MediWound Ltd. (MDWD) Q1 2022 Earnings Report, Transcript and Summary

Good day and welcome to the MediWound First Quarter 2022 Financial Results and Presentation of the EscharEx Phase 2 Clinical Trial Results Conference Call. At this time all participants are in a listen-only mode. Following management’s prepared remarks we will hold a Q&A session. [Operator Instructions]. At this time I would like to turn the conference over to Monique Kosse of LifeSci Advisors. Please go ahead.

Thank you, operator and welcome everyone. Earlier today, MediWound issued a press release announcing its first quarter 2022 financial results and provided a corporate update. We will be reviewing those results with the management team in addition to hearing from two KOLs on the results of the EscharEx U.S. Phase 2 trial which were announced in a press release issued on May 12, 2022. You may access both releases on the company’s website under the Investors tab. With us today from management are Sharon Malka, Chief Executive Officer of MediWound; Ofer Gonen, Board Member; and Boaz Gur-Lavie, Chief Financial Officer. Also joining us are Professor Lior Rosenberg, Chief Medical Officer and Dr. Cyaandi Dove from Advanced Wound and Ankle Center, Las Vegas and an investigator in the EscharEx Phase 2 study. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A session relating to MediWound’s expected future performance, future business prospects, or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Although, the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those forecast due to the impact of many factors beyond the control of MediWound. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events, or otherwise. Participants are directed to the cautionary notes set forth in today’s press release as well as the risk factors set forth in MediWound’s Annual Report filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. At this time, I would like to turn the call over to Sharon Malka, Chief Executive Officer of MediWound. Sharon?

Thank you Monique. Good morning to our listeners in the U.S. and good afternoon to those joining us from Israel. Welcome to our first quarter 2022 conference call to discuss our financial and recent operational highlights. We are very pleased to ask two esteemed key opinion leaders with us on the call today. Well first of all Lior Rosenberg, Chief Medical Officer of MediWound and Dr. Cya Dove, the principal investigator in our EscharEx Phase 2 studies and pharmacology study from the Advanced Wound and Ankle Center in Las Vegas. They will share their insights on our EscharEx trial and data and also provide some perspective on the overall wound care practices. After that discussion we will hear a quick review of the financials from Boaz before opening the call for Q&A. First, let me provide a quick review of our quarter and recent updates before taking a deeper dive with our KOL into the clinical data for EscharEx. Starting with EscharEx, we were excited to report positive data from the U.S. Phase 2 clinical study of EscharEx for the debridement of venous leg ulcers. The study met its primary and key secondary endpoints with statistically significant it response compared to the control arm. Study demonstrated significant improvement over the current standard of care. And no observed deleterious effect on wound closure and no safety issues were observed. We highlighted some of these results at the SAWC Spring 2022 Symposium in April and received a very warm welcome and high interest by the top wound care specialists from around the globe. The interest was very encouraging and we were very pleased to have received recognition for our poster which was selected as one of the top 10 posters out of 235 posters at the conference. In our next NexoBrid program we continue to partner with BARDA and Vericel for the approval of NexoBrid and look forward to bringing these innovative products to the U.S. market. We remain on track for a midyear resubmission of the NexoBrid BLA and we anticipate a six-month review process which would position NexoBrid for a potential approval by year-end and a commercial launch in the U.S. in the first half of 2023. To that end, BARDA expanded its contract, providing us with supplemental funding of $9 million to support the NexoBrid BLA submission and the ongoing expanded access protocol, which will run through approval. Lastly on NexoBrid, we are proud to have started the project with the U.S. Department of Defense for the development of NexoBrid for the U.S. Army as the nonsurgical solution for field care burn treatment. This research project, if successful, could open the gate for armies all over the world as well as simplify our supply chain costs and administration. Let me now provide a quick review of EscharEx Phase 2 study designs and the key results before handing the call to our esteemed KOL. The study was a multicenter prospective randomized placebo-controlled adaptive design study, evaluating the safety and efficacy of EscharEx in debridement of VLUs compared to Gel Vehicle as a placebo control and compared to the nonsurgical standard of care of either enzymatic or autolytic debridement. The study enrolled 120 patients with 119 treated at approximately 20 clinical sites, primarily in the United States. Study participants were treated with either EscharEx 46 patients, gel vehicle 43 patients, or non-surgical standard-of-care another 30 patients, with a three-month follow-up. The single primary endpoint was incidence of complete debridement, clinically assessed, within up to eight treatment applications during an assessment period of 14 days, compared to the gel vehicle placebo control as agreed with the FDA. Secondary and exploratory endpoints assessed time to achieve complete debridement, reduction of pain, reduction of wound area, granulation tissue, and quality of life, enabling evaluation of clinical benefits compared to both gel vehicle and a standard of care. Incidence and time to achieve wound closure were assessed as safety measurements. Turning now to the study results. The study met its primary endpoint with high degree of statistical significance demonstrating that patients treated with EscharEx had a statistically significant higher incidence of complete debridement compared to the gel vehicle. More specifically, 63% of the patients treated with EscharEx, 93 [ph] patients out of 46 achieved complete debridement by the eighth treatment, and this compares with only 30% of the patients treated with hydrogel vehicle, which is about 13 patients out of 43 with a p-value of 0.004. EscharEx efficacy superiority remains statistically significant compared to the gel vehicle, also after adjusting for pre-specified covariates ascribed to patient baseline characteristics, wound site, wound age, and regions. The study also met its key secondary and exploratory endpoints that provides further insight on additional efficacy parameters and can establish clinical benefit. Starting with head-to-head comparison with the nonsurgical standard of care, including enzymatic debridement or autolytic debridement. 63 of the patients treated with EscharEx achieved complete debridement compared to only 13% of patients treated with standard of care, four patients out of 30 patients within the 14 days assessment period and the time to achieve complete debridement was significantly shorter. The estimated median time to complete debridement was nine days for patients treated with EscharEx compared to 59 days for patients treated with a nonsurgical standard of care with a p-value of 0.01. Moreover, on average, complete debridement was achieved after less than four applications with EscharEx compared to almost 13 applications with the nonsurgical standard of care. This significant improvement over the current standard of care is important when you consider that the non-sharp debridement agent and the metical adder [ph] currently available on the U.S. market require daily applications for several weeks to achieve complete debridement, yet still generate hundreds of millions of dollars every year. Patients treated with EscharEx demonstrated significantly higher incidence of at least 75% granulation tissue at the end of the treatment period compared to the Gel Vehicle with p-value lower than 0.001, which is required for wound healing. And finally, favorable trends were offset in wound area reduction and reduction of pain compared to Gel Vehicle. The above efficacy results achieved our key goals in this study; one, to demonstrate that EscharEx efficacy in debridement chronic wounds; two, to establish a clear improvement over the current standard of care; and three, to give us a clear guidance for future pivotal studies in the indication of our interest. In addition, the study showed that EscharEx was safe and well tolerated and the overall safety was comparable between all arms. Importantly, there were no observed deleterious effect on wound closure and no material differences in reported adverse events. Actually, the estimated time to complete wound closure was 64 days for patients treated with EscharEx compared to 78 days for patients treated with standard of care. With that, we achieved additional goals for this Phase 2 study, which was to assess the EscharEx safety and tolerability and show that it's well tolerated treatment for debridement of chronic wound. Let me now turn the call over to Professor Rosenberg, our Chief Medical Officer, to provide us with some color regarding the unmet need, the role of debridement in wound management, the robust clinical evidence generated to date, and how a product like EscharEx would fit the current treatment paradigm. Professor Rosenberg, please?

Thank you very much, Sharon and good morning, everybody. First, I would like to thank our partners, the investigative staff and especially, the patients and their families for their commitment and perseverance in completing the study in the face of all the challenges posted by the COVID-19 pandemic. Let me start with a brief overview of the debridement role as a critical component of the wound management. Efficient debridement is an essential step in the acute and chronic wound management. Debridement is involving the removal of nonviable tissue from chronic wound to stimulate the granulation tissue and necrotization [ph]. The underlying pathogenic abnormalities in chronic wounds caused a continual buildup of necrotic tissue and regular debridement is necessary to reduce the necrotic burden and achieve healthy granulation tissue. Debridement also reduces wound contamination and therefore, assist in reducing tissue destruction. Dead spaces that may otherwise harbor material growth must be exposed during debridement. Routine care of non-healing chronic wounds start with debridement. The necessity to induce the functional causes of tissue repair by methods of debridement, selective and non-selecting are ready each with its own advantages and limitations. The choice of debridement techniques is highly dependent on site of care, wound care, and patient. Sharp debridement is the dominant debridement method used, non-sharp debridement techniques mainly autolytic or enzymatic debridement are primarily used adjusted to sharp or reserved for patients considered ineligible for sharp debridement. There is a great unmet need to effectively debride chronic wounds in an easy-to-use, nonsurgical, and prompt manner to enable wound healing. Moving to the EscharEx clinical evidence, I continue to be impressed by the compelling clinical data generated to date in EscharEx clinical trials. In the first Phase 2 randomized control study, evaluating EscharEx safety and efficacy in several etiologies, including DFU, diabetic foot ulcer and leg ulcer in post-traumatic wound. Patients treated with EscharEx demonstrated a significantly higher incidence of complete debridement compared to patients treated with Gel Vehicle. EscharEx, 55% versus Gel Vehicle, 29% with a p-value of 0.007, and complete debridement was achieved earlier in patients treated with EscharEx. The effect was even greater in diabetes lower extremity ulcers, and venous leg ulcer and EscharEx safe and well tolerated in all tested doses and dosing regimens. The robust results across multiple endpoints in the U.S. Phase 2 randomized controlled study for the debridement of BLU corroborated the results from the first Phase 2 study and demonstrated the potential significant clinical and patient beneficial impact that EscharEx may have on patient's life. EscharEx demonstrated significant higher incidents of complete debridement within up to eight applications, and that's compared for both Gel Vehicles and nonsurgical standard of care. The time to achieve complete debridement was significantly shorter compared to the control arm with a significant lower number of daily applications. In addition, EscharEx demonstrated higher incidence of at least 75% granulation tissue post debridement, which is critical for wound bed preparation towards wound healing with no deleterious effect on wound healing. Lastly, data from our ongoing Phase 2 pharmacology study, EscharEx demonstrated safe and effective debridement of lower leg ulcer, both diabetic food ulcer and venous leg ulcer with few daily applications. EscharEx demonstrated significant debridement of wound during the treatment period average of 84 nonviable tissue percent nonviable tissue wound and significant decrease in wound size by the end of the two-week follow-up. In addition, in evaluation of the tissue samples and florescent images indicated a reduction of biofilm score reduced from 2.44 at baseline to 0.7 post-treatment and bacterial load following treatment with EscharEx [indiscernible] reduced from 1.72 of baseline to 0.7 after debridement. The product like EscharEx fits into the unmet need for a fast and effective nonsurgical debridement for chronic wound. It is an easy-to-use daily topical journey that as documented in the study significantly improves the rate of complete debridement after few applications, thus facilitating wound debridement. I believe that EscharEx holds great potential to be a significant contributor in this market and welcome addition to our armamentarium for chronic wound care. Let me turn the call over to Dr. Cyaandi Dove, who treated more than 10 patients with EscharEx as a principal investigator in both Phase 2 studies, to share her clinical experience with EscharEx and how a product like EscharEx would fit within the current wound management practice. Dr. Dove?

Thank you, Doctor, and good morning everyone. It's my pleasure and privilege to joining this call and share my hands on experience with EscharEx. My name is Dr. Cyaandi Dove and I am the owner and Chief Medical Officer at Advanced Wound and Ankle Center in Las Vegas, Nevada for the past 16 years. In our clinical practice, we deal with chronic non-healing wounds on a daily basis. A chronic wound, as we all know, is debilitating both physically and physiologically. It also serves as a point of entry for local and systemic infections. It is a huge financial burden on patients, caregivers, and society. The data that we're talking about today is very positive and encouraging in a disease where we really have very few treatment options that are effective and really worked. Despite the growing number of new and innovative wound healing products on the market, why does the treatment of chronic wounds still continue to be such a great problem. For non-healing wound products to work, you initially have to have a wound that is clean and physiologically ready for these products. Effective debridement is a critical first step for wound bed preparation in order to facilitate effective management. As described by the Doctor previously, the most commonly used nonsurgical debridement methods include enzymes, we have hydrogels and other topical dressings, which require quite a long time to achieve a clean wound bed, if they achieve this at all. I have had the privilege of treating several patients suffering from either venous leg ulcers or diabetic foot ulcers with EscharEx. In my experience, after several applications of EscharEx, usually two to six applications, what we find is that the wound has a very vibrant, healthy, robust, and uniform granulation tissue. Granulation tissue that is ready to move on to negative pressure therapy or cellular therapy or even close secondarily. The level of debridement achieved via EscharEx is very precise and not something that I can replicate with traditional debridement methods, especially sharp debridement, which is typical. That is why it reinforces my belief that EscharEx is precise, and not -- I'm sorry, that is why it enforces my belief that EscharEx has the potential to become a best-in-class topical debridement product for the treatment of chronic wounds. We encourage MediWound to move forward with its continued clinical development, and I look forward to the data EscharEx becomes available. I really appreciate the opportunity to speak to all of you today. And now I will turn things back to Sharon. Thank you.

Thank you very much, Dr. Dove and thank you, Dr. Rosenberg. Your insight underscores the great need for a product that can effectively debride chronic wounds in a nonsurgical, effective, and prompt manner. Chronic wounds represent a significant burden to patients, health care professionals, and the health care system. They affect millions of patients and the cost of treatment runs into billions of dollars annually. We are excited to bring the EscharEx clinical development plan forward given the magnitude of its commercial opportunity. In summary, debridement is a critical component of wound care. There are about 2 million patients with venous leg ulcer and diabetic foot ulcer that undergo debridement every year in the U.S. alone. The two most commonly used nonsurgical debridement method enzymatic or autolytic generated several hundreds of millions in sales every year, yet can take weeks to show effect, leaving much room for improvement. With EscharEx, on the other hand, we've shown to be safe and effective in deployment of hard-to-heal wounds with a few daily applications. Looking now to our plans for development, we believe the data from this study and the clinical evidence generated to date provides further insight on the additional efficacy parameters and can establish clinical benefits. This enable us to better design the pivotal tariff. We plan to file that clinical data with the FDA and to request an end of Phase 2 meeting in the second half of 2022. Our goal is to work with the FDA on establishing a plan for a potential Phase 3 pivotal plan for EscharEx as soon as possible. EscharEx clearly has the potential to become a game-changing therapy, and we are committing to bringing it to the market. We believe EscharEx is well positioned to potentially become a best-in-class debridement option for millions of patients suffering from hard-to-heal wounds and transforming wound management. Before turning the call over to Boaz for a summary of our financials, I want to address the news announced today of my transition to the Board and the appointment of Ofer Gonen as the CEO. I have accomplished my goal as CEO of positioning the company for long-term success and strong future. MediWound is on the cusp of a very exciting chapter. The company's pipeline portfolio is in a strong position for continued advancement, including market expansion for our successful commercial product NexoBrid, a potential near-term launch in the U.S. for this product, and a promising best-in-class therapy for wound care. It has been an honor to lead this company and the entire team at MediWound, and I look forward to supporting Ofer in my new role as a member of the Board of Director and helping the company realize the tremendous opportunities that lay head. Ofer brings more than 20 years of experience in managing LifeScience investment and global businesses. His extensive managerial experience in leading companies, global network, and deep understanding of MediWound's strengths and potential position him uniquely to lead MediWound in its next phase of success. I will continue supporting the company as a Board member, ensuring success with our BLA process and reinforcing our strategic alliances and collaboration. We are positioned for success and poised for our transformational year. Now let me turn the call to Ofer, please.

Thank you. Good morning, everyone. I'm honored and excited to assume the role of MediWound's Chief Executive Officer. Thanks to the strong foundation made by Sharon and his team as well as the experience and ongoing support of our Board of Directors, MediWound has tremendous potential to grow into a leading global biopharmaceutical company. I look forward to driving the next phase of MediWound. We will continue to advance our lead programs to expand patient access to our technologies and increased value to our shareholders. Let me turn the call back to Sharon.

Thank you, Ofer. Now let me turn the call to Boaz for a brief look at our financials. Boaz?

Thank you, Sharon, and good morning everyone. We have started what we believe to be an eventful year. We recently raised $10 million net. This fund, along with our NexoBrid commercialization effort and the expected upcoming BLA approval provide us with a solid balance sheet to meet the upcoming milestones and activities throughout the next 24 months. Let me now review the financial statement of the quarter. Total revenues for the first quarter of 2022 was $4.4 million compared to $5.8 million for the same period last year. The decrease this quarter on a comparable basis was mainly related to product revenues due to a decrease in broader emergency stockpile equipment of $1.2 million. Gross profit was $1.5 million with a gross margin of 33% compared to a gross profit of $2.4 million and gross margin of 41% for the same period last year. Operating loss was $3.3 million compared with $1.9 million in the fourth quarter of 2021. This resulted primarily from a decrease in product revenues to BARDA. Net loss was $3.6 million or $0.12 per share compared to a net loss of $2.9 million or $0.10 per share for the fourth quarter of 2021. Adjusted EBITDA was a loss of $2.6 million compared to a loss of $1.3 million for the first quarter last year. Moving to our balance sheet highlights. As of March 31, 2022 cash and short-term investments were $16.8 million. We remained on budget, utilizing $4 million in the first quarter of 2022 for operational activities. Again, our cash position is expected to be sufficient to support the anticipated operating activities for the next 24 months. For the full year of 2022, we expect cash use to be in the range of $11 million to $13 million. With that, I conclude the financial overview. I will now turn the call back over to Sharon. Sharon?

Thank you, Boaz. I'd like to thank the investigators, and the KOL, and patients who participated in this study and especially, to thank Professor Rosenberg and Dr. Dove for joining us this morning. Naturally, we are grateful for their participation in our study and for giving us their time this morning, but we also appreciate their ability to view the clinical data and place it into a context of its ultimate objective, which is helping patients in real-world clinical practice. So thank you. In closing, we are very well positioned. We are on track to resubmit our NexoBrid BLA by midyear and continue to anticipate approval by the end of the year. We are preparing to meet with the FDA in the second half of this year to discuss EscharEx and gain clarity on path towards approval, and we are welcoming Ofer Gonen to take the company to the next level of success. I look forward to continuing to support the company as a Board Member and as certain, we will enjoy a smooth transition. With that, I would like to turn the call to the operator to open the line for questions. Operator?

[Operator Instructions]. Our first question comes from Josh Jennings with Cowen.

Hi, this is Bryan here for Josh. Thank you for taking my questions. I wanted to ask about the comment in today's press release about realizing the potential of your assets. Can you address your interest in looking for a partnership for either EscharEx or NexoBrid outside the U.S. and I guess maybe more plainly, given the strength of the Phase 2 data we've seen for EscharEx, what's your commitment to independently completing the Phase 3 program?

Good morning to Bryan and thank you for the question. So as communicated previously, I think that now we are even better positioned for the next stage in terms of flexibility. We have the financial injection or the cash injection we had in the first quarter to strengthen our cash position. Now we have additional clinical data, very robust clinical data providing us with the ability to establish an improvement over all current nonsurgical standard of care. This provides us to explore all alternatives which are taking the product to the finish line by ourselves or exploring any other potential collaboration. It's premature now to discuss the alternative, but I can share with you as you really frame it, we have now the opportunity to explore all options given the robust data that we have on hand. Thank you.

Okay, thanks for that. And I guess on the NexoBrid BLA, you've outlined a timeline to approval that matches what you'd face in a typical Class 2 resubmission. So my question is, has the FDA definitively indicated that this is a Class 2 resubmission and if so, can you discuss where you stand with factors such as the inspections and your readiness for a potential AdCom panel, if that's requested?

Thanks. So again, we remain on track for a mediary submission for the NexoBrid BLA, and we anticipate a six-month review process. The six-months review process is by law. Usually it takes either two to six months. But giving the COVID and the backlog FDA has since the COVID, we know that it will take six-months of review, which position NexoBrid for a potential approval by year-end and commercial launch in the beginning of 2022 in the first half of 2023. We can't speak on behalf of the FDA regarding the ability to get for pre-approval inspection in our facilities. That being said, we have been aware that the FDA inspected facilities outside the U.S., both in Europe and in Israel, and we are encouraged by that. Looking forward to get the FDA response while we submit the FDA. As you know, within 30 months from resubmission, we will get the FDA -- we expect to get the FDA acceptance and time line for the review as well as for the potential pre-approval inspection. Thanks.

Okay, thank you.

Our next question comes from Kevin DeGeeter with Oppenheimer.

Hey, thanks for taking my questions. And first I want to thank Sharon for all his help and feedback for several years. And my question, I don't know whether Dr. Dove is here for Q&A, but I guess we're primarily interested in better understanding how nonsurgical debridement is used in VLU and DFU patients, specifically circumstances under which its use as a standalone versus an adjunct to sharp debridement?

Sure. Thank you very much for the question, Kevin. You -- I can share with the audience that you were joining me in the last SAWC, the last conference, and we did see the nonsurgical means for debridement is used in conjunction with up as a maintenance debridement, but this is what we know about the market. And let's go to the fact that Dr. Dove is available and provide you with her perspective from her experience. So Dr. Dove, can you share your view with that point?

Yes, I can. So with the EscharEx, clinically, I did not -- when we applied it as per the parameters of the trial, this was applied and there was no assumptive sharp debridement even in patients who had fairly deep wounds for the diabetic foot ulcers. Traditionally, in my private practice, it is some type of enzymatic debridement, but almost always in conjunction with the sharp debridement. So the use of the EscharEx, again to reiterate, was very precise, much more precise than what I can replicate by a traditional sharp debridement with the 15 blade in my office. I hope that gives some clarification to you.

Thank you. And maybe building on that, I mean, based on the Phase 2 data, and I guess this is for the company or Dr. Dove, do you envision an evolution of standard of care potentially where EscharEx replaces the nonsurgical debridement, but where most patients continue to get surgical debridement and thus the nonsurgical essentially an adjunctive process or do you anticipate earned vision essentially a reduction in the volume of sharp debridement and the more standalone nonsurgical only debridement technique?

Thank you for that, Kevin. So I will start to provide you what we know about this and what we expect, and then Dr. Dove can add her perspective. Given the feedback that we have, which comprise of several market research that we conducted in the U.S. and in Europe. And given the feedback we get just in the last conference in the U.S. SAWC, we believe that given this efficacy of EscharEx providing an effective and prompt debridement, clear debridement, preparing the wound bed for the next stage of healing, we believe EscharEx can be positioned as a first-line therapy, taking not only -- not only replacing the current enzymatic standard of care, but rather take also chance from the autolytic as well as on the sharp debridement. And this is exactly what the market research indicated and what we got as a feedback. And the benchmark for that things to the ones that had some history in the wound care industry is the Papa Inovoya [ph] was a mixture of proteolytic enzyme product by [indiscernible] that was dominant in the market and used as a first-line therapy because it was effective. And when I say effective, it debrided wound in about two to three weeks. We are talking now based on the clinical data on the products that we provided to a site debridement, near debridement in less than four applications, on average four application. And with that, I would like to turn the call to Dr. Dove to share her perspective and please, Dr. Dove.

Yes. So as a principal investigator in the trial and as a physician who sees private practice patients, I think that there is nothing in the market like this product because it is standalone without surgical debridement. Because of the speed and the precision of EscharEx, I think that this will become standard of care therapy on the market. And I think that for the large wound care centers and private practice physicians, this will be the first-line therapy because it was incredibly effective at debriding and incredibly fast as well for the patients who were treated with that. So yes, this will become -- in my opinion, it will become the standard of care first-line therapy.

Thank you.

[Operator Instructions]. Our next question comes from Arthur He with H.C. Wainwright.

Hi, good morning everyone. This is Arthur in for RK. Thanks for taking my questions. And congratulations on the robust data from the Phase 2 study. So my first question is for the doctors. So within the secondary and exploratory endpoint from the Phase 2 study, which endpoint is more in your view, is important in terms of medical perspective?

Thank you for your question. Thank you for the question Arthur. I will turn the call to Professor Rosenberg to share his view and then to Dr. Dove to share her view regarding what is the meaning of the secondary endpoint in terms of wound bed preparation. Please Dr. Rosenberg?

Wound bed preparation is really the first step and the necessary step for wound healing. And what we found, it was that the granulation tissue was much more abundant and much more, shall we say, kicking and living than what we saw in the standard of care. The meaning of having such a granulation tissue is that one can really either heal the wound by grafting it and this is an immediate closure or healing it by spontaneous epithelization which will take a bit longer, but the granulation tissue means that the wound bed is alive. And the model for wound care is what we call TIME, that stand for tissue inflammation, et cetera, et cetera. This means that we really kind of having the key to open the wound care to much faster and much more efficient way of treating it.

Thank you, Dr. Rosenberg. Dr. Dove, can you provide your follow-up?

Yes. I would really build on what Dr. Rosenberg said. If you do not have a clean wound bed with a healthy granulation tissue that is robust, you have nothing because we will never proceed past that inflammatory stage. You will never have a decrease in size. You will not have a decrease in pain. You'll never have an improvement in quality of life. You have to have that initial healthy wound bed before you can even contemplate moving on to means of closure. So in my perspective, the primary endpoint of healthy -- complete the debridement and getting a healthy wound bed is the most viable endpoint that we have.

Thank you very much, Dr. Dove.

Thank you very much for both. And follow-up on that for Sharon and the team. So I guess based on these robust data from the Phase 2 study, could you guys give us more commentary on the potential, the pivotal study design and the potential costs related to that? Thank you.

Yes, thank you for your question. So as I said, first of all, it's premature yet to provide clear data on the next stage of development in terms of size, extent of the study, number of studies, et cetera, given the fact that we did not yet discuss with the FDA. We expect to continue to analyze the data as you know. We provide a robust data set, but we will continue to analyze the data, population, and others to establish additional benefits of EscharEx compared to both Gel Vehicle, and of course, the standard of care. We also expect final data from the ongoing Phase 2 pharmacology study, which is conducted with VLU and DFU, where the initial data demonstrated in addition to rapid debridement also reduction in biofilm and microbial load. We want to gather all this information, integrate the data from the first Phase 2 study from Europe and Israel, the current Phase 2 study from the U.S., and the pharmacology Phase 2 study, integrated data, establish a plan for the next stage and share with the FDA. Once we'll get the FDA, once we should have more clarity on that, of course, we'll communicate this plan with you. Thank you.

Thank you. Thank you for the color. Thanks for taking my question.

I'm showing no further questions in queue at this time. I'd like to turn the call back to Sharon Malka for closing remarks.

Thank you very much. We look forward to updating you again on our next earnings call. Have a great day. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.