MediWound Reports First Quarter 2014 Financial Results
YAVNE, Israel, May 2, 2014 (GLOBE NEWSWIRE) -- MediWound Ltd. (Nasdaq:MDWD), a fully integrated biopharmaceutical company bringing innovative therapies to address unmet needs in severe burn and wound management, reports today its financial results for the three months ended March 31, 2014.
Highlights of the first quarter of 2014 and recent weeks include:
- Raised approximately $80 million in a U.S. initial public offering (IPO) of 5.75 million ordinary shares at $14.00 per share, which included the full exercise of the underwriters' option to purchase additional shares.
- Generated initial revenues from sales of NexoBrid following its launch in Germany to burn specialists who treat patients in burn centers and hospital burn units.
- Executed a distribution agreement in Latin America for the marketing and distribution of NexoBrid in Argentina, pending market authorization, as disclosed in the prospectus.
"The first quarter of 2014 was a transformative time for MediWound during which we positioned our Company to continue the marketing of NexoBrid in Europe and the regulatory approval process in the United States," stated Gal Cohen, President and Chief Executive Officer of MediWound. "We are very excited to have completed our U.S. IPO and listing on the NASDAQ Global Market, as it provides us with growth capital to expand our marketing infrastructure in Europe, execute our planned clinical studies including the Phase III trial for NexoBrid in the United States and our pediatric trial in the European Union and to scale-up the Company's manufacturing capabilities.
"We launched NexoBrid in Germany in December 2013, and our efforts there have commenced well. Our strategy is to initiate direct sales to burn centers by utilizing tools that illustrate both the clinical and the economic benefits of NexoBrid for the treatment of severe burn wounds. The reception from physicians has been positive and highly encouraging. We look forward to expanding the use of NexoBrid into other European countries in the coming quarters and plan to expand the access of NexoBrid to other international markets through agreements with local distributors. In parallel, we will work to obtain reimbursement coverage. Central to that effort is data demonstrating that NexoBrid has the ability to promptly and effectively remove the eschar from a wound, thereby allowing clinicians to visually assess burn severity, which results in significantly reduced surgical burden on patients and overall favorable long-term outcomes, while reducing the burden on health systems.
"We expect to achieve a number of value-creating milestones throughout the balance of the year," concluded Mr. Cohen.
First Quarter Financial Results
The Company generated initial insignificant revenues from sales of NexoBrid in the first quarter of 2014, after launching NexoBrid in December 2013 in Germany, which included preliminary onsite training and hands-on demonstrations in burn centers throughout Germany.
Operating expenses for the first quarter of 2014 were $4.3 million compared with $1.4 million in the first quarter of 2013. The increase was primarily due to $1.1 million of commercial activities associated with building the European marketing infrastructure and $1.2 million increase in non-cash share based compensation expenses.
For the first quarter of 2014, the Company posted a net loss of $0.7 million, or $0.05 per share.
Adjusted EBITDA, as defined below, for the first quarter of 2014 was $3.1 million compared with $1.3 million for the same quarter last year.
Balance Sheet Highlights
As of March 31, 2014, the Company had $80.6 million in cash and cash equivalents and working capital of $78.5 million. The Company used $3.2 million during the quarter to fund operating activities.
On March 25, 2014, the Company closed its U.S. IPO and listed 5,750,000 of its ordinary shares on the NASDAQ Global Market. The public offering price was $14.00 per share. After deducting the underwriting discount and the offering expenses, the net proceeds from the offering amounted to $72 million.
During 2014, the Company plans to continue to build our marketing infrastructure in Europe, fund further clinical development of NexoBrid, support efforts to obtain regulatory approvals worldwide and initiate our plans to scale up manufacturing capabilities.
Non-IFRS Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with IFRS, the Company has provided a supplementary non-IFRS measure to consider in evaluating the Company's performance. Management uses Adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, impairment, restructuring and further eliminates the effect of share based compensation expenses.
Although Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with IFRS, we believe that the non-IFRS financial measures we present provide meaningful supplemental information regarding our operating results primarily because they exclude certain non-cash charges or items that we do not believe are reflective of our ongoing operating results when budgeting, planning and forecasting, determining compensation, and when assessing the performance of our business with our 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. 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.
- Financial Tables to Follow -
| CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS | ||
| U.S. dollars in thousands | ||
| March 31, | December 31, | |
| 2014 | 2013 | |
| CURRENT ASSETS: | ||
| Cash, cash equivalents and short term deposits | 80,570 | 9,553 |
| Accounts receivable | 2,455 | 2,512 |
| Inventories | 809 | -- |
| 83,834 | 12,065 | |
| LONG‑TERM ASSETS: | ||
| Long term deposits and deferred costs | 140 | 204 |
| Property, plant and equipment, net | 1,110 | 1,136 |
| Intangible assets, net | 987 | 1,004 |
| Other assets | 417 | 417 |
| 86,488 | 14,826 | |
| CURRENT LIABILITIES: | ||
| Current maturities of Financials Liabilities | 314 | -- |
| Accounts payables and accruals | 5,032 | 2,023 |
| 5,346 | 2,023 | |
| LONG‑TERM LIABILITIES: | ||
| Liabilities in respect of Chief Scientist government grants, net of current maturities | 6,714 | 6,604 |
| Contingent consideration for the purchase of treasury shares, net of current maturities | 17,115 | 16,800 |
| Warrants to shareholders | -- | 9,200 |
| Severance pay liability, net | 3 | 3 |
| 23,832 | 32,607 | |
| SHAREHOLDERS' EQUITY (DEFICIT) | 57,310 | (19,804) |
| 86,488 | 14,826 | |
| CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME | ||
| U.S. dollars in thousands (except share and per share data) | ||
| Three months ended | ||
| March 31, | ||
| 2014 | 2013 | |
| Revenues | 50 | -- |
| Cost of revenues | 170 | -- |
| Gross loss | (120) | -- |
| Operating expenses: | ||
| Research and development, net of participations | 1,465 | 757 |
| Selling and marketing | 1,615 | 240 |
| General and administrative | 1,267 | 411 |
| Total operating expenses | (4,347) | (1,408) |
| Operating loss | (4,467) | (1,408) |
| Financial income | 4,523 | -- |
| Financial expense | (791) | (885) |
| Loss from continuing operations | (735) | (2,293) |
| Loss from discontinued operation | (14) | (845) |
| Loss for the period | (749) | (3,138) |
| Foreign currency translation adjustments | (10) | -- |
| Total other comprehensive loss | (10) | -- |
| Total comprehensive loss | (759) | (3,138) |
| Basic and diluted loss per share: | ||
| Loss from continuing operations | (0.05) | (0.15) |
| Loss from discontinued operation | (*) | (0.05) |
| Net loss per share | (0.05) | (0.20) |
| Weighted average number of ordinary shares used in the computation of basic and diluted loss per share: | 15,749 | 15,707 |
| (*) Represents less than $ 0.01 | ||
| CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS | ||
| U.S. dollars in thousands | ||
| Three months ended | ||
| March 31, | ||
| Cash Flows from Operating Activities: | 2014 | 2013 |
| Net loss | (749) | (3,138) |
| Adjustments to reconcile net loss to net cash used in continuing operating activities: | ||
| Adjustments to profit and loss items: | ||
| Loss from discontinued operation | 14 | 845 |
| Depreciation and amortization | 117 | 65 |
| Revaluation of warrants to shareholders | (4,491) | -- |
| Share-based compensation | 1,261 | 59 |
| Revaluation of liabilities in respect of Chief Scientist government grants | 141 | 222 |
| Revaluation of contingent consideration for the purchase of treasury shares | 586 | 500 |
| Accrued interest in respect of financial loans | -- | 168 |
| Other Financing expenses, net | (14) | (6) |
| (2,386) | 1,853 | |
| Changes in asset and liability items: | ||
| Increase in trade receivables | (16) | -- |
| Decrease in other receivables | 8 | 44 |
| Increase in inventories | (809) | (17) |
| Decrease in trade payables | (359) | (198) |
| Increase in other payables | 1,092 | 219 |
| (84) | 48 | |
| Net cash used in continuing operating activities | (3,219) | (1,237) |
| Net cash used in discontinued operating activities | (14) | (424) |
| Net cash flows used in operating activities | (3,233) | (1,661) |
| Cash Flows from Investing Activities: | ||
| Purchase of property and equipment | (74) | (25) |
| Interest received | 3 | -- |
| Proceeds from (investment in) short term bank deposits, net of investments | 2,500 | -- |
| Net cash provided by (used in) investing activities | 2,429 | (25) |
| Cash Flows from Financing Activities: | ||
| Proceeds from exercise of options | 208 | 279 |
| Proceeds from issuance of shares and warrants, net | 74,082 | -- |
| Proceeds from shareholders' loans | -- | 1,445 |
| Proceeds from the Chief Scientist government grants | 12 | -- |
| Net cash provided by financing activities | 74,302 | 1,724 |
| Exchange rate differences on cash and cash equivalent balances | 19 | 6 |
| Increase in cash and cash equivalents from continuing activities | 73,531 | 468 |
| Decrease in cash and cash equivalents from discontinued activities | (14) | (424) |
| Balance of cash and cash equivalents at the beginning of the period | 7,053 | 337 |
| Balance of cash and cash equivalents at the end of the period | 80,570 | 381 |
| Significant non-cash activities: | ||
| Exercise of cashless warrants into shares | 4,709 | -- |
| Unpaid issuance expenses | 2,258 | |
| ADJUSTED EBITDA | ||
| U.S. dollars in thousands | ||
| Three months ended | ||
| March 31, | ||
| 2014 | 2013 | |
| Loss for the period | (749) | (3,138) |
| Adjustments: | ||
| Financial (expenses) income, net | 3,732 | (885) |
| Other expenses * | (14) | (845) |
| Depreciation and amortization | (117) | (65) |
| Share-based compensation expenses ** | (1,261) | (59) |
| Total adjustments | 2,340 | (1,854) |
| Adjusted EBITDA from continuing operation | (3,089) | (1,284) |
| * Loss from discontinued operation | ||
| ** Share-based compensation expenses: | ||
| Cost of revenues | 132 | |
| Research and development | 346 | 20 |
| Selling and marketing | 302 | |
| General and administrative | 481 | 39 |
| Share-based compensation expenses | 1,261 | 59 |
CONTACT: Sharon Malka
Chief Financial & Operation Officer
MediWound Ltd.
ir@mediwound.co.il
Anne Marie Fields
Senior Vice President
LHA
212-838-3777
afields@lhai.com