MediWound Ltd. (Nasdaq:MDWD), a fully integrated biopharmaceutical
company bringing innovative therapies to address unmet needs in
severe burn and wound management, reports financial results for the
three and 12 months ended December 31, 2016.
Highlights of the fourth quarter of 2016 and
recent weeks include:
- Revenue for the fourth quarter 2016 of $0.43 million increased
61% compared with revenue of $0.27 million in the prior year’s
fourth quarter, demonstrating continued growth in NexoBrid®
sales;
- Reported final results of the Phase 2 clinical trial of
EscharEx® for the debridement of chronic and hard-to-heal wounds,
which support the previously reported positive top-line
results;
- Reported favorable results from a NexoBrid Phase 2
pharmacokinetic (PK) clinical study that support treatment of
severe burns covering up to 30% of total body surface area;
- Initiated the second stage of a European pediatric Phase 3
study of NexoBrid that expands treatment of severe burns to
children age one to four, the age bracket representing the largest
incidence of pediatric burns;
- Awarded "Best Poster" at the International Disaster and
Military Medicine Conference (DiMiMED) for an abstract
highlighting NexoBrid in burn mass casualties; and
- Granted a U.S. patent for MWPC003 for the treatment of
connective tissue diseases.
Management Commentary
“2016 was an outstanding year for MediWound as
we reported positive data from our second Phase 2 clinical trial of
EscharEx to treat chronic and hard-to-heal wounds, made meaningful
progress towards establishing NexoBrid as the standard of care in
burn centers in Europe, extended NexoBrid's reach to emerging
markets and advanced our clinical programs to include larger burns,
younger pediatric patients and additional geographies,” stated Gal
Cohen, President and Chief Executive Officer of
MediWound.
“We were very pleased to report final results
from the first cohort of our second Phase 2 clinical trial of
EscharEx to treat chronic and hard-to-heal wounds and to affirm the
previously reported positive results. These final results reinforce
our belief that EscharEx has the potential to become a
first-in-class topical debridement treatment for chronic wounds, a
large and growing market that represents a significant commercial
opportunity. We plan to share these final data with the U.S. Food
and Drug Administration (FDA) as part of our request for a meeting
to discuss a U.S. pivotal clinical program for EscharEx. In tandem,
we advanced a second cohort of patients in this study to
demonstrate safety over extended periods of application to enhance
convenience and compliance and plan to report top-line data from
this cohort around mid-2017.
"We made great progress advancing NexoBrid
towards becoming the standard of care in burn centers across
Europe. This is evidenced by the growing number of patients treated
with NexoBrid, the increasing number of centers treating and able
to procure NexoBrid, additional countries establishing
reimbursement for NexoBrid such as in Italy and Belgium, and the
significant number of abstracts and award-winning presentations at
premier burn conferences. The magnitude of these presentations
illustrates the evolution taking place at European burn centers as
NexoBrid is transitioning to become the new standard of care for
severe burns. We continue to work with our partners in Latin
America, Russia, South Korea, India and Japan and look forward to
further expanding NexoBrid’s global commercial reach.
"Through our dialog with the FDA and European
Medicines Agency (EMA), we amended the U.S. phase 3 DETECT study
protocol to allow inclusion of patients suffering from burns
covering up to 30% of their total body surface area (TBSA).
The collection of data in these larger burns in DETECT, along with
the positive PK data from our recently completed phase 2 study in
36 patients, is aimed to generate data to support a request to FDA
and EMA to extend the label for NexoBrid to larger TBSA burns. In
addition, based on the recommendation of our pediatric phase 3
(CIDS) Data Safety Monitoring Board and the EMA endorsement, we
initiated the second stage of the CIDS study that allows inclusion
of pediatric burn patients ages one to four years, who represent
the age bracket with the largest incidence of pediatric burns.
“We have a very productive year ahead as we
continue to facilitate our pivotal program for EscharEx to treat
chronic wounds. We look forward to further advancing NexoBrid as a
new standard of care, to expanding its commercial reach to
important international markets and its potential use by countries
for preparedness for mass-casualty events. In addition, we will
continue to progress our ongoing NexoBrid phase 3 studies in the
U.S. and in the pediatric population,” concluded Mr. Cohen.
Fourth Quarter Financial
Results
Revenues for the fourth quarter of 2016
increased 61% to $430,000 from $267,000 for the same quarter last
year.
Operating expenses for the fourth quarter were
$4.1 million, down $2.3 million from $6.4 million in the fourth
quarter of 2015. The decrease was as a result of $1.5 million
reduction in net research and development expense, primarily due to
participation by BARDA and the Israeli Innovation Authority, and
$0.8 million decrease in selling, general and administrative
expenses.
For the fourth quarter of 2016, the Company
reported a net loss of $1.9 million, or $0.09 per share, compared
with a net loss of $7.8 million, or $0.36 per share, in the fourth
quarter of 2015. The decrease in net loss was primarily as a result
of non-cash financial income from revaluation of contingent
liabilities recorded in 2016 and the aforementioned decrease in
operating expenses.
Adjusted EBITDA, as defined below, for the
fourth quarter of 2016 was a loss of $3.5 million compared with a
loss of $6.0 million for the same quarter last year. A
reconciliation of adjusted EBITDA to GAAP net loss is set forth
below.
Full Year Financial Results
For the year ended December 31, 2016, revenues
increased 159% to approximately $1.6 million from approximately
$0.6 million for the year ended December 31, 2015.
Operating expenses for 2016 were $19.6 million,
in line with the Company's budget and up slightly from $19.3
million for 2015.
Research and development expenses in 2016, net
of participation, increased $1.1 million to $7.1 million from $6.0
million in 2015. The increase was primarily due to an increase of
$3.8 million related to NexoBrid clinical trials, as well as $2.8
million related to EscharEx and MWPC003 development, which was
partially offset by an increase of $5.6 million of participation
from BARDA and the Israeli Innovation Authority.
Selling, general and administrative expenses in
2016 decreased $0.8 million to $12.5 million from $13.3 million in
2015.
The Company reported a net loss for 2016 of
$18.9 million, or $0.86 per share, compared with a net loss of
$22.1 million, or $1.02 per share, in 2015. The decrease in net
loss was attributed to growth in revenues in 2016 and non-cash
financial income recorded in 2016, from revaluation of contingent
liabilities.
Adjusted EBITDA for 2016 was a loss of $16.4
million, compared with a loss of $18.1 million for 2015. A
reconciliation of adjusted EBITDA to GAAP net loss is set forth
below.
Balance Sheet Highlights
As of December 31, 2016, the Company had cash
and short-term deposits of $30.0 million and had no debt. The
Company used $15.7 million in cash to fund operations during 2016,
which was below the Company’s cash use guidance of $17.0
million.
Throughout 2017, the Company will continue to
invest primarily in research and development efforts for NexoBrid,
which is predominantly funded by BARDA, EscharEx for chronic wounds
and other pipeline product candidates, as well as in sales and
marketing activities to advance the adoption of NexoBrid in
Europe. As a result, cash use for 2017 is expected to be in
the range of $15.0 million to $17.0 million.
Conference Call
MediWound management will host a conference call
for members of the investment community today beginning at 8:30
a.m. Eastern time to discuss these results and answer
questions. Shareholders and other interested parties may
participate in the call by dialing (877) 602-7189 (in the U.S.) or
(678) 894-3057 (outside the U.S.) and entering passcode 43709562.
The call also will be broadcast live on the Internet on the
Company’s website at www.mediwound.com.
A replay will be available beginning two hours
after the completion of the live call through February 28, 2016 by
dialing (855) 859-2056 (in the U.S.) or 404-537-3406 (outside the
U.S.) and entering passcode 43709562. The call will also be
archived for 90 days on the Company’s website at
www.mediwound.com.
Non-IFRS Financial Measures
To supplement consolidated financial statements
prepared and presented in accordance with IFRS, the Company has
provided a supplementary non-IFRS measure to consider in evaluating
its performance. Management uses Adjusted EBITDA, which is defined
as earnings before interest, taxes, depreciation and amortization,
impairment, one-time expenses, restructuring and share-based
compensation expenses.
Although Adjusted EBITDA is not a measure of
performance or liquidity calculated in accordance with IFRS,
management believes the non-IFRS financial measures it presents
provide meaningful supplemental information regarding operating
results primarily because they exclude certain non-cash charges or
items management does not believe are reflective of ongoing
operating results when budgeting, planning and forecasting and
determining compensation, and when assessing the performance of the
business with senior management.
However, investors should not consider these
measures in isolation or as substitutes for operating income, cash
flows from operating activities or any other measure for
determining the Company’s operating performance or liquidity that
is calculated in accordance with IFRS. In addition, because
Adjusted EBITDA is not calculated in accordance with IFRS, it may
not necessarily be comparable to similarly titled measures employed
by other companies. The non-IFRS measures included in this press
release have been reconciled to the IFRS results in the tables
below.
About MediWound Ltd.
MediWound is a fully integrated
biopharmaceutical company focused on developing, manufacturing and
commercializing novel therapeutics based on its patented
proteolytic enzyme technology to address unmet needs in the fields
of severe burns, as well as chronic and other hard-to-heal wounds.
MediWound’s first innovative biopharmaceutical product, NexoBrid,
received marketing authorization from the European Medicines Agency
for removal of dead or damaged tissue, known as eschar, in adults
with deep partial- and full-thickness thermal burns and has been
launched in Europe. NexoBrid represents a new paradigm in burn
care management, and clinical trials have demonstrated, with
statistical significance, its ability to non-surgically and rapidly
remove the eschar earlier and without harming viable tissues.
MediWound's second innovative product, EscharEx® is a topical
biological drug being developed for debridement of chronic and
other hard-to-heal wounds, a large and growing market. EscharEx® is
complementary to the large number of existing wound healing
products, which require a clean wound bed in order to heal the
wound. EscharEx® contains the same proteolytic enzyme technology as
NexoBrid®, and benefits from the wealth of existing development
data on NexoBrid. For more information, please visit
www.mediwound.com.
Cautionary Note Regarding
Forward-Looking Statements
This release includes forward-looking statements
within the meaning of Section 27A of the U.S. Securities Act of
1933, as amended, Section 21E of the US Securities Exchange Act of
1934, as amended, and the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that are not historical facts, such as
statements regarding assumptions and results related to financial
results forecast, commercial results, clinical trials and the
regulatory authorizations. Forward-looking statements are based on
MediWound’s current knowledge and its present beliefs and
expectations regarding possible future events and are subject to
risks, uncertainties and assumptions. Actual results and the timing
of events could differ materially from those anticipated in these
forward-looking statements as a result of several factors
including, but not limited to, unexpected results of clinical
trials, delays or denial in the FDA or the EMA regulatory approval
process or additional competition in the market. The
forward-looking statements made herein speak only as of the date of
this announcement and MediWound undertakes no obligation to update
publicly such forward-looking statements to reflect subsequent
events or circumstances, except as otherwise required by law.
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
U.S. dollars in thousands |
|
|
|
December 31, |
|
|
2016 |
|
2015 |
CURRENT ASSETS: |
|
|
|
|
Cash,
cash equivalents and short term deposits |
|
30,029 |
|
45,768 |
Accounts and other receivables |
|
2,739 |
|
2,912 |
Inventories |
|
844 |
|
1,715 |
|
|
33,612 |
|
50,395 |
LONG‑TERM ASSETS: |
|
|
|
|
Long
term deposits |
|
103 |
|
192 |
Property, plant and equipment, net |
|
1,276 |
|
1,040 |
Intangible assets, net |
|
773 |
|
896 |
|
|
2,152 |
|
2,128 |
|
|
35,764 |
|
52,523 |
CURRENT LIABILITIES: |
|
|
|
|
Trade
payables |
|
1,456 |
|
1,123 |
Accrued expenses and other payables |
|
3,924 |
|
4,083 |
|
|
5,380 |
|
5,206 |
LONG‑TERM LIABILITIES: |
|
|
|
|
Deferred
revenues |
|
1,023 |
|
- |
Liabilities in respect of Israeli Innovation Authority grants, net
of current maturities |
|
6,839 |
|
7,275 |
Contingent consideration for the purchase of shares, net of current
maturities |
|
14,533 |
|
16,475 |
Severance pay liability, net |
|
219 |
|
97 |
|
|
22,614 |
|
23,847 |
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
7,770 |
|
23,470 |
|
|
35,764 |
|
52,523 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE LOSS |
U.S. dollars in thousands (except share and loss per
share) |
|
|
Year ended |
|
Three months ended |
December 31, |
|
December 31, |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
Revenues |
1,558 |
|
|
601 |
|
|
430 |
|
|
267 |
Cost
of revenues |
2,158 |
|
|
2,519 |
|
|
855 |
|
|
689 |
Gross loss |
(600) |
|
|
(1,918) |
|
|
(425) |
|
|
(422) |
Operating expenses: |
|
|
|
|
|
|
|
Research and development, gross |
14,779 |
|
|
8,139 |
|
|
3,359 |
|
|
2,844 |
Participation by IIA & BARDA |
(7,711) |
|
|
(2,118) |
|
|
(2,576) |
|
|
(550) |
Research and development, net |
7,068 |
|
|
6,021 |
|
|
783 |
|
|
2,294 |
Selling, general & administrative |
12,487 |
|
|
13,288 |
|
|
3,299 |
|
|
4,114 |
Total operating expenses |
19,555 |
|
|
19,309 |
|
|
4,082 |
|
|
6,408 |
Operating loss |
(20,155) |
|
|
(21,227) |
|
|
(4,507) |
|
|
(6,830) |
Financial income (expenses), net |
1,270 |
|
|
(444) |
|
|
2,621 |
|
|
(950) |
Loss from continuing operations |
(18,885) |
|
|
(21,671) |
|
|
(1,886) |
|
|
(7,780) |
Loss
from discontinued operation |
- |
|
|
(417) |
|
|
- |
|
|
- |
Loss for the period |
(18,885) |
|
|
(22,088) |
|
|
(1,886) |
|
|
(7,780) |
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
7 |
|
|
2 |
|
|
11 |
|
|
1 |
Total comprehensive loss |
(18,878) |
|
|
(22,086) |
|
|
(1,875) |
|
|
(7,779) |
|
|
|
|
|
|
|
|
Net loss per share |
(0.86) |
|
|
(1.02) |
|
|
(0.09) |
|
|
(0.36) |
Weighted average number of ordinary sharesused in the computation
of basic and dilutedloss per share: |
21,862,169 |
|
|
21,718,401 |
|
|
21,890,854 |
|
|
21,850,301 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
U.S. dollar in thousands |
|
|
Year ended |
|
Three months ended |
December 31, |
|
December 31, |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Audited |
|
Unaudited |
Cash Flows from
Operating Activities: |
|
|
|
|
|
|
|
Net loss |
(18,885) |
|
|
(22,088) |
|
|
(1,886) |
|
|
(7,780) |
|
|
|
|
|
|
|
|
Adjustments to
reconcile net loss to net cash used in continuing operating
activities: |
|
|
|
|
|
|
|
Adjustments to profit and loss items: |
|
|
|
|
|
|
|
Loss from
discontinued operation |
- |
|
|
417 |
|
|
- |
|
|
- |
Depreciation and amortization |
589 |
|
|
503 |
|
|
203 |
|
|
153 |
Share-based compensation |
3,171 |
|
|
2,659 |
|
|
771 |
|
|
699 |
Revaluation of liabilities in respect of Israeli Innovation
Authority grants |
(1,298) |
|
|
(474) |
|
|
(1,108) |
|
|
470 |
Revaluation of contingent consideration for the purchase of
shares |
(1,621) |
|
|
(764) |
|
|
(2,801) |
|
|
597 |
Increase
in severance liability, net |
125 |
|
|
90 |
|
|
125 |
|
|
90 |
Net
financing income |
(508) |
|
|
(219) |
|
|
(144) |
|
|
(209) |
|
458 |
|
|
2,212 |
|
|
(2,954) |
|
|
1,800 |
Changes
in asset and liability items: |
|
|
|
|
|
|
|
Decrease
(increase) in trade receivables |
(107) |
|
|
(181) |
|
|
138 |
|
|
(134) |
Decrease
(increase) in inventories |
873 |
|
|
(273) |
|
|
231 |
|
|
(383) |
Decrease
(increase) in other receivables |
33 |
|
|
(556) |
|
|
(392) |
|
|
(199) |
Increase
(decrease) in trade payables |
331 |
|
|
(76) |
|
|
428 |
|
|
(124) |
Increase
in other payables |
852 |
|
|
1,361 |
|
|
205 |
|
|
1,933 |
|
1,982 |
|
|
275 |
|
|
610 |
|
|
1,093 |
Net cash flows
used in operating activities |
(16,445) |
|
|
(19,601) |
|
|
(4,230) |
|
|
(4,887) |
Cash Flows from
Investment Activities: |
|
|
|
|
|
|
|
Purchase of property
and equipment |
(671) |
|
|
(376) |
|
|
(29) |
|
|
(78) |
Purchase of intangible
assets |
(30) |
|
|
(30) |
|
|
(30) |
|
|
(30) |
Interest received |
407 |
|
|
287 |
|
|
362 |
|
|
203 |
Proceeds from
short term bank deposits, net of investments |
2,110 |
|
|
36,165 |
|
|
27,349 |
|
|
21,989 |
Net cash
provided by investing activities |
1,816 |
|
|
36,046 |
|
|
27,652 |
|
|
22,084 |
Cash Flows from
Financing Activities: |
|
|
|
|
|
|
|
Proceeds from exercise
of options |
7 |
|
|
26 |
|
|
5 |
|
|
- |
Proceeds from the IIA
government grants, net of repayments |
900 |
|
|
752 |
|
|
242 |
|
|
643 |
Net cash
provided by financing activities |
907 |
|
|
778 |
|
|
247 |
|
|
643 |
Increase (decrease) in
cash and cash equivalents |
(13,722) |
|
|
17,223 |
|
|
23,669 |
|
|
17,840 |
Exchange rate
differences on cash and cash equivalent balances |
86 |
|
|
(143) |
|
|
15 |
|
|
112 |
Balance of cash and
cash equivalents at the beginning of the period |
42,502 |
|
|
25,422 |
|
|
5,182 |
|
|
24,550 |
Balance of cash
and cash equivalents at the end of the period |
28,866 |
|
|
42,502 |
|
|
28,866 |
|
|
42,502 |
|
|
RECONCILIATION OF NET LOSS TO ADJUSTED
EBITDA |
U.S. dollars in thousands |
|
|
Year ended |
|
|
Three months ended |
|
December 31, |
|
December 31, |
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
Loss
for the period |
(18,885) |
|
|
(22,088) |
|
|
|
(1,886) |
|
|
(7,780) |
Adjustments: |
|
|
|
|
|
|
|
|
Financial (expenses) income, net |
1,270 |
|
|
(444) |
|
|
|
2,621 |
|
|
(950) |
Loss
from discontinued operation |
- |
|
|
(417) |
|
|
|
- |
|
|
- |
Depreciation and amortization |
(589) |
|
|
(503) |
|
|
|
(203) |
|
|
(153) |
Share-based compensation expenses |
(3,171) |
|
|
(2,659) |
|
|
|
(771) |
|
|
(699) |
Total
adjustments |
(2,490) |
|
|
(4,023) |
|
|
|
1,647 |
|
|
(1,802) |
Adjusted EBITDA (loss) |
(16,395) |
|
|
(18,065) |
|
|
|
(3,533) |
|
|
(5,978) |
|
Contacts:
Sharon Malka
Chief Financial & Operations Officer
MediWound Ltd.
ir@mediwound.co.il
Anne Marie Fields
Senior Vice President
LHA
212-838-3777
afields@lhai.com
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