As BARDA and the DoD. In February, the company initiated a pivotal phase 3 study with EscharEx, a biologic for debridement of chronic wounds for treating venous leg ulcers. To discuss the company's wound care portfolio, let's get started with Ofer. Ofer, thanks for joining us, and I appreciate you accepting our invitation to talk to our audience today.
a pleasure, and thank you for inviting me.
So briefly, if you can discuss a little bit about the business strategy of MediWound and also give us an overview of your long-term strategy and how the enzyme debridement products are different from other wound health products?
Okay, so first of all, you presented the company so well so you can replace me, but we are a biotech company. We have a biologic technology which is validated in 14 clinical trials. Actually, our first product is approved by both FDA and EMA, and it is approved in more than 40 countries. We have an enzymatic technology that replaces surgeries across a few indications. The first one is already approved. It's for severe burns. Eschar removal for dead tissue, it does it in four hours. It's instead of a surgery. The second indication is currently in phase 3 studies. It's a much larger indication. The addressable market is considered to be something like $2.5 billion. And currently, we're in a pivotal phase 3 study, and the recruitment is ongoing. As a small company, we enjoy collaborations with the largest companies in their field.
We feel very comfortable with our technology, making sure that we can assist as many patients as possible.
Perfect, so just to get started off, what sort of catalysts do investors should be on the lookout for, especially over the next six to 12 months? Because I know quite a few things are happening right now.
Yeah, many things happened in the past few quarters were very good for our company. Since we initiated the trial, we met all the expectations in our revenue. Unfortunately, we cannot meet the real demand of the first product. We have three times more demand than we can actually manufacture our first drug for severe burns. So if we look forward, we have, I think, three very significant catalysts that are coming in the next few months. The first one, recently there was published an RFP for BARDA, and we expect to get a significant portion of it. It's a 10-year contract, and I guess we'll speak about it later on. The second thing is that we are going to complete and finish building our manufacturing facility.
We should be completing all the operational activities by the end of the year and only regulatory activities that will take a few months, and then everything will be approved, and the bottleneck of being able to manufacture NexoBrid eventually will be relieved, and finally, by the end of next year and mid-2026, we are going to have our interim look in the phase three study, and this is a very major catalyst, and it will tell us if we have a drug that targets $700 million in peak sales or we do not succeed, so it's a very important few months for us now.
Let's start with the last one, which is the big catalyst of EscharEx.
Yeah.
Since you already gave us a little bit on the market opportunity, when you started the study in February, you initially had three or four partners in terms of conducting the phase 3 study itself. Recently, you added additional collaborators.
Right.
So what was the rationale there to have almost four or five partners now within that study?
The VLU phase three study is the largest, most significant clinical trial in venous leg ulcers in a few decades. It's very clear that if we meet the endpoints and if the study is a success, all the treatment scheme of venous leg ulcer is going to be changed. The first step will be the same as NexoBrid, is using our product. We felt that there is a lot of pressure from large players to collaborate with us on this trial. We wanted to make sure that the patients in this trial are getting the best ancillaries possible in the treatment because success in the trial, this is how a treatment in VLU will look like down the road. We want them to get the best ancillaries.
So we collaborated with Solventum around the compression therapy, with Mölnlycke around the dressings, MiMedx around the cellular tissue products, recently with Essity around the compression after the wound is closed. And if I forgot the partner, so forgive me about it. But again, if you look at the list of collaborators that are not only around this trial, we are having additional indications. Seven out of the largest seven wound care companies are with us in those trials. And what they enjoy is being part of the treatment that is going to be the standard of care.
Correct. No, that's telling, especially with those larger cap companies wanting to work with you. But in terms of the data itself, as you said, there's going to be an interim assessment going to be done once you reach about 65% of the 216 enrollment that you need to achieve. So what would we see in this interim assessment? And is this going to be simple efficacy, I mean, simple futility, or will we see some efficacy data as well?
The reason for us to have an interim look in this trial is to minimize the risk and maximize the potential success. It's a relatively small trial, 216 patients for a phase 3 trial. It's a small trial. And on top of that, what we are saying is that it is powered for 90% success. It's a very high power to begin with. And our aim in the interim look is to make sure that this 90% probability of success is maintained. So what we are doing in this interim look is seeing that it is still 90% probability of success. We are looking at blinded, of course, just making sure that we are on the right direction. And if this is the case, there are only two outcomes. One of them that we are stopping the recruitment, finishing the follow-up period, and seeing the result.
It means that we are 90% or more, the probability is 90% or more for succeeding. And there is another scenario in which we see that we need to add additional patients. Let's say we have 87% probability of success. Probably we need to add additional 10 patients in order for this trial to be a successful one. As I said earlier, we succeeded in all the trials that we conducted, 14 out of 14 across a few indications. Three of them were almost identical to the current trial. So we have no intention to miss this opportunity as well.
So the API is the same as NexoBrid, which is already approved. So what is the real risk in this study? Or is there one?
So again, we succeeded in three studies that look almost the same according to the endpoint that are required by the FDA, which are incidence of complete debridement in two weeks and facilitation of wound closure. We saw in the previous trials that the gap between us and the placebo, which is the requirement of the FDA, the gap is huge. What can happen is that we do something wrong. So we are trying to take the previous trial, make sure that now it is better standardized for us not to have all kinds of mistakes. 90% is 90%. Always there is a chance of the 10%. Nothing that we can point out now.
Okay. So in terms of the program itself, I believe there are a couple of additional studies that you're doing. So what are these studies? And do you think they will be all completed by the time you get to the end of the phase 3 study?
Oh, yeah. Yeah, for sure. We have all kinds in order to have this product approved, we have additional small studies or not significant studies that we are planning in order to have a full package to submit for the BLA. Let's start with two trivial ones. One of them is a PK study. We did something the same with NexoBrid, which are much larger burns are much larger than wounds. So we don't see any risk in doing that because venous leg ulcers are smaller ones. It's a very small study, something like 20 patients. The second study will be a human factor study. EscharEx is not going to be used only in the clinics or at hospitals, also at home. This is a very small and very cheap study that makes sure that people are reading the instructions for use and knowing how to apply it to themselves.
Lastly, we are doing a kind of a head-to-head study versus collagenase. In the United States, it's Santyl, and in Europe, it's Iruxol. This is more a kind of a safety study and us collecting some data that we will be able to use it down the road, making sure that we can charge the right price for EscharEx, hopefully significantly higher than the current Santyl.
Okay. The last question on EscharEx is, since the market is big and we have seen some supply chain issues on NexoBrid, which we'll talk about in a minute, when you're planning for commercialization of EscharEx, how are you thinking about manufacturing, supply chain, and other things?
We announced a few months ago that we are in discussions with the U.S. government for them funding us a facility in the United States. We already got some funding from BARDA to plan the facility and to start locating an ideal place for that. We're in the process of finalizing it and securing the full funding. Between the current facility in Israel, the new facility in Israel that we are going to complete by the end of this year, and the new facility in the United States, we will have enough capacity to secure a successful launch in EscharEx. We appreciate the fact that the amount of units for EscharEx are extremely higher than the ones relatively to NexoBrid.
Okay. So going back to NexoBrid now, since NexoBrid was launched in 2024 in the U.S., how do you think it's tracking against your internal expectations? And also, what sort of lessons are you learning from commercializing NexoBrid that you would want to take it to EscharEx?
So let's start with the first question. I think that Vericel is doing a great job. What we see, first of all, we had an experience in launching such a product in Europe. It's a dramatic paradigm shift, totally different treatment than the previous one for the burn units, and they need to adjust. And I think Vericel is doing a great job. They just reported a 52% increase comparing to the previous quarter last year. They reported a record month in June. And when they reported, they said that July was even stronger in revenue. What we hear is also the feedback from the KOLs and from the burn centers. And we hear that the adoption of this product is outstanding. So they don't need me to give them grades, but I think that they're doing a great job.
Let's see if this growth is continuing as they did. As for lessons to EscharEx, it's a totally different market, different patient population. Unlike in NexoBrid, where you needed to educate the burn units how to work, then change SOPs, and to go through all kinds of hurdles in order to get used to working with it, with EscharEx, it's just replacing the current enzymatic debridement that is already available on the market. Nothing other than showing them the data that we do in a few days, what Santyl does in two months is required. We think that the uptake of EscharEx will be significantly quicker.
Okay. So we talked a little bit about how to manage supply chain. So two questions on that. One is, even though you already have collaborations with Japan and other parts of Asia, as well as Europe, so how are you managing in terms of inventory of NexoBrid between the U.S. and the rest of the geographies? And the second part of the question is, when you get your facility commissioned by the end of this year, where would the bulk of the material go to on the commercial side? Is it going to come to the U.S., or is it going to be to the rest of the geographies?
So currently, our priority is to support the U.S. commercial market and the Israeli market. The U.S. commercial market, we believe it is our largest market, and it will impact quite substantially the value of MediWound down the road. The Israeli market, Israel is under a war now, so I don't need to give further explanations why we give a priority to the soldiers that we saved quite a few in the past couple of years. We now control internally the commercialization in Europe. So in Europe, we are not disappointing any partner. We're not sending some materials. There is much more demand than we can manufacture. We have also shortages in Japan and in other countries. The bottleneck will be resolved once we get the first approval, which we believe will be the European approval for the facility. Immediately, we can almost double the revenue there.
After that, I think we will really start the commercialization efforts. We didn't do anything till now.
Okay. And then in terms of the expanding beyond the current one, when you were talking about the US facility in terms of EscharEx, will that facility also produce NexoBrid, or is it mostly on EscharEx?
We are speaking, it's the same. Again, it's the same API, almost the same manufacturing process. We have a lot of flexibility where to manufacture. Once we have three facilities, the old one in Israel, the new one in Israel, and the new one in the United States, we will have flexibility. I'm not sure what we will manufacture where, but probably EscharEx and NexoBrid will be manufactured in the United States.
Very good. So, talking about the contracts, you always had a good relationship with BARDA and DoD that has helped you get NexoBrid as well through the FDA, that you had worked with BARDA previously. So then the new RFP, how different is that from the one that you just got to the end of?
Yeah. So indeed, we have a very good relationship with the U.S. government. We were afraid in the beginning of the year that under the new administration, there will be different priorities and our programs will be deprioritized. But what we saw in the second quarter that the outcome is totally different. We got two additional incremental budgets from both BARDA and the DoD, BARDA for the manufacturing facility in the United States and the DoD for room temperature stable formulation. The new RFP of BARDA is very comprehensive. It speaks about three main programs. One of them is stockpiling. Stockpiling, of course, the main addressee, the main entity that has the commercial rights in the United States is Vericel. So these are stockpiling discussions between Vericel and BARDA, and we are the supplier of the NexoBrid.
The second two components, both of them, I think, the motivation was after seeing what NexoBrid is actually doing in the field. One of them is to develop NexoBrid for the scenario of blast injuries. The second one is to develop NexoBrid for a new formulation for NexoBrid that will be stable at room temperature. These are very heavy development programs, a few tens of millions of dollars each. I guess NexoBrid, the U.S. government saw what NexoBrid is doing in real time, and they decided to invest further.
So do you know when the RFP will be decided on and will be awarded?
The plan is that it will be that the kickoff will be in Q4 2025. I hope this will be the case. I know that Vericel, who leads the discussions with BARDA, the only thing I can share with you is that they submitted a very comprehensive proposal.
So in terms of that room stable temperature, room temperature stable NexoBrid, outside of the military interest, is there a market for it? And if there is, what sort of a market is it?
Yeah, for the field in the army, it's clear. You cannot have a serious cool chain process. But also, if you think about burn mass casualty incidents, you have an event in a remote city in the United States. You don't have it. It's very complicated to ship all the things to the place when you need to maintain a cool chain. The second thing is, even for the commercial market, if you remove all the hurdles of it being refrigerated, et cetera, it just increases the reach, the outreach for the relevant centers.
So then the last question from me is on the balance sheet. What's your current cash position? And in terms of runway, what commentary can you give?
Last quarter, we had $33 million in the bank. Every now and then, we have additional $30 million in warrants that are deep in the money. Every now and then, there is a bulk of a few millions that are being exercised. On top of that, our operation, other than the clinical trial, is profitable. The clinical trial cost is around $25 million. We are in a relatively good situation, not great. I would be happy if I had additional $200 million in the bank, but it is what it is.
Thank you.
Thank you for your time.
Thank you.
Thank you.