Executive Summary / Key Takeaways

• MediWound is poised for significant growth, driven by its proprietary enzymatic debridement technologies, NexoBrid for severe burns, and the late-stage EscharEx for chronic wounds.
• NexoBrid continues to expand globally, with strong U.S. adoption (52% year-over-year revenue growth in Q2 2025 from Vericel ) and new market approvals like Australia, backed by a six-fold manufacturing capacity expansion expected to be operational by year-end 2025.
• EscharEx, currently in a global Phase III trial for venous leg ulcers (VLU), demonstrates a strong clinical profile, with a post-hoc analysis confirming wound bed preparation as a critical healing predictor, positioning it favorably against competitors like SANTYL.
• The company's financial flexibility is supported by $32.9 million in cash as of June 30, 2025, and potential proceeds of up to $32 million from in-the-money warrants, providing runway for key clinical and operational milestones.
• Strategic collaborations with major wound care companies and significant non-dilutive funding from the U.S. government for NexoBrid's room temperature-stable formulation and a domestic manufacturing site underscore external validation and future growth avenues.

The Enzymatic Revolution in Tissue Repair

MediWound Ltd., founded in 2000 and headquartered in Yavne, Israel, stands at the forefront of biopharmaceutical innovation, specializing in enzymatic therapies for tissue repair and regeneration. The company's core strategy revolves around developing non-surgical solutions that offer superior efficacy and patient outcomes in critical areas like severe burns and chronic wounds. This approach leverages a unique technological platform that differentiates MediWound from traditional wound care providers and positions it as a challenger in a market dominated by larger, more diversified players.

The wound care industry is a dynamic landscape, with a constant drive for more effective and less invasive treatments. Broad industry trends, such as the increasing prevalence of chronic diseases like diabetes and an aging global population, fuel the demand for advanced wound care solutions. MediWound's enzymatic technology, which selectively removes non-viable tissue while preserving healthy dermis, represents a significant leap forward. This precision is a key differentiator, offering tangible benefits over conventional methods like surgical debridement or less selective enzymatic agents. For instance, in venous leg ulcers, EscharEx has demonstrated superiority over SANTYL in key endpoints, including faster debridement, enhanced granulation tissue formation, and improved wound closure. This translates into quicker wound bed preparation, a critical factor for healing, as evidenced by a Phase II post-hoc analysis showing wounds that achieved preparation were four times more likely to close (p-value 0.0004).

NexoBrid: A Lifesaving Solution for Severe Burns

NexoBrid, MediWound's flagship product, is an FDA-approved biologic for the enzymatic removal of eschar in deep partial- and full-thickness thermal burns, now indicated for both adult and pediatric patients. Its impact extends beyond routine care, proving vital in mass casualty incidents, as demonstrated during the Israel-Hamas War where it treated blast injuries and complex burns. This real-world efficacy led the World Health Organization (WHO) to designate enzymatic debridement as an essential treatment for burn injuries in mass casualty guidelines, reinforcing NexoBrid's crucial role in global emergency preparedness.

The commercial trajectory of NexoBrid reflects its growing recognition. In the U.S., commercial partner Vericel (VCEL) reported a robust 52% year-over-year revenue growth in the second quarter of 2025, driven by increased hospital unit orders and expanding adoption across burn centers. Japan has also seen remarkable adoption, with over 400 medical facilities utilizing NexoBrid. This global demand, however, has consistently outstripped MediWound's current manufacturing capacity, with the company reporting zero inventory and all manufactured product immediately sold. To address this, MediWound's new state-of-the-art GMP manufacturing facility is on track for completion by year-end 2025, promising a six-fold increase in output. Regulatory approvals from the EMA are anticipated in the first half of 2026, followed by FDA approval in the second half of 2026, which will unlock significant revenue growth.

Beyond current sales, NexoBrid's future is bolstered by strategic government interest. The U.S. Department of Defense has awarded an additional $3.6 million in non-dilutive funding, bringing total program funding to $18.2 million, to support the development of a room temperature-stable formulation for battlefield use. Furthermore, the U.S. government, recognizing the strategic importance of domestic supply, is funding the planning and site selection for a U.S.-based manufacturing facility, a project fully supported by BARDA. This initiative, while a longer-term endeavor not impacting revenue guidance before 2027-2028, ensures supply chain resilience and offers additional capacity for NexoBrid and potentially other products like EscharEx.

EscharEx: Targeting the Chronic Wound Epidemic

EscharEx represents MediWound's significant foray into the chronic wound market, a segment with an estimated peak sales potential of $725 million for its primary indications in venous leg ulcers (VLU) and diabetic foot ulcers (DFU). The therapy shares the same active pharmaceutical ingredient as NexoBrid, leveraging proven enzymatic debridement principles. The global Phase III VALUE study for VLU is actively enrolling 216 patients across 40 sites in the U.S. and Europe, with an interim assessment expected by mid-2026. This trial is strategically derisked, building on strong Phase II results and incorporating a larger patient population and standardized protocols to maximize success.

MediWound has forged critical collaborations for EscharEx, partnering with industry leaders like Solventum (SOLV), Mölnlycke, Kerecis, Essity (ESSYY), and Convatec . These partnerships, providing advanced wound care products and training, aim to standardize treatment protocols and demonstrate EscharEx's universal applicability with various supportive products. This broad validation within the wound care ecosystem is crucial for market acceptance. A planned 45-patient randomized Phase II head-to-head study against collagenase (SANTYL in the U.S. and IRUXOL in Europe), launching in the second half of 2025, will generate critical comparative data to inform market access and pricing strategies, with results expected before the Phase III completion. The DFU program has also seen accelerated development, benefiting from €16.25 million in funding from the European Innovation Council, with a Phase II/III study slated for the second half of 2026, pending regulatory alignment.

Financial Performance and Liquidity

MediWound's financial performance in the first half of 2025 reflects a company in a significant investment phase, balancing current revenue generation with substantial R&D for future growth. Total revenue for the second quarter of 2025 reached $5.7 million, marking a 43% sequential increase and a year-over-year rise from $5.1 million in Q2 2024. This growth was driven by higher product sales and a more favorable revenue mix. Gross profit improved significantly to $1.3 million (23.5% of revenue) in Q2 2025, up from $0.4 million (8.8%) in the prior year, also due to a favorable revenue mix.

However, the company's investment in its pipeline is evident in its R&D expenses, which rose to $3.5 million in Q2 2025 from $1.9 million in Q2 2024, primarily due to the EscharEx VALUE Phase III study. SG&A expenses also increased to $3.6 million from $3 million, mainly due to higher share-based compensation. These investments led to an operating loss of $5.7 million in Q2 2025, compared to $4.5 million in Q2 2024. The net loss for Q2 2025 was $13.3 million, or $1.23 per share, significantly impacted by $6.6 million in noncash financial expenses from warrant revaluation. For the first half of 2025, total revenue was $9.7 million, a slight decrease from $10 million in H1 2024, attributed to lower BARDA-funded development revenue as the NexoBrid R&D program nears completion.

Despite these losses, MediWound maintains a solid liquidity position. As of June 30, 2025, the company held $32.9 million in cash, cash equivalents, and deposits. Operations consumed $11.9 million in the first half of 2025, including $2.3 million in capital expenditures for the new manufacturing facility.

Critically, outstanding Series A warrants, exercisable through November 2026 at $13.47 per share, could provide up to $32 million in additional proceeds. Management believes this, combined with current cash, provides the financial flexibility to fund key programs through upcoming milestones. Insider purchases of 11,200 ordinary shares by the Chairman and CEO in August 2025 at an average price of $17.74 per share further signal confidence in the company's prospects.

Competitive Landscape and Strategic Positioning

MediWound operates in a competitive biopharmaceutical landscape, facing both direct and indirect rivals. Direct competitors include established players like Smith & Nephew (SNN), Convatec (CNVTY), Integra LifeSciences (IART), and Johnson & Johnson (JNJ), all with significant presence in wound care and tissue repair. While these larger entities benefit from broader market positioning, economies of scale, and diversified portfolios, MediWound differentiates itself through its specialized, enzyme-based bio-therapeutic technology.

MediWound's proprietary enzymatic debridement offers a distinct advantage, providing targeted efficacy that can lead to faster treatment times and improved patient outcomes compared to broader wound care portfolios. This technological edge is a key competitive moat, allowing MediWound to command pricing power in its niche markets. For instance, the new Medicare LCD policy, effective April 13, 2025, requiring proper wound debridement before cellular- and tissue-based product coverage, is a "huge win" for EscharEx, as it excels in wound bed preparation. This policy also aims to "clean up the pricing loophole" for CTPs, favoring products with strong clinical evidence and efficient debridement, where EscharEx is positioned to thrive.

However, MediWound's smaller scale presents vulnerabilities, potentially leading to higher operating costs and dependence on specialized supply chains compared to its larger, more financially robust competitors. The company's strategic response involves focusing on innovation, securing non-dilutive government funding, and forging collaborations with major wound care companies to leverage their distribution and market access expertise. The planned U.S. manufacturing facility, supported by BARDA, addresses the long-term need for capacity and strategic independence, mitigating supply chain risks.

Outlook and Risks

MediWound's outlook for 2025 includes a revenue guidance of $24 million, with growth primarily driven by development services and a slight increase in NexoBrid sales from optimized pricing and territory allocation, given current manufacturing constraints. The significant ramp-up in NexoBrid product revenue is anticipated in 2026, following regulatory approvals for the new manufacturing facility. R&D expenses are expected to increase in the second half of 2025 as European sites for the EscharEx VALUE Phase III study become fully active.

Key milestones in the near term include the interim assessment of the EscharEx VALUE Phase III trial by mid-2026, the launch of the EscharEx head-to-head study against collagenase in the second half of 2025, and the initiation of the DFU trial in the second half of 2026. The BARDA RFP for NexoBrid stockpiling and room temperature-stable formulation, expected to commence in Q4 2025 as a 10-year contract, represents a substantial long-term opportunity.

Despite the promising outlook, risks persist. The volatility of warrant revaluation can significantly impact net income, as seen in Q2 2025. Regulatory delays, particularly in Europe for clinical trial activations and for manufacturing facility approvals, could affect timelines. While BARDA funding has stabilized, any future shifts in government priorities could impact development service revenue. The successful commercialization of EscharEx hinges on positive Phase III results and effective market access strategies, which the head-to-head study aims to bolster. Competition from established players and the need for continuous innovation remain ongoing challenges.

Conclusion

MediWound is at a critical juncture, transitioning from a niche burn care provider to a broader leader in enzymatic tissue repair. Its core investment thesis is firmly rooted in the differentiated efficacy of its enzymatic technologies, NexoBrid and EscharEx, which address significant unmet medical needs in severe burns and chronic wounds. The company's strategic investments in manufacturing capacity, robust clinical development, and key collaborations are designed to capitalize on these innovative platforms. While current financial performance reflects heavy R&D investment and manufacturing limitations, the anticipated regulatory approvals for the expanded NexoBrid facility in 2026, coupled with the progress of the EscharEx pipeline, are expected to unlock substantial revenue growth. MediWound's technological leadership, validated by clinical data and strategic partnerships, positions it to capture a larger share of the advanced wound care market, making it a compelling opportunity for discerning investors focused on long-term growth in specialized biopharmaceuticals.