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Edited Transcript of MDWD earnings conference call or presentation 13-Aug-19 12:30pm GMT

Q2 2019 Mediwound Ltd Earnings Call

Yavne Aug 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Mediwound Ltd earnings conference call or presentation Tuesday, August 13, 2019 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Boaz Gur-Lavie

MediWound Ltd. - CFO

* Sharon Malka

MediWound Ltd. - CEO

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Conference Call Participants

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* Anthony Charles Petrone

Jefferies LLC, Research Division - Equity Analyst

* Bryan C. Bergin

Cowen and Company, LLC, Research Division - Director

* Kevin Michael DeGeeter

Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst

* Sameer Singh Sandhu Kandola

Wells Fargo Securities, LLC, Research Division - Associate Analyst

* Swayampakula Ramakanth

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Monique Kosse

LifeSci Advisors, LLC - MD

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Second Quarter MediWound 2019 Conference Call. (Operator Instructions) As a remainder, this conference is being recorded.

I would now like to introduce your host for today's conference. Ms. Monique Kosse. You may begin.

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Monique Kosse, LifeSci Advisors, LLC - MD [2]

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Thank you, Catherine, and good morning, everyone. Earlier today, MediWound issued a press release announcing its financial results and provided a business update for the second quarter of 2019. You may access that release on the website under the Investors tab.

With us today are Sharon Malka, Chief Executive Officer of MediWound; and Boaz Gur-Lavie, Chief Financial Officer of MediWound. Following management's prepared remarks, we will open the call for Q&A.

Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to 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.

Although the company believes that expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties that could differ materially from those forecasts due to the impact of many factors beyond the control of MediWound. The company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

Participants are directed to cautionary notes set forth in today's press release as well as the risk factors set forth in MediWound's annual report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. The conference call is the property of MediWound, and any recording or broadcast is expressly prohibited without the written consent of MediWound.

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

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Sharon Malka, MediWound Ltd. - CEO [3]

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Thank you, Monique, and good day, everyone. Thank you for joining us today on our second quarter earnings call. It is my pleasure to be here this morning and provide an overview of our recent accomplishments for our advanced programs, NexoBrid and EscharEx.

We had a very exciting start to this year, highlighted by several significant milestones related to NexoBrid, including robust Phase III results across all endpoints, a commercial agreement with Vericel, increased support from BARDA for the NexoBrid expanded access treatment protocol, NEXT, and a positive meeting with the FDA regarding our NexoBrid BLA submission plan.

We also launched last month our U.S. development plan for EscharEx, our topical biologic trial candidate for the debridement of chronic and hard-to-heal wounds, which we believe represent a significant commercial opportunity with existing commercial validation.

Let me now go into more details on each of our programs. Starting with NexoBrid, we were pleased to report earlier this year robust data from our pivotal Phase III DETECT study with NexoBrid to treat patients with deep partial and full thickness thermal burns. This study met its primary endpoint of complete eschar removal and all secondary endpoints, including reduction in the need for surgical eschar removal, earlier eschar removal and blood loss.

These robust results, which corroborate our previous positive EU Phase III clinical study results, demonstrated clear significant benefit for patients. And with this successful study, we were 2 for 2.

On the heels of this positive data, we entered into an exclusive license and supply agreement with Vericel Corporation to market NexoBrid in North America. We are working closely with our partner and are confident that Vericel is uniquely positioned to leverage the medical needs and to maximize the commercial potential of NexoBrid in North America.

As a result of this commercial license collaboration, we generated at peak revenues in the second quarter 2019 of $20.7 million, including the license [upon] payment.

We are very pleased to report that we recently held a pre-BLA meeting with the FDA, in which the agency accepted our BLA submission plan for NexoBrid. We were encouraged by the positive outcomes of this meeting ahead of our planned BLA filing in the second quarter of next year. We will provide further updates as this process progresses.

Also, during the quarter, BARDA committed an additional $21 million in support for NexoBrid development, primarily to fund the expanded access treatment protocol named NEXT, which we expect to initiate this quarter. The NexoBrid expanded access treatment protocol allows U.S. burn centers to treat patients with NexoBrid prior to BLA approval and to use NexoBrid in an undeclared emergency event.

With this protocol, we are able to increase the number of burn centers trained in the use of NexoBrid across the U.S., thereby furthering national preparedness for mass casualty burn incidents.

This is an extremely productive beneficial partnership which underscores BARDA's belief in the potential of our breakthrough therapy, NexoBrid, in treating severe burns and mass casualty preparedness.

Now with the FDA endorsement of our BLA submission plan, the continued ongoing support from BARDA and the commercial collaboration with Vericel, we are confident in our ability to bring NexoBrid to the U.S. market, where it has the potential to meaningfully impact patients' lives.

Moving to EscharEx, the primary focus of our strategy going forward, we were happy to have the opportunity to outline our EscharEx U.S. development plan at our Analyst Day held last month. EscharEx is an advanced biological formulation designed for the outpatient setting, in line with the existing treatment workflows and reimbursement programs.

With specific advantages over other approaches, including higher potency at lower doses, which potentially leading to improved efficacy and tolerability, design for a once-a-day application, improved ease-of-use and strong IP and patent protection. All these attributes are expected to further support compliance of both patients and caregivers.

We are very excited about this program, and we'll be initiating an adaptive adequately controlled Phase II study in the fourth quarter of this year. This study will assess the safety and efficacy of EscharEx compared to current U.S. nonsurgical Standard of Care and placebo control with a preplanned interim assessment.

This approach will allow us ability to demonstrate efficacy, safety and clinical benefits over both placebo and Standard of Care as required by the FDA, ability to address market needs and other stakeholders' interests, such as payers and healthcare professionals and a head-to-head comparison of EscharEx with the current U.S. nonsurgical Standard of Care, including the current available enzymatic debridement.

Most importantly, if successful, it provides the ability to have a data-driven discussion with the FDA that this study will be considered as 1 of the 2 pivotal studies required for BLA submission.

This study will be a multi-centered, prospective, randomized, adequately controlled, assessor blinded study to evaluate the safety and efficacy of EscharEx in debridement of venous leg ulcers in about 25 clinical sites, primarily in the U.S.

The study will enroll 174 patients randomized to either EscharEx arm, Gel Vehicle placebo arm or nonsurgical Standard of Care arm, which includes either SANTYL or hydrogel, at a ratio of 1:1:1 with a 3 months follow-up. This study includes a preplanned interim assessment for futility and sample size adjustment once the trial has achieved about 50% of the patients enrolled and treated, which we plan by year-end 2020.

We have obtained FDA concurrence that incidents of complete debridement versus the Gel Vehicle will be the primary endpoint of this pivotal program; and incidents and time to achieve wound closure will be assessed as a safety measurement.

In addition, FDA recommended that additional clinical measures will be collected to demonstrate the clinical benefit of EscharEx. Hence, secondary endpoints will include reduction of pain, time to achieve complete debridement, reduction of wound area, granulation tissue and quality of life, and will be compared with both Gel Vehicle placebo and Standard of Care.

Additionally, we have worked to derisk EscharEx development.

EscharEx contains the same API as NexoBrid and benefits from the wealth of existing development data on NexoBrid. We obtained FDA concurrence that the EscharEx toxicology package supports its intended clinical use, and the manufacturing processes and controls were reviewed and accepted by the FDA. Study preparations are ongoing, and we expect to initiate the study in the fourth quarter of this year following IRB's approval.

We continue to be enthusiastic about the commercial opportunity for EscharEx, driven by the significant market potential, the long-standing unmet medical need and the solid demand for enzymatic debridement agents, which provides commercial validation. We believe physicians will find EscharEx to be more effective and offer a shorter debridement period then the products that exist in the market today. Hence, EscharEx has the potential to achieve substantial market share with a meaningful impact on wound care treatment.

We held an Analyst Day last month in New York City, where we did a deep dive into the development plan, potential market of EscharEx and the medical need for our therapy. We encourage everyone to listen to the webcast of this event, which is available on our website.

In summary, we are very excited and look forward to several meaningful milestones in the coming quarters.

We have 2 significant assets: one is NexoBrid, with a clear regulatory pathway for a BLA submission and a commercial partnership in the U.S.; and the other is EscharEx, with significant market potential and a clear development path.

Finally, I would like to welcome aboard our CFO, Boaz Gur-Lavie, who joined us this quarter. He is a very skilled and experienced executive, and has been an asset to our team.

It is my pleasure to now turn the call over to Boaz for a summary of our financial this quarter. Boaz?

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Boaz Gur-Lavie, MediWound Ltd. - CFO [4]

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Thank you, Sharon, and thank you for those kind words. It is my pleasure and privilege to join the team, and I'm very excited about the clinical and commercial opportunities in front of MediWound.

Turning now to our financial results. The financial results for the second quarter were significantly driven by the license agreement with Vericel and the revenue recognition of the multiple elements of this deal.

As a result, in addition to revenues from sales of products, we will now recognize revenues from 2 additional elements: one, revenues from development services provided to Vericel in accordance with the BARDA agreement; and second, revenues from license agreements in consideration for license rights, which include upfront payments, milestone payments and future royalty payments.

We had peak revenues in the second quarter 2019 with $20.7 million compared with $1 million in the second quarter of 2018. The revenues include $17.5 million upfront license payment and $2.3 million from development services derived by various licensing agreements for NexoBrid.

Gross profit during the quarter was $17.3 million compared to a gross profit of $0.4 million for the second quarter of 2018. The gross profit in the second quarter was comprised of $0.3 million from sales of products, $0.1 million from development services and $16.9 million from license agreements, primarily driven by the upfront payments.

Research and development expenses net of participation were $0.2 million for the second quarter of 2019 compared with $1.5 million over the second quarter of 2019.

The decrease in research and development costs net was a result of decrease in clinical trials cost of $3.1 million and a decrease of $1.7 million in participation by BARDA and the Israeli Innovation Authority grant.

Selling, general and administrative expenses in the second quarter were $2.3 million compared to $2.1 million in the same period of last year.

Operating profit for the second quarter of 2019, which includes the $17.5 million upfront license payment, net of royalty payment of $0.7 million and $0.8 million of other expenses, were $13.9 million. Excluding the upfront license payment net of deal-related expenses, operating loss for the second quarter was $2.1 million, an improvement of 37% from the $3.3 million in the second quarter of 2018. The improvement was primarily due to the decrease in research and development costs net of participation.

The company net profit for the second quarter of 2019, which includes the $17.5 million upfront license payment and related costs of $0.7 million for royalty payments and $0.8 million for other expenses, was $12.7 million or $0.47 per share. Excluding the upfront license payment net of deal-related costs, net loss for the second quarter was $3.3 million or $0.12 per share compared with a net loss of $4.2 million or $0.15 per share in the second quarter of 2018.

Adjusted EBITDA for the second quarter was a profit of $15.4 million compared with a loss of $2.9 million for the prior-year period. A reconciliation of adjusted EBITDA to GAAP net income is included in the press release we filed with the SEC earlier this morning.

Looking now at the 6-month result versus prior year, revenues for the 6 months of 2019 were $21.2 million compared with $1.6 million in the first half of 2018. Revenues were primarily driven by the $17.5 million upfront payment and $2.3 million revenues from development services derived by Vericel licensing agreement for NexoBrid.

Operating profit for the first half of 2019, which includes a $17.5 million upfront license payment and $1.6 million of deal-related expenses, was $10.4 million. Excluding the upfront license payment net, operating loss for the first half of 2019 was $5.5 million, an improvement of 21% from the $7 million in the first half of 2018. The improvement was primarily due to the increase in research -- sorry, decrease in research and development costs net of participation.

The company net profit for the first half of 2019, which includes a $17.5 million upfront license payment, net of royalty payment of $0.7 million and $0.9 million of other expenses, was $8.6 million or a profit of $0.32 per share.

Excluding the upfront license payment net of deal-related costs, net loss was $7.3 million or $0.27 per share compared with a net loss of $8.7 million or $0.32 per share in the first half of 2018.

Turning now to our balance sheet. As of June 30, 2019, the company had cash, cash equivalents and bank deposits of $38.7 million compared with $23.6 million as of December 31, 2018, utilizing about $6.4 million in cash during the first half of 2019. We expect cash used for ongoing operating activities in the second quarter -- in the second half of 2019 to be in the range of $6 million to $8 million, including NexoBrid license-related payments and repayment of contingent liabilities.

Looking ahead, we believe that the existing cash, combined with the profit generated from the collaboration with Vericel, will provide us sufficient funds, enabling us to significantly advance the ongoing development of EscharEx through BLA filing when NexoBrid becomes a self-funded product, as its research and development programs are funded by BARDA.

I will now turn the call back over to Sharon. Sharon?

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Sharon Malka, MediWound Ltd. - CEO [5]

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Thank you, Boaz. Looking ahead, after a very active period for us, we anticipate to initiate the next treatment protocol soon, initiate a U.S. Phase II trial for EscharEx in the fourth quarter of 2019 and file a BLA for NexoBrid in the second quarter of 2020. We also will continue executing and advancing our programs forward as we continue to generate value for our shareholders.

With that, it is now my pleasure to open the call for Q&A. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Anthony Petrone with Jefferies.

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Anthony Charles Petrone, Jefferies LLC, Research Division - Equity Analyst [2]

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Congratulations on all the progress. One on NexoBrid and one on EscharEx. On NexoBrid, can you give us just timing on the additional funding from BARDA? What are the triggers for that -- timing around that? And specifically in the development, what were those funds be allocated toward? And then on EscharEx, can you -- Sharon, you mentioned end of 2020, there'll be an interim analysis on that study for futility purposes. Is it also possible if the safety and efficacy signals strong that study could potentially be accelerated?

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Sharon Malka, MediWound Ltd. - CEO [3]

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Okay. Thank you for the questions, Anthony. So let me start with NexoBrid. So we were awarded in this quarter a modified contract with BARDA providing us with additional -- with committed additional $21 million, and this to support additional activities, including the following ones: additional activities regarding the regulatory submission of this BLA; second is potential activities that will be required during the review process of the BLA; and third, which is the primary activity, is the funding for the NexoBrid expanded access treatment protocol, NEXT, in the U.S. This is regarding to the NexoBrid.

Regarding to your question, regarding the EscharEx clinical trial, so we will have an interim assessment for futility analysis and sample size adjustment after about 50% of the patients will be recruited. This will enable us 1 of the 3 scenarios. One scenario can be to stop the study. The second scenario can be to adjust the sample size in order to win the study. And the third scenario can be to complete the study with the original sample size. This sample size adjustment or interim assessment will provide us with a notion about the successful or the probability of success of this study going forward.

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Anthony Charles Petrone, Jefferies LLC, Research Division - Equity Analyst [4]

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That's helpful. And then just when we look at EscharEx, even with the interim analysis, just a rough, high-level estimate on timing, so if we kind of follow it along is 2022 a reasonable assumption for a potential U.S. launch? Or will that go into 2023?

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Sharon Malka, MediWound Ltd. - CEO [5]

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So I mentioned during the call, we expect to commence a Phase II study in the fourth quarter of this year, with an interim assessment conduct by year-end 2020, assuming that this study will end towards the end of 2021. As you know, we will require to do 2 pivotal studies for registration, so subject to the results of this study, anticipate to discuss with the FDA. And if this study will be successful, we will ask the FDA that this study will be 1 of the 2 pivotal studies made to be acquired to have an additional Phase III study and submit a BLA.

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Operator [6]

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Our next question comes from Josh Jennings with Cowen.

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Bryan C. Bergin, Cowen and Company, LLC, Research Division - Director [7]

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This is Bryan in for Josh. Will you still file the NexoBrid BLA with the acute results from DETECT? Or will the submission include the 1 year results? I'm trying to understand the revised timing versus the prior expectations of a fourth quarter submission?

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Sharon Malka, MediWound Ltd. - CEO [8]

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Okay. So basically, we held the pre-BLA meeting at the end of July, and we'll resume formation as soon as we get the formal minutes of this meeting. On the high level, we can say that we got a positive outcome of this meeting regarding the 12-months data since this 12-months data is soon be available. So we believe that the best strategy is to provide or to submit the BLA together with the 12-months data, which provide us with a better assessment by the FDA, and this is part of the new time line.

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Bryan C. Bergin, Cowen and Company, LLC, Research Division - Director [9]

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Okay, makes sense. And will you release the 1-year results publicly before the BLA submission?

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Sharon Malka, MediWound Ltd. - CEO [10]

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I assume we will announce the 12-months data ahead of the BLA submission and communicate it to the space.

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Bryan C. Bergin, Cowen and Company, LLC, Research Division - Director [11]

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Okay. And then lastly, does the creation of the NEXT protocol change your expectation regarding the $16.5 million procurement commitment from BARDA in any way? And maybe if could you just state plainly, what are your latest expectations for procurement in the second half of this year or next year?

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Sharon Malka, MediWound Ltd. - CEO [12]

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Thank you. So basically, from our end and from BARDA, a discussion that we have, the NEXT study provides BARDA another trigger to initiate the procurement. Because currently, they have the FDA eligibility to use the product, NexoBrid, in case of mass casualty events. So it's another trigger to procure the product before BLA approval.

Regarding expectation, so our current expectation is that BARDA will initiate the procurement in this year toward the fourth quarter of this year, the majority of which will be next year, and the balance, if any, will be in 2021.

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Operator [13]

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And our next question comes from Kevin DeGeeter with Oppenheimer.

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Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [14]

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First question for me, can you just comment with regard to the expanded access funding through BARDA? Are there any restrictions on what type of condition or site that capital can be allocated to? And operationally, can you just remind me, who is the primary driver of the interaction with the clinical sites under that structure at the moment? Is it primarily representatives of Vericel or MediWound?

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Sharon Malka, MediWound Ltd. - CEO [15]

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Thank you, Kevin. So I will refer first to the NEXT study. The NEXT study base provides us with the opportunity to treat up to 150 patients in accordance with the protocol approved by the FDA in about 30 burn centers across the U.S. We'll -- of course, we'll start with a size that already has hands-on experience and participated in either the DETECT study or the pediatric study and expand it to additional burn centers going forward. So this regard the protocol itself.

As to the control of this study, so this study is conducted under the BARDA agreement. Currently, the BARDA agreements are conducted and managed by MediWound with the oversight of Vericel. Vericel, as part of the collaboration agreement, assumes all the U.S. rights and effective control for the U.S. development and commercialization. But currently, we are conducting the development. We are managing the development in the clinical sites with the oversight of the -- of Vericel team. And with the collaboration of the Vericel team. We enjoy a lot of experienced and a track record of the Vericel team, which are joined together with our experienced team.

We've been together with Vericel team and with the BARDA team at the FDA pre-BLA meeting, and we worked together to submit this BLA and to have it successfully approved. And we are the sponsors of all clinical studies, the NEXT study, the DETECT study, which still has follow-up until 24 months follow-up, and the pediatric study.

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Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [16]

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Great. That's extremely helpful. And the just maybe one more for me, and it is a housekeeping item, and that is, if we think about from a financial modeling standpoint, participation from BARDA kind of as a percentage of R&D spending obviously moves around quarter-to-quarter, but it's sort of been 60%, 70% of kind of that gross R&D line for the last several quarters. At least by our thinking, that sort of contribution should evolve over the next kind of, call it, 2 to 4 quarters. Can you just provide us from a modeling perspective some way to think about sort of the magnitude of the contribution from BARDA in the context of kind of an aggregate R&D budget, including more spending on EscharEx?

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Sharon Malka, MediWound Ltd. - CEO [17]

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Thank you for the question. So first of all, the -- all NexoBrid development programs are fully funded by BARDA. We have 2 contracts with BARDA: one is the thermal burns contract and the second one is burns caused by sulfur mustard gas; chemical burns basically. And we have an overall support of up to $87 million for the development.

To date, we got already around $34 million out of which. And the way to look at it is not as a percentage of the overall R&D expenses, but rather a full coverage or reimbursement of all the NexoBrid development, while the R&D net primarily is as a result of the EscharEx development and our third product, 003. One thing I want to highlight that starting from this quarter, and as a result of the Vericel deal, the reimbursement from BARDA, which was still now classified as a participation by BARDA as a net R&D expenses, now going forward will be classified as revenues from development services that we are providing, with the cost of revenues and the net of the fee that we get from BARDA is part of our gross margin now.

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Operator [18]

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(Operator Instructions) And our next question comes from Sameer Kandola with Wells Fargo.

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Sameer Singh Sandhu Kandola, Wells Fargo Securities, LLC, Research Division - Associate Analyst [19]

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Can you just remind us on the logic behind the deal with Vericel? Why did you choose them? And what do you think investors are misunderstanding about their agreement, if anything?

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Sharon Malka, MediWound Ltd. - CEO [20]

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Thanks, Sameer. So we explored more options during the strategic process we held last year until May this year. We believe that EscharEx could generate more value for shareholders and by -- or through the commercial partnership for NexoBrid. And monetizing NexoBrid, we believe that, in addition to the fact that we find an ideal partner to maximize the potential market or the potential in the U.S. market, we got the proceeds that enable us to progress and advance the development of EscharEx going forward, generating more value with EscharEx, which is the primary asset of MediWound, and we are confident we can replicate later on with EscharEx, which is a much larger potential opportunity.

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Sameer Singh Sandhu Kandola, Wells Fargo Securities, LLC, Research Division - Associate Analyst [21]

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And do you think something's being misunderstood or no?

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Sharon Malka, MediWound Ltd. - CEO [22]

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I don't know to point out exactly. But I believe, as you are well familiar with The Street, which is basically, it's part of the expectation. So we shared all during the process that we are considering all structures, all different structures, and we are discussing several alternatives. At that time, we found that the best alternative going forward for MediWound is to monetize the most advanced or the late advanced development asset, NexoBrid, while keep EscharEx and develop it to the next stage, and then consider monetizing EscharEx in different structures going forward.

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Operator [23]

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And our next question comes from Swayampakula Ramakanth from H.C. Wainwright.

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Swayampakula Ramakanth, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [24]

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This is RK from H.C. Wainwright. A couple of quick questions. When thinking about the EscharEx 2 product, you stated that you're starting the trial later this year and, potentially, there's going to be an interim look at the end of 2020. From -- I'm just trying to understand, do you need to wait for that study to complete before you start the second? Sorry, if it just -- because I just heard you required 2 studies to file the BLA. I'm just trying to understand the timing of these 2 studies. Or can you start the second study as you get an interim look and get a feel for how that first study is going?

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Sharon Malka, MediWound Ltd. - CEO [25]

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Thanks for the question. Because we are data-driven, so it's all about the data we will generate in the interim assessment with the limitation of interim assessment. If the data will be supported, we can start planning and preparing for the next study -- the next pivotal study.

If we will be required to have because the data will not support the planning, so we will have to wait until the end of the study. But anyway, it seems that in terms of planning or to save part of the time between this study to the next, we'll be -- we will try to minimize the period between this study and the next study by preparing, by having the same CRO, by using the same clinical sites active in the first study to leverage all those infrastructures going forward to the next one.

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Swayampakula Ramakanth, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [26]

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And then regarding the NEXT protocol, how does that protocol help Vericel and yourselves in trying to commercialize NexoBrid? And will any of that data need to be submitted to the FDA at any point?

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Sharon Malka, MediWound Ltd. - CEO [27]

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So the NEXT protocol is an open arm -- single arm protocol. It's a treatment protocol in accordance with the treatment program of the FDA, which was approved by the FDA. And again, this NexoBrid expanded access treatment protocol allows U.S. burn centers to treat patients with NexoBrid prior to BLA approval in accordance with this protocol as well as to use this protocol and use NexoBrid in an undeclared emergency event.

The contribution has several aspects. On one hand, there would be, at the end of this process, increased number of burn centers trained in the use of NexoBrid across the U.S., which furthering the national preparedness for mass casualty burn incidents. And this is the trigger from BARDA's standpoint and the FDA's standpoint.

From Vericel's standpoint, with this protocol running, we basically educate the market, generate hands-on experience with more and more potential customers. Because by the end of the day, the customers, the end users for NexoBrid are the same burn centers. So it's the ultimate prelaunch activity that anyone can foresee.

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Operator [28]

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And I'm showing no further question at this time. I'd like to turn the call back to management for any further remarks.

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Sharon Malka, MediWound Ltd. - CEO [29]

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Thank you. Thank you, everyone, for joining us today. We look forward to updating you again on our next quarterly update call. Thank you, and have a nice day.

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Operator [30]

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Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.