midastouch017
4 months ago
Kamada Announces its Largest Commercial Agreement; A Strategic Engagement with Kedrion for U.S. Distribution of KEDRAB® including $180 Million of Revenues Over First Four Years
https://finance.yahoo.com/news/kamada-announces-largest-commercial-agreement-120000970.html
Largest Commercial Agreement in Kamada’s History Becomes Effective in January 2024 and Includes $180 Million of Revenues to Kamada Over the First Four Years of the Eight Year Term
Financial Terms Reflect KEDRAB®'s Significant U.S. Market Share and Continued Growth Through the Eight Year Term
Agreement Includes Potential Expansion of Kedrion’s Distribution of KEDRAB in Additional Territories Beyond the U.S.
Kamada to Host a Conference Call and Live Webcast Today at 8:30 AM ET
REHOVOT, Israel and HOBOKEN, N.J., Dec. 06, 2023 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, today announced the execution of a binding memorandum of understanding with Kedrion for the amendment and extension of the KEDRAB® U.S. distribution agreement between the parties. Within the first four years of the eight-year term, which begins in January 2024, Kedrion will purchase minimum quantities of KEDRAB with revenues to Kamada of approximately $180 million.
This agreement is the largest commercial agreement secured by Kamada to date, and its financial terms reflect the significant U.S. market share of KEDRAB and continued growth through the eight-year term, as well as the potential expansion of KEDRAB distribution by Kedrion to other territories beyond the U.S. In addition, the parties will collaborate to expand distribution of Kedrion products by Kamada in Israel.
“We are thrilled to secure this strategic agreement with Kedrion as it represents our largest commercial agreement since Kamada's inception,” said Amir London, CEO of Kamada. “Based on Kedrion’s extensive market coverage and on-going success in marketing KEDRAB in the U.S., as well as the significant market share growth achieved to date, we are confident that the continuation of this partnership maximizes the future growth and value potential of this important product. Moreover, this agreement most effectively maximizes our U.S. business by allowing us to focus our own internal sales efforts on the commercialization of our other specialized FDA-approved IgG products, primarily in transplant centers, while Kedrion continues to promote KEDRAB in numerous hospitals and medical centers across the U.S.”
“We are excited about our extended partnership with Kamada, a significant step in our commitment to hyperimmune therapies,” said Ugo Di Francesco, CEO of Kedrion Biopharma. “This collaboration emphasizes Kedrion's dedication to providing KEDRAB to U.S. patients, and we look forward to maximizing the success of the product and exploring opportunities for further expansion, delivering essential medical solutions where they are needed most.”
During 2022, Kamada generated approximately $16 million in revenues from sales of KEDRAB to Kedrion for distribution in the U.S. market. Kamada expects a substantial increase in sales of the product to Kedrion for full-year 2023.
Conference Call
Kamada management will host an investment community conference call today, December 6, 2023, at 8:30am Eastern Time to discuss this announcement and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 1-877-407-0792 (from within the U.S.), 1 809-406-247 (from Israel), or 1 201-689-8263 (International) and entering the conference identification number: 13743014. The call will also be webcast live on the Internet at:
https://viavid.webcasts.com/starthere.jsp?ei=1647140&tp_key=4c9e223e0b.
About KEDRAB®
KEDRAB® [Rabies Immune Globulin (Human)] is a human rabies immune globulin (HRIG) indicated for passive, transient post-exposure prophylaxis (PEP) of rabies infection in persons of all ages when given immediately after contact with a rabid or possibly rabid animal. KEDRAB should be administered concurrently with a full course of rabies vaccine.
KEDRAB was approved by the FDA in August, 2017. KEDRAB is supplied in single-dose vials containing 2 mL or 10 mL of ready-to-use solution with a nominal potency of 150 IU/mL.
Important Safety Information:
Severe hypersensitivity reactions, including anaphylaxis, may occur with KEDRAB. IgA deficient patients with antibodies against IgA are at greater risk. Have epinephrine available immediately to treat any acute severe hypersensitivity reactions.
KEDRAB administration may interfere with the development of an immune response to live attenuated virus vaccines. If feasible, delay immunization with measles vaccine for 4 months, and other live attenuated virus vaccines for 3 months, after KEDRAB administration.
A transient rise of the various passively transferred antibodies in the patient’s blood may result in misleading positive results of serologic tests after KEDRAB administration. Passive transmission of antibodies to erythrocyte antigens, e.g., A, B, and D, may interfere with serologic tests for red cell antibodies such as the antiglobulin test (Coombs’ test).
KEDRAB is made from human plasma donors and may carry a risk of transmitting infectious agents, e.g., viruses, the variant Creutzfeldt-Jakob disease (vCJD) agent and, theoretically, the Creutzfeldt-Jakob disease (CJD) agent.
Please see KEDRAB full prescribing Information for complete prescribing details. You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch, or call 1-800-FDA-1088.
About Kamada
Kamada Ltd. (the “Company”) is a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, focused on diseases of limited treatment alternatives. The Company is also advancing an innovative development pipeline targeting areas of significant unmet medical need. The Company’s strategy is focused on driving profitable growth from its significant commercial catalysts as well as its manufacturing and development expertise in the plasma-derived and biopharmaceutical fields. The Company’s commercial products portfolio includes six FDA approved plasma-derived biopharmaceutical products: CYTOGAM®, KEDRAB®, WINRHO SDF®, VARIZIG®, HEPAGAM B® and GLASSIA®, as well as KAMRAB®, KAMRHO (D)® and two types of equine-based anti-snake venom (ASV) products. The Company distributes its commercial products portfolio directly, and through strategic partners or third-party distributors in more than 30 countries, including the U.S., Canada, Israel, Russia, Argentina, Brazil, India, Australia and other countries in Latin America, Europe, Middle East, and Asia. The Company leverages its expertise and presence in the Israeli market to distribute, for use in Israel, more than 25 pharmaceutical products that are supplied by international manufacturers. During recent years the Company added eleven biosimilar products to its Israeli distribution portfolio, which, subject to the European Medicines Agency (EMA) and the Israeli Ministry of Health approvals, are expected to be launched in Israel through 2028. The Company owns an FDA licensed plasma collection center in Beaumont, Texas, which currently specializes in the collection of hyper-immune plasma used in the manufacture of KAMRHO (D). In addition to the Company’s commercial operation, it invests in research and development of new product candidates. The Company’s leading investigational product is an inhaled AAT for the treatment of AAT deficiency, for which it is continuing to progress the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial. FIMI Opportunity Funds, the leading private equity firm in Israel, is the Company’s controlling shareholder, beneficially owning approximately 38% of the outstanding ordinary shares.
midastouch017
5 months ago
Kamada Reports Significant Increase in Sales and Profitability in the Third Quarter and Nine Month 2023; Reiterates 2023 Revenue and Profitability Guidance
https://finance.yahoo.com/news/kamada-reports-significant-increase-sales-120000929.html
Third Quarter 2023 Revenues were $37.9 Million Representing an 18% Increase Year-over-Year; Nine Month 2023 Revenues of $106.1 Million, Up 26% Year-over-Year
Third Quarter 2023 Adjusted EBITDA of $7.9 Million Representing a 31% Increase Year-over-Year; Nine Month 2023 Adjusted EBITDA of $17.7 Million, Up 67% Year-over-Year
Strong Third Quarter Results and Positive Outlook for Fourth Quarter Support Reiteration of Fiscal Year 2023 Revenue and Adjusted EBITDA Guidance
Multiple Recent Achievements with CYTOGAM®, including Availability of Product Manufactured by the Company for U.S. Commercial Sale and Presentation of New Clinical Data
Received Shareholder Approval and Subsequently Closed $60 Million Private Placement with FIMI Opportunity Funds
Conference Call and Live Webcast Today at 8:30 AM ET
REHOVOT, Israel and HOBOKEN, N.J., Nov. 13, 2023 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, today announced financial results for the three and nine months ended September 30, 2023.
“We are highly encouraged with our strong financial and operational momentum during the first nine months of the year,” said Amir London, Kamada’s Chief Executive Officer. “With total revenues of $106.1 million, which represent year-over-year growth of 26%, and adjusted EBITDA of $17.7 million, an increase of 67% as compared to the first nine months of 2022, we achieved the top- and bottom-line growth anticipated in our business in the first nine months of the year. We continue to effectively leverage our multiple growth drivers, including a significant increase in sales of our anti-rabies immunoglobulin product, KEDRAB® as well as the portfolio of the four FDA-approved immunoglobulins (CYTOGAM®, HEPAGAMB®, VARIZIG® and WINRHO® SDF), and our Israeli distribution business.”
“We expect the momentum from the first nine months of the year to extend through the fourth quarter of 2023, with annual profitability to be further meaningfully enhanced as compared to last year. As such, we are reiterating our full-year 2023 revenue guidance of $138 million to $146 million and adjusted EBITDA of $22 million to $26 million; the mid-point of the range would represent profitability growth of approximately 35% over 2022,” continued Mr. London.
“During the recent period we reported multiple achievements with CYTOGAM. Specifically, following recent FDA approval of the technology transfer process, CYTOGAM manufactured at our Israeli facility is now available for commercial sale in U.S., and new clinical data highlighting five-year real-world survival benefits of high risk CMV mismatch lung transplant patients receiving CYTOGAM were presented at IDWeek 2023. In addition, we continue to advance our pivotal phase 3 InnovAATe trial for Inhaled AAT and we recently received positive feedback from the independent Data and Safety Monitoring Board (DSMB) which recommended study continuation without modification for the sixth time since study initiation, based on encouraging safety data observed in the study to date,” added Mr. London.
“Our future prospects were also recently further buoyed by the recent closing of our $60 million private placement with FIMI Opportunity Funds. This strategic investment provides us with financial flexibility to pursue compelling business development opportunities, a process that we are currently engaged in,” concluded Mr. London.
Financial Highlights for the Three Months Ended September 30, 2023
Total revenues were $37.9 million in the third quarter of 2023, an 18% increase from the $32.2 million recorded in the third quarter of 2022. The increase in revenues was primarily attributable to increased sales of KEDRAB to Kedrion due to increased market share and demand for the product in the U.S. market.
Gross profit and gross margins were $14.8 million and 39%, respectively, in the third quarter of 2023, compared to $12.9 million and 40%, respectively, reported in the third quarter of 2022. Cost of goods sold in the Company’s Proprietary segment, for the third quarter of 2023 and 2022, included $1.3 million of depreciation expenses associated with intangible assets generated through the IgG products acquisition.
Operating expenses, including R&D, Sales & Marketing (S&M), G&A and other expenses, totaled $10.4 million in the third quarter of 2023, as compared to $10.3 million in the third quarter of 2022. S&M costs, for the third quarter of 2023 and 2022, included $0.4 million of depreciation expenses of intangible assets generated through the IgG products acquisition.
Net income was $3.2 million, or $0.07 per share, in the third quarter of 2023, as compared to a net income of $0.5 million, or $0.01 per share, in the third quarter of 2022.
Adjusted EBITDA, as detailed in the tables below, was $7.9 million in the third quarter of 2023, a 31% increase as compared to $6.0 million in the third quarter of 2022.
Cash provided by operating activities was $0.9 million in the third quarter of 2023, as compared to cash provided by operating activities of $5.5 million in the third quarter of 2022. The change correlates to the changes in the Company’s working capital and supports overall growth.
Financial Highlights for the Nine Months Ended September 30, 2023
Total revenues for the first nine months of 2023 were $106.1 million, a 26% increase from the $83.9 million generated in the first nine months of 2022. The increase in revenues was primarily attributable to increased sales of KEDRAB to Kedrion due to increased market share and demand for the product in the U.S. market.
Gross profit and gross margins for the first nine months of 2023 were $41.1 million and 39%, respectively, compared to $31.4 million and 37%, respectively, in the first nine months of 2022. Cost of goods sold in the Company’s Proprietary segment, for the first nine months of 2023 and 2022, included $3.9 million of depreciation expenses associated with intangible assets generated through the IgG products acquisition.
Operating expenses, including R&D, S&M, G&A and other expenses, totaled $33.8 million in the first nine months of 2023, as compared to $30.9 million in the prior year period. S&M costs, for the first nine months of 2023 and 2022, included $1.2 million of depreciation expenses of intangible assets generated through the IgG products acquisition. The increase in operating expenses was attributable to an increase in S&M costs associated with the acquired portfolio commercial operation, as well as increased R&D costs, primarily due to advancing the pivotal Phase 3 InnovAATe trial for Inhaled AAT.
Net income for the first nine months of 2023 was $3.2 million, or $0.07 per share, as compared to net loss of $5.3 million, or $(0.12) per share, in the prior year period.
Adjusted EBITDA, as detailed in the tables below, was $17.7 million in the first nine months of 2023, a 67% increase as compared to $10.6 million in the first nine months of 2022.
Cash used in operating activities during the first nine months of 2023 was approximately $0.1 million, as compared to cash provided by operating activities of $21.8 million during the first nine months of 2022. The change correlates to the changes in the Company’s working capital and supports overall growth.
Balance Sheet Highlights
As of September 30, 2023, the Company had cash, cash equivalents, and short-term investments of $52.6 million, as compared to $34.3 million as of December 31, 2022. This includes the net proceeds of $58.2 million received from the $60 million financing closed during the third quarter. In addition, during the third quarter the Company made a $17.4 million pay-down in full the outstanding balance of a bank loan. The Company is currently debt free.
Recent Corporate Highlights
Received shareholder approval for and subsequently closed $60 million private placement with FIMI Opportunity Funds.
Announced multiple achievements with CYTOGAM, including the availability of product manufactured by Kamada for U.S. commercial sale, presented new clinical data highlighting five-year real-world survival benefits of high risk CMV mismatch lung transplant patients receiving CYTOGAM, and the establishment of a Scientific Advisory Board focused on U.S. clinical programs for CYTOGAM.
The Company continues to conduct its business operations in Israel with no effect on business continuity, and its global supply of products is not expected to be interrupted as a result of the recent events in Israel.
Fiscal Year 2023 Guidance
Kamada continues to expect to generate fiscal year 2023 total revenues in the range of $138 million to $146 million. The Company also continues to anticipate generating adjusted EBITDA during 2023 in the range of $22 million to $26 million, the mid-point of the range would represent profitability growth of approximately 35% over 2022.
Conference Call
Kamada management will host an investment community conference call on Monday, November 13, at 8:30am Eastern Time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 1-877-407-0792 (from within the U.S.), 1 809-406-247 (from Israel), or 1 201-689-8263 (International) and entering the conference identification number: 13741701. The call will also be webcast live on the Internet at: https://viavid.webcasts.com/starthere.jsp?ei=1637192&tp_key=fd85a910fe.
Non-IFRS financial measures
We present EBITDA and adjusted EBITDA because we use this non-IFRS financial measure to assess our operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes this non-IFRS financial measure are useful to investors because: (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and provide investors with a meaningful perspective on the current underlying performance of the Company’s core ongoing operations; and (2) they exclude the impact of certain items that are not directly attributable to our core operating performance and that may obscure trends in the core operating performance of the business. Non-IFRS financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, our IFRS results. We expect to continue reporting non-IFRS financial measures, adjusting for the items described below, and we expect to continue to incur expenses similar to certain of the non-cash, non-IFRS adjustments described below. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-IFRS financial measures should not be construed as an inference that these items are unusual, infrequent or non-recurring. EBITDA and adjusted EBITDA are not recognized terms under IFRS and do not purport to be an alternative to IFRS terms as an indicator of operating performance or any other IFRS measure. Moreover, because not all companies use identical measures and calculations, the presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. EBITDA and adjusted EBITDA are defined as net income (loss), plus income tax expense, plus or minus financial income or expenses, net, plus or minus income or expense in respect of securities measured at fair value, net, plus or minus income or expenses in respect of currency exchange differences and derivatives instruments, net, plus depreciation and amortization expense, plus non-cash share-based compensation expenses and certain other costs.
midastouch017
11 months ago
Kamada Reports Strong First Quarter 2023 Financial Results; Reiterates Revenue and Profitability Guidance
https://finance.yahoo.com/news/kamada-reports-strong-first-quarter-111000443.html
Total Revenues for First Quarter of 2023 were $30.7 Million, Up 9% Year-over-Year
First Quarter 2023 EBITDA of $3.8 Million, Increase of 16% Year-over-Year
Solid First Quarter Results and Expected Continued Momentum Supported by Multiple Growth Drivers Anticipated to Drive Full-Year 2023 EBITDA Growth of Over 30% Year-over-Year
Announced $60 Million Private Placement with FIMI Opportunity Funds
Received FDA Approval to Manufacture CYTOGAM® at the Company’s Israeli Facility; Expected to Positively Impact Plant Utilization and Efficiency
Conference Call and Live Webcast Today at 8:30 AM ET
REHOVOT, Israel and Hoboken, N.J., May 24, 2023 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a commercial stage global biopharmaceutical company, with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, today announced financial results for three months ended March 31, 2023.
“We are off to an excellent start to 2023, both financially and operationally,” said Amir London, Kamada’s Chief Executive Officer. “With total revenues in the first quarter of $30.7 million, which represented year-over-year growth of 9%, and EBITDA of $3.8 million, an increase of 16% year-over-year, we achieved the top- and bottom-line growth anticipated in our business to begin the year. Importantly, we continue to effectively leverage multiple growth drivers, including KEDRAB® sales in the U.S, the profitable portfolio of four FDA approved IgGs acquired in late 2021, the sales of our other Proprietary products in the international markets, and our Israeli distribution business.”
“While our first quarter results are impressive, we are equally excited about our outlook for the remainder of the year,” continued Mr. London. “As such, we are reiterating our full-year 2023 revenue guidance of $138 million to $146 million and EBITDA guidance of $22 million to $26 million, which would represent profitability growth of over 30% as compared to 2022. Looking beyond 2023, based on multiple catalysts from our existing business, we continue to anticipate annual double-digit growth rate in revenues and profitability in the foreseeable years ahead.”
“Our prospects were recently further significantly enhanced by the successful completion of multiple key achievements. The $60 million financing agreement signed with FIMI will provide us with financial flexibility, allowing us to accelerate the growth of our existing business and pursue compelling business development opportunities. Moreover, regarding our existing business, the FDA approval to manufacture CYTOGAM® at our facility in Israel, and the initiation of our commercial manufacturing, will positively impact our facility’s utilization and efficiency. In addition, we are encouraged by the most recent progress achieved in our ongoing pivotal Phase 3 InnovAATe clinical trial for the inhaled Alpha-1 Antitrypsin (AAT) therapy for the treatment of Alpha-1 Antitrypsin Deficiency (AATD). The study has enrolled 60 patients to date and the independent Data Safety Monitoring Board (DSMB) recently recommended study continuation without modification for the fifth time since study initiation,” concluded Mr. London.
Financial Highlights for the Three Months Ended March 31, 2023
Total revenues were $30.7 million in the first quarter of 2023, compared to $28.1 million in the first quarter of 2022, representing a 9% increase year-over-year.
Gross profit and gross margins were $11.8 million and 39%, respectively, in the first quarter of 2023, compared to $11.3 million and 40%, respectively, reported in the prior year period. Cost of goods sold in the Company’s Proprietary segment in the first quarter of 2023 included $1.3 million of depreciation expenses associated with intangible assets generated through the IgG products acquisition. Gross profit and gross margins, excluding such intangible assets depreciation, would have been $13.2 million and 43%, respectively, compared to $12.6 million and 45%, respectively, in the first quarter of 2022.
Operating expenses, including R&D, Sales & Marketing (S&M), G&A and other expenses (including excess severance remuneration described below), totaled $11.6 million in the first quarter of 2023, compared to $11.1 million in the first quarter of 2022. S&M costs for the most recently completed first quarter included $0.4 million of depreciation expenses of intangible assets generated through the IgG products acquisition.
During the first quarter of 2023, Kamada conducted a planned workforce downsizing at its Israeli plant, optimizing staff level to its capacity needs. As a result of this downsizing, the Company incurred an expense of $0.6 million for excess severance remuneration provided to employees who were laid off. The downsizing is expected to result in an annualized reduction of approximately 6% in the overall Israeli labor costs.
Finance expense, net for the first quarter of 2023 included a $1.8 million expense associated with the revaluation of the contingent consideration and other long-term liabilities assumed as part of the IgG products acquisition. For more information with respect to such contingent consideration and other long-term liabilities, please refer to Note 5 of Kamada’s 2022 financial statements included in the 2022 Annual Report on Form 20-F filed on March 15, 2023, with the Securities and Exchange Commission.
Net loss was $1.8 million, or $(0.04) per share, in the first quarter of 2023, in line with a net loss of $1.8 million, or $(0.04) per share, in the first quarter of 2022. Excluding depreciation expenses of intangible assets and finance expenses of the contingent consideration and other assumed long-term liabilities associated with the acquired IgG products, the Company would have recorded net income of $1.7 million, or $0.04 per share, in the first quarter of 2023, compared to $1.9 million, or $0.04 per share in the first quarter of 2022.
EBITDA, as detailed in the tables below, was $3.8 million in the first quarter of 2023, as compared to $3.3 million in the first quarter of 2022, representing a 16% increase year-over-year.
Excluding the $0.6 million expense of the excess severance remuneration paid to the employees who were laid off, EBITDA would have been $4.4 million in the first quarter of 2023, representing a 33% increase year-over-year.
Cash used by operating activities was $2.9 million in the first quarter of 2023, as compared to cash provided by operating activities of $5.5 million in the first quarter of 2022.
Balance Sheet Highlights
As of March 31, 2023, Kamada had cash, cash equivalents, and short-term investments of $27.1 million, as compared to $34.3 million on December 31, 2022. This figure does not include the expected net proceeds from the recently announced $60 million financing, which is expected to close during the second half of 2023.
Recent Corporate Highlights
Announced that it has entered into a securities purchase agreement with FIMI Opportunity Funds (FIMI), the leading private equity investor in Israel, to purchase $60 million of its ordinary shares in a private placement.
Received FDA approval of application to manufacture CYTOGAM® (Cytomegalovirus Immune Globulin Intravenous [Human]) (CMV-IGIV) at the Company’s facility in Beit Kama, Israel.
Granted marketing authorization in Switzerland from Swissmedic for GLASSIA® [Alpha-1 Proteinase Inhibitor (Human)], for chronic augmentation and maintenance therapy in adults with clinically evident emphysema due to severe hereditary AATD.
Announced that Chief Financial Officer (CFO) Chaime Orlev will remain in role and the appointment of Nir Livneh as the Company’s Vice President, General Counsel and Corporate Secretary.
Fiscal Year 2023 Guidance
Kamada continues to expect to generate fiscal year 2023 total revenues in the range of $138 million to $146 million. The Company also continues to anticipate generating EBITDA during 2023 in the range of $22 million to $26 million, representing profitability growth of over 30% from the year ended December 31, 2022.
Conference Call
Kamada management will host an investment community conference call on Wednesday, May 24, 2023, at 8:30 am Eastern Time to present the Company’s results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 1-877-407-0792 (from within the U.S.), 1 809-406-247 (from Israel) or 1-201-689-8263 (International) using conference ID 13738719. The call will also be webcast live on the Internet at: https://viavid.webcasts.com/starthere.jsp?ei=1614685&tp_key=87fb1414ee.
Non-IFRS financial measures
We present EBITDA and adjusted EBITDA because we use this non-IFRS financial measure to assess our operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes this non-IFRS financial measure are useful to investors because: (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and provide investors with a meaningful perspective on the current underlying performance of the Company’s core ongoing operations; and (2) they exclude the impact of certain items that are not directly attributable to our core operating performance and that may obscure trends in the core operating performance of the business. Non-IFRS financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, our IFRS results. We expect to continue reporting non-IFRS financial measures, adjusting for the items described below, and we expect to continue to incur expenses similar to certain of the non-cash, non-IFRS adjustments described below. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-IFRS financial measures should not be construed as an inference that these items are unusual, infrequent or non-recurring. EBITDA and adjusted EBITDA are not recognized terms under IFRS and do not purport to be an alternative to IFRS terms as an indicator of operating performance or any other IFRS measure. Moreover, because not all companies use identical measures and calculations, the presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. EBITDA and adjusted EBITDA are defined as net income (loss), plus income tax expense, plus or minus financial income or expenses, net, plus or minus income or expense in respect of securities measured at fair value, net, plus or minus income or expenses in respect of currency exchange differences and derivatives instruments, net, plus depreciation and amortization expense, plus non-cash share-based compensation expenses and certain other costs.
About Kamada
Kamada Ltd. (the “Company”) is a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, focused on diseases of limited treatment alternatives. The Company is also advancing an innovative development pipeline targeting areas of significant unmet medical need. The Company’s strategy is focused on driving profitable growth from its significant commercial catalysts as well as its manufacturing and development expertise in the plasma-derived and biopharmaceutical fields. The Company’s commercial products portfolio includes six FDA approved plasma-derived biopharmaceutical products: CYTOGAM®, KEDRAB®, WINRHO SDF®, VARIZIG®, HEPAGAM B® and GLASSIA®, as well as KAMRAB®, KAMRHO (D)® and two types of equine-based anti-snake venom (ASV) products. The Company distributes its commercial products portfolio directly, and through strategic partners or third-party distributors in more than 30 countries, including the U.S., Canada, Israel, Russia, Argentina, Brazil, India, Australia and other countries in Latin America, Europe, Middle East, and Asia. The Company leverages its expertise and presence in the Israeli market to distribute, for use in Israel, more than 25 pharmaceutical products that are supplied by international manufacturers. During recent years the Company added eleven biosimilar products to its Israeli distribution portfolio, which, subject to the European Medicines Agency (EMA) and the Israeli Ministry of Health approvals, are expected to be launched in Israel through 2028. The Company owns an FDA licensed plasma collection center in Beaumont, Texas, which currently specializes in the collection of hyper-immune plasma used in the manufacture of KAMRHO (D). In addition to the Company’s commercial operation, it invests in research and development of new product candidates. The Company’s leading investigational product is an inhaled AAT for the treatment of AAT deficiency, for which it is continuing to progress the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial. FIMI Opportunity Funds, the leading private equity firm in Israel, is the Company’s lead shareholder, beneficially owning approximately 21% of the outstanding ordinary shares and is expected to beneficially own approximately 38% upon the closing of the Private Placement.
Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, including statements regarding: (1) 2023 revenue guidance in the range of $138 Million to $146 Million; (2) 2023 EBITDA of $22 million to $26 million representing profitability growth of over 30% from the year ended December 31, 2022; (3) commercial manufacturing of CYTOGAM® in Israel shortly, which will positively impact the facility’s utilization and efficiency; (4) expected annual double-digit growth rate in revenues and profitability in the foreseeable years ahead; (5) effectively leveraging multiple growth drivers, including KEDRAB® sales in the U.S, the portfolio of four FDA approved IgGs acquired in late 2021, the sales of our other Proprietary products in the international markets, and our Israeli distribution business; (6) receiving net proceeds from the recently announced $60 million financing; (7) closing of the recently announced $60 million financing during the second half of 2023; (8) the financing providing the Company with financial flexibility, allowing the Company to accelerate the growth of its existing business and pursue compelling business development opportunities; (9) the downsizing is expected to result in an annualized reduction of approximately 6% in overall Israeli labor costs; and (10) optimism about AATD Phase 3 clinical trial progress. Forward-looking statements are based on Kamada’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, success in receiving the necessary shareholder and regulatory approvals for the Private Placement, timing of Kamada’s release of its financial results for the second quarter of 2023, overall stock market conditions and specifically Kamada’s stock price, availability of sufficient raw materials required to maintain manufacturing plans, continued utilization of Kamada’s Israeli manufacturing site, continuation of inbound and outbound international delivery routes, continued demand for the IgG product portfolio, FDA and international health authorities’ approval process, financial conditions of the Company’s customers, suppliers and services providers, Kamada’s ability to integrate the new product portfolio into its current product portfolio, Kamada’s ability to grow the revenues of its new product portfolio, and leverage and expand its international distribution network, Kamada’s ability to manage operating expenses, additional competition in the markets that Kamada competes, regulatory delays, prevailing market conditions and the impact of general economic, industry or political conditions in the U.S., Israel or otherwise, and other risks detailed in Kamada’s filings with the U.S. Securities and Exchange Commission (the “SEC”) including those discussed in its most recent Annual Report on Form 20-F and in any subsequent reports on Form 6-K, each of which is on file or furnished with the SEC and available at the SEC’s website at www.sec.gov. The forward-looking statements made herein speak only as of the date of this announcement and Kamada undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.
CONTACTS:
Amir London
Chief Executive Officer
IR@kamada.com
Brian Ritchie
LifeSci Advisors, LLC
212-915-2578
britchie@LifeSciAdvisors.com
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of
As of March 31,
December 31,
2023
2022
2022
Unaudited
Audited
Assets
Current Assets
Cash and cash equivalents
$
27,121
21,967
$
34,258
Trade receivables, net
20,925
21,568
27,252
Other accounts receivables
3,603
7,867
8,710
Inventories
79,754
64,761
68,785
Total Current Assets
131,403
116,163
139,005
Non-Current Assets
Property, plant and equipment, net
26,496
26,098
26,157
Right-of-use assets
5,836
2,990
2,568
Intangible assets, Goodwill and other long-term assets
145,305
151,858
147,072
Contract assets
7,755
5,987
7,577
Total Non-Current Assets
185,392
186,933
183,374
Total Assets
316,795
303,096
$
322,379
Liabilities
Current Liabilities
Current maturities of bank loans
$
4,444
3,725
$
4,444
Current maturities of lease liabilities
1,438
1,017
1,016
Current maturities of other long term liabilities
29,414
19,095
29,708
Trade payables
26,210
11,682
32,917
Other accounts payables
7,350
6,670
7,585
Deferred revenues
419
40
35
Total Current Liabilities
69,275
42,229
75,705
Non-Current Liabilities
Bank loans
11,852
16,296
12,963
Lease liabilities
4,992
3,056
2,177
Contingent consideration
18,115
22,551
17,534
Other long-term liabilities
37,280
42,531
37,308
Deferred revenues
-
15
-
Employee benefit liabilities, net
473
1,268
672
Total Non-Current Liabilities
72,712
85,717
70,654
Shareholder’s Equity
Ordinary shares
11,736
11,728
11,734
Additional paid in capital net
210,665
210,269
210,495
Capital reserve due to translation to presentation currency
(3,490
)
(3,490
)
(3,490
)
Capital reserve from hedges
(99
)
12
(88
)
Capital reserve from share-based payments
5,750
4,771
5,505
Capital reserve from employee benefits
539
(149
)
348
Accumulated deficit
(50,293
)
(47,991
)
(48484
)
Total Shareholder’s Equity
174,808
175,150
176,020
Total Liabilities and Shareholder’s Equity
$
316,795
303,096
$
322,379
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Three months
period ended
March 31,
Year ended
December 31,
2023
2022
2022
Unaudited
Audited
Revenues from proprietary products
24,061
23,011
$
102,598
Revenues from distribution
6,649
5,082
26,741
Total revenues
30,710
28,093
129,339
Cost of revenues from proprietary products
13,224
12,449
58,229
Cost of revenues from distribution
5,647
4,342
24,407
Total cost of revenues
18,871
16,791
82,636
Gross profit
11,839
11,302
46,703
Research and development expenses
3,231
4,420
13,172
Selling and marketing expenses
3,922
3,321
15,284
General and administrative expenses
3,418
3,005
12,803
Other expenses
979
310
912
Operating income (loss)
289
246
4,532
Financial income
25
2
91
Income (expense) in respect of securities measured at fair value, net
-
-
-
Income (expenses) in respect of currency exchange differences and derivatives instruments, net
151
169
298
Revaluation of long-term liabilities
(1,761
)
(2,010
)
(6,266
)
Financial expenses
(500
)
(194
)
(914
)
Income before tax on income
(1,796
)
(1,787
)
(2,259
)
Taxes on income
13
41
62
Net Income (loss)
$
(1,809
)
(1,828
)
$
(2,321
)
Other Comprehensive Income (loss) :
Amounts that will be or that have been reclassified to profit or loss when specific conditions are met
Gain (loss) from securities measured at fair value through other comprehensive income
Gain (loss) on cash flow hedges
(156
)
(108
)
(776
)
Net amounts transferred to the statement of profit or loss for cash flow hedges
145
66
634
Items that will not be reclassified to profit or loss in subsequent periods:
Remeasurement gain (loss) from defined benefit plan
191
-
497
Tax effect
-
-
-
Total comprehensive income (loss)
$
(1,629
)
(1,870
)
$
(1,966
)
Earnings per share attributable to equity holders of the Company:
Basic net earnings per share
(0.04
)
(0.04
)
$
(0.05
)
Diluted net earnings per share
(0.04
)
(0.04
)
$
(0.05
)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months period Ended
Year Ended
March, 31
December 31,
2023
2022
2022
Audited
Cash Flows from Operating Activities
Net income (loss)
$
(1,809
)
(1,828
)
$
(2,321
)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Adjustments to the profit or loss items:
Depreciation and impairment
3,123
3,027
12,155
Financial expenses (income), net
2,085
2,033
6,791
Cost of share-based payment
415
193
1,153
Taxes on income
13
41
62
Loss (gain) from sale of property and equipment
(22
)
-
-
Change in employee benefit liabilities, net
(8
)
(12
)
(111
)
5,606
5,282
20,050
Changes in asset and liability items:
Decrease (increase) in trade receivables, net
6,306
13,492
7,603
Decrease (increase) in other accounts receivables
1,362
589
(578
)
Decrease (increase) in inventories
(10,970
)
2,662
(1,361
)
Decrease (increase) in deferred expenses
3,554
(110
)
(1,340
)
Increase (decrease) in trade payables
(6,712
)
(13,649
)
7,055
Increase (decrease) in other accounts payables
(238
)
(772
)
290
Decrease in deferred revenues
384
-
(20
)
(6,314
)
2,212
11,649
Cash received (paid) during the period for:
Interest paid
(341
)
(194
)
(853
)
Interest received
25
2
97
Taxes paid
(18
)
(9
)
(36
)
(334
)
(201
)
(792
)
Net cash provided by (used in) operating activities
$
(2,851
)
5,465
$
28,586
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months period Ended
Year Ended
March, 31
December 31,
2023
2022
2022
Audited
Cash Flows from Investing Activities
Purchase of property and equipment and intangible assets
(1,117
)
(513
)
(3,784
)
Proceeds from sale of property and equipment
24
-
-
Business combination
-
-
-
Net cash provided by (used in) investing activities
(1,093
)
(513
)
(3,784
)
Cash Flows from Financing Activities
Proceeds from exercise of share base payments
1
3
9
Receipt of long-term loans
-
-
-
Repayment of lease liabilities
(271
)
(295
)
(1,098
)
Repayment of long-term loans
(1,111
)
(16
)
(2,628
)
Repayment of other long-term liabilities
(1,500
)
(1,500
)
(5,626
)
Net cash provided by (used in) financing activities
(2,881
)
(1,808
)
(9,343
)
Exchange differences on balances of cash and cash equivalent
(312
)
236
212
Increase (decrease) in cash and cash equivalents
(7,137
)
3,380
15,671
Cash and cash equivalents at the beginning of the period
34,258
18,587
18,587
Cash and cash equivalents at the end of the period
$
27,121
21,967
$
34,258
Significant non-cash transactions
Right-of-use asset recognized with corresponding lease liability
$
3,580
174
$
551
Purchase of property and equipment and Intangible assets
$
292
254
$
618
NON-IFRS MEASURES
Three months period ended
Year ended
March 31,
December 31,
2023
2022
2022
In thousands
Net income
$
(1,809
)
$
(1,828
)
$
(2,321
)
Taxes on income
13
41
62
Financial expense (income), net
2,085
2,033
6,791
Depreciation and amortization expense
3,123
2,886
12,155
Non-cash share-based compensation expenses
415
155
1,153
Adjusted EBITDA
$
3,827
$
3,286
$
17,840
midastouch017
1 year ago
Kamada Issues 2023 CEO Letter to Shareholders
https://finance.yahoo.com/news/kamada-issues-2023-ceo-letter-111000051.html
REHOVOT, Israel and HOBOKEN, N.J., March 15, 2023 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, today issued a Letter to Shareholders from Amir London, Chief Executive Officer.
Dear Shareholders, Colleagues and Business Partners:
The recently completed 2022 year was a transformational period for Kamada as we embarked on a new and exciting chapter in the Company’s evolution. Most importantly, we have now completed our rapid transition from our historical dependence on GLASSIA® sales to Takeda to a diversified, fully integrated specialty plasma company with six U.S. Food and Drug Administration (FDA) approved proprietary products and strong commercial capabilities in the U.S. market, as well as a global sales footprint in over 30 countries.
Earlier today, we reported our full-year 2022 financial results, which met our annual guidance, with total revenues of $129.3 million and EBITDA of $17.8 million, representing margins of 14%. Our strong performance in 2022 represented year-over-year revenue growth of 25%, and a 3x increase in EBITDA.
Moreover, we generated a record operating cash flow of $28.6 million during 2022, supporting the increase in our cash position to $34.3 million as of December 31, 2022.
Looking ahead, we expect the momentum from 2022 to extend throughout 2023, with profitability to be further increased as compared to the past year. As such, we are introducing full-year 2023 revenue guidance of $138 million to $146 million and EBITDA of $22 million to $26 million; the mid-point expected EBITDA represents approximately 35% growth year-over-year.
Our impressive results in 2022, and positive outlook for this year, are the consequence of our ability to leverage multiple growth drivers, including the portfolio of four FDA approved IgGs, acquired in late 2021, KEDRAB® sales in the U.S., GLASSIA royalties from Takeda, other Proprietary products sales in the international markets, and our thriving Israeli distribution business.
These significant catalysts are driving our annual double-digit growth, with significant upside potential and limited downside risk.
The November 2021 acquisition of the four FDA approved IgGs, consisting of CYTOGAM®, HEPAGAMB®, VARIZIG® and WINRHO®SDF, following a thorough search for the ideal assets for Kamada, was a critical strategic and synergistic advancement for the Company. Full-year 2022 revenues of the acquired portfolio increased by 24% as compared to full-year 2021. This portfolio is generating over 50% gross margins. I am pleased to report that we anticipate continued growth in the portfolio's revenues in 2023 and beyond.
During 2022, as part of the establishment of our direct presence in the U.S. market, we deployed a team of U.S.-based experienced sales and medical affairs professionals who have rapidly established our operations in this key market. The U.S. sales team is making good progress in promoting our portfolio of specialty plasma-derived IgG products to physicians and other healthcare practitioners through direct engagement and opportunities at medical conventions. The Medical Affairs team is working to educate physicians, while addressing their scientific and clinical inquiries, including participating in major medical conferences in the U.S. We are also leveraging our existing strong international distribution network to grow product revenue in new territories, primarily in Asia, Latin America and the Middle East. Our achievements with these key products in 2022 included winning a new $11.4 million procurement agreement for VARIZIG from an international organization operating principally in Latin America and securing a $22 million extension of a Canadian supply tender.
CYTOGAM is the largest of the four acquired products. The product is indicated for the prophylaxis of cytomegalovirus disease associated with solid organs transplantation. This proprietary and unique therapy is the only FDA approved IgG product for its indication. We recently submitted an application to the FDA to manufacture CYTOGAM at our plant in Israel, and we expect to receive regulatory approval to do so by mid-2023. The anticipated FDA approval will mark the successful conclusion of the technology transfer process for the product from its previous manufacturer, CSL Behring. The ability to manufacture the product at our facility will positively impact our plant utilization and efficiency.
KEDRAB, marketed in the U.S. by Kedrion, continued to gain market share during 2022 in the U.S., a market which is estimated to be $150 million annually. With Kamada’s support, Kedrion's commercial team successfully leveraged the FDA approval obtained in 2021 for a label expansion for the product that helped differentiate it as the first and only human rabies immunoglobulin (HRIG) available in the U.S. to be clinically studied in children. We anticipate that sales of the product will continue to grow significantly over the next few years.
During 2022, as planned, we began receiving royalties from Takeda based on sales of GLASSIA. We expect royalties in the range of $10 million to $20 million per year through 2040, which will support our profitability and cash position. In addition, we continue to grow sales of GLASSIA in international markets through our local partners.
Another major strategic step we are taking is the advancement of our plasma collection business through our wholly owned subsidiary, Kamada Plasma, based in Texas. Last year, we expanded the hyperimmune plasma collection capacity at our first center and are currently advancing our plan to open additional centers in the U.S. to further enhance our supply of specialty and regular plasma.
We are also very excited about our innovative investigational Inhaled AAT product candidate for the treatment of AAT Deficiency, a technology which has shown to be highly effective in delivering AAT directly into a patient’s lungs. A substantial opportunity exists for Inhaled AAT to be a transformational product in a market that is already over $1 billion in annual sales in the U.S. and EU. We are currently conducting the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 study. During 2022, we began to accelerate trial recruitment with seven clinical sites now open and enrolling patients. In November 2022, the independent Data Safety Monitoring Board (DSMB) recommended that the study continue without modification for the fourth time since study initiation. Moreover, based on encouraging safety observed to date, the study inclusion criteria were revised to also include patients with severe airflow limitation. During 2023, we intend to continue expediting trial recruitment, as well as meet with the FDA and the European Medicines Agency to discuss study progress and potential opportunities to shorten the regulatory pathways.
In our distribution segment, we are leveraging our expertise and strong presence in the Israeli market to register, market and distribute more than 25 products that are developed and manufactured by our international partners. In recent years, we have significantly grown our pipeline of distributed products and, in 2023, we anticipate continuing to launch new therapies across multiple medical specialties. An area of key strategic focus in this business is the planned distribution of a portfolio of 11 biosimilar products, expected to be launched upon receipt of Israeli regulatory approval, through 2028, with overall annual anticipated peak sales, within several years of launch, of more than $40 million. Included in this portfolio are 8 products through a distribution agreement with Alvotech, a global leader in the development and manufacturing of biosimilar drugs.
In closing, 2022 was a year of significant progress for Kamada during which we executed on a rapid financial turnaround of the Company by leveraging multiple robust value-creating catalysts, and we are well-positioned for further substantial revenue and profitability growth in 2023 and the years beyond with substantial upside potential and limited downside risk as a global leader in the specialty plasma industry. Importantly, looking past 2023, based on our multiple catalysts, we continue to project annual double-digit growth in revenues and profits in the foreseeable years ahead.
On behalf of the entire Kamada team, we look forward to continuing to support patients and clinicians with the important lifesaving products that we develop, manufacture, and commercialize. We thank all of our investors for their support and remain committed to creating long-term shareholder value.
Sincerely,
Amir London
Chief Executive Officer
Kamada Ltd.
About Kamada
Kamada Ltd. (the “Company”) is a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, focused on diseases of limited treatment alternatives. The Company is also advancing an innovative development pipeline targeting areas of significant unmet medical need. The Company’s strategy is focused on driving profitable growth from its significant commercial catalysts as well as its manufacturing and development expertise in the plasma-derived and biopharmaceutical fields. The Company’s commercial products portfolio includes six FDA approved plasma-derived biopharmaceutical products: CYTOGAM®, KEDRAB®, WINRHO SDF®, VARIZIG®, HEPAGAM B® and GLASSIA®, as well as KAMRAB®, KAMRHO (D)® and two types of equine-based anti-snake venom (ASV) products. The Company distributes its commercial products portfolio directly, and through strategic partners or third-party distributors in more than 30 countries, including the U.S., Canada, Israel, Russia, Argentina, Brazil, India, Australia and other countries in Latin America, Europe, Middle East, and Asia. The Company leverages its expertise and presence in the Israeli market to distribute, for use in Israel, more than 25 pharmaceutical products that are supplied by international manufacturers and during recent years added eleven biosimilar products to its Israeli distribution portfolio, which, subject to the European Medicines Agency (EMA) and the Israeli Ministry of Health approvals, are expected to be launched in Israel through 2028. The Company owns an FDA registered plasma collection center in Beaumont, Texas, which currently specializes in the collection of hyper-immune plasma used in the manufacture of KAMRHO (D). In addition to the Company’s commercial operation, it invests in research and development of new product candidates. The Company’s leading investigational product is an inhaled AAT for the treatment of AAT deficiency, for which it is continuing to progress the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial. FIMI Opportunity Fund, the leading private equity investor in Israel, is the Company’s lead shareholder, beneficially owning approximately 21% of the outstanding ordinary shares.
Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, including statements regarding: 2023 revenue guidance in the range of $138 million to $146 million, 2) 2023 EBITDA guidance in the range of $22 million to $26 million, 3) expected mid-point EBITDA representing approximately 35% growth year over year, 4) expectation that there will be continued growth in the IgGs portfolio in 2023, 5) expectation to receive FDA approval to manufacture CYTOGAM at Kamada’s plant in Israel by mid-2023, which will positively impact Kamada’s plant utilization and efficiency, 6) anticipation that KEDRAB's sales will continue to grow significantly over the next few years, 7) expectation of receiving GLASSIA royalties in the range of $10 million to $20 million per year through 2040, 8) plans to open additional plasma centers in the U.S., 9) intention to meet with the FDA and European Medicines Agency during the first half of 2023 to discuss study progress and potential opportunities to shorten the regulatory pathway, 10) anticipation that in 2023 we will continue to launch new therapies across multiple medical specialties, 11) planned distribution of a portfolio of 11 biosimilar products, expected to be launched upon receipt of Israeli regulatory approval, through 2028, with an overall annual anticipated peak sales, within several years of launch, of more than $40 million, 12) belief that by leveraging multiple robust value-creating catalysts Kamada is well positioned for further substantial revenue and profitability growth in 2023 and the years beyond with limited downside risk and substantial upside potential and 13) belief that based on multiple catalysts, Kamada will experience annual double-digit growth in revenues and profits in the foreseeable years ahead. Forward-looking statements are based on Kamada’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, the continued evolvement of the COVID-19 pandemic, its scope, effect and duration, availability of sufficient raw materials required to maintain manufacturing plans, disruption to the supply chain due to COVID-19 pandemic, continuation of inbound and outbound international delivery routes, impact of the workforce downsizing plan, continued demand for Kamada’s products, including GLASSIA and KEDRAB and its Distribution segment related products in Israel, financial conditions of the Company’s customer, suppliers and services providers, Kamada’s ability to integrate the new product portfolio into its current product portfolio, Kamada’s ability to grow the revenues of this new product portfolio, and leverage and expand its international distribution network, ability to reap the benefits of the recent acquisition of the plasma collection center, including the ability to open additional U.S. plasma centers, and acquisition of the FDA-approved plasma-derived hyperimmune commercial products, the ability to continue enrollment of the pivotal Phase 3 InnovAATe clinical trial, unexpected results of clinical studies, Kamada’s ability to manage operating expenses, additional competition in the markets that Kamada competes, regulatory delays, the impacts of the failure of Silicon Valley Bank and recent turmoil in the banking industry, prevailing market conditions and the impact of general economic, industry or political conditions in the U.S., Israel or otherwise, and other risks detailed in Kamada’s filings with the U.S. Securities and Exchange Commission (the “SEC”) including those discussed in its most recent Annual Report on Form 20-F and in any subsequent reports on Form 6-K, each of which is on file or furnished with the SEC and available at the SEC’s website at www.sec.gov. The forward-looking statements made herein speak only as of the date of this announcement and Kamada undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.
CONTACTS:
Chaime Orlev
Chief Financial Officer
IR@kamada.com
Brian Ritchie
LifeSci Advisors, LLC
212-915-2578
britchie@LifeSciAdvisors.com
midastouch017
1 year ago
Kamada Reports Strong Fiscal Year and Fourth Quarter 2022 Financial Results, and Provides 2023 Guidance Representing Significant Profitability Growth
https://finance.yahoo.com/news/kamada-reports-strong-fiscal-fourth-110000234.html
Total Revenues for Fiscal Year 2022 of $129.3 Million Represented Growth of 25% Compared to Fiscal Year 2021; Fourth Quarter 2022 Revenues of $45.4 Million Represented a 44% Increase Year-over-Year
Fiscal Year 2022 EBITDA of $17.8 million, Represented Margins of 14%, and a 3x Increase Over Fiscal Year 2021
Recorded Highest Annual Operating Cash Flow in Kamada's History of $28.6 Million in Fiscal Year 2022; $34.3 Million Cash Position as of December 31, 2022, Nearly Double Cash Position at Year-End 2021
Fiscal Year 2023 Revenues Expected to be in Range of $138 Million to $146 Million; 2023 EBITDA Anticipated to be in Range of $22 Million to $26 Million; Mid-Point Expected EBITDA Represents Approximately 35% Growth Year-over-Year
Strong 2022 Results and 2023 Positive Outlook Driven by Multiple Growth Drivers, including CYTOGAM® and KEDRAB® Sales, GLASSIA® Royalties, Other Proprietary Product Sales in International Markets, and Thriving Israeli Distribution Business
Continued Progress in Ongoing InnovAATe, Pivotal Phase 3 Clinical Trial of Inhaled AAT, Including Recruitment Acceleration, Successful DSMB Meeting and Intention to Meet Regulatory Agencies During H1/2023
Conference Call and Live Webcast with Slides Today at 8:30 AM ET
REHOVOT, Israel and Hoboken, N.J., March 15, 2023 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, today announced financial results for the 12 and three months ended December 31, 2022.
“The success of our rapid strategic transformation to a diversified, fully integrated specialty plasma company is evidenced by our impressive full-year 2022 financial results,” said Amir London, Kamada’s Chief Executive Officer. “We met our 2022 revenue and profitability guidance, with total revenues of $129.3 million, which represented 25% growth compared to 2021, and EBITDA of $17.8 million, a 3x increase over 2021. Moreover, we generated operating cash flow of $28.6 million during 2022, supporting the increase in our cash position to $34.3 million as of December 31, 2022. These impressive results were driven by our ability to leverage multiple growth drivers, including the portfolio of four FDA approved IgGs acquired in late 2021, the sales of which increased 24% year over year in 2022, KEDRAB sales in the U.S., GLASSIA royalties from Takeda, the sales of our other Proprietary products in the international markets, and our thriving Israeli distribution business,” continued Mr. London.
“Importantly, we expect the momentum from 2022 to extend throughout 2023, with profitability to be further enhanced. As such, we are introducing full-year 2023 revenue guidance of $138 million to $146 million and EBITDA guidance of $22 million to $26 million. Mid-point expected EBITDA represents approximately 35% growth year over year. Moreover, our multiple catalysts are anticipated to drive annual double-digit growth in the foreseeable years ahead, with significant upside potential and limited downside risk," concluded Mr. London.
Financial Highlights for the Year Ended December 31, 2022
Total revenues were $129.3 million in the year ended December 31, 2022, as compared to $103.6 million recorded in the year ended December 31, 2021.The increase in revenues was primarily attributable to sales of the acquired four IgG products.
Gross profit and gross margins were $46.7 million and 36%, respectively, in the year ended December 31, 2022, compared to $30.3 million and 29%, respectively, reported in the year ended December 31, 2021. Gross profit and gross margins in 2022, excluding intangible assets depreciation in the amount of $5.3 million would have been $52.0 million and 40%, respectively, representing a significant increase year-over-year.
Operating expenses, including R&D, Sales & Marketing (S&M), G&A and other expenses, totaled $42.2 million in the year ended December 31, 2022, as compared to $31.0 million in the prior year. This increase was attributable to an increase in S&M costs associated with the recently acquired portfolio, as well as increased R&D costs, primarily due to advancing the pivotal Phase 3 InnovAATe trial for Inhaled AAT through the opening of new clinical sites and the manufacturing of clinical supply for the study. S&M costs for the year ended December 31, 2022, included $1.7 million of depreciation expenses of intangible assets generated through the IgG products acquisition.
Finance expense, net for the year ended December 31, 2022, included $6.3 million of expenses associated with the revaluation of the contingent consideration and other long-term liabilities, assumed as part of the IgG products acquisition. For more information with respect to such contingent consideration and other long-term liabilities please refer to Note 5 of the Company’s 2022 financial statements included in the 2022 Annual Report on Form 20-F filed on March 15, 2023, with the Securities and Exchange Commission.
Net loss was $2.3 million, or $(0.05) per share in the year ended December 31, 2022. Excluding depreciation expenses of intangible assets generated through the recent acquisition, and finance expense associated with the revaluation of the contingent consideration and other assumed long-term liabilities, the Company would have recorded net income of $11.0 million, or $0.25 per share, in the year ended December 31, 2022, as compared to net loss of $2.2 million, or $(0.05) per share, in the prior year.
Adjusted EBITDA, as detailed in the tables below, was $17.8 million in the year ended December 31, 2022, as compared to $5.4 million in the year ended December 31, 2021, representing an over 3x increase year-over-year, and 14% margins, which was in line with Kamada’s annual guidance.
Cash provided by operating activities was $28.6 million in the year ended December 31, 2022, as compared to cash used in operating activities of ($8.8) million in the prior year.
Financial Highlights for the Three Months Ended December 31, 2022
Total revenues were $45.4 million in the fourth quarter of 2022, a 44% increase from the prior year period. Total revenues during the fourth quarter of 2022 included strong sales from the portfolio of four acquired FDA-approved IgG products.
Gross profit and gross margins were $15.3 million and 34%, respectively, in the fourth quarter of 2022, compared to $6.6 million and 21%, respectively, reported in the prior year period. The increase in profitability was driven by a positive product sales mix, including sales of the four new IgG products, KEDRAB U.S sales and GLASSIA royalties. Cost of goods sold in the Company’s Proprietary segment in the fourth quarter of 2022 included $1.3 million of depreciation expenses associated with intangible assets generated through the IgG products acquisition. Gross profit and gross margins, excluding such intangible assets depreciation, would have been $16.6 million and 37%, respectively.
Operating expenses, including R&D, S&M, G&A and other expenses, totaled $11.3 million in the fourth quarter of 2022, as compared to $9.9 million in the fourth quarter of 2021. This increase was attributable to increased S&M costs associated with expanded U.S. commercial operations. S&M costs for the fourth quarter of 2022 included $0.4 million of depreciation expenses of intangible assets generated through the IgG products acquisition.
Finance expense, net for the fourth quarter of 2022 included $0.3 million of expenses associated with the revaluation of the contingent consideration and other long-term liabilities assumed as part of the IgG products acquisition.
Net income was $2.9 million, or $0.07 per share, in the fourth quarter of 2022. Excluding depreciation expenses of intangible assets mentioned above and finance expense associated with the revaluation of the contingent consideration and other assumed long-term liabilities, the Company would have recorded net income of $5.0 million, or $0.11 per share, in the fourth quarter of 2022, as compared to a net loss of ($5.0) million, or $(0.11) per share, in the fourth quarter of 2021.
Adjusted EBITDA, as detailed in the tables below, was $7.2 million in the fourth quarter of 2022, as compared to ($1.3) million in the fourth quarter of 2021.
Cash provided by operating activities was $6.7 million in the fourth quarter of 2022, as compared to cash used in operating activities of ($5.0) million in the fourth quarter of 2021.
Balance Sheet Highlights
As of December 31, 2022, the Company had cash, cash equivalents, and short-term investments of $34.3 million, as compared to $18.6 million on December 31, 2021. The increase in Kamada’s cash position was driven by continued positive operational cash flows, which is indicative of the significant momentum in the Company’s commercial operations.
Recent Corporate Highlights
Submitted applications to the U.S. Food and Drug Administration (FDA) and to Health Canada to manufacture CYTOGAM® (Cytomegalovirus Immune Globulin Intravenous [Human]) (CMV-IGIV) at Kamada’s facility in Beit Kama, Israel.
Reported on progress achieved in the ongoing pivotal Phase 3 clinical trial of inhaled AAT, InnovAATe, including acceleration in trial recruitment, a successful DSMB meeting, encouraging safety data observed to date, and the intention to meet with the FDA and European Medicines Agency during first half of 2023 to discuss study progress and potential opportunities to shorten the regulatory pathway.
Fiscal Year 2023 Guidance
Kamada currently expects to generate fiscal year 2023 total revenues in the range of $138 million to $146 million and EBITDA in the range of $22 million to $26 million; mid-point expected EBITDA represents approximately 35% growth year-over-year.
Conference Call
Kamada management will host an investment community conference call and webcast with slides on Wednesday, March 15, at 8:30 AM Eastern Time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 1-877-407-0792 (from within the U.S.) 1 809-406-247 (from Israel) or 1 201-689-8263 (International). The live webcast will be available on the Internet at:
https://viavid.webcasts.com/starthere.jsp?ei=1601498&tp_key=dfb5545156
Non-IFRS financial measures
We present EBITDA and adjusted EBITDA, which is defined as net income, plus (i) tax expense, (ii) financial income (expense), net, (iii) depreciation and amortization; and (iv) non-cash share-based compensation expenses, because we use this non-IFRS financial measure to assess our operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes this non-IFRS financial measure are useful to investors because: (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and provide investors with a meaningful perspective on the current underlying performance of the Company’s core ongoing operations; and (2) they exclude the impact of certain items that are not directly attributable to our core operating performance and that may obscure trends in the core operating performance of the business. Non-IFRS financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, our IFRS results. We expect to continue reporting non-IFRS financial measures, adjusting for the items described below, and we expect to continue to incur expenses similar to certain of the non-cash, non-IFRS adjustments described below. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-IFRS financial measures should not be construed as an inference that these items are unusual, infrequent or non-recurring. EBITDA and adjusted EBITDA are not recognized terms under IFRS and do not purport to be an alternative to IFRS terms as an indicator of operating performance or any other IFRS measure. Moreover, because not all companies use identical measures and calculations, the presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. EBITDA and adjusted EBITDA are defined as net income (loss), plus income tax expense, plus or minus financial income or expenses, net, plus or minus income or expense in respect of securities measured at fair value, net, plus or minus income or expenses in respect of currency exchange differences and derivatives instruments, net, plus depreciation and amortization expense, plus non-cash share-based compensation expenses and certain other costs.
midastouch017
2 years ago
Kamada Awarded $22 Million Extension of Canadian Supply Tender
https://finance.yahoo.com/news/kamada-awarded-22-million-extension-110000798.html
Awarded Extension to Existing Supply Tender which relates to Portfolio of Four Specialty IgG Products Acquired in 2021
Supply Extension Secures Ongoing Sales of Approximately $7.5 Million Per Year for 2023-2025, with an Option to Extend for up to Additional Two Years
REHOVOT, Israel and HOBOKEN, N.J., Oct. 19, 2022 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ & TASE: KMDA), a vertically integrated global biopharmaceutical company, focused on specialty plasma-derived therapeutics, announced today that the Company was awarded an extension of an existing tender from the Canadian Blood Services (CBS) for the supply of four IgG products, CYTOGAM®, HEPAGAM®, VARIZIG® and WINRHO® SDF, for an additional three years for an approximate total value of $22 million. This award secures the ongoing sales of those products in the Canadian market. The four commercial products, approved by Health Canada and the U.S. Food and Drug Administration (FDA), were acquired by Kamada in November 2021. CBS manages the Canadian supply of blood products for all Canadian provinces and territories, excluding Quebec. The extension with CBS is for a three-year period, commencing on April 1, 2023, with an option to extend for up to two additional years.
“This award, together with KAMRAB® as the primary anti-Rabies IgG product used in Canada, validates our position as the leading specialty IgG company in that important geography,” said Amir London, Kamada’s Chief Executive Officer. “This achievement represents the second significant tender we have recently secured, following the new $11.4 million supply agreement won for VARIZIG from an international organization operating principally in Latin America. We remain confident that significant commercial potential exists for our IgG portfolio in international markets and intend to continue pursuing additional contracts in key strategic territories."
Commercial manufacturing of CYTOGAM at Kamada’s Israeli manufacturing plant is expected to be initiated during 2023, following anticipated FDA and Health Canada approvals of the ongoing tech transfer process. HEPAGAM, VARIZIG and WINRHO SDF are manufactured by Emergent BioSolutions (NYSE: EBS) at its facility in Winnipeg, MB, Canada, under a contract development and manufacturing service agreement.
About Kamada
Kamada Ltd. (the “Company”) is a vertically integrated global biopharmaceutical company, focused on specialty plasma-derived therapeutics, with a diverse portfolio of marketed products, a robust development pipeline and industry-leading manufacturing capabilities. The Company’s strategy is focused on driving profitable growth from our current commercial activities as well as our manufacturing and development expertise in the plasma-derived biopharmaceutical market. The Company’s commercial products portfolio includes its developed and FDA approved products GLASSIA® and KEDRAB® as well as its recently acquired FDA approved plasma-derived hyperimmune products CYTOGAM®, HEPAGAM B®, VARIZIG® and WINRHO®SDF. The Company has additional four plasma-derived products which are registered in markets outside the U.S. The Company distributes its commercial products portfolio directly, and through strategic partners or third-party distributors in more than 30 countries, including the U.S., Canada, Israel, Russia, Brazil, Argentina, India and other countries in Latin America and Asia. The Company has a diverse portfolio of development pipeline products including an inhaled AAT for the treatment of AAT deficiency for which the Company is currently conducting the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial. The Company leverages its expertise and presence in the Israeli pharmaceutical market to distribute in Israel more than 20 products that are manufactured by third parties and have recently added eleven biosimilar products to its Israeli distribution portfolio, which, subject to EMA and the Israeli MOH approvals, are expected to be launched in Israel through 2028. FIMI Opportunity Fund, the leading private equity investor in Israel, is the Company’s lead shareholder, beneficially owning approximately 21% of the outstanding ordinary shares.
Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts, including statements regarding: 1) the prospects of aggregate revenues of approximately $22 million for the tender extension, which would commence on April 1, 2023, 2) positive statements regarding Kamada’s ability to grow sales of its newly acquired portfolio of four FDA-approved plasma-derived specialty IgGs in the international markets, 3) Kamada's intention to continue pursuing additional commercial contracts in key strategic territories, 4) positive statements regarding validation of Kamada's position as the leading specialty IgG company in Canada, 5) the commercial manufacturing of CYTOGAM at Kamada’s Israeli manufacturing plant initiating during 2023, and 6) anticipated FDA and Health Canada approvals of the on-going tech transfer process. Forward-looking statements are based on Kamada’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, the continued evolvement of the COVID-19 pandemic, its scope, effect and duration, disruption to the supply chain due to COVID-19 pandemic, Kamada’s ability to successfully integrate the new product portfolio into its current product portfolio, regulatory delays, changes with FDA and other regulatory agencies’ rules and regulations, prevailing market conditions and the impact of general economic, industry or political conditions in the U.S., Israel or otherwise, and other risks detailed in Kamada’s filings with the U.S. Securities and Exchange Commission (the “SEC”) including those discussed in its most recent Annual Report on Form 20-F and in any subsequent reports on Form 6-K, each of which is on file or furnished with the SEC and available at the SEC’s website at www.sec.gov. The forward-looking statements made herein speak only as of the date of this announcement and Kamada undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.
CONTACTS:
Chaime Orlev
Chief Financial Officer
IR@kamada.com
Bob Yedid
LifeSci Advisors, LLC
646-597-6989
Bob@LifeSciAdvisors.com
midastouch017
2 years ago
Kamada Reports Second Quarter and First Half 2022 Financial Results; Significant Growth Driven by Multiple Catalysts Expected in Second Half of 2022; Reiterates 2022 Revenue and Profitability Guidance
https://finance.yahoo.com/news/kamada-reports-second-quarter-first-110000136.html
Second Quarter 2022 Revenues were $23.6 Million; First Half 2022 Revenues of $51.7 Million Increased 5% Year-Over-Year
First Half 2022 Adjusted EBITDA of $4.6 Million; Excluding Labor Strike Related Loss, Adjusted EBITDA Totaled $8.0 Million, Representing Adjusted EBITDA Margins of 15% of First Half 2022 Revenues
Generated Operating Cash Flows of $16.4 Million in First Half of 2022, Supporting the Increase of Cash Position to $29.9 Million as of June 30, 2022
2022 Year-to-Date Progress is Indicative of the Company's Evolution into a Diversified Fully Integrated Commercial Company with Multiple Growth Drivers
Significant Revenue and Profitability Growth Expected in Second Half of 2022, Supporting the Reiteration of Fiscal Year 2022 Revenue Guidance of $125 - $135 Million, Representing a 20% to 30% Increase over 2021 and Adjusted EBITDA Margins Anticipated Between 12%-15%, More Than 2.5x Over 2021 Adjusted EBITDA
REHOVOT, Israel, and HOBOKEN, N.J., Aug. 17, 2022 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a vertically integrated global biopharmaceutical company, focused on specialty plasma-derived therapeutics, today announced financial results for the three and six months ended June 30, 2022.
“We continue to be highly encouraged by the performance of our business in 2022, and believe it is a testament to our ability to rapidly transition from our past dependency on GLASSIA® sales to Takeda to a diversified fully integrated commercial company and a global leader in the plasma-derived specialty market," said Amir London, Kamada’s Chief Executive Officer. “Our recently acquired portfolio of four FDA-approved IgGs, consisting of CYTOGAM®, HEPAGAM B®, VARIZIG® and WINRHO®SDF, continues to gain traction in the U.S. and international markets, and delivered strong sales and gross margins of more than 50% in the first half of the year. We are focused on growing the new portfolio’s revenues through on-going promotional activities in the U.S. and expect these marketing efforts to bear fruit commencing in the second half of 2022. We also anticipate meaningful growth outside the U.S. from these products in the second half of the year, which is expected to include approximately half of the total revenues anticipated from the recently announced $11.4 million international VARIZIG supply agreement.”
“Based on our expectation of significant revenue growth and enhanced profitability in the second half of the year, we are reiterating our full-year 2022 financial guidance, which represents a 20% to 30% increase over 2021 revenue and more than 2.5x over 2021 adjusted EBITDA. Our outlook for a stronger second half of the year is driven by multiple key factors, including anticipated continued growth of the new IgG portfolio, including sales boosted by the new VARIZIG supply agreement, and the expected growth of KEDRAB® sales to Kedrion supporting the product continued increased in-market sales during 2022. In addition, total revenues in the second half of the year will include two full quarters of GLASSIA royalty income, as compared to only four months in the first half of the year. Second half profitability will continue to be driven by the new IgG products and KEDRAB sales, all of which generate more than 50% gross margins, and the GLASSIA royalty, which represents pure profit. Moreover, the now concluded labor strike will have a substantially reduced impact on the second half of the year profitability as compared to the first half,” continued Mr. London.
“Lastly, we continue to forecast growth at a double-digit rate in the foreseeable years beyond 2022, driven by our proprietary product catalysts, our plasma collection operations, GLASSIA's royalties and the planned launch of 11 biosimilar products in Israel. In addition, we continue to advance our inhaled AAT pivotal phase 3 trial with the opening of additional clinical sites and recruitment of patients to the study," concluded Mr. London.
Financial Highlights for the Three Months Ended June 30, 2022
Total revenues were $23.6 million in the second quarter of 2022, a 3% decrease from the $24.2 million recorded in the second quarter of 2021. Total revenues during the second quarter of 2022 included strong sales from the portfolio of the four FDA-approved commercial products recently acquired, which grew meaningfully year-over-year and as compared to the first quarter of 2022. Total revenues included $3.7 million of sales-based royalty income from Takeda based on GLASSIA sales in the U.S., which was in line with management’s expectations. A portion of the sales derived from products manufactured at the Israel facility were delayed to the second half of the year due to the work stoppage that was settled in mid-July.
Gross profit and gross margins were $7.2 million and 31%, respectively, in the second quarter of 2022, compared to $9.1 million and 37%, respectively, reported in the second quarter of 2021. Gross profit for the second quarter of 2022 was impacted by a loss of $3.3 million related to the recently concluded labor strike. As the labor strike concluded in July 2022, a subsequent portion of the strike-related loss will be recognized in the third quarter. Cost of goods sold in the Company’s Proprietary segment in the second quarter of 2022 included $1.4 million of depreciation expenses associated with intangible assets generated through the recent acquisition of the portfolio of four FDA-approved commercial products. Gross profit and gross margins, excluding such intangible assets depreciation and the loss related to the labor strike, would have been $11.9 million and 51%, respectively, representing a significant increase year-over-year.
Operating expenses, including R&D, Sales & Marketing (S&M), G&A and other expenses, totaled $9.5 million in the second quarter of 2022, as compared to $8.0 million in the second quarter of 2021. This increase was attributable to increased S&M costs associated with the recently acquired portfolio of four FDA-approved commercial products distribution and commercial operations. S&M costs for the quarter included $0.4 million of depreciation expenses of intangible assets generated through the recent acquisition.
Finance expense, net for the second quarter of 2022 included a $1.9 million expense associated with the revaluation of the contingent consideration and other long-term liabilities assumed as part of the recent acquisition of the portfolio of the four FDA-approved commercial products. For more information with respect to such contingent consideration and other long-term liabilities, please refer to Note 5 of the Company’s 2021 financial statements included in the 2021 Annual Report on Form 20-F filed on March 15, 2022, with the Securities and Exchange Commission.
Net loss was $3.9 million, or $(0.09) per share, in the second quarter of 2022, as compared to net income of $0.9 million, or $0.02 per share, in the second quarter of 2021. Excluding loss associated with the labor strike, depreciation expenses of intangible assets generated through the recent acquisition and finance expense associated with the revaluation of the contingent consideration and other assumed long-term liabilities, the Company would have recorded net income of $3.0 million, or $0.07 per share, in the second quarter of 2022.
Adjusted EBITDA, as detailed in the tables below, was $1.3 million in the second quarter of 2022, as compared to $2.4 million in the second quarter of 2021. Adjusted EBITDA, excluding loss associated with the labor strike, would have been $4.7 million, representing 20% of revenues.
Cash provided by operating activities was $10.9 million in the second quarter of 2022, as compared to cash used in operating activities of $3.3 million in the second quarter of 2021.
Financial Highlights for the Six Months Ended June 30, 2022
Total revenues for the first six months of 2022 were $51.7 million, a 5% increase from the $49.1 million generated in the first six months of 2021.
Gross profit and gross margins for the first six months of 2022 were $18.5 million and 36%, respectively, compared to $18.0 million and 37%, respectively, in the first half of 2021. Gross profit and gross margins in the first six months of 2022, excluding intangible assets depreciation and the loss related to the recently concluded labor strike, would have been $24.6 million and 48%, respectively, representing a significant increase year-over-year.
Operating expenses, including R&D, S&M, G&A and other expenses, totaled $20.6 million in the first six months of 2022, as compared to $14.6 million in the first half of 2021. This increase was attributable to an increase in S&M costs associated with the recently acquired portfolio distribution and commercial operation, as well as increased R&D costs, primarily due to advancing the pivotal phase 3 InnovAATe trial for Inhaled AAT through the opening of new clinical sites and the manufacturing of clinical supply for the study. S&M costs for the first six months included $0.8 million of depreciation expenses of intangible assets generated through the recent acquisition.
Finance expense, net for the first six months of 2022 included a $3.9 million expense associated with the revaluation of the contingent consideration and other long-term liabilities, assumed as part of the recent acquisition of the portfolio of the four FDA-approved commercial products.
Net loss for the first six months of 2022 was $5.8 million, or $(0.13) per share, as compared to net income of $3.6 million, or $0.08 per share, in the prior year period. Excluding loss associated with the labor strike, depreciation expenses of intangible assets generated through the recent acquisition and finance expense associated with the revaluation of the contingent consideration and other assumed long-term liabilities, the Company would have recorded net income of $5.0 million, or $0.11 per share, in the first six months of 2022.
Adjusted EBITDA, as detailed in the tables below, was $4.6 million in the first six months of 2022, as compared to $6.2 million in the first six months of 2021. Adjusted EBITDA, excluding loss associated with the labor strike, would have been $8.0 million, representing a 15% margin, which would have been in line with Kamada’s annual guidance.
Cash provided by operating activities during the first six months of 2022 was approximately $16.4 million, as compared to cash used in operating activities of $1.2 million during the first six months of 2021.
Balance Sheet Highlights
As of June 30, 2022, the Company had cash, cash equivalents, and short-term investments of $29.9 million, as compared to $18.6 million as of December 31, 2021. The increase was due to positive operational cash flows. Kamada’s working capital as of June 30, 2022, comprising of current assets (excluding cash and cash equivalents, and short-term investments) net of current liabilities, totaled $39.0 million.
Fiscal Year 2022 Guidance
Kamada continues to expect to generate fiscal year 2022 total revenues in the range of $125 million to $135 million, which would represent a 20% to 30% growth compared to fiscal year 2021. The Company also anticipates generating adjusted EBITDA during 2022 at a rate of 12% to 15% of total revenues, representing more than 2.5x of the adjusted EBITDA for the year ended December 31, 2021.
Recent Corporate Highlights
Secured an $11.4 million agreement to supply VARIZIG® to an undisclosed international organization, operating principally in Latin America. The supply of the product is expected to occur from the fourth quarter of 2022 through the first half of 2023.
Strengthened senior management team through promotions of Shavit Beladev to Vice President responsible for the Company’s Plasma Operations, and Boris Gorelik to Vice President of Business Development and Strategic Programs. These promotions further Kamada’s commitment to becoming a fully integrated global leader in the specialty plasma derived therapeutics market.
Conference Call
Kamada management will host an investment community conference call on Wednesday, August 17, at 8:30am Eastern Time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 1-877-407-0792 (from within the U.S.), 1 809-406-247 (from Israel), or 1 201-689-8263 (International) and entering the conference identification number: 13732049. The call will also be webcast live on the Internet at:
https://viavid.webcasts.com/starthere.jsp?ei=1562507&tp_key=0cee4cf215.
Non-IFRS financial measures
We present EBITDA and adjusted EBITDA because we use this non-IFRS financial measure to assess our operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes this non-IFRS financial measure are useful to investors because: (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and provide investors with a meaningful perspective on the current underlying performance of the Company’s core ongoing operations; and (2) they exclude the impact of certain items that are not directly attributable to our core operating performance and that may obscure trends in the core operating performance of the business. Non-IFRS financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, our IFRS results. We expect to continue reporting non-IFRS financial measures, adjusting for the items described below, and we expect to continue to incur expenses similar to certain of the non-cash, non-IFRS adjustments described below. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-IFRS financial measures should not be construed as an inference that these items are unusual, infrequent or non-recurring. EBITDA and adjusted EBITDA are not recognized terms under IFRS and do not purport to be an alternative to IFRS terms as an indicator of operating performance or any other IFRS measure. Moreover, because not all companies use identical measures and calculations, the presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. EBITDA and adjusted EBITDA are defined as net income (loss), plus income tax expense, plus or minus financial income or expenses, net, plus or minus income or expense in respect of securities measured at fair value, net, plus or minus income or expenses in respect of currency exchange differences and derivatives instruments, net, plus depreciation and amortization expense, plus non-cash share-based compensation expenses and certain other costs.
About Kamada
Kamada Ltd. (the “Company”) is a vertically integrated global biopharmaceutical company, focused on specialty plasma-derived therapeutics, with a diverse portfolio of marketed products, a robust development pipeline and industry-leading manufacturing capabilities. The Company’s strategy is focused on driving profitable growth from our current commercial activities as well as our manufacturing and development expertise in the plasma-derived biopharmaceutical market. The Company’s commercial products portfolio includes its developed and FDA approved products GLASSIA® and KEDRAB® as well as its recently acquired FDA approved plasma-derived hyperimmune products CYTOGAM®, HEPAGAM B®, VARIZIG® and WINRHO®SDF. The Company has additional four plasma-derived products which are registered in markets outside the U.S. The Company distributes its commercial products portfolio directly, and through strategic partners or third-party distributors in more than 30 countries, including the U.S., Canada, Israel, Russia, Brazil, Argentina, India and other countries in Latin America and Asia. The Company has a diverse portfolio of development pipeline products including an inhaled AAT for the treatment of AAT deficiency for which the Company is currently conducting the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial. The Company leverages its expertise and presence in the Israeli pharmaceutical market to distribute in Israel more than 20 products that are manufactured by third parties and have recently added eleven biosimilar p
midastouch017
2 years ago
Kamada Ltd.'s (KMDA) CEO Amir London On Q4 2021 Results - Earnings Call Transcript
Mar. 15, 2022 9:48 AM ETKamada Ltd. (KMDA)
Kamada Ltd. (NASDAQ:KMDA) Q4 2021 Earnings Conference Call March 15, 2022 8:30 AM ET
Company Participants
Bob Yedid - LifeSci Advisors
Amir London - Chief Executive Officer
Chaime Orlev - Chief Financial Officer
Operator
00:05 Greetings and welcome to the Kamada Ltd. Fourth Quarter and Full-Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
00:28 It is now my pleasure to introduce your host, Bob Yedid with LifeSci Advisors. Thank you, Bob. You may begin.
Bob Yedid
00:36 Thank you Paul and good morning and good afternoon to everyone. Thank you all for participating in today’s call. Joining me from Kamada are Amir London, Chief Executive Officer; and Chaime Orlev, Chief Financial Officer.
00:53 Earlier today, Kamada announced its financial results for the 3 months and 12 months ended December 31, 2021. If you have not received this news releases, please go to the Investors page of the company's website www.kamada.com.
01:26 I encourage you to review the company's filings with the Securities and Exchange Commission, including without limitation the company's Forms 20-F and 6-K, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
01:46 Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, Tuesday, March 15, 2022. Kamada undertakes no obligation to revise or update any statements to reflect the events or circumstances after the date of this conference call.
02:09 With those prepared remarks, it's my pleasure to turn the call over to Amir London, CEO. Amir?
Amir London
02:17 Thank you, Bob. My thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. The recently completed 2021 year was a transformational period for Kamada in our path to becoming a global leader in the plasma derived specialty markets.
02:39 Following the completion of the planned manufacturing transition of GLASSIA to Takeda, our recent acquisition of the portfolio of Four FDA-approved commercial immunoglobulins and the establishment of Kamada Plasma, our U.S. based plasma collection company, we are embarking on a new and exciting chapter in the company’s evolution.
02:39 We are building on the strong foundation established over the years entering 2022 as a new Kamada, a full-integrated specialty plasma company with six FDA-approved products and strong commercial capabilities in the U.S. market, as well as global commercial footprint in over 30 countries.
03:26 Our business performed as expected in 2021 and we look ahead to 2022 for which our revenue guidance is between $125 million to $135 million, representing a 20% to 30% growth, compared to 2021, with expected EBITDA margins of 12% to 15%, which would represent more than 2.5x of the 2021 EBITDA.
04:01 This strong guidance reflects the benefits stemmed from our new strategic direction and the resumption of revenue and profitability growth in 2022. Importantly, we further expect continued growth at a double-digit rate in the coming few years.
04:20 The completed in November 2021 following a thorough sales for the ideal assets for Kamada was a critical strategic and synergistic step for the company. The acquired products generated revenues exceeding $40 million in 2021, with over 50% gross margins, and we anticipate significantly growing the new portfolio revenues through proactive promotional activities in the U.S, where our newly established subsidiary, Kamada Inc., is responsible for the commercialization and direct sales of the products.
04:55 We also intend to leverage our existing strong international distribution network to grow product revenues in new territories, primarily in Asia, Latin America, and the Middle East. I’m pleased to report that these promotional and sales activities have already commenced.
05:13 Just yesterday, we announced that Jon Knight joined us as Vice President, U.S. Commercial Operations, to lead commercial activities for portfolio of innovative medicines. Jon’s vast commercial leadership experience in the biopharmaceutical industry, primarily focus on driving sales of innovative specialty plasma products will be instrumental to our initiatives aimed at further penetrating the U.S. markets with our expanded product line.
05:43 We intend to actively promote this compelling product to hospitals and physicians throughout the U.S. As such, we are also in the process of hiring a focused team of experienced sales and medical experts with established relationship with relevant U.S. Healthcare providers.
06:04 Of the full acquired product, the largest is Cytogam, indicated for the prophylaxis of CMV disease associated with solid organs transplantation. This proprietary and unique product is the only FDA-approved IgG product for its indication. The [manufacturing] [ph] process for Cytogam is already well underway, and we expect to receive FDA approval for its production at our Israeli facility by early 2023.
06:35 Moreover, based on the Cytogam manufacturing transfer, we expected growth of KedRAB, our anti-Rabies hyperimmune product, and planned manufacturing transition of the other acquired products over the next few years, we anticipate improving the gross margins of our proprietary products by effectively utilizing our plant capacity.
06:59 Another major strategic step taken is the acquisition of a plasma collection facility in Texas, in early 2021, which primarily specializes in the collection of hyper-immune plasma used for Anti-D immunoglobulin, a product manufactured by Kamada and distributed in the international markets. This acquisition represented Kamada’s entry into the U.S. plasma collection market and supported our strategic goal of becoming a fully integrated specialty plasma company.
07:36 We are already actively engaged in the expansion of the hyper-immune plasma collection capacity at this center and we are simultaneously advancing our plan to open additional centers in the U.S. to further enhance our supply of specialty and regular plasma.
07:55 To lead our expansion efforts, we've also recently appointed Jonathan Ward as Director for Facilities and Construction. Jonathan brings to Kamada more than 25 years of experience in facilities and construction management, most recently in the plasma collection industry. This plan expansion is expected to enhance our IgG competitive position in the various markets.
08:24 KedRAB, marketed in the U.S by Kedrion, continues to gain market share in the $150 million U.S. market. During 2021, the FDA approved a label expansion for the product, which differentiates KedRAB as the first and only human rabies immunoglobulin available in the U.S. to be clinically studied in children and confirming the safety and effectiveness of its use in pediatric population. We anticipate sales of the product to grow significantly during the next few years.
09:00 As for GLASSIA, in 2021 as planned, Takeda completed the own manufacturing facility for the product and we fulfilled our supply commitments. Going forward, we expect to begin receiving royalty payments from Takeda, starting as soon as the second quarter of this year, in the range of $10 million to $20 million per year from 2022 to 2040, enhancing our profitability and cash position.
09:31 In addition, we continue to grow sales of GLASSIA in international markets through our local partners.
09:40 Turning to our promising clinical development pipeline, we are excited about the potential of our innovative Inhaled AAT product for the treatment of AAT Deficiency, a technology which has shown to be highly effective way of delivering AAT directly into a patient’s lungs.
10:01 A substantial opportunity exists for inhaled AAT to be a revolutionary product in a market that is already over $1 billion in annual sales in the U.S. and the EU and growing steadily. We are currently conducting the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 study.
10:26 While enrollment in the study was slowed during the last two years, due to the COVID-19 pandemic, we are currently expanding the study with up to six additional clinical sites planned to be opened shortly, thereby expediting enrollment. Importantly, this is a unified study, as the trial’s data are expected to qualify for regulatory submissions in both the FDA and EMA.
10:56 In our distribution segment, which is an additional important growth catalyst for Kamada, we leverage our expertise and strong presence in the Israeli market to register, market, and distribute more than 20 products that are developed and manufactured by our international partners.
11:14 Since 2018, we significantly grown our pipeline of distributed products and in 2022 we anticipate launching a number of new products across multiple medical specialties. An area of key strategic focus in our distribution business is the planned distribution of a portfolio of 11 biosimilar products, expected to be launched upon receipt of Israeli regulatory approval, between the years 2022 and 2028, with an overall annual anticipated peak sales, within several years of launch, of more than $40 million. Once achieved, it will more than double our current Israeli distribution business.
11:52 Included in this portfolio are eight products through a distribution agreement with Alvotech, a global leader in the development and manufacturing of biosimilar drug candidates.
12:11 In closing, 2021 was a year of great importance for Kamada, as we successfully executed on multiple critical strategic transactions, ensuring a rapid financial turnaround of the company, with significant growth at a double-digit rate anticipated in the years ahead.
12:32 As we enter 2022, the initial benefits of the pivotal actions we have taken are already evident. Kamada is uniquely positioned for growth as a global leader in the specialty plasma industry, with multiple robust value-creating catalysts.
12:51 With that, I now turn the call over to Chaime for his review of our fourth quarter and full-year 2021 financial results. Chaime, please.
Chaime Orlev
13:04 Thank you, Amir, and good day everyone. Our business performed as we anticipated during 2021. Total revenues in 2021 were $103.6 million as compared to $133.2 million recorded in 2020. This decrease was primarily due to the transition of GLASSIA manufacturing to Takeda, resulting in an overall $38.7 million year-over-year decrease, and a year-over-year of $6.4 million in KEDRAB sales to Kedrion. This decrease resulted from a high level of product inventory at Kedrion at the end of 2020, due to the COVID-19 pandemic effect on KEDRAB sales by Kedrion in that year.
13:58 On the other hand, we posted $5.4 million of revenues generated from the newly acquired portfolio. Of note, these revenues are for the period from November 22, 2021 through the end of the year.
14:15 In the fourth quarter of 2021, total revenues were $31.5 million, which was equivalent to the revenues recorded in the fourth quarter of 2020. EBITDA in 2021 totaled $5.4 million, as compared to $25.1 million in 2020. This decrease is primarily attributed to the overall change in product sales mix, specifically for decrease in sales of GLASSIA to Takeda and KEDRAB to Kedrion.
14:51 In addition, we incurred approximately $1.2 million of transaction related expenses associated with the newly acquired portfolio and approximately $600,000 of excess severance to employees who were laid-off as part of the downsizing following the transition of GLASSIA manufacturing to Takeda.
15:15 As of December 31, 2021, the company had cash, cash equivalents, and short-term investments of $18.6 million, as compared to $109.3 million on December 31, 2020. The primary use of the cash during 2021 was the acquisition of the four FDA approved plasma derived hyperimmune commercial products.
15:39 As of the end of 2021, our working capital increased by $13.7 million to a total of $57.4 million. In connection with the recent acquisition, we secured the $40 million credit facility. Credit facility is comprised of a $20 million five-year term loan, which is fully utilized by us and a 20 million short-term revolving credit facility, which provides us access to additional cash resources to continue to support our expansion as needed. As of the end of 2021, we have not utilized the short-term credit facility.
16:21 To reiterate, our revenue guidance for 2022 is between $125 million to $135 million, a 20% to 30% growth, compared to 2021. We expect EBITDA margins of 12% to 15%, which would represent more than 2.5x of the 2021 EBITDA.
16:46 That concludes our prepared remarks. We will now open the call for questions. Operator?
Question-and-Answer Session
Operator
16:55 Thank you. [Operator Instructions]
Bob Yedid
17:39 Paul, it's Bob Yedid from LifeSci. I’ve been emailed a question by an investor. Maybe I could ask that question. The question is for Amir, which is, how long will it take to transition in addition to the four products to the Israeli manufacturing facility? And how will that enhance gross margins over time?
Amir London
18:08 Thank you, Bob. So, as described during the call, CYTOGAM is already underway as part of the tech transfer to our facility and we expect to have FDA approval by beginning of 2023. CYTOGAM is more than 50% of the new portfolio in terms of its revenue and contribution. The other three products, we will be initiating that tech transfer activities and we expect to be able to complete those within the next three to five years.
18:49 And once they are manufactured by Kamada at our facility this will have a significant contribution to the overall effectiveness of the plant and the gross margin of our proprietary products. This is definitely part of the synergies of the acquisition that we've made.
Operator
19:19 Thank you. There are no further questions at this time. I'd like to turn the floor back over to management for any closing comments.
Amir London
19:28 Yes. So, in closing, on behalf of the entire Kamada team, we look forward to continuing to help clinicians and patients with important lifesaving products that we develop, manufacture, and commercialize. We thank all of our investors for their support and remain committed to creating long-term shareholder value.
19:48 I wanted to reiterate the significant growth expected already in 2022 with our guidance for the year expected to range between $125 million to $135 million, representing a 20% to 30% increase over 2021, while EBITDA margins are expected to grow more than 2.5x over 2021 EBITDA.
20:15 So, this is significant growth expected for the year and we expect to have a double-digit growth continue over the next few years. We hope you all stay healthy and safe, and we thank you for you participating in today's call.
Operator
20:36 This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
midastouch017
2 years ago
Kamada Reports Fiscal Year and Fourth Quarter 2021 Financial Results; Provides Revenue and Profitability Guidance with Significant Growth Expected in 2022
https://finance.yahoo.com/news/kamada-reports-fiscal-fourth-quarter-110000920.html
Total Revenues for Fiscal Year 2021 were $103.6 Million and Fourth Quarter 2021 Revenues were $31.5 Million.
Fiscal Year 2022 Revenues are Expected to Range Between $125 Million to $135 Million, Representing a 20% to 30% Increase over 2021; 2022 EBITDA Margins Anticipated Between 12%-15%, Representing More Than 2.5X over 2021 EBITDA.
Integration of Newly Acquired Portfolio of Four FDA-Approved Commercial Products is Progressing as Planned with Expanded Sales in International Markets.
Advancing the Plan for the Opening of New U.S. Plasma Collection Centers.
Company Expands U.S. Leadership Team with Multiple Key Hires to Drive Sales of Proprietary Products and Expansion of Plasma Collection Operations.
Added Two New Biosimilar Product Candidates in Israel; Increasing the Expected Potential Collective Annual Peak Sales of the Entire Biosimilar Portfolio of 11 Product Candidates to over $40 Million.
Pivotal Phase 3 InnovAATe Trial for Inhaled AAT for the Treatment of Alpha-1 Antitrypsin Deficiency Progressing with the Opening of New Sites to Expand Recruitment.
GLASSIA® Royalty Payments from Takeda to Commence During Q2 2022.
REHOVOT, Israel, March 15, 2022 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a vertically integrated global biopharmaceutical company, focused on specialty plasma-derived therapeutics, today announced financial results for the 12 and three months ended December 31, 2021.
"2021 was a transformational year for Kamada in our path toward becoming a global leader in the plasma-derived specialty hyperimmune market. With the recent acquisition of the portfolio of four FDA-approved commercial products, that generated annual global revenue in 2021 of approximately $41.9 million with over 50% gross margins of which approximately $5.4 million of revenue was recognized by the Company, and the establishment of Kamada Plasma, our U.S. based plasma collection company, we are embarking on a new and exciting chapter in the company’s evolution. We are building on the strong foundation established over the years and entering 2022 as a "New Kamada" – a fully integrated specialty plasma company, with six FDA-approved products and strong commercial capabilities in the U.S. market, as well as a global commercial footprint in over 30 countries," said Amir London, Kamada’s Chief Executive Officer.
"Our business performed as expected during 2021, and we look ahead to 2022 for which our revenue guidance is between $125 million to $135 million, representing a 20% to 30% growth compared to 2021, with expected EBITDA margins of 12% to 15%, which would represent more than 2.5x of the 2021 EBITDA. This strong guidance reflects the benefits stemmed from our new undertaken strategic direction and our expectation of rapid return to revenue and profitability growth in 2022. We further expect continued growth at a double-digit rate in the foreseeable years ahead."
“I am happy to report that over the past few months we have made significant progress with all our key growth catalysts, and we are implementing the needed steps to realize our significant growth potential. The integration of the newly acquired immunoglobulins portfolio is well underway in the U.S., as well as in the international markets. We are progressing with our plans for the opening of new plasma collection centers in the U.S. We have expanded our portfolio of Biosimilar product candidates to be distributed in the Israeli market, increasing our expected peak potential annual biosimilar sales, within several years of launch, to over $40 million. In addition, we are expanding our inhaled AAT pivotal Phase 3 trial with up to six additional clinical sites to be opened by mid-2022. Further, commencing in the second quarter of 2022, we are expecting to begin receiving GLASSIA royalty payments from Takeda, improving our profitability and cash position," concluded Mr. London.
Fiscal Year 2022 Guidance
Kamada currently expects to generate fiscal year 2022 total revenues in a range of $125 million to $135 million which would represent a 20% to 30% growth compared to fiscal year 2021. The Company also anticipates generating EBITDA, during 2022, at a rate of 12% to 15% of total revenues, representing more than 2.5x of the EBITDA for the year ended December 31, 2021.
Financial Highlights for the Year Ended December 31, 2021
Total revenues were $103.6 million in the year ended December 31, 2021, as compared to $133.2 million recorded in the year ended December 31, 2020. This decrease was primarily due to the transition of GLASSIA manufacturing to Takeda resulting in an overall $38.7 million year over year decrease, and a year over year decrease of $6.4 million in KEDRAB sales to Kedrion as a result of a high level of product inventory at Kedrion as of December 31, 2020, due to the COVID-19 pandemic effect on KEDRAB sales by Kedrion during 2020. These decreases were partially offset by $5.4 million of revenues generated from the newly acquired portfolio between November 22, 2021, through December 31, 2021, as well as an increase in revenues of our other Proprietary products.
Gross profit was $30.3 million in the year ended December 31, 2021, compared to $47.6 million reported in the year ended December 31, 2020. The decrease compared to 2020 is primarily attributed to the overall change in product sales mix, specifically the decrease in sales of GLASSIA to Takeda and KEDRAB to Kedrion (as detailed above).
Net loss was $2.2 million, or $(0.05) per share, in the year ended December 31, 2021, as compared to net income of $17.1 million, or $0.38 per share, in the year ended December 31, 2020.
EBITDA, as detailed in the tables below, was $5.4 million in the year ended December 31, 2021, as compared to $25.1 million in the year ended December 31, 2020. Adjusted EBITDA, excluding certain costs, as detailed in the tables below, was $7.2 million for the year ended December 31, 2021.
Non-IFRS adjusted EBITDA for the year ended December 31, 2021, as detailed in the reconciliation table below, is presented excluding the following: (i) approximately $1.2 million in legal and other related fees associated with completing the acquisition transactions; and (ii) an expense of approximately $0.6 million related to excess severance remuneration for the employees who were laid-off as part of downsizing, following the transition of GLASSIA manufacturing to Takeda.
Cash used in operating activities was $8.8 million in the year ended December 31, of 2021, as compared to cash provided by operating activities of $19.1 million in the year ended December 31, 2020.
Financial Highlights for the Three Months Ended December 31, 2021
Total revenues were $31.5 million in the fourth quarter of 2021, equivalent to the revenues recorded in the fourth quarter of 2020.
Gross profit was $6.6 million in the fourth quarter of 2021, compared to $10.2 million reported in the fourth quarter of 2020.
Net loss was $5.0 million, or $(0.11) per share, in the fourth quarter of 2021, as compared to net income of $1.6 million, or $0.04 per share, in the fourth quarter of 2020.
EBITDA, as detailed in the tables below, was $(1.3) million in the fourth quarter of 2021, as compared to $4.0 million in the fourth quarter of 2020. Adjusted EBITDA, excluding certain costs, as detailed in the table below, was $(0.5) million in the fourth quarter of 2021.
Non-IFRS adjusted EBITDA for the fourth quarter of 2021, as detailed in the reconciliation table below, is presented excluding approximately $0.7 million in legal and other related fees associated with completing the acquisitions transaction.
Cash used in operating activities was $5.0 million in the fourth quarter of 2021, as compared to cash provided by operating activities of $12.7 million in the fourth quarter of 2020.
Balance Sheet Highlights
As of December 31, 2021, the Company had cash, cash equivalents, and short-term investments of $18.6 million, as compared to $109.3 million on December 31, 2020. The primary use of cash during 2021 was the acquisition of four FDA-approved plasma-derived hyperimmune commercial products. Kamada’s working capital as of December 31, 2021, comprising of current assets (excluding cash and cash equivalents, and short-term investments) net of current liabilities, totaled $57.4 million, representing an increase of $13.7 million compared to December 31, 2020.
The Company secured a $40 million credit facility from Bank Hapoalim, Israel’s leading commercial bank. The credit facility is comprised of a $20 million 5-year term loan and a $20 million short-term revolving credit facility. As of December 31, 2021, the Company drew-down the entire long-term loan and did not utilize the short-term revolving credit facility.
Conference Call
Kamada management will host an investment community conference call on Tuesday, March 15, 2022, at 8:30am Eastern Time to present the Company’s results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 877-407-0792 (from within the U.S.), 1-809-406-247 (from Israel), or 201-689-8263 (International) and entering the conference identification number: 13727620. The call will also be webcast live on the Internet at:
https://viavid.webcasts.com/starthere.jsp?ei=1533883&tp_key=876a5d54ec
Non-IFRS financial measures
We present EBITDA and adjusted EBITDA because we use this non-IFRS financial measure to assess our operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes this non-IFRS financial measure are useful to investors because: (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and provide investors with a meaningful perspective on the current underlying performance of the Company’s core ongoing operations; and (2) they exclude the impact of certain items that are not directly attributable to our core operating performance and that may obscure trends in the core operating performance of the business. Non-IFRS financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, our IFRS results. We expect to continue reporting non-IFRS financial measures, adjusting for the items described below, and we expect to continue to incur expenses similar to certain of the non-cash, non-IFRS adjustments described below. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-IFRS financial measures should not be construed as an inference that these items are unusual, infrequent or non-recurring. EBITDA and adjusted EBITDA are not recognized terms under IFRS and do not purport to be an alternative to IFRS terms as an indicator of operating performance or any other IFRS measure. Moreover, because not all companies use identical measures and calculations, the presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. EBITDA and adjusted EBITDA are defined as net income (loss), plus income tax expense, plus or minus financial income or expenses, net, plus or minus income or expense in respect of securities measured at fair value, net, plus or minus income or expenses in respect of currency exchange differences and derivatives instruments, net, plus depreciation and amortization expense, plus non-cash share-based compensation expenses and certain other costs.
About Kamada
Kamada Ltd. (the “Company”) is a vertically integrated global biopharmaceutical company, focused on specialty plasma-derived therapeutics, with a diverse portfolio of marketed products, a robust development pipeline and industry-leading manufacturing capabilities. The Company’s strategy is focused on driving profitable growth from our current commercial activities as well as our manufacturing and development expertise in the plasma-derived biopharmaceutical market. The Company’s commercial products portfolio includes its developed and FDA approved products GLASSIA® and KEDRAB® as well as its recently acquired FDA approved plasma-derived hyperimmune products CYTOGAM®, HEPAGAM B®, VARIZIG® and WINRHO®SDF. The Company has additional four plasma-derived products which are registered in markets outside the U.S. The Company distributes its commercial products portfolio directly, and through strategic partners or third-party distributors in more than 30 countries, including the U.S., Canada, Israel, Russia, Brazil, Argentina, India and other countries in Latin America and Asia. The Company has a diverse portfolio of development pipeline products including an inhaled AAT for the treatment of AAT deficiency for which the Company is currently conducting the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial. The Company leverages its expertise and presence in the Israeli pharmaceutical market to distribute in Israel more than 20 products that are manufactured by third parties and have recently added eleven biosimilar products to its Israeli distribution portfolio, which, subject to EMA and the Israeli MOH approvals, are expected to be launched in Israel between the years 2022 and 2028. FIMI Opportunity Fund, the leading private equity investor in Israel, is the Company’s lead shareholder, beneficially owning approximately 21% of the outstanding ordinary shares.
midastouch017
2 years ago
Kamada Issues 2022 CEO Letter to Shareholders
https://finance.yahoo.com/news/kamada-issues-2022-ceo-letter-110500357.html
REHOVOT, Israel, March 15, 2022 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a vertically integrated global biopharmaceutical company, focused on specialty plasma-derived therapeutics, today issued the Letter to Shareholders from Amir London, Chief Executive Officer.
March 15th, 2022
Dear Shareholders, Colleagues and Business Partners:
The recently completed 2021 year was a transformational period for Kamada in our path toward becoming a global leader in the plasma-derived specialty market. Following the completion of the planned manufacturing transition of Glassia® to Takeda, our recent acquisition of four FDA-approved commercial immunoglobulins and the establishment of Kamada Plasma, our U.S. based plasma collection company, we are embarking on a new and exciting chapter in the Company’s evolution. We are building on the strong foundation established over the years, entering 2022 as a "New Kamada" – a fully-integrated specialty plasma company with six FDA-approved products and strong commercial capabilities in the U.S. market, as well as a global commercial footprint in over 30 countries.
Our business performed as expected in 2021 and we look ahead to 2022 for which our revenue guidance is between $125 million to $135 million, representing a 20% to 30% growth compared to 2021, with expected EBITDA margins of 12% to 15%, which would represent more than 2.5x the 2021 EBITDA. This strong guidance reflects the benefits stemmed from our new undertaken strategic direction, and the resume of revenue and profitability growth in 2022. Importantly, we further expect continued growth at a double-digit rate in the coming few years.
The acquisition completed in November 2021, following a thorough search for the ideal assets for Kamada, was a critical strategic and synergistic step for the Company. The acquired products generated revenues exceeding $40 million in 2021, with over 50% gross margins, and we anticipate significantly growing the new portfolio’s revenues through proactive promotional activities in the U.S, where our newly established subsidiary, Kamada Inc., is responsible for the commercialization and direct sales of the products. We also intend to leverage our existing strong international distribution network to grow product revenue in new territories, primarily in Asia, Latin America and the Middle East. I am pleased to report that these promotional and sales activities have already commenced.
Of the four acquired products, the largest is Cytogam®, indicated for the prophylaxis of cytomegalovirus disease associated with solid organs transplantation. This proprietary and unique product is the only FDA-approved IgG product for its indication. The transition of Cytogam manufacturing to our facility is already well underway, and we expect to receive FDA approval for its production at our Israeli facility by early 2023. Moreover, based on the Cytogam manufacturing transfer, expected growth of KedRAB®, our FDA-approved anti-Rabies hyperimmune product, and planned manufacturing transition of the other acquired products over the next few years, we anticipate improving the gross margins of our proprietary products by effectively utilizing our plant capacity.
Another major strategic step taken is the acquisition of a plasma collection facility in Texas, in early 2021, which primarily specializes in the collection of hyper-immune plasma used for Anti-D immunoglobulin, a product manufactured by Kamada and distributed in international markets. This acquisition represented Kamada’s entry into the U.S. plasma collection market and supported our strategic goal of becoming a fully integrated specialty plasma company. We are already actively engaged in the expansion of the hyperimmune plasma collection capacity at this center and are simultaneously advancing our plan to open additional centers in the U.S. to further enhance our supply of specialty and regular plasma.
KedRAB, marketed in the U.S by Kedrion, continues to gain market share in the $150 million U.S. market. During 2021, the FDA approved a label expansion for the product which differentiates KedRAB as the first and only human rabies immunoglobulin (HRIG) available in the U.S. to be clinically studied in children and confirming the safety and effectiveness of its use in pediatric population. We anticipate sales of the product to grow significantly during the next few years.
During 2021, as planned, Takeda completed the transition of Glassia manufacturing to their own facility, and we fulfilled our supply commitments. Going forward, we expect to begin receiving royalty payments from Takeda, commencing during the second quarter of 2022, in the range of $10-$20 million per year from 2022 to 2040, adding to our profitability and cash position. In addition, we continue to grow sales of the product in international markets through our local partners.
Turning to our promising clinical development pipeline, we are excited about the potential of our innovative Inhaled AAT product for the treatment of AAT Deficiency, a technology which has shown to be highly effective in delivering AAT directly into a patient’s lungs. A substantial opportunity exists for inhaled AAT to be a revolutionary product in a market that is already over $1 billion in annual sales in the U.S. and EU. We are currently conducting the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 study. While enrollment in the study was slowed during recent two years due to the COVID-19 pandemic, we are currently expanding the study with up to six additional clinical sites planned to be opened shortly, thereby expediting enrollment. Importantly, this is a unified study, as the trial’s data are expected to qualify for regulatory submissions with both the FDA and EMA.
In our distribution segment, which is an additional important growth catalyst for Kamada, we leverage our expertise and strong presence in the Israeli market to register, market and distribute more than 20 products that are developed and manufactured by our international partners. Since 2018, we have significantly grown our pipeline of distributed products and in 2022 we anticipate launching an array of new products across multiple medical specialties. An area of key strategic focus in our distribution business is the planned distribution of a portfolio of 11 biosimilar products, expected to be launched upon receipt of Israeli regulatory approval, between the years 2022 and 2028, with an overall annual anticipated peak sales, within several years of launch, of more than $40 million. Included in this portfolio are 8 products through a distribution agreement with Alvotech, a global leader in the development and manufacturing of biosimilar drug candidates.
In closing, 2021 was a year of great importance for Kamada, as we successfully executed on multiple critical strategic transactions, ensuring a rapid financial turnaround of the Company, with significant revenue growth anticipated in the years ahead.
As we enter 2022, the initial benefits of the decisive actions we have taken are already evident. Kamada is uniquely positioned for growth as a global leader in the specialty plasma industry, with multiple robust value-creating catalysts.
On behalf of the entire Kamada team, we look forward to continuing to help clinicians and patients with the important lifesaving products that we develop, manufacture and commercialize. We thank all of our investors for their support and remain committed to creating long-term shareholder value.
Sincerely,
Amir London
Chief Executive Officer
Kamada Ltd.
midastouch017
2 years ago
Kamada Ltd. (KMDA) CEO Amir London on Q3 2021 Results - Earnings Call Transcript
Nov. 22, 2021 12:07 PM ETKamada Ltd. (KMDA)
Start Time: 08:30 January 1, 0000 8:55 AM ET
Kamada Ltd. (NASDAQ:KMDA)
Q3 2021 Earnings Conference Call
November 22, 2021, 08:30 AM ET
Company Participants
Amir London - CEO
Chaime Orlev - CFO
Bob Yedid - LifeSci Advisors, LLC
Conference Call Participants
Anthony Petrone - Jefferies
Operator
Hello, and welcome to the Kamada Ltd. Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded.
It's now my pleasure to turn the call over to Bob Yedid with LifeSci Advisors. Please go ahead, Bob.
Bob Yedid
Thank you and thank you all for joining us. This is Bob Yedid with LifeSci Advisors. Joining me from Kamada are Amir London, Chief Executive Officer; and Chaime Orlev, Chief Financial Officer.
Earlier this morning, Kamada announced a strategic transformational transaction positioning the company as a global leader in plasma-derived hyperimmune market through the acquisition of a portfolio of four FDA-approved plasma-derived commercial products from Saol Therapeutics, privately held pharmaceutical company as well as its financial results for the three and nine months ended September 30, 2021. If you have not received these news releases, please go to the Investors page of the company's Web site.
Before we begin, I'd like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada. I encourage you to review the company's filings with the Securities and Exchange Commission including without limitation the company's Forms 20-F and 6-K which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, Monday, November 22, 2021. Kamada undertakes no obligation to revise or update any statements to reflect these events or circumstances after the date of this conference call.
With those prepared remarks, it's my pleasure to turn the call over to Amir London, CEO. Amir?
Amir London
Thank you, Bob. My thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. I and all of us at Kamada are thrilled to announce this morning the strategic transformational transaction positioning Kamada as a global leader in the plasma-derived hyperimmune market through the acquisition of a portfolio of four FDA approved plasma-derived hyperimmune commercial products from Saol Therapeutics.
Before I continue to provide you with an overview of this strategic transaction, which is a significant growth catalyst for Kamada, I will let Chaime to provide the key details around our financial results for the third quarter and the nine months ended September 30. Chaime, please.
Chaime Orlev
Thank you, Amir, and good day, everyone. Our business continues to perform as anticipated through the first nine months of 2021. In the third quarter of 2021, total revenues were $23 million compared to $35.3 million for the third quarter of 2020. For the first nine months of 2021, total revenues were $72.2 million, down from the $101.7 million in the similar period of 2020. This decrease is primarily related to the expected reduction of GLASSIA sales, resulting from the completion of the product manufacturing transition to Takeda.
During the first nine months of 2021, we completed our committed supply of GLASSIA to Takeda and recognized revenues of approximately $26.9 million. As a reminder, we will begin receiving royalty payments in 2022 at a rate of 12% on Takeda's net in-market sales of GLASSIA through August 2025, and at the rate of 6% thereafter until 2014. We project receiving royalties in the range of $10 million to $20 million per year from 2022 to 2040.
From a profitability standpoint, gross profit for the third quarter of 2021 was $5.7 million as compared to $14.8 million in the third quarter of 2020. For the first nine months of the year, our total gross profit was 23.7 million as compared to the $37.4 million of total gross profit in the first nine months of 2020.
Gross margins for the third quarter and first nine months of the year were 22% and 32%, respectively, as compared to 42% and 36%, respectively, in the equivalent periods in 2020. As a reminder, we said on our last call that we expected a shift in product sales mix during the second half of the year, resulting in lower gross margins.
Net loss for the quarter was approximately $800,000 or $0.02 per share as compared to net income of $6.8 million or $0.15 per share in the third quarter of 2020. For the first nine months of 2021, net income was $2.8 million or $0.06 per share as compared to net income of $15.5 million or $0.35 per share in the first nine months of 2020.
For the first nine months of 2021, our adjusted EBITDA, excluding the one-time severance costs related to the workforce reduction, was $6.7 million compared to $21.1 million in the first nine months of 2020.
With that, let me turn the call over to Amir for his overview of the strategic acquisitions. Amir?
Amir London
Thank you, Chaime. As mentioned earlier, we are thrilled with this strategic transformational transaction positioning Kamada as a global leader in the plasma-derived hyperimmune market through the acquisition of a portfolio of four FDA approved plasma-derived commercial products.
Collectively, these four products acquired from Saol Therapeutics are expected to generate global revenue for the full year of 2021 of between $40 million to $45 million. Approximately 75% and 20% of these sales will be generated in the U.S. and Canada effectively. The acquired products expected full year 2021 gross margins are between 50% to 55%.
Importantly, after the temporary decline in our revenues and profitability in 2021 compared to previous years due to GLASSIA manufacturing transfer to Takeda, the integration of the newly acquired portfolio with Kamada's existing business is expected to result in a significant growth in our revenues and profitability already next year in 2022.
The four acquired products include; the first product is CYTOGAM, which currently accounts for approximately 50% of the portfolio revenue and is indicated for the prophylaxis of CMV disease associated with the transplantation of the kidney, lung, liver, pancreas and heart. The product is the sole FDA-approved IgG product for this indication.
You will recall that Kamada announced in late 2019 a Contract Manufacturing Agreement. That agreement was related to Cytogam. The tech transfer process for Cytogam is already well underway, and Kamada expects to receive FDA approval for manufacturing of the product and initiate commercial manufacturing at its facility in Israel by the end of 2022.
The second product is VARIZIG, indicated and recommended by the U.S. Centers for Disease Control, the CDC, for post-exposure prophylaxis of varicella in high-risk individuals, including immunocompromised children, newborns and pregnant women. The product is the sole FDA approved IgG product for this indication.
The third product is WINRHO, indicated for use in ITP and suppression of Rhesus Isoimmunization during pregnancy and other obstetric conditions in non-sensitized, Rho(NYSE:D)-negative women.
And the fourth product is HEPAGAM B, indicated for use in the prevention of hepatitis B recurrence following liver transplants as well as post-exposure prophylaxis. The acquisition of this FDA-approved commercial portfolio represents a critical strategic and synergistic transaction and it's an important growth driver for Kamada.
Our U.S. subsidiary, Kamada Inc., will be responsible for the commercialization of the product in the U.S., including direct sales to wholesalers and local distributors. Together with KEDRAB and Kedrion, our other commercial IgG products, our portfolio of commercial specialty plasma-derived hyperimmune therapies now include six products, and this is indicative of our global leadership position in the plasma-derived specialty hyperimmune market.
With the establishment earlier this year of Kamada Plasma, our U.S.-based plasma collection company, the acquisition of this new portfolio and the establishment of our U.S.-based commercial operation, Kamada continues to advance its core objective of entering 2022 as a fully-integrated specialty plasma company, with strong commercial capabilities in the U.S. market.
Importantly, in addition to the establishment of a commercial presence in the U.S., this transaction adds eight new international markets from current distribution networks. These new markets are primarily in the Middle East as shown on this map. Kamada now has a commercial footprint in over 30 countries.
Each of these products offer significant growth potential for Kamada, and we intend to invest in the commercialization and lifecycle management of the newly acquired products and to leverage our existing strong international distribution network to grow the acquired portfolio revenue in new geographic markets.
Moreover, with the planned transfer of Cytogam manufacturing to our facility in Israel, the expected continued growth of KEDRAB, our anti-Rabies hyperimmune product, and the potential to transfer the production of the other three products in the acquired portfolio to our Israeli facility, we anticipate utilizing and optimizing the capacity of our plant following the transition of GLASSIA manufacturing to Takeda.
In terms of the acquisition financial terms under the agreement, Kamada will pay Saol $95 million upfront and up to an additional $50 million in sales milestones during 2022 until 2034. In addition, Kamada is acquiring from Saol existing inventory at an estimated value of approximately $15 million, which will be paid over 10 equal quarterly installments. All other inventory transferred at no cost.
In addition to leveraging our current strong balance sheet to partially fund acquisition costs, Kamada has secured a $40 million credit facility from Bank Hapoalim, Israel’s leading commercial bank. The credit facility is comprised of a $20 million five-year term loan and a $20 million short-term revolving credit facility.
To summarize, this acquisition is an important step towards establishing Kamada as the global leader in the development, manufacturing and commercialization of plasma-derived specialty IgGs. As a reminder, our strategy is focused on driving profitable growth from our current commercial activities as well as our plasma-derived further development and manufacturing expertise.
Together with the existing growth catalyst comprising of KEDRAB sales in the U.S., GLASSIA royalties, our rapidly expanding Israeli distribution segment based on the anticipated launch of nine new biosimilar products, the sales of last year and existing hyperimmune sales in international markets, the establishment and expansion of our U.S.-based plasma collection capabilities and the potential of our Inhaled AAT investigational product, today's announced acquisition of the four plasma-derived hyperimmune commercial product is transforming Kamada into a vertically integrated specialty plasma-derived company and a global leader in the plasma-derived hyperimmune market.
In summary, we are highly confident in the strength of our overall business, which consists of multiple profitable lines of business that can each drive significant long-term growth opportunities for Kamada, and we look forward to leveraging the many benefits of the transformational transaction announced today.
With that, we will now open the call for questions. Operator?
Question-and-Answer Session
Operator
Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]. Our first question today is coming from Anthony Petrone from Jefferies. Your line is now live.
Anthony Petrone
Thank you and good morning. Congratulations on the transaction announced today. I have a few focused here and a few more broader higher level questions. So first, Amir, on the transaction announced today with Saol, maybe just a little bit more on the revenue breakdown across the four products in the 40 million to 45 million range, just how that breaks out across the four products, and maybe just the growth profile on the portfolio? And then I'll have a couple of follow ups.
Amir London
Okay. Thank you, Anthony. So CYTOGAM is the largest product of the four and it's currently selling approximately 50% of the portfolio. The second and third products, WINRHO and HEPAGAM, they sell between $10 million to $8 million approximately or $8 million to $12 million depending on the year. And VARIZIG is selling less than the other three products. I believe it's around $3 million to $6 million. This is the expectation for this year.
Anthony Petrone
Okay. And then when you look at that combined 40 million to 45 million, is there a growth rate -- a historical growth rate that you can share as well?
Amir London
So we're looking into the future and we believe that we can grow this portfolio significantly by mainly two aspects. One aspect in the U.S. market, we plan on establishing a commercial team that will be promoting the products. The products are primarily focused on transplantation, so we are going to cover the main transplantation centers in the U.S. and we are going to be very active in promoting the treatment for the needed population. In addition, the fact that Kamada already has currently a distribution network in over 20 countries, 25 to be precise, we believe that we can grow this business significantly outside of the U.S. Until today, the main focus was U.S. and Canada. As we've said, 95% of the current sales are within those two territories. And with Kamada's existing infrastructure, we believe that we can drive significant growth outside the U.S. and Canada through our existing distribution channel.
Anthony Petrone
That's helpful. And then maybe on the production side, Amir, is the current Kamada collection footprint enough to support the four products from a hyperimmune plasma standpoint on the collection side, or will the company have to go out there and acquire Hyper IG plasma to support the portfolio?
Amir London
So the products are being transferred to Kamada with an established supply chain, including plasma supply capabilities for all contracts for the years to come. In addition to that, we are planning to grow our own existing hyperimmune collection based on Kamada Plasma that was established beginning of the year. And we plan on being able to support majority of the plasma needed for its products through our own capabilities in the years to come. It will take time to build this capacity, but that's our plan. This is going to improve our cost of goods and will allow us to be even more competitive and to grow our profitability in the U.S. and ex-U.S. on those four products.
Anthony Petrone
A follow up for Chaime just on the margin profile here. 50% to 55% gross margin, it does sound like there will be investments to support the portfolio in other markets, both direct and indirect sales channels. And so maybe just how this flows through the P&L when you consider the operating expenses that are going to be layered on the operation? So a little bit on the margin profile down to the, let's say, the EBITDA line?
Chaime Orlev
So outside of the U.S., we are going to use our existing distribution channels. So we are not going to operate our own sales team. So we're not going to add to the pressure on cost in that regard. We are going to support the products, of course, from a marketing perspective and product management. And this is going to be part of the support we will need to give anyways to our U.S. affiliates, which is going to sell the product. In the U.S., the team is going to be focused and highly effective. We believe that we need up to 15 people that will be working on that portfolio in the U.S. market. And the reason I'm saying that we can be highly focused is because it is for the transplantation centers who are going to focus on the few dozen main transplantation centers in the U.S. market and that's going to be our core business.
Anthony Petrone
Great. And then maybe to just transition away from the transaction today on the base business, two quick follow ups, I'll get in queue here. One just on the Takeda royalties as we look into the first year in 2022, the range 10 million to 20 million is wide. Just wondering, is that to consider market fluctuations just in terms of GLASSIA being sold? Or is it something specific in the agreement when you consider the range? And then maybe if you can just provide as we look into '22 and '23, the next steps that we should be looking for on the InnovAATe Inhaled trial? Thanks and congratulations, again.
Amir London
Thank you. So on the GLASSIA Takeda royalties, it's not about fluctuation. As you may remember, we're starting with a 12% royalty and then it goes down in August 2025 to 6%. So basically into 2022, when work is started, it will be the higher range of 10 million to 20 million, because it will be the 12%. And then starting in September 2025, it will drop by half. That's why we gave the range. So you can start with the higher number for the next few years until end of 2025.
Anthony Petrone
Great. And then just on the InnovAATe trial?
Amir London
Yes. So we have a study -- as you know, we are in the Phase 3 pivotal study under the U.S. IND and European CTA. We announced today as part of our quarterly earnings that we had a successful DSMB meeting, the Drug Safety Monitoring Board review. So we are highly encouraged by the good feedback we received from that committee on the safety of the treatments. We are planning to continue of course and open additional sites of the study in early 2022.
Anthony Petrone
Thanks, again.
Operator
Thank you. [Operator Instructions]. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.
Amir London
Thank you, operator. So in closing, we are thrilled with today's transformational strategic acquisition of the four FDA-approved commercial products and remain confident in this prospect for our business, which consists of multiple profitable lines of business that can each drive significant long-term growth opportunities for Kamada.
As already explained, importantly, after the temporary decline in our revenues and profitability this year compared to previous years as a result of GLASSIA manufacturing transferred to Takeda, the integration of the newly acquired portfolio as Kamada's existing business will result in significant growth in our revenues and profitability over the next year in 2022.
Thank you for joining us today and we look forward to providing you with further updates in the coming weeks and months. We hope you all stay healthy and safe. Thank you very much.
Operator
Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
midastouch017
3 years ago
Kamada Limited (KMDA) CEO Amir London on Q2 2021 Results - Earnings Call Transcript
Aug. 11, 2021 2:50 PM ETKamada Ltd. (KMDA)
Q2: 2021-08-11 Earnings Summary
EPS of $0.02 misses by $0.03 | Revenue of $24.25M (-26.64% Y/Y) misses by $1.42M
Kamada Limited (KMDA) Q2 2021 Earnings Conference Call August 11, 2021 8:30 AM ET
Company Participants
Bob Yedid - LifeSci Advisors
Amir London - Chief Executive Officer
Chaime Orlev - Chief Financial Officer
Conference Call Participants
Anthony Petrone - Jefferies
Operator
Greetings and welcome to the Kamada Limited Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Bob Yedid with LifeSci Advisors. Thank you. You may begin.
Bob Yedid
Thank you, Doug, and welcome to all our listeners. This is Bob Yedid with LifeSci Advisors. Thank you all for participating in today's call. Joining me from Kamada are Amir London, Chief Executive Officer; and Chaime Orlev, Chief Financial Officer. Earlier this morning Kamada announced financial results for the three and six months ended June 30, 2021. If you've not received this news release please go to the Investors page of the company's website at www.kamada.com.
Before we begin, I'd like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada. I encourage you to review the company's filings with Securities and Exchange Commission including without limitation the company's Forms 20-F and 6-K which identifies specific risk factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the slide, broadcast Wednesday, August 11, 2021. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.
With that said, it's my pleasure to turn the call over to Amir London, CEO. Amir?
Amir London
Thank you, Bob. My thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. I'm pleased to report today that our business continued to perform as anticipated through the first half of 2021. Chaime will provide the key details around our second quarter and first six months financial results shortly. But I would like to indicate that despite the expected decrease in revenue, as compared to the first half of last year, we achieved gross margins of 37% in the first half of this year as compared to 34% during the first six months of 2020.
With that, let me begin by indicating two recent advancements. The first is related to workforce downsizing we previously discussed, which was largely completed during the second quarter. As we mentioned on our last call this downsizing is expected to result in an annualized reduction in overall labor cost of approximately 10%. As a reminder, the downsizing was implemented in order to align our workforce to the low utilization of our plant following the planned completion of the transition of glass manufacturing to Takeda later this year. The second is the recent FDA approval of a label update for KEDRAB. Our human rabies immune globulin product HRIG is marketed by Kedrion in the US. This label expansion confirms our product safety and effectiveness in children.
KEDRAB is now indicated for passive transient post exposure prophylaxis of rabies infection in persons of all ages when given promptly after contact with rabies or possibly rabid animal. This FDA approval was based on data from the US post-marketing pediatric study. The first and only clinical trial to establish pediatric safety and effectiveness of any HRIG in the US. Importantly, this label update has a potential to increase KEDRAB US market share and product revenues. While the ongoing global COVID-19 pandemic continues to impact sales of KEDRAB, we anticipate that sales of this product will continue to grow meaningfully in the years to come in the US capturing a significant portion of the estimated annual $150 million US HRIG market.
Turning to our product pipeline. The InnovAATe Phase 3 clinical program for our proprietary inhaled AAT for the treatment of Alpha-one Antitrypsin Deficiency is continuing to progress. As a reminder, InnovAATe is a randomized double-blind placebo-controlled pivotal Phase 3 trial performed under an IND and European CTA designed to assess the efficacy and safety of inhaled AAT in patients with Alpha-one deficiency and moderate lung disease. These high-priority program continues to be the focus of potential commercial partner discussions for us as we remain focused on evaluating strategic opportunities for this important product candidate in the market, which is currently already estimated at over $1 billion and growing 6% to 8% annually.
We are engaged in ongoing dialog with multiple parties and I'm pleased with the level of external interest generated in our product. Potential partners have clearly recognized the value of this compelling development program. Let's move on to the progress of a Plasma-derived immunoglobulin[ph] product as a potential therapy for COVID-19 disease. During the second quarter, we completed the supply of the product with Israeli Ministry of Health per our initial supply agreement. As a reminder, the initial order from Israeli Ministry of Health for the product is sufficient to treat approximately 500 hospitals patient and have generated approximately $3.4 million in revenues for Kamada. The therapy is available nationwide in Israel and patients are continuing to be treated as part of the MOH clinical study on named-patient basis. We remain in active discussions with several countries regarding the possible supply of IgG product. Moving on to Kamada plasma, our US plasma collection we've initiated plans to leverage our FDA license and open additional centers in the US through which we intend to significantly expand our plasma collection capacity. This plant expansion is expected to enhance our IgG competitive position in the various markets.
Lastly, we are having productive active discussions with multiple parties around new strategic business development opportunities that will utilize and expand our core plasma-derived development, manufacturing, and commercialization expertise. We are excited about the direction of this dialog and believe there are interesting prospective transactions available to us that could significantly impact our business.
As we have said previously, we are focused on identifying plasma derived product that can be acquired or we can provide manufacturing services. Our team remains highly focused on realizing this compelling opportunities which will be funded by our strong cash position of nearly $105 million as of June 30, 2021. As a reminder, our strategy is focused on driving profitable growth from our current commercial activities as well as our plasma-derived product development and manufacturing expertise. As such, we intend to further evolve into a vertically integrated specialty plasma-derived company for development and all the acquisition of plasma-derived products and distribution capabilities.
In summary, we remain highly confident in the strength of our overall business, which consists of multiple revenue generating operating lines that can each drive significant long-term growth opportunities for Kamada.
With that, I now ask Chaime to review our financial results. Chaime, please.
Chaime Orlev
Thanks, Amir, and good day everyone. As Amir noted, our business performed as expected throughout the first half of 2021. In the second quarter of 2021, total revenues were $24.2 million compared to $33.1 million for the second quarter of 2020. For the first six months in 2021, total revenues were $49.1 million compared to $66.4 million in the similar period of 2020. This decrease is mainly related to the expected reduction of sales of Glassia to Takeda due to the product manufacturing transition that will be completed this year.
During the first six months of 2021, we sold approximately $17 million of Glassia to Takeda, which is part of our overall expected $25 million in product revenue from the supplier to Takeda for full-year 2021. From a profitability standpoint gross profit for the second quarter of 2021 was $9.1 million as compared to $11.1 million in the second quarter of 2020. For the first six months our total gross profit was $18 million as compared to $22.6 million of total gross profit in the first six months of 2020. In both the second quarter and first half of 2021, our gross margin was 37%, an increase from 34% in the equivalent period in 2020.
Looking ahead to the second half of 2021, we do expect a shift in product sales mix with higher weighted sales in our distribution products which have lower gross margins as well as continued reduction in Glassia sales to Takeda. Therefore, we would not expect our gross margins in the second half of the year to be a strong as they were in the first half. Operating expenses in the second quarter of 2021 included approximately 600,000 in other expenses related to a one-time severance related cost associated with the workforce downsizing, which was largely concluded.
Moving on, net income was approximately 900,000 or $0.02 per share in the second quarter of 2021 as compared to net income of $3.5 million or $0.10 per share in the second quarter of 2020. For the first six months, net income was $3.6 million or $0.08 per share as compared to net income of $8.7 million or $0.20 per share in the first six months of 2020. For the first half of 2021 our adjusted EBITDA, excluding the one-time severance costs was $6.7 million compared to $11.8 million in the first half of 2020. Coming to the balance sheet continues to be a significant spread of our company. As of June 30, 2021, the company had cash, cash equivalents, and short-term investment of approximately $105 million as compared to approximately $109 million on December 31, 2020. The decrease is mainly related to working capital timing differences.
As Amir mentioned, we intend to leverage these cash resources for expansion of our plasma collection activity and targeted strategic business development opportunities.
That concludes our prepared remarks, we will now open the call for questions. Doug?
Question-and-Answer Session
Operator
Thank you, ladies and gentlemen, at this time, we would like to conduct a question-and-answer session. [Operator Instructions] Our first question comes from the line of Anthony Petrone with Jefferies. Please proceed with your question.
Anthony Petrone
Good morning, gentlemen. And congrats on first strong execution over the past first half through the pandemic here. First question would be on timing for Bonsity, the biosimilar for teriparatide and I know that's still on track for next year. Just trying to get a sense of sort of launch preparations behind the scenes and sort of expectations into 2022 for that product. And then similarly on the Hyperimmune globulin contract manufacturing contract signed last quarter 12-year agreement with an undisclosed partner, just again timing on when that will begin and how that's going to ramp over the next couple of years and then I have a few follow-ups. Thanks.
Amir London
Hi, Anthony, it is Amir. Thank you for the questions. So regarding the Biosimilar. Yes, we are on track -- we are on track to get the product launched early next year in 2022 as we've indicated in previous discussions. And regarding the tech transfer this is also moving forward according to the plan. We are going to manufacture the different validation batches over the next few months. We plan to submit the file amendment to the FDA and we are on track to have the product approved to be manufactured at our facility before the end of 2022 and initiate commercial production beginning of 2023, according to the plan. This is a 12-year agreement with expected revenue that can be as high as $10 million a year for a total of $120 million for the course of the agreement.
Anthony Petrone
Okay. And then on the follow-up. You've sort of indicated here on the InnovAATe trial in the development of inhalable potentially the strategic partnerships in the mix there. Just maybe sort of the latest thoughts there on how this asset could actually evolve now that you're seeking partnerships. And then, the last one I'll squeeze in will be on Plasma Centers. The company has been adding capabilities on that end. Maybe just the broader sort of outlook on the initiatives in the supply chain. How many plasma center overall do you think Kamada will have critical mass and will those be exclusively hyperimmune focused or just broader as it relates to plasma collections overall. Thanks.
Amir London
Thank you. Thank you for the questions, Regarding the InnovAATe study, the study is ongoing and we are in the process of expanding it with the plan to open additional sites in the partnering process as we've indicated in the prepared remarks is ongoing. It's high focus for us -- bringing on both[ph] potential commercial partners in terms of more details we will be happy to share this when things will mature and materialize. We are in discussions with multiple parties. We are pleased with the level of interest that has been generated by this program by the different parties and we believe this is definitely an important validation having external partners being recognizing the value of this compelling development program. So, stay tuned and we will update once we have more information about this potential commercialization agreement. In regards to Kamada plasma. So this site in Texas the one that we acquired. We have completed the integration of that into Kamada, according to the plan, we are growing the capacity of that facility. This facility is focused on high premium collection -- only high premium collection while in terms of our plan moving forward our focus at least for the time being will continue to be on the high premium plasma.
It's important for us to be vertically integrated and as we Kamada focus on specialty hyperimmune plasma product, we are planning to be fully vertically integrated in that regard. We are not ruling out the option that is part of the plan. We will also be collecting source plasma once our plan is finalized. We will share it with you with the public in terms of how many centers. how many liters of plasma we plan to collect and how we are going to go about this network of plasma collection centers in the US but this is definitely part of our strategy to be a player in the plasma collection space for Kamada internally[ph] but also potentially as a company that will be selling plasma to external clients.
Anthony Petrone
Thanks again, Amir.
Operator
There are no further questions in the queue, I'd like to hand the call back over to Amir London for closing remarks.
Amir London
Thank you. In closing, we remain confident in the strength and the fundamentals of our business and we look forward to executing on multiple potential compelling partnership and business development opportunities by utilizing our solid balance sheet. We also leverage our core expertise in development, manufacturing, and commercialization of plasma-derived therapeutics to further our evaluation into a vertically integrated company by expanding our plasma collection capabilities.
Thank you all for joining us on today's call. We look forward to providing you with further updates on our progress during the second half of the year. We hope you all stay healthy and safe. Thank you very much.
Operator
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
midastouch017
3 years ago
Kamada Reports Second Quarter and First Half 2021 Financial Results, Recent Achievements and Corporate Development Activities
https://finance.yahoo.com/news/kamada-reports-second-quarter-first-110000690.html
Second Quarter 2021 Revenues were $24.2 Million
In Connection with the Transition of GLASSIA® Manufacturing, Kamada Largely Completed a Workforce Downsizing in the Second Quarter that will Result in an Approximately 10% Annual Labor Cost Reduction
Pivotal Phase 3 InnovAATe Trial for Inhaled AAT for Treatment of Alpha-1 Antitrypsin Deficiency Continues to Advance as Kamada Evaluates Strategic Partnering Opportunities
Ongoing Expansion of Plasma Collection Capacity at Recently Acquired U.S. Plasma Collection Center; Company Intends to Open Additional Centers
Kamada Continues to Explore Additional Business Development Opportunities that Utilize and Expand the Company's Core Plasma-Derived Development, Manufacturing and Commercialization Expertise, and Further its Strategic Objective of Evolving into a Fully Integrated Specialty Plasma Company
REHOVOT, Israel, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a plasma-derived biopharmaceutical company, today announced financial results for the three and six months ended June 30, 2021.
“Our business continued to perform as anticipated throughout the first half of 2021,” said Amir London, Kamada’s Chief Executive Officer. “Despite the expected decrease in revenue as compared to the first half of last year due to the planned transition of GLASSIA manufacturing to Takeda later this year, we achieved gross margins of 37 percent in the first half of 2021, as compared to 34 percent during the first six months of 2020. As an outlook for the second half of 2021, we anticipate a reduction in overall gross margins mainly due to anticipated change in products sales mix.”
“We continue to progress the pivotal Phase 3 InnovAATe clinical trial of our proprietary Inhaled AAT for the treatment of Alpha-1 Antitrypsin Deficiency (AATD) and are exploring a potential commercial partnership with respect to this product. We are pleased with the level of external interest generated in this therapy to date,” continued Mr. London.
“Moreover, we initiated the planning for the opening of additional U.S. plasma collection centers by leveraging our existing U.S. Food and Drug Administration license. In addition, we continue to achieve important progress around the advancement of our business development priorities and are exploring potential strategic transactions that would utilize and expand our core plasma-derived development, manufacturing, and commercialization expertise. We believe we have multiple prospects that would represent significant steps toward accomplishing our strategic goal of becoming a fully-integrated specialty plasma company,” concluded Mr. London.
Financial Highlights for the Three Months Ended June 30, 2021
Total revenues were $24.2 million in the second quarter of 2021, compared to $33.1 million recorded in the second quarter of 2020.
Gross profit was $9.1 million in the second quarter of 2021, compared to $11.1 million reported in the second quarter of 2020.
In connection with the transition of GLASSIA manufacturing to Takeda, during the second quarter of 2021, the Company largely completed the planned workforce downsizing and incurred a one-time expense of $0.6 million related to excess severance remuneration for the employees who were laid-off as part of this downsizing. The downsizing process is expected to result in an annualized reduction of approximately 10% in overall labor costs.
Net income was $0.9 million, or $0.02 per share, in the second quarter of 2021, as compared to net income of $3.5 million, or $0.10 per share, in the second quarter of 2020.
Adjusted EBITDA, as detailed in the tables below, was $2.4 million in the second quarter of 2021, as compared to $5.5 million in the second quarter of 2020. Adjusted EBITDA in the second quarter of 2021, excluding one-time severance expenses, was $3.0 million.
Cash used in operating activities was $3.3 million in the second quarter of 2021, as compared to cash provided by operating activities of $10.7 million in the second quarter of 2020.
Financial Highlights for the Six Months Ended June 30, 2021
Total revenues were $49.1 million in the first six months of 2021, compared to $66.4 million recorded in the first six months of 2020.
Gross profit was $18.0 million in the first six months of 2021, compared to $22.6 million reported in the first six months of 2020.
Net income was $3.6 million, or $0.08 per share, in the first six months of 2021, as compared to net income of $8.7 million, or $0.20 per share, in the first six months 2020.
Adjusted EBITDA, as detailed in the tables below, was $6.2 million in the first six months of 2021, as compared to $11.8 million in the first six months of 2020. Adjusted EBITDA in the first six months of 2021, excluding one-time severance expenses, was $6.7 million.
Cash used in operating activities was $1.2 million in the first six months of 2021, as compared to cash provided by operating activities of $8.7 million in the first six months of 2020.
Balance Sheet Highlights
As of June 30, 2021, the Company had cash, cash equivalents, and short-term investments of $104.6 million, as compared to $109.3 million on December 31, 2020.
Recent Corporate Highlights
The FDA approved a label update for KEDRAB® (Rabies Immune Globulin [Human]), establishing the product’s safety and effectiveness in children. KEDRAB is now indicated for passive, transient post-exposure prophylaxis of rabies infection in persons of all ages when given promptly following contact with a rabid or possibly rabid animal.
Completed the supply of our plasma-derived COVID-19 Immunoglobulin (IgG) investigational product to the Israeli Ministry of Health (IMOH) for the treatment of hospitalized COVID-19 patients.
Conference Call
Kamada management will host an investment community conference call on Wednesday, August 11, 2021, at 8:30am Eastern Time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 877-407-0792 (from within the U.S.), 1-809-406-247 (from Israel), or 201-689-8263 (International) and entering the conference identification number: 13721962. The call will also be webcast live on the Internet at http://public.viavid.com/index.php?id=145993.
About Kamada
Kamada Ltd. (the “Company”) is a global specialty plasma-derived biopharmaceutical company with a diverse portfolio of marketed products, a robust development pipeline and industry-leading manufacturing capabilities. The Company’s strategy is focused on driving profitable growth from its current commercial products, its plasma-derived development pipeline and its manufacturing expertise, while evolving into a vertically integrated plasma-derived company. The Company’s two leading commercial products are GLASSIA® and KEDRRAB®. GLASSIA was the first liquid, ready-to-use, intravenous plasma-derived AAT product approved by the FDA. The Company markets GLASSIA in the U.S. through a strategic partnership with Takeda Pharmaceuticals Company Limited ("Takeda") and in other countries through local distributors. Pursuant to an agreement with Takeda, the Company will continue to produce GLASSIA for Takeda through 2021 and Takeda will initiate its own production of GLASSIA for the U.S. market in 2021, at which point Takeda will commence payment of royalties to the Company until 2040. KEDRAB is an FDA approved anti-rabies immune globulin (Human) for post-exposure prophylaxis treatment. KEDRAB is being marketed in the U.S. through a strategic partnership with Kedrion S.p.A. The Company has additional four plasma-derived products administered by injection or infusion, that are marketed through distributors in more than 15 countries, including Israel, Russia, Brazil, Argentina, India and other countries in Latin America and Asia. The Company has two leading development programs; an inhaled AAT for the treatment of AAT deficiency for which the Company is currently conducting the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial, and a plasma-derived hyperimmune immunoglobulin (IgG) product as a potential treatment for coronavirus disease (COVID-19). The Company leverages its expertise and presence in the Israeli pharmaceutical market to distribute in Israel more than 20 products that are manufactured by third parties and have recently added nine biosimilar products to its Israeli distribution portfolio, which, subject to EMA and the Israeli MOH approvals, are expected to be launched in Israel between the years 2022 and 2025. FIMI Opportunity Fund, the leading private equity investor in Israel, is the Company’s lead shareholder, beneficially owning approximately 21% of the outstanding ordinary shares.
midastouch017
3 years ago
Kamada's (KMDA) CEO Amir London on Q1 2021 Results - Earnings Call Transcript
May 12, 2021 12:41 PM ETKamada Ltd. (KMDA)
Kamada Ltd. (NASDAQ:KMDA) Q1 2021 Earnings Conference Call May 12, 2021 8:30 AM ET
Company Participants
Bob Yedid – LifeSci Advisors
Amir London – Chief Executive Officer
Chaime Orlev – Chief Financial Officer
Conference Call Participants
Anthony Petrone – Jefferies
Keay Nakae – Chardan Capital Markets
Operator
Greetings. Welcome to the Kamada Ltd. First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Bob Yedid. You may begin.
Bob Yedid
Thank you, operator, and thank you everyone for joining today’s call. This is Bob Yedid with LifeSci Advisors. Joining me today from Kamada are Amir London, Chief Executive Officer; and Chaime Orlev, Chief Financial Officer. Earlier this morning, Kamada announced financial results for the 3 months ended March 31, 2021. If you have not received this news release, please go to the Investors page of the company’s website at www.kamada.com.
Before we begin, I’d like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada. I encourage you to review the company’s filings with the Securities and Exchange Commission, including without limitation, the company’s Forms 20-F and 6-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Furthermore, the content on this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, Wednesday, May 12, 2021. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.
With those remarks, it’s my pleasure to turn the call over to Amir London, CEO. Amir?
Amir London
Thank you, Bob, I thank also to our investors and analysts for your interest in Kamada and for participating in today’s call. While the global pandemic continues to create commercial challenges, our sales and financial results for the first quarter of 2021 were in line with our expectations. Chaime will provide all the key details along the first quarter financial results shortly.
But I’d like to begin by highlighting the recently announced amendment to the Glassia license agreement with Takeda will buy upon completion of the transition of Glassia manufacturing to Takeda, which is expected by the end of 2021. We would transfer to Takeda to Glassia U.S. BLA. In exchange for the BLA transfer, we literally see the $2 million payment from Takeda expected by the end of the year. In addition, the term of the final sales-based milestone of $5 million due to Kamada under the license agreement was amended and resulted in a cognition of income in the first quarter.
Based on the transition of Glassia manufacturing to Takeda and it’s continued distribution of the product to the U.S., the transfer of the BLA to Takeda were the sound strategic next step for both sides. Also, in connection with the tradition of Glassia manufacturing to Takeda later this year, we are planning to implement a workforce downsizing in the early part of the third quarter, which is expected to result in an annualized reduction in labor costs of approximately 10%. This cost saving are in line with the plan to align our workforce to the lower plant utilization, maintaining a profitable and effective operation, meeting market demands.
With that, I would like now to turn to our product pipeline and discuss our InnovAATe Phase 3 clinical program for proprietary inhaled AAT for the treatment of alpha-1 antitrypsin deficiency. As a reminder, InnovAATe is a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial performed under an FDA IND in a European CTA designed to assess the efficacy and safety of inhaled AAT in patients with alpha-1 deficiency and moderate lung disease. This program continues to be a high priority for Kamada, and we continue to evaluate strategic opportunities for engaging a commercialization partner for this important product candidate in the market, which is currently estimated at over $1 billion growing 6% to 8% annually.
Moving on, I’d like to discuss important progress we continue to achieve around the development of our plasma-derived immunoglobulin products as a potential therapy for COVID-19 disease. We were pleased to announce top line results of our Phase 1/2 open-label single-arm, multicenter clinical trial of our IgG product in Israel. To briefly read the results. 11 of the 12 patients recovered following the receipt of the treatment. Seven patients were discharged from the hospital at or before day five post-treatment and the remaining four patients were discharged by day nine. Following the infusion of the product IgG levels in the plasma of all patients increased and preliminary results demonstrated that the IgG levels increase was associated with enhanced utilization activity.
In addition, we were encouraged to observe that our IgG product demonstrated a favorable safety profile, and there were no infusion related reactions or adverse event consider related to the study drug. Under our existing agreement, we continue to supply the product to the Israeli Ministry of Health, MOH for the treatment of COVID-19 patients in Israel. As a reminder, the initial order from the MOH for the product is sufficient to treat approximately 500 hospitalized patients and is expected to generate approximately $3.4 million in revenue for Kamada. The therapy is available nationwide in Israel and patients are being treated as part of the MOH clinical study or on a named patient basis.
During the first quarter, we also finalized the ramp up manufacturing production of the product by utilizing plasma collected in the U.S. by Kedrion. This scaled manufacturing on our commercial scale production line can accommodate possible demand from additional international markets.
We are currently in discussions with several countries regarding the potential supply of IgG product. In general, we believe that even after a global deployment of COVID-19 vaccination, there would still be specific population that will continue to need an IgG product, mainly immunocompromised patients, which are expected to continue to be at risk due to their condition. Lastly, we believe that our activity during the COVID-19 pandemic clearly demonstrated our ability to quickly and professionally respond to such emerging situation.
Moving onto the formation of Kamada Plasma, our new subsidiary in the U.S., we are extremely excited about the future opportunities provided by our recent acquisition of the plasma collection center in Beaumont, Texas in the establishment of our own collection capabilities. The acquisition represents our entry into the U.S. plasma production market and drives us toward our strategic goal of becoming a fully integrated specialty plasma company.
I’m pleased to report today that integration and extension activities are proceeding as planned in this facility. By leveraging our FDA license, we tend to open additional centers in the U.S., through which we intend to significantly expand our hyperimmune plasma collection capacity. This plant expansion is expected to improve our IgG competitive position in various markets. We look forward to sharing additional details with you regarding this potential growth opportunity in the coming quarters.
Lastly, we continue to proactively explore new strategic business development opportunities that we utilize and expand our core plasma-derived development, manufacturing and commercialization expertise. As a reminder, we will focus on identifying plasma-derived products that we can acquire or provide manufacturing services for. Our team is fully engaged and we are currently in active discussions that we hope will lead to realizing this opportunity, which will be funded by our strong cash position of nearly $110 million as of March 31, 2021.
Our strategies focused on driving profitable growth for our current commercial activities as well as our plasma-derived product development, and manufacturing expertise, as such, we intend to continue evolving into a vertically integrated specialty plasma-derived company, for the development and all the acquisition of plasma collection and product distribution capabilities.
In summary, we continue to firmly believe in the strength of our business, which consists of multiple lines of activity, which can each drive significant long-term growth opportunities for Kamada.
With that, I’ll now ask Chaime to review our financial results for the first quarter 2021. Chaime, please.
Chaime Orlev
Thank you, Amir, and good day everyone. As Amir noted, our business performed as anticipated in the first quarter. As we said, would be the case on prior calls, the transition of GLASSIA manufacturing to Takeda and the continued uncertainty in the operating environment created by the ongoing global COVID-19 pandemic, resulted in reduced revenues and profitability in the first quarter of 2021. And we expect this will continue throughout the year.
In this quarter, total revenues were $24.9 million, compared to $33.3 million for the first quarter of 2020, representing a 25% decrease. Total revenues in the first quarter included the recognition of the accelerated $5 million final sales-based milestone payment from Takeda under the amendment GLASSIA license agreement between the companies. During the quarter, we sold approximately $7 million of GLASSIA to Takeda, which are part of our overall expected $25 million in product revenues from the supply to the Takeda in 2021.
Importantly, upon the initiation of sales of GLASSIA manufactured by Takeda, we will receive royalty payments from the Takeda at the rate of 12% on net sales through August 2025, and at the rate of 6% thereafter until 2040, with a minimum of $5 million annually for each of the years, 2022 to 2040. Although the transition of the agreement to its royalty phase will result in a significant reduction of Kamada’s revenue from Takeda based on the current GLASSIA sales in the U.S., and the forecasted future growth. Kamada projects receiving royalties from Takeda in the range of $10 million to $20 million per year through 2040.
From profitability standpoints, gross profits for the first quarter of 2021 was $8.9 million down from $11.5 million in the first quarter of 2020. Gross margins were 36% from the first quarter of 2021, an increase from 34% gross margins in the first quarter of 2020. The reduction in gross profitability is associated with a decrease in the overall revenues, as well as a one-time inventory write-off of approximately $1.5 million.
Moving on, net income was $2.7 million or $0.06 per share on a fully diluted basis in the first quarter of 2021, as compared to net income of $5.2 million or $0.12 per share in the first quarter of 2020. Kamada continues to operate from a position of financial strength. As of March 31, 2021, the Company had cash, cash equivalents and short-term investments of $109.5 million. As Amir indicated previously, we intend to use the line these cash resources for the expansion of our plasma collection activity and strategic business development opportunities.
That concludes our prepared remarks. We will now open the call for questions. Operator?
Question-and-Answer Session
Operator
[Operator Instructions] Our first question is from Anthony Petrone with Jefferies. Please proceed with your question.
Anthony Petrone
Thank you, and good morning. Good afternoon. I hope everyone’s doing well. I guess to me or maybe first, just the question on geopolitical front, just given the events over the past 48 hours, maybe just to address just manufacturing, supply chains, how are you thinking about potential impacts from the events over the last 48 hours or lack thereof? And then we could go into other questions. And of course, hope everyone’s family is doing well.
Amir London
Thanks, Anthony. We all well and safe and we have no concerns regarding supply and the continuation of our operation of the plant. Each one has been onto this type of situation for the past 20 years. And we didn’t take to stop our production even for one day, as a result of this. We’ve very strong security, very strong technology around the iron dome system. And we are all safe and secure. Thank you very much.
Anthony Petrone
Best wishes to everyone. Hopefully, it’s a speedy resolution. So in terms of a few comments referencing the prepared remarks and some of the items in the press release, Amir, maybe a little bit on the outlook for establishing a partnership for the inhaled Alpha-1 Antitrypsin product, where are the discussions at the moment? And if you look ahead, what sort of partnership should we be thinking about? Will it be regional commercialization effort, or will it be a single partner that has access to multiple geographies across the world? And then maybe to follow-up on AATD would be just – timings on the next clinical updates that we should be thinking about? And I have a couple of more.
Amir London
Okay. So as we mentioned on the call, we are in active discussions with potential authors and we all evaluating the different opportunities ahead of us. We’re looking at a commercialization partner that we’ll be investing in clinical development. And in return, we’ll have commercial rights for future, a commercialization as license for future commercialization of the product in different territories. In terms of really to be one partner for territories, will it be multiple partners, all alternatives are open. And we are evaluating the different options as a business partners that are showing interest in such collaboration. And in due time, we will update on progress that we will potentially be making.
Anthony Petrone
A few fobs would be when we look toward the transition the manufacturing, the BLA transition to Takeda on GLASSIA IV, is there a way to sort of estimate how much capacity is actually freed up at the plants and subsequently would be available for future CDMO agreements. And then you mentioned also, Amir, leveraging the balance sheet, how should we be thinking about investments allocated toward hyperimmune supply as opposed to potentially in-licensing agreements or even potential acquisitions of hyperimmune globulin products?
Amir London
Okay. So internal capacity, we developed to slow the affects now a little bit. Basically, you can look at the revenue that is basically being transferred into royalties. And from that, you can kind of calculate the capacity. In general, we are going to have sufficient capacity to take additional CDMO contracts, like the one that we’ve signed end of the 2019, and then we currently in the tech transfer sides of this product. As you may remember, we’ve announced that we signed an agreement for 12 years with the expectation that it’ll contribute between $8 million to $10 million a year to Kamada. Hopefully, we’re close to that $120 million in revenue over the 12 years contract starting 2023. We have the capacity to take additional similar contracts, but also remember that we are growing our catalog in manufacturing. And we’ve own additional a catalog or Kamada contracts like the WHO or Canada, where we are supplying the products.
The product is all on the registration in other territories. GLASSIA is growing ex-U.S., and GLASSIA undergoes on the registration in some territories, primarily Latin America. So we are growing organically, our current products, and this, of course, will fill some of the capacity that is going to be available after completion of the transition into Takeda. Adding to that CMO services and adding to that, additional potential products. All of this does not probably recover – Anthony, all of this does not fully recover all of the verbal capacity, and this is why we are downsizing the plant in terms of number of employees. And as we said, the resolve of downsizing, which is going to happen at the beginning of the third quarter of this year, we will result in 10% cost reduction in terms of our labor cost.
Anthony Petrone
And two quick follow-ups there, one on the 10% overall cost reduction is that just total costs throughout the P&L or is it mostly COGS or operating expenses or how is it mixed between COGS and operating expenses? And then the last one would be just on a plasma supply Beaumont, Texas. You mentioned additional plasma collection centers. Should we be expecting this year that you will continue to bolster plasma collection efforts throughout the remainder of the year and into next year? Thanks, again.
Amir London
Yes. So I’m not sure I fully heard the question, but difficult answer it completely. Please ask another question. In terms of the plasma collection capabilities, so for this year, we have two objectives. One is to expand the capacity of the current center and try to maximize its potential. And this is already in the work. And in parallel to that we have initiated the planning of expanding into opening additional centers. So we expect to complete the planning of this decision on centers later this year. And once, basically the plan is finalized we will move into the execution phase of opening additional centers. So the actual opening additional centers, is something planned most likely for next year.
In terms of the label costs. So we have been busy downsize or planning to downsize across the entire company, but primarily, of course, on the label, which is walking directly on the production, this is well due to the transition of last year to Takeda, we have lower utilization in the plant, and we are aligning the capacity to the needed demand. So majority of that 10% is related directly to the cost.
Anthony Petrone
Okay. Well, thank you very much. I’ll hop back in. Thank you.
Operator
And our next question is from Keay Nakae with Chardan Capital Markets. Please proceed with your question.
Keay Nakae
Thanks. You can give us an update on the status of enrollment in the inhaled clinical steps.
Amir London
Yes. Thanks. So we did not provide exact numbers, what I can definitely say that, as you know, we initiated the study end of 2019 with suspension team, the site that was open has been kept open to the entire COVID situation in Europe, the site is in the Netherlands. Additional sites are ready to be open. And now as the COVID situation improves across Europe and the U.S. we will be looking into opening additional sites. So that’s part of our plan and in part to that we are walking on the business development side of the program concurrently and looking to engage as a commercial partner.
Keay Nakae
Okay. With respect to the hyperimmune plasma for COVID that you’re selling in Israel, can you tell us how much of that 5 million or I’m sorry, 500 patient revenue was recognized in Q1?
Amir London
So a significant pile of the $3.4 million has been sold already in Q1. The remaining is going to be supplied – is being supplied to the Ministry this quarter. So by the end of this quarter, the entire $3.4 million will be recognized. The treatment is well over 100 patients have been enrolled into the Israeli study that is sponsored and supervised for Israel Ministry of Health. In general, the COVID situation itself has been improving significantly, as you may know, with global vaccination, not global, nationwide vaccination program, so current recruitment into the study slow because there aren’t many new patients being diagnosed.
We are in discussion with other governments – other countries in terms of the supply agreement. And as mentioned during the call, we have scaled up the production and we have sufficient plasma and sufficient production capacity and have a commercial line to be able to supply in greater quantities of the product to other governments and other Ministry of Health’s.
Keay Nakae
Okay. For the rabies hyperimmune, last year obviously impacted by lockdown situations. What are you seeing there as the outlook for that product as things begin to open up globally?
Amir London
Yes. So as we mentioned in previous calls, June 2020, the actual in market cells of the anti-rabies immunoglobulin, of course, lower than the original expectation because of the lockdown, because people did not spend much time out and the parks in the nature. And as a result of this, the inventory levels with Kedrion carried beginning of the year with high inventories, and this has its effect on our 2021 sales to Kedrion where they needs to consume the high inventory beginning of the year. As the U.S. South to be open and people are going to spend more time, especially now for the summer, we expect this high inventories to be consumed and that the rate of [indiscernible] our rate of sales to Kedrion will catch up again, as it was prior to the pandemic.
As you may remember, we already had over 20% market share in 2019, which was kind of the first full year of us selling with Kedrion product in the U.S. market. We expect this market share to continue growing. We believe that it can reach up to 45% to 60% of the overall market, which is over $150 million. So starting late 2021 into 2022, we expect this market to continue growing and the overall sales of the product as to Kedrion and Kedrion in market sales to extend significantly.
Keay Nakae
Okay. And then just final question about the plasma centers. I assume that most of the product will be used internally, but how much intermediates do you see being collected that you would sell to other parties?
Amir London
So for the foreseeable future, for the next few years, as you said, it’s going to be for internal use. We would like to be independent or close to independent, high premium plasma collection capabilities. This will lower our cost of goods. And it will give us a competitive advantage when we compete mainly in countries, this is based on tenders. Price is the main power for product selection. So we see our ability to collect plasma internally, dependently as a significant competitive advantage in our – part of us becoming a fully vertical specialty plasma company.
Keay Nakae
Okay. That’s all I have. Thanks.
Operator
[Operator Instructions] And it looks like we have reached the end of our question-and-answer session. And I’ll now turn the call over to Amir London for closing remarks.
Amir London
Thank you very much. So in closing, we remain confident in the strength of the fundamentals of our business and look forward to multiple organic commercial growth catalyst as well, further leveraging our FDA approved plasma-derived technology platform to quickly respond to emerging pandemic situations. We will leverage our core expertise in the development manufacturing and commercialization of plasma-derived therapeutics to become a vertically integrated company by extending our plasma collection capabilities and the evolution that has already started with the acquisition of the Texas-based plasma collection center. Moreover, our team remains focused on pursuing compelling business development opportunities, by utilizing our solid balance sheet. Thank you for joining us today for the call. And we look forward to providing you with further updates on our progress for the year. We hope you all stay healthy and safe. Thank you very much.
midastouch017
3 years ago
Kamada's (KMDA) CEO Amir London on Q4 2020 Results - Earnings Call Transcript
Feb. 10, 2021 10:36 PM ETKamada Ltd. (KMDA)
Q4: 2021-02-10 Earnings Summary
EPS of $0.04 misses by $0.03 | Revenue of $31.44M (-1.94% Y/Y) misses by $1.60M
Kamada Ltd. (NASDAQ:KMDA) Q4 2020 Earnings Conference Call February 10, 2021 8:00 AM ET
Company Participants
Bob Yedid – Investor Relations-LifeSci Advisors
Amir London – Chief Executive Officer
Chaime Orlev – Chief Financial Officer
Conference Call Participants
Keay Nakae – Chardan Capital Markets
Operator
Greetings and welcome to the Kamada Ltd. Fourth Quarter and Fiscal Year 2020 Earnings Call. At this time all lines are in a listen-only mode. [Operator Instructions] As a reminder this conference is being recorded.
I would now like to turn the conference over to your host Mr. Bob Yedid with
LifeSci Advisors. Thank you. You may begin.
Bob Yedid
Thank you, Melissa, and welcome to everyone joining in the call. This is Bob Yedid from LifeSci Advisors. Thank for participating in today’s call. And joining me from Kamada are Amir London, Chief Executive Officer; and Chaime Orlev, Chief Financial Officer.
Earlier this morning, Kamada announced financial results for the three and 12 months ended December 31, 2020. If you have not received this press release, please go to the Investors page of the company’s website.
Before we begin, I’d like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada. I encourage you to review the company’s filings with the Securities and Exchange Commission, including, without limitation, the company’s Forms 20-F and 6-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, February 10, 2021. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.
With that said, it is my pleasure to turn the call over to Amir London, CEO. Amir?
Amir London
Thank you, Bob. Well, thanks also to our investors and analysts for your interest in Kamada and for participating in today’s call. Let me begin by highlighting our strong overall financial results for full year 2020. Despite the significant headwinds caused by the global coronavirus crisis, we overcame meaningful operational challenges and met our key financial targets. For full year 2020, we recorded total revenues of $133.2 million, which is in line with our guidance of $132 million to $137 million, and a 5% increase over the $127.2 million in total revenues generated in 2019.
In a year which was greatly impacted by COVID-19, we are pleased with this result and believe they indicate the fundamental strength of our business, which as I will discuss shortly, we drive Kamada growth prospects.
Kamada’s core focus is on driving profitable growth from our current commercial activities and manufacturing expertise. We intend to expand our proprietary plasma-derived product business by maximizing the market potential of our existing proprietary product portfolio, broadening our distributed product portfolio, enhancing our current manufacturing capabilities and evolving into a vertically integrated plasma-derived company.
In addition, we continue to develop our pipeline, primarily focusing on the pivotal Phase III InnovAATe clinical trial of inhaled AAT for the treatment of alpha-1 antitrypsin deficiency and on exploring new strategic business development opportunities funded by our strong cash position of nearly $110 million as of December 31, 2020. Moreover, we plan to leverage our FDA-approved IgG platform technology as a strategic business line with the ability to respond to future potential pandemic situations.
Let me now elaborate on three of our recent important achievements executing on these key initiatives. I will start with our recently announced acquisition of the privately-held blood and plasma research of B&PR in Beaumont, Texas and establishment of our own subsidiary, Kamada Plasma, which represents our entry into the U.S. plasma collection market and drives us toward our strategic goal of becoming a fully-integrated specialty plasma company. This facility specializes in collection of hyperimmune plasma used by Kamada to manufacture our anti-D products which are distributed in international markets.
By investing in the B&PR facility and leveraging its FDA license to open additional centers in the U.S., we plan to significantly expand our hyperimmune plasma collection capacity. This plant expansion is expected to improve our IgG competitive position in various markets. We are extremely excited about the future opportunities this acquisition will provide for our business.
Secondly, in regards to our COVID-19 IgG product, we believe this program clearly demonstrates our ability to quickly respond to emerging pandemic situations. We recently initiated a supply of this investigational product to the Israeli MOH for the treatment of COVID-19 patients in Israel. As a reminder, the initial order is sufficient to treat approximately 500 hospitalized patients and is expected to generate approximately $3.5 million in revenue for Kamada.
Importantly, the Israeli MOH has initiated a multicenter clinical study in which our product is being administrated. In parallel, we are ramping up our COVID-19 IgG manufacturing production utilizing plasma collected in the U.S. by our partner, Kedrion Biopharma. This manufacturing increase will support potential additional demand from the Israeli MOH and possibly other international markets. We previously reported the completion of enrollment and positive interim results from our Phase I/II open label, single-arm, multicenter clinical trial. We are currently assembling the final study report, and we plan to publish it before the end of the coming quarter.
Together with Kedrion, our partner for the development program, we continue to evaluate the best suitable plan for the U.S. and/or the EU COVID-19 IgG clinical program and will advance our development upon the conclusion of this review. While we are, of course, pleased that the rollout of COVID-19 vaccine has commenced in some countries, we remain confident that there will be a continued market demand for plasma-derived IgG as a treatment for COVID-19 infected patients.
Thirdly, we continue to expand our Israel-based Distribution segment by augmenting our existing distributed product portfolio, specifically in the emerging area of biosimilars. As recently reported, we entered into agreements with two international pharmaceutical companies to commercialize three biosimilar product candidates in Israel. Subject to approval by EMA and also with Israel MOH, the three products are expected to be launched in Israel between 2022 and 2024. These three products are added to the six other biosimilar products previously licensed from Alvotech and further position Kamada as the leader in the emerging biosimilar market in Israel. We estimate the potential collective maximum sales generated by the distribution of these nine biosimilar products achievable following regulatory approval and within several years to be in the range of $25 million to $35 million annually.
Before I summarize, let me now turn to the current status of our InnovAATe Phase III clinical program for our proprietary inhaled AAT for the treatment of alpha-1 antitrypsin deficiency. As a reminder, InnovAATe is a randomized, double-blind, placebo-controlled pivotal Phase III trial designed to assess efficacy and safety of inhaled AAT in patients with alpha-1 deficiency and moderate lung disease. While we continue to recruit patients into the study, the COVID-19 pandemic has limited our ability to open new study sites, and it continues to slow down the rate of recruitment, which has been true for many other clinical trials. From a strategic standpoint, we continue to evaluate passing opportunities for the development and commercialization of this important strategic pipeline products.
In addition to the three significant strategic initiatives described above: our new plasma collection capabilities, the rapid development and supply agreement of the COVID-19 IgG and the expansion of our biosimilar portfolio; we are intensely focused on driving higher organic growth by: one, continuing to increase KEDRAB market share in the U.S., where we believe we have significant room to grow; two, expanding the sales of GLASSIA in our IgG portfolio in ex-U.S. markets, including the registration and launch of the product in new territories; three, generating royalties from GLASSIA projected to be in the range of $10 million to $20 million per year commencing in 2022; and four, leveraging our plasma-derived and affecting capabilities for the provision of contract manufacturing services, such as those of the FDA-approved and commercialized specialty IgG product, which is expected to add between $8 million to $10 million in annual revenues starting in 2023. We continue to firmly believe in the strength of our business, which consists of multiple lines of activity, which can drive significant long-term growth opportunities for Kamada.
With that, I’ll now ask Chaime to review our financial results for the fourth quarter and the full year 2020. Chaime, please?
Chaime Orlev
Thank you, Amir, and good day, everyone. We believe the core drivers of our business helped deliver solid results in 2020 in the face of the global COVID-19 pandemic. In the fourth quarter, total revenues were $31.5 million compared to $32.1 million in the fourth quarter of 2019. For the full year ended December 31, 2020, total revenues were $133.2 million, up 5% from the $127.2 million for the year ended December 31, 2019. As Amir noted, this is in line with our guidance of $132 million to $137 million, which we view as a significant accomplishment during a year with many COVID-19-related operational challenges.
From a profitability standpoint, our gross profit for the fourth quarter of 2020 was $10.2 million and gross margins were at 33%, down from $12.1 million of total gross profit or 38% margin in the fourth quarter of 2019. For the full year ended December 31, 2020, our gross profit was $47.6 million and gross margins were 36%, compared to $49.7 million of gross profit and 39% margin in the year ended December 31, 2019. These results were in line with the guidance we provided at the beginning of the year of an annual decrease of three to five percentage points in proprietary product segment gross margin, primarily attributable to change in product sales mix and reduced plant utilization. Our distribution product segment margins were also negatively impacted in 2020 by a shift in product mix from 2019.
Operating expenses, including research and development, sales and marketing, G&A as well as other expenses, totaled $7.5 million in the fourth quarter of 2020 as compared to $6.6 million in the fourth quarter of 2019. For the full year, these costs totaled $28.3 million as compared to $27 million for the full year of 2019. As the case in the second and third quarters, enrollment during the fourth quarter in the company’s pivotal Phase III Innovate clinical trial, which resumed in the third quarter, but at a slow pace, was impacted by the ongoing COVID-19 pandemic. This again resulted in a lower-than-expected increase in research and development expenses in the fourth quarter. For full year 2020, research and development expenses increased 4% year-over-year versus our guidance of a 13% to 15% increase.
Moving on, net income was $1.6 million or $0.04 per share on a fully diluted basis in the fourth quarter of 2020 as compared to net income of $5.4 million or $0.13 per share in the fourth quarter of 2019. Net income was $17.1 million or $0.38 per share in the year-ended December 31, 2020 as compared to net income of $22.3 million or $0.55 per share in 2019.
Kamada continues to operate from a position of financial strength and is generating positive cash flow from operating activities, with a total of $109.3 million of cash balances as of December 31, 2020, as compared to $73.9 million at December 31, 2019. As previously reported, the transition of GLASSIA manufacturing to Takeda and the continued uncertainty in the operating environment created by the ongoing global COVID-19 pandemic are expected to result in reduced revenues and profitability in 2021.
That concludes our prepared remarks. We will now open the call for questions. Melissa?
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Our first question comes from the line of Raj Denhoy with Jefferies. Please proceed with your question.
Unidentified Analyst
Hi, this is Anthony for Raj. I have a couple of questions on biosimilars, and then I’ll move over to plasma and COVID. On the biosimilar products, Amir, can you maybe describe to us a little bit of detail around the approval pathway? These are biosimilars. Biosimilars have several hurdles to clear PK studies, PD studies. In some cases, there are comparative studies to prove similarity. And so I’m just wondering what the specific approval pathway for these products look like, and if any of them have an abbreviated pathway that we should expect. And then when we think about the 2022 to 2024 window, as it relates to timing, how should we expect the three products to sort of evolve in terms of catalysts and approval over those three years – two years, rather?
Amir London
Hi, Anthony, good morning, thank you for the questions. So basically, I would like to refer to that on all nine products, the six that were signed with Alvotech and then the three additional products from the other two agreements signed a few weeks ago. So in total, we are moving forward basically with this portfolio. We are relying on approvals from primarily EMA, the European authorities. So the company that owned the products will get them approved by EMA, and then the file basically goes to the Israeli Ministry of Health which needs to approve it.
Israel Ministry of Health typically usually approves based on EMA or U.S. approval. So we do not foresee significant hurdles in those approvals once it’s approved by the European authorities. The first product has already been submitted to the MOH here in Israel, and we expect approval and launch next year. Now the three new products expected to be approved between 2022 and 2024, I believe it’s going to be around one product per year. And then we expect to be the first or the second biosimilar product in the Israeli market, taking a significant market share. When you add up all nine products, we expect the sales from this portfolio to be between $25 million to $35 million. I want to remind everyone that this is in addition to our existing distribution business in Israel, which is currently around $30 million per year. So that’s a significant growth engine for Kamada. Profitability of those products is going to be higher than the current profitability, which is currently still primarily tenders product, which are plasma-derived. So we expect that the overall segment, our distribution segment, is going to grow significantly in terms of revenue but also in terms of profitability over the next few years.
Unidentified Analyst
That’s helpful. And again the $25 million to $30 million base – I think you caught off a bit – is the underlying and distributed?
Amir London
$25 million to $30 million? Yes. So currently, if you follow our report, for example, for this, for 2020, you see approximately $30 million in the distribution segment, and this is before without the new biosimilar portfolio.
Unidentified Analyst
Thank you. And then the follow-ups, I'll pivot over to plasma collection. And just wondering, there seems to be indications that following the Beaumont center, there'll be an effort to add plasma collection. And so maybe just a little bit more details there, maybe on will it exclusively continue to be high titer collection? Will the focus be exclusively on high titer IgG collection for specialty products or will the company eventually look to expand into broader general plasma collection? And when we think about the pathway to adding collection capacity, will it be exclusively through acquisition or will the company, at some point, begin to build its own plasma centers?
Amir London
Thank you. Good questions. So the Beaumont facility, basically, our plan is to invest in maximizing the capacity collection capacity in the Beaumont facility and to leverage its license to open additional centers. So Kamada plans to open additional centers. I'm referring to the last part of your question, in terms of opening centers or through acquisitions. So basically, this acquisition gives us the license and opportunity now to initiate the expansion by opening additional centers. The immediate focus is on hyperimmune plasma. This will give us the ability to strategically build the company as vertically integrated company, basically source our own plasma for our hyperimmune products. It improved our competitive profile by owning the plasma and not purchasing all of it from external suppliers. We are not ruling out the option that this will eventually evolve into also opening a regular source plasma collection, but the immediate current focus is on the hyperimmune for our specific specialty plasma needs.
Unidentified Analyst
That’s helpful. A couple of follow-ups there, I'll press a bit. What is the annual collection capacity at Beaumont today? And where do you expect that to trend to in terms of liters per year? When you think about building out new facilities, how many – how large do you envision the footprint can become over time?
Amir London
So, we do not disclose the specific volumes of the Beaumont facility. But as I said, we plan to maximize its capacity, unlike regular plasma collection centers that there are plenty of those in the U.S. and there is a lot of kind of benchmark and standards around it and everyone in this industry knows exactly how much such a plasma collection center can collect, et cetera, et cetera. In the specialty plasma business, it's different. We would like to collect at least over the next few years. So, we will become primarily almost self-sufficient in terms of growing that business and being able to supply. And as I mentioned before, having a better competitive profile with our hyperimmune product in the international markets, and be able to grow that collection business per our specific needs as we grow our hyperimmune portfolio in the different markets.
Unidentified Analyst
And maybe one for Chaime on collection. Maybe just can you review what the eventual gross margin or overall margin benefit the company could expect in hyperimmune specifically by bringing collections in-house? And I'll hop back in queue. Thanks, again.
Chaime Orlev
So, it’s a good question. But it really depends on the different markets, of course, in the U.S. and the western markets where prices – and for where the price is higher. Then it has one aspect in the developing countries, where we participate in large tenders, highly competitive tenders. It has its effect. We did not disclose yet what the impact is going to be on our gross margins. But as you can assume, owning the plasma versus buying the plasma has a significant impact in an industry where the cost of plasma is the number one component to the cost of goods.
Unidentified Analyst
Thank you.
Operator
Thank you. Our next question comes from the line of Keay Nakae with Chardan Capital Markets. Please proceed with your question.
Keay Nakae
Thanks. Good morning. For the Phase III inhaled study, can you give us a sense of when you now think you'll be able to complete enrollment?
Amir London
Thank you, Keay. So originally, when we put the plan together and what we have shared with the public was that we expect that enrollment will take around two years. Because of the COVID situation, we had to delay the opening of additional sites. So the actual time lines for recruitment, of course, will take longer in terms of duration. Once the COVID situation improves and the new sites, primarily in Europe, will be opened, we will be able to give a more accurate focus in terms of the time lines. In net, without the COVID situation, this should have taken us two years to complete recruitment.
Keay Nakae
Okay. So, with respect to the European sites in terms of the overall percentage of recruiting sites, the sites that are still closed would represent about what percentage?
Amir London
Of what, of the overall recruitment?
Keay Nakae
Yes.
Amir London
So as described in the past, we were planning to open sites in Europe and the U.S., primarily in the U.S. because of the landscape of countries where there is no current IV treatment available for patients. We've done a lot of the leg work in terms of being ready to open the sites. But in countries where the country is almost under a lockdown and there is no ability to effectively recruit patients, we decided not to open the sites yet. Once the situation improves and the COVID pandemia is in a different state and we decide to open those sites, we will be able to give a better forecast in terms of the time line to complete recruitment.
Keay Nakae
Okay. So obviously, that trial impacts R&D. So, having just finished the full year R&D relatively flat to 2019, so compared to the $13.6 million you spent in R&D in 2020, what should we anticipate R&D spend to look like in 2021?
Amir London
We expect it to be at a similar range because we expect that the current program that we are running will continue at the same rate. I think that's a good estimation for 2021. And once the COVID situation improves, we will be able to go back to the rate that we were anticipating for 2020, and that's the guidance that we have given in terms of planned R&D expense that eventually was not executed because of the delay with the recruitment of the inhaled study.
Keay Nakae
Okay. In terms of the new plasma collection facility in Beaumont, is there also intermediate products that you can – that are collective, then you can sell to others?
Amir London
Yes. There is another option also to sell it to third parties. The main focus and the main priority is to collect plasma for our needs, focusing on the high premium plasmas. But the answer to your question is yes. There is also different plasma products that are being sold to third-party clients.
Keay Nakae
But that's a small amount of the plasma collected? Or how do we characterize that?
Amir London
Correct, correct. It’s not going to be significant. It doesn't – it's not going to have a significant impact on our overall P&L.
Keay Nakae
Okay. In terms of the COVID hyperimmune, you talked about plans to publish the results from the first study. But when should we expect some clarity on moving that product forward in clinical trials?
Amir London
Okay. So, there is a clinical trial, which basically started. This is sponsored by the Israeli Ministry of Health. And that's a study that we provide the product, and the ministry is sponsoring. The study synopsis is for hospitalized patients, similar including criteria, to our Phase I/II study that we reported. The first cohort of this study is approximately 135 patients, which are being randomized 1:1 against standard of care and convalescent plasma. It's a multicenter study in Israel. In addition to the study, other hospitals in Israel can treat patients through a named patient procedure. So basically, the treatment is available for all hospitals in Israel, per the Ministry of Health procedures, and the hospitals decide if they want to treat through a clinical trial all on a named patient basis.
Keay Nakae
Right. And how about plans for any type of U.S. clinical study?
Amir London
Okay. So as I mentioned on the call, we're still evaluating together with Kedrion what was the best suitable plan for the U.S. or Europe and/or Europe. And we will advance the development once we reach the conclusion of this review.
Keay Nakae
And is – do you expect to make that decision in the first half of this year?
Amir London
Most likely, yes. The data from the Israeli study, the data from other studies that are being done abroad like the one that is being done with the NIH will partially support this decision. I want to – yes, I want to also reemphasize what I mentioned earlier that we are ramping up the production of the products in our FDA-approved facility using plasma collected in the U.S. and this manufacturing increase supports the potential additional demand that we expect from the Israeli Ministry of Health and possibly other international markets.
Keay Nakae
Okay. And then just in terms of how we think about product revenue in 2021, starting with the distributed products. Again, we just finished the year with – as you referenced, just slightly north of $30 million in revenue from distributed products. How should we think about that in 2021?
Amir London
So as you noticed, we did not provide yet specific guidance for 2021 due to the uncertainty in the – with the COVID situation. In terms of the Israel Distribution business, you should assume that the current pace will be similar. We are registering and launching new products. But in order to do that, there was some stockpiling of IVIG products by the hospitals in Israel in 2020, and that inventory is available for them also for 2021.
In general, our overall portfolio for the Israel Distribution is growing. It's not just the biosimilar product that we have been emphasizing. But we – over the last few years, every year, we signed additional agreements, additional in-licensing deals, and we are registering additional products for the Israeli market. And that business is steadily growing.
Keay Nakae
Okay. And in terms of the proprietary products, for KEDRAB or KamRAB, how should we think about their growth prospects in 2021?
Amir London
So this is, I think, part of the uncertainty regarding the COVID situation, and we will not give at this time specific guidance in regards to those products. For GLASSIA, you are familiar with the $25 million supply that we are going to supply to Kedrion this year. As a reminder, we also sell the product in other markets outside of the U.S. and this has been growing over the last few years. In regards to the other specifics, we are not giving currently yet guidance for 2021.
Keay Nakae
Okay, all right. That’s all I have. Thank you.
Amir London
Thank you, Keay.
Operator
Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. London for any final comments.
Amir London
Thank you. In summary, we are proud of the strength of our business in 2020 despite the global COVID-19 pandemic. We believe that the fundamentals of our business are solid. We have multiple organic commercial growth catalysts. Our FDA-approved plasma direct technology platform is a strategic asset in our ability to quickly respond to emerging pandemic situations, and we have a very strong balance sheet, which we can – which can support our business development opportunities. As such, we remain highly confident in Kamada's future prospects. Thank you for joining us on today's call, and we look forward to providing you with further updates on our progress throughout 2021. We hope you all stay healthy and safe. Thank you very much.
Operator
Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.
midastouch017
3 years ago
Kamada Reports Fourth Quarter and Fiscal Year 2020 Financial Results, Recent Achievements and Corporate Development Activities
https://finance.yahoo.com/news/kamada-reports-fourth-quarter-fiscal-120000971.html
Full-Year 2020 Revenues were $133.2 Million, In-Line withthe Company's Guidance;Adjusted EBITDA for 2020 was $25.1 Million
Kamada Enters U.S. Plasma Collection Market Through Acquisition of an FDA-Approved Facility, Furthering its Strategic Goal of Becoming a Fully Integrated Specialty Plasma Company Focused on Growing its Hyperimmune IgG Portfolio
Israeli Ministry of Health(IMOH) Initiated Treatment of Hospitalized COVID-19 Patients with Kamada's Plasma-Derived COVID-19 Immunoglobulin (IgG) Investigational Product Primarily as Part of a Multi-Center Clinical Study Led by the IMOH; Current Planned Supply to IMOH is Sufficient to Treat an Estimated 500 Patients
Kamada Continues to Expand Existing Business Lines as Evidenced by the Recent Additions to its Israeli Distribution Biosimilar Products Portfolio; Also Exploring Business Development Opportunities and Intends to Leverage IgG Platform Technology as Response to Future Pandemic Situations
REHOVOT, Israel, Feb 10, 2021 (GLOBE NEWSWIRE via COMTEX) -- REHOVOT, Israel, Feb. 10, 2021 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a plasma-derived biopharmaceutical company, today announced financial results for the three and 12 months ended December 31, 2020.
"We are pleased to have overcome meaningful operational challenges caused by the global COVID-19 pandemic and met our key financial targets for 2020," said Amir London, Kamada's Chief Executive Officer. "For full-year 2020, we recorded total revenues of $133.2 million, in-line with our guidance of $132 million to $137 million, and a 5% increase compared to 2019 revenues. These results are indicative of the fundamental strengths of our business."
"The acquisition of the Blood and Plasma Research (B&PR) collection center and establishment of our wholly-owned subsidiary, Kamada Plasma LLC, represents our entry into the U.S. plasma collection market, furthers our strategic goal of becoming a fully integrated specialty plasma company, and is expected to improve our IgG competitive profile in multiple markets. We intend to significantly expand our hyperimmune plasma collection capacity by investing in this center and leveraging its FDA license to open additional centers in the U.S.," continued Mr. London.
"We continue to advance the rapid development and manufacturing of our plasma-derived COVID-19 IgG investigational product, which is being supplied to the Israeli Ministry of Health (IMOH) for the treatment of an estimated 500 hospitalized patients, through an agreement that is expected to generate approximately $3.4 million in revenue to Kamada. We continue to ramp up production of the product using plasma collected by our partner Kedrion Biopharma, in anticipation of a potential expansion of the IMOH supply agreement and possible demand from additional international markets," added Mr. London.
"In addition, we continue to develop our pipeline, primarily focusing on the pivotal Phase 3 InnovAATe clinical trial of Inhaled AAT for the treatment of Alpha-1 Antitrypsin Deficiency and on exploring new strategic business development opportunities that will utilize and expand our core plasma-derived development, manufacturing, and commercialization expertise. Moreover, we intend to leverage our IgG platform technology as a strategic business line, with the ability to respond to future potential pandemic situations," concluded Mr. London.
As previously reported, the transition of Glassia manufacturing to Takeda and the continued uncertainty in the operating environment created by the ongoing global COVID-19 pandemic are expected to result in reduced revenues and profitability in 2021. At the same time, Kamada continues to focus on expanding its existing growth drivers, which include:
Continued market share growth for KedRAB in the U.S.;
Expanding the sales of Glassia and the Company's IgG portfolio in ex-U.S. markets, including registration and launch of the products in new territories;
Generating royalties from Glassia, projected to be in the range of $10 million to $20 million per year commencing in 2022;
Launching nine biosimilar products in the Israeli-based Distribution segment between 2022 and 2025, pending regulatory approval, with estimated maximum sales in the range of $25 million to $35 million; and
Leveraging the Company's plasma-derived products manufacturing facility and expertise to offer contract manufacturing services of specialty IgG products, including an FDA-approved and commercialized IgG product that is expected to add between $8 million to $10 million in annual revenues, beginning in 2023.
Financial Highlights for the Three Months Ended December 31, 2020
Total revenues were $31.5 million in the fourth quarter of 2020, a 2% decrease from the $32.1 million recorded in the fourth quarter of 2019.
Gross profit was $10.2 million in the fourth quarter of 2020, compared to $12.1 million reported in the fourth quarter of 2019.
Net income was $1.6 million, or $0.04 per share, in the fourth quarter of 2020, as compared to net income of $5.4 million, or $0.13 per share, in the fourth quarter of 2019.
Adjusted EBITDA, as detailed in the tables below, was $4.0 million in the fourth quarter of 2020, as compared to $6.8 million in the fourth quarter of 2019.
Cash provided by operating activities was $12.7 million in the fourth quarter of 2020, as compared to cash provided by operating activities of $8.6 million in the fourth quarter of 2019.
Financial Highlights for the Year Ended December 31, 2020
Total revenues were $133.2 million in the year ended December 31, 2020, a 5% increase from the $127.2 million recorded in the year ended December 31, 2019.
Gross profit was $47.6 million in the year ended December 31, 2020, compared to $49.7 million in the same period of 2019.
Proprietary Product segment gross margins in the year ended December 31, 2020 were 43%, down three percentage points from the year ended December 31, 2019, and in-line with the Company's expectations of an annual decrease of three to five percentage points, primarily attributable to a change in product sales mix and reduced plant utilization.
Operating expenses, including Research and Development, Sales & Marketing, General and Administrative, and Other Expenses, totaled $28.3 million in the year ended December 31, 2020, as compared to $27.0 million in the year ended December 31, 2019.
The 4% increase in Research and Development expenses for full-year 2020 as compared to 2019 was below Kamada's guidance of a 13%-15% year-over-year increase. This is primarily due to the delay in patient enrollment in the Company's InnovAATe clinical trial due to the impact of the COVID-19 pandemic.
Net income was $17.1 million, or $0.38 (fully diluted) per share, in the year ended December 31, 2020, as compared to net income of $22.3 million, or $0.55 per share, in the year ended December 31, 2019.
Adjusted EBITDA, as detailed in the tables below, was $25.1 million in the year ended December 31, 2020, as compared to $28.5 million in the year ended December 31, 2019.
Cash provided by operating activities was $19.1 million in the year ended December 31, 2020, as compared to cash provided by operating activities of $27.6 million in the year ended December 31,2019.
Balance Sheet Highlights
As of December 31, 2020, the Company had cash, cash equivalents, and short-term investments of $109.3 million, as compared to $73.9 million on December 31, 2019. This increase was attributable to the issuance and sale of $25 million of equity to FIMI Opportunity Fund, the leading private equity investor in Israel, as well as positive operational cash flow.
Recent Corporate Highlights
Acquired privately held B&PR's plasma collection center in Beaumont, TX, which specializes in the collection of hyper-immune plasma used by Kamada in the manufacture of its anti-D products.
Began supplying its COVID-19 plasma-derived IgG product to the IMOH for the treatment of COVID-19 patients in Israel; agreement expected to generate approximately $3.4 million in revenue to Kamada.
Entered into agreements with two undisclosed international pharmaceutical companies to commercialize three biosimilar product candidates in Israel. Subject to approval by the European Medicines Agency and subsequently by the IMOH, the three products are expected to be launched in Israel between 2022 and 2024 and Kamada estimates the potential collective maximum sales generated by the sale of these three products, achievable following regulatory approval and within several years of launch, to be in the range of $5 million to $7 million annually.
Added to the NASDAQ Biotechnology Index(R) (Nasdaq: NBI) designed to track the performance of a set of either biotechnology or pharmaceutical companies listed on The NASDAQ Stock Market(R).
Conference Call
Kamada management will host an investment community conference call on Wednesday, February 10, 2020, at 8:00am Eastern Time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 877-407-0792 (from within the U.S.), 1-809-409-247 (from Israel), or 201-689-8263 (International) and entering the conference identification number: 13715277. The call will also be webcast live on the Internet on the Company's website at http://public.viavid.com/index.php?id=143096.
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