Good afternoon, and thanks for joining us to have a conversation with Ofer Gonen, CEO of MediWound. MediWound is a biotech company developing next-generation enzymatic therapeutics focused on non-surgical tissue repair. The company is commercializing NexoBrid for eschar removal in severe burns through its distribution partner in the U.S., Japan, Europe, and India. MediWound is also initiating a pivotal phase III study with EscharEx, a biologic for debridement of chronic wounds, for treatment of VLU, or Venous Leg Ulcers. To talk about the company's strategy for 2024 and beyond, I welcome Ofer to this conversation with me.
Thank you. Thank you, Alky, for inviting me. It's a pleasure to be with you.
Thanks. So to start off, can you highlight to us the business strategy behind MediWound and what you have achieved so far?
MediWound is a biotech company, focuses on developing drugs for tissue repair for wound care. Maybe a few points to highlight. One, our technology is validated. We succeeded in 14 out of 14 clinical trials. We have an FDA and EMA approval for our technology. We have a drug which is already approved by the FDA to treat severe burns, NexoBrid, a pipeline product, EscharEx, which targets much larger patient population, which is chronic wounds. We have our own manufacturing facility that enables us to meet the global demand. And lastly, although we are a relatively small company, we were able to attract collaborations for the most prominent wound care companies in the world, companies like MiMedx, Mölnlycke, Solventum, Vericel, et cetera.
We have more than $50 million in the bank, which enables us to execute on our strategic plan, and to reach profitability.
Fantastic. So your commercial product, NexoBrid, has had enormous demand, you know, well beyond what you're able to supply for at this point. So can... And Vericel is the U.S. commercial partner for you. What success have they had in the U.S., and also what sort of efforts are you making to meet some of your supplies in the international markets?
Okay, so indeed, there is quite a substantial demand for NexoBrid globally. In fact, the demand is threefold than our current ability to manufacture. In the United States, for instance, Vericel is making great progress. They announced that 40 burn centers in the United States already are placing order. They also reported a 76% growth in their revenue this quarter compared to the previous quarter. In Japan, Kaken Pharmaceuticals is doing an outstanding job. They have leveraged their access to 400 burn centers in Japan, and they sell, basically, they are able to sell all their inventory.
And due to the limitation of the inventory that we have in Europe and Israel, we are focusing only on emergency cases in order to make sure, you know, to be able to focus on the U.S. market.
So, MediWound recently completed the construction of a GMP facility, but there are certain regulatory milestones yet to be achieved. So what are those? And also, what else do you need to do to make it operational, and also help alleviate the supply constraints that you currently have for NexoBrid?
So, the demand, the increase in demand is basically due to the fact that we have significant launches in Japan, in the United States, in India. Also, we expanded indications. We reported a pediatric indication that we received in the United States recently. Also, we have additional indications that we are working on. Indeed, we reported that we finished the construction of our manufacturing facility just recently, and we are now in the process, which is called commissioning. It's a very regulated process. It takes something like a year from start to finish. Until then, we are prioritizing. Commercial markets are more important for us than selling to governments, and there is a big demand there as well.
We also prioritize the U.S. market because we believe that most of the potential of NexoBrid is in this market.
Okay.
We want the launch, of course, to be successful.
So, beyond U.S., what is your largest market? Is Japan the largest market?
I'm not sure that if Japan or Europe will be our largest market out of the United States. Currently, in both of them, we have much more demand than we can manufacture. We're not spending any money on marketing or expanding it. We're just waiting until we will be able to manufacture the demand that is there.
Okay. So as you alluded to, you know, you recently got the pediatric use for NexoBrid. How does that indication help to expand the market, if at all? And also, has that helped you to revisit the European adoption, you know, that you always had?
NexoBrid is now approved for all ages across Europe, in Japan, and just recently in the United States. It's a very significant milestone for us. Having said that, it will have zero impact on, on actual revenue, in the next, one and a half years. The reason is, again, limitation of our ability to manufacture. Pediatric population, it's 30% of the burn market are pediatric care patients, so we believe it will have a very big impact in the years 2026 going forward.
Okay. So talking about your second proprietary product, EscharEx. So you're planning to start the phase III study of EscharEx for VLU. So how, what else do you need to do at this point to get the studies initiated?
So maybe before I'm digging into the details of this specific study, I would like to emphasize. I'm not sure how if people really appreciate how severe this disease is. Those patients who suffer from chronic wounds, these wounds are painful, they're chronic, they give off a terrible smell. Being diagnosed with a chronic wound is more life-threatening than being diagnosed with breast cancer, colon cancer, bladder cancer. It's unbelievable, 50% of those patients will die within a year, within five years, I'm sorry. This is the reason why we need to find a solution that is quick and rapid, and this is why all the wound care companies are interested in collaborating with us in this specific phase III trial.
This trial is going to be the largest and most significant phase III study in Venous Leg Ulcers in the last two decades, and we want to make sure that we are doing the things right. We are now finishing the setup activities, which means signing all the agreements with the medical centers. Hani, which is here, is working on that. We need to. We've already finalized all the agreements with the vendors, CRO, central labs, and the data management, et cetera.
We are, as we speak, we are manufacturing the clinical batches for all the trial. You know, we need to support 216 patients. Lastly, we need to submit everything to the FDA and get the clearance. Our plan is to finish everything, all the setup activities in the next few weeks, and then start the study by the end of the year.
So, the study itself, as you said, you know, you are going to be working with three other companies. What's the design of this phase III study, and you know, what's the contribution from the three collaborators that you have on this study?
As I mentioned, it is the most significant, the most robust study in Venous Leg Ulcer patients. Everyone appreciates, based on the data that we have to date in the phase II studies, that if this trial is successful, all the scheme of treatment of Venous Leg Ulcers is going to be changed, and the first critical step is going to be using EscharEx. Frankly or definitely, all those companies, Mölnlycke, who just recently invested in us as well, MiMedx and Solventum, they understand that this is going to be the treatment scheme of this huge market, and they want to be part of it. Study design, quite mirroring the successful three studies that we already did, conducted. 216 patients, two arms, placebo versus EscharEx.
It will be placebo-controlled, it will be blinded, we will have an interim assessment after 67% of the patient finish the study, and it will be a two-year study. After two years, we are expected to see the results, and hopefully we'll get a win.
So, as you said, you, you're setting up this phase III study based on, well, the success from the earlier studies, and one of them is the phase II chronic study-
Mm-hmm
Where you have actually showed 63% of patients achieving complete debridement within eight treatments of EscharEx, you know, compared to 30% in the placebo group. So what gives you the confidence of replicating such data in the phase III study, and, you know, beyond the study, what's the regulatory pathway? You know, is it just one study, or you have to do-
Yeah
... multiple studies?
So we are very confident that we will replicate the data that we had in the previous studies. And the reason is that MediWound succeeded in all the clinical studies that we did. And actually, we have a drug which is approved, which is based on the same active pharmaceutical ingredient, works with the same mechanism of action, and it actually works. You apply EscharEx on a wound, and after one day, two days, you see the difference. So we think that we will be able to replicate it. Not to mention that this trial is going to be much more robust, with many patients, and we feel very secure about that. As for the regulatory approval, FDA guidance, of course, the spotlight is on this phase III study.
We need to succeed it, and we need the data to be robust, but on top of that, we need to do additional, to conduct additional small studies, such as a pharmacokinetic study, human factor study. Small studies that we will do in parallel, very cheap studies, 20, 30 patient each. The main focus will be on this phase III study, and this will also be the one that will guide the timelines for approval.
Okay. So, as you said, Mölnlycke recently expanded their collaboration with you and also invested in MediWound. So how does number one, you know, what made them get to that decision? And number two, how does that either impact or benefit you in your future conversations with either collaborators or, you know, even potentially get to become a target?
This is a question that I was asked again and again and again this week. After we announced the head-to-head data of EscharEx versus SANTYL, we got a huge interest from all the relevant strategic players around the drug EscharEx. Mölnlycke decided. Just recently, we announced that they decided to invest in the company and led $25 million. We enjoy the proximity with such a company. We have access to their clinical experience, to their regulatory experience, to all kind of educational materials. They are a $12 billion company. We are only a $200 million company, so the proximity to such prominent wound care company is a plus for us.
We have also a collaboration agreement that defines exactly what their role will be if we decide to go to an M&A process, or if they decide to do something strategic with us. I would like to emphasize that Mölnlycke does not have the right or the ability to block a different transaction if the company decides that we are going to that route. But we think it's a very good, positive sign for us. It gives us flexibility also financially wise. As I said, we have more than $50 million in the bank. We have the ability now to execute on our strategic pathways, exactly as we planned.
Knowing you, I know you won't be happy with just VLU. You want to go ahead and try DFU-
Yeah
... as well. So, for that indication, you have lined up funds from EIC. How does that work? What sort of additional studies you need to do, or other people that you need to do before you can get started on the DFU study?
So you're right. I was not satisfied with just executing on the VLU, but, as a biotech company, our plan, our original plan was to succeed in the VLU, having it approved, and then sequentially go to, to another huge indication that comprises 1.6 million patients annually in the United States, for the Diabetic Foot Ulcers. We got, funding from a very competitive product from the European Commission. It was a good surprise for us. Actually, it covers a phase III study, of a huge indication. We have all the platform we need to execute such a plan. We, in our phase II studies, we show-- we saw the same data for Venous Leg Ulcers and for Diabetic Foot Ulcers. The drug just works the same on the same indications. So what we need to do next?
We have the funding. We need to approach FDA, EMA with a phase III plan. We are going to ask for the same plan that we have for the Venous Leg Ulcers, and if we get it, it accelerates the timelines by four years. We didn't expect that to happen, and we're very happy with it.
Another big agency that validates your technology is BARDA, here in the U.S.
Mm-hmm.
So we have not really talked much about BARDA today. What's the support you've been getting from BARDA on NexoBrid? And do you think that they will ever have any interest in working with you on the EscharEx as well?
BARDA is a very defined collaboration that is around severe burns. It's about to protect this country if something bad happens, and there is a mass casualty incidents that contain burn patients. As for the... What is their role there? They funded most of the activity. We got more than $115 million to date. They also stockpiled some of NexoBrid. And we are very grateful for this collaboration. As for EscharEx now, the Department of Defense is a different arm of the government is interested in developing the same solution for military use. As for EscharEx, there is all kind of units within the Department of Defense that are looking at the VAs, et cetera.
We are not there yet. I'm not sure we have the capacity to work again with the U.S. agency, but the interest of saving lives, of bringing cure to millions of patients, is something that I think this government is seeking.
Very good. So in terms of catalysts for investors to be on, on the lookout for, what should we expect in the next, say, you know, 12-18 months?
In the next 12- 18 months, I will divide it into three key catalysts. As for NexoBrid, we got the indications that we wanted. I would just wait and see how Vericel delivers, and if they take over the U.S. market, it's going to be something very significant for us. As for EscharEx, we have one phase III study that we are going to start in the end of this year, Venous Leg Ulcers. We have another phase III study that we will start next year for Diabetic Foot Ulcers, and we will get interim data from the first study in the beginning of 2026. This is going to be big.
I think most of the investors and the strategic partners are going to look at this, at this level. Lastly, it's purely operational. If everything goes well with the facility, we will be able to generate significant revenues in 2025 and 2026, according to the guidelines, and I think it is important. Since I joined the company two years ago, we delivered upon all we said that we are going to do, and it means that it's going to be exciting times at MediWound in the next two years.
So you already told us, you know, your current cash position is $50 million, but you have potential to get additional funds through EIC as well. So, do you have the funds that you can execute on your current plan? And, you know, beyond it, is there any runway out of this-
Yeah
... or you have to generate funds for that?
Let me speak about the numbers. We have more than $50 million in cash. We were granted additional $18 million that we need to receive, which brings it to $68 million. We have also a lot of warrants at a very low price, so we have access to $100 million in cash. It gives us more than enough flexibility to execute on our strategic progress, which specifically means bring EscharEx to market and to reach profitability.
Fantastic. Congratulations, I mean-
Thank you. It was a pleasure-
Congratulations so far.
As usual-
Good luck again.
As usual, it was great being with you.