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Published: 2021-11-16 07:05:12 ET
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EX-99.2 3 exhibit_99-2.htm EXHIBIT 99.2
Exhibit 99.2

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
INTERIM CONDENSED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2021

IN U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

 
Page
   
F-2
   
F-3
   
F-4 – F-6
   
F-7 – F-8
   
F-9 – F-11


 
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

   
September 30,
    
December 31,
  
   
2021
    
2020
    
2020
  
   
Unaudited
    
Audited
  
CURRENT ASSETS:
                  
Cash and cash equivalents
    
13,683
      
10,741
      
17,376
  
Restricted deposits
    
183
      
181
      
184
  
Short‑term bank deposits
    
-
      
14,101
      
4,024
  
Trade receivables
    
2,026
      
2,650
      
2,767
  
Inventories
    
1,252
      
1,805
      
1,380
  
Other receivables
    
1,527
      
845
      
462
  
                         
     
18,671
      
30,323
      
26,193
  
LONG‑TERM ASSETS:
                        
Property, plant and equipment, net
    
2,531
      
2,448
      
2,630
  
Right of-use assets, net
    
1,650
      
2,170
      
1,884
  
Intangible assets, net
    
314
      
380
      
363
  
                         
     
4,495
      
4,998
      
4,877
  
                         
     
23,166
      
35,321
      
31,070
  
CURRENT LIABILITIES:
                        
Current maturities of long-term liabilities
    
1,867
      
1,081
      
1,750
  
Trade payables and accrued expenses
    
3,710
      
3,155
      
2,992
  
Other payables
    
4,384
      
7,394
      
3,524
  
                         
     
9,961
      
11,630
      
8,266
  
LONG‑TERM LIABILITIES:
                        
Deferred  revenues
    
352
      
1,283
      
1,234
  
 Liability in respect of IIA grants
    
7,715
      
7,157
      
7,267
  
Liabilities in respect of purchase of shares
    
4,195
      
4,408
      
4,998
  
Lease liabilities
    
1,483
      
1,942
      
1,741
  
Severance pay liabilities, net
    
281
      
284
      
292
  
                         
     
14,026
      
15,074
      
15,532
  
SHAREHOLDERS' EQUITY:
                        
Ordinary shares of NIS 0.01 par value:
                        
Authorized: 50,000,000 shares as of September 30, 2021, December 31, 2020 and  September 30, 2020; Issued and Outstanding: 27,247,096 as of September 30, 2021, 27,236,752 as of  December  31, 2020 and 27,212,794 as of September 30, 2020
    
75
      
75
      
75
  
Share premium
    
143,476
      
141,794
      
142,193
  
Foreign currency translation adjustments
    
(25
)
    
(28
)
    
(40
)
Accumulated deficit
    
(144,347
)
    
(133,224
)
    
(134,956
)
                         
     
(821
)
    
8,617
      
7,272
  
                         
     
23,166
      
35,321
      
31,070
  

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

F - 2


MEDIWOUND LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands (except share data and per share data)

   
Nine months ended
September 30,
    
Three months ended
September 30,
    
Year ended December 31,
  
   
2021
    
2020
    
2021
    
2020
    
2020
  
   
Unaudited
    
Audited
  
Revenues from sale of products
    
7,689
      
4,744
      
2,644
      
3,082
      
7,445
  
Revenues from development services
    
9,260
      
10,095
      
3,297
      
3,464
      
13,935
  
Revenues from license agreements
    
1,327
      
251
      
431
      
79
      
383
  
Total revenues
    
18,276
      
15,090
      
6,372
      
6,625
      
21,763
  
                                         
Cost of revenues
    
11,044
      
9,873
      
3,917
      
3,855
      
14,218
  
                                         
Gross profit
    
7,232
      
5,217
      
2,455
      
2,770
      
7,545
  
                                         
Research and development
    
7,795
      
5,473
      
2,897
      
2,142
      
7,698
  
Selling and marketing
    
2,548
      
2,392
      
872
      
709
      
3,228
  
General and administrative
    
4,589
      
3,806
      
1,570
      
1,461
      
5,459
  
Total operating expenses
    
14,932
      
11,671
      
5,339
      
4,312
      
16,385
  
                                         
Operating loss
    
(7,700
)
    
(6,454
)
    
(2,884
)
    
(1,542
)
    
(8,840
)
                                         
Financial income
    
11
      
416
      
-
      
93
      
843
  
Financial expenses
    
(1,679
)
    
(1,509
)
    
(457
)
    
(541
)
    
(1,279
)
                                         
Loss before taxes on income
    
(9,368
)
    
(7,547
)
    
(3,341
)
    
(1,990
)
    
(9,276
)
Taxes on income
    
(23
)
    
-
      
(4
)
    
-
      
-
  
                                         
Loss from continuing operation
    
(9,391
)
    
(7,547
)
    
(3,345
)
    
(1,990
)
    
(9,276
)
Profit from discontinued operation
    
-
      
83
      
-
      
83
      
80
  
Net loss
    
(9,391
)
    
(7,464
)
    
(3,345
)
    
(1,907
)
    
(9,196
)
Other comprehensive income (loss):
                                        
Foreign currency translation adjustments
    
15
      
(11
)
    
7
      
(12
)
    
(23
)
                                         
Total comprehensive loss
    
(9,376
)
    
(7,475
)
    
(3,338
)
    
(1,919
)
    
(9,219
)
Total Basic and diluted net loss per share
    
(0.34
)
    
(0.27
)
    
(0.12
)
    
(0.07
)
    
(0.34
)

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

F - 3

MEDIWOUND LTD. AND ITS SUBSIDIARIES

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, 2020
    
75
      
142,193
      
(40
)
    
(134,956
)
    
7,272
  
                                         
Loss for the period
    
-
      
-
      
-
      
(9,391
)
    
(9,391
)
Other comprehensive income
    
-
      
-
      
15
      
-
      
15
  
Total comprehensive income (loss)
    
-
      
-
      
15
      
(9,391
)
    
(9,376
)
Exercise of options
    
(
*)
    
(*
)
    
-
      
-
      
(*
)
                                         
Share-based compensation
    
-
      
1,283
      
-
      
-
      
1,283
  
                                         
Balance as of September 30, 2021 (unaudited)
    
75
      
143,476
      
(25
)
    
(144,347
)
    
(821
)

   
Share capital
    
Share premium
    
Foreign currency translation reserve
    
Accumulated
deficit
    
Total
Equity
  
                               
Balance as of December 31, 2019
    
75
      
140,871
      
(17
)
    
(125,760
)
    
15,169
  
                                         
Loss for the period
    
-
      
-
      
-
      
(7,464
)
    
(7,464
)
Other comprehensive loss
    
-
      
-
      
(11
)
    
-
      
(11
)
Total comprehensive loss
    
-
      
-
      
(11
)
    
(7,464
)
    
(7,475
)
Exercise of options
    
(
*)
    
(*
)
    
-
      
-
      
(*
)
                                         
Share-based compensation
    
-
      
923
      
-
      
-
      
923
  
                                         
Balance as of  September 30, 2020 (unaudited)
    
75
      
141,794
      
(28
)
    
(133,224
)
    
8,617
  

(*)          Represents less than $ 1.

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

F - 4


MEDIWOUND LTD. AND ITS SUBSIDIARIES
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 July 1, 2021
    
75
      
143,077
      
(32
)
    
(141,002
)
    
2,118
  
                                         
Loss for the period
    
-
      
-
      
-
      
(3,345
)
    
(3,345
)
Other comprehensive loss
    
-
      
-
      
7
      
-
      
7
  
Total comprehensive loss
    
-
      
-
      
7
      
(3,345
)
    
(3,338
)
Exercise of options
    
(*
)
    
(*
)
    
-
      
-
      
(*
)
                                         
Share-based compensation
    
-
      
399
      
-
      
-
      
399
  
                                         
Balance as of  September 30, 2021 (unaudited)
    
75
      
143,476
      
(25
)
    
(144,347
)
    
(821
)

   
Share capital
    
Share premium
    
Foreign currency translation reserve
    
Accumulated
deficit
    
Total
Equity
  
                               
Balance as of July 1, 2020
    
75
      
141,390
      
(16
)
    
(131,317
)
    
10,132
  
                                         
Loss for the period
    
-
      
-
      
-
      
(1,907
)
    
(1,907
)
Other comprehensive loss
    
-
      
-
      
(12
)
    
-
      
(12
)
Total comprehensive loss
    
-
      
-
      
(12
)
    
(1,907
)
    
(1,919
)
Exercise of options
    
(*
)
    
(*
)
    
-
      
-
      
(*
)
                                         
Share-based compensation
    
-
      
404
      
-
      
-
      
404
  
                                         
Balance as of  September 30, 2020 (unaudited)
    
75
      
141,794
      
(28
)
    
(133,224
)
    
8,617
  

(*)          Represents less than $ 1.

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

F - 5


MEDIWOUND LTD. AND ITS SUBSIDIARIES
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
  
                               
Balance as of December 31, 2019
    
75
      
140,871
      
(17
)
    
(125,760
)
    
15,169
  
                                         
Loss for the period
    
-
      
-
      
-
      
(9,196
)
    
(9,196
)
Other comprehensive loss
    
-
      
-
      
(23
)
    
-
      
(23
)
Total comprehensive loss
    
-
      
-
      
(23
)
    
(9,196
)
    
(9,219
)
Exercise of options
    
(*
)
    
(*
)
    
(*)   -
      
-
      
(*
)
Share-based compensation
    
-
      
1,322
      
-
      
-
      
1,322
  
                                         
Balance as of December 31, 2020
    
75
      
142,193
      
(40
)
    
(134,956
)
    
7,272
  

(*)          Represents less than $ 1.

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

F - 6
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Nine months ended
September 30,
    
Three months ended
September 30,
    
Year ended December 31,
  
   
2021
    
2020
    
2021
    
2020
    
2020
  
   
Unaudited
    
Audited
  
Cash flows from operating activities:
                              
Net loss
    
(9,391
)
    
(7,464
)
    
(3,345
)
    
(1,907
)
    
(9,196
)
                                         
Adjustments to reconcile net loss to net cash used in continuing operating activities:
                                        
                                         
Adjustments to profit and loss items:
                                        
Profit from discontinued operation
    
-
      
(83
)
    
-
      
(83
)
    
(80
)
Depreciation and amortization
    
962
      
866
      
335
      
327
      
1,090
  
Share-based compensation
    
1,283
      
923
      
399
      
404
      
1,322
  
Revaluation of liability in respect of IIA grants
    
808
      
692
      
311
      
268
      
828
  
Revaluation of liabilities in respect of the purchase of shares
    
446
      
558
      
147
      
210
      
(433
)
Revaluation of lease liabilities
    
84
      
127
      
49
      
63
      
305
  
Increase (decrease) in severance pay liabilities, net
    
3
      
35
      
8
      
(5
)
    
33
  
Net financing income
    
(11
)
    
(244
)
    
-
      
(53
)
    
(297
)
Un-realized foreign currency gain
    
(238
)
    
(8
)
    
(12
)
    
(36
)
    
(211
)
                                         
     
3,337
      
2,866
      
1,237
      
1,095
      
2,557
  
Changes in asset and liability items:
                                        
   Decrease in trade receivables
    
697
      
1,477
      
17
      
136
      
1,386
  
Decrease (increase) in inventories
    
188
      
(231
)
    
171
      
95
      
141
  
Increase in other receivables
    
(1,078
)
    
(397
)
    
(646
)
    
(113
)
    
(13
)
Increase (decrease) in trade payables and accrued expenses
    
733
      
(925
)
    
(342
)
    
724
      
(1,096
)
Increase (decrease) in other payables and deferred revenues
    
(1,167
)
    
1,288
      
90
      
1,202
      
(479
)
                                         
     
(627
)
    
1,212
      
(710
)
    
2,044
      
(61
)
                                         
Net cash provided by (used in) continuing operating activities
    
(6,681
)
    
(3,386
)
    
(2,818
)
    
1,232
      
(6,700
)
Net cash used in discontinued operating activities
    
-
      
(192
)
    
-
      
(192
)
    
(195
)
Net cash provided by (used in) operating activities
    
(6,681
)
    
(3,578
)
    
(2,818
)
    
1,040
      
(6,895
)

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

F - 7

MEDIWOUND LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

   
Nine months ended
September 30,
    
Three months ended
September 30,
    
Year ended December 31,
  
   
2021
    
2020
    
2021
    
2020
    
2020
  
   
Unaudited
    
Audited
  
                               
Cash Flows from Investing Activities:
                              
                               
Purchase of property and equipment
    
(373
)
    
(480
)
    
(129
)
    
(236
)
    
(923
)
Interest received
    
35
      
43
      
-
      
1
      
274
  
Proceeds from short term bank deposits, net
    
4,002
      
8,136
      
-
      
(2,459
)
    
18,034
  
                                         
Net cash provided by (used in) continuing investing activities
    
3,664
      
7,699
      
(129
)
    
(2,694
)
    
17,385
  
                                         
Cash Flows from Financing Activities:
                                        
                                         
Repayment of leases liabilities
    
(513
)
    
(533
)
    
(176
)
    
(220
)
    
(508
)
Repayments of IIA grant
    
(360
)
    
(121
)
    
(180
)
    
(55
)
    
(121
)
                                         
Net cash used in financing activities
    
(873
)
    
(654
)
    
(356
)
    
(275
)
    
(629
)
                                         
Exchange rate differences on cash and cash equivalent balances
    
197
      
32
      
(7
)
    
58
      
273
  
                                         
Cash and cash equivalents:
                                        
                                         
Increase (decrease) in cash and cash equivalents from continuing activities
    
(3,693
)
    
3,691
      
(3,310
)
    
(1,679
)
    
10,329
  
Decrease in cash and cash equivalents from discontinued activities
    
-
      
(192
)
    
-
      
(192
)
    
(195
)
                                         
Balance of cash and cash equivalents at the beginning of the period
    
17,376
      
7,242
      
16,993
      
12,612
      
7,242
  
                                         
Balance of cash and cash equivalents at the end of the period
    
13,683
      
10,741
      
13,683
      
10,741
      
17,376
  

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

F - 8

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 1:
GENERAL


a.
General description of the Company and its operations:
        
          MediWound Ltd. which incorporated 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 is centered around its validated enzymatic technology platform, focused on next-generation bioactive therapies for burn care, wound care and tissue repair.

The Company's first innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency ("EMA") as well as the Israeli, Argentinean, South-Korean, Russian, Taiwanese, Ukrainian, United Arab Emirates, Chilean and Peruvian 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 Europe and in Israel through its commercial organizations while establishing additional local distribution channels to extend its outreach in the European Union. In other territories the Company sells NexoBrid through local distribution channels. In 2019, the Company entered into exclusive license and supply agreements with Vericel Corporation (“Vericel”) to commercialize NexoBrid in North America. NexoBrid is an investigational product at registration-stage in the U.S.

The Company second investigational innovative product, EscharEx, is a topical biological drug being developed for debridement of chronic and other hard-to-heal wounds.

The third clinical-stage innovative product candidate, MW005, is a topical biological drug candidate for the treatment of non-melanoma skin cancers.


 b.
The Company's securities are listed for trading on NASDAQ since March 2014.


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


d.
The Company awarded two contracts with the U.S. Biomedical Advanced Research and Development Authority ("BARDA"), 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.


e.
The Company addressed the challenges associated with the COVID-19 pandemic during the year ended 2020 and nine months ended September 30, 2021, while prioritizing the health and safety of its workforce and maintaining operational efficiency and flexibility.

F - 9
MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

NOTE 1:
GENERAL (Cont.)


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 (see Note 1(a) to 2020 Annual Financial Statements).

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 in response the CMC information requests, which were not reviewed for this action.

The FDA also stated that an inspection of NexoBrid's manufacturing facilities in Israel and Taiwan, are required before the FDA can approve the BLA, but it was unable to conduct the required inspections during the current review cycle due to COVID-related travel restrictions. The FDA stated that it will continue to monitor the public health situation as well as travel restrictions and is actively working to define an approach for scheduling outstanding inspections. 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.

As a result, the Company cannot predict how long the FDA may take to complete the review of the BLA of NexoBrid. Accordingly, the Company expects the timing of the potential approval of NexoBrid to be impacted.

Since incorporation through September 30, 2021, the Company has incurred losses mainly attributed to its development efforts and has total accumulated deficit of $144,437 thousand. 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.

Management’s plans include evaluating alternative financing arrangements and/or reducing expenditures as necessary to meet the Company’s future cash requirements. However, there is no assurance that, if required, the Company will be able to raise additional capital or reduce discretionary spending to provide the required liquidity. Management expects that the Company's cash and cash equivalents as of September 30, 2021 will allow the Company to fund its operating plan through at least the next 12 months from the financial statement issuance date.

F - 10

MEDIWOUND LTD. AND ITS SUBSIDIARIES
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands

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 nine and three months ended September 30, 2021 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, 2020 that were included in the Annual Report on Form 20-F filed on February 25, 2021 (hereinafter - Annual Consolidated Financial Statements).

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.

F - 11