MediWound Ltd. (MDWD) Q4 2014 Earnings Report, Transcript and Summary

Good ladies and gentlemen and welcome to the MediWound Fourth Quarter and Year-End 2014 Financial Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder today’s conference is being recorded. I would now like to turn the conference over to Anne Marie Fields, Senior Vice President at LHA. Ma'am you may begin.

Thank you, Candice. Good morning, this is Anne Marie Fields with LHA. Thank you all for participating in today’s call. Joining me from MediWound are Gal Cohen, Chief Executive Officer and Sharon Malka, Chief Financial Officer. Before the opening of the stock market today, MediWound announced financial results for the three months and full year ended December 31, 2014. If you have not received this new release or if you would like to be added to the company’s distribution list please call LHA in Europe at 212-838-3777 and speak with Carolyn Curran. Before we begin I would like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties, regarding the operations and full results of MediWound. I encourage you to review the company’s filings with the Securities and Exchange Commission including without limitation, the company’s Form 20F and 6-K which identifies specific factors that may cause actual results or event to differ materially from those described in the forward-looking statements. Furthermore the content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast February 12, 2015. MediWound undertakes no obligations to revise or update any statements to reflect event or circumstances after the date of this conference call. So with that said I would like to turn the call over to Gal Cohen. Gal?

Thank you, Anne Marie. Good morning to all listeners in the U.S. and good afternoon to those joining us from Israel. Thank you all for your interest in MediWound and for participating in today’s call. We have made considerable progress throughout 2014 and during the fourth quarter as we continue to execute our strategy as planned. In particular, we made significant progress with our commercial and clinical programs which I will detail for you in today’s call. We have achieved many milestones during 2014 including the build out of a full blown commercial organization and the launch of NexoBrid in nearly all of our target markets in Europe. We also expanded NexoBrid global reach with four new distribution agreements and obtained a marketing authorization in New Zealand. In addition we initiated NexoBrid safety study in pediatric patients in Europe in our EscharEx Phase 2 study. Importantly we received a three year extension of our cGMP accreditation for our productions site following a successful inspection by the Israeli Ministry of Health. Now let me turn to a review of the company’s ongoing commercial progress with our lead product NexoBrid in Europe. As many of you know, we initiated the commercial production of NexoBrid in Europe this year which included a recruitment and training of our on ground field force starting in Germany during the second quarter and continuing with Scandinavia, the UK, CE, Benelux, Italy, Spain, and finally France. I am happy to report and as communicated early this year that we now have a full blown commercial organization on the ground and we have launched NexoBrid in each of our target markets except France and the Czech Republic. Our primary calling point of the burn centers and burn units in each of these countries and as of December 31, 2014 we have conducted trainings at approximately one third of the leading burn centers in our target markets in Europe and we plan to continue our training plan to have most of our target burn centers trained by the end of 2015. More than 80% of the training centers were supplied with NexoBrid and the majority of them already started to experiment and treat patients. For example more than 100 patients have been treated in Germany with dozens more treated in Scandinavia and in Israel. We are also beginning to see physicians treating patients with NexoBrid in the UK, in Italy, in Spain, in Poland, in Belgium and we believe that this global effect will further accelerate in 2015. As we have noted before, the introduction of a new treatment paradigm takes time to integrate into the hospitals long standing routine practices. That said, we have put NexoBrid on the map in Europe this year and have made significant progress towards this end as evident by the fourth quarter revenues which were equal to the accumulated revenues in the previous nine months. Health centers gain more experience and confidence and our market access efforts continue to unfold throughout Europe, we expect sales to build further in 2015. During 2014 we had a significant presence at more than 10 international and national medical conferences for burn specialists where we showcased NexoBrid and highlighted its benefit in both scientific and clinical patients. We see a growing number of physicians from leading centers sharing their hands on experience with NexoBrid at international conferences such as International Society of Burn Injuries, the ISBI and the American Burn Association, the ABA. At important local meetings such as [indiscernible] and even in TV interviews and press releases initiated by these burn specialists themselves. In January we had the pleasure of meeting with the President of the German Burns Patient Association who said and I quote "every millimeter counts" stressing how important it is to reduce the surgical burden of burn patients and preserve their unharmed skin. In addition last week we were pleased to hear that the Head of the burn center in Sweden who happens to be also a former burn survivor himself, gave an interview to the Swedish television, expressing his enthusiasm from the prospect of NexoBrid in burn care. The accumulation of experience with NexoBrid and the growing number of medical reference points in burn centers throughout Europe, we further increased confidence and support our aim to accelerated adoption. In 2015, we will continue to support an advanced burn care by being the gold sponsors of nearly all the European national and regional burn conferences. In tandem we will continue to complete the training of nearly all the targeted burn centers which in turn is expected to increase the use and further adoption. In parallel, we are implementing the market experience [ph] we developed in collaboration with IMH, walking towards obtaining favorable funding across Europe. As most of you know, European market access and reimbursement is a country-by-country process. NexoBrid cost effectiveness enables us to generate sales at the hospital level in most countries without the need for national level reimbursement or pricing approval. To support and enhance hospital level market access efforts, we have introduced our proprietary budget impact tool which demonstrates to hospital administrators the positive economic impact NexoBrid will have on their institution and how it enables them and the hospital to have cost savings. We believe that combined with our compelling clinical data our budget impact tool will favorably influence the stakeholders at the hospital level who are the main decision makers. In addition we have completed the submission of the national level Value Dossier [ph] in France and the implication for products Italy and Belgium and certain CE countries. We are also facilitating the inclusion of NexoBrid in local hospital formularies in the UK and in local and regional hospitals in Spain. We expect to complete such market active processes on the individual hospital, at the regional hospital, and at the national level during the second half of 2015. With the ground work laid, we remain confident in our ability to demonstrate both the clinical and the cost effectiveness of NexoBrid in treating severe burn patients. Throughout 2014 we made considerable progress advancing our international commercial strategy. We recently announced the signing of a new physician agreement in Mexico in addition to the three we signed in 2014 in Argentina, Russia, and South Korea. We continue our efforts to expand the reach of NexoBrid in Latin America, in CIS, and in Asia-Pacific regions and hope to have even the first marketing authorization in one of these geographies in 2015. We are executing our commercial strategy for NexoBrid according to plan and are confident that with time NexoBrid will become the standard of care for severe burns as we see more and more centers moving from awareness to interest, from interest to use, from use to ordering and reordering. Turning now to our clinical development program. In addition to expanding geographically we are seeking to expand the NexoBrid label. Towards that end we commenced our Phase 3 pediatric study to evaluate the safety and efficacy of NexoBrid as a treatment for severe burn in children. During 2015 we plan to have all the study sites open throughout Europe. As part of the protocol it does effect in monetary board, it is planned to be convened after the recruitment of 50 patients. To assess the data and recommend whether to expand the study population to include infants and toddlers below the age 4. We await such event with great anticipation as unfortunately many of the burned children are young infants. You could benefit from a more minimally invasive modality since the surgical approach is very demanding on such small children. We recruited more than 110 children in past clinical studies and the effect on those treated with NexoBrid in terms of eschar removal, surgical burden, and long-term course medicine function were even greater than in others. Turning now to the initiation of our Phase 3 program for NexoBrid in the U.S. As previously reported, we completed all the preparations for starting the study in 2014 and we are practically waiting for the IR big clearance to commence the recruitment. Since we need to report the results of this study also to the European Medicine Agency, the EMA as a post approval commitment, we share the U.S. protocol with EMA. Subsequently EMA directly approached the FDA to discuss the study protocol. Following these discussions, the FDA sought the advice of a U.S. burn expert which is what we have been suggesting for several years now. The FDA has since sent us further recommendations that govern the design of the study. Under the current proposed protocol, the FDA has now agreed that eschar removal shall be the only primary end point and shall be tested against the weak arm which is expected to be a placebo hydrogen. This change to a single primary end point of eschar removal is expected to be less of a challenge giving the positive results in our past Phase 2 studies conducted in U.S. And will allow us to reduce the number of patients recruited to about 175 from the original 200 patients. In addition, the other two previously primary end points of surgical burden and long-term cosmetics can now be assessed at a secondary efficacy end point and as a non-priority safety end point respectively. And evaluated as before against the standard of care. As a result of this modification, we expect to be in a position to have top line results on the primary and secondary end points in the first half of 2017 and the long-term follow up of 12 months and 24 months in the first half of 2018 and 2019 respectively. Following this requested amendment, with the product available to severe burn patients in Europe and subject to favorable results in the acute phase end points, we consider to discuss with FDA the possibility of submitting a BMA after the recruitment of all the patients and analysis of the acute phase; primary, secondary, and safety data. And thereafter to supplement the 12 month and 24 month long-term follow up safety data when available. So while amendment may have held the initiation of the US study, it may actually further increase the study probability of success and possibly accelerate our time to filing. Looking beyond NexoBrid, our phase 2 clinical study of EscharEx for the treatment of chronic and hard to heal wound is ongoing. EscharEx is based on the same technology as NexoBrid so we believe that its development programs tend to significantly lower risk when compared to other phase 2 programs. We base this belief on the wealth of clinical data as well as the preclinical toxicology and manufacturing control data that was gained in the development and approval of NexoBrid. This allows us to focus on the clinical development of EscharEx to expedite time to market which will continue to open additional clinical sites in June 2015 and to report the top line results from this trial by the end of 2015. We are looking forward to advancing EscharEx in this large and growing market with significant unmet medical needs. With that overview of our progress let me turn the call over to Sharon Malka, our Chief Financial Officer for a review of our financials. Sharon?

Thank you Gal and good morning everyone. It is pleasure to be reporting our fourth quarter and year-end financial results. We continue to fund and execute our commercial plans and clinical programs being confident that our investments will drive us the use and adoption of NexoBrid in Europe and advance our pipeline product. Let me turn now to our financial results. The company generated initial revenues in 2014 of approximately 0.3 million following the launch of NexoBrid in Europe. The majority of which was generated from sales of NexoBrid in Germany. Revenues for the first quarter of 2014 substantially increased compared to previous nine months of 2014 and marking 125,000 primarily from sales in Germany. As Gal noted, our efforts during the year remained focused on building the European commercial organization, initiating onsite training, on market access, and hands on experience in burn centers throughout Europe. Overtime, we expect to drive revenues as these burn centers convert experimental usage into order. Also I think expenses for the year ended December 31, 2014 were $18.9 million in line with our expectations compared with $7.6 million for the same period of 2013. The increase was primarily due to 5.1 million of commercial activities associated with building the European marketing infrastructure, 3.6 million of research and development activities related to the clinical development, 4.3 million increase in non-cash share based compensation expenses, and additional 1.2 million due to expenses related to our initial public offering and being a public company in the United States. Operating expenses for the first quarter of 2014 were about $5.6 million in line with our expectations compared with $2.2 million for the fourth quarter of 2013. The increase was primarily due to commercial activities associated with building the European marketing infrastructure, research and development activities related to clinical development, and additional 1 million increase in non-cash share based compensation expenses in this quarter. For the year ended December 31, 2014, the company reported a net loss of $18.9 million or $0.95 per share. For the fourth quarter of 2014, we reported net loss of $7.1 million or $0.33 per share. Adjusted EBITDA for the year ended December 31, 2014 was $15.5 million compared with $6.7 million for the same period last year. While adjusted EBITDA for the fourth quarter of 2014 was $5.3 million loss compared with $1.9 million for the same quarter last year. Turning now to balance sheet, the company had approximately $65 million in cash and short-term deposit as of December 31, 2014 and working capital of $64.6 million. We remain on track with regards to cash use and the company used about $16.5 million in cash during the full year ended December 31, 2014 to fund ongoing operating activities. During 2015, the company will continue to primarily invest in its marketing infrastructure in Europe, to advance the commercialization of NexoBrid across Europe, and in our research and development efforts to develop our products for additional territories and indications. As a result, cash use for the year is expected to be in the range of $20 million to $22 million. With that financial overview let me turn the call back to Gal. Gal?

Thank you for that review Sharon. We are committed to achieving a number of value creating milestones during 2016 as our launches in Europe and our clinical studies continue to gain traction. Throughout the coming year we look forward to expanding our launch in Europe, finding additional distribution agreements, and perhaps even obtaining a marketing authorization in additional market as well as to initiate the U.S. Phase 3 study and reporting top line results from our EscharEx Phase 2 study. We continue to execute our strategy and are encouraged by the enthusiastic feedback of physicians who recently launched target markets such as Scandinavia, UK, Italy, Belgium, Poland, and Spain. And now operator, please open the call for questions. Thank you.

Thank you. [Operator Instructions]. And our first question comes from the line of Bruce Nudell of Credit Suisse. Your line is now open.

Hey guys, this is Matt in for Bruce, can you hear me okay.

Yeah, thank you.

Congrats on the quarter and thanks for the commentary on center training. I was wondering if you can give us any more color, as much as you could share on commercial trends for example, how many centers have been trained so far in Europe and sort of what’s your goal when you say most of the larger burn centers, how many centers is that by the end of the year?

As I mentioned before we have trained approximately a third of our targeted burn center throughout Europe which equals about, I would say little shy of 50. And next year we aim to train practically all, I don’t say all because there is always a possibility of one center having some issues but practically all the burn centers in the countries that we are covering. So for example as I mentioned in previous calls, since in France we are not allowed to provide -- physically provide the product to burn centers until there is a discussion at the national level reimbursement committee and we are training the centers in France. Once we get this clearance which we expect to get in the second half of 2015, we will start to train center by center in France. So to conclude, as I said we have trained approximately a little shy of 50 centers this year and we are aiming to train the rest in 2015.

Okay, thanks and then as a follow up is there any color you can give us on how many of those that you’ve trained so far, what percentage of those are generating revenues for you at this point?

Well I would say that about 80% of these centers have been supplied and I think about 30 and so, over 30 have started to use the product on patients and I would say that about a third of them or about a quarter of them are practically ordering.

Okay, great. Thanks, I’ll get back in queue.

Thank you and our next question comes from the line of Raj Denhoy of Jeffries, your line is now open.

Hi, good afternoon or morning, excuse me. Wonder if I could ask a bit about the European experience as well. I know it’s relatively small numbers of commercial cases thus far but can you comment on how much material is being used per patient as we try and calibrate the models in terms of the revenue you might generate per case, have you learned anything in terms of how much is actually being used?

Thank you for the question. When we are trying to estimate what is the average hospitalized burn patient on a steady state, we try to gather this information from the what you called the USNBR from our clinical studies and our estimations are that this should be around let’s say 10% of the total body surface area of the patient. This is how we end up with our cost of treatment of about $4000 to $5000. But what we see is that when we launched the product, physicians don’t start to treat any patient. They usually start with a small patient, may it be a hand or a limited burn and only after they do that and they get a bit of confidence and they see how the patients goes and being treated, now often being discharged from the hospital then they go to the second patient and the third patient. So because there is also like a learning curve in terms of TBSA, I would say that in the first year, the TBSA is usually I would say half of what we would expect on a steady state. It doesn’t mean that all the patients that are being treated are small patients. Some physicians treat very large patients, some physicians are even treating, you know, we had few cases where there was a patient with let’s say 80% or 90% TBSA that they decided to start and treat with NexoBrid because these kind of a patient is very difficult to take to the surgical theater. But on average I would say that there is also a growth in TBSA and they start with an average of half of what we would expect in the steady state.

Okay, that’s helpful in terms of, when you train these centers right, in terms of what the trend is for them to continue to or to start commercial sales of it, how much does reimbursement or payment, formalize payment represent as far as a deterrent to the adoption at this point?

Currently we didn’t get any push back on price or reimbursement of physician saying we don’t have you know and we can’t afford it or something like that. Some center can practically order it. They have -- the physician wants to order it, he sends an order and he is being ordered by the pharmacist. In some center depending on the country-by-country a market access there are processes enabling to do so. For example, in the UK every hospital has to put the product on the formulary before we can practically supply the product to the hospital on commercial scale. And because this formulary committee are gathered every three months, five months, two months, and you are not always first in queue, it takes time to unfold this market access and processes. In some countries like in Italy, Belgium you need to submit the price to a national level, you still get the private product to the hospital when they can purchase the product and we have just seen that happening but it is not as if you are past this stage of forgetting an exit price with the government. It is not that the government is going to invest there but it has to give them the price. So, it is a center-by-center and country-by-country thing. Some have just managed to buy and in some we have to have a discussion with the administrator, in some they have to have discussion with the administrator, and in some you just have to go through some kind of a formal process to do that.

Okay, and just two last ones if I could. You gave guidance in terms of your cash burn in 2015, could you offer us anything in terms of what you think you can do on the top line in terms of commercial sales?

I think that's a -- we have discussed before that we believe that during a launch phase it will be an unconservative for a company to give guidance on the top line because really things change. We don’t yet see or though we did see for example in the fourth quarter, I would say an increase in revenues because the revenues in the fourth quarter are practically equal to what we had in the first previous three quarters. We are not yet in a position that we can say this is a trend and that we can accurately predict the sales going forward. So, we prefer in the first year not to give guidance. We do believe in terms of guidance that we will become a standard of care and like other drugs it would take us about five to seven years to get there. And we do not foresee substantial sales I would say in the first year or two.

Was there anything in the fourth quarter in terms of stocking or anything anomalous that would make that increase from what we are seeing in the first three quarters kind of not sustainable now?

We don’t have any specific indication for that but at the same time we cannot preclude that. So, as I said before we see patients being treated, we see orders being generated outside of Germany, we have seen the enthusiasm in the -- the German speaking conferences was in January when many physicians at all start from central and come and tell us we treated three patients, we treated four patients. We cannot always track every patient that has been treated. So it seems that there is some traction there but I don’t have evidence or facts that I can share with you and unless I have such evidence or facts I don’t want to go into speculations or estimations.

No, that's helpful. I will leave it there. Thank you.

Thank you. And our next question comes from the line of David Maris of BMO Capital Markets. Your line is now open.

Hello, it seems that the best news that you have announced is that the change in the FDA requirements, maybe though I just want to be clear is this a proposal or is this set at this point. Have you gone to the IRBs with new plans for the studies and are you signing them up with that or is this just a proposal from the FDA that you are still working out and if so what do you think the timeline is?

Thank you for the question. Well, first of all the way that the FDA announces itself is by providing recommendations. They don’t -- they give you recommendations. They believe that this is what you should do and in many cases it means that this is what you should do. So, as I said before this is what we are doing. We were very happy to receive this from the FDA because we have been working very closely with the FDA for many years and we were happy to see that the FDA consulted with the U.S. burn surgeons and provided us with this input. What we are doing now, we are adapting the protocol and the statistical analysis granted goes with it and we intend to submit the protocol to the IMD and to the IRBs and within practically a month or so and to be in a position to help to open the study in the first half of this year. Again, there are processes so we are submitting it to the IRBs. We have to wait for the IRBs to approve the protocol and big stakes and it can take two months, it can take a bit more. We are hopeful that because many of the IRBs already review the protocol and practically somebody already approved it in the previous version that this now will be shorter time frame. From our perspective it is tomorrow morning, we submit the protocol and once IRBs approve it we can commence the studies next, with Europe ready and everything is ready in the U.S.

Thank you and our next question comes from the line of Akiva Felt of Oppenheimer, your line is now open.

Hi, guys. This is Amit Verma in for Akiva. I just had some clarification points. So as you said the patients enrollment requirements decreased from 200 patients to 175. I was curious if you could provide additional details relating to assumptions about getting the top line data on the first half 2017 enrolment rates and what not and a follow on after that?

Sure, thank. Well assuming that we will start to recruit patients in the second half or mid 2015 and it will take us about year and half to recruit the study sample size, so we are recruiting at 2015 and 2016 and therefore we believe that we will be in a position to report the top line data in the first half of 2017. The last point of acute data that we will be looking at would be wound closure and according to the FDA regulations you have to wait for wound closure and then you have to follow up the patient for three months. So once the last patient is in we have to wait approximately a month for wound closure and then approximately 3 months for a confirmation or follow up of this wound closure data and then crunch all the data, analyze it and be able to provide a top line data. In parallel the time is elapsing so we believe that after 12 month we will have already the 12 month long-term follow up of cosmetic and 12 months later we have the 24 month follow up. So if we have the top line data in the first half of 2017 we have the 12 month follow up at the first half of 2018 and we have the 24 months follow up at the first half of 2019. Now because I would say surgical burden which is practically an acute end point but mainly cosmetic and function which is a long term end point, is no longer requested by the FDA to be a primary end point and it’s now a safety end point. And because the policy is approved in Europe. And subject to -- and I am saying that subject to us being able to have significant or positive results in our primary secondary and safety end points we would consider to discuss with FDA the possibility to submit the acute phase data which is practically more of the data of the study. It is part of the DNA and supplement the long-term follow up data as this becomes available. We still have to have the FDA consent for that and this is what we would consider.

Thanks. I guess on heels of that, when do you expect to have some commentary from the FDA about the possibility of I guess the filing on the acute data and I guess if you could just recap what the secondary surgical end point and I miss the other end point?

Thank you. So first of all regarding the end point, so the primary end point of the study now which is also the primary end point that was in the study before or maybe I would go one second back and really give bit more count. In the previous protocol there were three primary end points in hierarchy. The first one was eschar removal, the second was surgical burden, and the third one was and only for a take on cosmetic end function. What the FDA did now is the first primary end point could remain a primary end point and will now be compared to placebo, to gel, to reacal [ph]. The two other primary end points, the surgical burden will be now be assessed as a secondary end point against terms of care, like it was before and the cosmetic end function at the point which was non-inferiority end point would now be assessed as a safety end point and will be compared to sound of care at non-inferiority. So this is in terms of the end points. In terms of discussing it with the FDA we intend to submit obviously the protocol and we intend to discuss with the FDA the fact, the statistical analysis plan which is something that we can do while the study is still ongoing, and we obviously be able to discuss with the FDA in what is called a pre-BLA meeting. Before you submit the BLA, you go to the FDA, you should be doing a pre-BLA meeting and in that stage we will need to ask the FDA if they agree that we can submit the data of the acute phase. At that stage we hope to have the data. So, it is always better to discuss with FDA when you have the data rather than when you think you have the data. So based on this – this is why I say submit to data. I think if the data will be very compelling in my point of view or in our approach, we believe that it makes sense to submit the file and wait for the long-term follow up and this is what we have done in Europe. But since there are two parties to this tangle and we have the FDA we will have to patiently wait for the FDA see the conduct.

Okay, great. Thank you very much.

[Operator Instructions]. Your question comes from the line of Bruce Nudell of Credit Suisse. Your line is now open.

Good morning, I am sorry I just jumped on late but Gal one of the things that you discussed with me is that one of the learning’s that has to go on in the adoption of NexoBrid, is that -- this little change in clinical mindset and some protocol things, so in terms of with NexoBrid your skin sparing but you are not necessarily throwing on a graft right away. And you got to deal with kind of keeping that wound healthy as it matures and heals probably more completely and easily than with you know with a graft and you avoid the surgical graft. And also pain management on the fore, could you just talk about that and the best practices that need to be imparted so that you could further speed adoption?

Thank you very much. Well as Bruce mentioned, one of the things that NexoBrid does it removes the eschar but it doesn’t affect the dermis. It doesn’t harm viable tissue so it gives the physician the opportunity to graft less and this is what we see in the clinical studies that we have a significant reduction in grafting. Now this is an opportunity. It is still in the end the physician to decide if he wants to graft the patient or he wants to spontaneously epithelialize the patient if dermis was there. When you want to epithelialize wound, it takes longer then when you closing it with a graft. So it may take a few days or weeks longer to close the wound but you are saving the surgical sequala as well as the donor side pain, donor side scars and all these kinds of things. So physicians today are also epithelializing wounds but with NexoBrid obviously this opportunity goes even further. And this is something that they are aware of but now practicing more. And when you try to heal a wound, any wound regardless of NexoBrid you have to make sure that you do several things for example the wound should desiccate, the wound should not become infected and so and so forth. And this is what they are now doing. And how do we accelerate that or how do we support them in that. First of all we are relying on what they know already, not that we are teaching them anything new that they don’t know. I mean plastic surgeons do know how to treat wounds or how to heal wounds but in our training we walk together with them on the wound healing phases and what can be expected, what should be avoided, and things like that based on our previous clinical data. So that everything will be fresh in their minds if one wants to say that one day do these kind of things. The other things that we are doing by the way, we are establishing what is called centers of excellence throughout Europe. Centers that have treated more patients, that have experience and these centers of excellence are now inviting additional physicians from other centers to first of all observe how they treat patients with NexoBrid, ask questions, be it a farewell point. We see now for example physicians from Sweden asking questions from physician from Germany and France. This is why we are encouraged by the good feedback that we get now from Italy, from Spain, from Belgium. There was a very good case now in Belgium in a very good center. So I think it’s a more in knowledge and experience that we would be in Europe then most of problems will be on the ground. We are also doing what we now call local training as we are trying establish local trainers. We have now one in Spain and other countries where we have some of the locally that is part of their -- that can support them, train them, is a point of reference for question and things like that. So as I said before we have several tools and strategies to support the physicians, provide them training guidance, and to address any technical questions that they may have.

And just another thing that you kind of mentioned to us regarding, IMH cost tool and one of the subtleties of that is you are able to check what the hospital thinks its internal costs are. How universally are you finding that with NexoBrid hospitals could get comfortable with the cost of NexoBrid versus the reduction in other cost and therefore be able to maintain or improve profitability at their own institution?

Thank you. I think that we have worked with IMH for particularly almost close to a year and this was a very, I would say this was a substantial part of our marketing expenses. And what we have done, we have been to what is called the HTA model, a health technology assessment model where we model the treatment of a burn patient regardless of NexoBrid. What is -- how do you treat a burn patient, debride him, than you can graft him and so on. And then we assign the probability for going to each treatment based on the results of the RCT study that were published on burns. For example what is the probability of a NexoBrid patient to go to an autograph, let’s say the others and so on. After you build this kind of a treat you try to assign the cost of each stage and when we do that we have to do it on a country by country level. So this is for something like 10 countries, Spain, England, France and so on and so forth. It’s not always trivial to be able obtain this cost because in this kind of indications these costs are not always readily available. So we kept the model flexible in terms -- in a way that when you go to a hospital and you show them this thing and he says no in my hospital the cost of excision is not $12,000 it is only $9000. Okay, he is able to plug in his own numbers. If he feel it uncomfortable with any number he can plug his own number and still when we do that we see that NexoBrid is cost benefit because at the end of the day with NexoBrid you a phasing two of the substantial cost driver surgery which is a costly procedure and time in the hospital which is a costly element. In addition to that you can save cost on blood transfusions, using of a diagnostic tool, and other things but these are the main things. So wherever they play with it they usually end up with favorable results.

That’s great and did you comment on EscharEx trial and how that’s going and what it looks like?

Well, first of all it’s a double blinded study, it has 72 patients, 3 indications, and [indiscernible] and post surgical complications. The study with EscharEx versus placebo or the gel of EscharEx. We have opened most of the centers in their third and fourth quarter and now we see an increase in recruitment and we are on plan currently. If we could keep up with the same rate we will be able to report the top line results at the end of 2015. It is a double blinded study. We are very encouraged by what we would heal or the impression that we see from physician that was in an investigation meeting now. Everybody came in, we see lot of good vibe, good positive reactions. We also rely on our feasibility study that we have completed in 24 patients where we saw that EscharEx can practically remove the eschar in three or four or five applications and when compared to what is now existing in the market let’s say in the U.S. we are not aware of this level of efficacy in existing products, not even close. So we are very encouraged by that and because of that we have just decided to open additional centers because we really want to drive this study forward and get these results and continue with this program.

Perfect, thank you so much.

Thank you.

Thank you and I am showing no further questions at this time. I would like to turn the conference back over to Mr. Cohen for any closing remarks.

Thank you. So, thank you for your questions and for your continued interest in MediWound. We look forward to updating you again when we report our first quarter results. Have a good day. Thank you very much.

Ladies and gentlemen thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Have a great day everyone.