Exhibit 99.2
MEDIWOUND LTD. AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2020
IN U.S. DOLLARS IN THOUSANDS
UNAUDITED
INDEX
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![]() | Kost Forer Gabbay & Kasierer 144 Menachem Begin Rd. Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
Introduction
We have reviewed the accompanying financial information of Mediwound Ltd. and its subsidiaries ("the Company") which comprises the condensed consolidated balance sheet as of March 31, 2020 and the related condensed consolidated statements of comprehensive loss, changes in equity and cash flows for the three months then ended. The Company's board of directors and management are responsible for the preparation and presentation of interim financial information for this period in accordance with IAS 34, "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with Review Standard 1 of the Institute of Certified Public Accountants in Israel, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34.
Tel-Aviv, Israel | KOST FORER GABBAY & KASIERER |
May 20, 2020 | A Member of Ernst & Young Global |
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
March 31, | December 31, | |||||||||||
2020 | 2019 | 2019 | ||||||||||
Unaudited | Audited | |||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | 7,981 | 7,134 | 7,242 | |||||||||
Restricted deposits | 174 | 172 | 180 | |||||||||
Short-term bank deposits | 19,156 | 14,211 | 22,036 | |||||||||
Trade receivables | 3,195 | 244 | 4,107 | |||||||||
Inventories | 2,004 | 1,472 | 1,613 | |||||||||
Other receivables | 345 | 6,511 | 450 | |||||||||
32,855 | 29,744 | 35,628 | ||||||||||
LONG-TERM ASSETS: | ||||||||||||
Property, plant and equipment, net | 2,339 | 2,151 | 2,304 | |||||||||
Right of-use assets, net | 2,191 | 2,418 | 2,229 | |||||||||
Intangible assets, net | 413 | 479 | 429 | |||||||||
4,943 | 5,048 | 4,962 | ||||||||||
37,798 | 34,792 | 40,590 | ||||||||||
CURRENT LIABILITIES: | ||||||||||||
Current maturities of long-term liabilities and leases | 1,417 | 2,018 | 569 | |||||||||
Trade payables and accrued expenses | 3,423 | 2,996 | 4,067 | |||||||||
Other payables | 5,843 | 2,438 | 5,737 | |||||||||
10,683 | 7,452 | 10,373 | ||||||||||
LONG‑TERM LIABILITIES: | ||||||||||||
Deferred revenues | 1,018 | 1,145 | 1,135 | |||||||||
Liabilities in respect of IIA grants | 6,942 | 7,497 | 6,811 | |||||||||
Contingent consideration for the purchase of shares | 4,097 | 5,186 | 4,853 | |||||||||
Liability in respect of discontinued operation | - | 6,003 | - | |||||||||
Lease liabilities | 1,905 | 2,043 | 2,006 | |||||||||
Severance pay liability, net | 264 | 325 | 243 | |||||||||
14,226 | 22,199 | 15,048 | ||||||||||
SHAREHOLDERS' EQUITY: | ||||||||||||
Ordinary shares of NIS 0.01 par value: | ||||||||||||
Authorized: 50,000,000 shares as of March 31, 2020 ,December 31, 2019 and 37,244,508 shares as of March 31, 2019; Issued and Outstanding: 27,211,128 as of March 31, 2020, 27,202,795 as of December 31, 2019 and 27,178,839 as of March 31, 2019 | 75 | 75 | 75 | |||||||||
Share premium | 141,044 | 139,912 | 140,871 | |||||||||
Foreign currency translation adjustments | (9 | ) | (21 | ) | (17 | ) | ||||||
Accumulated deficit | (128,221 | ) | (134,825 | ) | (125,760 | ) | ||||||
12,889 | 5,141 | 15,169 | ||||||||||
37,798 | 34,792 | 40,590 |
The accompanying notes are an integral part of the interim financial statements.
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands (except share and per share data)
Three months ended March 31, | Year ended December 31, | |||||||||||
2020 | 2019 | 2019 | ||||||||||
Unaudited | Audited | |||||||||||
Revenues from sale of products | 647 | 414 | 3,393 | |||||||||
Revenues from development services (1) | 3,709 | - | 10,678 | |||||||||
Revenues from license agreements | 82 | 47 | 17,718 | |||||||||
Total revenues | 4,438 | 461 | 31,789 | |||||||||
Cost of revenues | (3,208 | ) | (307 | ) | (11,849 | ) | ||||||
Gross profit | 1,230 | 154 | 19,940 | |||||||||
Operating expenses: | ||||||||||||
Research and development, gross | 1,719 | 4,182 | 10,070 | |||||||||
Participations by BARDA and IIA (1) | - | (2,903 | ) | (5,101 | ) | |||||||
Research and development, net of participations | 1,719 | 1,279 | 4,969 | |||||||||
Selling and marketing | 824 | 1,033 | 4,064 | |||||||||
General and administrative | 893 | 1,332 | 5,242 | |||||||||
Other expenses | - | 89 | 1,172 | |||||||||
Total operating expenses | 3,436 | 3,733 | 15,447 | |||||||||
Operating profit (loss) | (2,206 | ) | (3,579 | ) | 4,493 | |||||||
Financial income | 239 | 61 | 556 | |||||||||
Financial expense | (494 | ) | (642 | ) | (2,983 | ) | ||||||
Profit (loss) from continuing operation | (2,461 | ) | (4,160 | ) | 2,066 | |||||||
Profit from discontinued operation | - | 50 | 2,889 | |||||||||
Net profit (loss) | (2,461 | ) | (4,110 | ) | 4,955 | |||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | 8 | 4 | 8 | |||||||||
Total comprehensive income (loss) | (2,453 | ) | (4,106 | ) | 4,963 | |||||||
Basic and diluted loss per share: | ||||||||||||
Basic and diluted net loss per share from continuing operations | (0.09 | ) | (0.15 | ) | 0.08 | |||||||
Basic and diluted net profit per share from discontinued operations | - | * | ) | 0.10 | ||||||||
Total Basic and diluted net loss per share | (0.09 | ) | (0.15 | ) | 0.18 | |||||||
The accompanying notes are an integral part of the interim financial statements.
(1) Starting May 2019, following entrance into the Vericel license and supply agreements, participation by BARDA in the amount of $10.7 million was classified as revenues from development services. Prior to the Vericel deal, this participation by BARDA was classified as reimbursement of research and development expenses.
*) Represents an amount lower than $1.
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
Share capital | Share premium | Foreign currency translation reserve | Accumulated deficit | Total Equity | ||||||||||||||||
Balance as of December 31, 2019 | 75 | 140,871 | (17 | ) | (125,760 | ) | 15,169 | |||||||||||||
Loss for the period | - | - | - | (2,461 | ) | (2,461 | ) | |||||||||||||
Other comprehensive income | - | - | 8 | - | 8 | |||||||||||||||
Total comprehensive income (loss) | - | - | 8 | (2,461 | ) | (2,453 | ) | |||||||||||||
Exercise of options | (* | - | - | - | (* | |||||||||||||||
Share-based compensation | - | 173 | - | - | 173 | |||||||||||||||
Balance as of March 31, 2020 | 75 | 141,044 | (9 | ) | (128,221 | ) | 12,889 |
Share capital | Share premium | Foreign currency translation reserve | Accumulated deficit | Total Equity | ||||||||||||||||
Balance as of December 31, 2018 | 75 | 139,637 | (25 | ) | (130,715 | ) | 8,972 | |||||||||||||
Loss for the period | - | - | - | (4,110 | ) | (4,110 | ) | |||||||||||||
Other comprehensive income | - | - | 4 | - | 4 | |||||||||||||||
Total comprehensive income | - | - | 4 | (4,110 | ) | (4,106 | ) | |||||||||||||
Share-based compensation | - | 275 | - | - | 275 | |||||||||||||||
Balance as of March 31, 2019 | 75 | 139,912 | (21 | ) | (134,825 | ) | 5,141 |
*) Represents an amount lower than $1.
The accompanying notes are an integral part of the interim financial statements.
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
U.S. dollars in thousands
Share capital | Share premium | Foreign currency translation reserve | Accumulated deficit | Total Equity | ||||||||||||||||
Balance as of December 31, 2018 | 75 | 139,637 | (25 | ) | (130,715 | ) | 8,972 | |||||||||||||
Profit for the period | - | - | - | 4,955 | 4,955 | |||||||||||||||
Other comprehensive income | - | - | 8 | - | 8 | |||||||||||||||
Total comprehensive income | - | - | 8 | 4,955 | 4,963 | |||||||||||||||
Exercise of options | (* | - | - | - | (* | |||||||||||||||
Share-based compensation | - | 1,234 | - | - | 1,234 | |||||||||||||||
Balance as of December 31, 2019 | 75 | 140,871 | (17 | ) | (125,760 | ) | 15,169 |
*) Represents an amount lower than $1.
The accompanying notes are an integral part of the interim financial statements.
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
Three months ended March 31, | Year ended December 31, | |||||||||||
2020 | 2019 | 2019 | ||||||||||
Unaudited | Audited | |||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net Profit (loss) | (2,461 | ) | (4,110 | ) | 4,955 | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
Adjustments to profit and loss items: | ||||||||||||
Profit from discontinued operation | - | (50 | ) | (2,889 | ) | |||||||
Depreciation and amortization | 268 | 274 | 1,149 | |||||||||
Share-based compensation | 173 | 275 | 1,234 | |||||||||
Revaluation of liabilities in respect of IIA grants | 198 | 74 | (392 | ) | ||||||||
Revaluation of contingent consideration for the purchase of shares | 152 | 241 | 1,690 | |||||||||
Revaluation of lease liabilities | (36 | ) | 103 | 340 | ||||||||
Increase (decrease) in severance pay liability, net | 21 | (23 | ) | (105 | ) | |||||||
Net financing income | (110 | ) | (62 | ) | (434 | ) | ||||||
Un-realized foreign currency (gain) loss | 79 | (130 | ) | (152 | ) | |||||||
745 | 702 | 441 | ||||||||||
Changes in asset and liability items: | ||||||||||||
Decrease (increase) in trade receivables | 897 | 309 | (3,553 | ) | ||||||||
Decrease (increase) in inventories | (391 | ) | 208 | 67 | ||||||||
Decrease in other receivables | 99 | 262 | 6,376 | |||||||||
Increase (decrease) in trade payables and accrued expenses | (645 | ) | 281 | 1,355 | ||||||||
Increase (decrease) in other payables and deferred revenues | (47 | ) | 452 | 247 | ||||||||
(87 | ) | 1,512 | 4,492 | |||||||||
Net cash provided by (used in) continuing operating activities | (1,803 | ) | (1,896 | ) | 9,888 | |||||||
Net cash provided by (used in) discontinued operating activities | - | 50 | (1,559 | ) | ||||||||
Net cash provided by (used in) operating activities | (1,803 | ) | (1,846 | ) | 8,289 |
The accompanying notes are an integral part of the financial statements.
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three months ended March 31, | Year ended December 31, | |||||||||||
2020 | 2019 | 2019 | ||||||||||
Unaudited | Audited | |||||||||||
Cash Flows from Investing Activities: | ||||||||||||
Purchase of property and equipment | (144 | ) | (239 | ) | (792 | ) | ||||||
Interest received | 3 | 30 | 184 | |||||||||
Proceeds from (investment in) short term bank deposits, net | 2,992 | 2,565 | (5,050 | ) | ||||||||
Net cash provided by (used in) continuing investing activities | 2,851 | 2,356 | (5,658 | ) | ||||||||
Net cash used in discontinued investing activities | - | - | (1,239 | ) | ||||||||
Net cash provided by (used in) investing activities | 2,851 | 2,356 | (6,897 | ) | ||||||||
Cash Flows from Financing Activities: | ||||||||||||
Repayment of leases liabilities | (160 | ) | (155 | ) | (630 | ) | ||||||
Proceeds from issuance of shares, net | (* | - | (* | |||||||||
Net repayment of IIA grants | (66 | ) | (55 | ) | (376 | ) | ||||||
Net cash used in financing activities | (226 | ) | (210 | ) | (1,006 | ) | ||||||
Exchange rate differences on cash and cash equivalent balances | (83 | ) | 118 | 140 | ||||||||
Cash and cash equivalents: | ||||||||||||
Increase in cash and cash equivalents from continuing activities | 739 | 368 | 3,364 | |||||||||
Increase (decrease) in cash and cash equivalents from discontinued activities | - | 50 | (2,838 | ) | ||||||||
Balance of cash and cash equivalents at the beginning of the period | 7,242 | 6,716 | 6,716 | |||||||||
Balance of cash and cash equivalents at the end of the period | 7,981 | 7,134 | 7,242 |
* Represents an amount lower than $1.
The accompanying notes are an integral part of the financial statements.
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
U.S. dollars in thousands
NOTE 1: | GENERAL |
a. | General description of the Company and its operations: MediWound Ltd. (the "Company" or "MediWound"), is a fully integrated biopharmaceutical company focused on developing, manufacturing and commercializing novel products to address unmet medical needs in the fields of severe burns, chronic and other hard to heal wounds, connective tissue disorders and other indications. The Company's first innovative biopharmaceutical product, NexoBrid, received marketing authorization from the European Medicines Agency ("EMA") as well as the Israeli, Argentinean, South-Korean, Russian and Peruvian Ministries of Health, for removal of dead or damaged tissue, known as eschar, in adults with deep partial and full thickness thermal burns. The Company sells NexoBrid in Europe and in Israel through its commercial organizations and in other territories through local distributers. In 2019, the Company entered into exclusive license and supply agreements with Vericel Corporation (“Vericel”) to commercialize NexoBrid in North America. The Company second investigational innovative product, EscharEx, is a topical biological drug being developed for debridement of chronic and other hard-to-heal wounds. |
b. | The Company's securities are listed for trading on NASDAQ since March 2014. |
c. | The Company has two wholly owned subsidiaries: MediWound Germany GmbH, acting as Europe (“EU”) marketing authorization holder and EU sales and marketing arm and MediWound UK Limited, an inactive company. In addition, the Company owns approximately 10% of PolyHeal Ltd., a private life sciences company ("PolyHeal"). |
d. | The Company awarded two contracts with the U.S. Biomedical Advanced Research and Development Authority ("BARDA"), for the advancement of the development and manufacturing, as well as the procurement of NexoBrid, as a medical countermeasure as part of BARDA preparedness for mass casualty events. |
On March 3, 2020 BARDA has expanded its awarded contract with MediWound providing supplemental funding of $5.5 million to support emergency readiness for NexoBrid deployment.
NOTE 2: | SIGNIFICANT ACCOUNTING POLICIES |
The following accounting policies have been applied consistently in the financial statements for all periods presented unless otherwise stated.
a. | Basis of presentation of financial statements: These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). |
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MEDIWOUND LTD. AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2: | SIGNIFICANT ACCOUNTING POLICIES |
b. | Basis of preparation of the interim consolidated financial statements: |
The interim condensed consolidated financial statements for the three months ended March 31, 2020 have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as of December 31, 2019 that were included in the Annual Report on Form 20-F filed on February 25, 2020.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2019 that were included in the Annual Report on Form 20-F filed on February 25, 2020, except than the change discussed below.
c. | Reclassification: |
Certain amounts previously reported in the consolidated financial statements have been reclassified to conform to current year presentation. Such reclassifications did not affect net loss, shareholders’ equity or cash flows.
NOTE 3: SUBSEQUENT EVENTS
On April 23, 2020, the Company's Board of Directors approved the grant of 1,277,456 options to purchase ordinary shares, for an exercise price of $ 1.9 per share, to its employees, officers and members of the board. The fair value of the options, as of the grant date, was estimated at approximately $1.3 million.
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