Q2 2023 MediWound Ltd Earnings Call
Speaker 1: Good day and welcome to MediWoon second quarter 2023 earnings call. Today's conference is being recorded. At this time I would like to turn the conference over to Monique Cossie of Lifesize Advisors. Please go ahead.
Speaker 2: Thank you, operator, and welcome everyone.
Speaker 2: Yesterday, after the market closed, MetaWon issued a press release announcing financial results for the second quarter ended June 30, 2023.
Speaker 2: You may access that release on the company's website under the investors tab. With us today are Ofer Gounen, Chief Executive Officer of MetaWound, Hani Luxembourg, Chief Financial Officer, and Barry Wolfensohn, Executive Vice President of Strategy and Corporate Development. Following our prepared remarks, we will open the call for Q&A.
Yeah, thank you, that addresses my questions. Then I guess just one more follow up, it's kind of a housekeeping question.
addressing my questions. Then I guess just one more follow up, it's kind of a housekeeping question.
Can you talk a little bit about where you are with the India launch, how that's going? Yes, we communicated the last quarter that we got an Indian approval. It's a process that took us something like seven years. We have a strong partner there that already started the training of physicians across India.
Speaker 2: including the Q&A session relating to Meadowlands' 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.
We got the first orders. We started to ship products to India as well. Having said that, the official launch in India is expected in the next few weeks. Thank you very much.
Speaker 2: Although the company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risk and uncertainties and could differ materially from those forecasts due to the impact of many factors beyond the control of medical. The company assumes no obligation to update the subject.
Thank you. The next question comes from Harold Weber with Aegis Capital. Please go ahead. Yes, hello. Good morning. Good afternoon. I'm just curious to hear some further stuff you had announced. You have 40 approvals around the world and in Europe . How is that going forward?
Speaker 2: directed to cautionary notes set forth in today's press release, as well as the risk factors set forth in MediWoon's annual report filed with the SEC for factors that could cause actual results to differed from the tyrally from those anticipated in the foreign booking statements.
Speaker 2: The conference call is the property of Metamune and any recording or read broadcast is expressly prohibited without the written consent of Metamune. The conference call is the property of Metamune and any recording or read broadcast is expressly prohibited without the written consent of Metamune.
Speaker 2: Now I would like to turn the call over to Ofer Gounen, Chief Executive Officer of Meda1. Ofer.
Speaker 3: Thank you Monique and good morning everyone. By the way, this call is not recorded although the operator said so, so I'm live. It's a pleasure to welcome all of you to the second quarter earning conference call. Joining me today are Honey Luxembourg, our chief financial officer.
Speaker 3: and Barry Walthinson's son, our executive vice president of strategy and corporate development. After our prepared remarks, we will open the call for a Q&A session.
until they can get the next subgrid. Okay. Are you thinking about some alternative supply that you might be able to create in the interim between the now and the new facility ramp-up? So, unfortunately, construction of manufacturing facilities is only a year, and we are going to finish in the middle of 2024. But then we have some regulatory requirements, stability, all kinds of validation of the manufacturing facility.
Speaker 3: I'd like to begin with a comprehensive overview of MediWoon's recent progress.
Speaker 3: We are focused on advancing our commercial product portfolio, expanding our pipeline, strengthening our strategic partnership.
Speaker 3: Building new alliances and expanding our manufacturing capabilities.
Speaker 3: With the Solid Financial Foundation, we are well positioned to achieve our goals and ultimately become a profitable global bio from a suitable company.
Speaker 3: Let's start with the more detailed update on Nexus Brids.
It is not something that you can, it's not a standard manufacturing process. It's a botanical drug. It is very complicated. No one in the world can do it without many wounds and many wounds know how. This means that we don't need at all to invest in marketing. We have the demand.
Speaker 3: to receive the approval in the United States last December .
Speaker 3: Since the achievements of this important milestone, we have focused on manufacturing and delivering products to our partner very self for their US commercial launch. We ship next to very set in June 2023. However, at this time, very soon is unable to release the product for commercial distribution due to a deviation associated with a third-party testing lab used during the manufacturing process. We have conducted extensive testing and completed a detailed risk assessment, determining that this deviation presents no incremental risk to finish product quality and for patients safety. very self-media want continue to engage constructively with the FDA concerning nexobrid
Thank you. This concludes our question and answer session. I would like to turn the conference back over to Ofer Ghonim for any closing remarks. Thank you everyone for joining us today. We look forward to update you again on our next call. Thank you. We are taking some very short things into account as we finish this ALL And I am owl Hey Hey Hmm coaching Those and I Know You
Speaker 3: and we remain hopeful that the product will be commercially available in the United States in the near term. Very famous guy that is next to next to the commercial launch in the United States market to the first quarter of 2024. This timing will not affect our expected next to the revenue in 2023 and 2024 as there are multiple other partners to whom we can sell the inventory.
Speaker 3: In the meantime, we are in the process of manufacturing the next batches of next powder, reduced grouping of dried powder
Speaker 3: These batches will not be impacted by this variation. Pre-launch activities remain on track and very self-team has generated significant interest and enthusiasm for next-ubrid in the Burnkale community.
Speaker 3: Additionally, we are on track to submit our S-T-L-A for the pediatric indication in the second half of 2023.
Speaker 3: Our relationship with Bada remains strong as we are awarded with additional $10 million in funding to support the $3 million replenishment, the SPLA submission for the pediatric indication and the enrollment of an additional 50 patients.
Speaker 3: into our next program. Today, 237 burn patients have been treated across 26 sites in the United States in this expanded access program.
Speaker 3: Moving to the rest of the world in Japan, Kakan from Asutikal has successfully launched Next-Obrit commercially.
Speaker 3: A majority of these patients undergo a scleromobile as a crucial initial step.
Speaker 3: Notably, Japan is the first territory where the next breed is approved for both adults and pediatric patients. In Europe , we continue to see the demand for next breed escalates as it is adopted more broadly. We are also awaiting a decision for the European Commission
Speaker 3: on pediatric indication, which we anticipate in the second half of this year. In response to the increasing demand of nexobrid and the upcoming products, we have finalized a long term lease for the project production sites.
Speaker 3: This guarantees continuous manufacturing of Nexobrid and X-Corrects.
Speaker 3: We have also initiated the project to expand our current facility to accommodate and deriving global need of Nexobrit.
Speaker 3: We anticipate completing the expansion of this facility by mid-2024 and reaching full manufacturing capacity in 2025. looks like a new facility within the blink-and-?
Speaker 3: Moving now to our S-Corex program.
Speaker 3: We are giving up for the launch of our Phase 3 study focusing on Venus leg ulcers.
Speaker 3: I was carefully structural trial, adopt a multi-center, prospective, randomized and placebo-controlled methodology to rigorously evaluate S-currexes proposal, potential.
Speaker 3: The study aims to enroll 244 patients who will be equally distributed between S-corrects and placebo treatments.
Speaker 3: giving the studies manageable size and the lack of a direct competition will optimistic about expedited patient enrollment.
Speaker 3: and correcting feedback from both MIMDFDA has solidified our confidence in S-currex's global approval trajectory.
Speaker 3: We are in the process of qualifying the study sites.
Speaker 3: Selecting all the vendors, including CRO, data management, and central labs. And of course, we are manufacturing the final batches of S-Corex for the clinical study.
Speaker 3: These activities are expected to be completed by the fourth quarter of 2023, with patient enrollment in the Phase 3 study expected to begin in early 2024.
Speaker 4: For the more.
Speaker 3: Eskeritz has been a focal point of interest among potential partners in the advanced wound care domain.
Speaker 3: for interested in game changing modalities.
Speaker 3: The fact that the largest players in the market today are eager to take part in this venture is yet another indication for the great promise of our study.
Speaker 3: I would like to hand over the Coltowberry, who will provide more color around our strategic opportunities, including two announcements that we made just yesterday.
Speaker 4: Barry? Thanks, Ofer.
Speaker 5: One of the most important aspects of running a study in order to achieve the desired positive outcome is to as much as possible reduce variability between study ohms. Towards this goal, we are limiting the various products that sites will be able to use as they manage the wounds to closure.
Speaker 5: After reviewing available options, we set our sites on the best manufacturers and brands for each of these to offer sites and their patients the best in class products while also making the protocol and product fulfillment as easy as possible. As we announced yesterday, two of these manufacturers are MIMEDX and MUNLICA, both of whom are leaders in their respective categories. MIMEDX will provide epi-fix, their placental tissue alligraft, to be used on study subjects as soon as the wound is completely derided and has 100% granulation to.
Speaker 5: to their category leading brand MEPLEX, specifically designed to handle the unique fluid management demands of Venus leg ulcers. They will also be providing their novel exufiber and exufiber AG for additional fluid management, as well as for coverage when high levels of bio-burden are present. Importantly, both companies will also provide training as required for the investigators and their...
Speaker 5: factors, guidelines, and instructions. We're close to having a finalized agreement with our third research collaboration partner and we expect this to be announced in the coming weeks.
Speaker 3: With that, I'll hand it back to you over. Thank you, Barry. So before concluding, I would like to emphasize some pivotal updates regarding MW005.
Speaker 3: We have recently released promising results from our phase one to study on buzzer Telkat-Sinoma. The data validates our clinical efficacy as demonstrated by clearance of target lesions.
Speaker 3: Impressively, 11 out of 15 trial participants achieved total lesion removal, with a significant number of these clearances being histologically confirmed. This is in addition to the previously published results of 7 out of 7 lesions that were totally cleared.
Speaker 3: Furthermore, MW-005 impressive safety profile and positive patient feedback are notable.
Speaker 3: Finally, I would like to welcome Mr. Milky Rubinstein to our board as an independent director. Milky brings a distinguished record of pharmaceutical and biotech leadership experience, and he will add much to our board. Milky is joining as a sub-segalisteping down after six years with us. I would like to thank him for all his contributions over those years. You
Speaker 3: We are diligently progressing with our strategic long-term visions, ensuring that we remain poised for future success. As we gear up to initiate our phase 3 study for S-QRX, targeting venous leg ulcers, we take pride in collaborating with distinguished partners in the industry. Concurrently, we are expanding our manufacturing capacities.
Speaker 3: W-005 further solidified our position for upcoming business development endeavors.
Speaker 3: Our robust balance sheets with over $51 million in cash enable us to execute these pivotal initiatives.
Speaker 3: With that said, I now hand over to Hani for a brief review of our financials. Hani? Thank you, Ofer. Let me begin with our revenues.
Speaker 2: For the second quarter of 2023, we recorded revenues of $4.8 million, a slight uptick from the $4.7 million in the same quarter last year.
Speaker 2: Growth profits for both Q2 2023 and Q2 2022 remain consistent at 1.1 million, representing 24% of our total revenue.
Speaker 6: Now turn it to our expenditure to our operating expenses.
Speaker 6: Our other expensive for the quarter, amounted to 2 million, slightly down from the 2.2 million in Q2 2022. Bell in general administrative expenses, saw an uptick to 3.1 million.
Speaker 6: mainly attributed to the additional of full-time employees to support future growth along with an increase in share-based compensation expenditure.
Speaker 6: This is an increase from the 2.3 million reported in Q2 2022.
Speaker 6: Operating results for the quarter demonstrated an operating loss of 4 million and modest increase from the 3.7 million loss in the same period last year.
Speaker 6: The net profit of the hotel was 0.9 million or 10 cents per share, a positive shift from the net loss of 4.4 million or 29 cents per share in Q2 2022.
Speaker 6: This favorable term may arise from the evaluation of our warrants.
Speaker 6: Moving to our year-to-date highlights. Revenue summed up to $8.6 million in comparison to the $9.1 million recorded during the first half of 2022. This decline is primarily due to Bardens Emergency Stockpile Order in 2022. Our operating loss for the quarter reached $8.4 million higher than the $7 million loss from the first half of 2022.
Speaker 6: The net loss for the period was $2.8 million, or 32 cents per share, compared to the $7.9 million loss, or $1.79 per share, during the same period last year.
Speaker 6: Adjusted EBITDA for the first ASC of 2023 was a loss of 6.4 million ASC from the 5.4 million loss in the first ASC of 2022.
Speaker 6: Balance sheet overview. As of June 30, 2023, our cash and short-term deposits amounted to 51.3 million.
Speaker 6: This is a positive climb from the $34.1 million reported on December 31, 2022.
Speaker 6: In the first quarter of this year, we raised a growth amount of 27.5 million from our February 2023 offering. The second quarter demonstrated use of 6 million to fund our ongoing operation.
Speaker 6: Based on our current financial standing, we anticipate that the existing cash will sustain our operations through profitability.
Speaker 6: With death, I will now turn the car back to orphan. Offered.
Speaker 3: Thank you, Hane.
Speaker 3: So we remain committed to a strategic execution and encouraged by increasing industry-wide interest in our product.
Speaker 3: Nexobrid, S-Corex, and MW005 are not only additions to the market, they also hold promise to redefine the norms of medical practice.
Speaker 3: As we progress, we eagerly anticipate several milestone events, including...
Speaker 3: The launch of our pivotal phase three trial of S-Curex, which is slated for the first quarter of 2024.
Speaker 3: This is modern clinical milestone. It targets a lucrative billion dollar niche.
Speaker 3: Our partnerships with the world's leading advanced wound care companies fortify our unwaving drive to achieve positive results in this study. Also, we anticipate a rise in ex-sub-grid revenues, supported by our strategic commercial initiatives in the primary markets.
Speaker 3: This momentum is expected to be further strengthened by a US launch and by an expansion of the labor to include pediatric population.
Speaker 3: To match the increasing or the escalating demand of NexoBrid, we are increasing our manufacturing capabilities. Our state of the arts facility is on track to be constructed by mid-2024 and should be active full-scale production by 2025.
Speaker 3: Thank you all for joining our promising journey. And now, we will open the call for our Q&A session.
Speaker 1: Operator? We will now begin the question and answer session.
Speaker 1: To ask a question, you may press star and one on your touch tone phone.
Speaker 1: If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.
Speaker 1: At this time we will pause momentarily to assemble our roster.
Speaker 1: The first question today comes from Josh Jennings with TD Calend. Please go ahead. Am discussion
Speaker 4: Hi, good morning. Thanks for taking the questions and we appreciate the thorough update. Here you go.
Speaker 4: Just ask about the phase three S or X VLU trial and the enrollment kickoff early next year. I was hoping you guys made a lot of progress It seems like the start of that enrollment the start of that trial has been nearly fully de-risked But maybe offer if you could just line up what remaining boxes need to be checked.
Speaker 3: before that trial kicks off. I know you listed a couple of them on the call, but just to make sure we're clear. Yeah, okay. Thank you, Josh, for this question. So, this phase 3 study is the largest and the most comprehensive trial in VLU patients.
Speaker 3: in the past more than 10 years. It's a very complicated and big study.
Speaker 3: It includes multiple collaborations throughout all the program levels. For example, we have multiple collaborations with PIs, with study sites, with all kinds of wound care companies. We expose only two collaborations, but there are more to come.
Speaker 3: We are collaborating with CROs with all kinds of complex data management. This matrix of collaborations is highly complex and it comes at the price of agility. So we want to make sure that in this trial we are going to hit the endpoints. Therefore, we are not going, you know, there is the number of patients.
Speaker 3: In VLU patients are big. There are more than $1 million in one million patients in the United States every year. We don't want to recruit them very quickly in six months and then making mistakes and recruiting patients that are not ideal for hitting the end points. So we are planning for a conservative.
Speaker 3: trial and we know that we are able to execute and to hit all the endpoints. Thanks for that.
Speaker 3: No, I just wanted to ask you to answer the question.
Speaker 4: Yes, appreciate that. Also, you've had success drawing interest from partners. You, Vericel, now MiMedx, and I'm going to barge the pronunciation, but Molinicki. You mentioned in your prepared marks on the press release just about.
Speaker 4: being actively engaged in additional prominent companies for further collaboration opportunities? Is that referencing
Speaker 4: similar collaborations for the Phase III trial, or are there other collaborations and potential partnership opportunities outside of the Phase III trial? Thanks. Thanks for taking the question. So, Barry, can you step in and address that? Yes. We do have one or more questions.
Speaker 5: and its unique competitive landscape, SRX has definitely gained the attention of most of the key strategic players in the market.
Speaker 5: a topical debridement agent with the competitive advantages of SGRX will be a significant step forward for patients and caregivers. And we as a company are thrilled to have the funding to advance this program as quickly as possible and are confident that SGRX has incredible potential to unlock significant challenges.
Speaker 5: upon its approval by the FDA. And so concurrent with the execution of the Phase III program over these next several years, we'll be taking every step necessary to prepare us for this meaningful launch. So that's where our focus is right now.
Speaker 5: And if there's anything additional to report about, we will, I know for mentioned with regard to. We've got a good package of. Of data right now, and we're confident that at some point here soon, we'll initiate a program to.
Speaker 5: to get some collaboration partners, commercialization and research and development partners on that asset. We'll report that as well.
Speaker 5: some collaboration partners, commercialization and research and development partners on that asset. When we make progress on that, we'll report that as well. Excellent. Thanks again.
Speaker 1: The next question comes from Francois Griswold with Oppenheimer. Please go ahead. Please go ahead.
Speaker 4: All right, thanks for taking the questions. Just a few here. So, in terms of not necessarily enrolling, if you go too fast in the enrollment and you mentioned not enrolling the ideal patient, can you just help us understand what that would mean in terms of wound, maybe?
Speaker 3: So we have successful robust
okay I have a chronic wound maybe I'll join the trial and the wound is not that severe and suddenly the gel vehicle arm suddenly closes the wound. We don't want to be in the position, we want to be in the position that the results are very robust, very strong and we are hitting all the relevant milestones. So we although we think
And we can finish the trial quite quicker. We will focus on enrolling the right patients with the right size of wounds that we saw in the phase two trials that we have the best, the gaps between us and the gel vehicle is the largest, making sure that we hit the study because we saw.
on your revenues based on the potential to sell to the inventory to other partners? Is that an easy thing to do? Is that something that will require a lot of work? And then why should we feel comfortable that the next batches will not be affected by these variations? Thank you. Okay, so let me start with the last question, which is the easiest one. The next batches that will be manufactured will be tested directly by Mediwound, not by this lab in Taiwan. Mediwound is an approved testing site by the FDA, so there will be no issues. So, therefore, there is a...
100% confident that the next batches will be fine. As for the revenues in 2023, 2024, currently we have between two to three x or two to three fold more demand of Nexo-Bridgert than we can supply. We are all time shifting between customers.
Currently, we're keeping aside enough NexoBrid in order to support a successful launch in the United States. But if we see in the coming weeks that the issue with the FDA is not resolved, we are going to sell it elsewhere. We have the demand for that, and you can feel very comfortable about it. Thank you.
Please go ahead. Thank you. Good afternoon, Ofer and Hani. A couple of quick questions from me.
In your prepared remarks, you stated that very well, and you're so far in discussions with the FDA to see if some of these concerns of theirs would be taken care of with the current batch. What do you think? What do you think?
where are those discussions, and do you think there's a decent probability that you could get through FDA on the current batch? Okay, so since very soon and maybe won't announce the...
the recent announcement regarding the deviation. We have been engaged constructively with the FDA concerning NexoBrid, but of course it is an agency so I cannot disclose what the discussions are. The only thing that I can say very confidently that we remain hopeful that the product will be commercial.
In terms of the commercialization in Japan through your partner, how is that going and when do you think commercialization over there?
would start becoming meaningful to your top line? So we believe 2024 will be meaningful for our top line. Again, as I said to Francois before, if you look at the orders from Japan, they are quite significant.
We could sell all our inventory to Kaken if we wanted to. So let's see how they deliver. They just launched. We have orders lined up for 2023 and 2024. In 2024 the numbers were quite significant.
And then in terms of the manufacturing capacity expansion that you're planning to get started in 2024, would this capacity be sufficient to manufacture not only NEXA bread but also S-CADEX, you know, ones who have a successful growth.