SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C.  20549
______________________
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER
 
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of August 2020
 
Commission File Number: 001-36349
 
MediWound Ltd.

(Translation of registrant’s name into English)
 
42 Hayarkon Street
Yavne, 8122745 Israel
 (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F ☒          Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): 
 

 
EXPLANATORY NOTE
 
On August 6, 2020, MediWound Ltd. (the “Company”) issued a press release entitled “MediWound Reports Second Quarter 2020 Financial Results and Provides Corporate Update”. A copy of this press release is attached to this Form 6-K as Exhibit 99.1.

In addition, pursuant to the Information Rights Agreement between the Company and Clal Biotechnology Industries Ltd. ("CBI"), dated March 3, 2014 (which was attached to the Company's registration statement as exhibit 4.3), the Company is required to provide CBI with certain information necessary for CBI to meet its obligations  under Israeli Securities Law. This Form 6-K includes an Un-Audited Condensed Consolidated Interim Financial Statements as of June 30, 2020, attached as Exhibit 99.2, which was provided by the Company to CBI on August 5, 2020 pursuant to such contractual obligation.
2

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date: August 6, 2020       
  MEDIWOUND LTD.
 
By:  /s/ Boaz Gur-Lavie
Name:  Boaz Gur-Lavie
Title:    Chief Financial Office

3

EXHIBIT INDEX

The following exhibit is filed as part of this Form 6-K:

Exhibit
Description

99.1

99.2

4


Exhibit 99.1

MediWound Reports Second Quarter 2020 Financial Results and
Provides Corporate Update

Submitted Biological License Application to the FDA for NexoBrid
EscharEx U.S. Phase 2 Study Resumed Patient Screening
 
YAVNE, Israel, August 6, 2020 -- MediWound Ltd. (Nasdaq: MDWD) (the “Company”), a fully-integrated biopharmaceutical company bringing innovative therapies to address unmet needs in severe burn and wound management, today announced financial results for the second quarter ended June 30, 2020 and provided business and financial updates related to the COVID-19 pandemic.

Second Quarter Business and Financial Highlights:

Revenues for the second quarter of 2020 were $4.0 million, compared with $20.7 million for the second quarter of 2019, which included the upfront payment of $17.5 million from the Vericel licensing agreement

The Company had $24.4 million in cash and short-term investments as of June 30, 2020, compared with $29.5 million as of December 31, 2019

Resumed patient screening and randomization in U.S. EscharEx® phase 2 adaptive design study for the treatment of venous leg ulcers (“VLU’s”); Interim assessment is anticipated in the first half of 2021

Submitted Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for NexoBrid® for the treatment of severe thermal burns in adults

Instituted a series of measures to address challenges associated with the COVID-19 pandemic, while maintaining workforce and operational capacity and flexibility

“We are pleased to have submitted the BLA for NexoBrid on schedule despite the disruptions of the COVID-19 pandemic. This submission is a major milestone in our long-term partnership with BARDA, and we are actively preparing for the commercial launch with our partner, Vericel, upon approval,” said Sharon Malka, Chief Executive Officer of MediWound. “In addition, we are actively recruiting and enrolling patients in our U.S. EscharEx phase 2 study, and we are encouraged to see progress in moving this trial forward.”

Mr. Malka concluded, “In recent months, humanity is facing tremendous challenges with a great deal of uncertainty. We are privileged to be among those tasked with improving patients’ quality of care and impacting their lives. Our solid balance sheet continues to support our growth as we execute on our strategic plans, and we are optimistic that we will continue to successfully strengthen our Company.”

Corporate Update

MediWound has implemented several measures to safeguard the health and well-being of its employees, their families, and healthcare providers. The Company has reduced expenses to minimize impact to operations while ensuring full compliance with all necessary regulations. Management continues to assess the impact of the pandemic, the potential implications to business continuity, and necessary remedies and will adjust accordingly to the challenges created by any directives from regulatory authorities.

The Company continues to manufacture and supply NexoBrid to patients with severe burn injuries, including manufacturing NexoBrid and building an emergency stockpile for the U.S. Biomedical Advanced Research and Development Authority (BARDA), while the first delivery to BARDA is planned in the third quarter of 2020. The Company maintains a significant safety stock of all key raw materials and NexoBrid inventory to meet expected demand over the next several quarters. At this time, the Company does not expect any disruptions to its manufacturing operations and global supply chain.

 
The Company submitted a BLA to the U.S. FDA seeking the approval of NexoBrid for eschar removal (debridement) in adults with deep partial-thickness and full-thickness thermal burns. The BLA submission is based on multiple preclinical and clinical studies including the pivotal Phase 3 U.S. clinical study (DETECT) of NexoBrid in adult patients with severe thermal burns. Vericel Corporation (NASDAQ: VCEL) holds an exclusive license for North American commercial rights of NexoBrid. MediWound is eligible to receive a $7.5 million milestone payment from Vericel upon BLA approval.
 
On the clinical front, the Company has resumed new patients’ screening and randomization in its U.S. EscharEx phase 2 adaptive design study for the treatment of VLU’s and expects to achieve the pre-defined interim assessment in the first half of 2021. In addition, enrollment in the NexoBrid expanded access (NEXT) program continues with enhanced safety measures, such as remote visits and virtual tools.

The Company had $24.4 million in cash and short-term investments as of June 30, 2020, compared with $29.5 million as of December 31, 2019, with no debt. The Company reiterates its expectations of cash use for operating activities in 2020 to be in the range of $8 to $10 million.  At this time, the Company cannot predict the extent or duration of the impact of the COVID-19 outbreak on its ongoing financial and operational results.

Second Quarter Financial Results

Revenues for the second quarter of 2020 were $4.0 million, compared with $20.7 million for the second quarter of 2019, which included the upfront payment of $17.5 million from the Vericel licensing agreement. Revenues from product in the second quarter of 2020 were $1.1 million, reflecting an increase of 17% in comparison to the second quarter of 2019, excluding the one-time upfront payment.

Gross profit for the second quarter of 2020 was $1.2 million, compared to a gross profit of $17.5 million for the second quarter of 2019, which included $16.8 million from the Vericel licensing agreement.

Research and development expenses for the second quarter of 2020, net of participations, were $1.6 million, compared with $0.4 million for the second quarter of 2019. The increase was primarily due to decrease of participation by BARDA and Israeli Innovation Authority (IIA).

Selling, general and administrative expenses for the second quarter of 2020 were $2.3 million, in line with the second quarter of 2019.

Operating loss for the second quarter of 2020 was $2.7 million, compared with an operating profit of $13.9 million in the second quarter of 2019, which included the upfront payment of $17.5 million from the Vericel licensing agreement, net of royalty payment of $0.7 million and $0.8 million of other expenses.

The Company posted a net loss of $3.1 million, or $0.11 per share, for the second quarter of 2020 compared with a net profit of $12.7 million, or $0.47 per share, for the second quarter of 2019, which included the $17.5 million upfront license payment, net of royalty payment of $0.7 million and $0.8 million of other expenses. Excluding the upfront license payment net of deal related costs, net loss for the second quarter of 2019 was $3.3 million, or $0.12 per share.

Adjusted EBITDA, as defined below, for the second quarter of 2020 was a loss of $2.1 million, compared with a profit of $15.4 million for the second quarter of 2019, which included the upfront payment of $17.5 million from the Vericel licensing agreement, net of royalty payment of $0.7 million.


Year-to-Date 2020 Financial Results

Revenues for the first half of 2020 were $8.5 million compared with $21.2 million in the first half of 2019, which included the $17.5 million upfront payment from the Vericel licensing agreement for NexoBrid.

The Company’s net loss for the first half of 2020 was $5.6 million or  $0.20 per share compared with net profit of $8.6 million or  $0.32 per share for the first half of 2019, which included the $17.5 million upfront license payment, net of royalty payment of $0.7 million and $0.9 million of other expenses. Excluding the upfront license payment net of deal related costs, net loss for the first half of 2019 was $7.3 million, or $0.27 per share.

Adjusted EBITDA, for the first half of 2020, was a loss of $3.9 million, compared with a profit of $12.4 million for the first half of 2019, which included the upfront payment of $17.5 million from the Vericel licensing agreement, net of royalty payment of $0.7 million.

Conference Call

MediWound management will host a conference call for investors today, Thursday, August 6, 2020 beginning at 8:30 a.m. Eastern Time to discuss these results and answer questions.  Shareholders and other interested parties may participate in the conference call by dialing 877-602-7189 (in the U.S.)  1809 315 362 (Israel), or 678-894-3057 (outside the U.S. & Israel) and entering passcode 3176168. The call also will be webcast live on the Company’s website at http://ir.mediwound.com/events-and-presentations.

A replay of the call will be accessible two hours after its completion through August 27, 2020 by dialing 855-859-2056 (in the U.S.) or 404-537-3406 (outside the U.S.) and entering passcode 3176168. The call will also be archived on the Company website for 90 days at www.mediwound.com.

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, chronic and other hard-to-heal wounds. MediWound’s first innovative biopharmaceutical product, NexoBrid, non-surgically and rapidly removes burn eschar without harming viable tissue. The product has received marketing authorization from the European Medicines Agency as well as the Israeli, Argentinian, South Korean, Russian and Peruvian Ministries of Health. MediWound’s second innovative product, EscharEx® is a topical biological drug candidate for the debridement of chronic and other hard-to-heal wounds using the same proteolytic enzyme technology as NexoBrid. In two Phase 2 studies, EscharEx has demonstrated safety and efficacy in the debridement of various chronic and other hard-to-heal wounds, within a few daily applications. For more information, please visit www.mediwound.com.

About BARDA

The Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response within the U.S. Department of Health and Human Services, provides an integrated, systematic approach to the development and purchase of the necessary vaccines, drugs, therapies and diagnostic tools for public health medical emergencies. For more information, refer to www.phe.gov/about/BARDA. Funding and technical support for development of NexoBrid to obtain marketing approval in the U.S. including the expanded access treatment protocol (NEXT), the pivotal U.S. Phase 3 clinical study (DETECT) and the marketing approval registration process for NexoBrid in the U.S. is provided by BARDA, under the Assistant Secretary for Preparedness and Response (ASPR), within the U.S. Department of Health and Human Services (HHS), under ongoing USG Contract No. HHSO100201500035C. Additional projects for evaluation of NexoBrid funded under the BARDA contract include randomized, controlled pivotal clinical trial for use in pediatric population, establishment of a pre-emergency use data package and development of the health economic model to evaluate the cost savings impact to enable market adoption in the United States.


Cautionary Note Regarding Forward-Looking Statements

MediWound caution you that all statements other than statements of historical fact included in this press release that address activities, events, or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements.  Although we believe that we have a reasonable basis for the forward-looking statements contained herein, they are based on current expectations about future events affecting us and are subject to risks, assumptions, uncertainties and factors, all of which are difficult to predict and many of which are beyond our control.  Actual results may differ materially from those expressed or implied by the forward-looking statements in this press release.  These statements are often, but are not always, made through the use of words or phrases such as “anticipates,” “intends,” “estimates,” “plans,” “expects,” “continues,” “believe,” “guidance,” “outlook,” “target,” “future,” “potential,” “goals” and similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions.

Specifically, this press release contains forward-looking statements concerning the anticipated progress, development, objectives, expectations, and commercial potential of NexoBrid and EscharEx. Among the factors that may  cause results to be materially different from those stated herein are the inherent uncertainties associated with the timing and conduct of clinical trial and product development activities; the timing or likelihood of regulatory approvals; the ability to successfully develop and commercialize NexoBrid, including its commercial growth potential and the market demand for the product; the availability of funding from BARDA under its agreement with MediWound for use in connection with NexoBrid development activities; the timing of the NexoBrid delivery to BARDA, expected payments under the license agreement with Vericel; competitive developments; whether FDA will accept all or part of the BLA and provide marketing approval for NexoBrid in the United States; the risks related to the timing and conduct of NEXT Study; the ability to successfully develop and commercialize EscharEx, the design of the Phase 2 study, the timing of the interim assessment, the impact of applicable laws and regulations; and the uncertainties associated with the scope, scale and duration of the impact of the COVID-19 pandemic.  For example, we are unable to predict how the pandemic will affect the overall healthcare infrastructure, including the pace with which governmental agencies, such as the FDA, will review and approve regulatory submissions. Additional government-imposed quarantines and requirements to “shelter at home” or other incremental mitigation efforts also may impact our ability to source supplies for our operations or our ability or capacity to manufacture, sell and support the use of NexoBrid in the future.

These and other significant factors are discussed in greater detail in MediWound’s annual report on Form 20-F for the year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on February 25, 2020, Quarterly Reports on Form 6-K and other filings with the SEC from time-to-time.  These forward-looking statements reflect MediWound’s current views as of the date hereof and MediWound undertakes, and specifically disclaims, any obligation to update any of these forward-looking statements to reflect a change in their respective views or events or circumstances that occur after the date of this release except as required by law. 

Contacts:          
Boaz Gur-Lavie          
Chief Financial Officer          
MediWound Ltd.          
ir@mediwound.com          
Jeremy Feffer
Jeremy Feffer
Managing Director, LifeSci Advisors
212-915-2568
jeremy@lifesciadvisors.com



MediWound, Ltd.

CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

   
June 30,
   
December 31,
 
   
2020
   
2019
   
2019
 
   
Un-audited
   
Audited
 
Cash, cash equivalents and short term deposits
   
24,382
     
38,712
     
29,458
 
Accounts and other receivable
   
3,492
     
4,668
     
4,557
 
Inventories
   
1,934
     
1,535
     
1,613
 
Total current assets
   
29,808
     
44,915
     
35,628
 
                         
Property, plant and equipment, net
   
2,326
     
2,183
     
2,304
 
Right of use assets, net
   
2,086
     
2,315
     
2,229
 
Intangible assets, net
   
396
     
462
     
429
 
Total long-term assets
   
4,808
     
4,960
     
4,962
 
                         
Total assets
   
34,616
     
49,875
     
40,590
 
                         
Current maturities of long-term liabilities
   
1,321
     
896
     
569
 
Trade payables and accrued expenses
   
2,423
     
4,073
     
4,067
 
Other payables
   
6,040
     
5,889
     
5,737
 
Total current liabilities
   
9,784
     
10,858
     
10,373
 
                         
Deferred revenues
   
1,174
     
1,144
     
1,135
 
Liability in respect of Israeli Innovation Authority grants net of current maturity
   
7,130
     
6,919
     
6,811
 
Contingent consideration for the purchase of shares net of current maturity
   
4,249
     
4,412
     
4,853
 
Liability in respect of discontinued operation
   
-
     
6,003
     
-
 
Lease liabilities, net of current maturity
   
1,866
     
2,022
     
2,006
 
Severance pay liabilities, net
   
281
     
338
     
243
 
Total long-term liabilities
   
14,700
     
20,838
     
15,048
 
                         
Shareholders' equity
   
10,132
     
18,179
     
15,169
 
Total liabilities & shareholder equity
   
34,616
     
49,875
     
40,590
 


MediWound, Ltd.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE PROFIT (LOSS)
(ANAUDITED)
U.S. dollars in thousands

 
Six months ended
   
Three months ended
 
   
June 30,
   
June 30,
 
   
2020
   
2019
   
2020
   
2019
 
                         
Revenues
   
8,465
     
21,207
     
4,027
     
20,746
 
Cost of revenues
   
6,018
     
3,788
     
2,809
     
3,481
 
Gross profit
   
2,447
     
17,419
     
1,217
     
17,265
 
                                 
Operating expenses:
                               
Research and development, gross
   
3,312
     
6,075
     
1,593
     
1,893
 
Participation by BARDA & IIA
   
19
     
(4,624
)
   
19
     
(1,721
)
Research and development, net
   
3,331
     
1,451
     
1,612
     
172
 
Selling, general & administrative
   
4,028
     
4,708
     
2,311
     
2,343
 
Other expenses
   
-
     
901
     
-
     
812
 
Operating profit (loss)
   
(4,912
)
   
10,359
     
(2,706
)
   
13,938
 
Financial expenses, net
   
(645
)
   
(1,803
)
   
(390
)
   
(1,222
)
Profit (loss) from continuing operations
   
(5,557
)
   
8,556
     
(3,096
)
   
12,716
 
Profit from discontinued operation
   
-
     
50
     
0
     
0
 
Profit (loss) for the period
   
(5,557
)
   
8,606
     
(3,096
)
   
12,716
 
Foreign currency translation adjustments
   
1
     
2
     
0
     
(2
)
Total comprehensive profit (loss)
   
(5,556
)
   
8,608
     
(3,096
)
   
12,714
 
                                 
Net Profit (loss) per share
   
(0.20
)
   
0.32
     
(0.11
)
   
0.47
 
Weighted average number of ordinary shares used in the computation of basic and diluted profit (loss) per share:
   
27,207
     
27,179
     
27,211
     
27,179
 



MediWound, Ltd.

ADJUSTED EBITDA
U.S. dollars in thousands

   
Six months ended
   
Three months ended
 
   
June 30,
   
June 30,
 
   
2020
   
2019
   
2020
   
2019
 
Profit (loss) for the period
   
(5,557
)
   
8,606
     
(3,096
)
   
12,716
 
                                 
Adjustments:
                               
Financial expenses, net
   
(645
)
   
(1,803
)
   
(390
)
   
(1,222
)
Profit from discontinued operation
   
-
     
50
     
-
     
-
 
Other expenses
   
-
     
(901
)
   
-
     
(812
)
Depreciation and amortization
   
(539
)
   
(552
)
   
(271
)
   
(278
)
Share-based compensation expenses
   
(519
)
   
(599
)
   
(346
)
   
(324
)
Total adjustments
   
(1,703
)
   
(3,805
)
   
(1,007
)
   
(2,636
)
Adjusted EBITDA
   
(3,854
)
   
12,411
     
(2,089
)
   
15,352
 


MediWound, Ltd.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(UNAUDITED)
U.S. dollars in thousands

 
 
Six months ended
June 30,
   
Three months ended
June 30,
 
 
 
2020
   
2019
   
2020
   
2019
 
Cash Flows from Operating Activities:
                       
Net profit (loss)
   
(5,557
)
   
8,606
     
(3,096
)
   
12,716
 
 
                               
Adjustments to reconcile net profit (loss) to net cash used in continuing operating activities:
                               
Adjustments to profit and loss items:
                               
Profit from discontinued operation
   
-
     
(50
)
   
-
     
-
 
Depreciation and amortization
   
539
     
552
     
271
     
278
 
Share-based compensation
   
519
     
599
     
346
     
324
 
Revaluation of liabilities in respect of IIA grants
   
424
     
(392
)
   
226
     
(466
)
Revaluation of contingent consideration for the purchase of shares
   
348
     
1,322
     
196
     
1,081
 
Revaluation of lease liabilities
   
64
     
194
     
100
     
91
 
Increase (decrease) in severance liability, net
   
40
     
(10
)
   
19
     
13
 
Financing income
   
(191
)
   
(149
)
   
(81
)
   
(87
)
Unrealized foreign currency (gain) loss
   
28
     
(70
)
   
(51
)
   
60
 
 
   
1,771
     
1,996
     
1,026
     
1,294
 
Changes in asset and liability items:
                               
Decrease (increase) in trade receivables
   
1,341
     
(9
)
   
444
     
(318
)
Decrease (increase) in inventories
   
(326
)
   
146
     
65
     
(62
)
Decrease (increase) in other receivables
   
(284
)
   
2,744
     
(383
)
   
2,482
 
Increase (decrease) in trade payables
   
(1,649
)
   
1,357
     
(1,004
)
   
1,076
 
Increase in other payables & deferred revenues
   
86
     
529
     
133
     
77
 
 
   
(832
)
   
4,767
     
(745
)
   
3,255
 
Net cash provided by (used in) continuing operating activities
   
(4,618
)
   
15,369
     
(2,815
)
   
17,265
 
Net cash provided by discontinued operating activities
   
-
     
50
             
-
 
Net cash provided by (used in)  operating activities
   
(4,618
)
   
15,419
     
(2,815
)
   
17,265
 



MediWound, Ltd.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(UNAUDITED)-Cont.
U.S. dollars in thousands

 
 
Six months ended
June 30,
   
Three months ended
June 30,
 
 
 
2020
   
2019
   
2020
   
2019
 
 
                       
Cash Flows from Investment Activities:
                       
Purchase of property and equipment
   
(244
)
   
(433
)
   
(100
)
   
(194
)
Interest received
   
42
     
44
     
39
     
14
 
 Proceeds from short term bank  deposits, net of investments
   
10,595
     
2,977
     
7,603
     
412
 
Net cash provided by investing activities
   
10,393
     
2,588
     
7,542
     
232
 
                                 
Cash Flows from Financing Activities:
                               
Repayment of lease liabilities
   
(313
)
   
(312
)
   
(153
)
   
(157
)
Proceeds from IIA grants, net of repayments
   
(66
)
   
193
     
-
     
248
 
Net cash (used in) provided by financing activities
   
(379
)
   
(119
)
   
(153
)
   
91
 
 
                               
Exchange rate differences on cash and cash equivalent balances
   
(26
)
   
63
     
57
     
(55
)
 
                               
Increase in cash and cash equivalents from continuing activities
   
5,370
     
17,901
     
4,631
     
17,533
 
Increase in cash and cash equivalents from discontinued activities
   
-
     
50
     
-
     
-
 
Balance of cash and cash equivalents at the beginning of the period
   
7,242
     
6,716
     
7,981
     
7,134
 
Balance of cash and cash equivalents at the end of the period
   
12,612
     
24,667
     
12,612
     
24,667
 



Exhibit 99.2

MEDIWOUND LTD. AND ITS SUBSIDIARIES

INTERIM CONDENSED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020

IN U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

 
Page
   
   
F-2
   
F-3
   
F-4 – F-6
   
F-7 – F-8
   
F-9 – F-10

- - - - - - - - - - - - -


MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

   
June 30,
   
December 31,
 
   
2020
   
2019
   
2019
 
   
Unaudited
   
Audited
 
CURRENT ASSETS:
                 
Cash and cash equivalents
   
12,612
     
24,667
     
7,242
 
Restricted deposits
   
179
     
175
     
180
 
Short‑term bank deposits
   
11,591
     
13,870
     
22,036
 
Trade receivables
   
2,764
     
570
     
4,107
 
Inventories
   
1,934
     
1,535
     
1,613
 
Other receivables
   
728
     
4,098
     
450
 
                         
     
29,808
     
44,915
     
35,628
 
LONG‑TERM ASSETS:
                       
Property, plant and equipment, net
   
2,326
     
2,183
     
2,304
 
Right of-use assets, net
   
2,086
     
2,315
     
2,229
 
Intangible assets, net
   
396
     
462
     
429
 
                         
     
4,808
     
4,960
     
4,962
 
                         
     
34,616
     
49,875
     
40,590
 
CURRENT LIABILITIES:
                       
Current maturities of long-term liabilities
   
1,321
     
896
     
569
 
Trade payables and accrued expenses
   
2,423
     
3,993
     
4,067
 
Other payables
   
6,040
     
5,969
     
5,737
 
                         
     
9,784
     
10,858
     
10,373
 
LONG‑TERM LIABILITIES:
                       
Deferred  revenues
   
1,174
     
1,144
     
1,135
 
 Liability in respect of IIA grants
   
7,130
     
6,919
     
6,811
 
Contingent consideration for purchase of shares
   
4,249
     
4,412
     
4,853
 
Liability in respect of discontinued operation
   
-
     
6,003
     
-
 
Lease liabilities
   
1,866
     
2,022
     
2,006
 
Severance pay liabilities, net
   
281
     
338
     
243
 
                         
     
14,700
     
20,838
     
15,048
 
SHAREHOLDERS' EQUITY:
                       
Ordinary shares of NIS 0.01 par value:
                       
Authorized: 50,000,000 shares as of June 30, 2020, December 31, 2019 and  37,244,508 shares as of June 30, 2019; Issued and Outstanding: 27,211,128 as of June 30, 2020, 27,202,795 as of  December  31, 2019 and 27,178,839 as of June 30, 2019
   
75
     
75
     
75
 
Share premium
   
141,390
     
140,236
     
140,871
 
Foreign currency translation adjustments
   
(16
)
   
(23
)
   
(17
)
Accumulated deficit
   
(131,317
)
   
(122,109
)
   
(125,760
)
                         
     
10,132
     
18,179
     
15,169
 
                         
     
34,616
     
49,875
     
40,590
 

The accompanying notes are an integral part of the interim financial statements.

F - 2

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands (except share data and per share data)

   
Six months ended
June 30,
   
Three months ended
June 30,
   
Year ended
December 31,
 
   
2020
   
2019
   
2020
   
2019
   
2019
 
   
Unaudited
   
Audited
 
Revenues from sale of products
   
1,662
     
1,309
     
1,015
     
895
     
3,393
 
Revenues from development services
   
6,631
     
2,301
     
2,922
     
2,301
     
10,678
 
Revenues from license agreements
   
172
     
17,597
     
90
     
17,550
     
17,718
 
Total revenues
   
8,465
     
21,207
     
4,027
     
20,746
     
31,789
 
                                         
Cost of revenues
   
6,018
     
3,520
     
2,810
     
3,481
     
11,849
 
                                         
Gross profit
   
2,447
     
17,687
     
1,217
     
17,265
     
19,940
 
                                         
Research and development, gross
   
3,312
     
6,343
     
1,593
     
1,893
     
10,070
 
Participations by BARDA and IIA
   
19
     
(4,624
)
   
19
     
(1,721
)
   
(5,101
)
Research and development, net of participations
   
3,331
     
1,719
     
1,612
     
172
     
4,969
 
Selling and marketing
   
1,683
     
2,134
     
859
     
1,101
     
4,064
 
General and administrative
   
2,345
     
2,574
     
1,452
     
1,242
     
5,242
 
Other expenses
   
-
     
901
     
-
     
812
     
1,172
 
Total operating expenses
   
7,359
     
7,328
     
3,923
     
3,327
     
15,447
 
                                         
Operating profit (loss)
   
(4,912
)
   
10,359
     
(2,706
)
   
13,938
     
4,493
 
                                         
Financial income
   
323
     
153
     
101
     
92
     
556
 
Financial expense
   
(968
)
   
(1,956
)
   
(491
)
   
(1,314
)
   
(2,983
)
                                         
Profit (loss) from continuing operation
   
(5,557
)
   
8,556
     
(3,096
)
   
12,716
     
2,066
 
Profit from discontinued operation
   
-
     
50
     
-
     
-
     
2,889
 
Net Profit (loss)
   
(5,557
)
   
8,606
     
(3,096
)
   
12,716
     
4,955
 
Other comprehensive income (loss):
                                       
                                         
Foreign currency translation adjustments
   
1
     
2
     
(7
)
   
(2
)
   
8
 
                                         
Total comprehensive income (loss)
   
(5,556
)
   
8,608
     
(3,103
)
   
12,714
     
4,963
 
                                         
Basic and diluted net profit (loss) per share from continuing operations
   
(0.20
)
   
0.32
     
(0.11
)
   
0.47
     
0.08
 
Basic and diluted net profit (loss) per share from discontinued operations
   
-
     
(*
)
   
-
     
-
     
0.10
 
Total Basic and diluted net profit (loss) per share
   
(0.20
)
   
0.32
     
(0.11
)
   
0.47
     
0.18
 

(*)          Represents less than $ 1.

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 3

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands

   
Share capital
   
Share premium
   
Foreign currency translation reserve
   
Accumulated
deficit
   
Total
Equity
 
                               
Balance as of December 31, 2019
   
75
     
140,871
     
(17
)
   
(125,760
)
   
15,169
 
                                         
Loss for the period
   
-
     
-
     
-
     
(5,557
)
   
(5,557
)
Other comprehensive income
   
-
     
-
     
1
     
-
     
1
 
Total comprehensive loss
   
-
     
-
     
1
     
(5,557
)
   
(5,556
)
                                         
Share-based compensation
   
-
     
519
     
-
     
-
     
519
 
                                         
Balance as of  June 30, 2020 (unaudited)
   
75
     
141,390
     
(16
)
   
(131,317
)
   
10,132
 

   
Share capital
   
Share premium
   
Foreign currency translation reserve
   
Accumulated
deficit
   
Total
Equity
 
                               
Balance as of December 31, 2018
   
75
     
139,637
     
(25
)
   
(130,715
)
   
8,972
 
                                         
Profit for the period
   
-
     
-
     
-
     
8,606
     
8,606
 
Other comprehensive income
   
-
     
-
     
2
     
-
     
2
 
Total comprehensive income
   
-
     
-
     
2
     
8,606
     
8,608
 
                                         
Share-based compensation
   
-
     
599
     
-
     
-
     
599
 
                                         
Balance as of  June 30, 2019 (unaudited)
   
75
     
140,236
     
(23
)
   
(122,109
)
   
18,179
 

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 4

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands

   
Share capital
   
Share premium
   
Foreign currency translation reserve
   
Accumulated
deficit
   
Total
Equity
 
                               
Balance as of April 1, 2020
   
75
     
141,044
     
(9
)
   
(128,221
)
   
12,889
 
                                         
Loss for the period
   
-
     
-
     
-
     
(3,096
)
   
(3,096
)
Other comprehensive loss
   
-
     
-
     
(7
)
   
-
     
(7
)
Total comprehensive loss
   
-
     
-
     
(7
)
   
(3,096
)
   
(3,103
)
                                         
Share-based compensation
   
-
     
346
     
-
     
-
     
346
 
                                         
Balance as of  June 30, 2020 (unaudited)
   
75
     
141,390
     
(16
)
   
(131,317
)
   
10,132
 

   
Share capital
   
Share premium
   
Foreign currency translation reserve
   
Accumulated
deficit
   
Total
Equity
 
                               
Balance as of April 1, 2019
   
75
     
139,912
     
(21
)
   
(134,825
)
   
5,141
 
                                         
Profit for the period
   
-
     
-
     
-
     
12,716
     
12,716
 
Other comprehensive loss
   
-
     
-
     
(2
)
   
-
     
(2
)
Total comprehensive income
   
-
     
-
     
(2
)
   
12,716
     
12,714
 
                                         
Share-based compensation
   
-
     
324
     
-
     
-
     
324
 
                                         
Balance as of  June 30, 2019 (unaudited)
   
75
     
140,236
     
(23
)
   
(122,109
)
   
18,179
 

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 5

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands

   
Share capital
   
Share premium
   
Foreign currency translation reserve
   
Accumulated
deficit
   
Total
Equity
 
                               
Balance as of December 31, 2018
   
75
     
139,637
     
(25
)
   
(130,715
)
   
8,972
 
                                         
Profit for the period
   
-
     
-
     
-
     
4,955
     
4,955
 
Other comprehensive income
   
-
     
-
     
8
     
-
     
8
 
Total comprehensive income
   
-
     
-
     
8
     
4,955
     
4,963
 
Exercise of options
   
(*
)
   
-
     
-
     
-
     
(*
)
Share-based compensation
   
-
     
1,234
     
-
     
-
     
1,234
 
                                         
Balance as of December 31, 2019
   
75
     
140,871
     
(17
)
   
(125,760
)
   
15,169
 

(*)          Represents less than $ 1.

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 6

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Six months ended
June 30,
   
Three months ended
June 30,
   
Year ended December 31,
 
   
2020
   
2019
   
2020
   
2019
   
2019
 
   
Unaudited
   
Audited
 
Cash flows from operating activities:
                             
Net Profit (loss)
   
(5,557
)
   
8,606
     
(3,096
)
   
12,716
     
4,955
 
                                         
Adjustments to reconcile net profit (loss) to net cash provided by (used in) continuing operating activities:
                                       
                                         
Adjustments to profit and loss items:
                                       
Profit from discontinued operation
   
-
     
(50
)
   
-
     
-
     
(2,889
)
Depreciation and amortization
   
539
     
552
     
271
     
278
     
1,149
 
Share-based compensation
   
519
     
599
     
346
     
324
     
1,234
 
Revaluation of liability in respect of IIA grants
   
424
     
(392
)
   
226
     
(466
)
   
(392
)
Revaluation of contingent consideration for the purchase of shares
   
348
     
1,322
     
196
     
1,081
     
1,690
 
Revaluation of lease liabilities
   
64
     
194
     
100
     
91
     
340
 
Increase (decrease) in severance pay liabilities, net
   
40
     
(10
)
   
19
     
13
     
(105
)
Net financing income
   
(191
)
   
(149
)
   
(81
)
   
(87
)
   
(434
)
Un-realized foreign currency (gain) loss
   
28
     
(70
)
   
(51
)
   
60
     
(152
)
                                         
     
1,771
     
1,996
     
1,026
     
1,294
     
441
 
Changes in asset and liability items:
                                       
Decrease (increase) in trade receivables
   
1,341
     
(9
)
   
444
     
(318
)
   
(3,553
)
Decrease (increase) in inventories
   
(326
)
   
146
     
65
     
(62
)
   
67
 
Decrease (increase) in other receivables
   
(284
)
   
2,744
     
(383
)
   
2,482
     
6,376
 
Increase (decrease) in trade payables and accrued expenses
   
(1,649
)
   
1,277
     
(1,004
)
   
1,058
     
1,355
 
Increase in other payables and deferred revenues
   
86
     
609
     
133
     
95
     
247
 
                                         
     
(832
)
   
4,767
     
(745
)
   
3,255
     
4,492
 
                                         
Net cash provided by (used in) continuing operating activities
   
(4,618
)
   
15,369
     
(2,815
)
   
17,265
     
9,888
 
Net cash provided by (used in) discontinued operating activities
   
-
     
50
     
-
     
-
     
(1,599
)
Net cash provided by (used in) operating activities
   
(4,618
)
   
15,419
     
(2,815
)
   
17,265
     
8,289
 

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 7

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Six months ended
June 30,
   
Three months ended
June 30,
   
Year ended December 31,
 
     2020    
2019
     2020    
2019
   
2019
 
   
Unaudited
   
Audited
 
                               
Cash Flows from Investing Activities:
                             
                               
Purchase of property and equipment
   
(244
)
   
(433
)
   
(100
)
   
(194
)
   
(792
)
Interest received
   
42
     
44
     
39
     
14
     
184
 
Proceeds from (investment in) short term bank deposits, net
   
10,595
     
2,977
     
7,603
     
412
     
(5,050
)
                                         
Net cash provided by (used in) continuing investing activities
   
10,393
     
2,588
     
7,542
     
232
     
(5,658
)
                                         
Net cash used in discontinued investing activities
   
-
     
-
     
-
     
-
     
(1,239
)
                                         
Net cash provided by (used in) investing activities
   
10,393
     
2,588
     
7,542
     
232
     
(6,897
)
                                         
Cash Flows from Financing Activities:
                                       
                                         
Repayment of leases liabilities
   
(313
)
   
(312
)
   
(153
)
   
(157
)
   
(630
)
Proceeds from exercise of options
   
-
     
-
     
-
     
-
     
(*
)
Proceeds of IIA grant, net of repayments
   
(66
)
   
193
     
-
     
248
     
(376
)
                                         
Net cash (used in) provided by financing activities
   
(379
)
   
(119
)
   
(153
)
   
91
     
(1,006
)
                                         
Exchange rate differences on cash and cash equivalent balances
   
(26
)
   
63
     
57
     
(55
)
   
140
 
                                         
Cash and cash equivalents:
                                       
                                         
Increase in cash and cash equivalents from continuing activities
   
5,370
     
17,901
     
4,631
     
17,533
     
3,364
 
Increase (decrease) in cash and cash equivalents from discontinued activities
   
-
     
50
     
-
     
-
     
(2,838
)
                                         
Balance of cash and cash equivalents at the beginning of the period
   
7,242
     
6,716
     
7,981
     
7,134
     
6,716
 
                                         
Balance of cash and cash equivalents at the end of the period
   
12,612
     
24,667
     
12,612
     
24,667
     
7,242
 

(*)          Represents less than $ 1.

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 8

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 1:
GENERAL


a.
General description of the Company and its operations:

MediWound Ltd. (the "Company" or "MediWound"), is a fully-integrated biopharmaceutical company bringing innovative therapies to address unmet medical needs in severe burn and wound management, The Company's first innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency ("EMA") as well as the Israeli, Argentinean, South-Korean, Russian and Peruvian Ministries of Health, for removal of dead or damaged tissue, known as eschar, in adults with deep partial and full thickness thermal burns. The Company sells NexoBrid in Europe and in Israel through its commercial organizations and in other territories through local distributers. In 2019, the Company entered into exclusive license and supply agreements with Vericel Corporation (“Vericel”) to commercialize NexoBrid in North America.

The Company second investigational innovative product, EscharEx, is a topical biological drug being developed for debridement of chronic and other hard-to-heal wounds.


b.
The Company's securities are listed for trading on NASDAQ since March 2014.


c.
The Company has two wholly owned subsidiaries: MediWound Germany GmbH, acting as Europe (“EU”) marketing authorization holder and EU sales and marketing arm and MediWound UK Limited, an inactive company. In addition, the Company owns approximately 10% of PolyHeal Ltd., a private life sciences company ("PolyHeal").


d.
The Company awarded two contracts with the U.S. Biomedical Advanced Research and Development Authority ("BARDA"), for the advancement of the development and manufacturing, as well as the procurement of NexoBrid, as a medical countermeasure as part of BARDA preparedness for mass casualty events.

On March 3, 2020 BARDA has expanded its awarded contract with MediWound providing supplemental funding of $5.5 million to support emergency readiness for NexoBrid deployment.

NOTE 2:
SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been applied consistently in the financial statements for all periods presented unless otherwise stated.


a.
Basis of presentation of financial statements:

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

F - 9

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 2:
SIGNIFICANT ACCOUNTING POLICIES-Cont.


b.
Basis of preparation of the interim consolidated financial statements:

The interim condensed consolidated financial statements for the three months ended June 30, 2020 have been prepared in accordance with IAS 34 "Interim Financial Reporting".

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as of December 31, 2019 that were included in the Annual Report on Form 20-F filed on February 25, 2020.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2019 that were included in the Annual Report on Form 20-F filed on February 25, 2020, except than the change discussed below.

c.
Reclassification:

Certain amounts previously reported in the consolidated financial statements have been reclassified to conform to current year presentation. Such reclassifications did not affect net loss, shareholders’ equity or cash flows.

NOTE 3:          EQUITY

On April 23, 2020, the Company's Board of Directors approved the grant of 1,274,379 options to purchase ordinary shares, for an exercise price of $ 1.75 per share, to its employees, officers and members of the board. The fair value of the options, as of the grant date, was estimated at $1.8 million.

On June 29, 2020, the general meeting of the Company approved the abovementioned grants related the CEO and members of the board which were estimated at approximately $1.4 million.

******

F - 10