MediWound Q3 2026 Earnings Call - MEDIWOUND LTD

Good day and welcome to MediWool's 3rd Quarter 2026 Earnings Call, as all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note, this event is being recorded. At this time, I would like to turn the conference over to Gaya Shamis of Lifestyle Advisors. Please go ahead. Thank you, Sagar, and welcome, everyone. Earlier today, before the market opened, MediWound issued a press release announcing financial results for the third quarter ended September 30th, 2026. You may access this press release on the company's website under the Investors tab. I would ask you to review the full text of our forward-looking statements within this morning press release. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to MediWound expected future performance, future business prospects, or future events or plans are forward-thinking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements may involve risk and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our view only as of today, and MediWound assumes no obligation to update or supplement any forward-thinking statements, whether as a result of new information, future events, or otherwise. This conference call is the property of MediWound, and any recording or rebroadcast is expressly prohibited without the written consent of Medidwound. With us today are Ofer Zonen, Chief Executive Officer of Medivhund, Hany Luxemburg, 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. Now, I would like to turn the call over to Ofer Yonen, Chief Executive Officer of Medibund. Ofer? Thank you, Gaia, and good morning, everyone. During the third quarter, we advanced SCRX development, supported NexoBridge's commercial growth and government program, and continued preparing our expanded manufacturing facility to meet future demands. Let me start with an update on SCRx. The global Phase III value trial in venous leg ulcers remains our top priority. Enrollment continues, and we remain on track to complete the pre-specified interim sample size reassessment in the enrollment by the end of the first quarter of 2027. The current enrollment target is 216 patients across approximately 40 sites in the United States, Europe, and Israel. During the quarter, the Independent Data and Safety Monitoring Board completed its pre-specified periodic review of the value trial, identified no safety concerns, and recommended that the trial continues as planned, without modifications. The next DSMB meeting is scheduled for early January 2027. The following meeting is expected at the end of the first quarter of 2027, at which the DSMB will also conduct the interim sample size reassessment. Beyond venous leg alters, we continue to advance towards clinical trials in diabetic foot alters and pressure alters. The diabetic foot ulcer program has received grant funding from the European Innovation Council and is supported by strategic collaborations, while work on pressure ulcer is investigator initiated. Once final results from the FALU trial are available, we plan to discuss the development pathway for additional chronic wound indications with the FDA. Turning to NexoBRED. The U.S. commercial trajectory continues to strengthen. Paracel reported NexoBreed's strongest quarter since launch, with its highest quarterly revenue to date, driven by the highest number of ordering burn centers and hospital orders More new centers ordered NexoBREED in the first nine months of 2026 than in all 2025. More than 80 centers have placed orders to date, with approximately 70 placing repeat orders. Government procurement under Vericel's BARDA contract began in the third quarter, and as Vericcel indicated, is expected to continue through the fourth quarter of 2027 and the first quarter of 2025. We continue to collaborate with VeriCell in advancing two NexoBridge development programs under our Master Service Agreement, Indication Expansion to Acute Trauma Injuries Associated with Thermal Burns and Development of a New Stable Formulation. Both programs are covered by the contract between Veri-Cell and BARDA. Separately, the Department of War awarded MediWUN an additional $3.3 million in non-dilutive funding to advance the room temperature stable formulation of Nexobrid as a non-surgical debridement solution for battlefield burn care. This brings the program's total budget to $21.8 million and is intended to support the development through submission of an IMD application. Together, these programs are intended to broaden NexoBridge's potential applications in civilian and military burn care. Beyond the United States, demand for NexoBride extends across Europe, Japan, and other markets. However, global demand currently exceeds our manufacturing capacity, limiting our ability to fully meet the needs of these markets. Expanding our capacity is therefore a key priority for us. Let me provide some context on our manufacturing operations, starting with our current NexoBridge facility. The facility successfully completed routine GMP inspections by the FDA and the Israeli Ministry of Health, with the ministry also conducting its inspection on behalf of the EMA. the facility's GMP certification is valid now for an additional two years. To address the capacity constraints and support the future demand, we are advancing our expanded next-of-breed manufacturing facility. We are implementing the modification recommended during the previously reported EMA pre-audit and expect to complete this work in the fourth quarter of 2026 as planned. Commercial supply from the expanded facility remains subject to regulatory approval and is expected in the second half of 2027. With that, I will turn the call over to Hani. Thank you, Ofer, and good morning, everyone. Before I walk through the numbers, let me put our result in context. Our revenue is heavily weighted towards development services for U.S. government programs. Product sales, meanwhile, are constrained by supply rather than demand. We are selling every unit we can manufacture. On the expense side, our main investment is in R&D, mainly the SCRX Phase III value trial. We expect spending on that trial to decline substantially as it reaches completion. Now turning to our financial result for the third quarter of 2026. Revenue for the quarter was $3.6 million compared with $5.4 million in the third quarter of 2025. The decrease was primarily attributable to lower revenue from development services related to the U.S. government. Gross profit was $1 million, representing a gross margin of 28.5%, compared with gross profit of $0.9 million, or 16.5% in the prior year period. The margin improvement primarily reflected a higher contribution from royalty revenue, which carries a higher gross margin. Research and development expenses were $6.2 million compared with $3.5 million in the third quarter of 2025, primarily reflecting increased investment in the S-Correct Phase 3 value trial. SG&A expenses totaled $3,400,000 compared with 4,000,000 in the same period last year. The decrease primarily reflected lower marketing expenses. Operating loss was $8.5 million compared with $6.5 million in the third quarter of 2025. Net loss was $6 million or $0.47 per share compared with a net loss of $2.7 million or 24 cents per share in the prior year period. The year-over-year change primarily reflected lower non-cash financial income from revaluation of warrants. Adjusted EBITDA loss was $7.4 million compared with a loss of $5.4 million in the third quarter of 2025. Turning to our results for the first nine months, revenue for the first nine month of 2026 was $8.1 million compared with $15.1 in the first 9 months of 2025, primarily attributable to lower revenue from development services related to U.S. government. Cross-profit of $3 million or 19.7% in the prior year period, the margin improvement primarily reflected a higher contribution from royalty revenue. Research and development expenses were $17.3 million compared with $9.8 million in the first nine months of 2025, primarily reflecting increased investment in the Escarex Phase 3 value trial. SG&A expenses totaled $10.8 million compared with $106 million in the same period last year. Operating loss was $26 million compared to $17.5 million in first nine months of 2025. Net loss was $16.3 million or $1.27 per share, compared with a net loss of $167 million or $1 and 53 cents per share in the prior year period. The change primarily reflected non-cash warrant revaluation income of $10.3 billion in 2026 compared with $1,800,000 in 2025. Adjusted EBITDA loss was $22.7 million compared with a loss of $13.8 million in the first nine months of 2025. Turning to our balance sheet. As of September 30, 2026, we had $28.4 million in cash, cash equivalents, and deposits, compared with $53.6 million at year-end 2025. Cash burn during the first nine months of 2026 totaled $28,3 million. Warrant exercises generated $2 million during the first nine months, and we received an additional $1.1 million after quarter end. Those exercising warrants included all board members who held warrants, the company's founder, and our CEO, each of whom also agreed to lock up restrictions. In addition, in November 2026, we closed an underwritten public offering, including the full exercise and shoe option for gross proceeds of $17.25 million. This concludes my review of our financial results offer. Back to you. Thank you, Hani. We are advancing S-Corex, supporting Nextoblitz commercial growth, and expanding our manufacturing facility. Our recent public offerings strengthened our balance sheet, giving us additional financial flexibility through and beyond the value data readout. We continue to work with the U.S. government to secure funding for our planned U.K.-based manufacturing facility. A substantial portion of our anticipated 2026 revenue is tied to development services for this project. We do not yet know when or whether funding will be secured, and as a result, our 2026 Revenue Outlook depends on these ongoing discussions. Our priorities are clear. First, complete the value interim assessment and enrollment by the end of the first quarter of 2027. Second, support Nexo with continued commercial growth. We'll do that by bringing our expanded facility into operation and by advancing new indications. With that, we are ready to take your questions. Operator? Thank you. We will now begin the question and answers session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble a roster. Your first question comes from Josh Jennings with T.D. Corwin. Please go ahead. Josh Jenning, T.C. Corwin, M.D.: Hi, Oferhani and Barry. Thanks for taking the questions and appreciate the download today and the update. I wanted to just ask about value trial enrollment. You reiterated expectations for the completion of enrollment by the end of one Q. It's great to hear. maybe if you could just help us better understand your confidence in achieving that milestone within the next four to five months, any more granularity you can provide just on recent enrollment velocity. Hi, Josh. Good to speak to you. As for the value, we feel very comfortable. We had some hiccups in the past, as you know, especially about opening sites in Europe. Currently, we feel comfortable 95% of the sites are open. To protect the study integrity, we are not sharing patient enrollment numbers or enrollment trends during the conduct of the study. Having said that, if we plan on the 216 patients with the roughly 40 sites that are open, we are very comfortable in this guidance of the end of the first quarter of 2027. I just wanted to just better understand, or maybe you could just map out potential timing for the data readout for value, assuming that the enrollment is completed by the end of 1Q and the interim sample size reassessment leads to no change. You know, what's the required patient follow-up and data cleaning process and the other factors that could influence the timing of the top-line results being made public? So the protocol includes a pre-specified interim sample size reassessment after we finish the treatment of 140-ish patients. This is in order to confirm the targeted 85% statistical power. Based on that assessment, we will either finish the enrollment of the 216 patients or increase the sample size. Under the current 216 patient design, we expect to finish the involvement, as I said, by the end of the first quarter. After that, we have around three months of treatment, another couple of weeks of aggregating the data. So I would expect the top-line results in mid-2027. Actually, maybe just one more. Sorry for adding another question under my session here. But I just wanted to talk about the commercial strategy for S-Corrects and, you know, partnership versus independent launch. As you're moving value advances towards the pivotal readout, how are your discussions with potential commercial partners evolving? Are they waiting for the phase three results, or could a transaction or partnership occur ahead of the readout? Thanks for taking all the questions. So I don't want to comment on discussions with specific companies or on whether any are taking place right now. but what I can do is to explain why we believe that S-Corex is a strategic asset for the large wound care companies. First, the market has shifted after the CMS cut of the Skin Staptitude reimbursement. Companies with large wound care sales force are now looking for product approved through BLA, NDA, or PMA with an established reimbursement path. To our knowledge, S-Correx is the only late-stage BLA candidate of its kind. So this is, I think, the main reason for attractiveness of S-Corrects. Second, the product profile. If S-corrects is approved, if you compare it against the single decades-old Santil, which has more than $400 million in annual sales, and it takes four to eight-plus weeks to achieve what F-Corex has shown in four to five days on average. It is considered very significant in wound care. And third, the size of the opportunity. We project approximately $1 billion in US peak sales across venous leg ulcers, diabetic foot ulcers and pressure ulcers. The three largest chronic wound categories. And we believe that this is an opportunity that no major wound care company can ignore. you can see that by the engagement of our collaborators we have eight out of the nine larger wound care companies that are collaborating with us our focus is is delivering on the value data and i think after that we have the flexibility to get a decision on our own timeline I hope I answered your question yes understood thank you thank you thank you the next question comes from Swambekula Ramakant with H.C. Wainwright please go ahead thank you good afternoon and morning a couple of questions on the expanded facility. After the modifications that you need to do during the fourth quarter, what is left in terms of validation, inspection, and release milestones that you're expecting for the second half of 2017 commercial supply? And also, is there any timing cushion that you have included into it um so that if if things get shifted you still could um would achieve that milestone of second half 27. um so uh hi hi okay and thank you for joining uh as for the expanded facility As I mentioned in my prepared remarks, we expect the recommendation that we got in the pre-audit to do some operational changes. We expect to finish that work in the fourth quarter of this year. Once that work is complete, we will start manufacturing NexoBREED at the new facility. we will need to submit it. There is a review process. There is an in-site inspection. And then we can sell that specific commercial supply for the expanded facility. We are targeting a second half. The second half is a six-month period. There is some cushion there, but we do not expect it to be earlier. Very good. With With 70 repeat ordering centers in the U.S., and also the BARDA procurement has started, so what are the constraints now for incremental supply, especially before you can get that expansion approved? And congratulations on the current facility going through all the recent inspections. that facility have enough capacity to handle uh what is happening uh or what the supply is asking for i mean what the demand is asking for here in the us um and and is that all included you know into your guidance at this point so so as i said in the call uh we are quite limited in our ability to manufacture and we have no issues in in demand and we need to prioritize uh who we sell next to breed and when the united states market gets the priority we are in a position to give the supply that is required to very sell for the commercial use and also for the the procurement of BARDA, this is our top priority. So the last question is on the revenue outlook. I understand the inability with regards to the separate U.S. facility and why you cannot get the proper guidance as it. However, what is already included into your previous guidance in terms of how much of the executable work, you know, in that project has been included or not included? And is there any additional color you can provide around that? so our revenue is heavily weighted towards development services for the u.s government programs as you know and it it has a few pillars under the agreement with varicell we continue to support two next of redevelopment programs both of them are covered by the contract with varicel and barda it's the indication expansion to acute trauma injuries and the development of new stable formulation. Separately, we have income from the Department of War. They are awarded us an additional 3.3 million to develop the room temperature stable formulation through the IND. As I said in the product side, next of which cells are constrained by supply, so we have visibility towards what we can generate revenues there. We are We are selling every unit that we can manufacture, including all the products, and I'm referring to your previous questions, including products for the government procurement under the Varicell-Barda contract. The key uncertainty, and we highlighted this, is the U.S.-based manufacturing facility. We are substantial portion of our anticipated 26 revenues tied to that. We are still in ongoing discussions with them. all kinds of funding discussion that I cannot get into details now, and I don't know when it will be secured. Thank you. Thanks for taking all my questions. Yeah, thanks. Thank you, Okay. Thank You. Thank you Your next question comes from Meera Sharma with Oppenheimer. Please go ahead. Hi, this is Mira on for Jeff. Thank you for taking our question. I was just, we were just wondering if you could give a bit more guidance on how you think 2026 and 2027 will shake out for U.S. government and barrio revenue, and how will we see the first quarter of 2027 to be impacted, especially for the SCRX VLU trial timelines and for the other two indications as well for DFU and pressure ulcers. Thank you. Hi. As for the SCRX, as I said, the guidance is very clear. Interim assessment, first quarter. Assuming the base case happens, we expect top-line results mid-2027. we will start in parallel we are finishing the preparations for both pressure ulcers and diabetic foot ulcers we will give a color when we initiate the trials and I guess it will be at least the first one will be in the next few weeks so in S-Correct I think the guidance is quite clear did you also ask about Nexobrid? Nexogrid? No, thank you. That's it. Okay, thank you. Thank you. The next question comes from the line of Chase Knickerbocker with Greg Allum. Please go ahead. Hey guys, this is Nick Mattiacci on for Chase. Thanks for taking our questions. So I think you guys mentioned the prepared remarks so there will be a couple additional data safety and monitoring board meetings for value in the first quarter. Can you just walk us through what will be assessed at those meetings and how those reviews relate to the sample size reassessment and what information we should be looking out for from those meetings? Hi. So as we guided in the past, we have a DSMB that will be unblinded and unblinded and look at the data once 140 patients finish the treatment. But separately, we have this DSMB review safety at pre-specified points during the clinical study. At each review, the DSMB has all kinds of options of recommendations, such as continuous as planned, continue but make some protocol changes, a temporary hold until the changes are made, or they can even stop the trial if they see all kinds of major safety concerns. As we reported previously, the most recent DSMB recommendation was everything looks great, continuous plan without making any modification. The next DSMB review is expected in early January, the first week of January. And then the following meeting is expected to be at the end of the first quarter, and the DSMB there will also conduct the interim sample size reassessment, as we discussed earlier. I hope it was clear. Yeah, got it. Thanks for that. And then I think this was already touched on a little bit, but just as we think about the top line in the previous range you guys provided for 2027? Are you just able to share any color on what portion of that range was hinged on the progress with the U.S. manufacturing facility? So as we said, it's a major part of the – it's an important part of that $24 to $26 million guidance. We are not providing, we are not prepared now to say how we break out this component of the guidance, only to share that the substantial portion is tied to development services for the planned U.S.-based facility. Understood. Thanks for taking our questions. Thank you. Thank you! The next question comes from Michael Okunovic with Maxim Group. Please go ahead. Hey, guys. Good morning. Thank you for taking my questions. Good morning, I wanted to ask just a little bit about the value study, the upcoming DSMB review, and in particular, what change in the incidence of complete debridement or wound bed prep is the study powered for under the current target enrollment of 216 patients? So the value trial is very similar to a trial that we did, which was called Chronex, which is a phase two trial. There are some differences that we believe fit better the ability to demonstrate S-Corex advantage over placebo. All the power calculations were based on the previous trial. The changes that were made in this trial hopefully make the probability of success better based onthe fact that we standardized the treatment. All the patients are getting identical treatments across many sites. And based on the fact that we removed patients from the trial that are too easy to treat or very complicated to heal, we believe that it will increase substantially the gap between the active SCRX to a placebo. But the 216-patient calculation is based on the previous Phase II trial. All right, thank you. And then for the DSM-B, how do they look at the co-primer endpoints, right? Because you have both complete debridement and wound closure. Will they base their sample size recommendations on the probability of succeeding in both endpoints? or is it an either-or situation where probability of success in one or the other would lead them to recommend you unmodify the study? Okay, this is a great question. So we have two primary endpoints. The first one is the incidence of complete debridement. In order to prove that SCRX is better than placebo in debridment, you don't need 216 patients. According to our calculations, you need less than 20 in order to show that it is much better because basically if you recruit the right patients, and this is what we are focusing on this trial, the gap between the two arms should be significant. So no one is looking at the placebo assuming the 216 patients is 99.9% powered to beat this specific endpoint. The only thing that the DSMB are looking at is the difference in the time to facilitate wound closure, and this is what they're looking at. Only that. All right. Thank you. I really appreciate that clarity. And then one last one from you before I hop back into the queue. Could you provide just an update on your plans for the pressure ulcer study and the DFUs? Previously, those were expected to launch this year. Just an update on your development plans for X-Corex before or beyond value. So, as I said, the Phase III value study in VLU, this is our primary focus on X-Correx. We are conducting, beyond VLUs, we see X-correx addressing diabetic foot ulcers and pressure ulcers. And together with VLUs, these are the three largest chronic wounds categories. And the market size that we discussed last time was around $1 billion potential pixels or potential opportunity. We are now preparing for the broad development of the program. Both of the studies are getting ready for initiation. We will have some news about it in the next, I guess, next call or next few weeks. The first trial is the pressure ulcer, which is an investigator-initiated. It means that it is not directly run by us. It will be a small open label trial. And the second one is the DFU, 50-patient study, supported by the European Innovation Council. And this will be a larger trial, double-blinded. This specific trial is supported by some of the large collaborators that we discussed in the prepared remarks. I hope it was clear. Thank you very much, and I appreciate the additional clarity. Thank you. Thank you. At this time, there are no further questions in the queue. I would like to turn the conference over to the management for closing remarks. Thank you everyone for joining us today. We look forward to updating you again on our next quarterly call. Thank you, the conference has now concluded. you for attending today's presentation you may now disconnect