MediWound Files for $80 Million Wall Street IPO

Shares of parent company Clal Biotech close 5.2% higher on plan.

Joining the parade of Israeli biotech companies marching toward Wall Street, MediWound has filed a draft prospectus with the U.S. Securities and Exchange Commission for an $80 million initial public offering.

Clal Biotechnologies, the biotech holding company that controls 64% of MediWound, said on Sunday that the IPO was one of several options the company was exploring. Industry sources said the offering values the company at $500 million.

Shares of Clal Biotech, whose stake in MediWound would be delisted to 53.7% in an IPO, closed 5.2% higher at 8.55 shekels ($2.45).

MediWound develops products for treating wounds and burns. Its NexoBrid drug, based on a mixture of enzymes produced from pineapple stalks, is applied topically on damaged tissues, serving as an alternative to surgery, a process that requires hospitalization, exposes the patient to infections and removes healthy tissue.

MediWound values the market for NexoBrid, which received approval from the European Medicines Agency in December 2012 for use in debriding tissue damaged by second and third degree, is in the hundreds of millions of dollars. In the prospectus the company says the drug could achieve a market share of 20% to 40%.

The company said it should begin to win insurance coverage for the drug within one to three years of its approval by relevant health authorities. The reason is that NexoBrid has been designated an orphan drug, meaning it developed for a small patient population of fewer than 200,000 people a year.

The prospectus cites Variance Economic Consulting as estimating that the drug’s sales will grow from $9 million in 2014 to $22 million in 2015 and $61 million in 2016.

However, actual sales will hinge on whether it is approved for use on children in Europe and whether it receives the approval of the U.S. Food and Drug Administration in the United States. MediWound is expected to begin Phase III clinical trials in the coming weeks with 150 patients.

The underwriters for the IPO will be Credit Suisse, Jefferies and Bank of Montreal.

Founded in 2001, the company had a strategic partnership with Teva Pharmaceuticals Industries’ before Teva last year ended the agreement, citing a strategy of focusing on fewer products.

Reuters