MediWound (NASDAQ:MDWD) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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Summary
MediWound reported a decrease in Q2 2026 revenue to $3.1 million, down from $5.7 million in Q2 2025, primarily due to timing of BARDA-funded development revenue.
Significant progress was made in advancing the EscharEx Phase 3 VALUE trial, with enrollment ongoing and expected completion by Q1 2027, and updated market assessments projecting U.S. peak sales at $1.05 billion.
NexoBrid's U.S. commercial performance strengthened, with Vericel reporting record quarterly revenue, and a new master service agreement with Vericel was signed following a BARDA contract.
The company reaffirmed its full-year 2026 revenue guidance of $24 million to $26 million, expecting a revenue boost in the second half from government-funded programs and the Vericel MSA.
Increased investment in research and development was noted, with expenses reaching $5.9 million in Q2 2026, mainly due to the EscharEx VALUE trial.
Management highlighted the strategic importance of collaborations and government contracts, emphasizing the expansion of NexoBrid's applications and manufacturing capabilities.
Full Transcript
OPERATOR
Good day and welcome to the MediWound second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded.
I would now like to turn the conference over to Gaia Shamus from LifeSci Advisors. Please go ahead.
Gaia Shamus, LifeSci Advisors
Thank you, Chloe, and welcome everyone. Earlier today, pre-market open, MediWound issued a press release announcing financial results for the second quarter ended June 30, 2026. You may access this press release on the company's website under the Investor tab. I would ask you to review the full text of our forward-looking statements within this morning's press release. 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. These statements may involve risks and uncertainties that could cause actual results to differ materially from expectations and are described more fully in our filings with the SEC. In addition, all forward-looking statements represent our views only as of today, and MediWound assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise.
This conference call is property of MediWound and any recording or rebroadcast is expressly prohibited without the written consent of MediWound. With us today are Ofer Gonen, Chief Executive Officer of MediWound; Fanny Luxembourg, Chief Financial Officer; and Barry Wolfenson, Executive Vice President of Strategy and Corporate Development. Following our prepared remarks, we will open the call for Q&A. Now I would like to turn the call over to Ofer Gonen, Chief Executive Officer of MediWound.
Ofer Gonen, CEO
Thank you, Gaia, and good morning everyone. During the second quarter we made meaningful progress against our strategic priorities advancing EscharEx and. Do you hear me?
OPERATOR
Yes, we can hear you. Everyone please stand by while I reconnect our speaker. Thank you. Pardon me, everyone. We have reconnected our speaker. Please proceed.
Ofer Gonen, CEO
Okay, sorry about that. So, thank you, Gaia, and good morning everyone. During the second quarter we made meaningful progress against our strategic priorities, advancing EscharEx and expanding the commercial and development opportunities for NexoBrid. Specifically, the EscharEx global Phase 3 VALUE trial is actively enrolling patients as our assessment of its addressable market continues to grow. For NexoBrid, Vericel reported its strongest quarter since launch and we entered into a new master service agreement with Vericel following its BARDA contract.
Now let's start with an update on EscharEx. The VALUE study remains our top priority and our key long-term value driver. Our focus is on execution, with enrollment ongoing, targeting 216 patients across approximately 40 sites in the United States, Europe and Israel. As the study progresses, we are approaching two key milestones: first, the pre-specified interim sample size reassessment, and second, completion of enrollment, both expected by the end of the first quarter of 2027.
At the same time, we continue to build the broader commercial opportunity for EscharEx. During this quarter, an independent global consulting firm completed an updated U.S. market assessment following the expansion of the analysis to include pressure ulcers. This updated assessment now estimates U.S. annual peak sales at $1.05 billion. This analysis further strengthens our view that EscharEx, across multiple chronic wound indications, has the potential to address a substantial market opportunity.
An investigator-initiated study evaluating EscharEx in pressure ulcers is expected to begin in the fourth quarter of 2026. Our collaboration network across the program now spans essentially all the major relevant advanced wound care companies, including Coloplast, ConvaTec, Essity, Mölnlycke, Solventum, B. Braun and MiMedx. Together with the continued progress of VALUE and the expanding clinical and commercial opportunity, this positions EscharEx as a non-surgical, optimally effective debridement therapy for chronic wounds.
Turning to NexoBrid, the U.S. commercial trajectory continues to strengthen. Vericel reported NexoBrid's strongest quarter since launch, with record quarterly revenue, hospital unit sales and ordering centers. Approximately 80 burn centers have ordered NexoBrid since launch, reflecting continued adoption and increasing utilization across the U.S. burn care market. Following Vericel's 10-year contract with BARDA, valued at up to $197 million, we entered into a master service agreement with Vericel covering NexoBrid and next-generation product development activities.
Under the MSA, we expect to begin recognizing revenue in the second half of 2026 through participation in development initiatives, including a next-generation program launched to support the potential expansion of NexoBrid for use in blast and friction-related injuries. Leveraging real-world evidence, we continue to advance a room-temperature-stable formulation of NexoBrid as a non-surgical debridement solution for battlefield burn care, supported by non-dilutive funding from the Department of Defense with a total program budget of $18.3 million.
Together these programs further expand NexoBrid's role. Yeah, I'm here. Together, these programs further expand NexoBrid's role in burn care, national preparedness, military medicine and mass casualty response. To support current and future demand, we continue to advance our expanded NexoBrid manufacturing facility. We are implementing the modifications requested by the EMA following the pre-audit and expect to complete this work during the fourth quarter of 2026. Commercial supply from the expanded facility remains subject to regulatory approval and is expected in the second half of 2027.
With that, I will turn the call over to Fanny.
Fanny Luxembourg, CFO
Thank you, Ofer, and good morning everyone. Turning to our financial results for the second quarter of 2026. Revenue for the quarter was $3.1 million compared with $5.7 million in the second quarter of 2025. The decrease primarily reflected the timing of BARDA-funded development revenue. Gross profit was $0.3 million, representing a gross margin of 10.9%, compared with gross profit of $1.3 million, or 23.5%, in the prior-year period. The lower margin primarily reflected a one-time impact related to the facility scale-up.
Research and development expenses were $5.9 million compared with $3.5 million in the second quarter of 2025, primarily reflecting increased investment in the EscharEx VALUE Phase 3 trial. SG&A expenses totaled $3.9 million compared with $3.6 million in the same period last year. Operating loss was $9.5 million compared with $5.7 million in the second quarter of 2025. Net loss was $7.4 million, or $0.57 per share, compared with a net loss of $13.3 million, or $1.23 per share, in the prior-year period.
The year-over-year change primarily reflected non-cash financial income. Adjusted EBITDA loss was $8.3 million compared with a loss of $4.5 million in the second quarter of 2025. Turning to our first half results, revenue for the first half of 2026 was $4.6 million compared with $9.7 million in the first half of 2025, primarily reflecting the timing of BARDA-funded development revenue. Gross profit was $0.7 million, representing a gross margin of 14.4%, compared with gross profit of $2.1 million, or 21.5%, in the prior-year period.
Research and development expenses were $11.1 million compared with $6.4 million in the first half of 2025, primarily reflecting increased investment in the EscharEx VALUE Phase 3 trial. SG&A expenses totaled $7.5 million compared with $6.6 million in the same period last year, primarily reflecting higher professional services costs and exchange rate effects. Operating loss was $17.4 million compared with $10.9 million in the first half of 2025. Net loss was $10.3 million, or $0.80 per share, compared with a net loss of $14.0 million, or $1.30 per share, in the prior-year period.
The change primarily reflected non-cash warrant revaluation income of $7.7 million in 2026 compared with a non-cash warrant revaluation expense of $2.4 million in 2025. Adjusted EBITDA loss was $15.3 million compared with a loss of $8.5 million in the first half of 2025. Now turning to our balance sheet, as of June 2026 we had approximately $36 million in cash, cash equivalents and deposits compared with $54 million at year-end 2025. Cash burn during the first half of 2026 totaled $20 million.
Warrants and option exercises generated $0.8 million during the first half, and we received an additional $1.1 million after quarter end. This concludes my review of our financial results. Ofer, back to you.
Ofer Gonen, CEO
Thank you, Fanny. The second quarter strengthened both our core growth platform. The VALUE Phase 3 program of EscharEx continues to advance toward important milestones, while the updated market assessment and planned diabetic foot ulcer and pressure ulcer studies broaden its long-term clinical and commercial opportunity. NexoBrid continues to gain commercial traction in the United States. At the same time, the MSA with Vericel, the broader BARDA framework, the DoD funding, all that creates meaningful government-backed product supply and development opportunities.
Our revenue profile remains weighted toward the second half of 2026, reflecting the expected timing of contributions from the MSA and other government-funded programs. Based on these expected contributions, we are reaffirming our full-year 2026 revenue guidance of $24 million to $26 million. Our priorities for the remainder of the year are: continue executing the VALUE trial, begin recognizing revenue under the Vericel MSA, advance our next-generation NexoBrid programs, and complete the EMA-requested modifications at our expanded manufacturing facility.
We remain focused on disciplined execution across our strategic priorities and on building durable long-term value across our pipeline. Operator.
OPERATOR
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question today comes from RK Ramakant with HC Wainwright.
Please go ahead.
RK Ramakant, Analyst at HC Wainwright
Thank you. This is RK from HC Wainwright. Good afternoon, Ofer and Fanny. Hope you guys are doing well. Lots of stuff going on there. So let's start off on the VALUE study itself. On the study, do you still plan to get the study enrollment completed and get the interim also done during early 2027? That's my first question. The second one within that is, very recently Smith & Nephew, on their call, they were talking about potentially working on a second-generation Santyl.
Not sure you folks are aware of it. And what do you think? What's your business intelligence on that molecule and how does that impact EscharEx development from here onwards?
Ofer Gonen, CEO
Excellent. So hi RK, and thank you for joining. The first question is a short answer. Yes, our target of meeting the interim assessment and enrollment completion is still in the first quarter of 2027. As for the second question regarding Smith & Nephew’s approach to potential competition from EscharEx — maybe Barry, do you want to take this one?
Barry Wolfenson (Executive Vice President of Strategy and Corporate Development)
Sure. Absolutely. Hi RK. We heard those comments and we found them interesting. I think the thing that's most notable about the comments were the context where he was talking a little bit about — someone asked him about the competition. He was talking a little bit about his thoughts around EscharEx, but then he said that they noted that Santyl is not a fast debridement option, but it is slow. And because of this, that's what's driving their desire to make this second-generation product.
It's actually being developed by a company that they've invested in called Serta Therapeutics. The drug, I should say, is SN514 based on all the publicly available information we've been able to see. We're not aware of this drug having entered into any clinical development in chronic wound patients. We see some activity around burns, but not chronic wounds. And so while we take any potential competition seriously, EscharEx, as you know, is already in phase three in chronic wounds.
And that gives us what we believe to be a substantial clinical lead.
RK Ramakant, Analyst at HC Wainwright
Thanks for that, Barry. So now based on those comments, does that mean that the market is bigger than what it is because Santyl is obviously not the molecule of choice if it is not really doing what it is expected to do? And then the second part of that is your team has added pressure ulcers into the pool now, so how is that study being conducted in the sense of what is your responsibility within that IIT? And would that data be available by the time you're ready to file your own application with the agencies, both in the US and with the EMA?
Ofer Gonen, CEO
So, Barry, maybe you will answer the first part of the question regarding the market of pressure ulcers, and I'll speak about a study. Okay.
Barry Wolfenson (Executive Vice President of Strategy and Corporate Development)
Yes. Well, I think even more broadly, what I think I heard you ask, RK, is does that mean that since Santyl is not particularly effective and that Smith & Nephew is motivated to create a new drug, the inference is that the market is even bigger than what Santyl is currently supplying. And we believe the answer to that is resoundingly yes. That's why, even before including pressure ulcers, we showed our peak sales in the $800 million range, and with including pressure ulcers it tops a billion.
We believe that a drug for debridement that can reach complete debridement certainly within four to five days changes the entire expectation with regard to enzymatic debridement. It fits better into the workflows of wound clinics and podiatry offices, and it takes away, because of that utilization share, not just from sharp debridement, but across all different modalities. So we do believe that it greatly expands the market.
Ofer Gonen, CEO
If we speak about the pressure ulcer study: it's important to mention that the phase 3 VALU study in VLU — this is the primary focus of EscharEx's development program. It's of course the company's key value driver. The pressure ulcer study is an investigator-initiated initiative, so it's not run directly by us. It's a small study, open-label trial, 10–15 patients, and the initiation is expected in the fourth quarter of 2026. It involves, of course, pressure ulcer patients.
All of them are treated with EscharEx across a week or two, and we are assessing, as usual, debridement, granulation, and wound closure. Following the VALU readout, we plan to approach the FDA and determine what would be required to pursue approvals also for DFUs and pressure ulcers.
RK Ramakant, Analyst at HC Wainwright
Thank you. One last question. This is on NexoBrid, so it's a two-part question. The first one: What is EMA requesting you to do in terms of the new plan? And at least on the outset it looks like timelines are moving back. So is that true in your sense of the world? And also, if things get pushed to fourth quarter of '27, does that mean that the real product for the market actually gets pushed into 2028? And the third part of the questions are on the CPT code.
Where do we stand? And is January 2027 still an effective and realistic date?
Ofer Gonen, CEO
So I will address the manufacturing facility question. I think there was a confusion. As I said in the call, we completed the EMA pre-audit and the pre-audit process, and they recommended some operational changes that we are about to complete in the fourth quarter of this year, not the fourth quarter of 2027. So we'll complete all the implementation this year. The feedback that we got was operational in nature, not related to product quality, safety, or comparability concerns, which is very important.
Once this work is complete, we will begin the manufacturing of NexoBrid in the new facility and then, following submission, review, and inspection, we can get approval as early as in 2H27. So we have a delay — we reported this last quarter — but we are currently on track. As for your second question, the CPT code, Barry, do you want to address it?
Barry Wolfenson (Executive Vice President of Strategy and Corporate Development)
To my knowledge there is no publicly available information regarding any update to a Category I CPT code.
RK Ramakant, Analyst at HC Wainwright
Okay, thank you. Thanks for taking all my questions.
Ofer Gonen, CEO
Thank you.
OPERATOR
The next question comes from Josh Jennings with TD Cowen. Please go ahead.
Josh Jennings, Analyst at TD Cowen
Hi, good morning Ofer, Fanny, and Barry, thanks for taking the question. I wanted to just touch on the updated MSA with Vericel. Can you — any additional details you can share — just on certain changes to revenue recognition? Is the major update that you'll be recognizing revenue for the development program that's been expanded for blast and friction injuries, and potentially extending the shelf life of NexoBrid? And then the second question is just on any updates to the path for the DFU indication in the clinical development program there.
Ofer Gonen, CEO
Thanks for taking the questions. Hey Josh, good to speak to you. So let me speak about the BARDA economics and its strategic importance. As mentioned, in April Vericel was awarded a 10-year BARDA contract that is valued at up to $197 million. It is covering NexoBrid procurement, vendor-managed inventory, US-based manufacturing readiness, next-generation formulation development, and the potential blast and trauma expansion. It's a large, multi-year framework agreement with several components.
So I understand the appetite for more precision; we are currently not in a position to share additional detail. It reflects confidentiality obligations to Vericel as well as the fact that several elements of the program remain subject to further FDA feedback, which could affect the scope of development and work required. What is concrete today is that the MSA signed the first development program — the blast injury and friction injuries — is underway.
And Vericel expects about $6 million of BARDA procurement revenue in the second half. Additional elements, including the room temperature–stable formulation and the US-based manufacturing readiness, are areas that we are now in discussions with Vericel and BARDA regarding the scope, timing, technical requirements, and potential implementation pathway. So this is the maximum we can share right now. And as I said, we are about to begin recognizing revenue from that program in the second half of 2026.
If this is good enough, I'm moving to the DFU.
Josh Jennings, Analyst at TD Cowen
Thank you. Thank you, Ofer. That's great.
Ofer Gonen, CEO
Okay, so regarding the DFU, we have constructive discussions with the FDA and EMA. We got feedback. We are aligned on a DFU protocol. You can see the highlight of the protocol — it is attached to our corporate deck — and we plan to initiate the study in the fourth quarter of 2026. This phase 2 DFU study is expected to enroll 50 patients. It's a randomized trial, 1:1 design, EscharEx versus placebo. And the primary endpoint is something that EscharEx is very good at: time to complete debridement.
So we see it as a trial which is not that complicated. As I said to the previous question that was asked by RK, we plan to approach the FDA after the VALU readout and then to determine what would be required to pursue approval for that indication as well.
Josh Jennings, Analyst at TD Cowen
Thanks for those answers.
Ofer Gonen, CEO
Appreciate it. Thank you.
OPERATOR
The next question comes from Jeff Jones with Oppenheimer. Please go ahead.
Jeff Jones, Analyst at Oppenheimer
Good afternoon, Ofer, and thanks for taking the question. One point of clarification: On the BARDA contract with Vericel, you noted that Vericel is planning to receive $6 million in BARDA revenue in 2H. How then does that align with the $14 to $15 million in BARDA revenue that you guys are projecting for 2026? Is that dependent on some of these other pieces that are under negotiation? And then in regards to NexoBrid, looking ahead into ’26 and ’27, how do we think about revenue given the facility now doesn't look to be coming online until 2H27?
Ofer Gonen, CEO
Okay. Hi Jeff, good to have you on. So as for the first question, you gave there a number that I'm not familiar with — the 14. The 14 is not exclusively by BARDA. We have additional government-related agreements. One of them you are familiar with, which is the Department of Defense. So expect some news there as well. The agreement — the MSA agreement with BARDA — includes a few components. As I said, I cannot give you at this stage — due to confidentiality obligations — I cannot give you all the components.
Having said that, the first program, which is development of blast and friction burn indication, is on its way. Additional components are currently discussed and negotiated. As for the procurement, MediWound expects to benefit from the procurement that BARDA has with Vericel. It's not one-to-one; we have transfer prices with Vericel. Nothing really is disclosed at this stage, but when you speak about the amount of development services, the agreement contains a few components and not only one.
Jeff Jones, Analyst at Oppenheimer
Great, thank you.
Ofer Gonen, CEO
That addresses the first question. As for the second question, do you want to address the manufacturing facility delay?
Fanny Luxembourg, CFO
So hi Jeff. We do not actually expect the current facility timeline to have material impact on our 2026 revenue guidance. Importantly, meaningful portion of the revenue we expect in the second half is associated, as you know, with government-funded development activity and product supply under existing agreements rather than being depending on commercial supply from our expanded facility. So our $24 to $26 million in 2026 revenue guidance already reflect the current status and the expected timing of our facility.
And as you asked also about ’27 and ’28: As I mentioned earlier about facility readiness, our plan is to finish all the modifications by the end of the fourth quarter of this year. And first thing that we are going to do next year is to start manufacturing NexoBrid. So we don't think there will be any impact at all to the expected revenue in ’27 and ’28 for NexoBrid.
Jeff Jones, Analyst at Oppenheimer
Thank you guys very much.
OPERATOR
The next question comes from Chase Knickerbocker with Craig-Hallum. Please go ahead.
Chase Knickerbocker, Analyst at Craig-Hallum
Good morning. Thanks for taking the questions. Maybe just on a little bit more specifics about VALU, can you just talk about how the enrollment rate has trended sequentially on a per-site basis? And then can you just confirm that kind of all those 40 sites are up, running, and enrolling? And then just as we think about what your expectation for the 1Q re-sampling is, are you assuming any improvement in enrollment trends in that assumption, or is it just kind of static?
Ofer Gonen, CEO
Hey Chase, good to have you with us. As for the value, let's speak about the numbers to protect the integrity of the study. We cannot show patient enrollment numbers or enrollment trends during the conduct of the study in a multinational study. You know, individual snapshots can be noisy, and the advice we're getting is not to share any information. We think the more useful commitment is the milestones: the interim assessment and the enrollment completion.
What I can say now is that the design hasn't changed: 216 patients, roughly 40 sites. And we expect the interim sample size reassessment and enrollment completion to be by the end of the first quarter of 2027. We do not need any improvements or changes in trends. We are on track. I hope I answered the first question right.
Chase Knickerbocker, Analyst at Craig-Hallum
Yeah. And maybe, I mean, you've spoken to kind of active sites in the past. Can you maybe just speak to the update there?
Ofer Gonen, CEO
Yeah. So, regarding the sites, as we said, we are targeting approximately 40 sites and we are very close to having them all recruiting. We have less than 10% to reach this target.
Chase Knickerbocker, Analyst at Craig-Hallum
Got it. And then maybe just as we think about you obviously are also guiding to full enrollment. But if we just think about top-line data, kind of post last patient enrolled, I mean, should we think about it as kind of 12 weeks, obviously to that wound healing follow-up and then kind of, you know, a month or two for data lock and the like? Or maybe just talk us through exactly how that timeline will work. And then lastly, just one for Barry. So we're seeing a pretty large volume shift in wound care from site 11 to site 22.
Can you just remind us the sites of service that you think EscharEx will predominantly be used in if approved? And then if you could just remind us again where kind of Santyl usage is concentrated today and how you expect that to kind of change from a mix perspective for EscharEx? Thanks.
Ofer Gonen, CEO
So, Barry, let me start with answering about the clinical trial, if this is okay. Well, you plotted it quite accurately, Chase. Our plan is to have the interim assessment by the end of Q1. If everything goes well, it takes another quarter or so to get the top-line data. And after the top-line data, it is another few months until the final results. As for EscharEx, Barry, do you want to address it?
Barry Wolfenson (Executive Vice President of Strategy and Corporate Development)
Sure. Most of that shifting, of course, Chase, has to do with the CMS change to how it reimburses the tissue substitute products. Based on the third-party data that we've acquired regarding prescriptions of Santyl, it's fairly well distributed across acute care, into clinics, into home health, and certainly into nursing homes and SNFs. And we don't see that materially changing, nor do we see that being any different for EscharEx.
Chase Knickerbocker, Analyst at Craig-Hallum
Thanks, guys.
OPERATOR
The next question comes from Michael Okunich with Maxim Group. Please go ahead.
Michael Okunich, Analyst at Maxim Group
Hey guys, thank you for taking my questions today. Hi. I just wanted to follow up on the question surrounding the 2027 revenues and particularly to understand mechanically how that works with your current projections since it's nearly a doubling of the NexoBrid-specific revenues that you were projecting. So is this a case where there's pent-up demand that would lead to a surge in sales in the fourth quarter once you get that approval? Or can you actually ship the product and recognize revenue before the second-half EMA commissioning?
Ofer Gonen, CEO
Michael, this is a good question. So as I said, we are actually manufacturing NexoBrid in the beginning of 2027. Everything is ready to be shipped, the demand is there. Second half of 2027, we can sell significantly more than we are selling now. Currently, as you know, our ability to sell is capped by manufacturing capabilities. And in 2027 this limitation will finally be removed.
Michael Okunich, Analyst at Maxim Group
All right, and then how does the delay on the EMA side affect FDA? Is that still 1/2 after EMA approval or would these now be contemporaneous?
Ofer Gonen, CEO
Mathematically, it's something like three months. Having said that, the most important milestone is getting the first approval. As I mentioned in the previous call, and I'm sure that you remember, EMA comes first. And once EMA comes first, we can start selling substantially most of the inventory to the European countries and then the current facility can be dedicated to sell to the US market and to stockpile for governments. So this is the more important milestone.
So this is why we are speaking about the first regulatory approval. If FDA happens three months after that or five months after that, depends on inspections and other things, I don't think it will really change anything from a revenue point of view.
Michael Okunich, Analyst at Maxim Group
Thank you. And then one last one maybe before I hop back to the queue. In the second half of this year, you are expecting quite a significant uptick in revenues, particularly from development services, well beyond what you've seen historically, even when you had the full BARDA contract up and running. So I wanted to understand what's going to be driving that. Is that primarily the new programs that have been announced taking effect, or is this some front loading to the new BARDA contract you signed after the lapse?
Fanny Luxembourg, CFO
So yes, you're right. We are reaffirming the $24 to $26 million revenue guidance for 2026. Since the revenue for the first half was $4.6 million, clearly the majority of the year is weighted towards the second half of the year. We expect a meaningful step up in H2 driven by the product supply related to the contracts, development services under the Vericel MSA, and other government-funded programs including the Department of Defense, and of course the ongoing commercial NexoBrid sales under the MSA.
We just announced that we initiated the first development program to support the expansion to blast injuries. But, as I mentioned, we expect to initiate additional development programs under the MSA in the near term as well.
Michael Okunich, Analyst at Maxim Group
All right, thank you. I appreciate the additional color here.
Ofer Gonen, CEO
Thank you, Michael.
OPERATOR
The next question comes from Scott Henry with Alliance Global Partners. Please go ahead.
Scott Henry, Analyst at Alliance Global Partners
Thank you and good morning or afternoon depending on your location. Most of my questions have been asked but I did want to follow up on the product sales for 2026. Obviously the $2.6 million was very strong in 2Q but first quarter was only $528,000 based on what I got out of the filings. Would it be better to think about capacity for product sales as kind of the combination of those two? So about $1.7 million to $1.8 million per quarter. Is that kind of how much you can make in a quarter until we get this capacity?
Is that how I should be thinking about it? Or could you duplicate $2.6 million again prior to the capacity expansion? Thank you.
Ofer Gonen, CEO
So hi Scott. As you know, we are not guiding specifically for product, but I don't think it would be the right thing to do to think that we sold everything that we could. Again, we are capped only by capacity, not by demand. The inventory of NexoBrid is currently zero, I think in most territories and definitely here in the facility. Some of the impacts that you saw that prevented us from generating more revenue were because of the fact that the facility itself needed to go through all kinds of inspections and upgrades, etc. So I think it would be more accurate to look at the second quarter. Having said that, I would look at last year, and we are selling everything that we have. So maybe last year, if you add, let's say, a 10% premium because of price changes and a little bit more effectiveness, I think it will be more accurate.
Scott Henry, Analyst at Alliance Global Partners
Okay, thank you for the color. That is helpful. And then perhaps a question for Hani. R&D — should we expect a significant spike still in the second half of 2026? How should we think about the next couple quarters there?
Hani
Thank you. The increase in R&D is, as you know, primarily driven by our VALUE Phase 3 trial, which remains our top strategic priority in the company. We are not providing quarterly R&D guidance, but we are currently at an elevated level of investment and expect R&D spending to remain elevated as VALUE progresses through this phase of our program. At the same time, a meaningful portion of our NexoBrid development activity is supported, as you know, by non-dilutive government funding through BARDA and through the Department of Defense.
So while we are investing significantly in VALUE, we are also being very disciplined about where we deploy our own capital. I hope I answered your question.
Scott Henry, Analyst at Alliance Global Partners
Okay, great. Thank you for that feedback and thank you both for taking the questions.
Ofer Gonen, CEO
Thank you Scott.
OPERATOR
This concludes our question and answer session. I would like to turn the conference back over to Ofer Gonen for any closing remarks.
Ofer Gonen, CEO
So thank you everyone for joining us today. We look forward to updating you again on our next quarterly call.
OPERATOR
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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