MediWound expands US Defense Department agreement

Health Photo: Shutterstock ASAP Creative

The US Biomedical Advanced R&D Authority (BARDA) will inject $32 million more into developing the Israeli company's burns treatment.

MediWound Ltd. (Nasdaq:MDWD) has developed a product for treatment of burns that is already on the market in Europe, Israel, and Argentina, plus a product for treatment of hard-to-heal wounds that is in the advanced trial phases. The company has announced the expansion of its agreement with the US Department of Defense for continued development and purchase of its product for burns. MediWound's market cap is $152 million. The announcement came yesterday after trading, so its market cap has not yet been affected by the announcement. The share price of Clal Biotechnology Industries Ltd. (TASE: CBI), which holds 43% of MediWound's shares, today responded with a 3% rise on the Tel Aviv Stock Exchange (TASE).

Under the expanded agreement, the US Biomedical Advanced Research and Development Authority (BARDA), which is responsible for obtaining the necessary vaccines, drugs, therapies, and diagnostic tools for public health medical emergencies, will inject $32 million more into MediWound, without diluting its shareholders' holdings, for development of MediWound's burn product. The amount of BARDA's funding during the product's development, including options for purchasing the product, is now $132 million.

MediWound's products are designed for debridement of burns and hard-to-heal wounds - in other words, they removed the dead tissue. This process currently requires surgery as part of the treatment of the burn or wound. The product is produced from the pineapple plant. In the company's trials, it showed that use of the product removes 100% of the dead tissue with no harm to healthy tissue. The product is already being marketed in Europe, but the small size of the market and the difficulty in obtaining insurance reimbursement for the product, for which there is a substitute, are hampering sales, which totaled only $540,000 in the last quarter. The product is in advanced clinical trials in the US.

Under the revised agreement, BARDA is paying for all the trials necessary in order to obtain approval of the product in the US, plus the trial currently being conducted for treatment of burns in children. This trial is aimed in the first stage to obtain marketing approval for this target market in Europe and Israel, and later also in the US. MediWound founder and CMO Prof. Lior Rosenberg, a former chairman of the International Society for Burn Injuries disaster committee, said, " The current management of pediatric burns requires intensive medical therapy and typically several traumatic surgical procedures to remove eschar and prevent secondary complications. In addition, burn surgery in pediatric patients is more demanding than in adults for a variety of reasons and can become a major bottleneck in the management of a mass casualty event. In line with the trends in medicine, MediWound is aiming to replace the traumatic conventional treatments for burns."

Published by Globes [online], Israel Business News - www.globes-online.com - on July 20, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Health Photo: Shutterstock ASAP Creative
Health Photo: Shutterstock ASAP Creative
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