs, but pressure ulcers do seem to be a little bit overlooked in this market. So I'm curious if you could comment on the market and why pressure ulcers seems to be prioritized less so than the other 2 chronic wounds.

Michael, I don't think it's less prioritized. The largest unmet medical need is definitely at venous leg ulcers because these wounds are extremely painful and you don't have any alternative. The knife, the scalpel is not an alternative for that. Pressure ulcers are very different one of another. They might be very deep. There are all kinds of complications that might be associated. For us, it seems to be the more complicated wounds to treat. So we are going to start with relatively mild pressure ulcers. Having said that, it is important for us, as Barry said previously, EscharEx works on burns, it works on wounds. It doesn't care which type of wounds it is applied on. So our motivation is making sure that when we are very close to the finish line with having data in our venous leg ulcer trial, to make sure that everyone understands the potential partners, the investors, that everyone understands how large this market is and how big is the unmet medical need. So the current trial with pressure ulcer, it will be a very small trial that just demonstrates that EscharEx can debride pressure ulcers. We will do in parallel, as Barry said, by a third-party consultant in market research. We will understand exactly the portion of the patients that need to be -- to debride their wounds. And only then we will know how large is our accessible market. I hope I answered your question.

I appreciate that. And then can you just provide an update on the status of the head-to-head study? Are there any additional outstanding items before you can get that up and running?

Yes. So as you know, the main and the main focus of the company, and this will definitely determine our value, is the Phase III study. In parallel, we need to conduct some supportive studies that we are doing, if one of them is a PK study, for instance, one of them is a human factor study. We are doing all kind of small trials to support the BLA submission. Specifically regarding the head-to-head study versus collagenase or other types of nonsurgical standard of care, we are doing that in order to support future market access discussions. We guided and we are going to do that, that we will start the trial around mid this year, maybe the second part of the year. For us, it is a very important study since it will enable us to determine what the actual price of EscharEx will be.

All right. And then one last one for me before I hop into the queue. In terms of your enrollment -- your complete enrollment targets for the VALUE study and the interim analysis, is that based on the current rate of enrollment or does there need to be some additional ramp or acceleration of the studies to meet that?

So to protect the study integrity, we are not sharing enrollment numbers or trends. But we feel very comfortable with the target that we gave, which means interim assessment and completion of the enrollment of the study by the end of the year.

And our next and final question for today comes from Scott Henry from AGP.

First, just to clarify. As far as the interim analysis, when you talk about year-end, should we expect that to mean Q4?

Scott, I would expect it to be by year-end, which means in the end of Q4. I don't want to overpromise.

Okay. That's helpful, Ofer. And then with regards to revenue and timing, as far as the BARDA revenues, I assume there were none in fourth quarter of 2025. Should we expect any revenues in the first quarter of '26? Just a couple of weeks left in the quarter, you might have a sense at this point.

So once a BARDA agreement is signed with Vericel, I guess all of us will know. Our revenue guidance assumes that the initial revenue from those specific agreements will be only from Q2.

Okay. Great. So when we do model this out, just to confirm, we should really expect a pretty significant increase in revenues in the second half of '26 over the first half of '26 given the manufacturing capacity coming on stream given the BARDA revenue. So I just want to make sure I'm thinking about that correctly.

Yes. Scott, given our history, it was always that the second half is better in revenue than the first half. Of course, given the fact that BARDA -- we took in our model that BARDA's revenue will be only recorded from Q2 and also the capacity will increase at year-end or the second half, you are very much correct.

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 management for any closing remarks.

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

And with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.