MediWound Ltd. Aktie

Good day, and welcome to the MediWound Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Gaia Shamis from LifeSci Advisors. Please go ahead.

Thank you, Chloe, and welcome, everyone. Earlier today, premarket opened, MediWound issued a press release announcing financial results for the second quarter ended June 30, 2026. You may access this press release on the company's website under the Investor tab. I would ask you to review the full text of our forward-looking statements within this morning's press release.

Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to MediWound's expected future performance, future business prospects or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC.

In addition, all forward-looking statements represent our views only as of today, and MediWound assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise. This conference call is property of MediWound and any recording or rebroadcast is expressly prohibited without the written consent of MediWound.

With us today are Ofer Gonen, Chief Executive Officer of MediWound; Hani Luxenburg, Chief Financial Officer; and Barry Wolfenson, Executive Vice President of Strategy and Corporate Development. Following our prepared remarks, we will open the call for Q&A.

Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound. Ofer?

Thank you, Gaia, and good morning, everyone. During the second quarter, we made meaningful progress against our strategic priorities, advancing EscharEx and [Technical Difficulty] Do you hear me?

Yes, we can hear you. Please stand by while we reconnect our speaker connected our speaker. [Audio Gap] Pardon everyone we reconnected our speaker. Please proceed.

Okay. Sorry about that. So, thank you, Gaia, and good morning, everyone. During the second quarter, we made meaningful progress against our strategic priorities, advancing EscharEx and expanding the commercial and the development opportunities for NexoBrid.

Specifically, the EscharEx global Phase III VLU trial is actively enrolling patients as our assessment of its addressable market continue to grow. For NexoBrid, Vericel reported its strongest quarter since launch, and we entered into a new master service agreement with Vericel following its BARDA contract.

Now let's start with an update on EscharEx. The VALU study remains our top priority and our key long-term value driver. Our focus is on execution with enrollment ongoing, targeting the 216 patients across approximately 40 sites in the United States, Europe and Israel. As the study progresses, we are approaching two key milestones: first, the prespecified interim sample size reassessment and the second, completion of enrollment, both expected by the end of the first quarter of 2027.

At the same time, we continue to build the broader commercial opportunity for EscharEx -- during this quarter, an independent global consulting firm completed an updated U.S. market assessment. Following the expansion of the analysis to include pressure ulcer, this updated assessment now estimates the U.S. annual peak sales at $1.05 billion.

This analysis further strengthened our view that EscharEx across multiple chronic wound indications has the potential to address a substantial market opportunity. An investigator-initiated study evaluating EscharEx in pressure ulcers is expected to begin in the fourth quarter of 2026.

Our collaboration network across the program now spans essentially all the major relevant advanced wound care companies, including Coloplast, ConvaTec, SD, Molnlycke, Solventum, B. Brown and MIMEDX. Together with the continued progress of the value and the expanding clinical and commercial opportunity, this positions EscharEx as a nonsurgical optimally effective debridement therapy for chronic wounds.

Turning to NexoBrid. The U.S. commercial trajectory continues to strengthen. Vericel reported NexoBrid's strongest quarter since launch with record quarterly revenue, hospital unit sales and ordering centers. Approximately 80 burn centers have ordered NexoBrid since launch, reflecting continued adoption and increasing utilization across the U.S. burn care market.

Following Vericel's 10-year contract with BARDA valued at up to $197 million, we entered into a master service agreement with Vericel covering NexoBrid and next-generation product development activities.

Under the MSA, we expect to begin recognizing revenue in the second half of 2026 through participation in development initiatives, including a next-generation program launched to support the potential expansion of NexoBrid for use in blast and friction-related injuries, leveraging real-world evidence.

We continue to advance a room temperature stable formulation of NexoBrid as a nonsurgical debridement solution for battlefield burn care, supported by nondilutive funding from the Department of War with a total program budget of $18.3 million.

Together, these programs further expand NexoBrid growth, I'm here -- Together, this program further expands. Together, these programs further expand NexoBrid's role in burn care, national preparedness, military medicine and mass casualty response. To support current and future demand, we continue to advance our expanded NexoBrid manufacturing facility.

We are implementing the modification requested by the EMA following the pre-audit and expect to complete this work during the fourth quarter of 2026. Commercial supply from the expanded facility remains subject to regulatory approval and is expected in the second half of 2027.

With that, I will turn the call over to Hani.

Thank you, Ofer, and good morning, everyone. Turning to our financial results for the second quarter of 2026. Revenue for the quarter was $3.1 million compared with $5.7 million in the second quarter of 2025. The decrease primarily reflected the timing of BARDA funded development revenue. Gross profit was $0.3 million, representing a gross margin of 10.9% compared with gross profit of $1.3 million or 23.5% in the prior year period. The lower margin primarily reflected a onetime impact related to the facility scale-up.

Research and development expenses were $5.9 million compared with $3.5 million in the second quarter of 2025, primarily reflecting increased investment in the EscharEx value Phase III trial. SG&A expenses totaled $3.9 million compared with $3.6 million in the same period last year.

Operating loss was $9.5 million compared with $5.7 million in the second quarter of 2025. Net loss was $7.4 million or $0.57 per share compared with a net loss of $13.3 million or $1.23 per share in the prior year period. The year-over-year change primarily reflected noncash financial income. Adjusted EBITDA loss was $8.3 million compared with a loss of $4.5 million in the second quarter of 2025.

Turning to our first half results. Revenue for the first half of 2026 was $4.6 million compared with $9.7 million in the first half of 2025, primarily reflecting the timing of BARDA funded development revenue. Gross profit was $0.7 million, representing a gross margin of 14.4% compared with gross profit of $2.1 million or 21.5% in the prior year period.

Research and development expenses were $11.1 million compared with $6.4 million in the first half of 2025, primarily reflecting increased investment in the EscharEx value Phase III trial. SG&A expenses totaled $7.5 million compared with $6.6 million in the same period last year. primarily reflecting higher professional services costs and exchange rate effects.

Operating loss was $17.4 million compared with $10.9 million in the first half of 2025. Net loss was $10.3 million or $0.80 per share compared with a net loss of $14 million or $1.30 per share in the prior year period. The change primarily reflected noncash warrant revaluation income of $7.7 million in 2026 compared with a noncash warrant revaluation expense of $2.4 million in 2025. Adjusted EBITDA loss was $15.3 million compared with a loss of $8.5 million in the first half of 2025.

Now turning to our balance sheet. As of June 2026, we had approximately $36 million in cash, cash equivalents and deposits compared with $54 million at year-end 2025. Cash burn during the first half of 2026 totaled $20 million. Warrants and option exercises generated $0.8 million during the first half, and we received an additional $1.1 million after quarter end.

This concludes my review of our financial results. Ofer, back to you.

Thank you, Hani. The second quarter strengthened both our core growth platform. The value Phase III program of EscharEx continues to advance toward important milestones, while the updated market assessment and planned diabetic foot ulcer and pressure ulcer studies broaden its long-term clinical and commercial opportunity.

NexoBrid continues to gain commercial traction in the United States. At the same time, the MSA with Vericel, the broader BARDA framework, the DOW funding, all that creates meaningful government-backed product supply and development opportunities. Our revenue profile remained weighted toward the second half of 2026, reflecting the expected timing of contributions from the MSA and other government-funded programs.

Based on these expectation contributions, we are reaffirming our full year 2026 revenue guidance of $24 million to $26 million. Our priorities for the remainder of the year are clear: continue executing the VLU trial, begin recognizing revenue under the Vericel MSA, advance our next-generation NexoBrid programs and complete the EMA requested modification at our expanded manufacturing facility. We remain focused on disciplined execution across our strategic priorities and on building durable long-term value across our pipeline.

Operator?

[Operator Instructions] Our first question today comes from RK Ramakanth with H.C. Wainwright.

This is RK from H.C. Wainwright. Lots of stuff going on here. So, let's start off on the VLU study itself. On the study, do you still plan to get the study enrollment completed and get the interim also done during the early 2027? That's my first question.

The second one within that is very recently, Smith & Nephew on their call, they were talking about potentially working on a second-generation SANTYL. Not sure you folks are aware of it. And what do you think -- what's your business intelligence on that molecule? And how does that impact EscharEx development from here onwards?

Excellent. So RK, thank you for joining. The first question is a short answer. Yes, our target of meeting the interim assessment and the enrollment completion is still in the first quarter of 2027.

As for the second question regarding Smith & Nephew approach to potential competition from EscharEx, maybe, Barry, do you want to take this one?

Sure. Absolutely. RK. We heard those comments, and we found them interesting. I think the thing that's most notable about the comments were the context where he was talking a little bit about -- someone asked him about the competition. He was talking a little bit about his thoughts around EscharEx.

But then he said that they noted that sample is not a fast debridement option that it is slow. And because of this, that's what's driving their desire to make this second-generation product. It's actually being developed by a company that they've invested in called Certa Therapeutics. The molecule is SN or the drug, I should say, is SN-514.

Based on all the publicly available information we've been able to see, we're not aware of this drug having entered into any clinical development in chronic wound patients. We see some activity around burns, but not chronic wounds. And so, while we take any potential competition seriously, EscharEx, as you know, is already in Phase III in chronic wounds, and that gives us what we believe to be a substantial clinical lead.

So now based on those comments, does that mean that the market is bigger than what it is because SANTYL is obviously not the molecule of choice if it is not really doing what it is expected to do? And then the second part of that is on the -- your team has added treasure ulcers into the pool now. So how is that study being conducted in the sense, what is your responsibility within that IIT and would that data be available by the time you're ready to file your own application with the agencies, both in the U.S. and in the -- with the EMA?

So Barry, maybe you will answer the first part of the question regarding Smith & Nephew and the market of pressure ulcer, and I'll speak about the study, okay?

Yes. Well, I think even more broadly, what I think I heard you ask, RK, is does that mean that since SANTYL is not particularly effective and that Smith & Nephew is motivated to create a new drug, this must -- the inference is that the market is even bigger than what SANTYL is currently supplying.

And we believe the answer to that is resoundingly yes. That's why as we -- even before including pressure ulcers, we showed our peak sales in the $800 million range. And with including pressure ulcers, it tops $1 billion. We believe that a drug for debridement that can reach complete debridement, certainly within four to five days changes the entire expectation with regard to enzymatic debridement. It fits better into the workflows of wound clinics and podiatry offices and it takes away because of that share -- utilization share, not just from sharp debridement, but across all different modalities. So, we do believe that it greatly expands the market.

So, if we speak about the pressure ulcer study, so it's important to mention that the Phase III VLU study in VLU -- this is the primary focus of EscharEx development program. It's, of course, the company's key value driver. The pressure ulcer study is an investigator initiated. So, it's not run directly by us. It's a small study, open-label trial, 10, 15 patients, and the initiation is expected in the fourth quarter of 2026. It enrolls, of course, pressure ulcer patients.

All of them are treated with EscharEx across a week or 2. And we are assessing as usually debridement, granulation and wound closure. Following this -- the value readout, we plan to approach with the FDA and determine what would be required to pursue approvals also for DFU and pressure ulcers.

One last question. This is on NexoBrid. So, it's a two part question. The first one, what is EMA requesting you to do in terms of the new plant? And at least at the outset, it looks like time lines are moving back. So, is that true in your sense of the world?

And also, if things get pushed to fourth quarter of '27, does that mean the real product for the market actually gets pushed into 2028? And the third part of the questions are on the CPT code, where do we stand? And is January 2027 still an effective and realistic date?

So I will address the manufacturing facility question. I think there was a confusion. As I said in the call, we completed the EMA pre-audit and the pre-audit process, and they recommended some operational changes that we are about to complete in the fourth quarter of this year, not the fourth quarter of 2027.

So, we'll complete all the implementation this year. The feedback that we got was operational in nature, not related to product quality, safety or comparability concerns, which is very important. Once this work is complete, we will begin the manufacturing of NexoBrid in the new facility. And then following submission, review and inspection, we can get approval as early as in the second half of 2027. So, we have a delay. We reported this last quarter, but we are currently on track.

As for your second question, the CPT code, Barry, do you want to address it?

To my knowledge, there is no publicly available information regarding any update on a -- to a Category 1 CPT code.

The next question comes from Josh Jennings with TD Cowen.

And Barry. I wanted to just touch on the updated MSA with Vericel. Can you just -- any additional details you can share just on the changes to revenue recognition? Is the major update that you'll be -- the recognizing of revenue for the development program that's been expanded for blast and friction injuries and potentially extending the shelf life of NexoBrid. And then the second question is just on the -- any updates to the path for the DFU indication in the clinical development program there.

Josh, good to speak to you. So let me speak about the BARDA economics and its strategic importance. So as mentioned, in April, Vericel was awarded a 10-year BARDA contract that is valued at up to $197 million. It is covering NexoBrid procurement, vendor-managed inventory, U.S.-based manufacturing readiness, next-generation formulation development and the potential blast and trauma expansion. It's a large. It's a multiyear framework agreement with several components.

So, I understand the appetite for more precision. We are currently not in a position to share additional detail. It reflects confidentiality obligations to Vericel as well as the fact that several elements of the program remain subject to further FDA feedback, which could affect the scope of development and work required. What is concrete today is that the MSA is signed.

The first development program, the blast injury, pain friction injuries is underway, and Vericel expects about $6 million of BARDA procurement revenue in the second half. Additional elements, including the room temperature stable formulation, the U.S.-based manufacturing readiness, -- these are areas that we are now in discussions with Vericel and BARDA regarding the scope, timing, technical requirements and potential implementation pathway. So, this is the maximum we can share right now. And as I said, we are about to begin recognizing revenue from that program in the second half of 2026.

If this is good enough, I'm moving to the DFU? Okay. So, regarding the DFU, we have constructive discussions with the FDA and EMA. We got feedback. We are aligned on a DFU protocol. You can see the highlight of the protocol. It is attached to our corporate deck. And we plan to initiate the study in the fourth quarter of 2026.

This Phase II DFU study is expected to enroll 50 patients. It's a randomized trial, 1:1 design, EscharEx versus placebo. And the primary endpoint is something that EscharEx is very good at time to complete debridement -- so we see it as a trial, which is not that complicated. As I said to the previous question that I asked by RK, we plan to approach the FDA after the value readout and then to determine what would be required to pursue approval for that indication as well.

The next question comes from Jeff Jones with Oppenheimer.

One point of clarification on the BARDA contract with Vericel. You noted that Vericel planning to receive $6 million in BARDA revenue in 2H. How then does that align with the $14 million to $15 million in BARDA revenue that you guys are projecting for 2026? Is that dependent on some of these other pieces that are on negotiation? And then in regards to NexoBrid, looking ahead into '26 and '27, how do we think about revenue given the facility now doesn't look to be coming online until 2H '27?

Okay. Jeff, good to have you on. So as for the first question, you gave there a number that I'm not familiar with, which is the 14. The 14 is not exclusively by BARDA. We have additional government-related agreements, one of them you are familiar with, which is the Department of War. So, expect some news there as well. The agreement with -- the MSA agreement with BARDA includes a few components.

As I said, I cannot give you at this stage, used to confidentiality obligations, I cannot give you all the components. Having said that, the first program, which is development of blast and friction burn indication is on its way. Additional components are currently discussed and negotiated.

As for the procurement, -- we -- MediWound expects to benefit from the procurement that BARDA is -- has with Vericel. It's not one-to-one. We have the transfer prices with Vericel. Nothing really is disclosed at this stage. But when you speak about the amount of development services, BARDA agreement, it contains a few components and not only one.

Great.

This is the first sentence -- first question. As for the second question, Hani, do you want to address the manufacturing facility delay?

Yes. Jeff, we do not actually expect the current facility timeline to have material impact on our 2026 revenue guidance. Importantly, a meaningful portion of the revenue we expect in the second half is associated, as you know, with government-funded development activity and product supply under existing agreements rather than being depending on commercial supply from our expanded facility. So, our $24 million to $26 million in 2026 revenue guidance already reflects the current status and the expected timing of our facility.

And as you asked also about '27 and '28, as I mentioned earlier about the facility readiness, we -- our plan is to finish all the modification by the end of the fourth quarter of this year. And first thing that we are going to do next year is to start manufacturing NexoBrid. So we don't think we have -- there will be any impact at all to the expected revenue in '27 and '28 for NexoBrid.

The next question comes from Chase Knickerbocker with Craig-Hallum.

Maybe just on a little bit more specifics about value. Can you just talk about how the enrollment rate has trended sequentially on like a per site basis? And then can you just confirm that kind of all those 40 sites are up running and enrolling? And then just as we think about what your expectation for the 1Q resampling is, are you assuming any improvement in enrollment trends in that assumption? Or is it just kind of static?

Chase, good to have you with us. As for the value, let's speak about the numbers to protect the integrity of the study, we cannot share patient enrollment numbers or enrollment trends during the conduct of the study in a multinational study, individual snapshot can be noisy and the advice we are getting is not to share any information.

We think the more useful commitment is the milestones. It's the interim assessment and the enrollment completion. What can I say now is that the design hasn't changed, 216 patients, roughly 40 sites, and we expect the interim sample size reassessment and enrollment completion to be by the end of the first quarter of 2027. We do not need any improvement or changes in trends. We are on track. I hope I answered the first question, right?

Yes. And maybe you can -- I mean, you've spoken to kind of active sites in the past. Can you maybe just speak to kind of the update there? -- Go ahead.

Regarding the sites, as we said, we are targeting approximately 40 sites, and we are something like very close to have them all recruiting. It's -- we have more -- less than 10% to reach this target.

Got it. And then maybe just as we think about -- you obviously are also guiding to full enrollment, but if we just think about top line data kind of post last patient enrolled, I mean, should we think about it as kind of 12 weeks, obviously, to that wound healing follow-up and then kind of a month or two for data lock and the like? Or maybe just talk us through exactly how that time line will work?

And then lastly, just one for Barry. So, we're seeing a pretty large volume shift in wound care from Site 11 to Site 22. Can you just remind us the sites of service that you think EscharEx will predominantly be used in if approved? And then if you could just remind us again where kind of SANTYL usage is concentrated today and how you expect that to kind of change from a mix perspective for EscharEx?

So, Barry, let me start with answering about the clinical trial, if this is okay. Well, you got it quite accurately, Chase. Our plan is to have the interim assessment by the end of Q1. If everything goes well, it takes another quarter or so to get the top line data. And after the top line data, it is another few months until the final results.

As for EscharEx, Barry, do you want to address it?

Sure. Most of that shifting, of course, Chase, has to do with the CMS change to how it reimburses the tissue substitute products. Based on the third-party data that we've acquired regarding prescriptions of SANTYL, it's fairly well distributed across acute care into clinics, into home health and certainly into nursing homes and SNFs. And we don't see that materially changing nor do we see that being any different for EscharEx.

The next question comes from Michael Okunewitch with Maxim Group.

So, I just -- I wanted to follow up on the question surrounding the '27 revenues and particularly to understand mechanically how that works with your current projections. since it's nearly a doubling of the NexoBrid specific revenues that you are projecting. So, is this a case where there's pent-up demand that would lead to a surge in sales in the fourth quarter once you get that approval? Or can you actually ship the product and recognize revenue before the second half EMA commissioning?

Michael, this is a good question. So, as I said, we are actually manufacturing the NexoBrid in the beginning of 2027. Everything is ready to be shipped. The demand is there. Second half of 2027, we can sell significantly more than we are selling now. Currently, as you know, our ability to sell is capped by manufacturing capabilities. And in 2027, this limitation will finally be removed.

All right. And then what is the delay on the EMA side effect FDA? Is that still one half after EMA approval? Or would these now be contemporaneous?

Mathematically, it's something like three months. Having said that, the most important milestone is getting the first approval. As I mentioned in the previous call, and I'm sure that you remember, EMA comes first. And once EMA come first, we can start selling substantially most of the inventory to the European countries. And then the current facility can be dedicated to sell to the U.S. market and to stockpile for governments.

So, this is the more important milestone. So, this is why we are speaking about the first regulatory approval. If FDA happens three months after that or five months after that depends on inspections and other things, I don't think it will really change anything for a revenue point of view.

And then one last one for me before I hop back into the queue. In the second half of this year, you are expecting quite a significant uptick in revenues, particularly from development services, well beyond what you've seen historically even when you had the full BARDA contract up and running. So, I wanted to understand what's going to be driving that? Is that primarily the new programs that have been announced taking effect? Or is there some front-loading to the new BARDA contract you signed after the lapse?

So yes, you're right. We are reaffirming the $24 million to $26 million revenue guidance for 2026. Since the revenue for the first half was $4.6 million. Clearly, the majority of the year -- it is weighted towards the second half of the year. We expect meaningful step-up in H2, driven by the product supply related to the contracts, development services under the Vericel MSA and other government-funded programs, including the Department of War and of course, the ongoing commercial NexoBrid sale.

Under the MSA, we just announced that we initiated the first development program to support the expansion to last injuries. But we -- as I mentioned, we expect to initiate additional development programs under the MSA in the near term as well.

The next question comes from Scott Henry with Alliance Global Partners.

Most of my questions have been asked, but I did want to follow up on the product sales for 2026. Obviously, the $2.6 million was very strong in 2Q, but first quarter was only $528,000 based on what I got out of the filings. Would it be better to think about capacity for product sales as kind of the combination of those 2, so about $1.7 million to $1.8 million per quarter. Is that kind of how much you can make in a quarter until we get this capacity? Is that how I should be thinking about it? Or could you duplicate $2.6 million again prior to the capacity expansion?

Scott, as you know, we are not guiding specifically for product, but I don't think it will be the right thing to do is to think that we sold everything that we could. Again, we are capped only by capacity, not by demand. The inventory of NexoBrid is currently zero, I think, in most territories and definitely here in the facility.

Some of the impacts that we -- that you saw that prevented us from to generate more revenue were because of the fact that the facility itself needed to go through all kind of inspections and all kind of upgrades, et cetera. So, I think it would be more accurate to look at the second quarter. Having said that, I would look at last year, and we are selling everything that we have. So maybe last year, if you add, let's say, 10% premium because of price changes and a little bit more effectiveness, I think it will be more accurate.

Okay. Thanks for the color. That is helpful. And then perhaps a question for Hani. R&D, should we expect a significant spike still in the second half of '26. How should we think about the next couple of quarters there?

Scott, the increase in R&D is, as you know, primarily driven by our VALUE Phase III trial, which remain our top strategic priority in the company. We are not providing quarterly R&D, but we -- guidance, but we currently at an elevated level of investment and expect R&D spending to remain elevated as value progresses through this phase of our program.

At the same time, a meaningful portion of our NexoBrid development activity is supported, as you know, by nondilutive government funding through BARDA and through the Department of War. So, while we are investing significantly in value, we are also being very disciplined about where we deploy our own capital. I hope I answered your question.

This concludes our question-and-answer session. I would like to turn the conference back over to Ofer Gonen for any closing remarks.

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

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the MediWound First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded. I'd now like to turn the conference over to Dan Ferry of Lifesci Advisors. Please go ahead.

Thank you, operator, and welcome, everyone. Earlier today, pre-market open, MediWound issued a press release announcing financial results for the first quarter ended March 31, 2026. You may access this press release on the company's website under the Investors tab. I would ask you to review the full text of our forward-looking statements within this morning's press release.

Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session, relating to MediWound's expected future performance, future business prospects or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC.

In addition, all forward-looking statements represent our views only as of today, and MediWound assumes no obligation to update or supplement any forward-looking statements, whether a result of new information, future events or otherwise. This conference call is the property of MediWound, and any recording or rebroadcast is expressly prohibited without the written consent of MediWound.

With us today are Ofer Gonen, Chief Executive Officer of MediWound; and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Corporate Development, is also participating in today's call. Following our prepared remarks, we will open the call for Q&A. Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound. Ofer?

Thank you, Dan, and good morning, everyone. During the first quarter of 2026, we continue to execute against our key strategic priorities, advancing EscharEx towards commercialization and expanding the global role of NexoBrid. While the timeline for EscharEx Phase III VALUE study has shifted by 1 quarter, the underlying momentum behind the program continues to strengthen.

During this quarter, we expanded our chronic wound collaboration network, generated additional clinical and scientific validation for both EscharEx and NexoBrid and continue to see strong engagement from strategic collaborators and the broader wound care community. We continue to advance our expanded NexoBrid manufacturing facility towards commercial readiness and further strengthen long-term opportunities with industry leaders and government partners across our portfolio.

Let me start with an update on EscharEx. Enrollment continues in the global Phase III VALUE study in venous leg ulcers with more than 30 sites active across the United States, Europe and Israel. Recruitment has progressed more gradually than originally anticipated, primarily due to 2 operational factors.

First, certain European sites required ancillary-related regulatory adjustments, which have been now completed, and we expect the study to reach the targeted 40 active sites within weeks. Second, the travel and visit requirements associated with the protocol created participation challenges for the older and medically complex VLU patient population. To support enrollment and reduce participation burden, we implemented patient assistance measures, including hotel reimbursements, transportation services and facilitated access to enhanced care.

Importantly, given how quickly EscharEx works, the protocol requires daily wound assessment to determine the exact day complete debridement is achieved. This represents a shift from measuring debridement outcomes over weeks. While this creates operational complexity in the study, it may ultimately reflect one of EscharEx's key clinical and commercial advantages in real-world practice. Investigator engagement and site participation remains strong across all regions, and we expect the interim sample size reassessment and the enrollment completion by the end of the first quarter of 2027.

At the same time, we continue to see expanding commercial, clinical and scientific validation supporting the broader opportunity of EscharEx across the chronic wound care market. Medline, a global leader in medical surgical and wound care products, has joined our collaboration network. Together with Coloplast/Kerecis, Convatec, Essity, Mölnlycke, Solventum, B. Braun and MIMEDX, our collaborators now include essentially all the major advanced wound care companies relevant to the program.

As part of the collaboration, Medline will provide its class-leading skin protectant, Marathon, for the upcoming DFU Phase II study. Marathon is designed to protect tissue surrounding the wound, while EscharEx performed its debridement activity within the wound bed. A peer-reviewed U.S. expert consensus document published in Wound Journal emphasized the need for effective, easy-to-use and less invasive debridement approaches in chronic wound care, a conclusion that aligns closely with the clinical profile and positioning of EscharEx.

We also presented new clinical data and new preclinical data at the WHS, SAWC and EWMA conferences, highlighting EscharEx's clinical benefits, distinct mechanism of action and broad potential across venous leg ulcers, diabetic foot ulcers and pressure ulcers.

Turning to NexoBrid. During the quarter, we continue to see growing commercial adoption, clinical recognition and strategic interest in NexoBrid across both traditional burn care settings and government preparedness initiatives. Vericel reported continued growth in both ordering centers and total orders across the United States burn care market, reflecting ongoing adoption trends.

Most importantly, Vericel was also awarded a 10-year BARDA contract valued at up to $197 million to support NexoBrid procurement, vendor management inventory services, potential blast trauma indication development and next-generation manufacturing and formulation capabilities. We expect BARDA-related procurement and development to begin during the second half of 2026.

This new 10-year BARDA contract builds on approximately $138 million already received from BARDA and the Department of War over the past decade, further solidifying the significance of NexoBrid as a strategic asset in mass casualty burn response and national preparedness.

Importantly, the burn care community continues to move in the same direction. Newly published national consensus guidelines from Japan and the U.K. now added to existing recommendation from the WHO and countries, including Italy, Spain, Romania and Poland. To support this global demand, we remain focused on bringing our expanding manufacturing facility online. We are implementing modifications identified during a recent EMA pre-audit, and we expect to complete those implementations activities during the second half of 2026. With that, I'll turn on the call to Hani. Hani?

Thank you, Ofer, and good morning, everyone. Let's turn to our financial results for the first quarter of 2026. Revenue for the quarter was $1.5 million compared to $4 million in the first quarter of 2025. The decrease was primarily attributable to timing of BARDA-related revenue as well as postponed shipment related to regional conflict.

Gross profit for the quarter was $0.3 million, representing a gross margin of 21.9% compared to gross profit of $0.7 million or a gross margin of 18.7% in the prior year period. Research and development expenses were $5.2 million compared to $2.9 million in the first quarter of 2025, primarily reflecting continued investment in the EscharEx VALUE Phase III study. SG&A expenses totaled $3.6 million compared to $3.1 million in the same period last year.

Operating loss for the quarter was $8 million compared to $5.2 million in the first quarter of 2025. Net loss was $3 million or $0.23 per share compared to a net loss of $0.7 million or $0.07 per share in the prior year period. Adjusted EBITDA loss was $7 million compared to a loss of $4 million in the first quarter of 2025.

Turning to our balance sheet. As of March 31, 2026, with $45 million in cash, cash equivalents and deposits compared to $54 million at year-end 2025. During the first quarter, net cash used in operating activity was $9.6 million, including the impact of foreign exchange movement between the U.S. dollar and the Israeli shekel.

Our balance sheet also benefited from $1.2 million received under the European Innovation Council (EIC) Accelerator grant program as well as $0.7 million received from the exercise of Series A warrants subsequent to quarter end. That concludes my review of the financials. Ofer, back to you.

Thank you, Hani. We continue to make meaningful progress across our core strategic priorities, advancing EscharEx VALUE study, broadening industry validation, expanding NexoBrid commercial and government footprint and preparing our expanded manufacturing facility for commercial readiness.

Based on the expected timing of the government-related procurement and the development revenue in the second half of the year, we are reaffirming our full year 2026 revenue guidance of $24 million to $26 million. Our focus remains on disciplined execution as we position the company for a potential inflection point in the next phase of commercial growth. Operator?

Thank you. We will now begin the Q&A session. [Operator Instructions]

Today's first question comes from Josh Jennings at TD Cowen.

I wanted to just ask on the VALUE study and understand that there is some complexities in terms of evaluating some of the older patients and you described that well. But are there any other risks in terms of getting the interim analysis done by the end of 1Q '27?

And has these adjustments been made already? And what are you seeing to date that gives you confidence that 1Q '27 is the appropriate new timeline?

Josh, good to speak to you. As I said, indeed, the enrollment has progressed more gradually than originally anticipated. But importantly, this is not related to, I don't know, safety, efficacy or protocol concern.

As I said in my prepared remarks that the slower pace is primarily reflected by all kind of operational factors that we believe are behind us. They are associated with running a very large multinational VLU study, the largest in a few decades. And those operational challenges were, as I said, ancillary-related regulatory adjustments at certain European sites, and it is done.

We estimate that we reach approximately 40 active sites within weeks. We have also implemented targeted measures to support recruitment momentum with the transportation support, reimbursement programs and additional patient assistance initiatives.

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

Thanks for the extra detail. I appreciate it. And just in terms of the expanded manufacturing capacity for NexoBrid and looking at the regulators and the updates that you shared on the call, just the FDA inspection is planned in early 2027.

Any just next steps on getting the FDA in there? I mean what are the steps in front of that inspection occurring in 2027? And when should we expect that facility to come online to be able to supply NexoBrid product in the U.S.?

Yes. So indeed, the U.S. inspectors are supposed to come very early 2027. But in order to do that, we need to finalize with the EMA first. As you know, it's a very complex biologic manufacturing and the transfers includes all kind of process validations, comparability, stability and regulatory reviews.

These activities are progressing, but they require very careful and disciplined execution. We had -- during the quarter, we completed an on-site pre-audit from EMA. They identified all kind of several recommendations that are operational modifications. We are now implementing them.

And as I said in the call, we expect to complete these activities during the second half of 2026. The feedback is operational in nature. It doesn't have anything related to product quality, safety or comparability concerns. So we think that we are on the right track.

And our next question today comes from Jeff Jones at Oppenheimer.

This is Mira on for Jeff. Thanks for the update. Just a couple of questions regarding the manufacturing facility and the EMA pre-audit. Just wanted to understand sort of the impact of the recommended modifications by the EMA to the facility on material already manufactured.

And what is your confidence in being able to sell that material out of the new facility before year-end and sort of that timeline to complete the implementation of these fixes? And would the EMA have to reinspect this?

Good to have you on. So as I said, responded to Josh, we -- it wasn't the inspection. It was a pre-audit by the EMA. And they identified several recommended the operational modification. And when the agency recommends something, you know it's not a real recommendation, you need to do that. So we are now implementing it.

According to what we understand, we can finish everything as we planned during the second half of 2026. The feedback was only operational, nothing related to the comparability of the product, the safety of it. And these are the things that are really worrying in manufacturing transfer of biologics. So we think that we are in a good place.

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

So the only thing that I can share about at this stage at the BARDA contract is that the $197 million is a 10-year contract between BARDA and Vericel. It contains 5 components: procurement, we share it with Vericel, VMI management. Vericel is running that. And manufacturing readiness and next-generation formulation, another indication for blast trauma, we are -- we have a big share in bringing that to the market.

Certain elements in the BARDA framework also includes the room temperature stable formulation, which is a program that initiated back in the days by the Department of War. And we expect those revenue to kick in, in the beginning of the second half of 2026. Unfortunately, I cannot tell you at this stage what is the share, who gets what and what is the portion of MediWound there.

And our next question comes from RK at H.C. Wainwright.

A couple of questions from me. So just thinking through the program with EscharEx beyond the current study, just trying to have an idea of how the additional studies which you are planning, especially on the indication expansion, the DFU and the IIT on pressure ulcer, how are those -- the plans for those studies and how are those studies progressing?

Thanks for joining. So as we mentioned, the Phase III VALUE study in VLU remains the primary focus of the EscharEx development program, and this is the company's key value driver, as you can imagine. In parallel, we are conducting 40 studies that are required for regulatory submission, which is a PK study and human factor studies that we are about to start in the second half of the year.

We are also advancing a head-to-head Phase II study versus collagenase or SANTYL and all kind of other nonsurgical standard of care modalities also to strengthen the differentiation between us and to support -- between us and the competition and to support future market access discussions. Beyond VLU, we are expanding EscharEx into additional chronic wound indications.

As we already communicated, we're about to start a Phase II study in diabetic foot ulcers in the second half of '26. As well as an investigator-initiated trial in pressure ulcers, which is planned also for the second half of 2026. This structured program is designed to support the regulatory approval, the competitive positioning of EscharEx and of course, the long-term commercial expansion across the major chronic wound segments.

The second question is on the revenues. So, there is a statement saying some of the shipments had to be postponed because of the regional conflict. So just trying to understand what sort of -- how these shipments are going to be moved into the next 3 quarters?

And also, as you reconfirmed your guidance for the year, $24 million to $26 million, which means quite a bit of it is going to show up in the next 9 months. Out of that, how much is NexoBrid revenue-based income? And how much is the income that you can get from the BARDA contract approval?

RK, so the first quarter revenue was low -- relatively low, primarily as said, due to timing. We did not have BARDA-related revenue in the quarter and certain shipments were indeed postponed due to the regional conflict. Those postponed shipments have already been completed, so this was a timing issue.

As a result, we expect -- looking ahead, we expect revenue to be weighted towards the second half of 2026, driven primarily by the expected ramp-up in government-related development services and procurement activities.

So our reaffirming 2026 guidance of $24 million to $26 million is, as you understand, supported by expected government-related development services with burn mass casualty preparedness. So we are quite confident that the second half of the year will do the ramp-up, and we're still reaffirming our guidance for the revenue this year.

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

Sure.

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

Barry, do you want to speak on this?

Sure, absolutely. RK, thanks for the question. Generally, as an overall comment, obviously, we believe that the level of industry engagement around EscharEx is highly significant. As Ofer mentioned in his comments, with Medline joining this quarter, our collaboration network essentially comprises all of the major relevant advanced wound care companies.

So along with Medline, it's Coloplast/Kerecis, Convatec, Essity, Mölnlycke, Solventum, B. Braun and MIMEDX. These collaborations reflect growing recognition that chronic wound care continues to need an optimally effective, easy-to-use nonsurgical debridement solution, which we offer with EscharEx. And again, generally speaking, standardizing these key products used in both arms of the study, allowing us to only change one thing, active versus control, helps to minimize variability in the various studies and thus yield the best results.

Regarding Medline specifically, the product that they're going to provide is, again, for the DFU study, and it's their class-leading cyanoacrylate-based product, Marathon. So its job is to protect the healthy skin that surrounds the wound, which is an important component of standard of wound care, and that allows EscharEx to really just do its job within the wound bed itself.

So the collaborators get the benefit of having their products as standard of care in some of the largest, most substantial clinical studies in the field of advanced wound care. which could have meaningful commercial impact for their brands. Medline will be looking at data after the study with regard to the health of the surrounding or periwound tissue around the wounds to see if indeed use of their product in a large-scale study helped to keep all of that periwound in very good condition.

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

And our next question today comes from Chase Knickerbocker at Craig-Hallum.

Maybe just to start, could you elaborate a little bit more on that regulatory change is causing some issues in Europe? I know you talked a little bit about it last quarter, but maybe if you could just remind us.

And then is this responsible for the entirety of that difference between the current kind of 30-ish sites versus kind of the 40 target? Is that delta of 10 all in Europe?

Chase, good to have you with us. Yes. First of all, the 10 sites that we are speaking about, all of them are European ones, and they will be open within weeks. As I think I shared with you in the past, specifically, some of the ancillaries that we need to import to Europe are a little bit problematic, specifically without mentioning the brand, cellular tissue products are not or were not allowed in specific countries in Europe, and it was a nightmare to bring them in.

And even if we had some resolutions, they were very local and to make it on a global scale was a little bit complicated. But now we can officially tell you that we are after it and all the sites are being open, and it is going to be executed. What was the second part of the question, sorry?

Yes, both are. Maybe just secondly, as far as what the 1Q '27 timeline kind of assumes for an enrollment rate, does it assume kind of an acceleration?

I mean, maybe just talk about the assumptions you're making within that. And then secondly, just as it relates to some of those changes around the travel reimbursement, et cetera, have you seen kind of an improvement in enrollment rate already from that?

So Barry will address the second part of the question about the changes. But as for the first Q of 2027, our assumption that the enrollment per site, the number of patients per site to be enrolled per territory will be maintained. We will have more sites and we had some -- and eventually, we'll get there.

As I said in the beginning of the call, our main motivation since there is a huge need for biologics, and Barry will elaborate on that in a second, there is a huge need for biologics in the market. We just need to make it to the finish line and make sure that the trial is success.

So there is no compromise in adding patients with all kind of exclusion criteria that we think will be too easy to cure for placebo or too tough to cure for EscharEx. We are keeping them out. We have more than thousands of patients that were already screened for this study.

So it means that there isn't a lack of patients. We just need to make sure that the patients that are enrolled are the right ones in order for us to be able to replicate the data that we had in previous studies. Barry, do you mind addressing the second part of the question?

Sure. I think Chase, I think that the question was directed towards whether or not these changes have impacted enrollment. And I guess what I would say about that is not likely. As Ofer just mentioned, we've had so many patients screened already. It's not for lack of patients and also talking to the sites before the study and during this last year, none of them said that anything having to do with reimbursement changes was impacting their ability to enroll patients or not.

And just in general, what Chase is referring to is this major change in the Medicare Physician Fee Schedule that happened at the end of last year, which was a major change reclassifying the skin substitutes to be paid as incident to supplies and establishing a standardized per square centimeter payment, which really lowered the overall sort of amount of dollars, if you will, flowing into that segment, so much so that CMS itself stated that the change is expected to reduce Medicare spending on those skin substitutes by nearly 90%, so which effectively translates to around $12 billion out of what was a $14 billion segment.

That, in turn, will drop the whole U.S. chronic wound care market from around $18 billion down to $5.5 billion. And in fact, over the last month or so, we've heard leading CTP companies reporting year-over-year declines in sales of around 60%. As Medicare closes that loophole, setting aside the clinical trial environment from a commercial opportunity, differentiated products outside this reimbursement construct will definitely stand out.

EscharEx, for example, if approved, enters into a segment where a legacy product generates $400 million per year, and it places it as one of, if not the most valuable near-term asset in the field of wound care. Given the dramatic drop-off of these CTPs, certainly, the larger global wound care companies will very likely all shift their attention to products with higher order levels of regulatory approval, BLAs, NDAs, PMAs. And ours is one of the very few of those in late stages of clinical development.

And I'd add it's the only one heading into an existing proven category. So from a -- while it doesn't really impact or doesn't seem to have impacted the clinical study from a commercial perspective, this change is enormous for us.

And our next question today comes from Michael Okunewitch with Maxim Group.

I think to start off, I'd like to ask a little bit about the consensus document published in Wounds. And in particular, if you could expand on what the driving rationale for the consensus on less aggressive methods earlier in the debridement course and what this could mean for EscharEx adoption?

Is this something that could further build on that expectation that something like EscharEx could expand the share of enzymatic debridement in the overall chronic wound debridement segment? I'd just like to get your thoughts on that.

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

Sure. Michael, thanks for the question. We viewed the recent consensus publication, which was in Wounds as an important external validation of the direction that the field is moving. To your question specifically about why more of a focus on less invasive modalities early, I think it's just to allow for more broad access. The higher level of complexity of the intervention, the more training that someone would need to do that.

And if you know much about the wound care market, you know that wounds are treated in lots of different places from nursing homes in home care obviously, in the wound clinics and physicians' offices all the way up to and including hospitals, of course. And so there -- one of the charts that they have in the consensus document, they talk about it almost like a Chutes, and they talk about it as a Chutes and Ladders kind of approach where you start off at the base with these more easy-to-use products and then you progressively go higher and higher as it's required.

And then even after you get to the top, as you sort of come down from that, you might need kind of check-ins, if you will, for maintenance debridement with the more easy-to-use products. Overall, the way that we see it and to your question of how does this -- what does this really translate to for EscharEx, the way that we view this, not that they used these words in that consensus document, but the very accurate picture that they drew of the market, the segment is one of a lot of confusion and a lot of moving parts.

And the reason for that is the products that they consider to be first line, which are autolytic hydrogel types of moist wound care and the current enzymatic product are not deemed to be optimally clinically effective. Yes, they could be used in all settings. Yes, you don't need a lot of training to do them, but the debridement is measured in weeks.

So that kind of forces clinicians' hands to go up that ladder and get to more invasive approaches. How EscharEx changes that entire dynamic is by, yes, having a product that's easy to use, yes, having a product that could be used across all settings, but most importantly, is optimally effective where debridement can be measured in days.

According to the data from third-party research, we do believe that because of that change, that EscharEx will significantly increase the market size of the overall enzymatic debridement market. When we look at from a pricing perspective and a relative desire to switch to EscharEx between diabetic -- while SANTYL is around $400 million a year, for EscharEx, we believe that peak sales reaches up to around $831 million just from venous leg ulcers and diabetic foot ulcers alone. So yes, we do anticipate a good amount of market expansion.

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

Well, there are many lessons -- tactical lessons learned. The only one that I think is a change that we will take into account in future trials is that the enrolling rate, which is half a patient per site per month, which was a correct number when there was COVID, people were looking for excuses to go out of their home, physicians' offices were empty.

These numbers should be reduced in our future calculation when we say end of Q1, we are counting on a lower number, making sure that we recruit the right patients. So all the others, additional money for transportation, make sure not to import to Europe all kind of complicated products, we are after that, and I don't think it will be an issue next time.

And our next question today comes from Scott Henry at AGP.

A follow-up -- a bit of a follow-up on RK's question, perhaps a little more specific. How dependent is 2026 revenue guidance on increasing manufacturing capacity?

And if that comes in towards the back part in Q4, is that a risk? Or can you build inventory ahead and such that you ship a lot in that quarter? Just trying to get a sense as we get later into the year.

Scott, good to hear from you. So I'm following up, Hani, if this is okay, on what you said earlier. So we -- the forecast of 2026 is dependent on -- substantially on development services from all kind of government-related agreements. Specifically, we have some flexibility.

It's not that our guidance of $24 million to $26 million is assuming specific revenue from products or from revenue from development services. We know that we can do either this one or that one. We feel quite comfortable with the guidance, and we are not dependent specifically on the manufacturing capacity.

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

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

Don't forget that we still have an agreement with -- we have an agreement also with the Department of Force and Development Services there. So the assumption that it is 0 is not the right assumption. But definitely, it will be weighted towards the second half of the year.

Okay. And just one clarification. I thought I heard earlier in the remarks, you mentioned that the U.S. manufacturing capacity expansion somehow hinged on the EU manufacturing capacity expansion. Did I hear that correct? Because that would seem unusual that the 2 would be related, but I wanted to follow up on that.

Yes. It's a technical constraint. Every product that is shipped from Israel -- from Israel to the United States needs to get an approval from the local agency. The local agency is considered the European one.

So before I get the approval from the EMA or Israeli local agency, I cannot ship to the United States. But again, these are not different requirements. So I wouldn't spend too much in order to understand it. But it is what it is. We need to get OK clearance from Israel and then we can ship to the United States and then we can call for audits.

And that concludes our Q&A session. I'd like to turn the conference back over to management for any closing remarks.

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

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

Good day, everyone, and welcome to MediWound's Fourth Quarter and Full Year 2025 Earnings Call. Today's conference call is being recorded.

At this time, I would like to turn the conference call over to Gaia Shamis of LifeSci Advisors. Please go ahead.

Thank you, operator, and welcome, everyone. Earlier today, pre-market open, MediWound issued a press release announcing financial results for the fourth quarter and full year ended December 31, 2025. You may access this press release on the company's website under the Investors tab. I would ask you to review the full text of our forward-looking statements within this morning's press release.

Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session, relating to MediWound's expected future performance, future business prospects or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC.

In addition, all forward-looking statements represent our views only as of today, and MediWound assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

This conference call is the property of MediWound, and any recording or rebroadcast is expressly prohibited without the written consent of MediWound.

With us today are Ofer Gonen, Chief Executive Officer of MediWound; and Hani Luxenburg, Chief Financial Officer. Barry Wolfenson, EVP of Strategy and Corporate Development, is also participating in today's call. Following our prepared remarks, we will open the call for Q&A.

Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound. Ofer?

Hi, and thank you, Gaia. 2025 was a pivotal year for MediWound. We ended the year with 2 significant growth drivers firmly in place, a Phase III VALUE trial advancing as planned and an operational expanded manufacturing facility for NexoBrid, positioning us for long-term commercial growth. At the same time, we strengthened our balance sheet and outlined a multiyear revenue trajectory.

Despite the ongoing conflict with Iran, we at MediWound are fully prepared and will continue operating with resilience and discipline that have guided us through similar challenges in recent years. Our team remains focused on our clinical milestones and commercial objectives while continuing to support patients and partners worldwide.

Let me walk you through the progress. Let's start with an update on EscharEx, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment is ongoing in the global Phase III VALUE study in venous leg ulcers, with the majority of sites active and enrolling. We are targeting enrollment of 216 patients across approximately 40 sites in the United States and Europe, and we expect both prespecified interim assessment and enrollment completion by year-end 2026.

Importantly, we are expanding the EscharEx clinical program beyond just VLUs. We have aligned with both the FDA and EMA on the Phase II protocol in diabetic foot ulcers and plan to initiate the study in the second half of 2026. In addition, a prospective investigator-initiative study in pressure ulcers is also expected to begin in the second half of 2026. This expansion broadens the clinical footprint of EscharEx across the 3 major chronic wound indications.

We continue to see meaningful industry validation. B. Braun has joined the EscharEx clinical development program through a research collaboration agreement and will take part in the planned Phase II study in diabetic foot ulcers. This adds to the existing collaborations with Coloplast, ConvaTec, Essity, Molnlycke, Solventum and MiMedx. Taken together, continued clinical execution, regulatory alignment, expansion into additional indications and industry engagement support the advancement of EscharEx as a long-term growth driver for MediWound.

Now turning to NexoBrid. Our expanded manufacturing facility is now operational, increasing the production capacity sixfold to support growing global demand. Commercial availability from this site remains subject to regulatory approvals, which we expect in 2026. In the United States, adoption continues to expand, with utilization across more than 70 burn centers representing the majority of Vericel's approximately 90 target accounts.

To illustrate the driver of demand, here are some of the latest examples. Recently published real-world data from the Israel Defense Forces covering nearly 5,000 documented combat casualties showed that NexoBrid was clinically applicable in 71% of war-related injuries. In addition, a 15-year military analysis across multiple conflicts demonstrated a 50% increase in the proportion of severe burns among wounded soldiers.

In parallel, we reported peer-reviewed prospective data showing that NexoBrid reduced embedded particles in abrasion and blast injuries by more than 90%, supporting the role in acute trauma care. More recently, survivors in the tragic bar fire in Crans-Montana, Switzerland were treated with NexoBrid in medical centers across Switzerland, Italy and Germany, underscoring the importance of pre-deployment of advanced burn therapy for mass casualty events.

Taking all this together, growing clinical evidence from both military and civilian settings reinforces NexoBrid's role in the treatment of severe burns. Following regulatory clearance of our expanded facility, we intend to prioritize support for national preparedness initiatives, including stockpiling and collaboration with military and emergency response systems.

With that overview, I will now turn the call over to Hani. Hani?

Thank you, Ofer, and good morning, everyone. Let's turn to our financial results for the fourth quarter and full year of 2025.

Revenue for the fourth quarter was $1.9 million, compared to $5.8 million in the fourth quarter of 2024. The decrease was primarily driven by lower development services revenue, mainly attributable to U.S. government shutdown, which delayed budget approval and the initiation of new contractual agreements. Gross profit for the quarter was $0.3 million or 14.9% of revenue, compared to $0.9 million or 15.5% in the prior year period.

R&D expenses were $4.5 million compared to $3 million in the fourth quarter of 2024, reflecting continued investment in the EscharEx VALUE Phase III study. SG&A expenses totaled $3.6 million, compared to $4 million in the same period last year, mainly reflecting lower marketing and share-based compensation expenses.

Operating loss for the quarter was $7.8 million, compared to $6.1 million in the fourth quarter of 2024. Net loss was $7.2 million or $0.56 per share, compared to a net loss of $3.9 million or $0.36 per share in the prior year period. The increase was primarily attributable to lower noncash financial income from the revaluation of warrants. Adjusted EBITDA loss was $6.5 million, compared to a loss of $4.9 million in the fourth quarter of 2024.

Looking at our performance for the full year 2025. Revenue for the year was $17 million, compared to $20.2 million in 2024. The decrease was primarily attributable to the U.S. government shutdown and lower product sales to Vericel. Gross profit was $3.3 million or 19.2% of revenue, compared to $2.6 million or 13% in 2024. The margin improvement reflects a more favorable revenue mix.

R&D expenses increased to $14.3 million, compared to $8.9 million in 2024, driven by investment in the EscharEx VALUE Phase III trial. SG&A expenses were $14.2 million, versus $13.1 million in 2024, mainly reflecting higher marketing authorization holder expenses.

Operating loss for the year was $25.3 million, compared to $19.4 million last year. Net loss for 2025 was $23.9 million or $2.10 per share, compared to $30.2 million or $3.03 per share in 2024. The reduction in net loss was primarily driven by $2.2 million of noncash financial income from the revaluation of warrants in 2025, compared to $10.7 million of noncash financial expenses in 2024. Adjusted EBITDA loss was $20.3 million, compared to $14.8 million in 2024.

Turning to our balance sheet. As of December 31, 2025, we had $53.6 million in cash, cash equivalents and deposits, compared to $43.6 million at year-end 2024. During 2025, we used $21.4 million in cash to fund our operating activities. In addition, our balance sheet reflects the completion of a $30 million registered direct offering and $3.5 million in proceeds from Series A warrant exercises. We believe our current cash position provides the financial flexibility needed to advance our key programs and continued execution on our strategic priorities.

That concludes my review of the financials. Ofer, back to you.

Thank you, Hani. So before we conclude, let me briefly address our outlook.

We reaffirm our revenue guidance of $24 million to $26 million for 2026, $32 million to $35 million for 2027 and $50 million to $55 million for 2028. This guidance assumes continued support from BARDA and the U.S. Department of War. And the 2028 outlook includes a potential initial contribution related to EscharEx subject to regulatory approval. These projections reflect the foundation we've built in 2025 and in the milestones ahead.

In summary, 2025 was a year of infrastructure build-out and clinical advancement. We advanced our Phase III program towards key milestones. We completed and commissioned our expanded manufacturing facility. And we strengthened our balance sheet and established a multiyear revenue framework.

As we move into 2026, we are focused on disciplined execution, advancing EscharEx towards pivotal milestones, securing regulatory approvals for our expanded facility and converting our operational progress into meaningful long-term value creation.

Operator?

[Operator Instructions] Our first question today comes from Josh Jennings from TD Cowen.

I hope everyone at MediWound team is safe, and we're thinking about you, guys. I wanted to start with just a question on NexoBrid and the manufacturing expansion project that's been successful. Maybe just review both the pent-up demand in international regions and the timing. I think you baked this all into your multiyear guidance forecast, and just the timing of MediWound filling that demand over the next 12, 18, 24 months.

Josh, good speaking with you. So our expanded manufacturing facility is now operational and capacity now increased sixfold. The commercial output in this site remains subject to regulatory approvals that are expected later in 2026. Once we're approved by EMA or FDA, the products that are manufacturing during the validation process that we are doing now can be released to the market.

Our guidance that we have, they assume regulatory approval clearance in the second half of 2026. I think it's an assumption that we believe is reasonable given where we stand today.

As for the demand, it's much larger than we can actually manufacture across the territories. Having said that, I don't know if it will be the case once we can manufacture. Therefore, we guided according to what we expect, and I hope it will be better going forward.

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

So I have to admit that I didn't hear anything. Is it because of my line or because of yours? Do you hear me?

I'm sorry. It may have been because of my line. Can you hear me now?

I don't hear you. Operator, is it his line? Should they reconnect?

He is being heard into the conference. I am hearing both of you. Are you able to hear me?

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

Certainly. Can you hear me now?

Yes. Can you repeat the question? I didn't hear anything.

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

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

Sure, absolutely. As you know, we're going to start an investigator-led pressure ulcer study this year. And along with that, we'll have a third-party market research project initiated that will replicate what we did with regard to diabetic foot ulcers and venous leg ulcers. And so ultimately, those peak sales, as you mentioned, will increase.

I think from a back-of-the-envelope perspective, I would say to think about pressure ulcers as the third of the big 3 ulcer types, along with the DFUs and the VLUs. There's probably more pressure ulcers than there are the other 2. We still need to do the work to see how many of them require debridement and would be applicable to EscharEx. But back of the envelope, I would anticipate that it's going to be roughly 1/3 of -- when all is said and done, it will be roughly 1/3 of the business.

Our next question comes from Jeff Jones from Oppenheimer.

To echo Josh, I hope everyone is safe there. You mentioned in the 2026 revenue guide that this assumed continued support from BARDA and DOW. Can you clarify how much of that is based on new contracts that aren't currently committed versus the award that you're anticipating? And perhaps give us an update on what you know there.

Jeff, so good to have you on as well. Let's start with BARDA. In August 2025, BARDA issued an RFP covering stockpiling, room temperature stable formulation, and trauma and blast injury indications.

Vericel, which holds the U.S. commercial rights to NexoBrid, is leading the process in the United States. We will provide full technical and development support. Now with federal operations normalized, we expect BARDA to resume progress on this RFP and related development and procurement activities, subject, of course, to standard government processes. I cannot add more to that.

As for our collaboration with the Department of War, as you know, NexoBrid room temperature stable formulation is being developed for nonsurgical burn treatment for the U.S. Army. We have been awarded to date a total of $18.2 million in nondilutive funding from the U.S. Department of War to support this development. We are moving forward. So part of the revenue is supposed to be from BARDA and part of it from the Department of War.

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

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

Sure. I mean as you mentioned in your -- in the call, between the VLU and the DFU study, at this point, we have 7 of these research collaborations, all with market-leading advanced wound care companies. They include Coloplast through their acquisition of Kerecis, Essity, Solventum, Molnlycke, ConvaTec, MiMedx, and now the most recent one being B. Braun.

Just a little bit about B. Braun. They're one of the world's leading privately-held medical tech companies. They're headquartered in Germany, founded in 1839. They generate over $9 billion in annual revenue, operating in over 60 countries and employing more than 60,000 people globally. They're known for products that are used daily across hospitals, surgical centers, dialysis clinics and outpatient settings. So they're a perfect partner when it comes to wound care. They have a big wound care franchise.

Specifically with B. Braun, they're taking part in the DFU Phase II study. As with the other collaborators, they will be supplying one of the key products that's necessary for optimal care of wounds, which will be used in both arms of the study. Specifically, they're supplying their market-leading antimicrobial wound cleanser, Prontosan, to be used during dressing changes.

So each of these collaborators are putting in one kind of product, whether it be a wound dressing -- in the VLU study, compression therapy is required. Post wound healing, there's a different kind of compression device that keeps everything in place. So they all supply things that are needed for the standard of care in wound care, and it allows for the study design to be that only one thing needs to be changed between the 2 arms, and that's the active and the control. And so it reduces any sort of variability in the study and we get cleaner results.

For the companies, the collaborators, they get the benefit of having their product used as standard of care in these very, very large, hopefully successful studies. And it also provides the opportunity for relationship-building between MediWound and these collaborators. So as we get closer to the product making it to the market, and if there is any partnering transactions to consider, all these companies will be up to date with the program, know the details of it intimately and it will just facilitate conversations at that time.

Our next question comes from Swayampakula Ramakanth from H.C. Wainwright.

This is RK from H.C. Wainwright. Ofer and Hani, glad to hear your voice. And just a couple of quick questions. On the VLU trial, which is -- which includes the provision of adaptive adjustment that you could do at a 65% enrollment mark. So what clinical scenarios would there be if you had to increase your sample size? And if you end up doing that, what sort of an impact would it have on your time line?

RK, thank you for joining. Yes, as you mentioned, the prespecified interim sample size assessment will be conducted after approximately 65% of the patients complete the treatment. Based on this assessment, the study may continue as planned, which means that the sample size stays 216 patients.

The sample size may increase if necessary. We want to preserve the approximately 90% statistical power. As you know, in MediWound, we succeeded in all the 14 clinical trials that we conducted and all the 2 Phase II -- the 3 Phase II studies that we conducted with EscharEx. So we have no intention not to make it to the finish line in this study as well.

So the outcome could be the study, we should finish the enrollment as planned, which means 216 patients. And as we guided, it will be by the end of this year, the end of 2026. If, let's say, we are at 80% statistical power, not good enough, we will increase the number of patients. If it's increasing by 20, 40 patients, it means adding another couple of months to the study and another few millions of dollars, which is not a drama. If the outcome is that we need to increase it by 100 patients, it will be at least 6 months, and it will cost us another $10 million.

Let's hope that the data will be very similar to what we saw in the Phase II studies and we will be able to finish the enrollment by the end of this year.

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

So it's a great question because we just had a discussion about it this morning. We checked, and across the sites in Europe and in the United States, there is enough EscharEx that can support continuation of the trial for the next at least 6 months. So we're in a good place. On top of that, the other ancillaries are from global companies, so all of them should be in the sites. So we don't anticipate any issue regarding supply chain that will impact the clinical study.

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

RK, so the revenue for 2025 totaled $17 million, as you said, less than the $24 million that was expected. The decrease was primarily due to the U.S. government shutdown, which delayed, as you imagine, the budget approval and the initiation of new contractual agreement. There was a small part of -- that belonged to the sales to Vericel, but the main part is the U.S. government shutdown.

So can I ask a quick follow-up? So when you say that, I was just wondering about the 2026 revenue guidance. How much of that -- how much of the BARDA RFP award expectation is in that -- in the $24 million to $26 million that you were talking about?

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

Our next question comes from Chase Knickerbocker from Craig-Hallum.

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

Chase, good to have you with us. So our main program, as you know, is the DFUs, and we decided to expand the program into 2 additional chronic indications, as said, DFU and pressure ulcers. There are some changes in the administration. We are not certain that it will be required to execute a very large Phase III study in order to have an approval for DFU indication.

We, consultant with the -- we didn't get any clearance about that, but we discussed with the agencies, both with EMA, FDA, asked them what they are expecting to see in order to see the advantage of EscharEx in treating DFU patients. And the outcome was this study with 50 patients as we detailed in our corporate deck.

And then same type of question on pressure ulcers.

And if I may add, it's a 50-patient study, which is the kind of Phase II. And if we see that we need to have additional, I don't know, 100, 150-study to finalize the Phase III, we will do it study after study. So we don't -- it's a kind of a timing impact, but we are not certain that it should be -- that it will be done before the product is approved.

Appreciate that color, Ofer. That's helpful. And then same type of question on the pressure ulcers. Is it your understanding that the pressure ulcer would require a separate Phase III to get future...

Barry, do you want to speak about -- yes.

On the potential EscharEx label?

Barry, do you want to address it?

Yes. Thank you for the question. As Ofer intimated in his answer with regard to DFUs, there is a change in the what we'll call stance of this administration with regard to the FDA and how they are trying to make it, let's say, easier for drugs to be approved. The most notable thing being that they're moving from the need to do 2 well-designed, well-controlled Phase III studies in order to get approval, and they're moving that to needing only 1.

And when we look at that, and we also look at -- if you recall, at the end of last year, the FDA agreed that our second primary endpoint would be the facilitation of wound closure, which basically takes the onus of the closure portion away from EscharEx and puts it into the hand of already approved products like CTP or an autograft, we intend to have a discussion with the FDA around the necessity of these large-scale Phase III studies for each and every indication, i.e., DFU, pressure ulcers or any other chronic wound indication that's out there.

The necrotic material on these wounds is all very similar from wound to wound to wound. We have excellent data and a growing base of data that EscharEx works on all of that necrotic material, owing to its several different enzymes that are in the API and multi-different targets towards the necrotic material. And we believe in the end that it would be likely sufficient to have a, as we're doing in the DFU study, a well-designed Phase II study complemented by post-marketing real-world data to expand the pack insert to include additional indications.

Our next question comes from Michael Okunewitch from Maxim Group.

I guess to start off, I would like to ask a little bit about the pressure ulcer program and, in particular, the strategic considerations around prioritization in chronic wounds. We know about the prioritization between VLUs and DFUs, but pressure ulcers do seem to be a little bit overlooked in this market. So I'm curious if you could comment on the market and why pressure ulcers seems to be prioritized less so than the other 2 chronic wounds.

Michael, I don't think it's less prioritized. The largest unmet medical need is definitely at venous leg ulcers because these wounds are extremely painful and you don't have any alternative. The knife, the scalpel is not an alternative for that.

Pressure ulcers are very different one of another. They might be very deep. There are all kinds of complications that might be associated. For us, it seems to be the more complicated wounds to treat. So we are going to start with relatively mild pressure ulcers.

Having said that, it is important for us, as Barry said previously, EscharEx works on burns, it works on wounds. It doesn't care which type of wounds it is applied on. So our motivation is making sure that when we are very close to the finish line with having data in our venous leg ulcer trial, to make sure that everyone understands the potential partners, the investors, that everyone understands how large this market is and how big is the unmet medical need.

So the current trial with pressure ulcer, it will be a very small trial that just demonstrates that EscharEx can debride pressure ulcers. We will do in parallel, as Barry said, by a third-party consultant in market research. We will understand exactly the portion of the patients that need to be -- to debride their wounds. And only then we will know how large is our accessible market. I hope I answered your question.

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

Yes. So as you know, the main and the main focus of the company, and this will definitely determine our value, is the Phase III study. In parallel, we need to conduct some supportive studies that we are doing, if one of them is a PK study, for instance, one of them is a human factor study. We are doing all kind of small trials to support the BLA submission.

Specifically regarding the head-to-head study versus collagenase or other types of nonsurgical standard of care, we are doing that in order to support future market access discussions. We guided and we are going to do that, that we will start the trial around mid this year, maybe the second part of the year. For us, it is a very important study since it will enable us to determine what the actual price of EscharEx will be.

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

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

And our next and final question for today comes from Scott Henry from AGP.

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

Scott, I would expect it to be by year-end, which means in the end of Q4. I don't want to overpromise.

Okay. That's helpful, Ofer. And then with regards to revenue and timing, as far as the BARDA revenues, I assume there were none in fourth quarter of 2025. Should we expect any revenues in the first quarter of '26? Just a couple of weeks left in the quarter, you might have a sense at this point.

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

Okay. Great. So when we do model this out, just to confirm, we should really expect a pretty significant increase in revenues in the second half of '26 over the first half of '26 given the manufacturing capacity coming on stream given the BARDA revenue. So I just want to make sure I'm thinking about that correctly.

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

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

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

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

Good morning, everyone, and welcome to the MediWound's Third Quarter 2025 Earnings Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Dan Ferry of LifeSci Advisors. Please go ahead.

Thank you, operator, and welcome, everyone. Earlier today, premarket opened, MediWound issued a press release announcing financial results for the third quarter ended September 30, 2025. You may access this press release on the company's website under the Investors tab. I would ask you to review the full text of our forward-looking statements within this morning's press release.

Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session, relating to MediWound's expected future performance, future business prospects or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today, and MediWound assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise.

This conference call is the property of MediWound and any recording or rebroadcast is expressly prohibited without the written consent of MediWound. With us today are Ofer Gonen, Chief Executive Officer of MediWound; and Hani Luxenburg, Chief Financial Officer; Barry Wolfenson, EVP of Strategy and Corporate Development, is also participating on today's call. Following our prepared remarks, we will open up the call for Q&A. Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound. Ofer?

Thank you, Dan, and good morning, everyone. The third quarter was another strong period for MediWound, as we executed across our strategic clinical and operational objectives and continue to position the company for its next phase of growth. The three strategic priorities I'd like to emphasize today are our EscharEx VLU trial, our NexoBrid manufacturing expansion and our ability to fund our strategy. We have made meaningful progress on all those fronts.

Let's start with an update on EscharEx, our late-stage enzymatic debridement therapy for chronic wounds. Enrollment in the VALUE Phase III trial in venous leg ulcers continue to progress, with a target of 216 patients across roughly 40 sites in the United States and Europe. U.S. site activation proceeded as planned, while several EU sites required additional adjustments to meet ancillary-related regulatory requirements. Overall, the majority of sites are now active and enrolling. At this stage, we cannot yet assess whether these EU-related adjustments will impact the overall study time line. We are actively monitoring enrollment trends, and we'll update our guidance, if needed, as visibility improves.

The trial's co-primary end points are the incidence of complete debridement and the facilitation of wound closure, both measures on which EscharEx demonstrated strong results in previous Phase II studies. A prespecified interim sample size assessment will be conducted after 65% of patients complete the treatment. We have also made progress on the diabetic foot ulcer program. We have received positive FDA feedback and we are now awaiting EMA scientific advice. The company plans to initiate the study in the second half of 2026.

As our VLU and DFU programs move forward, the market around us is also shifting in ways that highlights as correct potential. Medicare recently lowered reimbursement rates of skin substitute products which is expected to put significant pressure on that category and close a long-standing payment loophole. In contrast, EscharEx is a biologic regulated under BLA pathway and aims to enter the enzymatic debridement segment, where a single legacy product generates roughly $370 million annually. Together, these market changes makes EscharEx increasingly attractive to potential strategic partners.

To quantify this opportunity, we completed an updated U.S. market access and pricing assessment with an independent global consulting firm, incorporating also input from health care professionals and payers. The analysis supports a higher potential U.S. price per course of therapy and estimates annual peak sales of about $831 million. This updated estimates reflects EscharEx robust clinical data, along with modeled health economic benefits derived from earlier wound closure. So with the value study advancing a clear regulatory path for DFU and strong commercial validation, EscharEx is positioned to drive MediWound to the next phase of growth.

Now let's turn the attention to NexoBrid, our innovative enzymatic therapy for severe burns. Most notably, we completed the commissioning of our expanded NexoBrid manufacturing facility, a major milestone that strengthens our ability to meet the rising global demand and maintain reliable supply. The process was not simple. We worked through a 2-year war, drafted personnel and import delays on specialized equipment, but the result is transformative. Our production capacity is now 6x larger, providing a strong foundation for future growth. We expect to reach full operational capacity by year-end 2025, with regulatory review and approval, determining the timing of commercial output.

In the United States, our partner, Vericel, reported NexoBrid record quarterly revenue since launch, up 38% year-over-year and 26% sequentially. Vericel noted broad utilization across more than 60 burn centers and plans to pursue a permanent CPT code, which would take effect in 2027. Internationally, the TGA in Australia approved NexoBrid for use in both adult and pediatric patients, bringing the total number of approval market to 45 countries worldwide. This approval, together with NexoBrid's prominent presence at the recent European Burns Association Congress, where it was featured in 36 scientific presentations, highlights its expanding clinical recognition and global momentum.

Regarding the collaboration with BARDA, on an covering stockpiling, development of room temperature stable formulation and evaluation of an enzymatic debridement product for trauma and blast injury indications. This multiyear program was scheduled to begin on October 1. As Vericel noted in the recent earnings call, the government shutdown caused all related activities to pause. Now that the shutdown has ended, we expect BARDA to resume normal operations and move forward with the planned development and procurement activities. The pause also created some uncertainty around the exact timing of BARDA and DoD-related revenue in Q4. We are actively working on these components. But the final outcome will depend on how activity's progress through the remainder of the year. Overall, the advancements we have made with NexoBrid position us to a durable and meaningful growth driver for MediWound.

From a corporate standpoint, we recently strengthened our balance sheet with a $30 million of equity financing from high-quality health care investors. This transaction provides us with the resources and flexibility to execute on our long-term growth strategy with focus and momentum. Given the discussion around the recent financing, this is a perfect point to transition the call to the financials. Hani?

Thank you, Ofer, and good morning, everyone. Let's turn to our financial results for the third quarter of 2025. Revenue for the quarter was $5.4 million, up 23% year-over-year compared to $4.4 million for the same period in 2024. The increase was primarily driven by higher development services revenue, including additional contracts with DoD. Gross profit for the quarter was $0.9 million or 16.5% of revenue compared to $0.7 million or 15.5% in the prior year period. R&D expenses were $3.5 million versus $2.5 million in the third quarter of 2024, reflecting increased investment in the EscharEx value Phase III study and related clinical activities.

SG&A expenses totaled $4 million compared to $3.2 million in the same period last year. The increase was primarily due to marketing authorization holder expenses. Operating loss for the quarter was $6.5 million compared to $5.1 million in the third quarter of 2024. Net loss was $2.7 million or $0.24 per share compared to a net loss of $10.3 million or $0.98 per share in the prior year period. The improvement was mainly driven by noncash financial income from the revaluation of warrants this quarter compared to noncash financial expenses for warrant revaluation in the third quarter of last year. Adjusted EBITDA loss was $5.4 million compared to a loss of $3.7 million in the third quarter of 2024.

Looking at our performance for the first 9 months of the year. Revenue for the period was $15.1 million compared to $14.4 million in the same period of 2024. Gross profit was $3 million or 19.7% of revenue compared to $1.7 million or 12% in the first 9 months of last year. The margin improvement was driven by a more favorable revenue mix. R&D expenses were $9.8 million compared to $5.9 million in the same period of 2024. SG&A expenses were $10.6 million versus $9.1 million in the first 9 months of 2024. Operating loss for the period was $17.5 million compared to $13.3 million last year.

Net loss for the first 9 months of 2025 was $16.7 million or $1.53 per share compared to $26.3 million or $2.72 per share in the same period of 2024. The reduction in net loss was primarily driven by noncash financial income from the revaluation of warrants in 2025 compared to noncash financial expenses from revaluation of warrants in the same period of 2024. Adjusted EBITDA loss for the first 9 months was $13.9 million compared to $9.9 million in the prior year period.

Now turning to our balance sheet. As of September 30, 2025, we had $60 million in cash, cash equivalents and short-term deposits compared to $44 million at year-end 2024. During the first 9 months of the year, we used $15.8 million in cash to fund our operating activities. In addition, our balance sheet reflects the completion of a $30 million registered direct offering and $3.5 million in proceeds from Series A warrant exercises. We believe our current cash position provides the financial flexibility needed to advance our key programs and continue executing on our strategic priorities. That concludes my review of the financial offer. Ofer, back to you.

Thank you, Hani. To summarize, the third quarter was defined by consistent execution and strategic progress across our programs and operations, clinical advancements with EscharEx, commercial expansion with NexoBrid and operational readiness for manufacturing infrastructure. With these accomplishment and a solid financial foundation, MediWound is well positioned for 2026. Operator?

[Operator Instructions] Our first question comes from Josh Jennings from TD Cowen.

Congrats on continued progress. Just two questions on EscharEx. Just first new peak sales assumption, I believe, in the U.S. of $830 million plus, that's up from prior assumptions. And I know you have a third-party working on this. Any help just thinking through what's changed just volumes in...

I'm sorry, Josh, am I the only 1 we can't hear you well.

I'm sorry, am I coming better now?

Yes.

Congrats on the continued progress. I have two questions on EscharEx. Just first on the -- just new U.S., I think peak sales estimate $830 million range, up from $725 million. Can you just share any more details just in terms of some of the assumptions that are baked in there? And any pricing changes or, I guess, just volumes or patient opportunity assumption deltas from the prior calculation?

Yes. So Josh, really good to speak to you. Barry, can you address that?

Yes. Josh, thanks for the question. So this analysis that we did was more market access focused. So the respondents skewed more towards payers than they did health care providers as opposed to the previous assessment that we did. Because of that, the focus was really specifically on pricing. So nothing changes with regard to the number of patients, the adoption rates, none of that changes in the model, it all remains the same. The only thing is the pricing. And really, what we focused on was incremental pricing that we would be able to take relative to HEOR benefits. So in the initial assessment that we did where we landed at $725 million for revenues. The price that we used was the baseline price, which was a 15% increase over SANTYL. And we had heard that previously. We had heard it in -- and we heard it in this most recent market research as well that, that base case without any HEOR benefits of 15% over SANTYL would stand when we add in the HEOR benefits, however, it changes a bit. And what we found is that the max could go up to as much as 50% over the price of SANTYL, and this is the price of the total cost of therapy per patient. And what we've done is basically taken what we considered to be a conservative kind of slice of it, somewhere between the base case and the top case. And when we put that into the model, it yields this $831 million of peak sales.

Understood. And the DFU study looking to kick off enrollment in the second half of next year. You mentioned over some constructive feedback from the FDA. And anything to share just on any design -- trial design updates? And then will the same centers that are enrolling the VLU study be investigator sites for the DFU study?

Yes. So let me address that. So we are not -- the easy part is that we are not addressing the same centers. We are working on centers that are specializing with VLU and there are centers for the few that are looking at different ones. As for the protocol, as I said in my prepared remarks, we are waiting for EMA feedback with the scientific advice and we will ultimately ensure alignment in both regulators as we finalize the study design. We expect it to happen in weeks. And therefore, we will be able to update about that in the next call.

And our next question comes from RK from H.C. Wainright.

This is RK from H.C. Wainwright. So I'll go back to the question Josh asked a minute ago, but a little bit different nuance. So of that $830 million that you're projecting now, just trying to understand the breakdown between DFU and VLU opportunities, so that we and the market understand what and how much weightage you're giving to each of these 2 indications. Then I have a couple more questions.

So Barry, maybe you will start with that and let's see what RK has to ask.

Sure. RK, there are more diabetic foot ulcers than there are venous leg ulcers. But the reason why we're doing venous leg ulcers was first is, frankly, because of the pain issue. They're very, very painful, and it makes it so that there are less likely to be debrided with surgical debridement. And so our alternative provides a really good solution. We do believe even though DFUs could be debrided with surgical debridement and they more often than not have peripheral neuropathy and so the pain is not an issue that because SRx reduces the time to complete debridement dramatically versus the enzymatic debridement that's in the market right now that there will be share gain there as well. I think if you look at the split with the puts and the takes, it comes out to roughly even with a little bit of an advantage -- a little bit of a weighting on the venous leg ulcer side.

Then Ofer in your remarks, at least the way I understood your commentary on the RFP with BARDA looks like you almost met with success or it has been successful. Is that true? And then now I understand the U.S. government has not been helpful having to have the shutdown. But is there any indication as to how soon this could start for you folks? And then the last question for me is on the CPT code itself. Any nuances you can give us about how not having a CPT code, is it impacting any adoption at all? Or this just adds more help once you get that -- get the CPT code on board.

Let me break down the answer into two parts. I will start with BARDA and Barry will speak on the code. So in BARDA, I'll tell you the maximum that I'm allowed to share. So as you all know that in August 2025, BARDA issued an RFP covering stockpiling, room temperature stable formulation and trauma blast injury solutions. We were ready to start the program on October 1. It's a program that is supposed to extend for up to 10 years. Vericel holds the commercial rights of NexoBrid in the United States. So they are leading the effort in the United States, and MediWound is providing a full support for that. Now when the shutdown ends, we expect BARDA to resume the normal operations and move forward with the planned development and procurement activities. Other than that, I cannot tell you a time, hopefully very soon. And Barry, you want to speak about the

Yes. From a CPT code perspective, RK. I guess, first, let me preface just by saying that Vericel, while they mentioned the fact that, a, they have a temporary CPT code that went into effect, I think it was July 1 and that based on the utilization that they're having, which has been strong, they believe that they'll able to in 2026, apply for a permanent CPT code that would then be activated in 2027, if all goes well. They haven't really talked about what those benefits are and provided those nuances that you're looking for. So these are just our thoughts on it, how those could be helpful. And I guess what I would say is, generally speaking, we all know that these procedures are done in-patient, which is through the DRG. But CPT codes do help in a couple of different areas, really about providing legitimacy. One is, it provides legitimacy nationally, at the national level, which can drive physician adoption. And what I mean by legitimacy, it provides those CPT codes provide a standardized language for the procedure, it helps with internal approval pathways, conventional frameworks and also just with workflow legitimacy, all of that, this legitimacy physician acceptance. And so when the physicians are more confident that they could do a procedure and that it's going to have the right coding associated with it, it could increase patient use, again, even though the payment mechanism is DRG based.

Secondly, it drives institutional acceptance. So having these CPT codes in place -- I mean, without them, institutions might hesitate to put on contract to any new technologies. And so they're helpful, having them in place with the P&T committees, the value analysis, ERM pathway creation. And so having the CPT codes just makes it easier for burn centers to approve NexoBrid. I know that Vericel talked about 60-plus burn centers, and there are around 100 of these sort of Grade A burn centers that they're targeting. So there's a little bit more to go. And maybe as they get a permanent CPT code, it will just make things easier to get the laggards on board and have NexoBrid on contract. So that's the way that we see it as they've got a temporary but a more permanent CPT code just adds to that legitimacy and would help drive both physician adoption and institutional acceptance.

Our next question comes from Jeff Jones from Oppenheimer.

A couple from us. Is -- can you provide any additional visibility on the breakdown of the $5.4 million in revenue? You noted increased margin based on Vericel sales, I assume, but just the breakdown between product services and revenues.

Jeff, thank you for the question. So in the third quarter, we only gave the press release with the condensed numbers of P&L. We do not give a full financial statement. Only in the second quarter and of course, at the end of the year. So I cannot tell you more than that. But anyway, I can tell you that the gross margin is a much -- as you know, the gross margin this quarter was around 20%. It was up from 12% last year. This improvement is reflecting a more favorable change in our revenue mix. And in any way, our gross margin also affected by a mix of revenue from product sales and the R&D services. And we accept that our gross margin to move, as you know, gradually towards the 25% in full capacity.

Appreciate that, Hani. Two additional questions. Just on the U.S. government contract discussions, with BARDA, obviously, that is with Vericel. Just for clarity, the BARDA contract hasn't been awarded correct, the second quarter...

Yes. There was an RFP for 10-year contract covering stockpiling, home temperature, stable formulations and trauma blast injury solutions. Vericel disclosed in their previous earnings call, they submitted a proposal to the U.S. government, and we are waiting for the contract to be signed.

Great and look forward to finding out about base options and sort of period of work there. Just any update on the commercialization plans and expansion into Europe?

So currently, as you know, we are capped by our ability to manufacture. We have much more demand that we can basically manufacture and ship towards the territories. Having said that, we expect that by year-end 2025, our manufacturing facility will be fully, fully operational, and we can start actually manufacturing for the market. As the demand is extremely higher, we believe that after that, we can disclose our commercial plans for that. .

[Operator Instructions] Our next question comes from Michael Okunewitch from Maxim Group.

I guess to start off, I just wanted to follow up on some of the previous questions around the pricing and the new health economic analysis. And in particular, what endpoints are most relevant to the health economic benefit? And then are there any specific thresholds in the Phase III that we should look to that could justify that upside pricing?

Michael, thank you for joining the call. I see that Barry wants to answer that. Right, Barry?

Yes. That's a great couple of questions there. So let me do the best I can to answer. The -- basically, all the HEOR that we've looked at in this assessment or that, frankly, the payers guided us to really think about, is this benefit that will be associated with early wound closure. And so when you think about it, if you've got a wound that's open for 6 to 10 weeks longer, whatever the time frame is, there's all sorts of whether it's the nursing time, physician time, the product time and then all the risks that are associated with it, infection, hospitalization, anything else that needs to be done, any kind of corrective treatments that come up due to the wound not progressing well. So all of those costs bundled together represent some amount of savings. There's already a pretty good publicly available published information on what is considered to be the average cost per week of an open venous leg ulcer. And so between what we generate in our -- from our endpoint of early closure data that we generate because we will look to create our own set of data around the cost of an open leg ulcer. That in combination with what's already been published will drive this total amount. As far as the cap is concerned, I will say that consistent feedback that we got from payers is that the product that's -- the legacy product in the market right now, SANTYL, has taken a price increase very consistently. I don't know that it's been every year, but it's been somewhat consistently such that, for example, a 30-gram tube has gone from roughly, again, an estimate around $100 for a 30-gram tube to around $300 over the course of the last 10-plus years. And so there was some feedback that there would be a cap at this roughly 50% premium over SANTYL even though that additional amount might only be a small portion of the actual HEOR benefits that are derived. So that's how we're modeling it. And again, what I said earlier is we're taking a conservative approach to that even. And for our own modeling in this number that we've pushed out at 831, it really isn't that top price. It's a price that's in between that top price of 50% premium over SANTYL and the 15% premium over SANTYL.

And then just one more for me and I'll hop back into the queue. Just in light of the recent updates to your market research, I want to ask a bit of an opposite question. We all on this call know the significant benefits that would draw converts over to EscharEx. But what are the factors that would lead people to -- or lead physicians to opt for other methods like sharper autolytic, I'm trying to understand if there are any hard limits for EscharEx in this setting beyond that 22.3% conversion estimate that you use?

So Barry take this as well.

Yes. Yes, thanks. Listen, I think that there are still going to be situations, in particular, as one mentioned early, due to peripheral neuropathy in the diabetic foot ulcer segment where it just might be easier for physicians to clean up a wound once or twice with a knife as opposed to several days of drug application. So on the sharp side, it is the standard of care now. We do estimate taking around 10% and of that of the utilization from sharp debridement, but there's still going to be a market for sharp debridement. This is not as one-to-one analogous as NexoBrid is in -- with burns where it can completely obviate the need for surgery. This is a little more soft in the chronic wound space. And so again, that's why I say we estimate around 10% on the sharp side. On the autolytic side, it's just -- autolytic debridement is so much less expensive than it depends on the setting, the case situation, the patient's insurance. There's still going to be a market for autolytic debridement. Again, we believe that we're going to take a significant share from current autolytic debridement. Right now, the legacy product relative to autolytic debridement, you can look it up in the published literature, whether there's an advantage or not, but there's certainly a significant pricing differential. We believe on that sort of ratio of price per clinical efficacy that we're going to hit a sweet spot and that it's going to encourage much more widespread adoption. But there'll be a market for autolytic.

I really appreciate the additional insights. Once again, congrats on all the progress this quarter.

And ladies and gentlemen, with that, we'll be ending today's question-and-answer session. I'd like to turn the floor back over to Ofer Gonen for closing remarks. .

So thank you, everyone, for joining us today, and we look forward to updating you again on our next quarterly call.

And with that, ladies and gentlemen, we'll be concluding today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.