Mediwound stock soars 60% on takeover interest

Mediwound Ltd (NASDAQ: MDWD) rallied a whopping 60% on Friday following a report that Solventum Corp (NYSE: SOLV) is interested in buying the biopharmaceutical firm.

Solventum has reportedly valued the Israel based company at $34 per share. 

Mediwound stock has nearly doubled now versus the start of 2024. 

Mediwound stock valued at a huge premium

The $34 a share offer from Solventum translates to an exciting 135% premium for those invested in Mediwound Ltd and indicates the buyer’s strong interest and perceived value in the acquiree. 

Mediwound specialises in novel therapies for tissue repair and regeneration that may complement the existing portfolio of Solventum. The related synergies are expected to help the latter expand its footprint in the biopharmaceuticals space. 

Note that Mediwound stock traded at a higher of $42 during the COVID pandemic. 

MDWD is seeing strong demand for NexoBrid

Neither Mediwound nor Solventum has so far opted to comment on the news on Friday – leaving investors eager for more concrete information. 

A lack of confirmation from both companies, however, is not uncommon. It’s a standard practice in the corporate world to keep negotiations confidential until a definitive agreement is reached. 

What’s also worth mentioning is that Mediwound has seen demand for NexoBrid – its treatment for severe burns have soared in recent months amidst the Israel-Hamas war. 

In late May, MDWD reported a 32% annualised growth in sales of NexoBrid to $5.0 million in its first quarter. Ofer Gonen – chief executive of the Nasdaq-listed firm also attributed part of that strength to a new contract with the U.S. Defence department at the time. 

Mediwound’s forecast for full-year sales

Mediwound forecasts its annual sales to hit $24 million this year – a sharp increase from $19 million in 2023. CEO Gonen told investors in May:

During the first quarter, we maintained a laser-focused approach to executing our strategic plan. I’m pleased with our progress, as we are on track to achieve all of our targets.

MDWD lost $9.7 million in its recently concluded quarter or $1.05 per share. That was, however, up sharply from a $3.7 million loss (44 cents per share) a year ago. The Israeli firm blamed costs related to revaluation of warrants for the increased loss in Q1. 

Mediwound had $36 million in cash including cash equivalents, restricted cash, and deposits at the end of March, 2024. Wall Street currently has a consensus “buy” rating on Mediwound stock. Analysts see upside in it to $28.50 on average that translates to a 25% gain on top of today’s surge.