Q2 2020 Mediwound Ltd Earnings Call
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Ladies and gentlemen, he says he operator today's conference is scheduled to begin momentarily until that time Airlines will again be placed into cold. Thank you for your patience.
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Good morning, ladies and gentlemen, and welcome to be Q2.
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I would now like to turn the conference over to your host Mr. Jeremy Feffer. Please go ahead.
Thank you Tiffany and good morning, everyone earlier today met it won't be issued a press release announcing financial results in providing a business update for the second quarter of 2020, you may access that release on the company's website under the investors tab.
With us today are Sharon Malka, Chief Executive Officer.
But was gorilla be chief financial Officer.
Following management's prepared remarks, we will open the call for Q1 day.
Before we begin I would like to remind everyone that statements made during this call, including the Q and a session relating to matter when its 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, although the company believes that the expectations reflected in such forward looking stay.
Mr based upon reasonable assumptions actual outcomes of results are subject to risks and uncertainties and could differ materially from those forecast due to the impacted many factors beyond the control matter ones.
Company assumes no obligation to update or supplement any forward looking statements, whether as a result of new information future events or otherwise.
Participants are directed to cautionary notes set forth in today's press release as was the risk factors set forth in medicine annual report filed with the FCC for factors that could cause actual results to differ materially from that was anticipated in the forward looking statements conference call is the property you've met a wound and any recording a rebroadcast of this expressly prohibited without the written consent of Maryland.
Now I would like to turn over the culture, Sharon Malka, Chief Executive Officer Jerome.
Thank you Jeremy.
Good morning, and good afternoon to our leasing there was anything.
Thank you everyone for joining that today on our second quarter Twentytwenty had any color, which we had bulls eye disease and financial uptick.
He has been an unprecedented that's how I like we oh anyone could have anticipated.
Why they covered 19 pandemic cause and never seen disruption due meineke. These guys think we'd significant adverse impact on international in low cap rate and business.
Well, what do you believe <unk>.
We overcame many of these challenges.
And have made tremendous progress they simply.
These quote do we remained committed to execution and five our next couple of beer La <unk> blend.
It is the only patients involvement in L.A. <unk> died and continued our efforts to expand says worldwide.
Oh, what ensuring the safety and was being godfather employees.
That's helpful. If I do and patient.
We are looking for world to a fairly busy second half phase with the continued execution and progress.
Let me now provide motivated and if you have what took place during the second quarter.
Although the last several months.
We have implemented several on Michelle.
Response to the Kobe 19 pandemic to safeguard the has so far the employees and has kept provider and to ensure continued manufacturing and supply of nexobrid to healthcare providers and patients with severe burn injuries.
We also implemented expense reduction measures to minimize the impact to operation what ensuring full compliance we need to set of regulation and directive.
Management continues to assess the impact of the ongoing thing Dan Inc. its potential implications to business continued de they need to say remedies like quiet and we'll adjust accordingly to the challenge it created by these pandemic.
We would like to thank all follow up really for their tremendous dedication commitment that flexibility demonstrate that you wouldn't be I said, enabling got to carry on critical business functions, while maintaining operational capacity and flexibility.
Moving to our it's kinda like phase two study for the treatment of venous leg. So.
This trial is designed to assess safety and efficacy escharex compared to placebo control and non subject got done other scale.
We're very pleased to have the v. initiate that patients in the older men de school to after temporarily suspending Danish creation of additional clinical site and new patient enrollment last quarter.
We have now actively recruiting patients in clinical sites, where clinical rise, but fiction have been lifted in compliance with applicable governmental older and clinical sites policies enforced feature.
We are monitoring all study clinical sites and dental ready to swiftly and assuming the government that all sites I, so not just rocky cod.
Since the initiation we are on track with patient recruitment and optimistic about other programs.
We haven't really find interim assessment for futility and potential sample size adjustment wants to about 100 patients complete you switched men, which we anticipate to accrue in the first half of Twentytwenty why.
And we look forward to providing mobile data later this year.
We believe aesthetic he successfully developed will be a game changer and these sizable market.
That's correct, we did target product profile has the potential to gain set stench of shale off more than 1 billion thought on market and.
To have a meaningful impact on wooden coaster treatment.
We doubled the next up with program.
College, we'd the submission of the beer late to the F.D.A. as we planned at the end of June despite the coffee this option.
Which represent a meaningful milestone for us and for the long term Korlach Alicia and we have we filed the.
The P.L.A. submission has been a collaborative EFL without passing <unk>, specifically by then they said being supportive of these filings.
That being a submission included a comprehensive set of manufacturing data.
Good for preclinical and clinical studies, including our people to Todd you would say the tech study.
We expect to receive F.D.A. acceptance and if they do for date in the coming weeks ended up pulling to be lay a pool, but we are eligible to receive 7.5 million milestone payment for that.
As we await that's did if you we continue to enroll patients in our next up with expanded access program in the U.S. and we see increase.
The June of next to bleed, we more than patients treated in mall burn centers across the way.
The next program importantly, and strategically.
Keeps us engage with all the key burn centers into U.S. as our U.S. commercial Boston, though verastem. He is actively preparing for the commercial launch.
On the manufacturing font, we continue to manufacture them next to bleed primarily focused on building an emergency stopped by four about that and supply nexobrid to patients with severe burn injuries.
The first delivery to BARDA is scheduled for later this quarter was the majority of deliveries will occur in Twentytwenty why.
We maintain a significant safety stocks to meet expected demand over the next several quarters and at this time, we do not expect any disruption to manufacturing operations and global supply chain.
On the comment on that front, we continue to support has kept professional utilizing good to us tools, but access it was I think that and showing on interrupted access to next away.
We are pleased to see product revenues growing and expansion of next so we'd two new territories as we look forward generating revenues from BARDA procurement starting from the next quarter.
Other solid balance sheet, we continue to support our goals as we execute on our strategic and development plan and we continued to strengthen our company.
We remain FIM in our commitment to bringing bringing our lifesaving treatment to burn patients everywhere.
Now it is my pleasure to turn the call over to bought.
For a summary of our financials this quarter, but thank you Sean.
Good morning, everyone.
Yes.
Good evening Tuesday listeners in Israel.
I'd like to start the financial overview, they things that we're implementing reaching 10 concise monitoring 'cause it covered maintaining vacation and continuing to adjust our twentytwenty plan, including cost reduction of operating expenses and material fortune.
Were also very pleased with our Nixon bring your revenue growth and global expansion.
Increasing its positive cash flow generation to further support our cash position.
I would like now to provide you with an update on our financial performance for the second quarter of Twentytwenty.
Revenues for the second quarter with Twentytwenty were 4 million compared with 20.7 million for the second point of 2019 as a result of various an upfront payment of 17.5 million.
Our next to me.
Excluding that revenues from product in the second quarter Twentytwenty.
And 1.1 million, reflecting increased 17%.
Very soon because upon in quarter, an increase of approximately 50 per cent compared to the first quarter Twentytwenty.
Looking ahead, we expect revenues from products to grow with delivery to border.
Starting from the third quarter Twentytwenty.
Gross profit for the second quarter, Twentytwenty was 1.2 million compared to gross profit of 17.5 million for the second quarter 2018.
Which included in which included 16.8 million.
I'd say licensing agreement net of expenses.
Works margin from product sales increased to 44 person.
29% into second quarter were 29 team.
As a result of increasing product sales and improvement of our manufacturing processes.
Research and development expenses for the second quarter Twentytwenty.
Participation or 1.6 million compared with a zero point fourmillion towards the second quarter of 2018.
I really do you does a decrease of participation by BARDA Israeli inhibition authority.
Selling general and administrative expenses for the second quarter Twentytwenty by two point Threemillion inline with the second quarter or 2019.
Operating loss was 2.7 million compared with an operating profit of 13.9 million for the same period in 2018, which included the upfront payment of 17.5 me them. Some very selective seem agreement net of royalty payment 0.7 million.
And zero point Eightmillion of other expenses.
The company posted commits us so 3.1 million or 11 cents per share for the second quarter Twentytwenty.
Compared with net proceeds of 12.7 million or 47 cents per share.
Towards the fun and quarter twinkling team.
Which included the 17.5 million.
Upfront license payment net of royalty payment of 0.7 million.
And do a point 8 million of other expenses.
Excluding the upfront license payment net of deal related costs.
Net loss for the second quarter of 29 team was three point threemillion or 12 cents per share.
Adjusted EBITDA as defined below.
It was a loss of 2.1 million.
Compared with the profit to 15.4 million towards the second quarter of twinkling team.
Which included the upfront payment of 17.5 million.
I'm very soon licensing agreement.
Net of royalty payment 0.7 years.
Moving now to read today Twentytwenty financial results.
Revenues for the first half of Twentytwenty were 8.5 million <unk>.
Compared with 21.2 medium in the first stuff of 29 team.
Which included the 17.5 million upfront them in some very see licensing agreements for next February.
The company net loss for the first half of Twentytwenty was 5.6 million or loss of 20 cents per share compared with a net profit of 8.6 million or a profits of 32 cents Fischer.
For the first stuff at 29 team.
Which included a 17.5 million upfront license payment.
Net of royalty payment of zero point, Sevenmillion and doing point 9 million of other expenses.
Excluding the upfront license payment net of deal related costs.
Net loss for the first half of 2019 was seven point threemillion or 27 cents per share.
Adjusted EBITDA was a loss of 3.9 million compared with the profit of 12.4 million for the first half of 2018, which included the upfront payment over 17.5 million.
I'm very soon licensing agreement.
As of June Thirtyth Twentytwenty is the company had cash and short term bank deposits or 24.4 million compared with a 29.5 million as of December 31st.
When do you think team.
And has no dipped.
The company will continue team this time I read in research and development that fourth for its correct and we reiterate our expectations for cashews for operating activities in Twentytwenty, two beans or range of eight to 10.
Well it just time as a company cannot predict extent or duration.
The impact of the cold evening teen outbreak on its ongoing financial and operating results.
We'll continue to close the morning through our operations in a sense the impact over the course evening team.
Yes, that's I've concluded the financial overview, and we'll know turns it comes back to show and so on.
Thank you bought.
Looking ahead, we anticipate F.D.A. acceptance or follow beer lay for Nexobrid soon and will continue I look almost felicitation activities with our partner if I said.
Voice Capex, we are actively enrolling patients and we continue moving forward with the study.
Well I uncertainties remain we remain highly confident in the fundamental as a follow business and we will continue executing our plans and actively focusing too old several meaningful milestones in both programs.
That concludes our prepared remarks. This now my pleasure to open the call for culinary operator.
Ladies and gentlemen, if you have a question at this time. Please press Star then the number one on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the Q. Please press the pound key.
Please hold for the first question.
Your first question comes from the line of Raj Denhoy with Jefferies.
Hi, this is pretty on entourage. Thank you for taking my question I'm. So congrats on being wrong teaching U.S. prompt study.
We were just wondering how many sites and watch have reopened and if you're targeting additional sites and then when you expect that all the take up and running things.
Thank you will be I know for the question.
First of all we're very pleased we did assume of patients environmental follow Escharex study. Despite the challenges we have with coffee.
In general we plan to out about 25 to 30 sites participating in this study primarily in the U.S.
We are now actively recruiting patients in about 20 clinical sites in the U.S. and anything that under the current local regulation and allowed to enroll patients into the study and we are monitoring all sites and stand ready to swiftly with them involvement at all sites as soon as it back because.
And what they can show do also is that since their initiation early June we are on track with patient recruitment and optimistic about our progress toward the interim assessment, which we anticipate will occur in the first half of 2021.
Of course, we need more time to evaluate the pace of like with men, which is subject to governmental policies dated and individuality facilities policies and of course, the willingness of up and the ability of patient.
To attend to clean it got settings.
And lastly.
A regarding a potential metrics, we plan to share metrics on the ex Cat IQ study once the uncertainties waiver and due to provide you with more insight of desk phase study progress and like loosened base.
Thank you sound like and then also congrats.
Our next so Brad.
Quick question on will bother procurement, so bad for human stockpile. So has bargain in Kenya previously adjusted scheduling to begin procurement in three key 20, I believe you said that but I was just wondering if the cadence during 2021 has shifted and if you expect any.
Covert 19 related distraction potentially delay.
Really timelines for there thank you.
Thanks, So following the initiation of the procurement of next up late fall Emergency response Edelita. This deal we began manufacturing nextel bleed and building an emergency stockpile ready for delivery, which is kind of stalled in our facility in Israel.
As a reminder, and last quarter about that equates to an adjustment off the delivery plan due to the Cobiz 19, and shifting priorities and currently defense delivery to validate scheduled to take place later this quarter in December quarter, followed by subsequent deliveries in the fall.
Going forward to five Cortez on a pull out the basis of the 16.5 million.
Okay. Thank you so much.
Your next question comes from the line, Kevin Degeeter with Oppenheimer.
Hey, guys. Thanks for taking my questions are just a couple of housekeeping maybe following up on the BARDA sure me if I I believe your partner various I'll sort of alluded to kind of a million dollars three to 1 million in Q4 of which I guess, probably generally consistent with your your prior yard your comments and response.
Your last question, but you can you kind of clarify how we should think about yo schedule for the fire procurements I guess sort of after this initial free to deliver.
Thanks, Kevin for the question. So what they can there is the way to that what you just mentioned regarding our partner very sale as a reminder, and we have a 16.5, mainly on procurement on a gross level.
Form which varies I forget about 30, a 45% and so correctly and fast caught a third quarter, we a plain old schedule, a dead set delivery for which we will get about 3 million gross.
Which then it'll get one may not to mention and it would be the same into fourth quarter means that the balance will be it but I didn't a past three quarters off 2021.
[noise] pull out there.
Very helpful and a bit of a housekeeping items can you remind me whether there will be.
The need for.
You know an increase in inventory in inventory build prior to the U.S. launch of of Nexobrid and to the extent it there is.
Should we think about perhaps some of that that inventory flowing through in the first half a 21 prior to the launch just just how do I think about sort of working capital impact of potential Nexobrid view I suffer.
Yeah, so in that in tandem to manufacturing and building damage thoughtful buyback, we assume and we plan at that very sale should it quite well for fuel for mass a launch inventory to work the potential approval.
And meet 2021, so I just said, yes, we expect that in the first half of 21.
The issue is manufacturing prepare a a safety stock on launch took full vendors had to be procured by them.
On the end of first quarter or something like that and we do not foresee a significant impact on the working capital you will do it was good we will give the guidance full a cash for Twentytwenty want it could be include also building. This talk as we build DCIO full about I know that itself.
[noise] Super helpful and vendors lastly in terms of your refining a potential timeline for bill revolve around your neck. So Brad I think we've kind of penciled in.
June based on the timing June 2021 days and the timing of the filing is there any can you just comment as to whether there's any of your puts or takes that.
Thanks.
Could logically result in sort of a a different.
Hi mine approval.
Sure typically review process takes 10 months following the 60 days acceptance of the filing and as we expected, but do five day to be around me 2021.
A F.D.A. issue guidance, let their stating that they will they strive to meet I do five deadlines. Despite the cold we maintain a related disruption and if they go with missed F.D.A. should and will communicate with the sponsors. So currently.
You mentioned, we anticipate a do for data around me 2021.
Terrific. Thanks for taking my questions.
Thank you.
Your next question comes from the line of C.M. Takkula, Randy Katz with H.C. Wainwright.
C. Wainwright.
Good afternoon sure on.
Thank you for taking my call. A this is all came from his friendly.
Couple of quick questions.
Could you comment on the enrollment status for the next program.
Sure.
So I just mentioned D.A. doing they say called we see continuous growth in the use of nexobrid with more patients treated by mole burn centers across the U.S. in the next expanded access program. Currently we have 15 active sites across the U.S. that activity.
Anything bent patient with Nexobrid, while another five sites Adrienne activation process.
Well good luck with BARDA is glad about therapy sites participating in this expanded access program.
A also all up there a protocol it and four three things 150 patients to be treated by if I do for date by mid 2021, and if required we will adjust the say protocol and currently a week tweeted already a faulty patient.
In doing those a 50 an active sites.
And the next organization always important things strategically keeps us engage with all keep on incentives in the U.S. as I'll tell you its commercial partner very silly actively preparing for commercial launch well and Hastings day, a U.S. preparedness for mass casualty event.
Hi, Thank you for that no regarding the the real used to redeem it sounds kinda.
You know from someone Dupont.
Sponsor, who is trying to do is really in the l. you'll be sure.
They are not aspects I was told us they had that's expected in terms of enrollment are you seeing any issues or are you concerned about the speed of enrollment and into your study or otherwise.
Really comfortable with the other than that things are Blaine.
So I see a god before currently we are on plan and we add equipment.
And we are optimistic about progress toward the interim assessment, which we target the festival Twentytwenty one of course, a b note with the uncertainty given the uncertainties of the Coke, we think can be change going forward, but we are supported also by some sites from Israel and we are in it.
Most of qualifying addition outside out of the U.S. to support and extend the number of sites and do it at the pickup site.
Yeah. So currently we are optimistic to meet our goal.
Thank you one last question for me as far as a milestone payments from there so outside of the sounding a half million that you expect to receive upon approval of.
Are there any additional milestone payments in the in the interim before we get to that pool.
No. It is the next matched en Pointe approval.
Okay. Thank you. Thank you very much for taking all my questions starting folks. Thank you for the quest.
Your next question comes from the line of Josh Jennings with Cowen.
<unk>.
Mr. James Your line is open.
If you're on mute could you please limit your line.
Well go to the next question. Your next question comes from the line of Checkup Hughes with Wells Fargo.
Hi, Good morning, and good evening. This is Nick neutral on for Jason. Thanks for taking my questions. We were wondering if you could comment on the percent enrollment of the rest corrects phase two study and also what are your expectations for the interim assessment.
Hi, so its a.
The correctly, it's very difficult then challenging two a share. It that's had because you have in a like a set up all six of these daily initiation of the study and we need more time to evaluate the pace of recruitment, which is due to several other matters I eat government that policy the local policies and of course.
The patients willing to to get to treatment.
Got a scene for initiation with early June we are on track with patient recruitment and 40 stage afraid to set up and building up there a sites ready for both men and yeah, a on plan and we did the progress of the study tools.
The interim assessment between PC pay to scale in the first half of 2021.
And a as mentioned before we plan to share metrics and additional insight of the ex cat faced a indic in day, a next about of PCU, while we have more clarity and uncertainty will wait.
Thank you.
Oh.
And again, if you would like to ask a question. Please press star one.
Your next question comes on line of Josh Jennings with Cowen.
Please go ahead.
Mr. James Your line is open.
This is Brian here for Josh. Thank you for taking my questions.
Hi, I have a question on next agreed to start just on the B.L.A. submission what are the milestones in the review process. Once the filing is accepted for instance is there a mid cycle review meeting or do you.
You need to be yeah, yeah, what do you supplemental filing with the 24 month data.
Yeah. So thank you buying for the questions. So a decent ballet. He supported by day detect studied acute phase into 12 month to 24 months data will people decided that they both the pullback commitment not as part of the if you a cycle of the appear like this is what was like.
Great with Ft, Ed it probably be limiting.
Regarding the key milestones within the 10 months I've mentioned before the review following the 60 days acceptance.
I do anticipate after five months.
Yes, after receipt of a defined Midcycle meeting and we DAF D.A. and there is another one and two all say a month nine of which is a late day cycle last meeting and after that if the dilution of the FDA.
Okay. That's helpful. Then on the Escharex trial is it kind of assume that you can complete enrollment around yearend 2021, whether you are enrolling the plan to 174 patients or if you need to enroll out to 225 patients captain.
I guess I'm, asking because it seems like with <unk>.
Like the study centers participating and expansion of the enrollment plan shouldn't really tack on.
Too much additional time, just given that involves you know to around two patients per slot decide.
Got a fair assumption.
Yeah. So it depends on what will be they find that is that something decided to keep though regional something outside.
Based on the interim assessment, so it's fair enough to anticipate.
A completely equipment by yearend Twentytwenty, one if you will need to increase the sample size. So it will boost to the fed stuff of Twentytwenty too.
Okay. Thank you.
At this time I'm showing no further questions in queue I will now I'll turn the call back over to Mr., Sharon Malka for any closing remarks.
Thank you.
Thank you everyone for joining us today, we look continuing to executing on our strategy and bringing new therapy to market and to update. Thank you again on our next quarterly update call. Thank you very much of an update.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may now disconnect.
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