SEC Filing | MediWound

Website Notice Block

View:

Download DOC

Download PDF

Download XLS

zk1517477.htm

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 October 2015

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 x Form 40-F o

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 October 27, 2015, MediWound Ltd. (the “Company”) issued a press release entitled “MediWound Reports Third Quarter 2015 Financial Results”. 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 Interim Financial Statements as of September 30, 2015, attached as Exhibit 99.2, which was provided by the Company to CBI on October 27, 2015 pursuant to such contractual obligation.

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.

	MEDIWOUND LTD.
Date: October 27, 2015	By:	/s/ Sharon Malka
		Name: Sharon Malka
		Title: Chief Financial Officer

EXHIBIT INDEX

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

Exhibit	Description

99.1	Press release dated October 27, 2015 titled “MediWound Reports Third Quarter 2015 Financial Results”.

99.2	Un-Audited Interim Financial Statements as of September 30, 2015.

exhibit_99-1.htm

Exhibit 99.1

News Release

MediWound Reports Third Quarter 2015 Financial Results

Conference call begins tomorrow at 8:30 a.m. Eastern time

YAVNE, Israel (October 27, 2015) – MediWound Ltd. (Nasdaq: MDWD), a fully integrated biopharmaceutical company bringing innovative therapies to address unmet needs in severe burn and wound management, today reported financial results for the three and nine months ended September 30, 2015.

Highlights of the third quarter of 2015 and recent weeks include:

Awarded contract from the U.S. Biomedical Advanced Research and Development Authority (BARDA) valued at up to $112 million for the development and procurement of NexoBrid for the U.S.

Completed enrollment in second Phase 2 clinical trial with EscharEx® to treat chronic and other hard-to-heal wounds

Received approval from Argentina’s Ministry of Health for NexoBrid® to treat severe burns

NexoBrid highlighted in more than two dozen clinical presentations at the 16th European Burns Association Congress

Management Commentary

“Throughout the third quarter we advanced our global commercial and clinical programs while significantly elevating the profile of both our lead product and our company. Our contract with BARDA provides up to $24 million of non-dilutive funding for our ongoing U.S. development program for NexoBrid, along with an initial commitment to procure $16 million of product for stockpiling and provides BARDA with options for additional funding of up to $72 million. Importantly, this contract also highlights an additional opportunity to aid countries in their efforts for preparedness in advance of mass casualties, whether military or civilian,” stated Gal Cohen, President and Chief Executive Officer of MediWound.

"We have completed enrollment in our second Phase 2 clinical study with EscharEx for the debridement of chronic wounds and are on track to report top-line results around the end of the year. We believe that since EscharEx is based on the same technology as NexoBrid, the wealth of development data supporting NexoBrid, which is an approved drug, as well as the clinical data from our first Phase 2 feasibility study in treating chronic and hard-to-heal wounds, de-risks EscharEx development. The enthusiasm for the potential of EscharEx to treat chronic and hard-to-heal wounds is supported by the results of the market study that surveyed more than 200 health care professionals as well as the feedback of a U.S. advisory board, both indicating that EscharEx represents a significant commercial opportunity within the multibillion-dollar chronic wound care market, where more than a million patients with diabetic foot ulcers and venous leg ulcers in the U.S. alone undergo debridement every year.

“Following the recent marketing authorization of NexoBrid in Argentina, we look forward to a commercial launch in 2016 by our exclusive distribution partner, Tuteur S.A. This approval supports our global commercial strategy to leverage our marketing authorization from the European Medicines Agency to expand NexoBrid into emerging markets mainly in Latin America, Asia Pacific and the CIS. We look forward to additional approvals in these regions while seeking to expand our distribution channels to other markets through ongoing business development efforts.

“The magnitude of positive NexoBrid data presented in dozens of clinical presentations by burn experts from numerous countries at the recent European Burns Association Congress underscores the growing interest in and adoption of NexoBrid for the treatment of severe burns throughout Europe. The breadth of clinical data presented clearly supports the transformation of NexoBrid from a novel therapy to standard-of-care treatment for severe burns. We look forward to amplifying the awareness and interest in NexoBrid among U.S. burn experts as we advance our U.S. Phase 3 clinical trial of NexoBrid, with plans to report top-line results on the acute primary and secondary endpoints in the first half of 2017," concluded Mr. Cohen.

Third Quarter Financial Results

Revenues for the third quarter of 2015 were $102,000 compared with $46,000 for the same quarter last year.

Operating expenses for the third quarter of 2015 were in line with the Company’s budget at $3.6 million, compared with $4.5 million for the third quarter of 2014. The decrease was primarily due to $0.6 million decrease in non-cash share-based compensation expense.

For the third quarter of 2015, the Company posted a net loss of $3.8 million, or $0.17 per share, compared with a loss of $5.0 million, or $0.24 per share, for the third quarter of 2014. The decrease was primarily due to net financial income, which was largely comprised of non-cash revaluation of contingent liabilities.

Adjusted EBITDA, as defined below, for the third quarter of 2015 was a loss of $3.6 million, compared with a loss of $3.7 million for the same quarter last year.

Nine Months Financial Results

Revenues for the first nine months of 2015 were $334,000 compared with $135,000 for the same period last year.

Operating expenses for the first nine months of 2015 were $12.9 million, in line with the Company’s budget, compared with $13.3 million for the same period of 2014. The decrease was primarily due to a $1.7 million decrease in non-cash share-based compensation expense offset by an increase of $1.3 million in commercial activities associated with the continued build-out of the European marketing infrastructure.

For the nine months ended September 30, 2015, the Company posted a net loss of $14.3 million, or $0.66 per share, compared with a loss of $11.7 million, or $0.61 per share, for nine months ended September 30, 2014. The increase was primarily due to one-time net financial income recognized in 2014, which was largely comprised of non-cash revaluation of warrants.

Adjusted EBITDA for the nine months ended September 30, 2015 was a loss of $12.1 million, compared with a loss of $10.3 million for the same period last year.

Balance Sheet Highlights

As of September 30, 2015 the Company had cash and short-term deposits of $49.9 million and working capital of $50.2 million. The Company utilized $14.7 million in cash during the period ended September 30, 2015 to fund operating activities, in line with the Company’s budget and guidance.

MediWound now expects 2015 full-year cash use for ongoing operating activities will be approximately $20 million, reflecting anticipated investment in its sales and marketing activities to advance the commercialization of NexoBrid across Europe and in research and development, net of participation by BARDA.

Conference Call

MediWound management will host a conference call for investors on October 28, 2015 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) 280-2296 (domestic) or (809) 212-923 (Israel) and entering passcode 9428013. The call also will be broadcast live on the Internet at www.mediwound.com.

A replay of the call will be accessible two hours after its completion until midnight November 4, 2015 Eastern time by dialing (866) 932-5017 or (800) 358-7735 (UK) and entering passcode 9428013. The call will also be archived for 90 days 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 the Company’s performance. Management uses Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization, impairment, one-time expenses, restructuring and stock-based compensation expense.

Although Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with IFRS, we believe 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 and 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 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 and Israel. 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. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. 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. In particular, you should consider the risks discussed under the heading “Risk Factors” in our annual report on Form 20-F for the year ended December 31, 2014 and information contained in other documents filed with or furnished to the Securities and Exchange Commission. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. 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.

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

-Financial Tables to Follow-

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

U.S. dollars in thousands

	September 30,				December 31,
	2015		2014		2014
	Unaudited				Audited
CURRENT ASSETS:
Cash, cash equivalents and short term deposits		49,948		69,007		64,853
Accounts and other receivable		2,009		2,356		2,223
Inventories		1,639		1,512		1,421
		53,596		72,875		68,497
LONG-TERM ASSETS:
Long term deposits and deferred costs		234		151		168
Property, plant and equipment, net		1,096		1,209		1,088
Intangible assets, net		887		945		951
Other assets		-		417		417
		55,813		75,597		71,121
CURRENT LIABILITIES:
Trade payables		1,253		797		1,214
Accrued expenses and other payables		2,121		2,002		2,683
		3,374		2,799		3,897
LONG-TERM LIABILITIES:
Liabilities in respect of Chief Scientist government grants net of current maturities		6,161		6,825		6,985
Contingent consideration for the purchase of treasury shares net of current maturities		15,721		17,279		17,361
Severance pay liability, net		7		3		7
		21,889		24,107		24,353

SHAREHOLDERS' EQUITY		30,550		48,691		42,871
		55,813		75,597		71,121

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME

U.S. dollars in thousands (except share and per share data)

	Nine months ended						Three months ended
	September 30,						September 30,
	2015			2014			2015			2014

Revenues		334			135			102			46
Cost of revenues		1,830			1,643			824			750
Gross loss		(1,496	)		(1,508	)		(722	)		(704	)
Operating expenses:
Research and development, net		3,727			3,853			836			1,027
Selling, general & administrative		9,174			9,480			2,805			3,492
Total operating expenses		12,901			13,333			3,641			4,519
Operating loss		(14,397	)		(14,841	)		(4,363	)		(5,223	)
Financial income, net		506			3,060			597			206
Loss from continuing operations		(13,891	)		(11,781	)		(3,766	)		(5,017	)
Loss from discontinued operation		(417	)		-			-			-
Loss for the period		(14,308	)		(11,781	)		(3,766	)		(5,017	)

Foreign currency translation adjustments		1			41			-			34
Total comprehensive loss		(14,307	)		(11,740	)		(3,766	)		(4,983	)

Basic and diluted loss per share:
Loss from continuing operations		(0.64	)		(0.61	)		(0.17	)		(0.24	)
Loss from discontinued operation		(0.02	)		-			-			-
Net loss per share		(0.66	)		(0.61	)		(0.17	)		(0.24	)

Weighted average number of ordinary shares used in the computation of basic and diluted loss per share:		21,674			19,448			21,801			21,298

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Nine months ended						Three months ended
	September 30,						September 30,
	2015			2014			2015			2014
Cash Flows from Operating Activities:
Net loss		(14,308	)		(11,781	)		(3,766	)		(5,017	)

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		350			404			120			150
Revaluation of warrants to shareholders		-			(4,491	)		-			-
Share-based compensation		1,960			3,623			657			1,246
Revaluation of liabilities in respect of Chief Scientist government grants		(944	)		32			(894	)		(294	)
Revaluation of contingent consideration for the purchase of treasury shares		(1,361	)		557			(870	)		(677	)
Net financing expenses (income)		(10	)		278			(63	)		296
		412			403			(1,050	)		721
Changes in asset and liability items:
Decrease (increase) in trade receivables		(47	)		(21	)		16			(7	)
Decrease in other receivables		110			83			121			209
Decrease (increase) in inventories		(357	)		(1,582	)		139			(270	)
Decrease in trade payables		48			(279	)		(980	)		(368	)
Increase in other payables		(572	)		1,065			256			383
		(818	)		(734	)		(448	)		(53	)

Net cash used in continuing operating activities		(14,714	)		(12,112	)		(5,264	)		(4,349	)

Cash Flows from Investment Activities:
Purchase of property and equipment	(298	)	(427	)	(129	)	(143	)
Interest received	84		45		58		16
Proceeds from (investment in) short term bank deposits, net of investments	14,176		(47,574	)	16,072		2,688
Net cash provided by (used in) investing activities	13,962		(47,956	)	16,001		2,561
Cash Flows from Financing Activities:
Proceeds from exercise of options	26		208		6		-
Proceeds from issuance of shares and warrants, net	-		71,824		-		-
Proceeds from the Chief Scientist government grants, net of repayments	109		279		34		252
Net cash provided by financing activities	135		72,311		40		252
Exchange rate differences on cash and cash equivalent balances	(255	)	(363	)	(4	)	(347	)
Increase in cash and cash equivalents from continuing activities	(617	)	12,243		10,777		(1,536	)
Balance of cash and cash equivalents at the beginning of the period	25,422		7,053		13,777		80,570
Balance of cash and cash equivalents at the end of the period	24,550		18,933		24,550		78,687

ADJUSTED EBITDA

U.S. dollars in thousands

	Nine months ended						Three months ended
	September 30,						September 30,
	2015			2014			2015			2014
Loss for the period		(14,308	)		(11,781	)		(3,766	)		(5,017	)
Adjustments:
Financial (expenses) income, net		506			3,060			597			206
Loss from discontinued operation		(417	)		-			-			-
Depreciation and amortization		(350	)		(404	)		(120	)		(150	)
Share-based compensation expenses		(1,960	)		(3,623	)		(657	)		(1,246	)
One-time IPO related expenses		-			(511	)		-			(111	)
Total adjustments		(2,221	)		(1,478	)		(180	)		(1,301	)
Adjusted EBITDA from continuing operation		(12,087	)		(10,303	)		(3,586	)		(3,716	)

Share-based compensation and options expenses:
Cost of revenues		271			575			68			196
Research and development		375			494			128			171
Selling and marketing		480			1,079			181			371
General and administrative		834			1,475			280			508
Total share-based compensation expenses		1,960			3,623			657			1,246

exhibit_99-2.htm

Exhibit 99.2

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2015

U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

	Page


Condensed Interim Consolidated Balance Sheets	2

Condensed Interim Consolidated Statements of Comprehensive Income	3

Condensed Interim Consolidated Statements of Changes in Equity	4 - 6

Condensed Interim Consolidated Statements of Cash Flows	7 - 8

Notes to Condensed Interim Consolidated Financial Statements	9 - 11

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollar in thousands

	2015			2014			2014
	Unaudited						Audited
CURRENT ASSETS:
Cash and cash equivalents		24,550			18,933			25,422
Short-term bank deposits		25,398			50,074			39,431
Trade receivables		108			20			64
Inventories		1,639			1,512			1,421
Other receivables		1,901			2,336			2,159

		53,596			72,875			68,497
LONG-TERM ASSETS:
Long term deposits and deferred costs		234			151			168
Property, plant and equipment, net		1,096			1,209			1,088
Intangible assets, net		887			945			951
Other assets		-			417			417

		2,217			2,722			2,624

		55,813			75,597			71,121
CURRENT LIABILITIES:
Trade payables		1,253			797			1,214
Other payables		2,121			2,002			2,683

		3,374			2,799			3,897
LONG-TERM LIABILITIES:
Liabilities in respect of Chief Scientist government grants net of current maturities		6,161			6,825			6,985
Contingent consideration for the purchase of treasury shares net of current maturities		15,721			17,279			17,361
Severance pay liability, net		7			3			7

		21,889			24,107			24,353
SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.01 par value:
Authorized: 32,244,508 shares as of September 30, 2014, December 31, 2014 and September 30, 2015; Issued and Outstanding: 21,297,844, 21,550,300, and 21,850,330 shares respectively		60			59			59
Share premium		111,102			107,816			109,117
Foreign currency translation adjustments		(17	)		9			(18	)
Accumulated deficit		(80,595	)		(59,193	)		(66,287	)

		30,550			48,691			42,871

		55,813			75,597			71,121

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

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

U.S. dollar in thousands (expect share data)

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31,
	2015			2014			2015			2014			2014
	Unaudited												Audited

Revenues		334			135			102			46			259
Cost of revenues		1,830			1,643			824			750			2,785

Gross loss		(1,496	)		(1,508	)		(722	)		(704	)		(2,526	)

Operating expenses:
Research and development, net of participations		3,727			3,853			836			1,027			5,349
Selling and marketing		6,650			5,977			2,019			2,252			8,829
General and administrative		2,524			3,503			786			1,240			4,723

Total operating expenses		(12,901	)		(13,333	)		(3,641	)		(4,519	)		(18,901	)

Operating loss		(14,397	)		(14,841	)		(4,363	)		(5,223	)		(21,427	)

Financial income		1,587			4,611			941			738			4,665
Financial expense		(1,081	)		(1,551	)		(344	)		(532	)		(2,113	)

Loss from continuing operations		(13,891	)		(11,781	)		(3,766	)		(5,017	)		(18,875	)
Loss from discontinued operation		(417	)		-			-			-			-

Loss for the period		(14,308	)		(11,781	)		(3,766	)		(5,017	)		(18,875	)

Other comprehensive loss:
Items to be reclassified to profit or loss in subsequent periods:
Foreign currency translation adjustments		1			41			-			34			14

Total other comprehensive income		1			41			-			34			14

Total comprehensive loss		(14,307	)		(11,740	)		(3,766	)		(4,983	)		(18,861	)

Basic and diluted loss per share:
Loss from continuing operations		(0.64	)		(0.61	)		(0.17	)		(0.24	)		(0.95	)
Loss from discontinued operation		(0.02	)		-			-			-			-

Net loss per share		(0.66	)		(0.61	)		(0.17	)		(0.24	)		(0.95	)

Weighted average number of Ordinary shares used in the computation of basic and diluted loss per share		21,674			19,448			21,801			21,298			19,940

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

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

U.S. dollar in thousands

	Share capital		Share premium		Foreign currency translation reserve			Accumulated deficit			Total equity
	Unaudited
Balance as of January 1, 2015 (audited)		59		109,117		(18	)		(66,287	)		42,871

Loss for the period		-		-		-			(14,308	)		(14,308	)
Other comprehensive income		-		-		1			-			1

Total comprehensive loss		-		-		1			(14,308	)		(14,307	)

Exercise of options		1		25		-			-			26
Share-based compensation		-		1,960		-			-			1,960

Balance as of September 30, 2015 (unaudited)		60		111,102		(17	)		(80,595	)		30,550

	Share capital			Share premium			Treasury shares			Foreign currency translation reserve			Accumulated deficit			Total equity
	Unaudited
Balance as of January 1, 2014 (audited)		11			62,229			(34,600	)		(32	)		(47,412	)		(19,804	)

Loss for the period		-			-			-			-			(11,781	)		(11,781	)
Other comprehensive income		-			-			-			41			-			41

Total comprehensive loss		-			-			-			41			(11,781	)		(11,740	)

Exercise of options		*) -			208			-			-			-			208
Exercise of warrants		1			4,711			-			-			-			4,712
Issuance of shares, net		17			71,675			-			-			-			71,692
Effect of share split		32			(32	)		-			-			-			-
Treasury shares cancellation		(2	)		(34,598	)		34,600			-			-			-
Share-based compensation		-			3,623			-			-			-			3,623

Balance as of September 30, 2014 (unaudited)		59			107,816			-			9			(59,193	)		48,691

*)	Represent less than $1.

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

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

U.S. dollar in thousands

	Share capital			Share premium		Foreign currency translation reserve			Accumulated deficit			Total equity
	Unaudited
Balance as of July 1, 2015		60			110,439		(17	)		(76,829	)		33,653

Loss for the period		-			-		-			(3,766	)		(3,766	)
Other comprehensive income (loss)		-			-		-			-			-

Total comprehensive loss										(3,766	)		(3,766	)

Exercise of options		*	)		6		-			-			6
Share-based compensation		-			657		-			-			657

Balance as of September 30, 2015		60			111,102		(17	)		(80,595	)		30,550

	Share capital		Share premium		Foreign currency translation reserve			Accumulated deficit			Total equity
	Unaudited
Balance as of July 1, 2014		59		106,570		(25	)		(54,176	)		52,428

Loss for the period		-		-		-			(5,017	)		(5,017	)
Other comprehensive income		-		-		34			-			34

Total comprehensive loss		-		-		34			(5,017	)		(4,983	)

Share-based compensation		-		1,246		-			-			1,246

Balance as of September 30, 2014		59		107,816		9			(59,193	)		48,691

*)	Represent less than $1.

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

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

U.S. dollar in thousands

	Share capital			Share premium			Treasury shares			Foreign currency translation reserve			Accumulated deficit			Total equity
	Audited
Balance as of January 1, 2014		11			62,229			(34,600	)		(32	)		(47,412	)		(19,804	)
Loss for the period		-			-			-			-			(18,875	)		(18,875	)
Other comprehensive income		-			-			-			14			-			14

Total comprehensive loss		-			-			-			14			(18,875	)		(18,861	)

Exercise of warrants		1			4,711			-			-			-			4,712
Exercise of options		1			305			-			-			-			306
Cancellation of treasury shares		(2	)		(34,598	)		34,600			-			-			-
Effect of share split		32			(32	)		-			-			-			-
Share-based compensation		-			4,827			-			-			-			4,827
Issuance of shares, net		16			71,675			-			-			-			71,691

Balance as of December 31, 2014		59			109,117			-			(18	)		(66,287	)		42,871

*)	Represent less than $1.

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

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31,
	2015			2014			2015			2014			2014
	Unaudited												Audited

Cash flows from operating activities:

Net loss		(14,308	)		(11,781	)		(3,766	)		(5,017	)		(18,875	)

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		350			404			120			150			492
Revaluation of warrants to shareholders		-			(4,491	)		-			-			(4,491	)
Share-based compensation		1,960			3,623			657			1,246			4,827
Revaluation of liabilities in respect of Chief Scientist government grants		(944	)		32			(894	)		(294	)		87
Revaluation of contingent consideration for the purchase of treasury shares		(1,361	)		557			(870	)		(677	)		612
Net financing (income) expenses		(10	)		278			(63	)		296			226

		412			403			(1,050	)		721			1,753
Changes in asset and liability items:

Decrease (Increase) in trade receivables		(47	)		(21	)		16			(7	)		(67	)
Decrease in other receivables		110			83			121			209			186
Decrease (Increase) in inventories		(357	)		(1,582	)		139			(270	)		(1,421	)
Increase in trade payables		48			1,065			256			383			1,909
Increase (Decrease) in other payables		(572	)		(279	)		(980	)		(368	)		22

		(818	)		(734	)		(448	)		(53	)		629

Net cash flows used in continuing operating activities		(14,714	)		(12,112	)		(5,264	)		(4,349	)		(16,493	)

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

MEDIWOUND LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Nine months ended September 30,						Three months ended September 30,						Year ended December 31,
	2015			2014			2015			2014			2014
	Unaudited												Audited

Cash flows from investing activities:

Purchase of property and equipment		(298	)		(427	)		(129	)		(143	)		(366	)
Purchase of intangible assets		-			-			-			-			(30	)
Interest received		84			45			58			16			173
Proceeds from (Investments in) short term bank deposits		14,176			(47,574	)		16,072			2,688			(36,931	)

Net cash provided by(used in) investing activities		13,962			(47,956	)		16,001			2,561			(37,154	)

Cash flows from financing activities:

Proceeds from exercise of options		26			208			6			-			306
Proceeds from issuance of shares and warrants, net		-			71,824			-			-			71,824
Proceeds from the Chief Scientist government grants, net of repayment		109			279			34			252			345

Net cash provided by financing activities		135			72,311			40			252			72,475

Exchange rate differences on cash and cash equivalent balances		(255	)		(363	)		(4	)		(347	)		(459	)

Increase (decrease) in cash and cash equivalents from continuing activities		(617	)		12,243			10,777			(1,536	)		18,828

Balance of cash and cash equivalents at the beginning of the period		25,422			7,053			13,777			20,816			7,053

Balance of cash and cash equivalents at the end of the period		24,550			18,933			24,550			18,933			25,422

Non-cash activities:

Treasury shares cancellation against share premium		-			34,600			-			-			34,600

Exercise of cashless warrants into shares		-			4,709			-			-			4,709

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

MEDIWOUND LTD. AND ITS SUBSIDIARIES

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 1:

GENERAL

General description of the Company and its operations:

MediWound Ltd. (the "Company" or "MediWound"), is a fully integrated biopharmaceutical company focused on developing, manufacturing and commercializing novel products to address unmet needs in the fields of severe burns, chronic and other hard to heal wounds and connective tissue disorders and others.

The Company's innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency, or the EMA, in December 2012 for removal of dead or damaged tissue, known as eschar, in adults with deep partial and full thickness thermal burns. The Company launched NexoBrid in the European Union and in Israel through its own commercial organization and first generated initial sales in 2014.

The Company has two wholly-owned subsidiaries: MediWound Germany GmbH, acting as EU marketing authorization holder and EU sales and marketing arm and MediWound UK Limited, an inactive company. In addition, the Company owns about 6.6% of Polyheal Ltd., a private life sciences company ("Polyheal").

On March 25, 2014, the Company closed its initial public offering in the United States and listing on the NASDAQ Global Select Market ("the IPO") of 5,750,000 ordinary shares in the offering, including 750,000 additional shares to cover underwriters over-allotments, which was exercised on March 25, 2014 by the underwriters. As a result, the Company issued and sold a total of 5,750,000 ordinary shares at a price per share of $14.00 with aggregate gross proceeds of approximately $80,500. Under the terms of the offering, the Company incurred aggregate underwriting discounts of approximately $5,635 and expenses of approximately $3,173 in connection with the offering, resulting in net proceeds to us of approximately $71,692. Following the IPO the Company's securities are listed for trading on NASDAQ.

On September 29, 2015, the Company awarded BARDA (the U.S. Biomedical Advanced Research and Development Authority) contract valued up to $112 million for development and procurement of NexoBrid for the U.S. The contract is 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.

The five-year base contract includes $24 million of funding to support development activities to complete the U.S. Food and Drug Administration (FDA) approval process for NexoBrid for use in thermal burn injuries, as well as $16 million for procurement of NexoBrid, which is contingent upon FDA Emergency Use Authorization (EUA) and/or FDA marketing authorization for NexoBrid. In addition, the contract includes options for further funding of up to $22 million for expanding NexoBrid’s indications and of up to $50 million for additional procurement of NexoBrid.

MEDIWOUND LTD. AND ITS SUBSIDIARIES

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 2:

SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the interim consolidated financial statements:

The interim condensed financial statements for the nine and three months ended September 30, 2015 have been prepared in accordance with IAS 34 "Interim Financial Reporting".

The interim condensed 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, 2014 that were included in the Annual Report on Form 20-F filed on February 12, 2015.

The significant accounting policies and methods of computation adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the annual consolidated financial statements.

NOTE 3:

CONTINGENT LIABILITIES

On September 15, 2014, a Statement of Claim was filed against the Company by some shareholders of Polyheal. The plaintiffs allege that the Company is obligated to pay them a total amount of $1,475 in exchange for their respective portion of PolyHeal's shares, following the commencement of a feasibility study for the next generation of the PolyHeal Product in November 15, 2012, which constituted a milestone under a buyout option agreement between the Company, PolyHeal and its shareholders.

On December 14, 2014, the Company filed its Petition for a Right to Defend, or the Petition, in which it: (i) rejected the arguments raised against it in the Statement of Claim; (ii) emphasized that its obligation under the 2010 Polyheal Agreement to purchase the 7.5% of Polyheal’s ordinary shares is subject to the consumption of the deferred closing, as defined in the buyout agreement, including the receipt of the funds from Teva on a “back to back” basis; and (iii) stated that since no such payment has been made by Teva, the Company is not subject to any obligation to purchase Polyheal shares and/or make any payments to Polyheal’s shareholders.

A hearing in the Company's Petition was held on February 16, 2015, in which the Court accepted the Company's Petition and allowed it to file a statement of defense. The Company filed the statement of defense on July 6, 2015. A date for a preliminary hearing has been scheduled to February 10, 2016.

Based on advice from its external legal counsels, the Company believes that it has substantive defenses against the claim. Accordingly, no provision was recorded in respect of this claim.

MEDIWOUND LTD. AND ITS SUBSIDIARIES

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

NOTE 4:

EQUITY

On January 1, 2015, the Company granted to certain employees options to purchase 57,000 ordinary shares under the "2014 Share Incentive Plan" (the "Plan") for an exercise price of $6.02 per share. The options are exercisable in accordance with the terms of the Plan, within 10 years from the date of grant and will vest over four years. The fair value of the options at the date of grant was estimated at $267.

On May 3, 2015, the Company granted to certain employees options to purchase 10,000 ordinary shares under the "2014 Share Incentive Plan" (the "Plan") for an exercise price of $6.73 per share. The options are exercisable in accordance with the terms of the Plan, within 10 years from the date of grant and will vest over four years. The fair value of the options at the date of grant was estimated at $39.

NOTE 5:

OTHER ASSETS

The Company has been acknowledged during the first quarter about certain changes in circumstances indicating that the carrying amount of its royalty rights arising from the Company's ownership of shares of Polyheal would not be recoverable. Accordingly, a full impairment of these royalty rights amounting to $417 is included within the loss from discontinued operation for the nine months period ended September 30, 2015.