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Published: 2022-11-09 16:05:48 ET
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EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2022

IN U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

 
Page
   
F-2
   
F-3
   
F-4 – F-5
   
F-6 – F-7
   
F-8 – F-12

- - - - - - - - - - - - -
 
Unaudited Condensed Interim Consolidated Statements of Financial Position as of
U.S. dollars in thousands

   
June 30,
    
December 31,
  
   
2022
    
2021
  
             
Cash and cash equivalents
    
7,729
      
11,046
  
Restricted deposits
    
168
      
-
  
Short-term bank deposits
    
2,509
      
-
  
Trade receivables
    
3,759
      
1,779
  
Inventories
    
1,991
      
1,200
  
Other receivables
    
653
      
927
  
Total current assets
    
16,809
      
14,952
  
                 
Other receivables
    
230
      
469
  
Property, plant and equipment, net
    
2,439
      
2,478
  
Right of-use assets, net
    
1,364
      
1,548
  
Intangible assets, net
    
264
      
297
  
Total non-current assets
    
4,297
      
4,792
  
                 
Total assets
    
21,106
      
19,744
  
                 
Current maturities of non-current liabilities
    
2,479
      
2,408
  
Trade payables and accrued expenses
    
4,877
      
4,693
  
Other payables
    
3,060
      
3,620
  
Total current liabilities
    
10,416
      
10,721
  
                 
Deferred revenues
    
61
      
119
  
 Liabilities in respect of IIA grants
    
8,131
      
7,885
  
Liabilities in respect of purchase of shares
    
3,361
      
3,922
  
Lease liabilities
    
1,053
      
1,391
  
Severance pay liability, net
    
319
      
288
  
Total non-current liabilities
    
12,925
      
13,605
  
                 
Total liabilities
    
23,341
      
24,326
  
                 
Shareholders' equity:
                
Ordinary shares of NIS 0.01 par value:
                
Authorized: 50,000,000 shares as of June 30, 2022, December 31, 2021, and June 30, 2021; Issued and Outstanding: 33,143,414 as of June 30, 2022, 27,272,818 as of December 31, 2021 and 27,245,429 as of June 30, 2021
    
93
      
75
  
Share premium
    
154,119
      
143,869
  
Foreign currency translation adjustments
    
3
      
(19
)
Accumulated deficit
    
(156,450
)
    
(148,507
)
Total equity (deficit)
    
(2,235
)
    
(4,582
)
                 
Total liabilities and equity
    
21,106
      
19,744
  

The accompanying notes are an integral part of the interim financial statements.

November 7, 2022
            
Date of approval of the
financial statements
  
Nahum Shamir
Chairman of the Board
  
Ofer Gonen
Chief Executive Officer
  
Boaz Gur- Lavie
Chief Financial Officer

F - 2
Unaudited Condensed Interim Consolidated Statements of Profit or Loss and Other Comprehensive Income or Loss
U.S. dollars in thousands (except loss per share data)

   
Six months ended
June 30,
    
Three months ended
June 30,
  
   
2022
    
2021
    
2022
    
2021
  
Revenues from sale of products
    
2,771
      
5,045
      
1,669
      
2,527
  
Revenues from development services
    
5,866
      
5,963
      
2,777
      
3,023
  
Revenues from license agreements
    
438
      
896
      
222
      
507
  
Total revenues
    
9,075
      
11,904
      
4,668
      
6,057
  
                                 
Cost of revenues from sale of products
    
1,539
      
2,451
      
1,148
      
1,311
  
Cost of revenues from development services
    
4,932
      
4,638
      
2,391
      
2,365
  
Cost of revenues from license agreements
    
31
      
38
      
16
      
20
  
Total cost of revenues
    
6,502
      
7,127
      
3,555
      
3,696
  
                                 
Gross profit
    
2,573
      
4,777
      
1,113
      
2,361
  
                                 
Research and development
    
4,599
      
4,898
      
2,191
      
2,656
  
Selling and marketing
    
1,854
      
1,676
      
935
      
854
  
General and administrative
    
2,769
      
3,019
      
1,352
      
1,746
  
Other expenses
    
309
      
-
      
309
      
-
  
Total operating expenses
    
9,531
      
9,593
      
4,787
      
5,256
  
                                 
Operating loss
    
(6,958
)
    
(4,816
)
    
(3,674
)
    
(2,895
)
                                 
Financial income
    
11
      
11
      
11
      
118
  
Financial expenses
    
(988
)
    
(1,222
)
    
(687
)
    
(399
)
Financing expenses, net
    
(977
)
    
(1,211
)
    
(676
)
    
(281
)
                                 
Loss before taxes on income
    
(7,935
)
    
(6,027
)
    
(4,350
)
    
(3,176
)
                                 
Taxes on income
    
(8
)
    
(19
)
    
(4
)
    
(19
)
 Net loss
    
(7,943
)
    
(6,046
)
    
(4,354
)
    
(3,195
)
                                 
Other comprehensive income (loss):
                                
                                 
Foreign currency translation adjustments
    
22
      
8
      
17
      
(3
 )
                                 
Total comprehensive loss
    
(7,921
)
    
(6,038
)
    
(4,337
)
    
(3,198
)
                                 
Loss per share data:
                                
Basic and diluted net loss per share - USD
    
(0.26
)
    
(0.22
)
    
(0.13
)
    
(0.12
)
Number of shares used in calculating basic and diluted net loss per share
    
31,079
      
27,241
      
33,140
      
27,241
  

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 3
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
U.S. dollars in thousands

   
Share capital
    
Share premium
    
Foreign currency translation reserve
    
Accumulated
deficit
    
Total
equity (deficit)
  
                               
Balance as of April 1, 2022
    
93
      
153,962
      
(14
)
    
(152,096
)
    
1,945
  
                                         
Loss for the period
    
-
      
-
      
-
      
(4,354
)
    
(4,354
)
Other comprehensive income
    
-
      
-
      
17
      
-
      
17
  
Total comprehensive income (loss)
    
-
      
-
      
17
      
(4,354
)
    
(4,337
)
Issuance expenses, see Note 3
    
-
      
(95
)
    
-
      
-
      
(95
)
Exercise of options
    
(*
)
    
-
      
-
      
-
      
(*
)
                                         
Share-based compensation
    
-
      
252
      
-
      
-
      
252
  
                                         
Balance as of June 30, 2022
    
93
      
154,119
      
3
      
(156,450
)
    
(2,235
)

Balance as of April 1, 2021
    
75
      
142,577
      
(29
)
    
(137,807
)
    
4,816
  
                                         
Loss for the period
    
-
      
-
      
-
      
(3,195
)
    
(3,195
)
Other comprehensive loss
    
-
      
-
      
(3
)
    
-
      
(3
)
Total comprehensive loss
    
-
      
-
      
(3
)
    
(3,195
)
    
(3,198
)
Exercise of options
    
(*
)
    
-
      
-
      
-
      
(*
)
                                         
Share-based compensation
    
-
      
500
      
-
      
-
      
500
  
                                         
Balance as of June 30, 2021
    
75
      
143,077
      
(32
)
    
(141,002
)
    
2,118
  

(*)          Represents less than $ 1.

 The accompanying notes are an integral part of the interim consolidated financial statements.

F - 4
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficit)
U.S. dollars in thousands

   
Share capital
    
Share premium
    
Foreign currency translation reserve
    
Accumulated
deficit
    
Total
equity (deficit)
  
                               
Balance as of December 31, 2021
    
75
      
143,869
      
(19
)
    
(148,507
)
    
(4,582
)
Loss for the period
    
-
      
-
      
-
      
(7,943
)
    
(7,943
)
Other comprehensive income
    
-
      
-
      
22
      
-
      
22
  
Total comprehensive income (loss)
    
-
      
-
      
22
      
(7,943
)
    
(7,921
)
Issuance of ordinary shares, net of issuance expenses (see note 3)
    
18
      
9,653
      
-
      
-
      
9,671
  
Exercise of options
    
(*
)
    
-
      
-
      
-
      
(*
)
Share-based compensation
    
-
      
597
      
-
      
-
      
597
  
                                         
Balance as of June 30, 2022
    
93
      
154,119
      
3
      
(156,450
)
    
(2,235
)
                                         
Balance as of December 31, 2020
    
75
      
142,193
      
(40
)
    
(134,956
)
    
7,272
  
                                         
Loss for the period
    
-
      
-
      
-
      
(6,046
)
    
(6,046
)
Other comprehensive income
    
-
      
-
      
8
      
-
      
8
  
Total comprehensive income (loss)
    
-
      
-
      
8
      
(6,046
)
    
(6,038
)
Exercise of options
    
(*
)
    
-
      
-
      
-
      
(*
)
                                         
Share-based compensation
    
-
      
884
      
-
      
-
      
884
  
                                         
Balance as of June 30, 2021
    
75
      
143,077
      
(32
)
    
(141,002
)
    
2,118
  

(*)          Represents less than $ 1.

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 5
Unaudited Condensed Interim Consolidated Statements of Cash Flows
U.S. dollars in thousands

   
Six months ended
June 30,
    
Three months ended
June 30,
  
   
2022
    
2021
    
2022
    
2021
  
Cash flows from operating activities:
                        
Net loss
    
(7,943
)
    
(6,046
)
    
(4,354
)
    
(3,195
)
                                 
Adjustments to reconcile net loss to net cash used in continuing operating activities:
                                
                                 
Adjustments to profit and loss items:
                                
Depreciation and amortization
    
650
      
627
      
329
      
319
  
Share-based compensation
    
597
      
884
      
252
      
500
  
Revaluation of liabilities in respect of IIA grants
    
482
      
497
      
248
      
222
  
Revaluation of liabilities in respect of the purchase of shares
    
272
      
299
      
135
      
147
  
Revaluation of lease liabilities
    
(152
)
    
35
      
(138
)
    
79
  
Increase (decrease) in severance pay liability, net
    
55
      
(5
)
    
35
      
5
  
Net financing income
    
(11
)
    
(11
)
    
(11
)
    
-
  
Un-realized foreign currency (gain) loss
    
528
      
(226
)
    
283
      
(482
)
     
2,421
      
2,100
      
1,133
      
790
  
Changes in asset and liability items:
                                
   (Increase) decrease in trade receivables
    
(2,024
)
    
680
      
(1,445
)
    
3,087
  
(Increase) decrease in inventories
    
(747
)
    
17
      
(37
)
    
62
  
Decrease (increase) in other receivables
    
330
      
(432
)
    
205
      
(469
)
Increase (decrease) in trade payables and accrued expenses
    
11
      
1,075
      
(272
)
    
803
  
Decrease in other payables and deferred revenues
    
(1,367
)
    
(1,257
)
    
(484
)
    
(2,063
)
     
(3,797
)
    
83
      
(2,033
)
    
1,420
  
                                 
Net cash used in operating activities
    
(9,319
)
    
(3,863
)
    
(5,254
)
    
(985
)

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 6
Unaudited Condensed Interim Consolidated Statements of Cash Flows
U.S. dollars in thousands

   
Six months ended
June 30,
    
Three months ended
June 30,
  
   
2022
    
2021
    
2022
    
2021
  
                         
Cash Flows from Investing Activities:
                        
                         
Purchase of property and equipment
    
(298
)
    
(244
)
    
(138
)
    
(26
)
Interest received
    
-
      
35
      
-
      
-
  
(Increase) decrease in short term bank deposits, net
    
(2,499
)
    
4,002
      
(2,499
)
    
(4
)
                                 
Net cash provided by (used in) investing activities
    
(2,797
)
    
3,793
      
(2,637
)
    
(30
)
                                 
Cash Flows from Financing Activities:
                                
                                 
Repayment of leases liabilities
    
(350
)
    
(337
)
    
(172
)
    
(171
)
Proceeds from issuance of shares, net
    
9,861
      
-
      
(556
)
    
-
  
Repayment of IIA grant
    
(162
)
    
(180
)
    
-
      
-
  
                                 
Net cash provided by (used in) financing activities
    
9,349
      
(517
)
    
(728
)
    
(171
)
                                 
Exchange rate differences on cash and cash equivalent balances
    
(550
)
    
204
      
(303
)
    
495
  
                                 
Decrease in cash and cash equivalents
    
(3,317
)
    
(383
)
    
(8,922
)
    
(691
)
                                 
Balance of cash and cash equivalents at the beginning of the period
    
11,046
      
17,376
      
16,651
      
17,684
  
                                 
Balance of cash and cash equivalents at the end of the period
    
7,729
      
16,993
      
7,729
      
16,993
  
                                 
Supplement disclosure of Non-cash transactions:
                                
ROU asset, net recognized with corresponding lease liability
    
43
      
155
      
43
      
155
  
Issuance of shares due to RSUs exercised
    
191
      
43
      
14
      
-
  

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 7
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
Notes to Unaudited Condensed Interim Consolidated Financial Statements
U.S. dollars in thousands

NOTE 1:
GENERAL


a.
Description of the Company and its operations:

MediWound Ltd. was incorporated in Israel. The Company which is located in Yavne, Israel (The "Company" or "MediWound"), is biopharmaceutical company that develops, manufactures and commercializes novel, cost effective, bio-therapeutic solutions for tissue repair and regeneration. The Company’s strategy leverages its breakthrough enzymatic technology platform into diversified portfolio of biotherapeutics across multiple indications to pioneer solutions for unmet medical needs.  The Company’s current portfolio is focused on next-generation bio-active therapies for burn and wound care and tissue repair.

The Company's first innovative biopharmaceutical product, NexoBrid, has received marketing authorization from the European Medicines Agency ("EMA") as well as the Israeli, Argentinean, South-Korean, Russian, Taiwanese, Ukrainian, United Arab Emirates, Chilean, Peruvian and Switzerland Ministries of Health, for removal of dead or damaged tissue, known as eschar, in adults with deep partial and full thickness thermal burns.

The Company sells NexoBrid in the European Union, United Kingdom, Norway, Switzerland and Israel through its commercial organizations while establishing additional local distribution channels to extend its outreach in the European Union. In other international markets the Company sells NexoBrid through local distributors which are also responsible for obtaining the local marketing authorization within the relevant territory. In the United States, the Company entered into exclusive license and supply agreements with Vericel Corporation (“Vericel”) to commercialize NexoBrid in North America upon FDA's approval.

The Company’s second investigational innovative product, EscharEx, is a topical biological drug being developed for debridement of chronic and other hard-to-heal wounds. In May 2022, the company announced positive results from its U.S. phase 2 study. The study met its primary endpoint, its key secondary endpoints with high degree of statistical significance, as well as its wound closure safety measurements. The Company anticipates meeting with the U.S. Food and Drug Administration (the “FDA”) in the fourth quarter of 2022, to discuss study results and Phase 3 pivotal design for EscharEx.

The third clinical-stage innovative product candidate, MW005, is a topical biological drug candidate for the treatment of non-melanoma skin cancers. A U.S. phase 1/2 study of MW005 for the treatment of low-risk basal cell carcinoma (BCC) was initiated in July 2021, and in July 2022, a positive initial data was announced. The Company anticipates announcing the final data by year end 2022.


 b.
The Company's securities are listed for trading on NASDAQ since March 2014. In March, 2022, the Company completed an additional public offering. A total of 5,208,333 new ordinary shares were issued at a public offering price of $1.92 per share. The gross proceeds before deducting underwriting discounts and commissions and offering expenses, were approximately $10 million (see Note 3 and 5b).

F - 8
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
Notes to Unaudited Condensed Interim Consolidated Financial Statements
U.S. dollars in thousands
NOTE 1:
GENERAL (Cont.)


c.
The Company has three wholly owned subsidiaries: MediWound Germany GmbH, acting as Europe (“EU”) marketing authorization holder and EU sales and marketing arm, and MediWound UK Limited and MediWound US, Inc. which are currently inactive companies.
 

 d.
The Company was awarded two contracts with the U.S. Biomedical Advanced Research and Development Authority ("BARDA") valued at up to $168,000 for the advancement of the development, manufacturing and emergency readiness for NexoBrid deployment as well as the procurement of NexoBrid as a medical countermeasure as part of BARDA preparedness for mass casualty events. In February 2022 BARDA has expanded its awarded contract providing supplemental funding of approximately $9,000 to support the NexoBrid BLA resubmission to the FDA and the continuous expanded access program.
 

 e.
On February 17, 2022 the Company engaged with the U.S. Department of Defense (“DoD”), through the Medical Technology Enterprise Consortium (MTEC), for a $1,800 contract for the development of NexoBrid as a non-surgical solution for field-care burn treatment for the U.S. Army.


f.
On June 29, 2021, the Company received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding its Biologics License Application (BLA) seeking approval of NexoBrid for eschar removal (debridement) in adults with deep partial-thickness and/or full-thickness thermal burns.

The FDA communicated that it had completed its review of the BLA, as amended, and has determined that the application cannot be approved in its present form. The FDA identified issues related to the Chemistry, Manufacturing and Controls (“CMC”) section of the BLA and requested additional CMC information. The FDA acknowledged receipt of several CMC amendments, submitted by the Company in response to the CMC information requests, which were not reviewed yet by the FDA.

FDA inspection of NexoBrid's manufacturing facilities in Israel and Taiwan, is anticipated in the fourth quarter of 2022. The inspection is required before the FDA can approve the BLA. In addition, the CRL cited certain observations identified during good clinical practice (GCP) inspections related to the U.S. Phase 3 study (DETECT), and requested the Company to provide its perspective on the potential impact, if any, of these observations on the efficacy findings in the study. The FDA also requested to provide a safety update as part of its BLA resubmission, although there were no safety issues raised in the CRL.

On July 1, 2022, the Company has re-submitted the Biologics License Application (BLA) to the U.S. Food and Drugs Administration (FDA) and received an acknowledgement letter from the FDA assigning PDUFA target date to January 1, 2023.


 g.
Since incorporation through June 30, 2022, the Company has incurred losses mainly attributed to its development efforts and a total accumulated deficit of $156,450, the Company’s total shareholders’ equity amounted to a deficit of $2,235. During the six-month period ended June 30, 2022, the Company incurred losses of $7,943 and its cash used in operating activities was $9,319. The Company expects to continue to incur significant research and development and other costs related to its ongoing operations, and in order to continue its future operations, the Company will need to obtain additional funding until becoming profitable. Subsequent to the balance sheet date, the Company raised approximately $30,500 to further finance its ongoing operations, see also Note 5b.

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MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
Notes to Unaudited Condensed Interim Consolidated Financial Statements
U.S. dollars in thousands
NOTE 1:
GENERAL (Cont.)


h.
The Company addresses the challenges associated with the ongoing COVID-19 pandemic, while prioritizing the health and safety of its workforce and maintaining operational efficiency and flexibility.

NOTE 2:
SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been applied consistently in the financial statements for all periods presented unless otherwise stated.

 
a.
Basis of presentation of financial statements:

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").


 b.
Basis of preparation of the interim consolidated financial statements:

The interim condensed consolidated financial statements for the six and three months ended June 30, 2022 have been prepared in accordance with IAS 34 "Interim Financial Reporting".

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as of December 31, 2021 that were included in the Annual Report on Form 20-F filed on March 17, 2022.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2021 that were included in the Annual Report on Form 20-F filed on March 17, 2022.

NOTE 3: EQUITY


a.
On March 7, 2022, the Company completed an additional public offering. A total of 5,208,333 new ordinary shares were issued in consideration to offering price of $1.92 per share. The net proceeds were $8,641, after deducting commissions and other offering expenses. In addition, on March 22, 2022 the underwriters exercised their options to purchase an additional 623,082 ordinary shares at the public offering price, less underwriting discounts and commissions at an additional net proceeds of $1,030.

As part of the above- mentioned public offering, certain entities affiliated with CBI purchased 1,458,333 of ordinary shares at the public offering price.

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MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
Notes to Unaudited Condensed Interim Consolidated Financial Statements
U.S. dollars in thousands
NOTE 3: EQUITY (Cont.)


b.
Over the second quarter of 2022, the Company’s Board of Directors approved the grant of 2,052,922 options to purchase the Company’s ordinary shares, for an exercise price of $ 2.06 per share as well as 275,000 restricted share units (“RSU’s”) to its CEO, officers and employees. The fair value of the options and RSU’s as of the grant date, was estimated at $2,400 and $500 respectively.

The above-mentioned grant includes the grant of 1,062,500 options to purchase the Company’s ordinary shares and 275,000 restricted share units (“RSU’s”) to the directors and the CEO of the Company which are required to be approved by the Company’s General meeting as well. The fair value of the options and RSU’s, as of the approval date, was estimated at approximately $1,200 and $500, respectively.

NOTE 4: OTHER EXPENSES

The other one-time expenses amounted to $309 are attributed to the termination expenses of the previous CEO which were approved by the Shareholders General meeting.

NOTE 5: SUBSEQUENT EVENTS


a.
On July 19, 2022, the Company’s Shareholders General meeting approved the abovementioned grants (Note 3b, Note 4) to the directors and the CEO, the compensation terms of Mr. Ofer Gonen as the Company’s new Chief Executive Officer, which terms will be effective as of July 1, 2022 and the termination terms for the previous CEO.


b.
On September 26, 2022, the Company completed a registered direct (the “RD”) offering in an aggregate amount of $13,257 represent a combine purchase price of $1.75 for issuance of 7,575,513 ordinary shares issuable thereunder and 7,575,513 warrants that will become exercisable upon the Company’s receipt of shareholders’ approval to increase the number of its authorized ordinary shares (hereinafter: ”the Authorized Share Increase Date”), at an exercise price of $1.925 per ordinary share which will expire in four years from the Authorized Share Increase Date.

The net proceeds from this offering in the amount of $12,244 have been received on September 28, 2022.

Concurrently, on October 6, 2022, the Company entered into a Privet Issuance Purchase Equity agreement (the “PIPE”) with several purchasers in an aggregate amount of $17,233, in connection with the offering of 9,853,058 unregistered Pre-Funded Warrants to purchase up to 9,853,058 ordinary shares and 9,853,058 warrants to purchase up to 9,853,058 ordinary shares. The Pre-Funded Warrants will be exercisable upon the Authorized Share Increase Date at an exercise price of $0.001 per ordinary share and the warrants will be also exercisable upon the Authorized Share Increase Date at an exercise price of $1.925 per ordinary share and will expire four years from the Authorized Share Increase Date.

The net proceeds from this offering in the amount of approximately $16,200 have been received on the same day.

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MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
Notes to Unaudited Condensed Interim Consolidated Financial Statements
U.S. dollars in thousands
NOTE 5: SUBSEQUENT EVENTS (Cont.)

In an event that the Authorized Share Increase Date will not be obtained within 90 days following the abovementioned closing dates, the Company would be liable for partial liquidated damages under the terms of the above warrants and shall pay in cash a damages fee equal to 1.5% from the proceeds.
 
Upon closing of the Offerings, the Company also issued the placement agent up to 871,429 warrants to purchase up to 871,429 ordinary shares. The warrants have substantially the same terms as the RD warrants, except that the placement agent’s warrants have an exercise price equal to $2.1875 per share (which represents 125% of the offering price per ordinary share in the offerings) and will expire four years after the Authorized Share Increase Date, but no more than five years following the commencement of the sales pursuant to the RD offering.

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