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 May 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):   __
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes o                                           No x
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  __________

 

 
 
EXPLANATORY NOTE

On May 4, 2015, MediWound Ltd. (the “Company”) issued a press release entitled “MediWound Reports First 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 March 31, 2015, attached as Exhibit 99.2, which was provided by the Company to CBI on May 4, 2015 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: May 4, 2015 	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  
 
99.1	Description
 
Press release dated May 4, 2015 titled “MediWound Reports First Quarter 2015 Financial Results”.	

99.2	Un-Audited Interim Financial Statements as of March 31, 2015.	
 
4

Exhibit 99.1

News Release 

MediWound Reports First Quarter 2015 Financial Results

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

YAVNE, Israel (May 4, 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 months ended March 31, 2015.

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

 	·	Initiated U.S. Phase 3 clinical trial of NexoBrid® to treat severe burns	

 	·	NexoBrid highlighted in award-winning poster presentation at the American Burn Association (ABA) Annual Meeting	

 	·	NexoBrid featured at the International Conference on Minimally Invasive Medicine	

 	·	Expanded global distribution of NexoBrid through agreement in Mexico	

Management Commentary

“Throughout the first quarter of 2015, we made progress on a number of important initiatives that support MediWound’s long-term growth strategy,” stated Gal Cohen, President and Chief Executive Officer of MediWound.  “We continued to advance the commercial launch of NexoBrid in targeted European countries, initiated our U.S. Phase 3 clinical trial of NexoBrid to treat severe burns, expanded our distribution for NexoBrid in international markets and made good progress with the enrollment of our Phase 2 clinical trial with EscharEx™ to treat chronic wounds.”

“We are particularly pleased to have initiated our U.S. Phase 3 clinical trial with NexoBrid to treat patients with severe thermal burns, especially as the streamlined study protocol evaluates NexoBrid on a singular primary endpoint of eschar removal compared with vehicle, rather than on three co-primary endpoints as in the previous version of the study protocol. The other two primary endpoints of reduction in surgical burden and long term cosmesis are now a secondary endpoint and a safety endpoint, respectively. As a result of this efficient protocol and in light of the significant positive results in eschar removal vs. vehicle in our past clinical studies, we were able to reduce the number of patients to be enrolled in the study to 175.

“Since long-term cosmesis after a 12-month and 24-month follow up is no longer a primary endpoint, we now expect to have top-line results on the acute primary and secondary endpoints in the first half of 2017 and to have the results of the long-term 12- and 24-month follow-up in the first half of 2018 and 2019, respectively.  Subject to positive acute results, we can discuss with the U.S. Food and Drug Administration the potential for submitting a Biologics License Application after completion of the acute phase of the study, with plans to supplement the application with the long-term follow up data, when it is available."

 

 

“While product revenues during this early phase of our European launch remains modest, we made significant progress in integrating NexoBrid use in Europe throughout the first quarter, as evidenced by the growing number of patients treated and the number of burn centers that have started to use NexoBrid.  To date in 2015, burn specialists in Europe treated nearly as many patients with NexoBrid as were treated during all of 2014 and the number of treating centers has more than doubled.  We have trained more than half of our target burn centers in Europe and will continue this effort to further expand the use of NexoBrid throughout Europe.   We believe this growing patient experience and the increasing number of medical reference points in burn centers throughout Europe will further increase physician confidence and use, and supports our aim to assimilate NexoBrid as standard-of-care. We understand that reimbursement in the different markets in Europe will enable us to convert increasing use into revenues.  Toward this end, we have submitted the locally required reimbursement dossiers in target European markets and expect that the compelling clinical and pharmacoeconomic benefits of NexoBrid will provide the basis for favorable payment determinations in these territories.

“We continue to build strong clinical support among burn specialists as evidenced by the number and quality of the papers presented on the benefits of NexoBrid as a non-surgical debridement for severe burns at the recent ABA meeting. We continue to encourage such sharing of evidenced-based data and will maintain a major presence in the burn conferences on a national and European level.   We are confident that the work we are undertaking to increase awareness, interest and hands-on experience with NexoBrid will establish a strong foundation, from which to integrate NexoBrid into standard-of-care treatment for severe burns.

“Our Phase 2 clinical study with EscharEx for debridement of chronic wounds has enrolled more than half the patients required and we expect to report top-line results from this study in the second half of 2015.  EscharEx represents a significant opportunity for MediWound due to the prevalence of patients and the remaining unmet medical need despite the billions of dollars spent on currently available treatments." concluded Mr. Cohen.
First Quarter Financial Results

Revenues for the first quarter of 2015 totaled $67,000 compared with $50,000 for the same quarter last year.

Operating expenses for the first quarter of 2015 totaled $4.4 million, in line with our budget, compared with $4.3 million in the first quarter of 2014.  The increase was primarily due to an increase of $0.6 million in commercial activities associated with the European marketing infrastructure, offset by a $0.5 million decrease in non-cash share-based compensation expense.

For the first quarter of 2015, the Company posted a net loss of $6.4 million, or $0.30 per share, compared with a loss of $0.8 million, or $0.05 per share, in the first quarter of 2014. The increase was primarily due to net financial expenses, which was largely comprised of non-cash revaluation of contingent liabilities and exchange rate differences.

Adjusted EBITDA, as defined below, for the first quarter of 2015 was a loss of $3.7 million, compared with a loss of $3.1 million for the same quarter last year.

 

 
Balance Sheet Highlights

As of March 31, 2015 the Company had cash and short-term deposits of $59.4 million and working capital of $59.6 million.  The Company remained on budget and utilized $4.8 million in cash during this quarter to fund operating activities.

During 2015 the Company will continue to mainly invest in its sales and marketing activities to advance the commercialization of NexoBrid across Europe and in research and development efforts to develop products for additional territories and indications. As a result, cash usage for the year is expected to remain as communicated in the range of $20 million to $22 million.

Conference Call

MediWound management will host a conference call for investors May 4, 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 3015886. The call also will be broadcast live on the Internet at  www.streetevents.com  and  www.mediwound.com .

A replay of the call will be accessible two hours after its completion until 5:00 p.m. Eastern time May 10, 2015 by dialing (866) 932-5017 and entering passcode 3015886. The call will also be archived for 90 days at  www.streetevents.com  and 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 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, as well as chronic and other hard-to-heal wounds. MediWound’s first innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency for removal of dead or damaged tissue, known as eschar, in adults with deep partial- and full-thickness thermal burns and has been launched in Europe. NexoBrid represents a new paradigm in burn care management, and clinical trials have demonstrated, with statistical significance, its ability to non-surgically and rapidly remove the eschar earlier and, without harming viable tissues. For more information, please visit www.mediwound.com.

 

 

Cautionary Note Regarding Forward-Looking Statements

This release includes forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the US Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, such as statements regarding assumptions and results related to financial results forecast, commercial results, clinical trials and the regulatory authorizations. Forward-looking statements are based on MediWound’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, ability to recruit patients, low recruitment rate, unexpected results of clinical trials, delays or denial in the FDA or the EMA regulatory approval process or additional competition in the market. The forward-looking statements made herein speak only as of the date of this announcement and MediWound undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.
 
Contacts:
Sharon Malka
Chief Financial & Operation Officer
MediWound Ltd.
ir@mediwound.co.il	Anne Marie Fields
Senior Vice President
LHA
212-838-3777
afields@lhai.com	
 
Financial Tables to Follow

 

 

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS 

U.S. dollars in thousands
 
 	 	March 31,	 	 	December 31,	 	
 	 	2015	 	 	2014	 	
CURRENT ASSETS:	 	 	 	 	 	 	
Cash, cash equivalents and short term deposits	 	 	59,427	 	 	 	64,853	 	
Accounts and other receivable	 	 	2,081	 	 	 	2,223	 	
Inventories	 	 	1,997	 	 	 	1,421	 	
 	 	 	63,505	 	 	 	68,497	 	
LONG-TERM ASSETS:	 	 	 	 	 	 	 	 	
Long term deposits and deferred costs	 	 	151	 	 	 	168	 	
Property, plant and equipment, net	 	 	1,050	 	 	 	1,088	 	
Intangible assets, net	 	 	930	 	 	 	951	 	
Other assets	 	 	-	 	 	 	417	 	
 	 	 	65,636	 	 	 	71,121	 	
CURRENT LIABILITIES:	 	 	 	 	 	 	 	 	
Trade payables	 	 	1,096	 	 	 	1,214	 	
Accrued expenses and other payables	 	 	2,859	 	 	 	2,683	 	
 	 	 	3,955	 	 	 	3,897	 	
LONG-TERM LIABILITIES:	 	 	 	 	 	 	 	 	
Liabilities in respect of Chief Scientist government grants net of current maturities	 	 	7,140	 	 	 	6,985	 	
Contingent consideration for the purchase of treasury shares net of current maturities	 	 	17,385	 	 	 	17,361	 	
Severance pay liability, net	 	 	7	 	 	 	7	 	
 	 	 	24,532	 	 	 	24,353	 	
 	 	 	 	 	 	 	 	 	
SHAREHOLDERS' EQUITY (DEFICIENCY)	 	 	37,149	 	 	 	42,871	 	
 	 	 	65,636	 	 	 	71,121	 	

 

 
 
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME

U.S. dollars in thousands (except share and per share data)
 
 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2015	 	 	2014	 	
 	 	 	 	 	 	 	
Revenues	 	 	67	 	 	 	50	 	
Cost of revenues	 	 	175	 	 	 	170	 	
Gross loss	 	 	(108	)	 	 	(120	)	
Operating expenses:	 	 	 	 	 	 	 	 	
Research and development, net	 	 	1,397	 	 	 	1,465	 	
Selling, general & administrative	 	 	2,963	 	 	 	2,882	 	
Total operating expenses	 	 	4,360	 	 	 	4,347	 	
Operating loss	 	 	(4,468	)	 	 	(4,467	)	
Financial income (expenses), net	 	 	(1,525	)	 	 	3,732	 	
Loss from continuing operations	 	 	(5,993	)	 	 	(735	)	
Loss from discontinued operation	 	 	(417	)	 	 	(14	)	
Loss for the period	 	 	(6,410	)	 	 	(749	)	
 	 	 	 	 	 	 	 	 	
Foreign currency translation adjustments	 	 	1	 	 	 	(10	)	
Total comprehensive loss	 	 	(6,409	)	 	 	(759	)	
 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share:	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(0.28	)	 	 	(0.05	)	
Loss from discontinued operation	 	 	(0.02	)	 	 	0.00	 	
Net loss per share	 	 	(0.30	)	 	 	(0.05	)	
 	 	 	 	 	 	 	 	 	
Weighted average number of ordinary shares used in the computation of basic and diluted loss per share:	 	 	21,550	 	 	 	15,749	 	

 

 
 
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2015	 	 	2014	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	
Net  loss	 	 	(6,410	)	 	 	(749	)	
Adjustments to reconcile net income (loss) to net cash used in continuing operating activities:	 	 	 	 	 	 	 	 	
Adjustments to profit and loss items:	 	 	 	 	 	 	 	 	
Loss from discontinued operation	 	 	417	 	 	 	14	 	
Depreciation and amortization	 	 	115	 	 	 	117	 	
Revaluation of warrants to shareholders	 	 	0	 	 	 	(4,491	)	
Share-based compensation	 	 	687	 	 	 	1,261	 	
Revaluation of liabilities in respect of Chief Scientist government grants	 	 	202	 	 	 	141	 	
Revaluation of contingent consideration for the purchase of treasury shares	 	 	641	 	 	 	586	 	
Net financing expenses (income)	 	 	504	 	 	 	(14	)	
 	 	 	2,566	 	 	 	(2,386	)	
Changes in asset and liability items:	 	 	 	 	 	 	 	 	
Increase in trade receivables	 	 	30	 	 	 	(16	)	
Decrease in other receivables	 	 	90	 	 	 	8	 	
Increase in inventories	 	 	(783	)	 	 	(809	)	
Increase in trade payables	 	 	(105	)	 	 	(359	)	
(Decrease) increase  in other payables	 	 	(157	)	 	 	1,092	 	
 	 	 	(925	)	 	 	(84	)	
Net cash used in continuing operating activities	 	 	(4,769	)	 	 	(3,219	)	
Net cash used in discontinued operating activities	 	 	0	 	 	 	(14	)	
Net cash flows used in operating activities	 	 	(4,769	)	 	 	(3,233	)	
Cash Flows from Investing  Activities:	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(61	)	 	 	(74	)	
Interest received	 	 	7	 	 	 	3	 	
Proceeds from (investment in) short term bank deposits, net of investments	 	 	(2,897	)	 	 	2,500	 	
Net cash provided by (used in) investing activities	 	 	(2,951	)	 	 	2,429	 	
Cash Flows from Financing Activities:	 	 	 	 	 	 	 	 	
Proceeds from exercise of options	 	 	-	 	 	 	208	 	
Proceeds from issuance of shares and warrants, net	 	 	-	 	 	 	74,082	 	
Proceeds from the Chief Scientist government grants	 	 	-	 	 	 	12	 	
Net cash provided by financing activities	 	 	0	 	 	 	74,302	 	
Exchange rate differences on cash and cash equivalent balances	 	 	(603	)	 	 	19	 	
Increase in cash and cash equivalents from continuing activities	 	 	(7,720	)	 	 	73,512	 	
Decrease in cash and cash equivalents from discontinued activities	 	 	-	 	 	 	(14	)	
Balance of cash and cash equivalents at the beginning of the period	 	 	25,422	 	 	 	7,053	 	
Balance of cash and cash equivalents at the end of the period	 	 	17,099	 	 	 	80,570	 	

 

 
 
ADJUSTED EBITDA

U.S. dollars in thousands
 
 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2015	 	 	2014	 	
Loss for the period	 	 	(6,410	)	 	 	(749	)	
Adjustments:	 	 	 	 	 	 	 	 	
Financial (expenses) income, net	 	 	(1,525	)	 	 	3,732	 	
Other expenses*	 	 	(417	)	 	 	(14	)	
Depreciation and amortization	 	 	(115	)	 	 	(117	)	
Share-based compensation expenses	 	 	(687	)	 	 	(1,261	)	
Total adjustments	 	 	(2,744	)	 	 	2,340	 	
Adjusted EBITDA from continuing operation	 	 	(3,666	)	 	 	(3,089	)	
* Loss from discontinued operation	 	 	 	 	 	 	 	 	
Share-based compensation and options expenses:	 	 	 	 	 	 	 	 	
Cost of revenues	 	 	101	 	 	 	132	 	
Research and development	 	 	122	 	 	 	346	 	
Selling, general & administrative	 	 	464	 	 	 	783	 	
Equity-based compensation  continuing operations	 	 	687	 	 	 	1,261	 	

Exhibit 99.2

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 
AS OF MARCH 31, 2015
 
IN 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 Shareholders' Equity	4 - 5	
 	 	
Condensed Interim Consolidated Statements of Cash Flows	6 – 7	
 	 	
Notes to Condensed Consolidated Interim Financial Statements	8 - 10	

 

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
BALANCE SHEETS 

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

 	 	March 31,	 	 	December 31,	 	
 	 	2015	 	 	2014	 	 	2014	 	
 	 	Unaudited	 	 	Audited	 	
CURRENT ASSETS:	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	 	17,099	 	 	 	80,570	 	 	 	25,422	 	
Short-term bank deposits	 	 	42,328	 	 	 	-	 	 	 	39,431	 	
Trade receivables	 	 	29	 	 	 	16	 	 	 	64	 	
Inventories	 	 	1,997	 	 	 	809	 	 	 	1,421	 	
Other receivables	 	 	2,052	 	 	 	2,439	 	 	 	2,159	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	63,505	 	 	 	83,834	 	 	 	68,497	 	
LONG-TERM ASSETS:	 	 	 	 	 	 	 	 	 	 	 	 	
Long term deposits and deferred costs	 	 	151	 	 	 	140	 	 	 	168	 	
Property, plant and equipment, net	 	 	1,050	 	 	 	1,110	 	 	 	1,088	 	
Intangible assets, net	 	 	930	 	 	 	987	 	 	 	951	 	
Other assets	 	 	-	 	 	 	417	 	 	 	417	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	2,131	 	 	 	2,654	 	 	 	2,624	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	65,636	 	 	 	86,488	 	 	 	71,121	 	
CURRENT LIABILITIES:	 	 	 	 	 	 	 	 	 	 	 	 	
Trade payables	 	 	1,096	 	 	 	823	 	 	 	1,214	 	
Other payables	 	 	2,859	 	 	 	4,523	 	 	 	2,683	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	3,955	 	 	 	5,346	 	 	 	3,897	 	
LONG-TERM LIABILITIES:	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities in respect of Chief Scientist government grants	 	 	7,140	 	 	 	6,714	 	 	 	6,985	 	
Contingent consideration for the purchase of treasury shares	 	 	17,385	 	 	 	17,115	 	 	 	17,361	 	
Severance pay liability, net	 	 	7	 	 	 	3	 	 	 	7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	24,532	 	 	 	23,832	 	 	 	24,353	 	
SHAREHOLDERS' EQUITY:	 	 	 	 	 	 	 	 	 	 	 	 	
Ordinary shares of NIS 0.01 par value:	 	 	 	 	 	 	 	 	 	 	 	 	
Authorized: 33,000,000 shares as of March 31, 2014 and 32,244,508 shares as of December 31, 2014
   and March 31, 2015; Issued: 22,053,336 and 21,550,300 shares respectively;
   Outstanding: 21,297,844 and 21,550,300 shares respectively	 	 	59	 	 	 	61	 	 	 	59	 	
Share premium	 	 	109,804	 	 	 	140,052	 	 	 	109,117	 	
Treasury shares	 	 	-	 	 	 	(34,600	)	 	 	-	 	
Foreign currency translation adjustments	 	 	(17	)	 	 	(42	)	 	 	(18	)	
Accumulated deficit	 	 	(72,697	)	 	 	(48,161	)	 	 	(66,287	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	37,149	 	 	 	57,310	 	 	 	42,871	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	65,636	 	 	 	86,488	 	 	 	71,121	 	
 
The accompanying notes are an integral part of the interim financial statements.

2

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
STATEMENTS OF COMPREHENSIVE INCOME

U.S. dollars in thousands

 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2015	 	 	2014	 	 	2014	 	
 	 	Unaudited	 	 	Audited	 	
 	 	 	 	 	 	 	 	 	 	
Revenues	 	 	67	 	 	 	50	 	 	 	259	 	
Cost of revenues	 	 	175	 	 	 	170	 	 	 	2,785	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross loss	 	 	(108	)	 	 	(120	)	 	 	(2,526	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development, net of participations	 	 	1,397	 	 	 	1,465	 	 	 	5,349	 	
Selling and marketing	 	 	2,084	 	 	 	1,615	 	 	 	8,829	 	
General and administrative	 	 	879	 	 	 	1,267	 	 	 	4,723	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	(4,360	)	 	 	(4,347	)	 	 	(18,901	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss	 	 	(4,468	)	 	 	(4,467	)	 	 	(21,427	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial income	 	 	74	 	 	 	4,523	 	 	 	4,665	 	
Financial expense	 	 	(1,599	)	 	 	(791	)	 	 	(2,113	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(5,993	)	 	 	(735	)	 	 	(18,875	)	
Loss from discontinued operation	 	 	(417	)	 	 	(14	)	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	(6,410	)	 	 	(749	)	 	 	(18,875	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss):	 	 	 	 	 	 	 	 	 	 	 	 	
Items to be reclassified to profit or loss in subsequent periods:	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency translation adjustments	 	 	1	 	 	 	(10	)	 	 	14	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other comprehensive income (loss)	 	 	1	 	 	 	(10	)	 	 	14	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	(6,409	)	 	 	(759	)	 	 	(18,861	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share:	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(0.28	)	 	 	(0.05	)	 	 	(0.95	)	
Loss from discontinued operation	 	 	(0.02	)	 	 	(*	) 	 	 	-	 	
     Net loss per share	 	 	(0.30	)	 	 	(0.05	)	 	 	(0.95	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of ordinary shares used in the computation of basic and diluted loss per share:	 	 	21,550	 	 	 	15,749	 	 	 	19,940	 	
 
(*)           Represents less than $ 0.01.

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

3

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands (except share data)
 
 	 	Share capital	 	 	Share premium	 	 	Foreign currency translation reserve	 	 	Accumulated
deficit	 	 	Total
equity	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 1, 2015	 	 	59	 	 	 	109,117	 	 	 	(18	)	 	 	(66,287	)	 	 	42,871	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss for the period	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(6,410	)	 	 	(6,410	)	
Other comprehensive income	 	 	-	 	 	 	-	 	 	 	1	 	 	 	-	 	 	 	1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income (loss)	 	 	-	 	 	 	-	 	 	 	1	 	 	 	(6,410	)	 	 	(6,409	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Share-based compensation	 	 	-	 	 	 	687	 	 	 	-	 	 	 	-	 	 	 	687	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of March 31, 2015 (unaudited)	 	 	59	 	 	 	109,804	 	 	 	(17	)	 	 	(72,697	)	 	 	37,149	 	
 
 	 	Share capital	 	 	Share premium	 	 	Treasury
shares	 	 	Foreign currency translation reserve	 	 	Accumulated deficit	 	 	Total equity	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 1, 2014	 	 	11	 	 	 	62,229	 	 	 	(34,600	)	 	 	(32	)	 	 	(47,412	)	 	 	(19,804	)	
Loss for the period	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(749	)	 	 	(749	)	
Other comprehensive loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(10	)	 	 	-	 	 	 	(10	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(10	)	 	 	(749	)	 	 	(759	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exercise of options	 	 	(*	) 	 	 	208	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	208	 	
Exercise of warrants	 	 	1	 	 	 	4,711	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	4,712	 	
Issuance of shares, net	 	 	17	 	 	 	71,675	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	71,692	 	
Share-based compensation	 	 	-	 	 	 	1,261	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	1,261	 	
Effect of share split	 	 	32	 	 	 	(32	)	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of March 31, 2014 (unaudited)	 	 	61	 	 	 	140,052	 	 	 	(34,600	)	 	 	(42	)	 	 	(48,161	)	 	 	57,310	 	

(*)           Represents less than $ 1.

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

4

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands (except share data)
 
 	 	Share capital	 	 	Share premium	 	 	Treasury
shares	 	 	Foreign currency translation reserve	 	 	Accumulated
deficit	 	 	Total
equity	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
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 income (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	 	

(*)           Represents less than $ 1.

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

5

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES

STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2015	 	 	2014	 	 	2014	 	
 	 	Unaudited	 	 	Audited	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	 	 	 	
Net loss	 	 	(6,410	)	 	 	(749	)	 	 	(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	 	 	 	14	 	 	 	-	 	
Depreciation and amortization	 	 	115	 	 	 	117	 	 	 	492	 	
Revaluation of warrants to shareholders	 	 	-	 	 	 	(4,491	)	 	 	(4,491	)	
Share-based compensation	 	 	687	 	 	 	1,261	 	 	 	4,827	 	
Revaluation of liabilities in respect of Chief Scientist government grants	 	 	202	 	 	 	141	 	 	 	87	 	
Revaluation of contingent consideration for the purchase of treasury shares	 	 	641	 	 	 	586	 	 	 	612	 	
Other financing expenses, net	 	 	504	 	 	 	(14	)	 	 	226	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	2,566	 	 	 	(2,386	)	 	 	1,753	 	
Changes in asset and liability items:	 	 	 	 	 	 	 	 	 	 	 	 	
Decrease (increase)  in trade receivables	 	 	30	 	 	 	(16	)	 	 	(67	)	
Decrease in other receivables	 	 	90	 	 	 	8	 	 	 	186	 	
Increase in inventories	 	 	(783	)	 	 	(809	)	 	 	(1,421	)	
Increase (decrease) in trade payables	 	 	(105	)	 	 	(359	)	 	 	22	 	
Increase (decrease) in other payables	 	 	(157	)	 	 	1,092	 	 	 	1,909	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	(925	)	 	 	(84	)	 	 	629	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in continuing operating activities	 	 	(4,769	)	 	 	(3,219	)	 	 	(16,493	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash used in discontinued operating activities	 	 	-	 	 	 	(14	)	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows used in operating activities	 	 	(4,769	)	 	 	(3,233	)	 	 	(16,493	)	

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

6

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
STATEMENTS OF CASH FLOWS

U.S. dollars in thousands
 
 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2015	 	 	2014	 	 	2014	 	
 	 	Unaudited	 	 	Audited	 	
Cash Flows from Investing Activities:	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(61	)	 	 	(74	)	 	 	(366	)	
Purchase of intangible assets	 	 	-	 	 	 	-	 	 	 	(30	)	
Interest received	 	 	7	 	 	 	3	 	 	 	173	 	
Proceeds from (investment in) short term bank deposits, net of investments	 	 	(2,897	)	 	 	2,500	 	 	 	(36,931	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) investing activities	 	 	(2,951	)	 	 	2,429	 	 	 	(37,154	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash Flows from Financing Activities:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from exercise of options	 	 	-	 	 	 	208	 	 	 	306	 	
Proceeds from issuance of shares and warrants, net	 	 	-	 	 	 	74,082	 	 	 	71,824	 	
Proceeds from the Chief Scientist government grants	 	 	-	 	 	 	12	 	 	 	345	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by financing activities	 	 	-	 	 	 	74,302	 	 	 	72,475	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Exchange rate differences on cash and cash equivalent balances	 	 	(603	)	 	 	19	 	 	 	(459	)	
Increase (decrease) in cash and cash equivalents from continuing activities	 	 	(8,323	)	 	 	73,531	 	 	 	18,828	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Decrease in cash and cash equivalents from discontinued activities	 	 	-	 	 	 	(14	)	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance of cash and cash equivalents at the beginning of the period	 	 	25,422	 	 	 	7,053	 	 	 	7,053	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance of cash and cash equivalents at the end of the period	 	 	17,099	 	 	 	80,570	 	 	 	25,422	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-cash activities:	 	 	 	 	 	 	 	 	 	 	 	 	
Treasury shares cancellation against share premium	 	 	-	 	 	 	-	 	 	 	34,600	 	
Exercise of cashless warrants into shares	 	 	-	 	 	 	4,709	 	 	 	4,709	 	
Unpaid issuance expenses	 	 	-	 	 	 	2,258	 	 	 	-	 	

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

7

 
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO FINANCIAL STATEMENTS

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, 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.	

 	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 about 7% of Polyheal Ltd., a private life sciences company ("Polyheal").	

 	c.	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.	

8

 

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)
 
NOTE 2:	SIGNIFICANT ACCOUNTING POLICIES	

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

 	a.	Basis of presentation of financial statements:
 
These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").	
 
 	b.	Basis of preparation of the interim consolidated financial statements
 
The interim condensed financial statements for the three months ended March 31, 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.	
 
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 (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 (together with a third party notice against Teva, if the Company decides to do so).  
 
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.

9

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO FINANCIAL STATEMENTS

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

NOTE 5:	OTHER ASSETS	

The Company has been acknowledged during the 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, on March 31, 2015, the Company had fully impaired these royalty rights amounting to $417 within the loss from discontinued operation.
 
10