MediWound Ltd. (Nasdaq:MDWD), which has developed technology for treatment of burns and wounds, has announced the completion of pricing for a financing round on Nasdaq. It is believed that the company raised $22 million at $5 a share, reflected an 18% discount on yesterday's closing market price, before the announcement was made. Clal Biotechnology Industries Ltd. (TASE: CBI) has a 43% stake in MediWound.
Wells Fargo and Cowen and Co. underwrote the offering in the US, together with sub-underwriters Oppenheimer and Suntrust Robinson Humphrey. Rosario Capital led the offering for Israeli investors.
MediWound is already marketing its burn treatment product in Europe, but its revenue from this product amounts to only a few hundred thousand dollars a quarter. MediWound CEO Gal Cohen previously announced that increasing the company's sales depended mainly on insurance reimbursement for the product in all European countries, and on educating the market to use the product. He added that the combination of these two processes would take time.
In the second quarter of 2017, however, the company posted $687,000 in revenue, 91% more than in the corresponding quarter in 2016, despite a fall in marketing costs (with the launch phase receding into the past). In any case, the burns debridement market in which MediWound operates is not enormously large, amounting to several hundred million dollars in Europe.
In the US, where the product has not yet been approved for marketing, in June the company signed the second stage of an agreement with the Biomedical Advanced Research and Development Authority (BARDA), the US agency responsible for procurement for emergencies. BARDA will invest $22 million more in MediWound, on top of a previous $24 million commitment. BARDA also undertook to spend at least $16 million on buying the product after it is approved for marketing, and obtained an option to buy more of the product for $50 million under the agreement. The company will use the money invested by BARDA to pay for its trials of the product, obtain marketing approval for it in the US, and extend its marketing.
MediWound is pinning greater hopes on its product for treatment of chronic wounds, for which the market is significantly larger. This product successfully passed Phase II trials several weeks ago. A Phase III trial, likely to be the last before marketing of the product begins, is slated to begin next year. The company lost $4.5 million in the second quarter, and had $21 million as of the end of the second quarter.
Published by Globes [online], Israel Business News - www.globes-online.com - on September 19, 2017
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