Aegis Capital Starts MediWound (MDWD) at 'Buy'; Positive on NexoBrid Advancement
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Aegis Capital starts coverage on MediWound with a Buy rating and $11 price target, noting positive sentiment behind the company's development of a next-generation proteolytic enzyme platform.
Analyst Jason Wittes commented on Monday:
- A significant advancement in burn debridement: NexoBrid for burns is undergoing a controlled launch in Europe and is completing a Phase III trial (under Orphan Drug Status) for burn debridement in the US (funded by BARDA), with US launch set for 2020 (12-month data expected 1H18). As this trial is very similar to the European pivotal trial, we believe it is substantially de-risked. Although exoBrid represents a paradigm shift in treating burn patients, we believe the speed of action (four hours vs. 1-5 days for surgery, depending on wound size), selectivity, safety, and cost profile will drive usage, and that the drug will ultimately overtake surgery as the standard of care. We estimate the worldwide market opportunity at over $800 million, which assumes it becomes the standard of care.
- An even larger opportunity in chronic wound care: EscharEx is a formulation of the company’s proteolytic enzyme platform specifically designed for chronic wounds; notably, over 1 million diabetic foot ulcers and venous leg ulcers undergo debridement annually in the US. About 40% of these patients undergo some form of soft debridement, but with limited efficacy, as removal of the eschar usually takes weeks if not months. In contrast, Phase 2 results for EscharEx showed complete removal of eschar within 10 days (93% of patients were within a week). The company is in the process of re-formulating EscharEx for easier use and higher potency, using the same active pharmaceutical ingredient (API), and will meet with the FDA to discuss next steps, which could allow for a Phase 3 start or another Phase 2 with the reformulation—we are conservatively assuming 2023 launch. Like NexoBrid, we think EscharEx represents a significant improvement over current options, and has the potential to become the standard of care, ultimately representing a several billion dollar opportunity.
- Finally, MediWound is undergoing preclinical testing for connective tissue disorders (MWPC003), which is not in our estimates but also represents a billion dollar opportunity.
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