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 April 2016
 
Commission File Number: 001-36349
 
          MediWound Ltd.        
(Translation of registrant’s name into English)
 
42 Hayarkon Street
Yavne, 8122745 Israel
 (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F x   Form 40-F o
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):   __
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):   __

 

 
 
EXPLANATORY NOTE
 
On April 21, 2016, MediWound Ltd. (the “Company”) issued a press release entitled “MediWound Reports First Quarter 2016 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, 2016, attached as Exhibit 99.2, which was provided by the Company to CBI on April 21, 2016 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.	 	
 	 	 	 	
 	By:	/s/ Sharon Malka	 	
 	 	Name: Sharon Malka	 	
 	 	Title:   Chief Financial Officer	 	
 	 	 	 	
Date: April 21, 2016                                                                        

3

 
EXHIBIT INDEX

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

Exhibit	Description	

99.1	Press release dated April 21, 2016 titled “MediWound Reports First Quarter 2016 Financial Results”.	

99.2	Un-Audited Interim Financial Statements as of March 31, 2016.	
 
4

Exhibit 99.1

News Release                                                                
 
MediWound Reports First Quarter 2016 Financial Results

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

YAVNE, Israel (April 21, 2016) – 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 months ended March 31, 2016.

Highlights of the first quarter of 2016 and recent weeks include:

 	·	Reported positive top-line results from the Company’s Phase 2 clinical trial with EscharEx® for the debridement of chronic and hard-to-heal wounds, achieving the primary endpoint of incidence of complete debridement compared with patients treated with the hydrogel vehicle, with statistical significance;	

 	·	Expanded global access to NexoBrid® through distribution agreements for certain territories in Latin America and in India, Bangladesh and Sri Lanka;	

 	·	Presented positive EscharEx Phase 2 data at the “Late Breaker” session at the Symposium on Advanced Wound Care (SAWC) Spring 2016.	

Management Commentary

“Throughout the first quarter of 2016 we made important clinical and operational progress that supports MediWound’s growth strategy,” stated Gal Cohen, President and Chief Executive Officer of MediWound.  “We reported positive Phase 2 clinical trial data with EscharEx for the debridement of chronic and hard-to-heal wounds, continued to advance the adoption of NexoBrid in targeted European countries and expanded distribution for NexoBrid in important international markets.”

“We were delighted to report the top-line data from our Phase 2 study of EscharEx and to have them presented at the ‘Late Breaker’ session at this year’s SAWC.  These highly encouraging results reinforce our belief that EscharEx has the potential to become a first-in-class topical debridement pharmaceutical product for the treatment of chronic wounds.  There is a great unmet medical need to effectively debride chronic wounds in a non-surgical and prompt manner, as debriding is a critical first step for subsequent wound management and is complementary to the large number of existing wound healing products, which require a clean wound bed in order to heal the wound.  Based on the safety data and the compelling clinical activity EscharEx demonstrated, particularly in diabetic foot ulcers and venous leg ulcers, we are moving forward with our clinical program with the goal of making EscharEx available for the treatment of these important indications.”

 

 

“We look forward to continued progress throughout 2016 and to advancing our commercial and clinical programs to the benefit of patients suffering with severe burns and chronic wounds," concluded Mr. Cohen.
 
  First Quarter Financial Results

Revenues for the first quarter of 2016 were $254,000 compared with $67,000 for the first quarter of 2015.

Research and Development expenses, gross, for the first quarter of 2016 were $3.2 million, in line with the Company’s budget, compared with $1.4 million for the first quarter of 2015.  The increase was primarily due to an increase of $0.8 million related to expenses for NexoBrid clinical trials and $0.8 million for EscharEx development. Research and development expenses gross, were offset by $1.8 million participation by the U.S. Biomedical Advanced Research and Development Authority (BARDA) and $0.4 million revaluation of the Office of the Chief Scientist (Israel) contingent liability. Sales, marketing and G&A expenses remained stable at $2.9 million.

For the first quarter of 2016, the Company posted a net loss of $3.8 million, or $0.17 per share, compared with a loss of $6.4 million, or $0.30 per share, for the first quarter of 2015. The decrease was primarily due to a decrease in net research and development expenses of $0.4 million, net financial expenses of $1.5 million recorded in 2015, which was largely comprised of non-cash revaluation of contingent liabilities and changes in foreign currency exchange rates, and an impairment of discontinued operation of $0.4 million recorded in the first quarter of 2015.

Adjusted EBITDA, as defined below, for the first quarter of 2016 was a loss of $3.0 million, compared with a loss of $3.7 million for the first quarter of 2015.

Balance Sheet Highlights

As of March 31, 2016 the Company had cash and short-term deposits of $41.6 million and working capital of $41.4 million.  The Company remained on budget and utilized $4.2 million in cash to fund operating activities during the first quarter of 2016.

During 2016 the Company will continue to invest primarily in its sales and marketing activities in Europe to advance the adoption of NexoBrid and in research and development efforts for NexoBrid supported by BARDA funding, as well as amplify the development of EscharEx for chronic wounds and other pipeline product candidates. As a result, cash use for the year is expected to be in the range of $20.0 million to $22.0 million.

Conference Call

MediWound management will host a conference call for investors April 21, 2016 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 84818465. 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 April 27, 2016 by dialing (855) 859-2056 (domestic and international) and entering passcode 84818465. 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, 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 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.  MediWound has distribution agreements for NexoBrid in Latin America, Asia Pacific, India, Japan and CIS regions.  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 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, 2015 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: 	Anne Marie Fields	

Sharon Malka	Senior Vice President	

Chief Financial and Operations Officer 	LHA	

MediWound 	212-838-3777	

ir@mediwound.co.il	afields@lhai.com	
 
Financial Tables to Follow

# # #

 

 
 
CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	
 	 	Unaudited	 	 	Audited	 	
CURRENT ASSETS:	 	 	 	 	 	 	
Cash, cash equivalents and short term deposits	 	 	41,591	 	 	 	45,768	 	
Accounts and other receivable	 	 	3,283	 	 	 	2,912	 	
Inventories	 	 	1,534	 	 	 	1,715	 	
 	 	 	46,408	 	 	 	50,395	 	
LONG-TERM ASSETS:	 	 	 	 	 	 	 	 	
Long term deposits	 	 	135	 	 	 	192	 	
Property, plant and equipment, net	 	 	1,267	 	 	 	1,040	 	
Intangible assets, net	 	 	874	 	 	 	896	 	
 	 	 	48,684	 	 	 	52,523	 	
CURRENT LIABILITIES:	 	 	 	 	 	 	 	 	
Trade payables	 	 	1,815	 	 	 	1,123	 	
Accrued expenses and other payables	 	 	3,144	 	 	 	4,083	 	
 	 	 	4,959	 	 	 	5,206	 	
LONG-TERM LIABILITIES:	 	 	 	 	 	 	 	 	
Liabilities in respect of Chief Scientist government grants net of current maturities	 	 	7,019	 	 	 	7,275	 	
Contingent consideration for the purchase of treasury shares net of current maturities	 	 	16,041	 	 	 	16,475	 	
Severance pay liability, net	 	 	101	 	 	 	97	 	
 	 	 	23,161	 	 	 	23,847	 	
 	 	 	 	 	 	 	 	 	
SHAREHOLDERS' EQUITY	 	 	20,564	 	 	 	23,470	 	
 	 	 	48,684	 	 	 	52,523	 	

 

 

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands (except share and per share data)
 
 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2016	 	 	2015	 	
 	 	 	 	 	 	 	
Revenues	 	 	254	 	 	 	67	 	
Cost of revenues	 	 	404	 	 	 	175	 	
Gross loss	 	 	(150	)	 	 	(108	)	
Operating expenses:	 	 	 	 	 	 	 	 	
Research and development, gross	 	 	3,230	 	 	 	1,397	 	
Participation by OCS & BARDA	 	 	(2,237	)	 	 	-	 	
Research and development, net	 	 	993	 	 	 	1,397	 	
Selling, general & administrative	 	 	2,861	 	 	 	2,963	 	
Total operating expenses	 	 	3,854	 	 	 	4,360	 	
Operating loss	 	 	(4,004	)	 	 	(4,468	)	
Financial income (expenses), net	 	 	230	 	 	 	(1,525	)	
Loss from continuing operations	 	 	(3,774	)	 	 	(5,993	)	
Loss from discontinued operation	 	 	-	 	 	 	(417	)	
Loss for the period	 	 	(3,774	)	 	 	(6,410	)	
 	 	 	 	 	 	 	 	 	
Foreign currency translation adjustments	 	 	(6	)	 	 	1	 	
Total comprehensive loss	 	 	(3,780	)	 	 	(6,409	)	
 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share:	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(0.17	)	 	 	(0.28	)	
Loss from discontinued operation	 	 	0.00	 	 	 	(0.02	)	
Net loss per share	 	 	(0.17	)	 	 	(0.30	)	
Weighted average number of ordinary shares used in the computation of basic and diluted loss per share:	 	 	21,850	 	 	 	21,550	 	

 

 
 
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands
 
 	 	Three months ended
March 31,	 	
 	 	2016	 	 	2015	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	
Net loss	 	 	(3,774	)	 	 	(6,410	)	
 	 	 	 	 	 	 	 	 	
Adjustments to reconcile net loss to net cash used in continuing operating activities:	 	 	 	 	 	 	 	 	
Adjustments to profit and loss items:	 	 	 	 	 	 	 	 	
Loss from discontinued operation	 	 	-	 	 	 	417	 	
Depreciation and amortization	 	 	123	 	 	 	115	 	
Share-based compensation	 	 	874	 	 	 	687	 	
Revaluation of liabilities in respect of Chief Scientist government grants	 	 	(228	)	 	 	202	 	
Revaluation of contingent consideration for the purchase of treasury shares	 	 	(76	)	 	 	641	 	
Net financing (income) expenses	 	 	(229	)	 	 	504	 	
 	 	 	464	 	 	 	2,566	 	
Changes in asset and liability items:	 	 	 	 	 	 	 	 	
Decrease (increase) in trade receivables	 	 	(143	)	 	 	30	 	
Decrease (increase) in other receivables	 	 	(149	)	 	 	90	 	
Decrease (increase) in inventories	 	 	169	 	 	 	(783	)	
Increase (decrease) in trade payables	 	 	685	 	 	 	(105	)	
Decrease in other payables	 	 	(1,353	)	 	 	(157	)	
 	 	 	(791	)	 	 	(925	)	
Net cash flows used in operating activities	 	 	(4,101	)	 	 	(4,769	)	
Cash Flows from Investment Activities:	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(327	)	 	 	(61	)	
Interest received	 	 	9	 	 	 	7	 	
Investment in short term bank deposits	 	 	(29,211	)	 	 	(2,897	)	
Net cash used in investing activities	 	 	(29,529	)	 	 	(2,951	)	
Increase in cash and cash equivalents	 	 	(33,630	)	 	 	(7,720	)	
Exchange rate differences on cash and cash equivalent balances	 	 	154	 	 	 	(603	)	
Balance of cash and cash equivalents at the beginning of the period	 	 	42,502	 	 	 	25,422	 	
Balance of cash and cash equivalents at the end of the period	 	 	9,026	 	 	 	17,099	 	

 

 
 
ADJUSTED EBITDA

U.S. dollars in thousands
 
 	 	Three months ended	 	
 	 	March 31,	 	
 	 	2016	 	 	2015	 	
Loss for the period	 	 	(3,774	)	 	 	(6,410	)	
Adjustments:	 	 	 	 	 	 	 	 	
Financial income (expenses), net	 	 	230	 	 	 	(1,525	)	
Loss from discontinued operation	 	 	-	 	 	 	(417	)	
Depreciation and amortization	 	 	(123	)	 	 	(115	)	
Share-based compensation expenses	 	 	(874	)	 	 	(687	)	
Total adjustments	 	 	(767	)	 	 	(2,744	)	
Adjusted EBITDA	 	 	(3,007	)	 	 	(3,666	)	

Share-based compensation expenses:	 	 	 	 	 	 	
Cost of revenues	 	 	130	 	 	 	101	 	
Research and development	 	 	193	 	 	 	122	 	
Selling, general & administrative	 	 	551	 	 	 	464	 	
Total share-based compensation expenses	 	 	874	 	 	 	687	 	

Exhibit 99.2
 
MEDIWOUND LTD. AND ITS SUBSIDIARIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2016

IN U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX
 
 	Page	

Condensed Interim Consolidated Balance Sheets	2	
 	 	
Condensed Interim Consolidated Statements of Comprehensive Loss	3	
 	 	
Condensed Interim Consolidated Statements of Changes in Shareholders' Equity	4 - 5	
 	 	
Condensed Interim Consolidated Statements of Cash Flows	6 – 7	
 	 	
Notes to Condensed Interim Consolidated Financial Statements	8 - 10	

 

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands
 
 	 	March 31,	 	 	December 31,	 	
 	 	2016	 	 	2015	 	 	2015	 	
 	 	Unaudited	 	 	Audited	 	
CURRENT ASSETS:	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	 	9,026	 	 	 	17,099	 	 	 	42,502	 	
Short-term bank deposits	 	 	32,565	 	 	 	42,328	 	 	 	3,266	 	
Trade receivables	 	 	396	 	 	 	29	 	 	 	238	 	
Inventories	 	 	1,534	 	 	 	1,997	 	 	 	1,715	 	
Other receivables	 	 	2,887	 	 	 	2,052	 	 	 	2,674	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	46,408	 	 	 	63,505	 	 	 	50,395	 	
LONG-TERM ASSETS:	 	 	 	 	 	 	 	 	 	 	 	 	
Long term deposits and deferred costs	 	 	135	 	 	 	151	 	 	 	192	 	
Property, plant and equipment, net	 	 	1,267	 	 	 	1,050	 	 	 	1,040	 	
Intangible assets, net	 	 	874	 	 	 	930	 	 	 	896	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	2,276	 	 	 	2,131	 	 	 	2,128	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	48,684	 	 	 	65,636	 	 	 	52,523	 	
CURRENT LIABILITIES:	 	 	 	 	 	 	 	 	 	 	 	 	
Trade payables	 	 	1,815	 	 	 	1,096	 	 	 	1,123	 	
Other payables	 	 	3,144	 	 	 	2,859	 	 	 	4,083	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	4,959	 	 	 	3,955	 	 	 	5,206	 	
LONG-TERM LIABILITIES:	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities in respect of Chief Scientist government grants	 	 	7,019	 	 	 	7,140	 	 	 	7,275	 	
Contingent consideration for the purchase of treasury shares	 	 	16,041	 	 	 	17,385	 	 	 	16,475	 	
Severance pay liability, net	 	 	101	 	 	 	7	 	 	 	97	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	23,161	 	 	 	24,532	 	 	 	23,847	 	
SHAREHOLDERS' EQUITY:	 	 	 	 	 	 	 	 	 	 	 	 	
Ordinary shares of NIS 0.01 par value:	 	 	 	 	 	 	 	 	 	 	 	 	
Authorized: 32,244,508 shares; Issued and Outstanding: 21,850,300 as of March 31, 2016 and December  31, 2015 and 21,550,300 as of March 31, 2015	 	 	60	 	 	 	59	 	 	 	60	 	
Share premium	 	 	112,675	 	 	 	109,804	 	 	 	111,801	 	
Foreign currency translation adjustments	 	 	(22	)	 	 	(17	)	 	 	(16	)	
Accumulated deficit	 	 	(92,149	)	 	 	(72,697	)	 	 	(88,375	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	20,564	 	 	 	37,149	 	 	 	23,470	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	48,684	 	 	 	65,636	 	 	 	52,523	 	

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

2

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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

 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2016	 	 	2015	 	 	2015	 	
 	 	Unaudited	 	 	Audited	 	
 	 	 	 	 	 	 	 	 	 	
Revenues	 	 	254	 	 	 	67	 	 	 	601	 	
Cost of revenues	 	 	404	 	 	 	175	 	 	 	2,519	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross loss	 	 	(150	)	 	 	(108	)	 	 	(1,918	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development, net of participations	 	 	993	 	 	 	1,397	 	 	 	6,021	 	
Selling and marketing	 	 	1,942	 	 	 	2,084	 	 	 	9,284	 	
General and administrative	 	 	919	 	 	 	879	 	 	 	4,004	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	(3,854	)	 	 	(4,360	)	 	 	(19,309	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating loss	 	 	(4,004	)	 	 	(4,468	)	 	 	(21,227	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial income	 	 	451	 	 	 	74	 	 	 	1,052	 	
Financial expense	 	 	(221	)	 	 	(1,599	)	 	 	(1,496	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(3,774	)	 	 	(5,993	)	 	 	(21,671	)	
Loss from discontinued operation	 	 	-	 	 	 	(417	)	 	 	(417	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	 	(3,774	)	 	 	(6,410	)	 	 	(22,088	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss):	 	 	 	 	 	 	 	 	 	 	 	 	
Items to be reclassified to profit or loss in subsequent periods:	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency translation adjustments	 	 	(6	)	 	 	1	 	 	 	2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	(3,780	)	 	 	(6,409	)	 	 	(22,086	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted loss per share:	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from continuing operations	 	 	(0.17	)	 	 	(0.28	)	 	 	(1.00	)	
Loss from discontinued operation	 	 	-	 	 	 	(0.02	)	 	 	(0.02	)	
     Net loss per share	 	 	(0.17	)	 	 	(0.30	)	 	 	(1.02	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of ordinary shares used in the computation of basic and diluted loss per share:	 	 	21,850	 	 	 	21,550	 	 	 	21,718	 	

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

3

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

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	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(3,774	)	 	 	(3,774	)	
Other comprehensive loss	 	 	-	 	 	 	-	 	 	 	(6	)	 	 	-	 	 	 	(6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss	 	 	-	 	 	 	-	 	 	 	(6	)	 	 	(3,774	)	 	 	(3,780	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Share-based compensation	 	 	-	 	 	 	874	 	 	 	-	 	 	 	-	 	 	 	874	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of March 31, 2016 (unaudited)	 	 	60	 	 	 	112,675	 	 	 	(22	)	 	 	(92,149	)	 	 	20,564	 	
 
 	 	Share
capital	 	 	Share
premium	 	 	Foreign currency translation reserve	 	 	Accumulated
deficit	 	 	Total
equity	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of January 1, 2015	 	 	59	 	 	 	109,117	 	 	 	(18	)	 	 	(66,287	)	 	 	42,781	 	
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	 	

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

4

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands
 
 	 	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	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(22,088	)	 	 	(22,088	)	
Other comprehensive income	 	 	-	 	 	 	-	 	 	 	2	 	 	 	-	 	 	 	2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income (loss)	 	 	-	 	 	 	-	 	 	 	2	 	 	 	(22,088	)	 	 	(22,086	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exercise of options	 	 	1	 	 	 	25	 	 	 	-	 	 	 	-	 	 	 	26	 	
Share-based compensation	 	 	-	 	 	 	2,659	 	 	 	-	 	 	 	-	 	 	 	2,659	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance as of December 31, 2015	 	 	60	 	 	 	111,801	 	 	 	(16	)	 	 	(88,375	)	 	 	23,470	 	

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

5

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2016	 	 	2015	 	 	2015	 	
 	 	Unaudited	 	 	Audited	 	
Cash Flows from Operating Activities:	 	 	 	 	 	 	 	 	 	
Net loss	 	 	(3,774	)	 	 	(6,410	)	 	 	(22,088	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments to profit and loss items:	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from discontinued operation	 	 	-	 	 	 	417	 	 	 	417	 	
Depreciation and amortization	 	 	123	 	 	 	115	 	 	 	503	 	
Share-based compensation	 	 	874	 	 	 	687	 	 	 	2,659	 	
Revaluation of liabilities in respect of Chief Scientist government grants	 	 	(228	)	 	 	202	 	 	 	(474	)	
Revaluation of contingent consideration for the purchase of treasury shares	 	 	(76	)	 	 	641	 	 	 	(764	)	
Increase in severance liability	 	 	-	 	 	 	-	 	 	 	90	 	
Net financing (income) expenses	 	 	(229	)	 	 	504	 	 	 	(219	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	464	 	 	 	2,566	 	 	 	2,212	 	
Changes in asset and liability items:	 	 	 	 	 	 	 	 	 	 	 	 	
Decrease (increase)  in trade receivables	 	 	(143	)	 	 	30	 	 	 	(181	)	
Decrease (increase) in other receivables	 	 	(149	)	 	 	90	 	 	 	(556	)	
Decrease (increase) in inventories	 	 	169	 	 	 	(783	)	 	 	(273	)	
Increase (decrease) in trade payables	 	 	685	 	 	 	(105	)	 	 	(76	)	
Increase (decrease) in other payables	 	 	(1,353	)	 	 	(157	)	 	 	1,361	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	(791	)	 	 	(925	)	 	 	275	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash flows used in operating activities	 	 	(4,101	)	 	 	(4,769	)	 	 	(19,601	)	

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

6

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands
 
 	 	Three months ended
March 31,	 	 	Year ended
December 31,	 	
 	 	2016	 	 	2015	 	 	2015	 	
 	 	Unaudited	 	 	Audited	 	
Cash Flows from Investing Activities:	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(327	)	 	 	(61	)	 	 	(376	)	
Purchase of intangible assets	 	 	-	 	 	 	-	 	 	 	(30	)	
Interest received	 	 	9	 	 	 	7	 	 	 	287	 	
Proceeds from (investment in) short term bank deposits, net	 	 	(29,211	)	 	 	(2,897	)	 	 	36,165	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash (used in) provided by investing activities	 	 	(29,529	)	 	 	(2,951	)	 	 	36,046	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash Flows from Financing Activities:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from exercise of options	 	 	-	 	 	 	-	 	 	 	26	 	
Proceeds from the Chief Scientist government grants, net of re-payment	 	 	-	 	 	 	-	 	 	 	752	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by financing activities	 	 	-	 	 	 	-	 	 	 	778	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Exchange rate differences on cash and cash equivalent balances	 	 	154	 	 	 	(603	)	 	 	(143	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents:	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Increase (decrease) in cash and cash equivalents	 	 	(33,476	)	 	 	(8,323	)	 	 	17,080	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance of cash and cash equivalents at the beginning of the period	 	 	42,502	 	 	 	25,422	 	 	 	25,422	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance of cash and cash equivalents at the end of the period	 	 	9,026	 	 	 	17,099	 	 	 	42,502	 	

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

7

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands

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 launched NexoBrid in the European Union and in Israel through its own commercial organization and first generated initial sales in 2014.

The Company's securities are listed for trading on NASDAQ since March 25, 2014.

 	b.	The Company has two wholly-owned subsidiaries: MediWound Germany GmbH, acting as Europe ("EU") marketing authorization holder and EU sales and marketing arm and MediWound UK Limited, an inactive company. In addition, the Company owns approximately 7% of PolyHeal Ltd., a private life sciences company ("PolyHeal").	
 
 	c.	On September 29, 2015, the Company was awarded a U.S. Biomedical Advanced Research and Development Authority ("BARDA") contract valued up to $112,000 for development and procurement of NexoBrid for the U.S. The contract is for the advancement of the development and manufacturing, as well as the procurement of NexoBrid, as a medical countermeasure as part of BARDA preparedness for mass casualty events.	
 
The five-year base contract includes $24,000 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 $16,000 for procurement of NexoBrid, which is contingent upon FDA Emergency Use Authorization (EUA) and/or FDA marketing authorization for NexoBrid. In addition, the contract includes options for further funding of up to $22,000 for expanding NexoBrid’s indications and of up to $50,000 for additional procurement of NexoBrid. As of March 31, 2016 the Company recorded approximately $2,600 in funding from BARDA under the contract.

8

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands
 
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 consolidated financial statements for the three months ended March 31, 2016 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, 2015 that were included in the Annual Report on Form 20-F filed on January 25, 2016.

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, 2015 that were included in the Annual Report on Form 20-F filed on January 25, 2016.
 
NOTE 3:	CONTINGENT LIABILITIES	

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

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

A hearing in the Company's Petition was held on February 16, 2015, in which the Court accepted the Company's Petition and allowed it to file a statement of defense. The Company filed the statement of defense on July 6, 2015. A preliminary hearing has been held on February 10, 2016 and oral summaries are scheduled for June 21, 2016.
 
Based on advice from its external legal counsels, the Company believes that it has substansive defenses against the claim. Accordingly, no provision was recorded in respect of this claim.

9

 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)
 
NOTE 4:	EQUITY	

On January 1, 2016, the Company granted to the chairman of the board of directors options to purchase 20,000 ordinary shares under the "2014 Share Incentive Plan" (the "Plan") for an exercise price of $9.47 per share. The options are exercisable in accordance with the terms of the Plan, within 5 years from the date of grant and will vest over three years. The fair value of the options at the date of grant was estimated at $62.
 
On January 28, 2016, the general meeting of the Company's shareholders approved the grant to CEO dated December 23, 2015 and the above mention grant.

NOTE 5:	DISCONTINUED OPERATION	

The Company has been acknowledged during the first quarter of 2015 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