Good day and thank you for standing by and welcome to the Quarter 1 MediWound 2021 Conference Call. At this time, all participants are in listen only mode. After the speaker presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Mr. Jeremy Feffer.
Please go ahead, sir.
Thank you, and good morning, everyone. Earlier today, MediWound issued a press release announcing financial results and provided a business update for the Q1 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 Gurlevi, 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 results 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 broadcast 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 MediWound's Q1 2021 conference call to discuss our financial results and business updates and highlights.
This quarter, we continue to generate product revenue growth compared with prior year, driven by the procurement of NexoBrid by BARDA for emergency response preparedness and out of U. S. Sales as we continue to execute on our global expansion strategy of expanding the use of NexoBrid in additional international markets. In addition, we have gained progress across each of our ongoing clinical programs, highlighted by the enrollment of the first patient in our Phase 2 pharmacology study of EscharEx and the launch of our new program in non melanoma skin cancer, while we continue to advance our U. S.
Phase 2 adaptive design study of EscharEx for the treatment of venous leg ulcer. Let me now provide you with more color on the progress we made and the review of the Q1 highlights. Starting with NexoBrid, we continue to enroll new patients to the next expanded access program at leading U. S. Burn centers with 82 burn victims who were already treated with NexoBrid to date.
The expanded access study runs through approval and there is plenty of opportunity to continue to enroll patients across over 20 sites which will continue to increase burn surgeons experience with NexoBrid. The pediatric study is fully enrolled and we expect to report top line results from this study in the Q3 of 2021. On the commercial front, budget procurement for emergency stockpile continue to drive product revenue growth and we are expecting to recognize the remaining revenue related to BARDA procurement of NexoBrid in 2021. We are satisfied with NexoBrid global expansion into new international markets supporting our top line, signing additional distribution agreements in Europe and Asia and receiving marketing approvals for NexoBrid in Taiwan and Chile. Turning to the BLA, in September 2020, the FDA accepted for review our BLA for NexoBrid for severe burns and they signed PDUFA goal date of June 29, 2021.
However, as it's apparent from recent FDA actions across the industry, travel restrictions related to COVID-nineteen pandemic are impacting the FDA ability to complete manufacturing facility inspections and review processes have been affected. Recently, the FDA has informed us that due to these travel restrictions, it may be unable to conduct the required inspections of our manufacturing facilities in Israel and Taiwan by the PDUFA date and that it is unlikely that the additional CMC information provided in support of our BLA will be reviewed during the current review cycle. The PDUFA goal date remains June 29, 20 21 and FDA review is ongoing as we continue to work closely with the agency. At this time, we expect the timing of potential approval and the commercial launch of NexoBrid to be impacted. We are committed to bringing NexoBrid to the U.
S. Market as our North American commercial partner Vericel continued to make significant progress with respect to its commercial and medical affairs pre launch activity. Given its robust clinical data package, we believe that NexoBrid remains well positioned to replace surgical excision as the standard of care for eschar removal in patients with severe burns and we look forward upon approval to bringing NexoBrid to the U. S. Market.
Moving to our product candidate EscharEx where our development program is well underway. We continue to actively recruit patients for our U. S. Phase 2 adaptive design study for the treatment of venous leg ulcers. We are on track to reach the target of 80 patients required for the interim assessment and reiterate our expectation for an interim assessment around mid-twenty 21 and anticipate completion of patient enrollment by year end 2021.
As part of the EscharEx development program, we are conducting a Phase 2 pharmacology study to explore the potential clinical benefits of EscharEx associated with chronic wound management. The study is an open label single arm study assessing the pharmacological effect of EscharEx in up to 15 patients with both VLUs and DFUs. This study will provide us with a better understanding of what is happening in the wound pad during and after debridement with EscharEx and more specifically it will enable to assess the effect on reduction in biofilm burden, the reduction in inflammation and initiation of healing process. We enrolled the 1st patient in this study last month and expect data from this study in the second half of twenty twenty one. We were proud to host an EscharEx Analyst Day in March, featuring 4 prominent key opinion leaders who will discuss the current U.
S. Wound debridement practices and how EscharEx upon approval has the potential to change the current standard of practice and care of chronic wound. Our 3 key opinion leaders, Doctors Kysner, Singer and Snyder spoke about the need for better therapeutics and improving upon the current standard of care. With a $1,000,000,000 market opportunity in each the VLU and DFU markets, a clear opportunity in the hospital outpatient setting and potential for meaningful improving on the current standard of care. We believe EscharEx can have a meaningful impact on chronic wound management offering significant benefit for patients, healthcare professionals and payroll.
Moving now to our product candidate 5. We submitted a protocol to the FDA for a Phase onetwo clinical study for the treatment of partial cell carcinoma and we are advancing the initiation which is planned for the Q2 2021. This study is designed to evaluate safety and tolerability using different schedules of administration as well as to provide a preliminary evaluation of its efficacy as measured by the percentage of target lesion with complete histological clearance. In tandem, an investigator initiated Phase 2 trial will be conducted at the Soroka Medical Center in Israel designed to evaluate the safety and efficacy of 5 in removing non melanoma skin cancer and precancerous lesions like actinic keratosis, basal cell carcinoma and squamous cell carcinoma. We expect that data from both studies will be generated by the end of this year 2021.
We believe that 5 has a reasonable path to market with a clear unmet medical need and the clinical plan we have laid out carries relatively low development costs given its active substance, which is the same like NexoBrid and EscharEx and the intended indication. In closing, we anticipate 2021 to have multiple data readouts in EscharEx and 5 clinical trials and excited about the NexoBrid opportunity in the U. S. As we continue to work closely with the FDA. We remain focused on continuing to drive growth and further strengthen our company with a deep pipeline of parotherapeutic solutions for tissue repair and regeneration.
Now, I would like to turn the call over to Boaz for a summary of our financials. Boaz?
Thank you, Karen, and good morning, everyone, and good afternoon to our listeners in Israel. I'd like to start our financial review, noting that we continue to generate strong product and license revenue growth from both the U. S. And ex U. S.
Markets as NexoBrid continues to support our balance sheet and clinical development program. Now I'd like to provide you with an update on our financial results for the Q4 of 2021. Revenues for the Q4 of 2021 were 5,800,000 dollars compared with $4,400,000 for the Q4 of 2020, an increase of 32%. Revenues from product and licenses were $2,900,000 an increase of 300% compared to the Q4 of 2020, primarily driven by BARDA's procurement for emergency stockpile and sales increase outside of the U. S.
Gross profit was $2,400,000 or 41 percent of net revenues compared with a gross profit of 1,200,000 dollars or 28 percent of net revenues for the Q4 of 2020. Research and development expenses were 2,200,000 compared with $1,700,000 for the Q4 of 2020. The increase was primarily driven by EscharEx clinical development program. Selling, general and administrative expenses were $2,100,000 compared with $1,700,000 in the Q4 of 2020. This was as a result of directors and officers insurance premiums increase.
As a percentage of revenues, SG and A expenses were 36%, reflecting 300 basis points decrease versus the parallel quarter of 2020. Operating loss was $1,900,000 reflecting a 13% decrease in operating loss compared to the $2,200,000 in the Q1 of 2020. The company posted a net loss of $2,900,000 or $0.10 per share compared with a net loss of $2,500,000 or $0.09 per share for the Q4 of 2020. Adjusted EBITDA was a loss of $1,300,000 compared with a loss of $1,800,000 for the Q4 of 2020, reflecting a decrease in adjusted EBITDA loss of 28%. Moving now to the balance sheet.
As of March 31, 2021, MediWound had $17,900,000 in cash and short term investments compared with $21,600,000 as of December 31, 2020 and no debt. MediWound remained on budget utilizing $3,700,000 in the Q1 of 2021 for its operational activities. The company reiterates its expectation for cash use in 2021 to be in the range of $5,000,000 to $7,000,000 With that, I have concluded the financial overview and will now turn the call back over to Sharon. Sharon?
Thank you, Bharat. As you can see, we have several tremendous opportunities before us. We will continue our commercialization activities with our partner Vericel and we continue to work with FDA for the regulatory review process for NexoBrid. We are actively recruiting patients for the EscharEx Phase 2 adaptive design study and we are excited to initiate the new clinical study in non melanoma skin cancer. With that, it is my pleasure to open the call for your questions.
Operator?
Thank you. Your first question comes from the line of Kevin from Oppenheimer.
Hi. Good morning. This is Susan calling on behalf of Kevin DeGeeter, Oppenheimer. My first question is a clarification on a comment you said earlier. You mentioned that the FDA will not be able to inspect the manufacturing facilities for Taiwan, Chile.
Can you comment on how that will affect the regulatory timeline for BLA approval?
Good morning, Susan, and thank you for the question. As we communicated during the call, the FDA accepted the review of the BLA and provided us with PDUFA goal date of June 29. However, as we see in the industry from recent FDA action, to other restriction related to COVID-nineteen pandemic are impacting the FDA ability to complete manufacturing facility inspection on time and review processes have been affected. As communicated, the FDA had informed us that due to this drug restriction, it may be unable to conduct the required inspection of our manufacturing facility in Israel and Taiwan, and that it's unlikely to review the CMC information provided by the PDUFA withdrawal within the current review cycle. The PDUFA goal date remains June 29 and the FDA review is still ongoing as we continue to work closely with the agency.
However, at this time, we expect the timing of the potential approval and commercial loans of NexoBrid to be impacted, given the different potential scenarios. And we cannot speak for the FDA, although there are several of the scenarios, we cannot predict how long the FDA may take to complete the review of the BLA. We are committed to bring NexoBrid to the U. S. Market, while our partner Vericel continue to make significant progress with the preparation for launch.
And given its robust clinical data package, we believe that NexoBrid remains well positioned to become standard of care and if you look both the inspection and the additional information provided are just potential timing issues.
Got it. Thanks for the clarification. Just one more question for me. So you're planning to initiate the BCC study in the next, I guess, couple of months. Can you provide any color on just on the study protocol, potential enrollment traits, anything?
Yes. So we submitted already the protocol as a communicate to the FDA for a Phase III study. This study is for treatment of partial cell carcinoma, nodular and superficial partial cell carcinoma and we plan to initiate this study in this quarter, the Q2 of 2021. The study objective is to evaluate safety and tolerability using different schedule of administration as well as to provide us with preliminary evaluation of its efficacy as measured by the percentage of target lesions with complete histological clearance. We will have 2 cohort of patients while we assess the 1st cohort and adjust accordingly to the 2nd cohort regarding the administration regimen.
And we believe that 5 has a reasonable path to market with a clear unmet need as this clinical plan that we laid out carries relatively low development costs given the active substance and the intelligent indication.
Got it. Thank you. That's all for me. Thank you. Your next question comes from the line of Swayampakula.
Your line is open. You can ask your question.
Thank you. This is RK from H. C. Wainwright. Good morning, Sharon and Bose.
It's quite unfortunate that FDA is unable to deal with the it's a huge backlog. It's not just for you folks. I understand it's an industry wide situation and even the GEO is looking into this. Having said that, what is the how are the conversations going? Because I believe FDA is trying to figure out how to manage this, even accepting inspection reports from other regulatory agencies, because you certainly have been inspected by BARDA at least a couple of times, if I remember it correctly, before the NexoBrid contract came through.
Any commentary on that or anything that you can provide us?
Yes. Good morning, Ake, and thank you for the question. Specifically, we are not going to discuss the specific details from the interaction of the ADN with respect FDA review process. However, with less than 2 months left before the PDUFA date, we feel that at this stage the inspection is not likely to occur before the PDUFA date and this is the reason that we communicated. We can't speak for the FDA, although the FDA has some guidance and are assessing alternatives vehicle to conduct inspections.
And although there are a number of scenarios, it is very difficult to predict the impact. We can look at 2 other recent examples across the industry as you mentioned, it's across the industry now and now the FDA is handling this type of situation and outcomes can range from a deferral deferred action through major amendment with the extension of the TRUBL cycle and potentially of CRL. And given potential scenarios, we cannot predict how long it will take the FDA to make or to complete the review. But we do think that both the inspection and the CMC data provided, we believe are just a potential timing issue and hopefully it will be resolved soon. As you clearly stated, NexoBrid is approved in Europe and in other international market with over 7,000 patients that were treated with the product with BARDA procurement continue and we continue to treat patients in the U.
S. Under the expanded access protocol next. And given its robust clinical data, we believe that next clinical data that NexoBrid will be approved in the U. S. And our commercial partner Ferrisib continue to plan for launch.
Okay. Thanks for that. Just to clarify, so I'm assuming that up until the PDUFA date that you will not even know whether this is going to be a 3 month CRL or a 6 month delay, correct? Correct. Okay.
Fair enough. And then just staying within NexoBrid, on the pediatric study that you were talking about, your expectation for the data in Q3, could you kind of highlight to us what sort of data we are expecting? And is this study enough for label expansion? Or would you need to do any additional work?
Yes. Thank you. So the pediatric study as communicated is fully enrolled. We completed the enrollment stage and we expect to report the top line data results, which will include the acute stage safety and the twelve month follow-up data in the Q3 of this year 2021. We believe that this data is sufficient for a label extension.
However, we believe that the submission of the pediatric indication expansion for NexoBrid will be subject of course to the review process that is ongoing and we get more clarity regarding the BLA review outcome. In general, I can tell you that as an orphan drug, we are waived in the U. S. From pediatric investigational plan. This study was initiated based on our European pediatric investigational plan, but this study is conducted with 2 protocols from the FDA and EMA, and it will be used for both authorities for label extension.
Okay. One last question on NexoBrid, and I'll step back into the line. Regarding the global expansion that you have been conducting over the last 6 to 8 months, What can you highlight out of that? Any insight into how we should think about revenues from other geographies?
Yes. So we look at other geographies as ex U. S. We have the U. S.
Geography currently with BARDA and later on upon approval with the commercial market through Vericel. The ex U. S. Geography comprised of the European market and the international market. As we discussed during the call, we are satisfied with NexoBrid global expansion into new international market, which support our top line, primarily by advanced payment or upfront payment as part of the distribution agreement and later on by selling the product to Bose distributor.
We continue upon our strategy to sign additional distribution agreements in Europe and Asia. And just recently in the last quarter, we already received 2 additional marketing approval for NexoBrid, 1 in Taiwan and 1 in Chile, and we are getting ready with the distributor for a launch in this territory.
Thank you.
Thank you. Your next question comes from the line of Nathan Winstin from Aegis. Sir, your line is open. You can ask your question.
Yes. Thank you. Good morning, Sharon and Boaz. Thanks for taking my question. I just had one question and it's a follow-up on the international opportunity and specifically I was thinking about BARDA and whether there's stockpiling opportunities from other ex U.
S. Governments?
Thank you for the question, Eitan. So you are totally right. We are working with BARDA and BARDA procurement for emergency stockpile continue to drive product revenue growth for MediWound. As mentioned, we expect to recognize the remaining revenue from BARDA of approximately $6,500,000 in 2021 related to the initial procurement of BARDA and we are pleased with the increase in sales of products and expect it to continue in 2021. Looking at other territories, we are exploring the options of having such a model in other countries worldwide.
I can tell you that the ability or the budget allocated for such a procurement is different in U. S. And in other territories. However, we are in contact with several governmental authorities worldwide to have such kind of mechanism, but with less significant amount of procurement compared to BARDA 16,000,000 procurement.
Your next question comes from the line of Josh Jennings from Cowen. Your line is open. You can ask your question.
Hi. This is Brian here for Josh. Thank you for taking my questions. I also have a couple on the FDA approval process for NexoBrid. Just to start, can you clarify the role of the manufacturing facility in Taiwan?
I thought the Israel facility was the primary site responsible for manufacturing. And I guess where I'm going with this is, do you need both facilities inspected before a final decision? Or could you start with just the Israel facility approved?
Good morning, Brian. To your question, MediWound is the primary manufacturing facility. We are manufacturing here in our facility in Israel both the drug substance and the drug product, API and the drug product as well as the gel vehicle. However, because the Taiwanese manufacturer or supplier is manufacturing the bromelain special production, which is the key raw material or intermediate drug substance, it is subject also or required also inspection. And what we've been informed is that the FDA may be unable to conduct the required inspections of our manufacturing facilities, both in Israel and Taiwan.
Okay, that's helpful. And just on any potential for estimates of time revisions, do you expect to receive any kind of estimate for when these facility inspections could occur? And also if it turns out that the FDA does not make the June 29 PDUFA date, do you expect there to be an estimated time for a final decision if they do not make that June 29 date?
Yes. So first of all, currently the reviews ongoing at the PDUFA date is June 29. FDA communicated it anticipated to meet this June 29 PDUFA date, but we can't speak for the FDA and things are evolving in the last few months due to the backlog and other things that they have. And although there are a number of scenarios, it is very difficult to us to predict now what will be the impact and what will be the results. We will wait for further communication for the FDA, whether it's alternative vehicles to conduct inspection or whether it's scheduling inspections, etcetera.
But current given the different potential scenarios, we cannot predict now how long it will take them to complete the review, to complete including of course the inspection of the facilities.
Okay. Thank you. And maybe just one more on the BARDA procurement process. So you're about halfway done with the delivery there. Do you have insight yet into BARDA's plans for potentially additional procurement after this first tranche is completed?
Yes. So as we said, we are on track with the BARDA procurement for Amazasys Stockpile, which continue to drive the revenue growth of MediWound and we expect to recognize the remaining revenue during 2021, which is about $6,500,000 our portion out of the overall $10,500,000 for 2021. Currently, we have no definitive decision by part of the option. The option for additional procurement will be a sole discretion of BARDA and I assume it will be utilized only when the current procurement will be expired for rotation of expired stock or alternatively if they will be required to increase the level of safety stock, emergency stock.
Okay. And are you directly in those discussions or is Vericel handling those primarily?
We are the primary contact with BARDA. We are the sponsor till the product will be approved. We are the sponsor in front of BARDA, of course, and with the FDA. So we are the primary contact with BARDA.
Okay. Thank you.
Thank you.
Thank you. There is no question at this time. Presenters, please continue.
Thank you, everyone, for joining us today. We look continuing to executing on our strategy and bringing new therapies to market and to updating you again on our next update call. Thank you very much and have a great day. Bye bye.
Thank you. That concludes today's conference call. You may