MDWD

Good day, and welcome to the MediWound first quarter 2026 earnings conference call. I'd now like to turn the conference over to Dan Ferry of LifeSci Advisors. Please go ahead.

Thank you, Operator, and welcome everyone. Earlier today, pre-market open, MediWound issued a press release announcing financial results for the first quarter ended March 31, 2026. You may access this press release on the company's website under the Investors tab. I would ask you to review the full text of our forward-looking statements within this morning's press release. Before we begin, I would like to remind everyone that statements made during this call, including the Q&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. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations, and are described more fully in our filings with the SEC.

In addition, all forward-looking statements represent our views only as of today, and MediWound assumes no obligation to update or supplement any forward-looking statements, whether a result of new information, future events, or otherwise. This conference call is the property of MediWound, and any recording or rebroadcast is expressly prohibited without the written consent of MediWound. With us today are Ofer Gonen, Chief Executive Officer of MediWound, and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Corporate Development, is also participating in today's call. Following our prepared remarks, we will open the call for Q&A. I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound. Ofer.

Thank you, Dan, and good morning, everyone. During the first quarter of 2026, we continued to execute against our key strategic priorities, advancing EscharEx towards commercialization and expanding the global role of NexoBrid. While the timeline for EscharEx phase III VALUE study has shifted by one quarter, the underlying momentum behind the program continues to strengthen. During this quarter, we expanded our chronic wound collaboration network, generated additional clinical and scientific validation for both EscharEx and NexoBrid, and continued to see strong engagement from strategic collaborators and the broader wound care community. We continued to advance our expanded NexoBrid manufacturing facility toward commercial readiness and further strengthen long-term opportunities with industry leaders and government partners across our portfolio. Let me start with an update on EscharEx.

Enrollment continues in the global phase III VALUE study in venous leg ulcers, with more than 30 sites active across the United States, Europe, and Israel. Recruitment has progressed more gradually than originally anticipated, primarily due to two operational factors. First, certain European sites required ancillary related regulatory adjustments, which have been now completed, and we expect the study to reach the targeted 40 active sites within weeks. Second, the travel and visit requirements associated with the protocol created participation challenges for the older and medically complex VLU patient population. To support enrollment and reduce participation burden, we implemented patient assistance measures, including hotel reimbursements, transportation services, and facilitated access to enhanced care. Importantly, given how quickly EscharEx works, the protocol requires daily wound assessments to determine the exact day complete debridement is achieved. This represents a shift for measuring debridement outcomes over weeks.

While this creates operational complexity in the study, it may ultimately reflect one of EscharEx's key clinical and commercial advantages in real-world practice. We expect the interim sample size reassessment and the enrollment completion by the end of the first quarter of 2027. At the same time, we continue to see expanding commercial, clinical, and scientific validation supporting the broader opportunity of EscharEx across the chronic wound care market. Medline, a global leader in medical, surgical, and wound care products, has joined our collaboration network. Together with Coloplast Kerecis, ConvaTec, Essity, Mölnlycke, Solventum, B. Braun, and MiMedx, our collaborators now include essentially all the major advanced wound care companies relevant to the program. As part of the collaboration, Medline will provide its class-leading skin protectant, Marathon, for the upcoming DFU phase II study.

Marathon is designed to protect tissue surrounding the wound while EscharEx performs its debridement activity within the wound bed. A peer-reviewed U.S. expert consensus document published in Wounds emphasized the need for effective, easy-to-use, and less invasive debridement approaches in chronic wound care. A conclusion that aligns closely with the clinical profile and positioning of EscharEx. We also presented new clinical data and new preclinical data at the WHF, FAWC, and UMAC conferences, highlighting EscharEx's clinical benefits, distinct mechanism of action, and broad potential across venous leg ulcers, diabetic foot ulcers, and pressure ulcers. Turning to NexoBrid. During the quarter, we continued to see growing commercial adoption, clinical recognition, and strategic interest in NexoBrid across both traditional burn care settings and government preparedness initiatives. Vericel reported continued growth in both ordering centers and total orders across the U.S. burn care market, reflecting ongoing adoption trends.

Vericel was also awarded a 10-year BARDA contract valued at up to $197 million to support NexoBrid procurement, vendor management inventory services, potential blast trauma indication development, and next-generation manufacturing and formulation capabilities. We expect BARDA-related procurement and development to begin during the second half of 2026. This new 10-year BARDA contract builds on approximately $138 million already received from BARDA and the Department of Defense over the past decade, further solidifying the significance of NexoBrid as a strategic asset in mass casualty burn response and national preparedness. The burn care community continues to move in the same direction. Newly published national consensus guidelines from Japan and the U.K. now added to existing recommendation from the WHO in countries including Italy, Spain, Romania, and Poland. To support this global demand, we remain focused on bringing our expanding manufacturing facility online.

We are implementing modifications identified during a recent EMA pre-audit. We expect to complete those implementation activities during the second half of 2026. With that, I'll turn on the call to Hani. Hani?

Thank you, Ofer, and good morning, everyone. Let's turn to our financial results for the first quarter of 2026. Revenue for the quarter was $1.5 million compared to $4 million in the first quarter of 2025. The decrease was primarily attributable to timing of BARDA-related revenue, as well as postponed shipment related to regional conflict. Gross profit for the quarter was $0.3 million, representing a gross margin of 21.9%, compared to gross profit of $0.7 million or a gross margin of 18.7% in the prior year period. Research and development expenses were $5.2 million compared to $2.9 million in the first quarter of 2025, primarily reflecting continued investment in the EscharEx VALUE Phase III study. SG&A expenses totaled $3.6 million compared to $3.1 million in the same period last year. Operating loss for the quarter was $8 million, compared to $5.2 million in the first quarter of 2025.

Net loss was $3 million, or $0.23 per share, compared to a net loss of $0.7 million or $0.07 per share in the prior year period. Adjusted EBITDA loss was $7 million, compared to a loss of $4 million in the first quarter of 2025. Turning to our balance sheet. As of March 31, 2026, we had $45 million in cash equivalents, and deposits, compared to $54 million at year-end 2025. During the first quarter, net cash used in operating activity was $9.6 million, including the impact of foreign exchange movement between the U.S. dollar and the Israeli shekel. Our balance sheet also benefited from $1.2 million received under the European Innovation Council, or EIC, Accelerator Grant program, as well as $0.7 million received from the exercise of Series A warrants subsequent to quarter end. That concludes my review of the financials. Ofer, back to you.

Thank you, Hani. We continue to make meaningful progress across our core strategic priorities: advancing EscharEx VALUE study, broadening industry validation, expanding NexoBrid commercial and government footprint, and preparing our expanded manufacturing facility for commercial readiness. Based on the expected timing of the government-related procurement and the development revenue in the second half of the year, we are reaffirming our full year 2026 revenue guidance of $24 million-$26 million. Our focus remains on disciplined execution as we position the company for a potential inflection point in the next phase of commercial growth. Operator?

Thank you. We'll now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. Today's first question comes from Joshua Jennings at TD Cowen. Please go ahead.

Hi, good morning, Ofer and Hani. Thanks for the update. I wanted to just ask on the VALUE study and understand that there is some complexities in terms of evaluating some of the older patients, and you described that well. Are there any other risks in terms of getting the interim analysis done by the end of 1Q27? Has these adjustments been made already, and what are you seeing to date that gives you confidence that 1Q27 is the appropriate new timeline?

Hi, Joshua. Good to speak to you. As I said, indeed, the enrollment has progressed more gradually than originally anticipated. Importantly, this is not related to, I don't know, safety, efficacy or protocol concern. As I said in my prepared remark, that the slower pace is primarily reflected by all kind of operational factors that we believe are behind us. They are associated with running a very large multinational VLU study, the largest in a few decades. Those operational challenges were, as I said, ancillary-related regulatory adjustments at certain European site, it is done. We estimate that we reach approximately 40 active sites within weeks. We have also implemented targeted measures to support recruitment momentum with the transportation support, reimbursement programs, and additional patient assistance initiatives.

According to what we see, believe, and understand from how this study runs, we expect the enrollment to be completed by the end of 2027. I have to emphasize that we are focusing on making sure that the right patients are included in the study, not patients that placebo can cure the wound or not patients that even EscharEx cannot move the needle for them. It takes time, but we feel that we are around nearing the end.

Thanks for those extra details. Appreciate it. Just in terms of the expanded manufacturing capacity for NexoBrid and looking at the regulators and the updates that you shared on the call, the FDA inspection is planned in early 2027. Any just next steps on getting the FDA in there? I mean, what are the steps in front of that inspection occurring in 2027 and when should we expect that facility to come online to be able to supply NexoBrid product in the U.S.?

Yeah. Indeed, the U.S. inspectors are supposed to come very early 2027. In order to do that, we need to finalize with the EMA first. As you know, it's a very complex biologic manufacturing, and the transfers includes all kind of process validations, comparability, stability, and regulatory reviews. These activities are progressing, but they require very careful and disciplined execution. During the quarter, we completed an on-site pre-audit from EMA. They identified all kind of several recommendations that are operational modifications. We are now implementing them, and as I said in the call, we expect to complete these activities during the second half of 2026. The feedback is operational in nature. It doesn't have anything related to product quality, safety or comparability concerns. We think that we are on the right track.

Understood. Appreciate it. Thanks a lot, Ofer.

Thank you.

Our next question today comes from Jeff Jones at Oppenheimer. Please go ahead.

Hi, this is Mira on for Jeff. Thanks for the update. Just a couple questions regarding the manufacturing facility and the EMA pre-audit. Just wanted to understand sort of the impact of the recommended modifications by the EMA to the facility on material already manufactured. What is your confidence in being able to sell that material out of the new facility before year-end and sort of that timeline to complete these implementation of these fixes, and would the EMA have to reinspect this? Thank you.

Hi, Mira. Good to have you on. As I said, responded to Josh, it wasn't the inspection, it was a pre-audit by the EMA, and they identified several recommended operational modification. When agency recommends something, you know it's not a real recommendation, you need to do that. We are now implementing it. According to what we understand, we can finish everything as we planned during the second half of 2026. The feedback was only operational, nothing related to the comparability of the product, the safety of it, and these are the things that are really worrying in manufacturing transfer of biologics. We think that we're in a good place.

Great. Thanks. Just one additional question on the BARDA contract. Was wondering if you could comment on the portion of the base BARDA contract, that $35 million that goes to NexoBrid procurement, and how you would expect that to flow to MediWound versus Vericel. Thank you.

The only thing that I can share about at this stage at the BARDA contract is that the $197 million is a 10-year contract between BARDA and Vericel. It contains five components. Procurement, we share it with Vericel. VMI management, Vericel is running that. Manufacturing readiness, next generation formulation, another indication for blast trauma, we have a big share in bringing that to the market. Certain elements in the BARDA framework also include the room temperature-stable formulation, which is a program that initiated back in the days by the Department of Defense. We expect those revenues to kick in the beginning of the second half of 2026. Unfortunately, I cannot tell you at this stage what is the share, who gets what, and what is the portion of MediWound there.

Thank you.

Thank you. Our next question comes from RK at H.C. Wainwright. Please go ahead.

Thank you. Good afternoon, Ofer and Hani. Couple of questions from me. Just thinking through the program with EscharEx. Beyond the current study, just trying to have an idea of how the additional studies which you're planning, especially on the indication expansion, the DFU and the IIT on pressure ulcer, how are the plans for those studies, and how are those studies progressing?

Hi, RK, and thanks for joining. As we mentioned, the phase III VALUE study in VLU remains the primary focus of the EscharEx development program, and this is the company's key value driver, as you can imagine. In parallel, we are conducting supportive studies that are required for regulatory submission, which is a PK study and human factor study that we are about to start in the second half of the year. We are also advancing a head-to-head phase study versus collagenase or SANTYL, and all kind of other non-surgical standard of care modalities. To strengthen the differentiation between us and the competition, and to support future market access discussions. Beyond the value, we are expanding EscharEx into additional chronic wound indications.

As we already communicated, we're about to start a phase II study in diabetic foot ulcers in the second half of 2026, as well as investigator-initiated trial in pressure ulcers, which is planned also for the second half of 2026. This structured program is designed to support the regulatory approval, the competitive positioning of EscharEx, and of course, the long-term commercial expansion across the major chronic wounds segments.

Thank you. The second question is on the revenues. There is a statement saying some of the shipments had to be postponed because of the regional conflict. Just trying to understand how these shipments are going to be moved into the next three quarters. Also, as you reconfirmed your guidance for the year, $24 million to $26 million, which means quite a bit of it is going to show up in the next nine months. Out of that, how much is NexoBrid revenue-based income, and how much is the income that you can get from the BARDA contract approval?

Hi, RK. The first quarter revenue was relatively low, primarily, as said, due to timing. We did not have BARDA-related revenue in the quarter, and certain shipments were indeed postponed due to the regional conflict. Those postponed shipments have already been completed, so this was a timing issue. As a result, looking ahead, we expect revenue to be weighted toward the second half of 2026, driven primarily by the expected ramp-up in government-related development services and procurement activities. Our reaffirming 2026 guidance of $24 million-$26 million is, as you understand, supported by expected government-related development services with burn mass casualty preparedness. We are quite confident that the second half of the year will do the ramp-up, and we're still reaffirming our guidance for the revenue this year.

Is it possible for me to ask one more question, please?

Sure.

Of course.

Yeah. On the Medline partnership, how does that relationship help in the overall development of the product itself, and what do they bring to the table just so that we understand their contribution to this development cycle?

Barry, do you want to speak on this?

Sure. Absolutely. Hi, RK. Thanks for the question. Generally, as an overall comment, obviously, we believe that the level of industry engagement around EscharEx is highly significant, as Ofer mentioned in his comments. With Medline joining this quarter, our collaboration network essentially comprises all of the major relevant advanced wound care companies. Along with Medline, it's Coloplast Kerecis, ConvaTec, Essity, Mölnlycke, Solventum, B. Braun, and MiMedx. These collaborations reflect growing recognition that chronic wound care continues to need an optimally effective, easy-to-use, non-surgical debridement solution, which we offer with EscharEx. Again, generally speaking, standardizing these key products used in both arms of the study, allowing us to only change one thing, active versus control, helps to minimize variability in the various studies and thus yield the best results.

Regarding Medline specifically, the product that they're going to provide is, again, for the DFU study, and it's their class-leading cyanoacrylate-based product, Marathon. Its job is to protect the healthy skin that surrounds the wound, which is an important component of standard wound care, and that allows EscharEx to really just do its job within the wound bed itself. The collaborators get the benefit of having their products as standard of care in some of the largest, most substantial clinical studies in the field of advanced wound care, which could have meaningful commercial impact for their brands. Medline will be looking at data after the study with regard to the health of the surrounding or peri-wound tissue around the wounds to see if indeed use of their product in a large-scale study helped to keep all of that peri-wound in very good condition.

From our perspective, the relationships with the research collaborators are strong, and any one of them could develop into a key strategic partner as EscharEx approaches commercialization.

Perfect. No, thank you. Thank you all for taking all my questions. Appreciate it.

Thank you.

Our next question today comes from Chase Knickerbocker at Craig-Hallum. Please go ahead.

Good morning. Thanks for taking the questions. Maybe just to start, could you elaborate a little bit more on that regulatory change that's causing some issues in Europe? I know you talked a little bit about it last quarter, maybe you could just remind us. Is this responsible for the entirety of that difference between the current kind of 30-ish sites versus kind of the 40 target? Is that delta of 10 all in Europe?

Hey, Chase. Good to have you on with us. Yes. First of all, the 10 sites that we're speaking about, all of them are European ones, and they will be open within weeks. As I think I shared with you in the past, specifically, some of the ancillaries that we need to import to Europe are a little bit problematic, specifically, without mentioning the brand, cellular tissue products are not or were not allowed in specific countries in Europe, and it was a nightmare to bring them in. Even if we had some resolutions, they were very local, and to make it on a global scale was a little bit complicated. Now we can officially tell you that we are after it, and all the sites are being opened, and it is going to be executed. What was the second part of the question? Sorry.

Yeah, both there. Just secondly, as far as what the 1Q 2027 timeline kind of assumes for an enrollment rate. Does it assume kind of an acceleration? Just talk about the assumptions you're making within that. Secondly, just as it relates to some of those changes around the travel reimbursement, et cetera, have you seen kind of an improvement in enrollment rates already from that?

Barry will address the second part of the question about the changes. As for the first Q of 2027, our assumption that the enrollment per site, the number of patients per site to be enrolled per territory will be maintained. We'll have more sites, and eventually we'll get there. As I said in the beginning of the call, our main motivation, since there is a huge need for biologics, and Barry will elaborate on that in a second. There is a huge need for biologics in the market. We just need to make it to the finish line and make sure that the trial is a success. There is no compromise in adding patients with all kind of exclusion criteria that we think will be too easy to cure for a placebo or too tough to cure for EscharEx. We are keeping them out.

We have more than thousands of patients that were already screened for this study. It means that there isn't a lack of patients. We just need to make sure that the patients that are enrolled are the right ones in order for us to be able to replicate the data that we had in previous studies. Barry, do you mind addressing the second part of the question?

Sure. Hi, Chase. I think that the question was directed towards whether or not these changes have impacted enrollment. I guess what I would say about that is, not likely. As Ofer just mentioned, we've had so many patients screened already, it's not for lack of patients. Also talking to the sites before the study and during this last year, none of them said that anything having to do with reimbursement changes was impacting their ability to enroll patients or not. Just in general, what Chase is referring to is this major change in the Medicare physician fee schedule that happened at the end of last year, which was a major change reclassifying the skin substitutes to be paid as incident 2 supplies and establishing a standardized per square centimeter payment, which really lowered the overall amount of dollars, if you will, flowing into that segment.

Much so that CMS itself stated that the change is expected to reduce Medicare spending on those skin substitutes by nearly 90%. Which effectively translates to around $12 billion out of what was a $14 billion segment. That in turn will drop the whole U.S. chronic wound care market from around $18 billion down to $5.5 billion. In fact, over the last month or so, we've heard leading CTP companies reporting year-over-year declines in sales of around 60%. As Medicare closes that loophole, setting aside the clinical trial environment from a commercial opportunity, differentiated products outside this reimbursement construct will definitely stand out. EscharEx, for example, if approved, enters into a segment where a legacy product generates $400 million per year, and it places it as one of, if not the most valuable near-term asset in the field of wound care.

Given the dramatic drop-off of these CTPs, certainly the larger global wound care companies will very likely all shift their attention to products with higher order levels of regulatory approval, BLAs, NDAs, PMAs. Ours is one of the very few of those in late stages of clinical development, and I'd add it's the only 1 heading into an existing proven category. While it doesn't really impact or doesn't seem to have impacted the clinical study from a commercial perspective, this change is enormous for us.

Helpful color, guys. Thank you.

Thank you.

Our next question today comes from Michael Okunewitch with Maxim Group. Please go ahead.

Hey there. Thank you so much for taking my questions today.

Hi, Michael.

I think to start off, I'd like to ask a little bit about the consensus document published in "Wounds," and in particular, if you could expand on what the driving rationale for the consensus on less aggressive methods earlier in the debridement course and what this could mean for EscharEx adoption. Is this something that could further build on that expectation that something like EscharEx could expand the share of enzymatic debridement in the overall chronic wound debridement segment? I'd just like to get your thoughts on that.

Hi, Michael. I think, Barry, it's best that you respond to that, okay?

Sure. Hi, Michael. Thanks for the question. We viewed the recent consensus publication, which was in "Wounds" as an important external validation of the direction that the field is moving. To your question specifically about why more of a focus on less invasive modalities early, I think it's just to allow for more broad access. The higher level of complexity of the intervention, the more training that someone would need to do that. If you know much about the wound care market, you know that wounds are treated in lots of different places, from nursing homes, in home care, obviously in the wound clinics and physician's offices, all the way up to and including hospitals, of course.

One of the charts that they have in the consensus document, they talk about it as a Chutes and Ladders kind of approach, where you start off at the base with these more easy-to-use products, then you progressively go higher and higher as it's required. Even after you get to the top, as you sort of come down from that, you might need check-ins, if you will, for maintenance debridement with the more easy-to-use products. Overall, the way that we see it, and to your question of what does this really translate to for EscharEx?

The way that we view this, not that they used these words in that consensus document, but the very accurate picture that they drew of the market, the segment, is one of a lot of confusion and a lot of moving parts. The reason for that is the products that they consider to be first line, which are autolytic hydrogel types of moist wound care and the current enzymatic product, are not deemed to be optimally clinically effective. Yes, they could be used in all settings. Yes, you don't need a lot of training to do them, but the debridement is measured in weeks. That kind of forces clinicians' hands to go up that ladder and get to more invasive approaches.

How EscharEx changes that entire dynamic is by, yes, having a product that's easy to use, yes, having a product that could be used across all settings, but most importantly, is optimally effective, where debridement can be measured in days. According to the data from third-party research, we do believe that because of that change that EscharEx will significantly increase the market size of the overall enzymatic debridement market. When we look at from a pricing perspective and a relative desire to switch to EscharEx between diabetic foot ulcers, while SANTYL is around $400 million a year, for EscharEx, we believe that peak sales reaches up to around $831 million just from venous leg ulcers and diabetic foot ulcers alone. Yes, we do anticipate a good amount of market expansion.

All right. Thank you. Just one more from me before I hop into the queue. Just with the enrollment challenges in VALUE, are there any lessons learned that you think you can carry over to streamline future development for EscharEx, whether that's for these supplementary studies or for the potential expansion studies into DFU and pressure ulcers?

Well, there are many tactical lessons learned. The only one that I think is a change that we will take into account in future trials is that, the enrolling rate, which is half a patient per site per month, which was a correct number when there was COVID, people were looking for excuses to go out of their home, physicians' offices were empty. These numbers should be reduced in our future calculation when we say end of Q1, we are counting on a lower number, making sure that we recruit the right patients. All the others, additional money for transportation, make sure not to import to Europe all kind of complicated products. We are after that, and I don't think it will be an issue next time.

All right. Thank you very much.

Thank you.

Thank you. Our next question today comes from Scott Henry at AGP. Please go ahead.

Thank you. Good morning or afternoon, depending on your location. A bit of a follow-up on RK's question, perhaps a little more specific. How dependent is 2026 revenue guidance on increasing manufacturing capacity? If that comes in towards the back part in Q4, is that a risk, or can you build inventory ahead in such that you ship a lot in that quarter? Just trying to get a sense as we get later into the year.

Hi, Scott. Good to hear from you. I'm following up, Hani, if this is okay, on what you said earlier. The forecast of 2026 is dependent substantially on development services from all kind of government-related agreements. Specifically, we have some flexibility. It's not that our guidance of 2024 to 2026 is assuming specific revenue from product or from revenue from development services. We know that we can do either this one or that one. We feel quite comfortable with the guidance. We are not dependent specifically on the manufacturing capacity.

Okay, great. Thank you. When we think about the development services revenue, how should we think about 2Q? I'm assuming there was none in Q1. Should we expect that to sequentially go up through the year, or should 2Q be perhaps a little bigger than that? Just trying to get a sense of that.

Looking ahead, we expect revenue to be weighted toward the second half of 2026, primarily from government-related development services. We still have some revenue from development services in the first half, but it's relatively very low compared to what we expect in the second half.

Don't forget that we have an agreement also with the Department of Defense and Development Services there, so the assumption that it is zero is not the right assumption. Definitely, it will be weighted towards the second half of the year.

Okay, thank you. Just one clarification. I thought I heard earlier in the remarks, you mentioned that the U.S. manufacturing capacity expansion somehow hinged on the EU manufacturing capacity expansion. Did I hear that correct? That would seem unusual that the two would be related, but I want to follow up on that.

Yeah, it's a technical constraint. Every product that is shipped from Israel to the United States needs to get an approval from the local agency. The local agency is considered the European one. Before I get the approval from the EMA or Israeli local agency, I cannot ship to the United States. Again, these are not different requirements, so I wouldn't spend too much in order to understand it. It is what it is. We need to get okay clearance from Israel, and then we can ship to the United States, and then we can call for audits.

Okay, great. Thank you for that clarification, and thank you for taking the questions.

Thank you very much.

Thank you. That concludes our question and answer session. I'd like to turn the conference back over to management for any closing remarks.

Thank you, everyone, for joining us today. We look forward to updating you again on our next quarterly call.

Thank you. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Good day, everyone, and welcome to MediWound Ltd.'s Fourth Quarter and Full Year 2025 Earnings Call. Today's conference call is being recorded. At this time, I would like to turn the conference call over to Gaia Seamus of LifeSci Advisors. Please go ahead.

Thank you, operator, and welcome, everyone. Earlier today, premarket open, MediWound Ltd. issued a press release announcing financial results for the fourth quarter and full year ended December 31, 2025. You may access this press release on the company's website under the Investors tab. I would ask you to review the full text of our forward-looking statements within this morning's press release. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session, relating to MediWound Ltd.'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. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today, and MediWound Ltd. assumes no obligation to update or supplement any forward-looking statements, whether a result of new information, future events, or otherwise. This conference call is the property of MediWound Ltd., and any recording or rebroadcast is expressly prohibited without the written consent of MediWound Ltd. With us today are Ofer Gonen, Chief Executive Officer of MediWound Ltd., and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Co-Development, is also participating in today's call. Following our prepared remarks, we will open the call for Q&A. Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound Ltd. Ofer?

Hi, and thank you, Gaia. 2025 was a pivotal year for MediWound Ltd. We ended the year with two significant growth drivers firmly in place: a Phase III VALUE trial advancing as planned, and an operational and expanded manufacturing facility for NexoBrid positioning us for long-term commercial growth. At the same time, we strengthened our balance sheet and outlined a multiyear revenue trajectory. Despite the ongoing conflict with Iran, we at MediWound Ltd. are fully prepared and will continue operating with the resilience and discipline that have guided us through similar challenges in recent years. Our team remained focused on our clinical milestones and commercial objectives, continuing to support patients and partners worldwide. Let me walk you through the progress. Let us start with an update on EscharEx, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment is ongoing in the global Phase III VALUE study in venous leg ulcers, with the majority of sites active and enrolling. We are targeting enrollment of 216 patients across approximately 40 sites in the United States and Europe, and we expect both the prespecified interim assessment and enrollment completion by year-end 2026. Importantly, we are expanding the EscharEx clinical program beyond just VLUs. We have aligned with both the FDA and EMA on the Phase II protocol in diabetic foot ulcers and plan to initiate the study in 2026. In addition, a prospective investigator-initiated study in pressure ulcers is also expected to begin in 2026. This expansion broadens the clinical footprint of EscharEx across the three major chronic wound indications. We continue to see meaningful industry validation; B. Braun has joined the EscharEx clinical development program through a research collaboration agreement and will take part in the planned Phase II study in diabetic foot ulcers. This adds to the existing collaborations with Coloplast, ConvaTec, Essity, Mölnlycke, Solventum, and MiMedx. Taken together, continued clinical execution, regulatory alignment, expansion into additional indications, and industry engagement support the advancement of EscharEx as a long-term growth driver for MediWound Ltd. Now turning to NexoBrid. Our expanded manufacturing facility is now operational, increasing the production capacity sixfold to support growing global demand. Commercial availability from this site remains subject to regulatory approvals, which we expect in 2026. In the United States, adoption continues to expand, with utilization across more than 70 burn centers, representing the majority of Vericel's approximately 90 target accounts. To illustrate the driver of demand, here are some of the latest examples. Recently published real-world data from the Israel Defense Forces covering nearly 5,000 documented combat casualties showed that NexoBrid was clinically applicable in 71% of war-related injuries. In addition, a 15-year military analysis across multiple conflicts demonstrated a 50% increase in the proportion of severe burns among wounded soldiers. In parallel, we reported peer-reviewed prospective data showing that NexoBrid reduced embedded particles in ablation and blast injuries by more than 90%, supporting the role in acute trauma care. More recently, survivors in the tragic bar fire in Trans Montana, Switzerland, were treated with NexoBrid in medical centers across Switzerland, Italy, and Germany, underscoring the importance of pre-deployment of an advanced burn therapy for mass casualty events. Taking all this together, growing clinical evidence from both military and civilian settings reinforces NexoBrid's role in the treatment of severe burns. Following regulatory clearance of our expanded facility, we intend to prioritize support for national preparedness initiatives, including stockpiling and collaboration with military and emergency response systems. With that overview, I will now turn the call over to Hani. Hani?

Thank you, Ofer, and good morning, everyone. Let us turn to our financial results for the fourth quarter and full year of 2025. Revenue for the fourth quarter was $1.9 million compared to $5.8 million in 2024. The decrease was primarily driven by lower development services revenue, mainly attributable to the U.S. government shutdown, which delayed budget approval and the initiation of new contracts and agreements. Gross profit for the quarter was $300,000, or 14.9% of revenue, compared to $900,000, or 15.5%, in the prior-year period. R&D expenses were $4.5 million compared to $3.0 million in 2024, reflecting continued investment in the EscharEx VALUE Phase III study. SG&A expenses totaled $3.6 million compared to $4.0 million in the same period last year, mainly reflecting lower marketing and share-based compensation expenses. Operating loss for the quarter was $7.8 million compared to $6.1 million in 2024. Net loss was $7.2 million, or $0.56 per share, compared to a net loss of $3.9 million, or $0.36 per share, in the prior-year period. The increase was primarily attributed to lower noncash financial income from the revaluation of warrants. Adjusted EBITDA loss was $6.5 million compared to a loss of $4.9 million in 2024. Looking at our performance for the full year 2025, revenue for the year was $17.0 million compared to $20.2 million in 2024. The decrease was primarily attributable to the U.S. government shutdown and lower product sales to Vericel. Gross profit was $3.3 million, or 19.2% of revenue, compared to $2.6 million, or 13%, in 2024. The margin improvement reflects a more favorable revenue mix. R&D expenses increased to $14.0 million compared to $8.9 million in 2024, driven by investments in the EscharEx VALUE Phase III trial. SG&A expenses were $14.2 million versus $13.1 million in 2024, mainly reflecting higher marketing authorization order expenses. Operating loss for the year was $25.3 million compared to $19.4 million last year. Net loss for 2025 was $23.9 million, or $2.10 per share, compared to $30.2 million, or $3.30 per share, in 2024. The reduction in net loss was primarily driven by $2.2 million of noncash financial income from the revaluation of warrants in 2025 compared to $10.7 million of noncash financial expenses in 2024. Adjusted EBITDA loss was $20.3 million compared to $14.8 million in 2024. Turning to our balance sheet, as of December 31, 2025, we had $53.6 million in cash, cash equivalents, and deposits compared to $43.6 million at year-end 2024. During 2025, we used $21.4 million in cash to fund our operating activities. In addition, our balance sheet reflects the completion of a $30.0 million registered direct offering and $3.5 million in proceeds from Series A warrant exercises. We believe our current cash position provides the financial flexibility needed to advance our key program and continue execution on our strategic priorities. That concludes my review of the financials. Ofer, back to you.

Thank you, Hani. So before we conclude, let me briefly address our outlook. We reaffirm our revenue guidance of $24 million to $26 million for 2026, $32 million to $35 million for 2027, and $50 million to $55 million for 2028. This guidance assumes continued support from BARDA and the U.S. Department of War, and the 2028 outlook includes potential initial contribution related to EscharEx, subject to regulatory approval. These projections reflect the foundation we built in 2025 and the milestones ahead. In summary, 2025 was a year of infrastructure build-out and clinical advancement. We advanced our Phase III program for key milestones. We completed and commissioned our expanded manufacturing facility. And we strengthened our balance sheet and established a multiyear revenue framework. As we move into 2026, we are focused on disciplined execution, advancing EscharEx towards pivotal milestones, securing regulatory approvals for our expanded facility, and converting our operational progress into meaningful long-term value creation. Operator?

Ladies and gentlemen, at this time, we will begin the question-and-answer session. Using a touch-tone telephone, to withdraw your questions, you may press star and 2. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. So, again, that is star and then 1 to join the question queue. We will now open for questions. Our first question today comes from Josh Jennings from TD Cowen. Please go ahead with your question.

Morning. Thank you for taking the questions, and I hope everyone on the team is safe, and we are thinking about you guys. I wanted to start with just a question on NexoBrid and the manufacturing expansion project that has been successful. Just maybe review the pent-up demand in international regions and the timing. I think you can take this all into your multiyear guidance forecast, just the timing of MediWound Ltd. filling that demand over the next 12, 18, 24 months.

Hey, Josh. Good speaking with you. So our expanded manufacturing is now operational, and the capacity has now increased sixfold. The commercial output in this site remains subject to regulatory approvals that are expected later in 2026. Once we are approved by EMA or FDA, the product that we are manufacturing during the validation process that we are doing now can be released to the market. Our guidance assumes a regulatory approval clearance in 2026. I think it is an assumption that we believe is reasonable given where we stand today. As for the demand, it is much larger than we can actually manufacture across the territories. Having said that, I do not know if it will be the case once we can manufacture. Therefore, we guided according to what we expect, and I hope it will be better going forward.

Thanks for that, and congratulations on the pace of the VALUE trial, and it sounds like things are going well there. I wanted to ask about the pressure ulcer trial. It is my understanding that, just in terms of your team's assessment of the peak sales in the U.S. down the line for EscharEx, it does not include contributions from the pressure ulcer indication. Maybe just talk about or review the size of that opportunity in the U.S. and how that will be unlocked with this trial. Thanks for taking the questions.

I have to admit that I did not hear anything. Is it because of my line or because of yours? Do you hear me? I am sorry. It may have been because of my line. Can you hear me now? I do not hear you. Operator, is it his line? Should I reconnect?

I am hearing both of you. Are you able to hear me, sir? Can you, sir?

Yes, I hear you loud and clear. Josh, can you speak again?

Certainly. Can you hear me now?

Yes. Can you repeat the question? Sorry.

Sorry for the technical difficulties. Maybe that was on my line. Yes, I was just saying that you are making nice progress on the VALUE trial, which is a good signal. I just wanted to dive a little bit deeper into the pressure ulcer indication. My understanding is that that is not included in your team's assessment or forecast of peak sales in the U.S., which is a little bit of conservatism there. But just wanted to either review that pressure ulcer indication and the kickoff of this pressure ulcer study later this year. Thanks for taking the question.

Okay. Barry, do you want to take this one?

Sure, absolutely. As you know, we are going to start an investigator-led pressure ulcers study this year, and along with that, we will have a third-party market research project initiated that will replicate what we did with regard to diabetic foot ulcers and venous leg ulcers. And so, ultimately, those peak sales, as you mentioned, will increase. I think from a back-of-the-envelope perspective, I would say to think about pressure ulcers as the third of the big three ulcer types along with DFUs and VLUs. There are probably more pressure ulcers than there are the other two. We still need to do the work to see how many of them require debridement and would be applicable to EscharEx. But back of the envelope, I would anticipate that when all is said and done, it will be roughly a third of the business.

Thanks for that, Barry and Ofer. Appreciate it.

Our next question comes from Jeffrey Jones from Oppenheimer. Please go ahead with your question.

Thank you very much for taking the question. Josh and Ofer, I hope everyone is safe there. You mentioned in the 2026 revenue guide that this assumed continued support from BARDA and DOW. Can you clarify how much of that is based on new contracts that are not currently committed versus the award that you are anticipating, and perhaps give us an update on what you know there?

Hi, Jeff. So good to have you on as well. Let us start with BARDA. In August 2025, BARDA issued an RFP covering stockpiling, warm-temperature stable formulation, and trauma and blast injury indications. Vericel, which holds the U.S. commercial rights on NexoBrid, is leading the process in the United States. We will provide full technical and development support. Now, with federal operations normalized, we expect BARDA to resume progress on this RFP and related development and procurement activities, subject, of course, to standard government processes. I cannot add more to that. As for our collaboration with the Department of War, as you know, NexoBrid room-temperature stable formulation is being developed for a nonsurgical burn treatment for the use for the U.S. Army. We have been awarded to date a total of $18.2 million in nondilutive funding from the U.S. department for order to support this development. We are moving forward. So part of the revenue is supposed to be from BARDA and part of it from the Department of War.

Thank you for that. You mentioned the research collaboration in the context of the DFU study, I believe. Can you speak in a little more detail about what some of these collaborators are providing and how that guides to your long-term strategy in VLU, DFU, and beyond?

Okay. Barry, do you want to speak on this?

Sure. I mean, as you mentioned in the call, between the VLU and the DFU study, at this point we have seven of these research collaborations, all with market-leading advanced wound care companies. They include Coloplast, through their acquisition of Kerecis, Essity, Solventum, Mölnlycke, ConvaTec, MiMedx, and now the most recent one being B. Braun. Just a little bit about B. Braun: they are one of the world's leading privately held medtech companies. They are headquartered in Germany, founded in 1839. They generate over $9 billion in annual revenue, operate in over 60 countries, and employ more than 60,000 people globally. They are known for products that are used daily across hospitals, surgical centers, dialysis clinics, and outpatient settings, so they are a perfect partner when it comes to wound care. They have a big wound care franchise. Specifically with B. Braun, they are taking part in the DFU Phase II study. As with the other collaborators, they will be supplying one of the key products that is for optimal care of wounds, which will be used in both arms of the study. Specifically, they are supplying their market-leading antimicrobial wound cleanser, Prontosan, to be used during dressing changes. So each of these collaborators are putting in one kind of product, whether it be a wound dressing. In the VLU study, compression therapy is required. Post wound healing, there is a different kind of compression device that keeps everything in place. So they all supply things that are needed for the standard of care in wound care, and it allows for the study design to be that only one thing needs to be changed between the two arms, and that is the active and the control, and so it reduces any sort of variability in the study, and we get cleaner results. For the companies, the collaborators, they get the benefit of having their product used as standard of care in these very, very large, hopefully successful studies, and it also provides the opportunity for relationship building between MediWound Ltd. and these collaborators. So as we get closer to the product making it to the market, and if there are any partnering transactions to consider, all these companies will be up to date with the program, know the details of it intimately, and it will just facilitate conversations at that time.

Great. Thank you very much for the detail. We will get back in queue.

Thank you. Our next question comes from Swayampakula Ramakanth from H.C. Wainwright. Please go ahead with your question.

Thank you. This is RK from H.C. Wainwright. Good afternoon, Ofer, and I am glad to hear your voice. Just a couple of quick questions. On the VALUE trial, which includes the provision of adaptive adjustment that you could do at a 65% enrollment mark, what clinical scenarios would there be if you had to increase your sample size, and if you end up doing that, what sort of an impact would it have on your timeline?

Hi, RK. So thank you for joining. Yes, as you mentioned, the prespecified interim sample size assessment will be conducted after approximately 65% of the patients complete the treatment. Based on this assessment, the study may continue as planned, which means that the sample size stays 216 patients. The sample size may increase if necessary. We want to preserve the approximately 90% statistical power. As you know, at MediWound Ltd., we succeeded in all the 14 clinical trials that we conducted and all the three Phase II studies that we conducted with EscharEx. So we have no intention not to make it to the finish line in this study as well. So the outcome could be the study should finish the enrollment as planned, which means 216 patients, and as we guided, it would be by the end of 2026. If, let us say, we are at 80% statistical power, not good enough, we will increase the number of patients. If it is increasing by 20–40 patients, it means adding another couple of months to the study and another few millions of dollars, which is not a drama. If the outcome is that we need to increase it by 100 patients, it will be at least six months, and it will cost us another $10 million. Let us hope that the data will be very similar to what we saw in the Phase II studies, and we will be able to finish the enrollment by the end of this year.

Thank you for that. And then the question I have on supply chain for the clinical studies: as we understand how things are in and around Israel at this point because of what is going on in the geopolitical world, is that impacting anything in terms of supplying clinical product to the various centers, and if so, how are you managing it?

So it is a great question because we just had a discussion about it this morning. We checked in across the sites in Europe and in the United States. There is enough EscharEx that can support continuation of the trial for the next at least six months, so we are in a good place. On top of that, the other ancillaries are from global companies, so all of them should be in the sites. So we do not anticipate any issue regarding the supply chain that will impact the clinical study.

Thank you for that. And then the last question from me is, the revenues for 2025 were below what was expected, and is that partially a stocking issue through Vericel, or is it the pull-through in some of these active burn centers?

RK, so the revenue for 2025 totaled $17.0 million, as you said, less than the $24.0 million that was expected. The decrease was primarily due to the U.S. government shutdown, which delayed, as you imagine, the budget approval and the initiation of new contractual agreements. There was a small part that belonged to the sales to Vericel, but the main part is the U.S. government shutdown.

So when you say that, I was just wondering about the 2026 revenue guidance. How much of the BARDA RFP award expectation is in the $24 million to $26 million that you are talking about?

We are not sharing the split. We have potential of getting from BARDA, potential from or indirectly by Vericel. We have potential to get it from the DOW, and we have revenue from product. We feel comfortable achieving the $24 million to $26 million, but we are not giving the split.

Thank you. Thank you both for taking all my questions.

Next question comes from Chase Knickerbocker from Craig-Hallum.

Hello, everyone. This is Jake on for Chase. Wondering if you could provide a little bit more color and further discuss the decision to move forward with a Phase II for DFU rather than the adaptive Phase II/III design as previously planned. What kind of feedback from the FDA did you receive that indicated that this was the best path forward?

Hi, Chase. Good to have you with us. So the main program, as you know, is the VLUs, and we decided to expand the program into two additional chronic wound indications, as said, DFU and pressure ulcers. There are some changes in the administration. We are not certain that it will be required to execute a very large Phase III study in order to have an approval for a DFU indication. We consulted with the agencies, both with EMA and FDA, asked them what they are expecting to see in order to see the advantage of EscharEx in treating DFU patients, and the outcome was this study with 50 patients, as we detailed in our corporate deck. And if I may add, it is a 50-patient study, which is the kind of Phase II, and if we see that we need to have additional, I do not know, 100, 150 patients to finalize the Phase III, we will do it study after study. So it is a kind of a timing impact, but we are not certain that it will be done before the product is approved.

Appreciate that color, Ofer. That is helpful. And then same type of question on the pressure ulcers. Is it your understanding that the pressure ulcer would require a separate Phase III to get the potential EscharEx label?

Thank you for the question. As Ofer intimated in his answer with regard to DFUs, there is a change in the stance with regard to the FDA and how they are trying to make it, let us say, easier for drugs to be approved, the most notable thing being that they are moving from the need to do two well-designed, well-controlled Phase III studies in order to get approval, and they are moving that to needing only one. And when we look at that, and we also look at, if you recall, at the end of last year, the FDA agreed that our second primary endpoint would be the facilitation of wound closure, which basically takes the onus of the closure portion away from EscharEx and puts it into the hands of already approved products like a CTP or an autograft. We intend to have a discussion with the FDA around the necessity of these large-scale Phase III studies for each and every indication, i.e., DFU, pressure ulcers, or any other chronic wound indication that is out there. The necrotic material on these wounds is all very similar from wound to wound to wound. We have excellent data and a growing base of data that EscharEx works on all of that necrotic material, owing to its several different enzymes that are in the API and multiple different targets towards the necrotic material. And we believe, in the end, that it would be likely sufficient to have, as we are doing in the DFU study, a well-designed Phase II study complemented by post-marketing real-world data to expand the pack insert to include additional indications.

Appreciate that additional color, Barry. Thanks for taking the questions.

Thank you. Our next question comes from Michael Okunewitch from Maxim Group.

Hey, guys. Thank you so much for taking my questions today. I guess to start off, I would like to ask a little bit about the pressure ulcer program, and in particular, the strategic considerations around prioritization in chronic wounds. We know about the prioritization between VLUs and DFUs, but pressure ulcers do seem to be a little bit overlooked in this market. So I am curious if you could comment on the market and why pressure ulcers seem to be prioritized less so than the other two chronic wounds.

Hi, Michael. I do not think it is less prioritized. The largest unmet medical need is definitely at venous leg ulcers, because these wounds are extremely painful, and you do not have any alternative. The knife, the scalpel, is not an alternative for that. Pressure ulcers are very different one from another, might be very deep. There are all kinds of complications that might be associated. For us, it seems to be the more complicated ones to treat. So we are going to start with relatively mild pressure ulcers. Having said that, it is important for us, as Barry said previously, EscharEx works on burns, it works on wounds, it does not care which type of wounds it is applied on. So our motivation is making sure that when we are very close to the finish line, having data in our venous leg ulcer trial, to make sure that everyone understands—the potential partners, the investors—that everyone understands how large this market is and how big is the unmet medical need. So the current trial with pressure ulcers will be a very small trial. We will do in parallel, as Barry said, that just demonstrates that EscharEx can debride. By a third-party consultant and market research, we will understand exactly the portion of the patients that need to debride their wounds, and only then we will know how large is our accessible market. I hope I answered your question.

Thank you. I appreciate that. And then could you just provide an update on the status of the head-to-head study? Are there any additional outstanding items before you can get that up and running?

Yes. So, as you know, the main focus of the company, and this will definitely determine our value, is the Phase III study. In parallel, we need to conduct some supportive studies that we are doing. One of them is a PK study, for instance, one of them is a human factors study. We are doing all kinds of small trials to support the BLA submission. Specifically regarding the head-to-head study versus collagenase or other types of nonsurgical standard of care, we are doing that in order to support future market access discussions. We guided, and we are going to do that, that we will start the trial around mid this year, maybe the second part of the year. For us, it is a very important study, since it will enable us to determine what the actual price of EscharEx will be.

Alright. Thank you. And then one last one for me before I hop into the queue. In terms of your enrollment, the complete enrollment targets for the VALUE study and the interim analysis, is that based on the current rate of enrollment, or does there need to be some additional ramp or acceleration at the sites to meet that?

To protect the study integrity, we are not sharing enrollment numbers or trends. But we feel very comfortable with the target that we gave, which means interim assessment and completion of the enrollment of the study by the end of the year.

Alright. Thank you very much for taking my questions today.

And our next and final question for today comes from Scott Henry from A.G.P. Please go ahead with your question.

Thank you, and good afternoon. First, just to clarify, as far as the interim analysis, when you talk about year-end, should we expect that to mean Q4?

Hi, Scott. I would expect it to be by year-end.

Which means in the end, in the end of Q4.

I do not want to overpromise.

Okay. That is helpful. Thank you, Ofer. And then with regards to revenue and timing, as far as the BARDA revenues, I assume there were none in 2025. Should we expect any revenues in 2026? Just a couple of weeks left in the quarter. You might have a sense at this point.

So once BARDA agreement is signed with Vericel, I guess all of us will know. Our revenue guidance assumes that the initial revenue from those specific agreements will be only from Q2.

Okay. Great. So when we do model this out, just confirming, we should really expect a pretty significant increase in revenues in 2026 over the first half of 2026, given the manufacturing capacity coming on stream, given the BARDA revenue. So just want to make sure I am thinking about that correctly. Thank you.

Yes. Scott, it was always that the second half is better in revenue than the first half. Of course, given the fact that in our model BARDA's revenue will be only recorded from Q2, and also the capacity will increase at year-end or the second half. You are very much correct.

Okay. Great. Thank you for taking the questions.

Thank you so much.

And ladies and gentlemen, with that, we will be ending today's question-and-answer session. I would like to turn the floor back over to management for any closing remarks.

Thank you, everyone, for joining us today. We look forward to updating you again on our quarterly call.

And with that, we will conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.