Q4 2021 Mediwound Ltd Earnings Call
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Ladies and gentlemen, your conference is scheduled to begin momentarily. Please continue to standby and thank you for your patience.
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Good day, and thank you for standing by welcome to many wound fourth quarter and year end 2021 conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session you will need to press star one on your telephone please be.
Today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to Monique coffee with lifestyle advisors. Please go ahead.
Thank you operator, and good morning, everyone earlier today <unk> issued a press release announcing financial results for the fourth quarter and year ended December 31 2021.
You may access that release on the company's website under the investors tab with US today are Sharon Malka, Chief Executive Officer of meta wound and bullets Girl Levy Chief Financial Officer.
Following management's prepared remarks, we will open the call for Q&A before.
Before we begin I would like to remind everyone that statements made during this call, including the Q&A session relating to meta once 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 the expectations reflected in such forward looking statements are based upon reasonable assumptions actual outcomes and results are subject to risks and uncertainties that could differ materially from those forecast due to the impact of many factors beyond the control of meta wound.
The 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 the cautionary notes set forth in today's press release as well as the risk factors set forth in meta once annually.
Report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward looking statements.
The conference call is the property of metalwork, and any recording or rebroadcast is expressly prohibited without the written consent of meta wound.
Now I'd like to turn the call over to Sharon Malka, Chief Executive Officer of Medicine Sharon.
Yeah.
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Yeah.
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Yeah.
Thank you Monique and good morning to all of you at Lithia and good afternoon to our leasing as well.
Welcome to our fourth quarter and year end 2021 conference call to discuss our financial and operational highlights.
We continued to execute well across all operating areas of the business in 2021.
Setting up 2022 to be a transformational year as we approached several important milestones throughout the year.
Yeah.
Starting with <unk> in January we announced the robust topline data from our S kind of ex U S Phase II study.
The study met its primary endpoint with a high degree of statistical significance, showing a P value of civil point, the Aussie awful.
Patients treated with nice correct demonstrated a high incidence of complete debridement compared to the patients treated with the <unk> It got it.
63% for West correct, there's a 30% with the gel vehicle.
The incidence of complete debridement in the Nonsurgical standard of care of which was ideal autolytic all in thematic modalities doing the same.
Measurement period was 17%.
We are heading towards patient follow up completion and expect to have the full data set from the study next quarter.
This will include secondary and exploratory endpoints as well as additional safety measure of mens which will be used to guide and develop although phase III program.
In addition to the phase II data, we also announced the President you may not have positive got that fall in the ongoing phase II pharmacology study of aesthetics.
It's got X demonstrated safe and effective debridement of lower leg I felt both the athletic food ourselves and venous leg ulcers within few daily applications.
Moreover, it and evaluation of the tissue samples and fluorescence images indicated a reduction of biofuels and bacterial load following the treatment. We that's correct.
We expect to have the full data set from this study in the next quarter as well.
We plan to present these results for those two recent rise at the wound care scientific conference soon.
In the meantime, we are advancing in our preparation for an end of phase two meeting with the F. D. A planned for the second half of 2022 in order to discuss the program itself and the potential phase III pivotal plane full S correct.
We are excited to bring ESCO next clinical development plan for award given the magnitude of its commercial opportunity, which is based on the following fed.
Third we know that debridement is a critical component of wound care.
There are about 2 million patients with values and diffuse that undergo debridement every year in the U S alone.
Ed.
The two most commonly used non surgical debridement methods and thematic autolytic generates several hundreds of million in says every year yet it can take weeks to show effect, leaving much room for improvement.
And lastly aesthetics on the other hand has shown in every trial, we conducted to date to be safe and effective in the broadening of how to heal wounds. We the few daily applications.
<unk> clearly has the potential to become a game changing therapy, and we are committed to bringing it to market. We believe <unk> is well positioned to potentially become a best in class debridement option for millions of patients suffering from how to heal wounds.
Foaming wound management.
Okay.
Moving to Nexobrid program, we remain on track for a mid year Resubmission of Nexobrid BLA and we anticipate a six month review process, which would position nexobrid for a potential approval by year end and commercial launch in the U S. In the first half of 2023.
We continue to partner with BARDA and very fail before they approve out of next week and look forward to bringing this innovative product to the U S market.
But this is lee as basketball.
To that end buyback spend that is contact providing us with supplemental funding of $9 million to support the nexobrid BLA submission and the ongoing expanded access treatment protocol, which will run through approval.
In Europe , we gain clarity on our regulatory path toward the pediatric label extension for Nexobrid from the European Medicine agency through a scientific advice we.
We plan to submit a pediatric label extension for Nexobrid next quarter, which will be based on the best available safety and efficacy results of the pivotal phase III pediatric clinical study, we did 12 months follow up.
Commercially we continue to see burn centers across Europe embrace nexobrid as the standard of care.
As a result, we have seen nexobrid revenue showing consistent growth and I will now achieving profitability in our commercial operations.
Our commercial efforts will continue to grow as we continue adding marketing approval worldwide.
In D C. We anticipate additional marketing approvals in Japan, India among adults.
Lastly for Nexobrid, we were encouraged by the U S Department of Defense Research Grant.
For the development of Nexobrid as the nonsurgical solution for Philco Bernd with mental the U S Army.
This research project if successful could open the gate for armies all over the world as well as simplify our supply chain for Nexobrid.
For us it was yet another vote of confidence in our technology platform and Nexobrid in specific.
Our cash balance is sound with the additional of 10 million dollar rate recently in a public equity offering the funding improves our liquidity as we approach our planned near term catalyst and facilitates our effort as we realize the potential of outback.
Hi.
The current cash balance is sufficient to fund currently anticipated operating activities for at least the next 24 months.
Before I turn the call, although two board to discuss the details of our financial results I want to thank our study participants their families and our clinicians for their participation in our clinical trials.
I also want to thank our board and our shareholders for their commitment and support.
We are looking forward to the coming months as we approached several unimportant milestones.
And now I would like to turn the call over to Bob for a summary of our financials.
It was.
Thank you, Sean and good morning, everyone.
First I'd like to reiterate our continued product revenue growth from both the U S and ex U S walk market as Nexobrid continues to gain traction into new territories and increased operational profitability in 2021.
He also improved significantly our liquidity position.
The BARDA funding and the recent fund raising.
Moving now to our financial results.
Total revenue for the fourth quarter of 2021 were $5 5 million compared to $6 6 million for the fourth quarter of 2020 due to decreasing BARDA as emergency stockpile recruitment can decrease in revenues from services to BARDA, resulting from the completion of the tick in Paediatric clinical programs.
Total revenue for the year of 2021 were $23 8 million compared to $21 8 million in 2020, an increase of 9%.
Product revenues in 2021 were $11 4 million, which reflects an increase of 46% compared to products revenues of $78 million in 2020.
Primarily driven by BARDA emergency stockpile procurement and increased sales in Europe .
Gross profit for the fourth quarter of 2021 was $1 5 million with a gross margin of 28% compared to a gross profit of $2 3 million and gross margin of 35% for the fourth quarter of 2020.
Gross profit for the full year of 2021 was $8 8 million with a gross margin of 37% compared with a gross profit of $7 5 million with a gross margin of 35% in 2020.
Operating expenses for the quarter were $5 1 million compared to $4 7 million for the product period.
So the 40 year operating expenses were 20 million compared to $16 4 million in 2020, primarily driven by $2 5 million on the warrant the investment in this phase II study and one time G&A expenditure or 0.6 million.
Operating loss for the quarter was $3 5 million compared to a loss of $2 4 million in the fourth quarter of last year.
For the full year of 2021 operating loss was $11 2 million compared to a loss of $8 8 million in 2020, primarily due to increase in research and development expenses.
Net loss for the quarter was $4 2 million or <unk> 15 per share compared to a net loss of one 7 million or six cents per share for the fourth quarter of 2020 .
It's a 40 year of 2021 net loss was $13 5 million or 50 cents per share compared to a net loss of $9 2 million or 34 cents per share for the pilot period.
Adjusted EBITA.
<unk> reflected a loss of $2 9 million compared to a loss of $1 8 million for the fourth quarter of last year for the full year of 2021, adjusted EBITA was a loss of $8 3 million compared to a loss of $6 4 million in 2020.
Moving to our balance sheet highlights.
December 31, 2021 cash and short term investments were 11 million.
I think 2021, the company utilized $10 6 million to fund ongoing operating activities.
The company recently completed an equity financing of $10 million in gross proceeds.
Listening its cash position and we expect it to be sufficient to support the currently anticipated operating activities for at least the next 24 months.
For 2022, we expect cash used to be in the range of 11 to 13 million.
With that I have concluded my financial overview I will now turn the call back over to Sean Sean.
Thank you Bob.
This year I started off positively philosophy already with the announcement of SK phase two topline data and we look forward to continued good news squad this ear.
As we near several important milestones, including our full data set from U S phase two studies in aesthetics.
The clarity on the Phase III study design voice codecs.
The submission of Nexobrid BLA.
And the potential approval of Nexobrid BLA towards the year end we.
And with that it is my pleasure to open the call for your questions operator.
Thank you as a reminder to ask a question you will need to press star one on your telephone to Australia. A question. Please press the pound key please standby, while we compile the Q&A roster.
Our first question comes from Josh Jennings with Cowen. Your line is now open.
Hi, Good morning, Truman Umbro and thanks for taking the questions.
Congratulations again on those phase two that's great results I wanted to ask about the S. Greg.
Path forward here it just with this upcoming meeting with the FDA.
How should investors think about the possibility still existing that the U S trial data.
Generated or well see the final results later this year a phase two study could potentially be able to use this as one of the two pivotal studies, you'll need for FDA approval.
How long do you expect to no different than really the scope of the phase III program is that.
How we should think about this this upcoming FDA meeting and I have one follow up on the phase two trial. Thanks.
Sure. Thank you for a question and good morning, Josh.
I'd say are communicated before we are heading towards the static completion, the followup completion and anticipate the full data set in the coming quarter. A day additional debt of course will include the full data set including secondary exploratory and all additional safety.
And based on that we expect to reach out the F. D. A and asked for an end of phase two meeting to discuss the next stage based on their exact policy yet premature to share information about the next stage keeping the fact that we did not have yet the discussion with the F. D. A N.
It's a data driven company I think that the discussion will be based on the data we will generate from the ongoing two phase two studies, which will enable us to ideal use of leverage to do it.
Ongoing phase two study to be deemed as one of the.
Adequately control studies and registration all to have two phase II study that we would conduct probably with two indications different failure in tandem, but again, it's premature yet to share this information.
No understood. Thanks for that and then just last question on the Phase two trial and we just wanted to see if you could remind us on what we'll see for the head to head comparison with Bard surgical enzymatic debridement, you just remind us how many roughly 20 patients will be in the Seattle group and as the comparison extra extra it's being run for.
For non inferior already or superiority in terms of that sale to group versus versus exports. Thanks again for taking my questions.
Yeah sure no problem. So in general we treated 119 patients in this study of which 46 patients was in the S. M. S. M 43 patients in the gel vehicle and 30 patients in the nonsurgical standard of care arm the nonsurgical standard.
Was comprised of either of political and thematic as you know and thematic stands for Ed Disanto, ointment, and autolytic Stanfill hydro gel hydro friends et cetera.
A day a current information that we reported was that doing day 14 days of measurement for debridement. They nonsurgical standard of care achieved 13% as opposed to the 63% we achieved with the escape in the same period after maximum eight daily.
<unk>, what I can share with us the Santa <unk> East.
Really one third of the Nonsurgical standard of care. It's comprised of one third of the Nonsurgical standard of care and looking forward, we expect to analyze time to complete debridement number of application.
Between the different and of course, all secondary endpoints wound area reduction granulation tissue and quality of life will be also compared to the nonsurgical standard of care.
Okay.
That's great. Thanks, Thanks, Sean.
Okay.
Thank you.
Our next question comes from Kevin <unk> with Oppenheimer. Your line is now open.
Hey, great. Thanks for taking my questions I wanted to start with the pharmacology data and specifically the biofilm finding for salt.
Yeah do you have a specific venue in mind for the second quarter in terms of where that data may be presented and.
In terms of interactions with regulatory agencies in the second half of 2022.
I mean, how how should we think about.
The potential biofilm findings here in terms of you know do you think.
There is a specific secondary.
Secondary endpoint that is amenable to capturing that potential benefit or should we are you on a on.
The comparative basis or should we think about that is it's primarily a data that could be presented the clinical data section of the pharmacology section, but not necessarily.
Our label, but not necessarily.
Primary or secondary endpoint in our registration strategy.
Thank you Kevin for the question. So as you know we reported initial data from this study that are on top of the deep reichman effective and safety broadening demonstrated reduction in bathroom and microbial load, we will continue to analyze that dishing out patients.
We are treated to date and we plan to treat up to 15 patients and also Michelle fluid for biomass cows for wound pour correction.
We believe that the data first of all will be supportive of pharmacology data to be included in the clinical part of the aesthetics, but considering that result, and if we will replicate it with the full data set I assume that we can incorporate it in the phase III program as part of the <unk>.
The endpoints of the phase III program.
Great and then just maybe one housekeeping question.
Sure.
Cash burn guidance, just clarify is that includes or excludes the potential milestones from your partner Barra shall honor that spread approval.
Okay.
So they.
Sufficient use of cash that we indicated.
You know to get always a BARDA funding and the recent fund raising.
The next 24 months.
Including and the BLA milestone payment from a very self serving one five which expected to be received in Q1 of 2023.
Great Thanks for that.
Thank you. Our next question comes from the line of Ryan Zimmerman with <unk>. Your line is open.
Good afternoon, thanks for taking the questions Sharon and buys.
I want to start with actually Netzel bread and just as you know.
International has grown the adoption internationally has grown nicely what kind of expectation and ramp should we think about potentially when nexobrid is cleared in the U S and how fast that could start to achieve scale potentially in the U S.
Thank you Ryan.
Good morning, So as you know for the U S market, we do have the collaboration the commercial collaboration with fairly cell, which are responsible for commercializing nexobrid upon a full value.
And we do believe that the U S market is the primary market for Nexobrid.
Giving that a well that the data coming from New York and next the word becoming standard of care in key burn centers in Europe , given the fact that we have I think now an expanded access program in the U S, where we treated already more than 140 patients and generate a lot of positives.
And hands on experience with Nexobrid, we do believe that the uptick in the U S will be quicker and faster.
To what we had in York, enabling very sell to achieve substantial buy.
Share of this market pretty fast.
Regarding the outlook the ex U S. We will continue to see growth in EU and other international markets, while we expect them to get more and more marketing a pool of us and as mentioned before we expect to have additional marketing approval in key markets I E.
Japan and India during 2022 that can boost there.
Revenues worldwide to that end.
I would also add the fact that we plan to submit the pediatric label expansion in the second half of D. C. A year and given the fact that the pediatric population is the council about 25% to 30% of the other all been population. This can be another growth factor for revenues.
Ramp up.
Yeah.
Got it.
And in that pediatric label expansion Youre, referring to the U S not internationally.
Europe .
So we start we will start of course with the pediatric label expansion in countries, where the Nexobrid already approved for adult Dan. We can extend that indication to include also put the I think he is of course fuel in all countries that are based on do you all have been filed where we negatively the already approved and in the.
The U S. It will follow the doubtful about first we have to get their approval.
After the Resubmission of the BLA and falling Steven that Paul will for adults, we will ask for a label extension also in the U S.
Got it but just on the gross margin this year.
And in this quarter, specifically, if you could just speak to kind of what kind of led to that pressure and how youre thinking about gross margins as we move into next year. Thank you for taking the question here.
So hi, Ryan. Thank you for the question. So overall gross margin for 2021 was 37%, which had a slight improvement from the 35% which was in 2020.
That was driven by you know revenues increased 9%.
If you're reading down so from.
Gross margin for the product.
<unk> decreased to 55% from silver was 60.
And that was driven from a composition of revenues we had a.
Hi.
A portion of revenues from BARDA procurement, which you know we're paying royalties to very soon.
Has that impacted the gross margin slightly by 500 basis points to 55%.
Looking into 2022 is shown indicate anywhere completions of BARDA procurement throughout the first half.
Yeah, we're expecting the rest of the world ex U S revenues to ramp up so we believe we should.
Hey, keep and the gross margin into wrong, 60%.
Okay got it. Thank you I appreciate it.
Thank you as a reminder to ask a question Thats Star One. Our next question comes from swam popular with H C. Wainwright. Your line is open.
Thank you good afternoon, Armstrong and Buzz this is RK.
Couple of quick questions. The first one is on <unk>.
I'm just trying to.
I understand a little bit more about the market potential in the United States.
Is there some some commentary you can give us on how hum.
And what do you think the market is as you said their current associate it doesn't really work.
So I'm just trying to understand you know.
Could you come in in terms of pricing.
Do you expect.
Growth in the U S market.
Sure. Thank you okay for the question.
In general we are very.
So I think we'd ask I'd say potential keeping the magnitude of its commercial opportunity and the key reasons for that is as follows first of all we all know that the placement of those the wounds in aquatic tissue is a critical component of wound care in.
In the U S alone there are about 2 million patients with values venous leg ulcers and defuse that undergo debridement every evil.
And we're keeping the current cost of treatment of the enzymatic debridement product available in the market. The addressable market is estimated at about one 5 billion dollar there too.
Most commonly used non surgically bright and methods I did enzymatic, which is the central ointment and autolytic debridement, which can take weeks to show effect yet.
Generate.
But out of hundreds of millions in says if are you, leaving much room for improvement.
And as Scott likes on the other hand as shown in every trial to date to be effective and safe in the breadth of those once in less than a week in few daily application that is why we believe SK has the potential to become a game changing therapy.
And we believe that SK cannot only replace there.
Talent and thematic for that but also expand the Carlin says haematic. He was across all sites of care and take a big portion of the say a segment and we do believe that SPX is well positioned to potentially become the best in class debridement option for those millions of patients suffering from how to heal wounds.
Thank you for that.
Next our bread.
Hmm.
In general you're utilized distributors and third parties.
To commercialize your product.
It opened elsewhere. So when we think about this new geographies that you were talking about Japan and India.
Is that the same strategy would be utilizing or do you.
Plan to forge relationships with.
Somebody who can co promote with you in this and this new geographies.
So although a.
Our intestinal out of our global strategy for Nexobrid is based on collaboration with local distribution internationally. We are collaborating with local distribution worldwide with focusing with Latam Asia Pacific and to see countries and the GCC.
The local distributor is responsible to get the product approved and level of just local expertise with market with the investment you know market access as well as we did at Golar to a process to get the product approved and then commercialize the product while we imply.
And of course, Oh price revenue share mechanism between the distributor and medicines.
Okay. Thanks, and the last question from me.
With Israel opening up in terms of our.
Well into the into the country.
With little or no restrictions.
How are you seeing any FDA inspections going on in Israel, right now I'm, sorry, you feel comfortable with that.
When it comes time for next update we should not have any issues.
Yeah. So it's a little premature at this point to speak on behalf of the FDA, but what I can show you that follow we do believe that they shouldn't I, just said had eased worldwide worldwide and in Israel, and we do know that some inspections outside the U S are now occurring we also familiar with.
One inspection in Israel. So we are optimistic looking forward.
Perfect. Thank you very much for taking all my questions.
Thank you.
Our next question comes from Nathan Weinstein with Aegis capital Your line is open.
Thank you good morning, Sharon Boaz. Thanks for taking my question I just had one question. This morning and that was about M. W. P. CS are all five of non melanoma skin cancer any updates you could share or just remind us what the outlook could be in that product.
Sure Nathan Good morning, So as you know we initiated a phase one to say a clinical study for the treatment of battery cell carcinoma alone may not a low risk battery cell carcinoma in the U S. A D study designed to evaluate the safety and Tolerability.
I'll still say five fusing different schedules and it offered them installation as well as to provide us with the preliminary evaluation of its efficacy and it.
We'll be measured by the percentage of dogs Legion with complete histological clearance. The design of these studies based on clinical case series that was published in a peer reviewed paper and we are looking forward to all the data from the first cohort of patients by mid <unk>.
Oh 2022.
Great. Thanks, so much.
Thank you.
And I'm currently showing no further questions in the queue I'd like to hand, the conference back over to Sharon.
Malka for closing comments.
Yeah.
Thank you. Thank you everyone for joining us today, we look forward to updating you again on our next call. Thank you and have a great day.
Ladies and gentlemen, thank you for your participation you may now disconnect everyone have a wonderful day.
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