---

---

---

News Release          

MediWound Reports Fourth Quarter and Full-Year 2019 Financial Results

Generated total full-year 2019 revenues of $31.8 million, driven primarily by Vericel license

payment and development services to BARDA

Initiated U.S. Phase 2 adaptive design study of EscharEx for the treatment of venous leg ulcers

BARDA initiated the procurement of NexoBrid valued at $16.5 million

for emergency response

Conference call begins today at 8:30 a.m. Eastern Time

YAVNE, Israel (February 25, 2020) – MediWound Ltd. (Nasdaq: MDWD), a fully-integrated biopharmaceutical company bringing innovative therapies to address unmet medical needs in severe burn and wound management, today announced financial results for the fourth quarter and full-year ended December 31, 2019.

Fourth Quarter and Full-Year 2019 Financial Highlights:

Fourth Quarter and Full-Year 2019 Business Highlights:

 

 

 

 

 

 

“2019 was a transformational year for MediWound, and we have continued building on this momentum in what we believe will be a meaningful 2020,” said Sharon Malka, Chief Executive Officer of MediWound. “We are very pleased to have our U.S. Phase 2 adaptive design study for EscharEx up and running. This study is designed to assess the efficacy and safety of our advanced once-a-day topical treatement in the debridement of venous leg ulcers. The study enables the comparison of EscharEx to placebo control, as well as a head-to-head comparison with the current non-surgical standard of care in the U.S. We believe EscharEx can be a game-changer, addressing a significant unmet medical need, and we anticipate having an interim assessment for this study by the end of the year.”

 

Mr. Malka continued, “With regard to NexoBrid, we announced in early 2019 the results of the U.S. phase 3 DETECT study, which were robust across all endpoints, and subsequently reported the long-term follow-up safety data, which was comparable across all study arms. We are currently targeting the NexoBrid BLA submission for midyear 2020 and are actively preparing for commercial launch in the U.S. with our partner, Vericel. In addition, the NEXT program is up and running, allowining for the continued clinical use of NexoBrid for U.S. patients during the preparation and review of the NexoBrid BLA. Finally, the initiation of the NexoBrid procurement by BARDA prior to BLA submission  is a significant milestone in our partnership with BARDA, which we believe will significantly increase U.S. readiness for burn mass casualty incidents.”

 

“Our solid balance sheet and near-term cash inflows will continue to support our development plans and we look forward to several meaningful upcoming milestones in each of our programs,” concluded Mr. Malka.

 

Fourth Quarter Financial Results

Revenues for the fourth quarter of 2019 were $5.4 million, an increase of $4.4 million versus the $1.0 million in the fourth quarter of 2018, primarily driven by revenues from development services. Starting in May 2019, following entrance into the Vericel license and supply agreements, funding by BARDA was classified as revenues from development services. As a result, we now generate also revenues from development services provided to BARDA.

Gross profit for the fourth quarter of 2019 was $1.1 million, compared to a gross profit of $0.3 million for the fourth quarter of 2018, due to the increase in revenues.

Research and development expenses, net of participations for the fourth quarter of 2019, were $1.7 million, compared with the $0.3 million for the fourth quarter of 2018. The increase is attributed primarily to the initiation of our U.S. Phase 2 adaptive design study of EscharEx for the treatment of venous leg ulcers.

Selling, general and administrative expenses for the fourth quarter of 2019 were $2.4 million, compared with $2.2 million for the fourth quarter of 2018.

Operating loss for the fourth quarter of 2019 was $3.1 million, compared with a loss from ongoing operational activities of $2.2 million in the fourth quarter of 2018.  In the fourth quarter of 2018, we recognized one-time other income from settlement with Teva of $7.4, resulting an operating profit of $5.3 million.

The Company posted a net loss of $3.4 million, or loss of ($0.13) per share, for the fourth quarter of 2019 compared with a net profit of $10.6 million, or $0.39 per share, for the fourth quarter of 2018. The Company’s net profit in 2018 included one-time other income of $12.1 million as a result of the settlement with Teva, which was partially recorded as discontinued operation.

Adjusted EBITDA, as defined below, for the fourth quarter of 2019 was a loss of $2.4 million, compared with a loss of $1.9 million in the fourth quarter of 2018.

Full-Year 2019 Financial Results

Operating profit for the year ended December 31, 2019, which includes a $17.5 million upfront license payment and $1.7 million of deal related expenses, was $4.5. million. Operating loss for the full-year 2018, which included other one-time net income of $6.8 million primarily as a result settlement with Teva was $4.0 million.

 

---

Balance Sheet Highlights

As of December 31, 2019, the Company had cash, cash equivalents and short-term bank deposits of $29.5 million, compared with $23.6 million at December 31, 2018. The Company utilized $11.6 million in cash to fund its ongoing operating activities during 2019, NexoBrid license related payments and repayment of contingent liabilities, in line with the Company’s guidance for 2019 of $10.0 million to $12.0 million.

The Company will continue to invest primarily in research and development efforts for EscharEx, while NexoBrid is expected to be cash flow positive primarily due to anticipated inflows from BARDA and from the Vericel collaboration. As a result, the Company expects cash use for 2020 to be in the range of $11 million to $13 million, including repayment of contingent liabilities.

Conference Call

MediWound management will host a conference call for investors today, Tuesday, February 25, 2020 beginning at 8:30 a.m. Eastern Time to discuss these results and answer questions.  Shareholders and other interested parties may participate in the conference call by dialing 877-602-7940 (in the U.S.) , 1809 457 877 (Israel) or 678-894-3057 (outside the U.S. & Israel) and entering passcode 1809315362. Investors may also access the live call via webcast link at: https://edge.media-server.com/mmc/p/ugn4f67k

An archived version of the webcast will be available 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 share-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.

---

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 content of the BLA filing package, the timeline for the BLA filing; FDA acceptance of the BLA; the ability to fund the development of NexoBrid until BLA submission; the ability to successfully complete the development  and commercialize NexoBrid, expected funding from BARDA; our ability to meet the timeline for the NEXT treatment protocol, results of the NEXT treatment protocol and Vericel’s ability to commercialize NexoBrid, the design of the Phase 2 study, the timeline for the Phase 2 study and the interim assessment; the ability of the Phase 2 study to serve as one of the two adequately controlled studied required for BLA submission our development plan for EscharEx; expected revenues from Vericel and the ability to fund the development of EscharEx until BLA submission; the ability to fit EscharEx into treatment workflow and reimbursement programs; our expectations regarding the wound care market; and the ability to successfully develop and commercialize EscharEx. 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 important factors. In particular, you should consider that the FDA may not accept part or all of our BLA; FDA may require additional information, which we may or may not able to provide; FDA may not provide marketing approval for NexoBrid in the United States; we may not submit the BLA to FDA in the timeframe expected; risks related to our collaboration with Vericel; our ability to obtain marketing approval of NexoBrid or EscharEx in the U.S.; the clinical utility, potential advantages and timing or likelihood of regulatory filings and approvals of NexoBrid and EscharEx; our commercialization, marketing and manufacturing capabilities and strategy; risks related to our contract BARDA; the impact of government laws and regulations; and the additional risks discussed under the heading “Risk Factors” in our annual report on Form 20-F for the year ended December 31, 2019 as well as 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: Boaz Gur-Lavie           Chief Financial Officer         MediWound Ltd.           ir@mediwound.com

Jeremy Feffer Managing Director, LifeSci Advisors 212-915-2568 jeremy@lifesciadvisors.com

MediWound, Ltd.