Website Notice Block
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
Securities Exchange Act of 1934
For the month of August 2017
Commission File Number: 001-36349
MediWound Ltd.
(Translation of registrant’s name into English)
(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 3, 2017, MediWound Ltd. (the “Company”) issued a press release entitled “MediWound Reports Second Quarter 2017 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 June 30, 2017, attached as Exhibit 99.2, which was provided by the Company to CBI on August 2, 2017 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.
| MEDIWOUND LTD. | |||
|
Date: August 3, 2017
|
By:
|
/s/ Sharon Malka | |
| Name: Sharon Malka | |||
| Title: Chief Financial Officer | |||
3
EXHIBIT INDEX
The following exhibit is filed as part of this Form 6-K:
| Exhibit |
Description
|
4
Exhibit 99.1
News Release
MediWound Reports Second Quarter 2017 Financial Results
NexoBrid® sales double in first half of 2017
BARDA upsizes committed funding by additional $32 million, bringing total contract
value to up to $132 million of non-dilutive financing
Conference call begins today at 8:30 a.m. Eastern time
YAVNE, Israel (August 3, 2017) – MediWound Ltd. (Nasdaq: MDWD), a fully-integrated biopharmaceutical company bringing innovative therapies to address unmet needs in severe burn and wound management, reports financial results for the three and six months ended June 30, 2017.
Operational and Financial Highlights of second quarter 2017 and recent weeks include:
| · |
Total revenues for the second quarter of 2017 were $0.69 million, a 93% increase from $0.36 million in the second quarter of 2016, underscoring the continued growth of NexoBrid® sales
|
| · |
BARDA upsizes contract with MediWound and exercises its option to fund further NexoBrid® indications, committing an additional $32 million to support R&D activities, bringing total non-dilutive funding of up to $132 million
|
| · |
An independent study in Germany, which was published in a peer-reviewed health economics journal, demonstrates NexoBrid® reduces average burn treatment costs by nearly 30% versus standard of care
|
| · |
Poster Presentation Highlighting NexoBrid® Awarded "Best Poster" at the 52nd Congress of the Spanish Society of Aesthetic, Plastic and Reconstructive Surgery for data on functional outcomes following enzymatic debridement of hand burns
|
| · |
Enhances Board of Directors with experienced experts and executives in U.S. wound care market
|
Management Commentary
“In our second quarter, we continued to make progress in our commercial and clinical programs for NexoBrid and EscharEx.
“We are thrilled with BARDA’s increased commitment to NexoBrid. This non-dilutive funding, totaling up to $132 million, provides significant support for our clinical development and manufacturing programs for several years. In effect, BARDA’s financing will now fully fund our development programs for NexoBrid for the treatment of both adult and pediatric burns, thereby substantially reducing the requirement for MediWound’s investment in these programs. Consequently, we submitted the Children Innovative Debridement Phase 3 Study (CIDS) protocol to the FDA and are working to open additional clinical sites at U.S. pediatric burn centers in addition to the existing pediatric sites in Europe,” stated Gal Cohen, President and Chief Executive Officer of MediWound.
“We completed enrollment of 38 patients into the second cohort of the Phase 2 trial of EscharEx, to demonstrate safety over extended periods of application, and expect to report topline results in early September. In tandem, we are working with several U.S. expert groups from different disciplines to optimize the pivotal program and plan to initiate our Phase 3 study in EscharEx in the first half of 2018.
“We are looking forward to our presence at the European Burn Association conference in Barcelona in early September. Over 40 independent abstracts authored by burn specialists from all over Europe, highlighting NexoBrid, have been accepted for presentation at this premier scientific event. We believe that this magnitude of independent body of information will be informative for burn specialists and further drive the introduction of NexoBrid into standard of care,” concluded Mr. Cohen.
Second Quarter Financial Results
Revenues for the second quarter of 2017 were $0.69 million, up 93% from the $0.36 million in revenues for the second quarter of 2016.
Gross profit for the second quarter of 2017 was $0.2 million, compared to a gross loss of $0.1 million, in the prior year period.
Research and development expenses, net of participations, for the second quarter of 2017 were $1.7 million, compared with $2.9 million for the second quarter of 2016. The decrease in net research and development expenses was primarily due to a decrease of $1.0 million related to NexoBrid and EscharEx clinical trials, EscharEx non-clinical development and an increase of $0.2 million in participation by BARDA.
Sales, marketing and G&A expenses decreased to $2.2 million for the second quarter of 2017 from $3.7 million for the second quarter of 2016, primarily due to a reduction of $1.1 million related to marketing expenses associated with launch activities and a $0.4 decrease in non-cash share based compensation.
Operating loss for the second quarter of 2017 was $3.7 million, down 45% from $6.7 in the second quarter of 2016. The decrease was primarily due to improvements in gross margins and a decrease of about $2.7 million in operating expenses compared to the second quarter of 2016.
For the second quarter of 2017, the Company posted a net loss of $4.5 million, or $0.20 per share, compared with a net loss of $7.5 million, or $0.34 per share, for the second quarter of 2016. The decrease was primarily due to the decrease of $3.0 million in operating expenses.
Adjusted EBITDA, as defined below, for the second quarter of 2017 was a loss of $3.2 million, compared with a loss of $5.7 million for the second quarter of 2016.
First Half 2017 Financial Results
Revenues for the first half of 2017 were $1.2 million compared with $0.6 million for the first half of 2016, an increase of 101%.
Gross profit for the first half of 2017 was $0.4 million, compared with a gross loss of $0.2 million in the prior year period, a change of $0.6 million.
Research and development expenses, net of participations, were $3.4 million for the first half of 2017, compared with $3.9 million for the first half of 2016. The decrease was primarily due to a decrease of $0.9 million related to NexoBrid and EscharEx clinical trials and EscharEx non-clinical development, which was offset by a decrease of $0.4 million of participation from the Israeli Innovation Authority, resulted from revaluation of a contingent liability in 2016.
Selling, general and administrative expenses in the first half of 2017 decreased $2.3 million to $4.3 million from $6.6 million in the first half of 2016, primarily due to a reduction of $1.5 million related to marketing expenses associated with launch activities and a $0.8 decrease in non-cash share based compensation.
Operating loss for the first half of 2017 was $7.4 million, down 31% from $10.7 in the first half of 2016. The decrease was primarily due to the decrease in operating expenses and the positive change in gross profits in the first half of 2017 compared to the prior year period.
For the six months ended June 30, 2017, the Company posted a net loss of $8.8 million, or $0.40 per share, compared with a net loss of $11.3 million, or $0.52 per share, for the same period in 2016. The decrease was primarily due to a $3.3 million decrease in operating loss which was offset by an increase of $0.8 million net financial expenses, largely comprised of non-cash revaluation of contingent liabilities and changes in foreign currency exchange rates.
Adjusted EBITDA, as defined below, for the first half of 2017 was a loss of $6.4 million, compared with a loss of $8.7 million for the first half of 2016.
Balance Sheet Highlights
As of June 30, 2017, the Company had cash and short-term deposits of $20.9 million and working capital of $20.9 million. The Company remained on budget and utilized $9.1 million in cash to fund operating activities during the first half of 2017.
Throughout 2017, the Company will continue to invest primarily in research and development efforts for NexoBrid, which is now fully funded by BARDA, and EscharEx for chronic wounds. As a result of the increased funding by BARDA, we intend to allocate cash resources to advance the development of EscharEx and we expect that cash use for 2017 will be in the lower end of our $15.0 million to $17.0 million guidance.
Conference Call
MediWound management will host a conference call for investors today, August 3, 2017 beginning at 8:30 a.m. Eastern time to discuss these results and answer questions. Shareholders and other interested parties may participate in the call by dialing (877) 602-7189 (domestic) or (678) 894-3057 (international) and entering passcode 63004670. The call also will be broadcast live on the Internet on the Company's website at www.mediwound.com.
A replay of the call will be accessible two hours after its completion through August 4, 2017 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering passcode 63004670. The call will also be archived on the Company website 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 it defines as earnings before interest, taxes, depreciation and amortization, impairment, one-time expenses, restructuring and stock-based compensation expenses.
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 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®, received marketing authorization from the European Medicines Agency as well as the Israeli and Argentinian Ministries of Health, for removal of dead or damaged tissue, known as eschar, in adults with deep partial and full-thickness thermal burns and was launched in Europe and Israel, with plans for a launch in Argentina. NexoBrid® represents a new paradigm in burn care management, and clinical trials have demonstrated, with statistical significance, its ability to non-surgically and rapidly remove the eschar earlier and, without harming viable tissues.
MediWound's second innovative product, EscharEx® is a topical biological drug being developed for debridement of chronic and other hard-to-heal wounds and is complementary to the large number of existing wound healing products, which require a clean wound bed in order to heal the wound. EscharEx® contains the same proteolytic enzyme technology as NexoBrid®, and benefits from the wealth of existing development data on NexoBrid®. In two Phase 2 studies, EscharEx® has demonstrated safety and efficacy in the debridement of chronic and other hard-to-heal wounds, within a few daily applications. 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 the regulatory authorizations and launch dates. 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, 2016 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
|
Bob Yedid
|
|
Chief Financial and Operations Officer
|
Managing Director
|
|
MediWound
|
LifeSci Advisors
|
|
ir@mediwound.co.il
|
646-597-6989
|
|
bob@lifesciadvisors.com
|
-Tables to Follow –
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
|
June 30,
|
December 31,
|
|||||||||||
|
2017
|
2016
|
2016
|
||||||||||
|
Unaudited
|
Audited
|
|||||||||||
|
Cash, cash equivalents and short term deposits
|
20,922
|
37,760
|
30,029
|
|||||||||
|
Accounts and other receivable
|
3,089
|
3,173
|
2,739
|
|||||||||
|
Inventories
|
1,124
|
1,160
|
844
|
|||||||||
|
25,135
|
42,093
|
33,612
|
||||||||||
|
Long term deposits
|
75
|
129
|
103
|
|||||||||
|
Property, plant and equipment, net
|
1,425
|
1,270
|
1,276
|
|||||||||
|
Intangible assets, net
|
685
|
853
|
773
|
|||||||||
|
2,185
|
2,252
|
2,152
|
||||||||||
|
27,320
|
44,345
|
35,764
|
||||||||||
|
Trade payables and accrued expenses
|
2,121
|
2,919
|
3,320
|
|||||||||
|
Other payables
|
2,115
|
2,476
|
2,060
|
|||||||||
|
4,236
|
5,395
|
5,380
|
||||||||||
|
Deferred revenues
|
966
|
1,021
|
1,023
|
|||||||||
|
Liabilities in respect of Israeli Innovation Authority grants net of current maturities
|
7,153
|
7,222
|
6,839
|
|||||||||
|
Contingent consideration for the purchase of shares net of current maturities
|
15,082
|
16,639
|
14,533
|
|||||||||
|
Severance pay liability, net
|
239
|
99
|
219
|
|||||||||
|
23,440
|
24,981
|
22,614
|
||||||||||
|
Shareholders' equity (deficiency)
|
(356
|
)
|
13,969
|
7,770
|
||||||||
|
27,320
|
44,345
|
35,764
|
||||||||||
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
U.S. dollars in thousands (except share and per share data)
|
Six months ended
|
Three months ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
Revenues
|
1,227
|
610
|
687
|
356
|
||||||||||||
|
Cost of revenues
|
824
|
829
|
484
|
425
|
||||||||||||
|
Gross profit (loss)
|
403
|
(219
|
)
|
203
|
(69
|
)
|
||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Research and development, gross
|
6,622
|
7,473
|
3,181
|
4,243
|
||||||||||||
|
Participation by IIA & BARDA
|
(3,187
|
)
|
(3,543
|
)
|
(1,517
|
)
|
(1,306
|
)
|
||||||||
|
Research and development, net
|
3,435
|
3,930
|
1,664
|
2,937
|
||||||||||||
|
Selling, general & administrative
|
4,334
|
6,555
|
2,242
|
3,694
|
||||||||||||
|
Operating loss
|
(7,366
|
)
|
(10,704
|
)
|
(3,703
|
)
|
(6,700
|
)
|
||||||||
|
Financial expenses, net
|
(1,410
|
)
|
(581
|
)
|
(759
|
)
|
(811
|
)
|
||||||||
|
Loss for the period
|
(8,776
|
)
|
(11,285
|
)
|
(4,462
|
)
|
(7,511
|
)
|
||||||||
|
Foreign currency translation adjustments
|
(17
|
)
|
(3
|
)
|
(14
|
)
|
3
|
|||||||||
|
Total comprehensive loss
|
(8,793
|
)
|
(11,288
|
)
|
(4,476
|
)
|
(7,508
|
)
|
||||||||
|
Net loss per share
|
(0.40
|
)
|
(0.52
|
)
|
(0.20
|
)
|
(0.34
|
)
|
||||||||
|
Weighted average number of ordinary shares used in the computation of basic and diluted loss per share:
|
21,938
|
21,850
|
21,946
|
21,850
|
||||||||||||
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS (UNAUDITED)
U.S. dollars in thousands
|
Six months ended
|
Three months ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
Cash Flows from Operating Activities:
|
||||||||||||||||
|
Loss for the period
|
(8,776
|
)
|
(11,285
|
)
|
(4,462
|
)
|
(7,511
|
)
|
||||||||
|
Adjustments to reconcile net loss to net cash used in continuing operating activities:
|
||||||||||||||||
|
Adjustments to profit and loss items:
|
||||||||||||||||
|
Depreciation and amortization
|
302
|
253
|
146
|
130
|
||||||||||||
|
Share-based compensation
|
665
|
1,787
|
337
|
913
|
||||||||||||
|
Revaluation of liabilities in respect of IIA grants
|
402
|
(23
|
)
|
221
|
205
|
|||||||||||
|
Revaluation of contingent consideration for the purchase of shares
|
1,120
|
539
|
570
|
615
|
||||||||||||
|
Increase in severance liability, net
|
20
|
-
|
12
|
-
|
||||||||||||
|
Net financing expenses (income)
|
(265
|
)
|
(260
|
)
|
(127
|
)
|
(31
|
)
|
||||||||
|
2,244
|
2,296
|
1,159
|
1,832
|
|||||||||||||
|
Changes in asset and liability items:
|
||||||||||||||||
|
Increase in trade receivables
|
(241
|
)
|
(155
|
)
|
(201
|
)
|
(12
|
)
|
||||||||
|
Decrease (increase) in inventories
|
(279
|
)
|
546
|
(132
|
)
|
377
|
||||||||||
|
Decrease (increase) in other receivables
|
(277
|
)
|
(329
|
)
|
278
|
(180
|
)
|
|||||||||
|
Increase (decrease) in trade payables
|
(1,210
|
)
|
527
|
(2,487
|
)
|
254
|
||||||||||
|
Increase (decrease) in other payables & deferred revenues
|
(459
|
)
|
555
|
1,606
|
1,496
|
|||||||||||
|
(2,466
|
)
|
1,144
|
(936
|
)
|
1,935
|
|||||||||||
|
Net cash flows used in operating activities
|
(8,998
|
)
|
(7,845
|
)
|
(4,239
|
)
|
(3,744
|
)
|
||||||||
|
Cash Flows from Investment Activities:
|
||||||||||||||||
|
Purchase of property and equipment
|
(365
|
)
|
(440
|
)
|
(169
|
)
|
(113
|
)
|
||||||||
|
Interest received
|
27
|
41
|
12
|
32
|
||||||||||||
|
Proceeds from (investment in) short term bank deposits, net
|
(16,837
|
)
|
(23,734
|
)
|
3,007
|
5,477
|
||||||||||
|
Net cash provided by (used in) investing activities
|
(17,175
|
)
|
(24,133
|
)
|
2,850
|
5,396
|
||||||||||
|
Cash Flows from Financing Activities:
|
||||||||||||||||
|
Proceeds from exercise of options
|
2
|
-
|
2
|
-
|
||||||||||||
|
Proceeds from IIA grants, net of repayments
|
(37
|
)
|
-
|
(65
|
)
|
-
|
||||||||||
|
Net cash used in financing activities
|
(35
|
)
|
-
|
(63
|
)
|
-
|
||||||||||
|
Exchange rate differences on cash and cash equivalent balances
|
117
|
70
|
76
|
(84
|
)
|
|||||||||||
|
Increase in cash and cash equivalents
|
(26,091
|
)
|
(31,908
|
)
|
(1,376
|
)
|
1,568
|
|||||||||
|
Balance of cash and cash equivalents at the beginning of the period
|
28,866
|
42,502
|
4,151
|
9,026
|
||||||||||||
|
Balance of cash and cash equivalents at the end of the period
|
2,775
|
10,594
|
2,775
|
10,594
|
||||||||||||
ADJUSTED EBITDA
U.S. dollars in thousands
|
Six months ended
|
Three months ended
|
|||||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
Loss for the period
|
(8,776
|
)
|
(11,285
|
)
|
(4,462
|
)
|
(7,511
|
)
|
||||||||
|
Adjustments:
|
||||||||||||||||
|
Financial (expenses) income, net
|
(1,410
|
)
|
(581
|
)
|
(759
|
)
|
(811
|
)
|
||||||||
|
Depreciation and amortization
|
(302
|
)
|
(253
|
)
|
(146
|
)
|
(130
|
)
|
||||||||
|
Share-based compensation expenses
|
(665
|
)
|
(1,787
|
)
|
(337
|
)
|
(913
|
)
|
||||||||
|
Total adjustments
|
(2,377
|
)
|
(2,621
|
)
|
(1,242
|
)
|
(1,854
|
)
|
||||||||
|
Adjusted EBITDA
|
(6,399
|
)
|
(8,664
|
)
|
(3,220
|
)
|
(5,657
|
)
|
||||||||
Exhibit 99.2
MEDIWOUND LTD. AND ITS SUBSIDIARIES
INTERIM CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2017
IN U.S. DOLLARS IN THOUSANDS
UNAUDITED
INDEX
|
Page
|
|
|
2
|
|
|
3
|
|
|
4 - 6
|
|
|
7 - 8
|
|
|
9 - 11
|
MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
June 30,
|
December 31,
|
|||||||||||
|
2017
|
2016
|
2016
|
||||||||||
|
Unaudited
|
Audited
|
|||||||||||
|
CURRENT ASSETS:
|
||||||||||||
|
Cash and cash equivalents
|
2,775
|
10,594
|
28,866
|
|||||||||
|
Short‑term bank deposits
|
18,147
|
27,166
|
1,163
|
|||||||||
|
Trade receivables
|
612
|
401
|
332
|
|||||||||
|
Inventories
|
1,124
|
1,160
|
844
|
|||||||||
|
Other receivables
|
2,477
|
2,772
|
2,407
|
|||||||||
|
25,135
|
42,093
|
33,612
|
||||||||||
|
LONG‑TERM ASSETS:
|
||||||||||||
|
Long term deposits
|
75
|
129
|
103
|
|||||||||
|
Property, plant and equipment, net
|
1,425
|
1,270
|
1,276
|
|||||||||
|
Intangible assets, net
|
685
|
853
|
773
|
|||||||||
|
2,185
|
2,252
|
2,152
|
||||||||||
|
27,320
|
44,345
|
35,764
|
||||||||||
|
CURRENT LIABILITIES:
|
||||||||||||
|
Trade payables
|
2,121
|
2,919
|
3,320
|
|||||||||
|
Other payables
|
2,115
|
2,476
|
2,060
|
|||||||||
|
4,236
|
5,395
|
5,380
|
||||||||||
|
LONG‑TERM LIABILITIES:
|
||||||||||||
|
Deferred revenues
|
966
|
1,021
|
1,023
|
|||||||||
|
Liabilities in respect of IIA grants
|
7,153
|
7,222
|
6,839
|
|||||||||
|
Contingent consideration for the purchase of shares
|
15,082
|
16,639
|
14,533
|
|||||||||
|
Severance pay liability, net
|
239
|
99
|
219
|
|||||||||
|
23,440
|
24,981
|
22,614
|
||||||||||
|
SHAREHOLDERS' EQUITY (DEFICIENCY):
|
||||||||||||
|
Ordinary shares of NIS 0.01 par value:
|
||||||||||||
|
Authorized: 32,244,508 shares; Issued and Outstanding: 21,954,079 as of June 30, 2017 ; 21,930,449 as of December 31, 2016 and 21,850,300 as of June 30, 2016
|
60
|
60
|
60
|
|||||||||
|
Share premium
|
115,646
|
113,588
|
114,979
|
|||||||||
|
Foreign currency translation adjustments
|
(26
|
)
|
(19
|
)
|
(9
|
)
|
||||||
|
Accumulated deficit
|
(116,036
|
)
|
(99,660
|
)
|
(107,260
|
)
|
||||||
|
(356
|
)
|
13,969
|
7,770
|
|||||||||
|
27,320
|
44,345
|
35,764
|
||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
2
MEDIWOUND LTD. AND ITS SUBSIDIARIES
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,
|
||||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2016
|
||||||||||||||||
|
Unaudited
|
Audited
|
|||||||||||||||||||
|
Revenues
|
1,227
|
610
|
687
|
356
|
1,558
|
|||||||||||||||
|
Cost of revenues
|
824
|
829
|
484
|
425
|
2,158
|
|||||||||||||||
|
Gross profit (loss)
|
403
|
(219
|
)
|
203
|
(69
|
)
|
(600
|
)
|
||||||||||||
|
Research and development, net of participations
|
3,435
|
3,930
|
1,664
|
2,937
|
7,068
|
|||||||||||||||
|
Selling and marketing
|
2,693
|
4,528
|
1,306
|
2,586
|
8,403
|
|||||||||||||||
|
General and administrative
|
1,641
|
2,027
|
936
|
1,108
|
4,084
|
|||||||||||||||
|
Operating loss
|
(7,366
|
)
|
(10,704
|
)
|
(3,703
|
)
|
(6,700
|
)
|
(20,155
|
)
|
||||||||||
|
Financial income
|
174
|
397
|
87
|
109
|
2,166
|
|||||||||||||||
|
Financial expense
|
(1,584
|
)
|
(978
|
)
|
(846
|
)
|
(920
|
)
|
(896
|
)
|
||||||||||
|
Net loss
|
(8,776
|
)
|
(11,285
|
)
|
(4,462
|
)
|
(7,511
|
)
|
(18,885
|
)
|
||||||||||
|
Other comprehensive income (loss):
|
||||||||||||||||||||
|
Items to be reclassified to profit or loss in subsequent periods:
|
||||||||||||||||||||
|
Foreign currency translation adjustments
|
(17
|
)
|
(3
|
)
|
(14
|
)
|
3
|
7
|
||||||||||||
|
Total comprehensive loss
|
(8,793
|
)
|
(11,288
|
)
|
(4,476
|
)
|
(7,508
|
)
|
(18,878
|
)
|
||||||||||
|
Basic and diluted loss per share:
|
(0.40
|
)
|
(0.52
|
)
|
(0.20
|
)
|
(0.34
|
)
|
(0.86
|
)
|
||||||||||
|
Weighted average number of ordinary shares
used in the computation of basic and diluted loss per share
|
21,938
|
21,850
|
21,946
|
21,850
|
21,862
|
|||||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
3
MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
Share capital
|
Share premium
|
Foreign currency translation reserve
|
Accumulated
deficit
|
Total
Equity (Deficiency)
|
||||||||||||||||
|
Balance as of January 1, 2017
|
60
|
114,979
|
(9
|
)
|
(107,260
|
)
|
7,770
|
|||||||||||||
|
Loss for the period
|
-
|
-
|
-
|
(8,776
|
)
|
(8,776
|
)
|
|||||||||||||
|
Other comprehensive loss
|
-
|
-
|
(17
|
)
|
-
|
(17
|
)
|
|||||||||||||
|
Total comprehensive loss
|
-
|
-
|
(17
|
)
|
(8,776
|
)
|
(8,793
|
)
|
||||||||||||
|
Exercise of options
|
-
|
2
|
-
|
-
|
2
|
|||||||||||||||
|
Share-based compensation
|
-
|
665
|
-
|
-
|
665
|
|||||||||||||||
|
Balance as of June 30, 2017 (unaudited)
|
60
|
115,646
|
(26
|
)
|
(116,036
|
)
|
(356
|
)
|
||||||||||||
|
Share capital
|
Share premium
|
Foreign currency translation reserve
|
Accumulated
deficit
|
Total
Equity
|
||||||||||||||||
|
Balance as of January 1, 2016
|
60
|
111,801
|
(16
|
)
|
(88,375
|
)
|
23,470
|
|||||||||||||
|
Loss for the period
|
-
|
-
|
-
|
(11,285
|
)
|
(11,285
|
)
|
|||||||||||||
|
Other comprehensive loss
|
-
|
-
|
(3
|
)
|
-
|
(3
|
)
|
|||||||||||||
|
Total comprehensive loss
|
-
|
-
|
(3
|
)
|
(11,285
|
)
|
(11,288
|
)
|
||||||||||||
|
Share-based compensation
|
-
|
1,787
|
-
|
-
|
1,787
|
|||||||||||||||
|
Balance as of June 30, 2016 (unaudited)
|
60
|
113,588
|
(19
|
)
|
(99,660
|
)
|
13,969
|
|||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
4
MEDIWOUND LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
U.S. dollars in thousands
|
Share capital
|
Share premium
|
Foreign currency translation reserve
|
Accumulated
deficit
|
Total
Equity (Deficiency)
|
||||||||||||||||
|
Balance as of April 1, 2017
|
60
|
115,307
|
(12
|
)
|
(111,574
|
)
|
3,781
|
|||||||||||||
|
Loss for the period
|
-
|
-
|
-
|
(4,462
|
)
|
(4,462
|
)
|
|||||||||||||
|
Other comprehensive loss
|
-
|
-
|
(14
|
)
|
-
|
(14
|
)
|
|||||||||||||
|
Total comprehensive loss
|
-
|
-
|
(14
|
)
|
(4,462
|
)
|
(4,476
|
)
|
||||||||||||
|
Exercise of options
|
-
|
2
|
-
|
-
|
2
|
|||||||||||||||
|
Share-based compensation
|
-
|
337
|
-
|
-
|
337
|
|||||||||||||||
|
Balance as of June 30, 2017 (unaudited)
|
60
|
115,646
|
(26
|
)
|
(116,036
|
)
|
(356
|
)
|
||||||||||||
|
Share capital
|
Share premium
|
Foreign currency translation reserve
|
Accumulated
deficit
|
Total
Equity
|
||||||||||||||||
|
Balance as of April 1, 2016
|
60
|
112,675
|
(22
|
)
|
(92,149
|
)
|
20,564
|
|||||||||||||
|
Loss for the period
|
-
|
-
|
-
|
(7,511
|
)
|
(7,511
|
)
|
|||||||||||||
|
Other comprehensive income
|
-
|
-
|
3
|
-
|
3
|
|||||||||||||||
|
Total comprehensive income (loss)
|
-
|
-
|
3
|
(7,511
|
)
|
(7,508
|
)
|
|||||||||||||
|
Share-based compensation
|
-
|
913
|
-
|
-
|
913
|
|||||||||||||||
|
Balance as of June 30, 2016 (unaudited)
|
60
|
113,588
|
(19
|
)
|
(99,660
|
)
|
13,969
|
|||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
5
MEDIWOUND LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
U.S. dollars in thousands
|
Share capital
|
Share premium
|
Foreign currency translation reserve
|
Accumulated
deficit
|
Total
Equity
|
||||||||||||||||
|
Balance as of January 1, 2016
|
60
|
111,801
|
(16
|
)
|
(88,375
|
)
|
23,470
|
|||||||||||||
|
Loss for the period
|
-
|
-
|
-
|
(18,885
|
)
|
(18,885
|
)
|
|||||||||||||
|
Other comprehensive income
|
-
|
-
|
7
|
-
|
7
|
|||||||||||||||
|
Total comprehensive income (loss)
|
-
|
-
|
7
|
(18,885
|
)
|
(18,878
|
)
|
|||||||||||||
|
Exercise of options
|
*
|
)
|
7
|
-
|
-
|
7
|
||||||||||||||
|
Share-based compensation
|
-
|
3,171
|
-
|
-
|
3,171
|
|||||||||||||||
|
Balance as of December 31, 2016
|
60
|
114,979
|
(9
|
)
|
(107,260
|
)
|
7,770
|
|||||||||||||
(*) Represents less than $ 1.
The accompanying notes are an integral part of the interim consolidated financial statements.
6
MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
|
Six months ended
June 30,
|
Three months ended
June 30,
|
Year ended
December 31,
|
||||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2016
|
||||||||||||||||
|
Unaudited
|
Audited
|
|||||||||||||||||||
|
Cash flows from operating activities:
|
||||||||||||||||||||
|
Net loss
|
(8,776
|
)
|
(11,285
|
)
|
(4,462
|
)
|
(7,511
|
)
|
(18,885
|
)
|
||||||||||
|
Adjustments to reconcile net loss to net cash used in continuing operating activities:
|
||||||||||||||||||||
|
Adjustments to profit and loss items:
|
||||||||||||||||||||
|
Depreciation and amortization
|
302
|
253
|
146
|
130
|
589
|
|||||||||||||||
|
Share-based compensation
|
665
|
1,787
|
337
|
913
|
3,171
|
|||||||||||||||
|
Revaluation of liabilities in respect of IIA grants
|
402
|
(23
|
)
|
221
|
205
|
(1,298
|
)
|
|||||||||||||
|
Revaluation of contingent consideration for the purchase of shares
|
1,120
|
539
|
570
|
615
|
(1,621
|
)
|
||||||||||||||
|
Increase in severance liability
|
20
|
-
|
12
|
-
|
125
|
|||||||||||||||
|
Net financing expenses (income)
|
(265
|
)
|
(260
|
)
|
(127
|
)
|
(31
|
)
|
(508
|
)
|
||||||||||
|
2,244
|
2,296
|
1,159
|
1,832
|
458
|
||||||||||||||||
|
Changes in asset and liability items:
|
||||||||||||||||||||
|
Increase in trade receivables
|
(241
|
)
|
(155
|
)
|
(201
|
)
|
(12
|
)
|
(107
|
)
|
||||||||||
|
Decrease (increase) in inventories
|
(279
|
)
|
546
|
(132
|
)
|
377
|
873
|
|||||||||||||
|
Decrease (increase) in other receivables
|
(277
|
)
|
(329
|
)
|
278
|
(180
|
)
|
33
|
||||||||||||
|
Increase (decrease) in trade payables
|
(1,210
|
)
|
527
|
(2,487
|
)
|
254
|
2,195
|
|||||||||||||
|
Increase (decrease) Increase in other payables and deferred revenues
|
(459
|
)
|
555
|
1,606
|
1,496
|
(1,012
|
)
|
|||||||||||||
|
(2,466
|
)
|
1,144
|
(936
|
)
|
1,935
|
1,982
|
||||||||||||||
|
Net cash flows used in operating activities
|
(8,998
|
)
|
(7,845
|
)
|
(4,239
|
)
|
(3,744
|
)
|
(16,445
|
)
|
||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
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,
|
||||||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
2016
|
||||||||||||||||
|
Unaudited
|
Audited
|
|||||||||||||||||||
|
Cash Flows from Investing Activities:
|
||||||||||||||||||||
|
Purchase of property and equipment
|
(365
|
)
|
(440
|
)
|
(169
|
)
|
(113
|
)
|
(671
|
)
|
||||||||||
|
Purchase of intangible assets
|
-
|
-
|
-
|
-
|
(30
|
)
|
||||||||||||||
|
Interest received
|
27
|
41
|
12
|
32
|
407
|
|||||||||||||||
|
Proceeds from (investment in) short term bank deposits, net
|
(16,837
|
)
|
(23,734
|
)
|
3,007
|
5,477
|
2,110
|
|||||||||||||
|
Net cash provided by (used in) investing activities
|
(17,175
|
)
|
(24,133
|
)
|
2,850
|
5,396
|
1,816
|
|||||||||||||
|
Cash Flows from Financing Activities:
|
||||||||||||||||||||
|
Proceeds from exercise of options
|
2
|
-
|
2
|
-
|
7
|
|||||||||||||||
|
Proceeds from IIA grants, net of repayments
|
(37
|
)
|
-
|
(65
|
)
|
-
|
900
|
|||||||||||||
|
Net cash provided by (used in) financing activities
|
(35
|
)
|
-
|
(63
|
)
|
-
|
907
|
|||||||||||||
|
Exchange rate differences on cash and cash equivalent balances
|
117
|
70
|
76
|
(84
|
)
|
86
|
||||||||||||||
|
Increase (decrease) in cash and cash equivalents
|
(26,091
|
)
|
(31,908
|
)
|
(1,376
|
)
|
1,568
|
(13,636
|
)
|
|||||||||||
|
Balance of cash and cash equivalents at the beginning of the period
|
28,866
|
42,502
|
4,151
|
9,026
|
42,502
|
|||||||||||||||
|
Balance of cash and cash equivalents at the end of the period
|
2,775
|
10,594
|
2,775
|
10,594
|
28,866
|
|||||||||||||||
The accompanying notes are an integral part of the interim consolidated financial statements.
8
MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands (except share and per share data)
| NOTE 1: |
GENERAL
|
| a. |
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, as well as chronic and other hard to heal wounds, connective tissue disorders and other indications.
The Company's innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency ("EMA") and the Israeli and Argentinean 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 established a commercial organization for the marketing, sales and distribution of NexoBrid in Europe based in Germany. The Company sells NexoBrid in Europe in Israel through its commercial organization and in other territories through local distributers.
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| b. |
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 approximately 6.5% of PolyHeal Ltd., a private life sciences company ("PolyHeal").
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| c. |
The Company's securities are listed for trading on NASDAQ since March 2014.
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| d. |
On September 29, 2015, the Company was awarded a U.S. Biomedical Advanced Research and Development Authority ("BARDA") contract 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.
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As of June 30, 2017 the Company recorded $9.5 million in funding from BARDA under the contract.
On July 19, 2017 BARDA had upsized the contract and exercised an option to fund further research and development activities relating to NexoBrid (see Note 4).
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
| NOTE 2: |
SIGNIFICANT ACCOUNTING POLICIES
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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:
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These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").
b. Basis of preparation of the interim consolidated financial statements:
The interim condensed consolidated financial statements for the six months and three months ended June 30, 2017 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, 2016 that were included in the Annual Report on Form 20-F filed on February 21, 2017.
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, 2016 that were included in the Annual Report on Form 20-F filed on February 21, 2017.
| 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 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 preliminary hearing took place on February 10, 2016. On June 21, 2016, both parties presented their oral summaries before the Court. As of June 30, 2017, ruling has not yet been given.
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
| NOTE 3: |
CONTINGENT LIABILITIES (Cont.)
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Based on advise 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.
| NOTE 4: |
SUBSEQUENT EVENTS
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On July 19, 2017 BARDA had upsized the contract and exercised an option to fund further research and development activities relating to NexoBrid. The modified contract includes $56 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 $10 million for expanding NexoBrid’s indications and of up to $50 million for additional procurement of NexoBrid.
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