MediWound Ltd. (MDWD) Q1 2026 Earnings Call Transcript

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Overview

The earnings call summary presents a mixed outlook. The reaffirmation of revenue guidance and ongoing clinical developments are positive, but uncertainties in regulatory approvals and manufacturing expansions pose risks. The Q&A reveals potential delays and a lack of specific details on key contracts, which may cause investor concern. Overall, despite some promising developments, the lack of clarity and potential operational challenges lead to a neutral sentiment.

Key Financial Performance

Revenue $1.5 million compared to $4 million in the first quarter of 2025, a decrease primarily attributable to timing of BARDA-related revenue as well as postponed shipment related to regional conflict.

Gross Profit $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 $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 $3.6 million compared to $3.1 million in the same period last year.

Operating Loss $8 million compared to $5.2 million in the first quarter of 2025.

Net Loss $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 $7 million compared to a loss of $4 million in the first quarter of 2025.

Cash, Cash Equivalents and Deposits $45 million as of March 31, 2026, compared to $54 million at year-end 2025.

Net Cash Used in Operating Activity $9.6 million during the first quarter, including the impact of foreign exchange movement between the U.S. dollar and the Israeli shekel.

Funds Received $1.2 million received under the European Innovation Council (EIC) Accelerator grant program and $0.7 million received from the exercise of Series A warrants subsequent to quarter end.

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Operating Highlights

EscharEx Phase III VALUE study: Enrollment continues with over 30 active sites across the US, Europe, and Israel. Recruitment challenges due to regulatory adjustments and patient participation issues are being addressed. Interim sample size reassessment and enrollment completion expected by Q1 2027.

NexoBrid: Continued commercial adoption and strategic interest in burn care and government preparedness. Vericel awarded a 10-year BARDA contract worth up to $197 million for procurement and development. Expanding manufacturing facility expected to be ready in H2 2026.

Chronic wound care market: Medline joined collaboration network, adding Marathon skin protectant to the DFU Phase II study. Collaborators now include major advanced wound care companies like Coloplast/Kerecis, Convatec, Essity, Mölnlycke, Solventum, B. Braun, and MIMEDX.

Burn care market: Vericel reported growth in ordering centers and total orders in the US. BARDA contract further solidifies NexoBrid's role in mass casualty burn response and national preparedness.

Manufacturing facility expansion: Modifications identified during EMA pre-audit are being implemented. Facility expected to be commercially ready in H2 2026.

Patient assistance measures: Implemented hotel reimbursements, transportation services, and enhanced care access to support EscharEx study enrollment.

Government partnerships: BARDA contract valued at $197 million supports NexoBrid procurement and development, emphasizing its strategic importance in national preparedness.

Global guidelines and recognition: Newly published national consensus guidelines from Japan and the UK, along with existing recommendations from WHO and other countries, highlight NexoBrid's global significance.

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Risk or Challenges

EscharEx Phase III VALUE Study Delays: The timeline for the EscharEx Phase III VALUE study has shifted by one quarter due to slower-than-expected recruitment. Operational challenges include regulatory adjustments required at European sites and participation difficulties for older and medically complex patients due to travel and visit requirements.

Operational Complexity in EscharEx Study: The protocol for EscharEx requires daily wound assessments, creating operational complexity and potentially impacting study efficiency.

Revenue Decline: Revenue for the first quarter of 2026 decreased to $1.5 million from $4 million in the same period of 2025, primarily due to timing of BARDA-related revenue and postponed shipments caused by regional conflict.

Increased R&D Expenses: Research and development expenses increased to $5.2 million from $2.9 million in the first quarter of 2025, reflecting higher investment in the EscharEx VALUE Phase III study.

Operating and Net Loss: Operating loss increased to $8 million from $5.2 million in the first quarter of 2025, and net loss rose to $3 million from $0.7 million in the same period, indicating financial strain.

Cash Burn and Foreign Exchange Impact: Net cash used in operating activities was $9.6 million during the first quarter, with additional impact from foreign exchange movements between the U.S. dollar and the Israeli shekel.

Manufacturing Facility Readiness: The expanded NexoBrid manufacturing facility requires modifications identified during a recent EMA pre-audit, delaying its commercial readiness to the second half of 2026.

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Guidance & Outlook

EscharEx Phase III VALUE Study: Enrollment continues with more than 30 active sites across the US, Europe, and Israel. Recruitment challenges have delayed the timeline, but the study is expected to reach 40 active sites within weeks. Interim sample size reassessment and enrollment completion are anticipated by the end of Q1 2027.

EscharEx Market Opportunity: Expanding commercial, clinical, and scientific validation for EscharEx in the chronic wound care market. Collaboration with Medline and other major wound care companies to support upcoming studies and market positioning.

NexoBrid BARDA Contract: A new 10-year BARDA contract valued at up to $197 million will support procurement, vendor management, trauma indication development, and manufacturing capabilities. BARDA-related activities are expected to begin in the second half of 2026.

NexoBrid Manufacturing Facility: Modifications identified during a recent EMA pre-audit are being implemented, with completion expected in the second half of 2026 to support global demand.

2026 Revenue Guidance: Reaffirmed full-year revenue guidance of $24 million to $26 million, supported by expected government-related procurement and development revenue in the second half of the year.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What are the risks in completing the interim analysis of the VALUE study by the end of Q1 2027?

A:The enrollment has progressed more gradually than anticipated due to operational factors, such as regulatory adjustments at European sites. These challenges have been addressed, and approximately 40 active sites are expected within weeks. Measures like transportation support and reimbursement programs have been implemented to support recruitment momentum. The company is focused on including the right patients to ensure the study's success.

Q:What are the next steps for the FDA inspection of the expanded manufacturing capacity for NexoBrid in early 2027?

A:The company needs to finalize with the EMA first, including process validations, comparability, stability, and regulatory reviews. An EMA pre-audit identified operational modifications, which are being implemented and expected to be completed in the second half of 2026. The feedback was operational and not related to product quality, safety, or comparability concerns.

Q:What is the impact of the EMA's recommended modifications on material already manufactured and the timeline for selling material from the new facility?

A:The EMA pre-audit identified operational modifications that are being implemented and expected to be completed in the second half of 2026. The feedback does not affect product comparability or safety. The company is confident in selling material from the new facility before year-end, and the EMA would not need to reinspect.

Q:What is the portion of the $35 million BARDA contract allocated to NexoBrid procurement, and how will it flow to MediWound versus Vericel?

A:The $197 million BARDA contract is a 10-year agreement with five components, including procurement shared with Vericel. The revenue from this contract is expected to kick in during the second half of 2026. However, the specific share and portion allocated to MediWound cannot be disclosed at this stage.

Q:What are the plans and progress for additional studies on EscharEx, including DFU and pressure ulcers?

A:The Phase III VALUE study in VLU is the primary focus. Parallel studies include a PK study and human factor studies starting in the second half of the year. A Phase II study in diabetic foot ulcers and an investigator-initiated trial in pressure ulcers are planned for the second half of 2026. These studies aim to support regulatory approval, competitive positioning, and commercial expansion.

Q:How will postponed shipments due to regional conflict affect revenue, and what is the revenue guidance for 2026?

A:Postponed shipments have already been completed, and the company reaffirms its 2026 revenue guidance of $24 million to $26 million. Revenue is expected to be weighted towards the second half of 2026, driven by government-related development services and procurement activities.

Q:What is the role of the Medline partnership in product development?

A:Medline provides a cyanoacrylate-based product, Marathon, for the DFU study to protect healthy skin around wounds. This collaboration, along with others, helps standardize key products in studies, minimizes variability, and could lead to strategic partnerships as EscharEx approaches commercialization.

Q:What regulatory changes in Europe caused issues, and how do they affect the VALUE study?

A:Regulatory changes in Europe made it difficult to import certain ancillary products, such as cellular tissue products, to specific countries. These issues have been resolved, and the remaining 10 sites in Europe are expected to open within weeks.

Q:What are the assumptions for the Q1 2027 timeline for the VALUE study, and have changes like travel reimbursement improved enrollment?

A:The Q1 2027 timeline assumes consistent enrollment rates per site and the addition of more sites. Travel reimbursement changes have not significantly impacted enrollment, as the main focus is on enrolling the right patients to ensure study success.

Q:What lessons from the VALUE study can be applied to future EscharEx studies?

A:Future studies will account for lower enrollment rates per site and avoid complications like importing problematic products to Europe. Tactical lessons learned will streamline future development.

Q:How dependent is 2026 revenue guidance on increasing manufacturing capacity?

A:The 2026 revenue guidance is not specifically dependent on increased manufacturing capacity. It is supported by government-related development services and procurement activities, with flexibility in revenue sources.

Q:How will development services revenue progress through 2026?

A:Development services revenue will be weighted towards the second half of 2026, with some revenue in the first half but relatively low compared to the second half.

Q:Is the U.S. manufacturing capacity expansion dependent on the EU expansion?

A:Yes, U.S. manufacturing capacity expansion depends on approval from the EMA or Israeli local agency before shipping to the U.S. This is a technical constraint but does not involve different requirements.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on the share of the BARDA contract allocated to MediWound versus Vericel, citing an inability to disclose this information at the current stage.

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Earnings Word Cloud

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MDWD Transcript

MediWound Ltd. (MDWD) Q1 2026 Earnings Call Transcript

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MDWD Report

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