Kamada Reports Third Quarter and First Nine Months of 2020 Financial Results, Recent Achievements and Corporate Development

REHOVOT, Israel, Nov. 11, 2020 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a plasma-derived biopharmaceutical company, today announced financial results for the three and nine months ended September 30, 2020.

“We are pleased with our solid financial and operational results during the recently completed quarter and first nine months of 2020, achieved in the midst of the COVID-19 global pandemic,” said Amir London, Kamada’s Chief Executive Officer. “Total revenues increased seven percent for both the three and nine months ended September 30, 2020 as compared to the same periods in 2019. Based on our solid performance in the first nine months of the year, and our positive outlook for the fourth quarter, we are reiterating our full-year 2020 total revenue guidance of $132 million to $137 million.”

“We continue to achieve important progress in the development of our plasma derived immunoglobulin (IgG) product as a potential therapy for COVID-19 disease,” continued Mr. London. “We executed an agreement with the Israeli Ministry of Health (“IMOH”) to supply our product for the treatment of COVID-19 patients in Israel, under which the initial supply is expected to generate approximately $3.4 million in revenues during the first quarter of 2021. Importantly, per recent discussions with the IMOH, the treatment utilizing our product will be provided as part of a multi-center clinical study led by the IMOH. From a supply perspective, we are ramping up our COVID-19 IgG manufacturing capacity, and we intend to increase our supply capabilities during 2021 to support potential increased demand from the IMOH as well as from other potential international markets. In addition, we completed enrollment and announced positive initial interim results from our ongoing Phase 1/2 open-label COVID-19 clinical trial in Israel. Lastly, following recent response from the U.S. Food and Drug Administration (“FDA”) to our previously submitted pre-Investigational New Drug (IND) information package, we, together with our partner, Kedrion Biopharma, are currently evaluating the suitable targeted patient population for our US clinical program and will submit an IND application upon conclusion of such evaluation and successful completion of additional required activities.”

“As we move into 2021 and in anticipation of the reduction in revenues due to the planned transition of GLASSIA manufacturing to Takeda, we are exploring strategic business development opportunities that will utilize and expend our core plasma-derived therapeutics development, manufacturing, and commercialization expertise. These opportunities will be funded by our strong cash position. We believe that our COVID-19 IgG program demonstrates Kamada’s ability to quickly respond to emerging pandemic situations, and we plan to leverage these capabilities and our IgG platform technology as a strategic business line, with the ability to respond to other potentially similar future pandemic situations. These strategic opportunities are anticipated to be added to the expected organic commercial growth of our existing products portfolio, including KEDRAB, our distributed products in Israel, the anticipated future royalty payments from Takeda, and the contract manufacturing of an FDA approved and commercialized specialty IgG product.” concluded Mr. London.

Financial Highlights for the Three Months Ended September 30, 2020

  • Total revenues were $35.3 million in the third quarter of 2020, a 7% increase from the $33.1 million recorded in the third quarter of 2019.
  • Proprietary Products segment revenues in the third quarter of 2020 were $29.7 million, a 19% increase from the third quarter of 2019.
  • Distribution segment revenues were $5.6 million in the third quarter of 2020, a 31% decrease from the third quarter of 2019.
  • Gross profit was $14.8 million in the third quarter of 2020, compared to $12.9 million reported in the third quarter of 2019.
  • Proprietary Product segment gross margins in the third quarter were 46%, down one percentage point from the third quarter of 2019. For full-year 2020, Kamada continues to expect an annual decrease of three to five percentage points in Proprietary Product segment gross margins, primarily attributable to a change in sales product mix and reduced plant utilization.
  • Operating expenses, including Research and Development, Sales and Marketing, General and Administrative, and Other Expenses, totaled $7.1 million in the third quarter of 2020, as compared to $7.2 million in the third quarter of 2019.
  • The Company continues to expect a 13%-15% increase in Research and Development expenses for full-year 2020 as compared to 2019.
  • Net income was $6.8 million, or $0.15 per share, in the third quarter of 2020, as compared to net income of $5.8 million, or $0.14 per share, in the third quarter of 2019.
  • Adjusted EBITDA, as detailed in the tables below, was $9.3 million in the third quarter of 2020, as compared to $7.2 million in the third quarter of 2019.
  • Cash used in operating activities was $2.4 million in the third quarter of 2020, as compared to cash provided by operating activities of $6.1 million in the third quarter of 2019.

Financial Highlights for the Nine months Ended September 30, 2020

  • Total revenues were $101.7 million in the first nine months of 2020, a 7% increase from the $95.1 million recorded in the first nine months of 2019.
  • Revenues from the Proprietary Products segment for the first nine months of 2020 were $77.6 million, a 7% increase from the $72.5 million reported in the first nine months of 2019.
  • Revenues from the Distribution segment were $24.1 million in the first nine months 2020, a 7% increase from the $22.6 million recorded in the first nine months of 2019.
  • Gross profit was $37.4 million in the first nine months 2020, compared to $37.6 million in the first nine months of 2019.
  • Operating expenses, including Research and Development, Sales & Marketing, General and Administrative, and Other Expenses, totaled $20.8 million in the first nine months 2020, as compared to $20.3 million in the first nine months of 2019.
  • Net income was $15.5 million, or $0.35 per share, in the first nine months of 2020, as compared to net income of $16.9 million, or $0.42 per share, in the first nine months of 2019.
  • Adjusted EBITDA, as detailed in the tables below, was $21.1 million in the first nine months of 2020, as compared to $21.7 million in the first nine months of 2019.
  • Cash provided by operating activities was $6.4 million in the first nine months of 2020, as compared to cash provided by operating activities of $18.9 million in the first nine months of 2019.

Balance Sheet Highlights
As of September 30, 2020, the Company had cash, cash equivalents, and short-term investments of $99.7 million, as compared to $73.9 million at December 31, 2019. This increase is mainly related to the sale of $25 million of equity to FIMI Opportunity Fund, the leading private equity investor in Israel.

Recent Corporate Highlights

  • Appointed Yifat Philip, Esq. as Vice President Legal, General Counsel and Corporate Secretary.

Conference Call
Kamada management will host an investment community conference call on Wednesday, November 11, 2020, 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.), 1-809-409-247 (from Israel), or 201-689-8263 (International) and entering the conference identification number: 13710863. The call will also be webcast live on the Internet on the Company’s website at www.kamada.com.

About Kamada
Kamada Ltd. (“the Company”) is a commercial stage plasma-derived biopharmaceutical company focused on orphan indications, with an existing marketed product portfolio and a late-stage product pipeline. The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived immune globulins. The Company’s flagship product is GLASSIA®, the first liquid, ready-to-use, intravenous plasma-derived AAT product approved by the U.S. FDA. The Company markets GLASSIA in the U.S. through a strategic partnership with Takeda Pharmaceuticals Company Limited 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 is planning to 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. The Company’s second leading product is KamRab®, a rabies immune globulin (Human) for post-exposure prophylaxis against rabies infection. KamRab is FDA approved and is being marketed in the U.S. under the brand name KEDRAB® through a strategic partnership with Kedrion S.p.A. In addition to Glassia and KEDRAB, the Company has a product line of four other plasma-derived pharmaceutical products administered by injection or infusion, that are marketed through distributors in more than 15 countries, including Israel, Russia, Brazil, India and other countries in Latin America and Asia. The Company has late-stage products in development, including an inhaled formulation of AAT for the treatment of AAT deficiency. In addition, the Company’s intravenous AAT is in development for other indications, such as GvHD and prevention of lung transplant rejection, and during 2020, the Company initiated the development of 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 plasma-derived protein therapeutics market by distributing more than 20 complementary products in Israel that are manufactured by third parties. 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) total revenues to be in the range of $132 million to $137 million for fiscal 2020; 2) ability to ramp up Kamada’s COVID-19 IgG manufacturing capacity and its plan to increase its supply capabilities during 2021 to support potential increased demand from the IMOH as well as from other potential international markets; 3) ability to advance the U.S. clinical development of a plasma derived hyperimmune immunoglobulin (IgG) product as a potential treatment for COVID-19; 4) ability to explore strategic business development opportunities that utilize and expend Kamada’s core plasma-derived therapeutics development, manufacturing, and commercialization expertise; and 5) Kamada’s belief that its COVID-19 IgG program demonstrates its ability to quickly respond to emerging pandemic situations, and its plan to leverage these capabilities and its IgG platform technology as a strategic line of business. 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, the effects of the COVID-19 pandemic and related government mandates on the availability of adequate levels of work-force required to maintain manufacturing plans, disruption to the supply chain due to COVID-19 pandemic, continuation of inbound and outbound international delivery routes, ability to offset significant revenue loss associated with GLASSIA manufacturing transitioning to Takeda, continued demand for Kamada’s products, including GLASSIA and KEDRAB, in the U.S. market and its Distribution segment related products in Israel, financial conditions of the Company’s customer, suppliers and services providers, ability to obtain regulatory approval for clinical trials of the plasma-derived hyperimmune IgG product for COVID-19, ability to continue enrollment of the pivotal Phase 3 InnovAATe clinical trial, unexpected results of clinical studies and on-going compassionate-use treatments, 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. 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



 

CONSOLIDATED CONDENSED BALANCE SHEETS

  As of September 30,     As of
December 31,
 
  2020     2019     2019  
  Unaudited     Audited  
     
  U.S Dollars in thousands  
Assets    
Current Assets                      
Cash and cash equivalents $ 52,487     $ 27,449     $ 42,662  
Short-term investments   47,230       39,380       31,245  
Trade receivables, net   28,643       23,999       23,210  
Other accounts receivables   3,533       1,722       3,272  
Inventories   42,618       34,031       43,173  
Total Current Assets   174,511       126,581       143,562  
                       
Non-Current Assets                      
Property, plant and equipment, net   25,323       24,197       24,550  
Right-of-use-assets   3,694       4,100       4,022  
Other long term assets   1,081       178       352  
Contract asset   1,438       -       -  
Deferred taxes   298       1,445       1,311  
Total Non-Current Assets   31,834       29,920       30,235  
Total Assets $ 206,345     $ 156,501     $ 173,797  
Liabilities                      
Current Liabilities                      
Current maturities of bank loans $ 322     $ 573     $ 489  
Current maturities of lease liabilities   1,038       964       1,020  
Trade payables   15,110       13,079       24,830  
Other accounts payables   6,236       5,439       5,811  
Deferred revenues   486       561       589  
Total Current Liabilities   23,192       20,616       32,739  
                       
Non-Current Liabilities                      
Bank loans   48       461       257  
Lease liabilities   3,589       4,052       3,981  
Deferred revenues   1,525       347       232  
Employee benefit liabilities, net   1,262       884       1,269  
Total Non-Current Liabilities   6,424       5,744       5,739  
                       
Shareholder’s Equity                      
Ordinary shares   11,703       10,420       10,425  
Additional paid in capital   209,650       179,589       180,819  
Capital reserve due to translation to presentation currency   (3,490 )     (3,490 )     (3,490 )
Capital reserve from hedges   234       18       8  
Capital reserve from financial assets measured at fair value through other comprehensive income   -       137       145  
Capital reserve from share-based payments   4,550       9,898       8,844  
Capital reserve from employee benefits   (356 )     4       (359 )
Accumulated deficit   (45,562 )     (66,435 )     (61,073 )
Total Shareholder’s Equity   176,729       130,141       135,319  
Total Liabilities and Shareholder’s Equity $ 206,345     $ 156,501     $ 173,797  




CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

  Nine months period ended     Three months period ended     Year ended  
  September 30,     September 30,     December 31,  
  2020     2019     2020     2019     2019  
                 
  Unaudited     Unaudited     Audited  
     
  U.S Dollars In thousands  
                             
Revenues from proprietary products $ 77,633     $ 72,521     $ 29,691     $ 24,859     $ 97,696  
Revenues from distribution   24,071       22,595       5,634       8,207       29,491  
                                       
Total revenues   101,704       95,116       35,325       33,066       127,187  
                                       
Cost of revenues from proprietary products   43,817       38,412       15,936       13,234       52,425  
Cost of revenues from distribution   20,500       19,056       4,568       6,968       25,025  
                                       
Total cost of revenues   64,317       57,468       20,504       20,202       77,450  
                                       
Gross profit   37,387       37,648       14,821       12,864       49,737  
                                       
Research and development expenses   10,335       9,730       3,365       3,477       13,059  
Selling and marketing expenses   3,297       3,441       1,179       1,161       4,370  
General and administrative expenses   7,133       6,851       2,514       2,230       9,194  
Other expenses   34       327       -       299       330  
Operating income   16,588       17,299       7,763       5,697       22,784  
                                       
Financial income   865       887       250       328       1,146  
Income (expense) in respect of securities measured at fair value, net   102       (3 )     -       55       (5 )
Income (expenses) in respect of currency exchange differences and derivatives instruments, net   (696 )     (503 )     (761 )     25       (651 )
Financial expenses   (204 )     (217 )     (69 )     (68 )     (293 )
Income before tax on income   16,655       17,463       7,183       6,037       22,981  
Taxes on income   1,144       574       348       214       730  
                                       
Net Income $ 15,511     $ 16,889     $ 6,835     $ 5,823     $ 22,251  
                                       
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   (188 )     132       -       (66 )     143  
Gain (loss) on cash flow hedges   516       99       75       28       92  
Net amounts transferred to the statement of profit or loss for cash flow hedges   (273 )     (20 )     (266 )     (18 )     (23 )
Items that will not be reclassified to profit or loss in subsequent periods:                                      
Remeasurement gain (loss) from defined benefit plan   -               -       -       (388 )
Tax effect   29       (33 )     14       16       (11 )
Total comprehensive income $ 15,595     $ 17,067     $ 6,658     $ 5,783     $ 22,064  
                                       
Earnings per share attributable to equity holders of the Company:                                      
Basic net earnings per share $ 0.35     $ 0.42     $ 0.15     $ 0.14     $ 0.55  
Diluted net earnings per share $ 0.35     $ 0.42     $ 0.15     $ 0.14     $ 0.55  




CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

  Nine months period Ended     Three months period Ended     Year Ended  
  September 30,     September 30,     December 31,  
  2020     2019     2020     2019     2019  
           
  Unaudited     Audited  
     
  U.S Dollars In thousands  
Cash Flows from Operating Activities                            
Net income $ 15,511     $ 16,889     $ 6,835     $ 5,823     $ 22,251  
                                       
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                                      
                                       
Adjustments to the profit or loss items:                                      
                                       
Depreciation and impairment   3,632       3,379       1,252       1,128       4,519  
Financial expenses (income), net   (67 )     (164 )     580       (340 )     (197 )
Cost of share-based payment   853       987       265       353       1,163  
Taxes on income   1,144       574       348       214       730  
Gain from sale of property and equipment   (7 )     (2 )     (1 )     -       (2 )
Change in employee benefit liabilities, net   (7 )     97       (5 )     66       94  
    5,548       4,871       2,439       1,421       6,307  
Changes in asset and liability items:                                      
                                       
Decrease (increase) in trade receivables, net   (5,540 )     4,408       (8,956 )     1,806       5,117  
Decrease (increase) in other accounts receivables   972       1,204       231       955       (214 )
Decrease (increase) in inventories   555       (4,715 )     5,028       1,470       (13,857 )
Decrease (increase) in Contract asset and deferred expenses   (2,464 )     333       (1,553 )     605       399  
Increase (decrease) in trade payables   (10,488 )     (4,585 )     (7,769 )     (6,512 )     6,259  
Increase in other accounts payables   426       379       740       432       863  
Increase (decrease) in deferred revenues   1,190       (221 )     397       (95 )     (283 )
    (15,349 )     (3,197 )     (11,882 )     (1,339 )     (1,716 )
Cash received (paid) during the period for:                                      
                                       
Interest paid   (158 )     (182 )     (51 )     (58 )     (243 )
Interest received   891       554       290       254       1,106  
Taxes paid   (87 )     (25 )     (13 )     (9 )     (134 )
    646       347       226       187       729  
                                       
Net cash provided by (used in) operating activities $ 6,356     $ 18,910     $ (2,382 )   $ 6,092     $ 27,571  




CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

  Nine months period Ended     Three months period Ended     Year Ended  
  September 30,     September 30,     December 31,  
  2020     2019     2020     2019     2019  
           
  Unaudited     Audited  
     
  U.S Dollars In thousands  
Cash Flows from Investing Activities                            
                             
Proceeds of investment in short term investments, net $ (15,646 )   $ (6,160 )   $ -     $ (1,032 )   $ 1,727  
Purchase of property and equipment and intangible assets   (3,372 )     (1,488 )     (1,471 )     (731 )     (2,300 )
Proceeds from sale of property and equipment   7       9       1       -       9  
Net cash used in investing activities   (19,011 )     (7,639 )     (1,470 )     (1,763 )     (564 )
                                       
Cash Flows from Financing Activities                                      
                                       
Proceeds from exercise of share base payments   61       12       41       3       16  
Repayment of lease liabilities   (815 )     (794 )     (275 )     (265 )     (1,070 )
Repayment of long-term loans   (373 )     (353 )     (127 )     (121 )     (476 )
Proceeds from issuance of ordinary shares, net   24,894       -       -       -       -  
                                       
Net cash provided by (used in) financing activities   23,767       (1,135 )     (361 )     (383 )     (1,530 )
                                       
Exchange differences on balances of cash and cash equivalent   (1,287 )     (780 )     (699 )     (332 )     (908 )
                                       
Increase (decrease) in cash and cash equivalents   9,825       9,356       (4,912 )     3,614       24,569  
                                       
Cash and cash equivalents at the beginning of the period   42,662       18,093       57,399       23,835       18,093  
                                       
Cash and cash equivalents at the end of the period $ 52,487     $ 27,449     $ 52,487     $ 27,449     $ 42,662  
                                       
Significant non-cash transactions                                      
Right-of-use asset recognized with corresponding lease liability $ 539     $ 4,984     $ 194     $ 436     $ 5,035  
Purchase of property and equipment $ 973     $ 264     $ 973     $ 264     $ 992  




Adjusted EBITDA

  Nine months period ended     Three months period ended     Year ended  
  September 30,     September 30,     December 31,  
  2020     2019     2020     2019     2019  
     
  In thousands  
Net income $ 15,511     $ 16,889     $ 6,835     $ 5,823     $ 22,251  
Taxes on income   1,144       574       348       214       730  
Financial expense (income), net   (67 )     (164 )     580       (340 )     (197 )
Depreciation and amortization expense   3,632       3,379       1,252       1,128       4,519  
Non-cash share-based compensation expenses   853       987       265       353       1,163  
Adjusted EBITDA $ 21,073     $ 21,665     $ 9,280     $ 7,178     $ 28,466  




Adjusted net income

  Nine months period ended     Three months period ended     Year ended  
  September 30,     September 30,     December 31,  
  2020     2019     2020     2019     2019  
     
  In thousands  
Net income $ 15,511     $ 16,889     $ 6,835     $ 5,823     $ 22,251  
Share-based compensation charges   853       987       265       353       1,163  
Adjusted net income $ 16,364     $ 17,876     $ 7,100     $ 6,176     $ 23,414  

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