MediWound reported its second quarter on 13 August. We are writing about it today.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
What the Company Does
MediWound, of Yavne, develops enzymatic therapies for removing damaged tissue. Its two principal products are NexoBrid, for removing burn eschar, and EscharEx, which is in a Phase III trial for treating venous leg ulcers. A substantial part of its revenue to date comes from development contracts with BARDA, the US government's medical preparedness authority, rather than from commercial sales.
The Quarter
| The quarter | A year ago | |
|---|---|---|
| Revenue | $3.1 million | $5.7 million |
| Gross profit | $0.3 million | $1.3 million |
| Gross margin | 10.9% | 23.5% |
| Research and development | $5.9 million | $3.5 million |
| Selling, general and administrative | $3.9 million | $3.6 million |
| Operating loss | $9.5 million | $5.7 million |
| Net loss | $7.4 million | $13.3 million |
| Loss per share | $0.57 | $1.23 |
| Adjusted EBITDA loss | $8.3 million | $4.5 million |
The Line That Looks Good, and Why It Is Not
At first glance the net loss improved dramatically: $7.4 million against $13.3 million a year ago. Loss per share fell from $1.23 to $0.57.
But every other line moved the other way. The operating loss grew from $5.7 million to $9.5 million, and the adjusted EBITDA loss nearly doubled, from $4.5 million to $8.3 million.
The company itself explains the gap: the improvement in the bottom line reflects "primarily non-cash financial income".
This is the same pattern we saw this week at Ondas: the bottom line improves thanks to financial items unrelated to operations, while the operating line deteriorates.
The simple rule in cases like this: when the net loss and the operating loss move in opposite directions, the operating one is describing the business.
Why Revenue Fell, and Why That Is Less Dramatic Than It Looks
Revenue fell from $5.7 million to $3.1 million. The company attributes this to the timing of BARDA-funded development revenue - which is to say not to a lost customer or falling demand, but to the pace of revenue recognition on a government contract.
Gross margin was also cut, from 23.5% to 10.9%, which the company attributes to a one-time impact related to the facility scale-up.
And the Number That Demands Full Attention
Full-year 2026 revenue guidance was reaffirmed: $24 to $26 million.
| $ millions | |
|---|---|
| First half revenue, actual | 4.6 |
| Full-year guidance | 24-26 |
| Required in the second half | 19.4-21.4 |
That is to say, the second half must deliver 4.2 to 4.65 times the first half.
That is a demanding assumption in any industry. The company hangs it on two defined sources: the new master services agreement with Vericel under its BARDA contract, from which it expects to begin recognising revenue in the second half, and continued NexoBrid sales.
What the release does not detail is the split - how much of the $19 to $21 million comes from each source, and on which milestones it depends. Without that, the guidance cannot be checked in parts, only waited out.
The Cash
| Cash, equivalents and deposits at 30 June 2026 | $36 million |
| Against the end of 2025 | $54 million |
| First half cash burn | $20 million |
At the first half's burn rate, $36 million is about 11 months. That is a mechanical calculation which ignores two things: revenue that is meant to grow in the second half, and the fact that burn is not necessarily even.
Warrant and option exercises brought in $0.8 million during the period, and a further $1.1 million after it.
The Pipeline, Which Is Most of the Story in a Company Like This
EscharEx is in a global Phase III trial named VALUE, in venous leg ulcers. The trial is enrolling 216 patients across about 40 sites in the United States, Europe and Israel. The interim sample size reassessment and completion of enrollment are expected by the end of the first quarter of 2027.
The company cites an updated market assessment by an independent global consulting firm, according to which US annual peak sales potential stands at $1.05 billion, following expansion of the assessment to include pressure ulcers. An investigator-initiated trial in pressure ulcers is expected to begin in the fourth quarter of 2026.
A note on that figure: $1.05 billion is a third party's market potential estimate, not a company forecast and not mine. It refers to a product in Phase III that has not been approved for marketing in this indication.
It is recorded here because the company presents it as part of the report, and in the same breath because it matters to know what it is not.
And on the commercial side: Vericel, the US commercial partner, reported according to MediWound NexoBrid's strongest quarter since launch, with record quarterly revenue, hospital unit sales and ordering centres. About 80 burn centres have ordered the product since launch.
Following Vericel's contract with BARDA, worth up to $197 million over ten years, a master services agreement was signed between the parties under which MediWound expects to begin recognising revenue.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
In a company at this stage an income statement is almost meaningless - and that is true both ways.
Revenue fell because a government contract recognises revenue on a different schedule, not because something broke. Gross margin was cut because of a facility scale-up. R&D jumped from $3.5 million to $5.9 million because the trial the company is built around is at peak enrollment. All of these are exactly what should happen in a company funding a Phase III trial.
And so the two lines I read are the cash and the date. Thirty-six million dollars against a burn of $20 million in a half, and a trial whose enrollment completion is expected by the end of the first quarter of 2027. Those two numbers sit in the same order of magnitude of time, and that is what makes the second half consequential.
And the point that troubles me most is the gap in the guidance. Reaffirming $24 to $26 million after a half of $4.6 million is a strong statement, and it rests on revenue recognition from an agreement signed only just now. If that recognition slips a quarter, it is not only the guidance that moves - the cash calculation moves with it.
What I would follow: the third quarter is the first test. If revenue from the Vericel agreement starts arriving at a pace that supports $19 to $21 million for the half, the guidance proves itself. If not, the next question will be about financing rather than sales.
(An important note: this is my personal opinion only, and nothing here is a recommendation to take any action.)
