MediWound secures $25 million in PIPE investment

YAVNE, Israel - MediWound Ltd. (NASDAQ:MDWD), a pioneer in enzymatic therapeutics for tissue repair, announced today that it has finalized a share purchase agreement with several investors, headlined by a $15 million investment from Mölnlycke Health Care. The transaction involves the sale of 1,453,488 ordinary shares for $17.20 per share, amounting to a total of $25 million in gross proceeds.

The company intends to channel the net proceeds from this private investment in public equity (PIPE) offering towards the pre-commercial activities of EscharEx, its lead drug candidate, as well as to enhance large-scale manufacturing and for general corporate purposes. The closing of the PIPE offering is anticipated within the coming days, pending customary closing conditions.

Ofer Gonen, CEO of MediWound, expressed confidence that the investment would bolster strategic initiatives for EscharEx and "create substantial long-term value for our stakeholders and help improve the standard of care for patients."

In parallel with the PIPE offering, MediWound and Mölnlycke, a prominent MedTech company specializing in wound care and surgical solutions, have entered into a collaboration agreement. This partnership grants Mölnlycke certain rights, such as appointing a representative to MediWound's R&D Committee and engaging in potential strategic discussions.

The agreement also includes a stand-still clause, capping Mölnlycke's ownership at a maximum of 9.99% of MediWound's issued and outstanding ordinary shares.

The securities sold in the PIPE offering have not been registered under the Securities Act of 1933 and are subject to restrictions on resale in the United States. MediWound has committed to filing a registration statement with the SEC to permit the resale of the ordinary shares issued in the PIPE offering.

MediWound is recognized for its FDA and EMA-approved drug, NexoBrid®, for eschar removal in severe burns, and its ongoing development of EscharEx® for chronic wound debridement.

This announcement is based on a press release statement.

In other recent news, MediWound reported a rise in Q1 revenue to $5 million, marking an increase from $3.8 million in the same period last year. Despite a net loss of $9.7 million, primarily due to financial expenses, the company saw significant progress in its strategic plans. This includes the expansion of its NexoBrid product and advancements in clinical trials.

Collaborations with companies like Vericel (NASDAQ:VCEL), PolyMedics, Kaken Pharmaceuticals, and BSV have proven productive, and the construction of a new manufacturing facility is on track for completion by mid-2024.

MediWound is also set to join the Russell 3000 Index, potentially increasing its visibility within the investment community. The company reported $36 million in cash and cash equivalents as of March 31, 2024.

Looking ahead, the Phase III clinical trial for EscharEx is scheduled to begin in the second half of 2024.

InvestingPro Insights

As MediWound Ltd. (NASDAQ:MDWD) secures a significant investment to advance its therapeutic projects, including EscharEx, the company's financial health and market performance provide additional context for investors. According to InvestingPro data, MediWound holds a market capitalization of $196.44 million, underscoring its position in the biotech market. Despite facing some challenges, such as a -23.32% revenue growth over the last twelve months as of Q1 2024, the company has demonstrated strong price performance with a 112.11% return over the last year. This robust return could be indicative of investor confidence in MediWound's long-term prospects and its strategic partnership with Mölnlycke Health Care.

InvestingPro Tips suggest that while MediWound carries more cash than debt, enhancing its financial stability, analysts have revised their earnings expectations downwards for the upcoming period. Additionally, the company is not expected to turn a profit this year, which aligns with the strategic investments being made towards pre-commercial and manufacturing activities for its lead drug candidate. These insights can be pivotal for investors looking to gauge the potential risks and rewards associated with MediWound's growth trajectory.

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