Q1 2023 MediWound Ltd. Earnings Call
Speaker 1: The.
Speaker 1: The.
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Speaker 2: Good day, everyone, and welcome to MediWoon's first quarter of the 2020-2023 earnings call.
Speaker 2: today's conference is being recorded.
Speaker 2: At this time, I'd like to turn the floor over to Monique Cossie of Lifestyle Advisors.
Speaker 3: Ma'am, please go ahead.
Speaker 4: Thank you, operator, and welcome everyone. Earlier today, MetaWoon issued a press release announcing financial results for the first quarter ended March 31, 2023. You may access that release on the company's website under the investors tab.
Speaker 4: With us today are Ofar Gonen, Chief Executive Officer of Medawun, Hani Luxembourg, Chief Financial Officer, and Barry Wolfensohn, Executive Vice President of Strategy and Corporate Development.
Speaker 4: Following our prepared remarks, we will open the call for Q&A.
Speaker 4: Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to MetaWoo'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.
Speaker 4: Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those forecast due to the impact of many factors beyond the control of metal.
Speaker 4: 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 cautionary notes set forth in today's press release, as well as the risk factors.
Speaker 4: set forth in the Meadowose Annual Report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements.
Speaker 4: The conference call is the property of Meadowoon and any recording or rebroadcast is expressly prohibited without the written consent of Meadowoon.
Speaker 4: Now I'd like to turn the call over to Ofer Gounen, Chief Executive Officer of Medawin. Ofer. I imagine you'll be doing great.
Speaker 5: Thank you, Monique, and good morning, everyone. It's my pleasure to welcome all of you to our first quarter earnings conference call.
Speaker 5: I am eager to share the substantial progress we have made this quarter.
Speaker 5: We are poised to launch NexoBrid in the US market and initiate our pivotal phase 3 ESCAREC study.
Speaker 5: This significant milestone highlights the strong momentum we are experiencing and sets the foundation for a promising future. Allow me to introduce my newest colleagues who are joining me today.
Speaker 5: Ms. Hani Luxembourg, who has recently assumed the role of Chief Financial Officer, and Mr. Barry Wolfensohn, our Executive Vice President of Strategy and Corporate Development. We are fortunate to have their expertise and leadership as we continue to advance our company forward.
Speaker 5: Khani officially became part of our team in the beginning of this month, ensuring seamless transition in our financial leadership.
Speaker 5: Barry, who joined us in March, has been diligently working on the expansion of our US operations. I will now briefly hand over the call to both Hani and Barry, allowing them to personally introduce themselves. Hani, over to you.
Speaker 6: Thank you, Ofer, and good morning, everyone.
Speaker 6: I am thrilled to be part of this call today and even more so to be a member of the MediWoon team.
Speaker 6: Prior to joining MediWound, I was the Chief Financial Officer at Bird Aero Systems, a high-tech company generating over $100 million in annual revenue.
Speaker 6: I bring with me over 20 years of financial and accounting expertise, Evan L's senior position at AstraZeneca, Alvarion Technologies, and Ernst & Young. I'm excited about the opportunity to contribute to MediMoon's growth. Now I will pass the call to Barry.
Speaker 7: Thank you, Hani. As Ofer mentioned earlier, I joined MediWoon this past March in the role of Executive Vice President of Strategy and Corporate Development, with a focus on crafting MediWoon's global strategic plan, spearheading our business development initiatives, and preparing for the commercialization of SGRX.
Speaker 7: With over two decades of experience in the healthcare and wound care markets, I was instrumental in scaling a small publicly traded company, Derma Sciences, prior to its acquisition by Integral Life Sciences.
Speaker 7: Prior to that, I held roles at Bristol-Myers Squibb and Accenture. Before joining Mediwound, I saw a company with many opportunities in front of it, and I was very optimistic about its future. Now, as a part of Mediwound's team with a more comprehensive understanding of the company's core technology,
Speaker 7: and R&D infrastructure, I'm even more confident of and excited about the opportunities ahead for the company.
Speaker 7: Our products like NexoBritt and SqRX truly stand apart and are completely differentiated in the market due to their unique capabilities and rapid results.
Speaker 7: Both products have the potential to revolutionize the standard of care in their respective indications, benefiting patients, healthcare systems, and of course our investors. In particular, there is undeniable substantial interest surrounding SGRX, and I'm confident that upon approval,
Speaker 7: it will become a major drug in the market. I'm truly thrilled to be part of this exciting journey. Now, I'd like to return the call back to Ofair.
Speaker 5: Thank you, Barry. As I approach my first anniversary as CEO of MediWound, I look back with a sense of pride as our substantial accomplishment and significant progress.
Speaker 5: Thank you, Barry. As I approach my first anniversary as CEO of MediWound, I look back with a sense of pride as our substantial accomplishment and significant progress. We have achieved FDA approval of Nexabrid.
Speaker 5: completed a positive phase 2 study with S. carex and VLU patients, and raised a considerable amount of capital.
Speaker 5: Now, we are ready to launch NexoBit in the United States in collaboration with VeriCell, while simultaneously giving up to initiate the phase 3 study of SqRX. Our robust financial position has been a driving force behind our success.
Speaker 5: drawing the attention of top-tier shareholders and institutional investors who align with and support our strategic vision.
Speaker 5: Now I'd like to discuss our progress across each of the programs, providing a more comprehensive update starting with S-QureX, our innovative enzymatic solution developed for the bridement of chronic wounds. S-QureX is our primary focus.
Speaker 5: Today, we were pleased to announce the upcoming global phase III clinical study.
Speaker 5: This pivotal study is set to begin in the fourth quarter of 2023.
Speaker 5: It will evaluate the safety and efficacy of SqRx in treating venous leg ulcers. We have invested significant effort in developing a comprehensive protocol that guarantees the integration of all SqRx's advantages.
Speaker 5: while maintaining a high probability of success. Our trial design incorporates a multicenter, perspective, randomized, and placebo-controlled approach.
Speaker 5: It will solely assess the potential benefits of S-CorpsX.
Speaker 5: We plan to enroll a total of 244 patients into this trial.
Speaker 5: they will be randomly assigned into a one-to-one ratio to either S-corrects or placebo.
Speaker 5: Treatment will involve a daily visit period for up to 14 days, during which S. carex or the placebo will be applied for a maximum of eight applications lasting 24 hours each. Following this period, you will need to have a 4 week
Speaker 5: or upon achievement of complete debridement.
Speaker 5: all the patients will receive standard of care for up to 10 weeks or until they have achieved complete wound closure.
Speaker 5: Patients who achieved wound closure will be followed for an additional 12 weeks to assess wound recurrence.
Speaker 5: The strong data from our Phase II studies gives us confidence as we head into this Phase III study.
Speaker 5: As you may recall, the phase 2 study results demonstrated significant advantages of S-Curex over the gel vehicle.
Speaker 5: 63% of the patients treated with S-Curex achieved complete debridement compared to only 30% in gel vehicle arm.
Speaker 5: The P value was very significant. It was 0.004. Furthermore, S-CAREQ showed significantly shorter time to wound bed preparation for closure of only 11 days compared to 85 days for the jail vehicle. Here as well, the P value was 0.002.
Speaker 5: We are determined to maximize the value of these two significant findings and integrate both of them into our phase three study. By promptly transitioning to active closure, once wound bed operation is accomplished, we can see that the wound bed operation is complete.
Speaker 5: we can fully take advantage of the 11-day treatment duration of S-Qurex compared to the 85 days with the gel vehicle.
Speaker 5: Furthermore, this approach positions S-QRX not only as a powerful debridement drug, but also as the optimal treatment for wound bed preparation. This distinction will grant S-QRX a notable medical and commercial advantage.
Speaker 5: over all the existing products in the market. In line of this approach, we have carefully selected two co-primary endpoints for study.
Speaker 5: The incidence of complete debridement at the end of the treatment.
Speaker 5: and the time required for wound closure.
Speaker 5: Both endpoints are attainable within a manageable patient population.
Speaker 5: Based on a comprehensive analysis that we did for the Phase 2 data, we have determined that enrolling a target of 244 patients will provide us with 90% statistical power to achieve significant results for these co-primary endpoints.
Speaker 5: To provide more insight into the commercial opportunity of S-QRX, I would like to invite Barry again to elaborate further. Barry, the floor is yours.
Speaker 7: Thank you, Ofer. Having this alignment with the FDA, which clears our path to the start of the Phase 3 study in Q4 of this year, is very exciting as it brings us one step closer to the potential of marketing approval and commercialization.
Speaker 7: At the recent SAWC meeting, both the symposium focused on SGRX as well as our meetings with potential investigators validated what we already believed to be true.
Speaker 7: One, that there is going to be no shortage of qualified investigators interested in participating in this trial. Two, that clinicians would love a commercially available enzymatic debridement option that consistently results in complete debridement within less than two weeks.
Speaker 7: It is of utmost importance to highlight that the integration of complete debridement and early wound closure endpoints, along with the demonstrated qualities from our previous Phase 2 studies, including effectiveness against both planktonic bacteria and biofilm, positions S-GR-X in a league of its own. This meaningful combination of benefits sets S-GR-X apart.
Speaker 7: as a truly unique solution and establishes it as the epitome of a wound bed preparation drug, which could be thought of as the holy grail in this particular field.
Speaker 7: The current available legacy drug, which has been in the market for decades, has annual sales in the United States estimated to be above $300 million. Beyond that, when shown a profile of an enzymatic debridement drug that can achieve complete debridement in the amount of time achieved by S-QaRx, wound care clinicians indicated they would likely expand their usage of the drug.
Speaker 7: in the market.
Speaker 7: This is in an addressable market of two billion dollars. So you can see why SGRX is MediWoon's primary focus. With that I will turn it back to Ofair. Ofair?
Speaker 5: Thank you, Barry. We're excited to move this program forward. We believe our upcoming phase three trial design leverages the impressive efficacy and safety outcomes observed in the previous phase two studies.
Speaker 5: With the planned enrollment of only 244 patients for the Phase III study, we anticipate completing the recruitment within approximately 24 months.
Speaker 5: The similarity between the upcoming study and our phase two trials, along with the fact that S-Curex shares the same active pharmaceutical ingredient and targets a comparable indication as NexoBrid, significantly bolster our confidence in mitigating potential risks. We intend for the study to be global.
Speaker 5: Therefore, as part of our development strategy, we have submitted a request to the EMA for scientific advice on our phase 3 protocol, and we anticipate EMA's feedback by mid-year.
Speaker 5: We will finalize the protocol according to the feedback received.
Speaker 5: Moving to the next subgrid.
Speaker 5: We were proud to gain FDA approval for NexoBrid in December 2022.
Speaker 5: We have strong confidence in Nexobri potential to redefine the standard of care for burn patients, not just in the United States, but globally.
Speaker 5: As we gear up with the upcoming launch, our commercial partner VeriCell has already become preparing their sales teams, conducting medical training, and hosting educational sessions. VeriCell reported that their commercial launch activities were not being supported by the company.
Speaker 5: remain on track and interest from burn surges and healthcare providers remain very high.
Speaker 5: of 2023. We anticipate next-door grid revenue to grow in 2023 and beyond driven by factors such as new launches, the United States and Japan, escalating global demand, and the pediatric label extension in Europe .
Speaker 5: To meet this increasing demand, we are strengthening our manufacturing capabilities by integrating an additional manufacturing line and enlarging our existing facility. We are committed to staying on track with this expansion.
Speaker 5: aiming for full-scale operation by the end of next year.
Speaker 5: In the meantime, we are concentrating our manufacturing efforts in key markets. The United States.
Speaker 5: southern countries in Europe , Japan and India.
Speaker 5: We recently announced that we secured an additional $10 million in funding from BARDA.
Speaker 5: This supplemental funding will enhance several key areas in our operations.
Speaker 5: First, it will facilitate a $3 million replenishment of expired products.
Speaker 5: Second, it will support the submission of supplemental DLA for the pediatric indication of NexoBrid. Second, it will support the submission of supplemental DLA for the pediatric indication
Speaker 5: And finally, it will enable treatment of up to 250 patients in the ongoing expanded access treatment protocol.
Speaker 5: The inflow of these funds underscores Bowders' confidence and support for marijuana.
Speaker 5: We are also delighted to be in partnership with the U.S. Department of Defense to develop NexoBrid as a non-surgical solution for treating burns in field conditions.
Speaker 5: We have recently received additional funding, enabling us to maintain strategic progress in line with our projected development schedule.
Speaker 5: Lastly, I would like to update you on MW005, our product in development for the treatment of basal cell carcinoma.
Speaker 5: In our Phase 1-2 study, MW005 demonstrated positive results with patients achieving complete clinical and histological clearance of their target lesions.
Speaker 5: The product was also found to be safe and well tolerated.
Speaker 5: We have recently concluded the enrollment of additional patients following the optimization of the treatment application.
Speaker 5: We anticipate obtaining final results in the third quarter of 2023. In summary, we are well positioned for successful 2023.
Speaker 5: We are preparing to initiate the phase restudy with S-QRX while simultaneously preparing for NexoBritt US launch.
Speaker 5: We have already begun upgrading our manufacturing facility to meet the increased demand, and we anticipate further news on MW005 this year.
Speaker 5: our solid financial position with over $57 million in cash.
Speaker 5: supports all these strategic endeavors.
Speaker 5: With that said, I'll now hand it over to Chani for a brief review of our financials.
Speaker 5: With that said, I'll now hand it over to Chani for a brief review of our financials. Chani?
Speaker 6: Thank you, Ofer. In February 2023, the company received a milestone payment of $7.5 million from our partner Verisil.
Speaker 6: This payment was the FDA approval of NexoBrid in December 2022.
Speaker 6: Additionally, in February 2023, the company successfully completed a public offering generating gross proceeds of $27.5 million.
Speaker 6: Moving to the income statement. Total revenues for the first quarter was $3.8 million compared to $4.4 million for the same quarter last year, representing a decrease of 14%. This decrease was a result of lower development services revenues.
Speaker 6: which amounted to $2.6 million in Q1 2023, compared to $3.1 million in the same quarter last year. The decline is directly linked to the NexoBrid approval in December 2022.
Speaker 6: Product revenue, however, increased by 5% this quarter to $1.2 million compared to $1.1 million last year.
Speaker 6: This increase is due to Nexobrid growth in Europe and the company's successful entry into the Japanese market. The last profit for the quarter was 0.8 million on 22% of the total revenues.
Speaker 6: compared to a gross profit of $1.5 million or 33% for the same period last year. The decrease in gross profit was mainly due to the change in revenue mix and non-recurring production costs.
Speaker 6: Total operating expenses for the first quarter were $5.2 million versus $4.7 million in the same period last year.