MediWound Ltd.

Good day and thank you for standing by and welcome to the Quarter 1 MediWound 2021 conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and then the number 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn the conference over to your speaker today, Mr. Jeremy Pfeffer. Please go ahead, sir.

Thank you, and good morning, everyone. Earlier today, MediWound issued a press release announcing financial results and provided a business update for the first quarter of 2021. You may access that release on the company's website under the Investors tab. With us today are Sharon Malka, Chief Executive Officer of MediWound, and Boaz Gurlevi, Chief Financial Officer. Following management's prepared remarks, we will open the call for Q&A. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to Meduun'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. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, Actual outcomes and results are subject to risks and uncertainties and could differ materially from those forecast due to the impact of many factors beyond the control of MediWound. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future results, or otherwise. Participants are directed to cautionary notes set forth in today's press release, as well as the risk factors set forth in MediWound's annual report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. The conference call is the property of MediWound, and any recording or broadcast is expressly prohibited without the written consent of MediWound. Now, I would like to turn the call over to Sharon Malka, Chief Executive Officer of MediWound. Sharon?

Thank you, Jeremy. Good morning to our U.S. listeners and good afternoon to our listeners in Israel. Welcome to MediWound's first quarter 2021 conference call to discuss our financial results and business updates and highlights. This quarter, we continue to generate product revenue growth compared with prior year, driven by the procurement of NexoBread by BARDA for emergency response preparedness and out-of-U.S. sales. as we continue to execute on our global expansion strategy of expanding the use of NexoBREAD in additional international markets. In addition, we have gained progress across each of our ongoing clinical programs, highlighted by the enrollment of the first patient in our Phase II pharmacology study of escarex and the launch of our new program in non-melanoma skin cancer, while we continue to advance our U.S. Phase II Adaptive Design Study of ASCAREX for the treatment of venous leg ulcers. Let me now provide you with a more color on the progress we made and review of the first quarter highlights. Starting with Nexobrid, we continue to enroll new patients to the next expanded access program at leading U.S. burn centers, with 82 burn victims who were already treated with Nexobrid to date. The expanded access study runs through approval, and there is plenty of opportunity to continue to enroll patients across over 20 sites, which will continue to increase burn surgeons' experience with Nexobrid. The pediatric study is fully enrolled, and we expect to report top-line results from this study in the third quarter of 2021. On the commercial front, BARDA procurement for emergency stockpile continue to drive product revenue growth, and we are expecting to recognize the remaining revenue related to BARDA procurement of NexoBREED in 2021. We are satisfied with NexoBREED global expansion into new international markets, supporting our top line signing additional distribution agreements in Europe and Asia, and receiving marketing approvals for NexoBREED in Taiwan and Chile. Turning to the BLA, in September 2020, the FDA accepted for review our BLA for NexoBREED for severe burns and assigned a PADUFA goal date of June 29, 2021. However, as is apparent from recent FDA actions, across the industry, travel restrictions related to COVID-19 pandemic are impacting the FDA ability to complete manufacturing facility inspections and review processes have been affected. Recently, the FDA has informed us that due to these travel restrictions, it may be unable to conduct the required inspections of our manufacturing facilities in Israel and Taiwan by the PADUFA date. and that it is unlikely that the additional CMC information provided in support of our BLA will be reviewed during the current review cycle. The PDUFA goal date remains June 29, 2021, and FDA review is ongoing as we continue to work closely with the agency. At this time, we expect the timing of potential approval and the commercial launch of NexoBREED to be impacted. We are committed to bringing NexoBridge to the U.S. market as our North American commercial partner, VeriCell, continues to make significant progress with respect to its commercial and medical affairs pre-launch activity. Given its robust clinical data package, we believe that NexoBridge remains well-positioned to replace surgical excision as the standard of care for eschar removal in patients with severe burns and we look forward, upon approval, to bringing NexoBREAD to the U.S. market. Moving to our product candidate, Escarex, where our development program is well underway. We continue to actively recruit patients for our U.S. Phase II adaptive design study for the treatment of venous leg ulcers. We are on track to reach the target of 80 patients required for the interim assessment and reiterate our expectation for an interim assessment around mid-2021 and anticipate completion of patient enrollment by year-end 2021. As part of the S-CAREX development program, we are conducting a Phase II pharmacology study to explore the potential clinical benefits of S-CAREX associated with chronic wound management. The study is an open-label, single-arm study assessing the pharmacological effect of SKRx in up to 15 patients with both VLUs and DFUs. This study will provide us with a better understanding of what is happening in the wound bed during and after debridement with SKRx, and more specifically, it will enable to assess the effect on reduction in biofilm burden, the reduction in inflammation, and initiation of healing process. We enrolled the first patient in this study last month and expect data from this study in the second half of 2021. We were proud to host an Escarex Analyst Day in March, featuring four prominent key opinion leaders who discussed the current US wound debridement practices and how Escarex, upon approval, has the potential to change the current standard of practice and care of chronic wounds. Our three key opinion leaders, Drs. Kistner, Singer, and Snyder, spoke about the need for better therapeutics and improving upon the current standard of care. With a billion-dollar market opportunity in each of the VLU and DFU markets, a clear opportunity in the hospital outpatient settings, and potential for meaningful improving on the current standard of care, we believe SKRx can have a meaningful impact on chronic wound management, offering significant benefits for patients, healthcare professionals, and payers. Moving now to our product candidate 005, we submitted a protocol to the FDA for a Phase I-II clinical study for the treatment of basal cell carcinoma, and we are advancing the initiation, which is planned for the second quarter 2021. This study is designed to evaluate safety and tolerability using different schedules of administration, as well as to provide a preliminary evaluation of its efficacy as measured by the percentage of target lesion with complete histological clearance. In tandem, an investigator-initiated phase two trial will be conducted at the Soroka Medical Center in Israel, designed to evaluate the safety and efficacy of 005 in removing non-melanoma skin cancers and precancerous lesions like actinic keratosis, basal cell carcinoma, and squamous cell carcinoma. We expect that data from both studies will be generated by the end of this year, 2021. We believe that 005 has a reasonable path to market with a clear unmet medical need, and the clinical plan we have laid out carries relatively low development costs given its active substance, which is the same like NexoBred and SKRx, and the intended indication. In closing, we anticipate 2021 to have multiple data readouts in SKRx and 005 clinical trials and excited about the next opportunity in the U.S. as we continue to work closely with the FDA. We remain focused on continuing to drive growth and further strengthen our company with a deep pipeline of paratherapeutic solutions for tissue repair and regeneration. Now, I would like to turn the call over to Boaz for a summary of our financials.

Boaz? Thank you, Sharon, and good morning, everyone, and good afternoon to our listeners in Israel. I'd like to start our financial review noting that we continue to generate strong product and license revenue growth from both the U.S. and ex-U.S. markets as Nexobrid continues to support our balance sheet and clinical development programs. Now, I'd like to provide you with an update on our financial results for the first quarter of 2021. Revenues for the first quarter of 2021 were $5.8 million, compared with $4.4 million for the first quarter of 2020, an increase of 32%. Revenues from product and licenses were $2.9 million, an increase of 300%, compared to the first quarter of 2020, primarily driven by borders, procurement for emergency stockpile, and sales increase outside of the U.S. Gross profit was $2.4 million, or 41% of net revenues, compared with a gross profit of $1.2 million, or 28% of net revenues for the first quarter of 2020. Research and development expenses were $2.2 million compared with $1.7 million for the first quarter of 2020. The increase was primarily driven by SCRx clinical development program. Selling general and administrative expenses were $2.1 million, compared with $1.7 million in the first quarter of 2020. This was as a result of directors' and officers' insurance premiums increase. As a percentage of revenues, SG&A expenses were 36%, reflecting 300 basis points decrease versus the parallel quarter of 2020. Operating loss. was 1.9 million, reflecting a 13% decrease in operating loss compared to the 2.2 million in the first quarter of 2020. The company posted a net loss of 2.9 million, or 10 cents per share, compared with a net loss of 2.5 million, or 9 cents per share, for the first quarter of 2020. Adjusted EBITDA was a loss of 1.3 million, compared with a loss of $1.8 million for the first quarter of 2020, reflecting a decrease in adjusted EBITDA loss of 28%. Moving now to the balance sheet. As of March 31, 2021, MediWound had $17.9 million in cash and short-term investments, compared with $21.6 million as of December 31, 2020, and no debt. MediWound remained on budget, utilizing 3.7 million in the first quarter of 2021 for its operational activities. The company reiterates its expectation for cashiers in 2021 to be in the range of 5 to 7 million. With that, I have concluded the financial overview and will now turn the call back over to Sharon. Sharon?

Thank you, Boaz. As you can see, we have several tremendous opportunities before us. We will continue our commercialization activities with our partner, VeriCell, and we continue to work with FDA for the regulatory review process for NexoBridge. We are actively recruiting patients for the Escalic Space to Adaptive Design Study, and we are excited to initiate the new clinical study in non-melanoma skin cancer. With that, it is my pleasure to open the call for your questions.

Thank you. As a reminder, to ask a question, please press star and then the number one on your telephone keypad. Again, that's star and then the number one on your telephone keypad. To withdraw your question, please press the pound key. Please stand by while we compile the question and answer roster. Your first question comes from the line of Kevin from Oppenheimer.

Hi, good morning.

Yes, hi, good morning. This is Susan calling on behalf of Kevin DeGieter from Oppenheimer. My first question is a clarification on a comment you said earlier. You mentioned that the FDA will not be able to inspect the manufacturing facilities for Taiwan and Chile. Can you comment on how that will affect the regulatory timeline for BLA approval?

Good morning, Susan, and thank you for the question. As we communicated during the call, the FDA accepted the review of the BLA and provided us with the PADUFA goal date of June 29. However, as we see in the industry, from recent FDA action, travel restrictions related to COVID-19 pandemic are impacting the FDA ability to complete manufacturing facility inspection on time and review processes have been affected. As communicated, the FDA had informed us that due to this travel restriction, it may be unable to conduct the required inspection of our manufacturing facility in Israel and Taiwan and that it's unlikely to review or the CMC information provided by the PADUFA data within the current review cycle. The PADUFA goal date remains June 29, and the FDA review is still ongoing as we continue to work closely with the agency. However, at this time, we expect the timing of the potential approval and commercial loans of Nexable to be impacted, giving the different potential scenarios and we cannot speak for the FDA, although there are several scenarios, we cannot predict how long the FDA may take to complete the review of the BLA. We are committed to bring NexoBRED to the U.S. market while our partner VeriCell continue to make significant progress with the preparation for launch. And given its robust clinical data package, we believe that NexoBRED remains well positioned to become standard of care, we believe both the inspection and the additional information provided are just potential timing issues.

Got it. Thanks for the clarification. Just one more question for me. So you're planning to initiate the BCC study in the next, I guess, couple months. Can you provide any color on just on the study protocol, potential enrollment rates, anything?

Yes. So we submitted already the protocol as a communicate to the FDA for a Phase I-II study. This study is for treatment of passive cell carcinoma, nodular and superficial passive cell carcinoma. and we plan to initiate this study in this quarter, the second quarter of 2021. The study objective is to evaluate safety and tolerability using different schedule of administration, as well as to provide us with a preliminary evaluation of its efficacy as measured by the percentage of target lesions with complete histological clearance. We will have two cohorts of patients while we assess the first cohort and adjust accordingly to the second cohort regarding the administration regimen. And we believe that 005 has a reasonable path to market with a clear unmet need as this clinical plan that we laid out carries relatively low development costs given the active substance and the intended indication.

Got it. Thank you. That's all for me. Thank you. Your next question comes from the line of Swayam Pakula. Your line is open. You can ask your question.

Thank you. This is RK from Hitsi Wainwright. Good morning, Sharon and Boz. It's quite unfortunate that FDA is unable to deal with the... It's a huge backlog. It's not just for you folks. I understand it's an industry-wide situation and even the GO is looking into this. Having said that, How are the conversations going? Because I believe the FDA is trying to figure out how to manage this, even accepting inspection reports from other regulatory agencies because you certainly have been inspected by BARDA. at least a couple of times, if I remember it correctly, before the NexaBridge contract came through. Any commentary on that or anything that you can provide us?

Good morning, Arke, and thank you for the question. Specifically, we are not going to discuss the specific details from the interaction of the ADA, and we respect the FDA review process. However, with less than two months left before the PADUFA date, we feel that at this stage the inspection is likely to occur before the PADUFA date, and this is the reason that we communicate it. We can't speak for the FDA, although the FDA has some guidance and they are assessing alternative vehicles to conduct inspections. And although there are a number of scenarios, it is very difficult to predict the impact. We can look at two other recent examples across the industry, as you mentioned. It's across the industry now, and now the FDA is handling this type of situation, and outcomes can range from a deferral, deferred action through major amendment with the extension of the review cycle and potentially of a CRL. And given the different potential scenarios, we cannot predict how long it will take the FDA to make or to complete the review. But we do think that both the inspection and the CMC data provided, we believe, are just a potential timing issue, and hopefully it will be resolved soon. As you clearly stated, NexoBread is approved in Europe and in other international markets with over 7,000 patients that were treated with the product, with part of procurement continuing, and we continue to treat patients in the U.S. under the expanded access protocol NEXT. And given its robust clinical data, we believe that the clinical data that NEXT will be approved in the U.S., and our commercial partner, Ferris, will continue to plan for launch.

Okay. Thanks for that. Just to clarify and just clarify, So I'm assuming that up until the PDUFA date that you will not even know whether this is going to be a three-month CRL or a six-month delay. Correct? Correct. Okay. Fair enough. Then just staying within Nexobred, on the pediatric study that you were talking about, your expectation for the data in third quarter, could you kind of highlight to us what sort of data we are expecting from And is this study enough for a label expansion, or would you need to do any additional work?

Yeah, thank you. So the pediatric study, as I communicated, is fully enrolled. We completed the enrollment stage, and we expect to report the top-line data results, which will include the acute stage safety and the 12-month follow-up data in the third quarter of this year, 2021. We believe that this data is sufficient for a labless extension. However, we believe that the submission of the pediatric indication expansion for NexoBREAD will be subject, of course, to the review process that is ongoing, and we get more clarity regarding the BLA review outcome. In general, I can tell you that as an orphan drug, we are waived in the U.S. from pediatric investigational plan, This study was initiated based on our European Pediatric Investigation Plan, but this study is conducted with two protocols from the FDA and EMA, and it will be used for both authorities for label extension.

Okay. One last question, and then I'll step back into the line. Regarding the global expansion that you have been conducting over the last six to eight months, What can you highlight out of that? Any insight into how we should think about revenues from other geographies?

Yes, so we look at other geographies as ex-U.S. We have the U.S. geography currently with BARDA and later on upon approval with the commercial markets through VeriCell. The ex-U.S. geography comprised of the European markets and the international market. As we discussed during the call, we are satisfied with the next global expansion into new international market which support our top line, primarily by advance payment or upfront payment as part of the distribution agreement and later on by selling the product to those distributors. We continue upon our strategy to sign additional distribution agreements in Europe and Asia And just recently, in the last quarter, we already received two additional marketing approvals for NexoBridge, one in Taiwan and one in Chile, and we are getting ready with the distributor for a launch in these territories.

Thank you.

Thank you. Your next question comes from the line of Nathan Winstein from Aegis. So your line is open. You can ask your question.

Yes, thank you. Good morning, Sharon and Boaz. Thanks for taking my question. I just had one question, and it's a follow-up on the international opportunity, and specifically I was thinking about BARDA and whether there are stockpiling opportunities from other ex-U.S. governments.

Thank you for the question, Nathan. So you are totally right. We are working with BARDA, and BARDA procurement for emergency stockpile continue to drive product revenue growth for MediWound. As mentioned, we expect to recognize the remaining revenue from Barda of approximately 6.5 million in 2021 related to the initial procurement of Barda, and we are pleased with the increase in sales of products and expect it to continue in 2021. Looking at other territories, we are exploring the options of having such a model in other countries worldwide, I can tell you that the ability or the budget allocated for such procurement is different in U.S. and in other territories. However, we are in contact with several governmental authorities worldwide to have such kind of mechanism, but with less significant amount of procurement compared to BARDA 16 million procurement.

Thanks. That's very helpful. I appreciate it.

Thank you. Your next question comes from the line of Josh Jennings from Cowen. Your line is open. You can ask your question.

Hi, this is Brian here for Josh. Thank you for taking my questions. I also have a couple on the FDA approval process for Nexabreed. Just to start, can you clarify the role of the manufacturing facility in Taiwan? I thought the Israel facility was the primary site responsible for manufacturing, and I guess where I'm going with this is do you need both facilities inspected before a final decision, or could you start with just the Israel facility approved?

Good morning, Brian. To your question, MediWound is the primary manufacturing facility. We are manufacturing here in our facility in Israel both the drug substance and the drug product, the API and the drug product, as well as the gel vehicle. However, because the Taiwanese manufacturer or supplier is manufacturing the bromelain special production, which is the key raw material or intermediate drug substance, it is subject also or required also inspection. And what we've been informed is that the FDA may be unable to conduct the required inspections of our manufacturing facilities, both in Israel and Taiwan.

Okay, that's helpful. And just on any potential for estimates of time revisions, do you expect to receive any kind of estimate for when these facility inspections could occur? And also, if it turns out that the FDA does not make the June 29th PDUFA date, do you expect there to be an estimated time for a final decision if they do not make that June 29th date?

Yes. So, first of all, currently the review is ongoing and the PDUFA date is June 29th. FDA communicated it anticipated to meet. this June 29 PADUFA date, but we can't speak for the FDA and things are evolving in the last few months due to the backlog and other things that they have. And although there are a number of scenarios, it is very difficult for us to predict now what will be the impact and what will be the results. We will wait for further communication for the FDA, whether it's alternative vehicles to conduct inspection or whether it's scheduling inspections, etc., But currently, given the different potential scenarios, we cannot predict now how long it will take them to complete the review, to complete the, including, of course, the inspection of the facilities.

Okay, thank you. And maybe just one more on the BARDA procurement process. So, you're about halfway done with the delivery there. Do you have insight yet into BARDA's plans for potentially additional procurement after this first tranche is completed?

Yes, so as we said, we are on track with the BARDA procurement for emergency stockpile, which continues to drive the revenue growth of MediWound, and we expect to recognize the remaining revenue during 2021, which is about $6.5 million, our portion out of the overall $10.5 million for 2021. Currently, we have no definitive decision by BARDA regarding the option. The option for additional procurements will be a sole discretion of BARDA, and I assume it will be utilized only when the current procurement will be expired for rotation of expired stock, or alternatively, if they will be required to increase the level of safety stock, emergency stock.

Okay, and are you directly in those discussions, or is Verasol handling those primarily?

We are the primary contact with BARDA. We are the sponsor of We are the sponsors in front of BARDA, of course, and with the FDA. So we are the primary contact with BARDA.

Okay. Thank you. Thank you.

Thank you. Again, to ask a question, that would be star and then the number one on your telephone keypad. Star and then the number one on your telephone keypad. There is no question at this time. Presenters, please continue.

Thank you, everyone, for joining us today. We look to continue executing on our strategy and bringing new therapies to market and to update you again on our next update call. Thank you very much and have a great day. Bye-bye.

Thank you. That concludes today's conference call. You may now disconnect. Thank you. THE END you Thank you. music music Thank you. Thank you. Good day and thank you for standing by and welcome to the Quarter 1 MediWound 2021 conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and then the number 1 on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn the conference over to your speaker today, Mr. Jeremy Pfeffer. Please go ahead, sir.

Thank you, and good morning, everyone. Earlier today, MediWound issued a press release announcing financial results and provided a business update for the first quarter of 2021. You may access that release on the company's website under the Investors tab. With us today are Sharon Malka, Chief Executive Officer of MediWound, and Boaz Gurlevi, Chief Financial Officer. Following management's prepared remarks, we will open the call for Q&A. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session, relating to Meduun'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. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, Actual outcomes and results are subject to risks and uncertainties and could differ materially from those forecast due to the impact of many factors beyond the control of MediWound. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future results, or otherwise. Participants are directed to cautionary notes set forth in today's press release, as well as the risk factors set forth in MediWound's annual report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. The conference call is the property of MediWound, and any recording or broadcast is expressly prohibited without the written consent of MediWound. Now, I would like to turn the call over to Sharon Malka, Chief Executive Officer of MediWound. Sharon?

Thank you, Jeremy. Good morning to our U.S. listeners and good afternoon to our listeners in Israel. Welcome to MediWound's first quarter 2021 conference call to discuss our financial results and business updates and highlights. This quarter, we continue to generate product revenue growth compared with prior year, driven by the procurement of NexoBread by BARDA for emergency response preparedness and out-of-U.S. sales. as we continue to execute on our global expansion strategy of expanding the use of NexoBREAD in additional international markets. In addition, we have gained progress across each of our ongoing clinical programs, highlighted by the enrollment of the first patient in our Phase II pharmacology study of escarex and the launch of our new program in non-melanoma skin cancer, while we continue to advance our U.S. Phase II adaptive design study of ASCAREX for the treatment of venous leg ulcers. Let me now provide you with a more color on the progress we made and review of the first quarter highlights. Starting with Nexobrid, we continue to enroll new patients to the next expanded access program at leading U.S. burn centers, with 82 burn victims who were already treated with Nexobrid to date. The expanded access study runs through approval, and there is plenty of opportunity to continue to enroll patients across over 20 sites, which will continue to increase burn surgeons' experience with Nexobrid. The pediatric study is fully enrolled, and we expect to report top-line results from this study in the third quarter of 2021. On the commercial front, BARDA procurement for emergency stockpile continue to drive product revenue growth, and we are expecting to recognize the remaining revenue related to BARDA procurement of NexoBREED in 2021. We are satisfied with NexoBREED global expansion into new international markets, supporting our top line signing additional distribution agreements in Europe and Asia, and receiving marketing approvals for NexoBREED in Taiwan and Chile. Turning to the BLA, in September 2020, the FDA accepted for review our BLA for NexoBREED for severe burns and assigned a PDUFA goal date of June 29, 2021. However, as is apparent from recent FDA actions, across the industry, travel restrictions related to COVID-19 pandemic are impacting the FDA ability to complete manufacturing facility inspections and review processes have been affected. Recently, the FDA has informed us that due to these travel restrictions, it may be unable to conduct the required inspections of our manufacturing facilities in Israel and Taiwan by the PADUFA date. and that it is unlikely that the additional CMC information provided in support of our BLA will be reviewed during the current review cycle. The PDUFA goal date remains June 29, 2021, and FDA review is ongoing as we continue to work closely with the agency. At this time, we expect the timing of potential approval and the commercial launch of NexoBREED to be impacted. We are committed to bringing NexoBridge to the U.S. market as our North American commercial partner, VeriCell, continues to make significant progress with respect to its commercial and medical affairs pre-launch activity. Given its robust clinical data package, we believe that NexoBridge remains well-positioned to replace surgical excision as the standard of care for ex-care removal in patients with severe burns and we look forward, upon approval, to bringing NexoBREAD to the U.S. market. Moving to our product candidate, Escarex, where our development program is well underway. We continue to actively recruit patients for our U.S. Phase II adaptive design study for the treatment of venous leg ulcers. We are on track to reach the target of 80 patients required for the interim assessment and reiterate our expectation for an interim assessment around mid-2021 and anticipate completion of patient enrollment by year-end 2021. As part of the Escarex Development Program, we are conducting a Phase II pharmacology study to explore the potential clinical benefits of Escarex associated with chronic wounds management. The study is an open-label, single-arm study assessing the pharmacological effect of SKRx in up to 15 patients with both VLUs and DFUs. This study will provide us with a better understanding of what is happening in the wound bed during and after debridement with SKRx, and more specifically, it will enable to assess the effect on reduction in biofilm burden, the reduction in inflammation, and initiation of healing process. We enrolled the first patient in this study last month and expect data from this study in the second half of 2021. We were proud to host an Escarex Analyst Day in March, featuring four prominent key opinion leaders who discussed the current US wound debridement practices and how Escarex, upon approval, has the potential to change the current standard of practice and care of chronic wounds. Our three key opinion leaders, Drs. Kistner, Singer, and Snyder, spoke about the need for better therapeutics and improving upon the current standard of care. With a billion-dollar market opportunity in each of the VLU and DFU markets, a clear opportunity in the hospital outpatient settings and potential for meaningful improving on the current standard of care, we believe SKRx can have a meaningful impact on chronic wound management, offering significant benefits for patients, healthcare professionals, and payers. Moving now to our product candidate 005, we submitted a protocol to the FDA for a Phase I-II clinical study for the treatment of basal cell carcinoma, and we are advancing the initiation, which is planned for the second quarter 2021. This study is designed to evaluate safety and tolerability using different schedules of administration, as well as to provide a preliminary evaluation of its efficacy as measured by the percentage of target lesion with complete histological clearance. In tandem, an investigator-initiated phase two trial will be conducted at the Soroka Medical Center in Israel, designed to evaluate the safety and efficacy of 005 in removing non-melanoma skin cancers and precancerous lesions like actinic erythrosis, basal cell carcinoma, and squamous cell carcinoma. We expect that data from both studies will be generated by the end of this year, 2021. We believe that 005 has a reasonable path to market with a clear unmet medical need, and the clinical plan we have laid out carries relatively low development costs given its active substance, which is the same like NexoBred and SKRx, and the intended indication. In closing, we anticipate 2021 to have multiple data readouts in SKRx and 005 clinical trials and excited about the next opportunity in the U.S. as we continue to work closely with the FDA. We remain focused on continuing to drive growth and further strengthen our company with a deep pipeline of paratherapeutic solutions for tissue repair and regeneration. Now, I would like to turn the call over to Boaz for a summary of our financials.

Boaz? Thank you, Sharon, and good morning, everyone, and good afternoon to our listeners in Israel. I'd like to start our financial review noting that we continue to generate strong product and license revenue growth from both the U.S. and ex-U.S. markets as NexoBridge continues to support our balance sheet and clinical development programs. Now, I'd like to provide you with an update on our financial results for the first quarter of 2021. Revenues for the first quarter of 2021 were $5.8 million, compared with $4.4 million for the first quarter of 2020, an increase of 32%. Revenues from product and licenses were $2.9 million, an increase of 300%, compared to the first quarter of 2020, primarily driven by borders, procurement for emergency stockpile, and sales increase outside of the U.S. Gross profit was $2.4 million, or 41% of net revenues, compared with a gross profit of $1.2 million, or 28% of net revenues for the first quarter of 2020. Research and development expenses were $2.2 million compared with $1.7 million for the first quarter of 2020. The increase was primarily driven by SCRx clinical development programs. Selling general and administrative expenses were $2.1 million compared with $1.7 million in the first quarter of 2020. This was as a result of directors' and officers' insurance premiums increase. As a percentage of revenues, SG&A expenses were 36%, reflecting 300 basis points decrease versus the parallel quarter of 2020. Operating loss. was 1.9 million, reflecting a 13% decrease in operating loss compared to the 2.2 million in the first quarter of 2020. The company posted a net loss of 2.9 million, or 10 cents per share, compared with a net loss of 2.5 million, or 9 cents per share, for the first quarter of 2020. Adjusted EBITDA was a loss of 1.3 million, compared with a loss of $1.8 million for the first quarter of 2020, reflecting a decrease in adjusted EBITDA loss of 28%. Moving now to the balance sheet. As of March 31, 2021, MediWound had $17.9 million in cash and short-term investments, compared with $21.6 million as of December 31, 2020, and no debt. MediWound remained on budget, utilizing 3.7 million in the first quarter of 2021 for its operational activities. The company reiterates its expectation for cash use in 2021 to be in the range of 5 to 7 million. With that, I have concluded the financial overview and will now turn the call back over to Sharon. Sharon?

Thank you, Boaz. As you can see, we have several tremendous opportunities before us. We will continue our commercialization activities with our partner, VeriCell, and we continue to work with FDA for the regulatory review process for Nexobrid. We are actively recruiting patients for the Escalic Space to Adaptive Design Study, and we are excited to initiate the new clinical study in non-melanoma skin cancer. With that, it is my pleasure to open the call for your questions.

Thank you. As a reminder, to ask a question, please press star and then the number one on your telephone keypad. Again, that's star and then the number one on your telephone keypad. To withdraw your question, please press the pound key. Please stand by while we compile the question and answer roster. Your first question comes from the line of Kevin from Oppenheimer.

Hi, good morning. Yes, hi, good morning. This is Susan calling on behalf of Kevin DeGieter from Oppenheimer. My first question is a clarification on a comment you said earlier. You mentioned that the FDA will not be able to inspect the manufacturing facilities for Taiwan and Chile. Can you comment on how that will affect the regulatory timeline for BLA approval?

Good morning, Susan, and thank you for the question. As we communicated during the call, the FDA accepted the review of the BLA and provided us with the PADUFA goal date of June 29. However, as we see in the industry, from recent FDA action, travel restrictions related to COVID-19 pandemic are impacting the FDA ability to complete manufacturing facility inspection on time and review processes have been affected. As communicated, the FDA had informed us that due to this travel restriction, it may be unable to conduct the required inspection of our manufacturing facility in Israel and Taiwan and that it's unlikely to review or the CMC information provided by the PADUFA data within the current review cycle. The PADUFA goal date remains June 29, and the FDA review is still ongoing as we continue to work closely with the agency. However, at this time, we expect the timing of the potential approval and commercial loans of Nexoble to be impacted, giving the different potential scenarios and we cannot speak for the FDA. Although there are several scenarios, we cannot predict how long the FDA may take to complete the review of the BLA. We are committed to bring NexoBRED to the U.S. market while our partner VeriCell continues to make significant progress with the preparation for launch. And given its robust clinical data package, we believe that NexoBRED remains well positioned to become standard of care, we believe both the inspection and the additional information provided are just potential timing issues.

Got it. Thanks for the clarification. Just one more question for me. So you're planning to initiate the BCC study in the next, I guess, couple months. Can you provide any color on just on the study protocol, potential enrollment rates, anything?

Yes. So we submitted already the protocol as a communicate to the FDA for a Phase I-II study. This study is for treatment of passive cell carcinoma, nodular and superficial passive cell carcinoma. and we plan to initiate this study in this quarter, the second quarter of 2021. The study objective is to evaluate safety and tolerability using different schedule of administration, as well as to provide us with a preliminary evaluation of its efficacy as measured by the percentage of target lesions with complete histological clearance. We will have two cohorts of patients while we assess the first cohort and adjust accordingly to the second cohort regarding the administration regimen. And we believe that 005 has a reasonable path to market with a clear unmet need as this clinical plan that we laid out carries relatively low development costs given the active substance and the intended indication.

Got it. Thank you. That's all for me. Thank you. Your next question comes from the line of Swayam Pakula. Your line is open. You can ask your question.

Thank you. This is RK from Head Save and Write. Good morning, Sharon and Bose. It's quite unfortunate that FDA is unable to deal with the... It's a huge backlog. It's not just for you folks. I understand it's an industry-wide situation and even the GO is looking into this. Having said that, How are the conversations going? Because I believe the FDA is trying to figure out how to manage this, even accepting inspection reports from other regulatory agencies because you certainly have been inspected by BARDA. at least a couple of times, if I remember it correctly, before the NexaBridge contract came through. Any commentary on that or anything that you can provide us?

Good morning, Arke, and thank you for the question. Specifically, we are not going to discuss the specific details from the interaction of the ADA, and we respect the FDA review process. However, with less than two months left before the PADUFA date, we feel that at this stage the inspection is likely to occur before the PADUFA date, and this is the reason that we communicate it. We can't speak for the FDA, although the FDA has some guidance and they are assessing alternatives vehicle to conduct inspections. And although there are a number of scenarios, it is very difficult to predict the impact. We can look at two other recent examples across the industry, as you mentioned. It's across the industry now, and now the FDA is handling this type of situation, and outcomes can range from a deferral, deferred action through major amendment with the extension of the review cycle and potentially of a CRL. And given the different potential scenarios, we cannot predict how long it will take the FDA to make or to complete the review. But we do think that both the inspection and the CMC data provided, we believe, are just a potential timing issue, and hopefully it will be resolved soon. As you clearly stated, NexoBread is approved in Europe and in other international markets with over 7,000 patients that were treated with the product, with part of procurement continuing, and we continue to treat patients in the U.S. under the expanded access protocol next. And given its robust clinical data, we believe that the clinical data that next will be approved in the U.S., and our commercial partner, Ferris, will continue to plan for launch.

Okay. Thanks for that. Just to clarify and just clarify, So I'm assuming that up until the PDUFA date that you will not even know whether this is going to be a three-month CRL or a six-month delay, correct? Correct. Okay, fair enough. Then just staying within Nexobred, on the pediatric study that you were talking about, your expectation for the data in third quarter, could you kind of highlight to us what sort of data we are expecting And is this study enough for a label expansion, or would you need to do any additional work?

Yeah, thank you. So the pediatric study, as I communicated, is fully enrolled. We completed the enrollment stage, and we expect to report the top-line data results, which will include the acute stage, safety, and the 12-month follow-up data in the third quarter of this year, 2021. We believe that this data is sufficient for a labless extension. However, we believe that the submission of the pediatric indication expansion for NexoBREAD will be subject, of course, to the review process that is ongoing. And we get more clarity regarding the BLA review outcome. In general, I can tell you that as an orphan drug, we are waived in the U.S. from pediatric investigational plan. This study was initiated based on our European pediatric investigation plan, but this study is conducted with two protocols from the FDA and EMA, and it will be used for both authorities for label extension.

Okay. One last question, and then I'll step back into the line. Regarding the global expansion that you have been conducting over the last six to eight months, What can you highlight out of that? Any insight into how we should think about revenues from other geographies?

We look at other geographies as ex-U.S. We have the U.S. geography currently with BARTA and later on upon approval with the commercial markets through VeriCell. The ex-U.S. geography comprised of the European markets, and the international market. As we discussed during the call, we are satisfied with the next global expansion into new international market, which support our top line, primarily by advance payment or upfront payment as part of the distribution agreement, and later on by selling the product to those distributors. We continue upon our strategy to sign additional distribution agreements in Europe and Asia, And just recently, in the last quarter, we already received two additional marketing approval for NexoBridge, one in Taiwan and one in Chile. And we are getting ready with the distributor for a launch in these territories.

Thank you.

Thank you. Your next question comes from the line of Nathan Winstein from Aegis. So your line is open. You can ask your question.

Yes, thank you. Good morning, Sharon and Boaz. Thanks for taking my question. I just had one question, and it's a follow-up on the international opportunity, and specifically I was thinking about BARDA and whether there are stockpiling opportunities from other ex-U.S. governments.

Thank you for the question, Nathan. So you are totally right. We are working with BARDA, and BARDA procurement for emergency stockpile continue to drive product revenue growth for MediWound. As mentioned, we expect to recognize the remaining revenue from Barda of approximately 6.5 million in 2021 related to the initial procurement of Barda, and we are pleased with the increase in sales of products and expect it to continue in 2021. Looking at other territories, we are exploring the options of having such a model in other countries worldwide, I can tell you that the ability or the budget allocated for such procurement is different in U.S. and in other territories. However, we are in contact with several governmental authorities worldwide to have such kind of mechanism, but with less significant amount of procurement compared to BARDA 16 million procurement.

Thanks. That's very helpful. I appreciate it.

Thank you. Your next question comes from the line of Josh Jennings from Cowen. Your line is open. You can ask your question.

Hi, this is Brian here for Josh. Thank you for taking my questions. I also have a couple on the FDA approval process for Nexabreed. Just to start, can you clarify the role of the manufacturing facility in Taiwan? I thought the Israel facility was the primary site responsible for manufacturing, and I guess where I'm going with this is do you need both facilities inspected before a final decision, or could you start with just the Israel facility approved?

Good morning, Brian. To your question, MediWound is the primary manufacturing facility. We are manufacturing here in our facility in Israel both the drug substance and the drug product, the API and the drug product, as well as the gel vehicle. However, because the Taiwanese manufacturer or supplier is manufacturing the bromelain special production, which is the key raw material or intermediate drug substance, it is subject also or required also inspection. And what we've been informed is that the FDA may be unable to conduct the required inspections of our manufacturing facilities, both in Israel and Taiwan.

Okay, that's helpful. And just on any potential for estimates of time revisions, do you expect to receive any kind of estimate for when these facility inspections could occur? And also, if it turns out that the FDA does not make the June 29th PDUFA date, do you expect there to be an estimated time for a final decision if they do not make that June 29th date?

Yes. So, first of all, currently the review is ongoing and the PDUFA date is June 29th. FDA communicated it anticipated to meet. this June 29 PADUFA date. But, you know, we can't speak for the FDA and things are evolving in the last few months due to the backlog and other things that they have. And although there are a number of scenarios, it is very difficult for us to predict now what will be the impact and what will be the results. We will wait for further communication for the FDA, whether it's alternative vehicles to conduct inspection or whether it's scheduling inspections, etc., But currently, given the different potential scenarios, we cannot predict now how long it will take them to complete the review, to complete the, including, of course, the inspection of the facilities.

Okay, thank you. And maybe just one more on the BARDA procurement process. So you're about halfway done with the delivery there. Do you have insight yet into BARDA's plans for potentially additional procurement after this first tranche is completed?

Yes, so as we said, we are on track with the BARDA procurement for emergency stockpile, which continues to drive the revenue growth of MediWound, and we expect to recognize the remaining revenue during 2021, which is about $6.5 million, our portion, out of the overall $10.5 million for 2021. Currently, we have no definitive decision by BARDA regarding the option. The option for additional procurements will be a sole discretion of BARDA, and I assume it will be utilized only when the current procurement will be expired for rotation of expired stock, or alternatively, if they will be required to increase the level of safety stock, emergency stock.

Okay, and are you directly in those discussions, or is Verasol handling those primarily?

We are the primary contact with BARDA. We are the sponsor of We are the sponsors in front of BARDA, of course, and with the FDA. So we are the primary contact with BARDA.

Okay. Thank you. Thank you.

Thank you. Again, to ask a question, that would be star and then the number one on your telephone keypad. Star and then the number one on your telephone keypad. There is no question at this time. Presenters, please continue.

Thank you, everyone, for joining us today. We look to continue executing on our strategy and bringing new therapies to market and to update you again on our next update call. Thank you very much and have a great day. Bye-bye.

Thank you. That concludes today's conference call. You may now disconnect.