Good day and thank you for standing by. Welcome to the Q2 MediWound 2021 Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Jeremy Feffer. Please go ahead.
Thank you, Dawn, and good morning, everyone. Earlier today, MediWound issued a press release announcing financial results for the Q2 of 2021. You may access that release on the company's website under the Investors tab. With us today are Sharon Malka, Chief Executive Officer of MediWound and Boaz Gourdavi, Chief Financial Officer. Following management's prepared remarks, we will open the call for Q and A.
Before we begin, I would like to remind everyone that statements made during this call, including the Q and A session, relating to MediWound's expected future performance, future business prospects or future events or plans are forward looking statements as defined under the Private Securities Litigation Reform Act of 1995. Although the company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those forecast due to the impact of many factors beyond the control of MediWound. The company assumes no obligation to update or supplement any forward looking statements, whether as a result of new information, future events or otherwise. Participants are directed to cautionary notes set forth in today's press release as well as the risk factors set forth in MediWound's annual report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward looking statements. The conference call is the property of MediWound, and any recording or rebroadcast is expressly prohibited without the written consent of MediWound.
Now I would like to turn the call over to Sharon Malka, Chief Executive Officer of MediWound. Sharon?
Thank you, Jeremy. Good morning to our U. S. Listeners and good afternoon to our listeners in Israel. Welcome to our Q2 2021 conference call to discuss our financial results and business highlights.
The Q2 of 2021 and the subsequent weeks have been eventful from a clinical and commercial standpoint with a positive interim assessment for EscharEx Phase 2 study, FDA feedback on NexoBrid BLA and the robust results of NexoBrid Phase 3 pediatric study. Commercially, we continue to generate product revenue growth compared with the prior year, driven by the procurement of NexoBrid BIPADA and the revenues continued growth out of U. S. On the clinical front, we are pleased with the progress we gained across each of our ongoing clinical programs and are encouraged by the positive clinical data for both EscharEx and NexoBrid. Let me begin first with a review of our EscharEx clinical development program where we most recently announced the best possible outcome of the interim assessment for its U.
S. Phase 2 adaptive design study. Recall that this study aims to assess the safety and efficacy of EscharEx for the debridement of venous leak ulcer as compared to gel vehicle and non surgical standard of care, while the interim assessment served to determine whether a sample size adjustment is required to maintain conditional power for this study. The interim assessment had 3 potential outcomes: continuation of the trial at its current sample size and increase in the sample size to power the trial or a sudden end of the trial due to futility. The interim assessment conducted after about 80 patients, approximately 2 thirds of the originally enrollment target of 120 patients completed the debridement treatment.
Based on the independent data monitoring committee's recommendation, the interim assessment yielded 2 positive takeaways. 1st, no enrollment sample size changes are necessary to maintain the pre specified statistical power of 80% or greater for the study's primary endpoint of incidence of complete debridement compared to the jail vehicle. This positive outcome means that the study is appropriately sized at the planned enrollment of 120 patients and can continue without the need to add more patients. As a reminder, we had previously reduced the enrollment target from 174 patients to 120 patients. So we are happy with the independent data monitor and committee's recommendation confirming that change.
2nd, no safety concerns were identified in the study population, which is another positive result. This successful interim assessment suggests that EscharEx is safe and tolerable and provides positive signal that increase our confidence that EscharEx may prove to be an effective non surgical therapy for debridement of chronic wounds. We anticipate completing full enrollment in this study by end of 2021 with data readout anticipated in the first half of twenty twenty two. Also in our EDCARE program, we have enrolled our 1st patients in our Phase 2 pharmacology study and anticipate data from that study later this year. As a reminder, this is a Phase 2 open label single arm study designed to evaluate the clinical performance, safety and pharmacology effects of EscharEx in the debridement of lower leg ulcer, I.
E. Venous leg ulcer and diabetic foot ulcer in up to 15 patients. The data generated to date for EscharEx have been very encouraging. We published a peer reviewed paper summarizing the results of a successful Phase 2 assessor blinded study of our 1st generation EscharEx, which achieved its efficacy and safety endpoints. EscharEx was well tolerated and has demonstrated safety and efficacy in the debridement of various chronic and other outworld wounds within a few daily applications.
Earlier this year, we completed successfully a comparator in vivo study designed to evaluate the debridement efficacy of EscharEx and the commercial collagenous enzymatic debridement agent in a posting how to heal model. The study concluded that EscharEx treatment was clinically superior to the commercially available collagenous agent in removing eschar in this model. The data from this trial together with a positive interim assessment give us confidence in both of our current ongoing Phase 2 trials of 2nd generation EscharEx and we look forward to data from both of these trials. With a clear unmet medical need for a non surgical rapid and effective debridement agent in the outpatient setting, EscharEx has the potential to improve on the current standard of care and have a meaningful impact on chronic wound management. Turning to NexoBrid.
On the commercial front, BARDA's procurement for emergency stockpile continues to drive product revenue growth and we are expecting to recognize most of the remaining revenues related to BARDA procurement in 2021. In addition, we continue to execute on our global expansion strategy with sustained revenues growth and expecting additional marketing approvals in lucrative markets during the next 18 months. We continue to enroll new patients to the next expanded access program at leading U. S. Burn centers with over 100 burn victims who were already treated with NexoBrid to date.
The expanded access program runs through approval. We believe that the continued burn centers training on the use of NexoBrid through the next extended access protocol will support NexoBrid launch upon approval in the U. S. Turning to the NexoBrid BLA, though we were disappointed with the receipt of the CRL, we believe the FDA comments and concerns are manageable and can be addressed. We will continue to partner with BARDA and Vericel to leverage their vast experience and track record in regulatory domain to meet with the FDA as soon as possible and provide the FDA with a detailed response to the CLL.
While it's premature to provide a specific timeline for the BLA resubmission, we are actively preparing for a Type A meeting with the FDA and will provide a further update at the appropriate time. We remain optimistic about the prospects and long term potential for NexoBrid and committed to bringing NexoBrid to the U. S. Market as expeditiously as possible. Regarding our pediatric investigational plan, we were thrilled to announce positive top line results from our Phase 3 study of NexoBrid in children with severe thermal burns, which met all of its primary endpoints with high degree of statistically significance, reinforcing the stronger clinical safety and efficacy profile of the product.
The data for NexoBrid is clear and we strongly believe it will become an important treatment option for the pediatric brand patients. Following those results, we are planning to submit the data for label expansion in Europe and other international markets during 2022 and believe it would further enhance growth and global expansion of NexoBrid. Turning to our newest clinical development program for non melanoma skin cancers, we initiated an open label Phase III study of 5 product in basal cell carcinoma designed to evaluate safety and tolerability of the product using different schedules of administration. This study will provide us with a preliminary evaluation of 5 efficacy and this could be a very exciting program for us. In tandem, the first patients were enrolled in an investigator initiated Phase 2 trial conducted at the Soroka Medical Center in Israel, designed to evaluate the safety and efficacy of 5 in removing non melanoma skin cancers.
We expect that data from both studies will be generated by the end of 2021. Lastly, we were pleased to have the case series data of partial cell carcinoma destruction by a concentrate of autolytic enzymes enriching bromelain, which is actually 5, published in a peer reviewed paper. The data provide a preliminary proof of concept that 5 may be a safe and effective destructive treatment for basal cell carcinomas and more importantly establish the foundation for our non melanoma skin cancer clinical development. Now, I would like to turn the call over to Boaz for a summary of our financials.
Boaz? Thank you, Sharon, and good morning to our U. S. Listeners and good afternoon to the Israeli ones. First, I'd like to reiterate our continued product revenue growth from both the U.
S. Market and the ex U. S. Market as NexoBrid continues to support our balance sheet. We're looking to enhance our global expansion and expecting to have additional marketing approvals in new territories this year and throughout 2022.
I would like now to provide you with an update of our financial results for the Q2 and first half of twenty twenty one. Revenues for the Q2 of 2021 increased 50% to $6,100,000 compared to $4,000,000 for the Q2 of 2020. Product revenue for the quarter was $3,000,000 an increase of 175 percent compared to 20 20 2nd quarter product revenue of $1,100,000 primarily driven by broader procurement of NexoBrid for emergency stockpile and sales increase outside of the U. S. Gross profit for the quarter was $2,400,000 or 39 percent of net revenue compared to a gross profit of $1,200,000 or 30 percent of net revenue for the parallel quarter.
Gross profit from product revenue was 57% of net revenues versus 48% in the Q2 of 2020, driven by increase in product revenue versus a fixed nature of our manufacturing costs. Research and development expenses for the quarter were $2,700,000 compared with $1,600,000 for the Q2 of 2020. The increase was primarily due to EscharEx clinical development program. Selling, general and administrative expenses for the quarter were $2,600,000 compared with $2,300,000 in the Q2 of 2020. As a percentage of revenue, SG and A expenses decreased 1400 basis points from 57% in the Q2 of last year to 43% for the Q2 of 2021.
Operating loss for the quarter was $2,900,000 compared with an operating loss of $2,700,000 in the Q2 of 2020. The company posted a net loss of $3,200,000 or $0.12 per share for the quarter compared with a net loss of 3,100,000 dollars or $0.11 per share for the Q2 of 2020. Adjusted EBITDA for the quarter was a loss of $2,000,000 compared with a loss of $2,100,000 for the Q2 of 2020. Moving now to the first half of twenty twenty one financial results. Revenue for the first half of twenty twenty one increased 41% to 11,900,000 dollars compared to $8,500,000 in the first half of twenty twenty.
Product revenue for the half were $5,900,000 dollars an increase of 2 24 percent compared to the $1,800,000 in the first half of twenty twenty. Operating loss for the half was $4,800,000 compared with an operating loss of $4,900,000 in the first half of twenty twenty. The company's net loss for the half was $6,000,000 or $0.22 per share compared with a net loss of 5,600,000 dollars or $0.20 per share for the first half of twenty twenty. Adjusted EBITDA for the half was a loss of 3,300,000 dollars compared with a loss of $3,900,000 for the first half of twenty twenty, an improvement of 14%. This was driven by our product revenue growth and continued budget discipline, allowing us to advance our clinical development program of EscharEx, while yielding this improvement.
Now moving to the balance sheet highlights. As of June 30 this year, MediWound had $17,200,000 in cash and short term investments compared with $21,600,000 dollars as of December 31, 2020, and no debt. MediWound remained on budget utilizing 4,400,000 dollars in the first half of twenty twenty one for its operational activities. Throughout the remainder of twenty twenty one, the company will continue to invest primarily in research and development efforts for EscharEx, while the planned NexoBrid BLA resubmission and its related ongoing development programs will be funded by BARDA. We now expect cash used for 2021 to be in the range of $9,000,000 to 11,000,000 dollars Our financial guidance also assumes that the COVID-nineteen dynamics do not worsen, including the impact of the delta variant in the second half of the year.
With that, I've concluded my financial overview and will now turn the call back to Sharon. Sharon?
Thank you, Boaz. We are excited by our prospects as a company. We have a diversified pipeline with meaningful early and late stage products to support our continual growth for years to come as we have several tremendous opportunities ahead of us. With that, it is my pleasure to open the call for your questions. Operator?
Your first question comes from the line of Kevin DeGeeter with Oppenheimer.
Hey guys, thanks for taking our questions. Maybe first off, congratulations on the pediatric data for NexoBrid. Can you provide
us an update on how to
think about regulatory process in the U. S? We believe that a separate regulatory filing from the adult population. Do you need any additional clinical data or other supporting information apart from resolution of the CRL for the adult population before filing?
Thank you for the question, Kevin. As we communicated earlier when we got the CRL and mentioned in our prepared remarks, we believe that we can address the FDA concerns without additional starting. We do have sufficient data. Given the robust clinical data package, we believe that NexoBrid remain well positioned to become a standard of care and ready for approval. We are actively preparing together with our partners, Sericell and BARDA for a Type A meeting with the FDA.
This meeting can be requested within 3 months after the FDA regulatory action and typically scheduled within 30 days from application. That's the timeline timeframe we are looking for. So obviously, we are looking to do so as soon as possible. And beyond that, we are not going to comment on when the meeting is scheduled and so on, but we plan and we certainly update investors and analysts at the appropriate time when we have more clarity after this meeting.
That's where you actually answered my second question. But my first one was actually in context of the pediatric population, which I believe is not included in the filing for which you received a CRL. Can you provide an update on the regulatory strategy in the U. S. For the pediatric population?
Yes, correct. So regarding the pediatric population, any label expansion in the U. S. Will be only after we'll get the approval for the adult BLA or the adult indication. This is a label extension.
Currently, we are leveraging the pediatric data in the safety uptake we will provide the FDA as part of the RIC submission and leverage the pediatric data where we have already approval for NexoBrid I. E. In EMA and other international market for label extension. As a reminder, in the U. S, we are waived from pediatric investigational plan.
So based on our prior discussion with the FDA, we plan to submit this data of the pediatric kid study after we will finalize the adult review of the file.
Thank you for that. And then maybe just lastly, on the next study, I think you called out that you dosed about 100 patients or treated about 100 patients on compassionate use. How many centers roughly have used NexoBird under the expanded access protocol? And has that changed meaningfully over the last quarter or 2?
Yes. So currently, we have 21 active sites in the U. S. And we have about 3 to 5 additional sites in the process of initiation in the U. S.
I would like to reiterate that the expanded access program runs through approval and we will continue to enroll patients to this study and treat patients with NexoBrid till the review of the BLA will finalize. And as you said, we already treated over 100 burn victims to date. And according to the protocol, we are able to extend to up to 30 sites and treat at least 200 patients under the current protocol. Thank you for that.
Your next question comes from the line of Josh Jennings with Cowen.
Hi, good morning. Thanks for taking the questions. Can you hear me okay?
Yes. Good morning.
Good morning. So first, just on NexoBrid. Last week on earnings call, Vericel talked about how their team is taking leadership role in the BLA resubmission of NexoBrid.
Can you
just help us understand how the MediWound's role and Alverasil's role has changed since the CLL and what exactly they mean by leadership role?
Thank you for the question. So in general, bringing NexoBrid to the U. S. Market is a joint collaboration or joint project as you know of Vericel as the commercial the U. S.
Commercial partner wants the rights in North America, BARDA the ones that provide support and funding and of course many ones around the IP and the extensive experience of NexoBrid. We have best experience with NexoBrid given the 20 years of history with the development of NexoBrid. Vericel have a clinical regulatory and operation team with great deal of experience and success on the regulatory front. So we are in a great position to leverage Vericel to lead the regulatory front with our years of experience with NexoBrid and BARDA's special matter consultants who bring their personal experience and this joint collaboration providing us with the confidence that we have the best team to achieve the BLA approval. So we feel good about the best going forward.
And we have a great deal of confidence with NexoBrid robust clinical data and we look forward to bringing this product into the U. S. Market.
Understood. Thanks. And on EscharEx, I believe you've mentioned historically that the possibility is starting a second dose of trial for EscharEx after you've seen results and interim analysis of the first trial. Now that we have favorable interim results, any updated thoughts on timing of starting the second trial or accelerated approval timelines on that stress?
As I mentioned in the prepared remarks, we plan to complete the enrollment of the ongoing Phase 2 study by year end and to generate data from the pharmacology study by year end. And if we meet this goal, we will have data readout from the ongoing Phase 2 study anticipated in the first half of twenty twenty two. The data that will be generated from those 2 ongoing trials together with the data generated to date, which is the prior Phase 2 study and preclinical studies will be gathered and incorporated for a discussion with the FDA before we move forward to the next study in the U. S. In order to align and get FDA concurrence for the next stage of development in the U.
S.
Got it. Got it. So just in terms of the pharmacology study, EscharEx, and when you have those data later this year, how will the data inform your next steps in the pivotal program? What will the pharmacology study show you and how will that be incorporated into the development pathway. Thank
you. As a reminder, this pharmacology study is an open label study assessing the pharmacological effect of EDGARX in up to 15%, both VLUs and DFUs. We already enrolled several patients to this study and this study will provide us with a better understanding of what is happening in the wound bed during and after the debridement with EscharEx and most specifically it will enable us to assess effect on reduction of biofilm burden, reduction of inflammation and initiation of healing process. All of those data points or measurements provide us with additional clinical benefits of EscharEx and we would like to have this data as part of the discussion with the FDA because we would like to incorporate the best result of this study or some of the results of this study also as measurement in the next clinical study in the U. S.
Your next question comes from the line of Siyampakula Ramakanth with H. C. Wainwright.
Thank you. This is RK from H. C. Wainwright. Good morning, Sharon and Bharat.
Good morning.
Quick question on ExtraBrid.
One of the concerns of one of the issues which you brought up in the CRL was the inspection of your plants at both Israel and Taiwan. So what's the situation there? How is FDA resolving the travel stuff? Any updates there?
So in terms of the inspections, that's not a discussion that we have been engaged with the FDA at this point. We first can resubmit the package and the inspection that need to occur prior to the approval. And since the situation is dynamic worldwide and also the instruction in the FDA are changing on a monthly basis, We will have to monitor carefully and see the vehicles or the tools that the FDA is implementing in order to get the backlog they have with inspections domestically and foreign inspections going forward.
Thank you for that. And then on the 5 molecule, when should we expect data from that study?
As communicated previously, we plan to have data from both study, the Phase III study in the U. S. And the IIT study conducted in Israel by year end 2021.
Okay. Thank you. Thanks for taking my questions. Thank
you.
And there are no further questions in queue. I will now turn the call back over to CEO, Sharon. Please go ahead.
Thank you very much. Thank you everyone for joining us today and for your continued interest in MediWound. We look continuing to executing on our strategy and bringing new therapies to the market and to update you again on our next update call. Thank you very much and have a great day.
Thank you.
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