An update of the list of approved drugs for 2022 on the FDA website revealed that the company from Diwand Received marketing approval for its burn medicine, NexoBrid. The product is currently approved for the treatment of burns in adults. The approval allows the company to market its drug in the US, and its marketing partner, Vericel, which already has a marketing system in the field, is expected to start marketing the product in the coming months. At this time, the company’s stock is up 4.8% and its value is approximately $108 million.
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Medivend’s product removes dead tissue from burns (and potentially from chronic wounds as well, but the closest possible approval is only for burns). It mainly competes with burn removal surgery, which requires more expensive manpower and removes more healthy tissue.
The product is based on the pineapple plant, and is one of the first to receive FDA approval as a botanical medicine. This is a slightly more forgiving definition in terms of the exact dosage of the ingredients in the product, with more emphasis on the way the plant is processed.
The company already markets the product in Europe. Until today, the income from the activity there has been low, among other things because of the company’s limited resources and the small market. Most of the severe burns are in children, and to date its approval has been for the treatment of adults. It is expected to receive approval for use in children in the current quarter, along with expanding the number of countries in Europe where the product is approved and adding Japan to the list. The American market for burns in adults alone is estimated at about 200 million dollars. Medivend has signed a marketing agreement in the US with Verisal, and it will receive royalties from the revenues and payments on milestones. In addition, the company also has an agreement with BARDA, the American government research company in the field of biological defense, which financed part of the development and is equipped with the product as an emergency supply.
One of the challenges in marketing will be to overcome the fear of competition analysts. Success in market penetration may depend on the incentive structure. Surgeons may still be able to collect most of the payment for the product even if someone else actually applies the ointment. Another challenge is obtaining insurance compensation from the various insurance programs in the countries, a matter that may take years.
As of September 2022, Madivend had $35 million in the coffers. In October, she raised another 30 million dollars. It is expected to receive $7.5 million as a milestone payment, so its coffers are expected to be sufficient until 2025.
The company is also developing a product for treating wounds, which appeals to a larger market, and the company has already indicated that it is examining options for another strategic agreement.