Market Overview

Kamada Reports Financial Results for Second Quarter and First Six Months of 2018

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  • Total Revenues for Second Quarter were $33.8 Million, a 4% Increase Over Second Quarter of 2017
  • Total Revenues for First Half of 2018 were $51.3 Million, a 16% Increase Over First Half of 2017
  • Gross Profit for First Half of 2018 was $17.7 million, a  26% Increase Year-Over-Year
  • Adjusted EBITDA was $8.7 Million in the First Half of 2018, an Increase of Approximately 149% Compared to $3.5 Million in the Same Period of 2017

REHOVOT, Israel, Aug. 07, 2018 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ:KMDA) (KMDA.TA), a plasma-derived protein therapeutics company, today announced financial results for the three and six months ended June 30, 2018.

"We are pleased with the overall performance of our business in the first half of the year," said Amir London, Kamada's Chief Executive Officer. "We achieved 16% year-over-year top-line growth, driven by continued GLASSIA® sales growth and the recent launch by Kedrion of KEDRAB®, our Anti-Rabies IgG product, in the first half of 2018."

"Our profitability metrics were also strong in the first half of the year, with gross profit increasing 26% year-over-year.  In addition, we generated positive operating and net income over the first six months of 2018," continued Mr. London.  "Moreover, we are supported by a strong balance sheet, including $44.6 million of cash and short-term investments at the end of the second quarter, which provides us with the financial resources needed to continue executing on our business plan."

"We also continue to achieve important progress with our pipeline.  We recently received positive scientific advice from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) on the overall design of our proposed pivotal Phase 3 study for our proprietary inhaled AAT for the treatment of alpha-1 antitrypsin deficiency (AATD). We intend to use this advice to finalize a detailed plan for the clinical program, proceed with the submission of a Clinical Trial Application, and seek to engage in discussions with strategic European partners with the goal of signing a collaboration agreement for commercialization rights to Inhaled AAT. The EMA process is being conducted in parallel with our continued discussions with the U.S. Food and Drug Administration (FDA). As previously communicated, following feedback received from the FDA, we will provide the Agency with the additional requested information and data, as well as an amended study protocol, during the third quarter of this year." concluded Mr. London.

Kamada's strong performance in the second quarter of 2018 positions it to achieve its previously provided full-year 2018 revenue guidance of $116 to $120 million. However, due to the recently disclosed labor strike at the Company's production facility, which is currently still on going, Kamada is unable to reaffirm this guidance at this time. The Company will provide further information regarding revenue guidance shortly after routine production at the plant resumes .

In addition, due to that work stoppage, Kamada will record, in the third quarter of 2018 a one-time loss of up to $1.0 million related to the loss of in-process materials.

Financial Highlights for the Three Months Ended June 30, 2018

  • Total revenues were $33.8 million in the second quarter of 2018, a 4% increase from the $32.5 million recorded in the second quarter of 2017. 
  • Revenues from the Proprietary Products segment in the second quarter of 2018 were $26.0 million, a 3% decrease from the $26.9 million reported in the second quarter of 2017. As a reminder, Kamada's second quarter 2017 revenues were positively impacted by its recording of approximately $11.5 million in Proprietary Product revenues that were delayed from the first quarter of 2017.
  • Revenues from the Distributed Products segment were $7.8 million in the second quarter of 2018, a 39% increase from the $5.7 million recorded in the second quarter of 2017.
  • Gross profit was $10.7 million in the second quarter of 2018, a $1.0 million decrease from the $11.7 million reported in the second quarter of 2017.  Gross margin decreased to 32% from 36% in the second quarter of 2017, partially due to changes in product mix.
  • Operating expenses, including R&D and SG&A expenses, totaled $5.5 million in the second quarter of 2018, as compared to $6.7 million in the second quarter of 2017. This decrease was attributable to a decrease in R&D spending, primarily as a result of delays related to the initiation of certain clinical trials.
  • Net income was $5.7 million, or $0.14 per share, in the second quarter of 2018, compared to $4.9 million, or $0.13 per share, in the second quarter of 2017.
  • Adjusted EBITDA was $6.3 million in the second quarter of 2018, an increase of 4% compared to $6.1 million in the second quarter of 2017.
  • Cash used in operating activities was $2.3 million in the second quarter of 2018, compared to cash flow provided by operating activities of $0.4 million in the second quarter of 2017.

Financial Highlights for the Six Months Ended June 30, 2018

  • Total revenues were $51.3 million in the first six months of 2018, a 16% increase from the $44.2 million recorded in the same period of 2017. 
  • Revenues from the Proprietary Products segment in the first six months of 2018 were $38.2 million, a 14% increase from the $33.5 million reported in the same period of 2017.
  • Revenues from the Distributed Products segment were $13.1 million in the first six months of 2018, a 22% increase from the $10.7 million recorded in the same period of 2017.
  • Gross profit was $17.7 million in the first six months of 2018, a $3.7 million increase from the $14.0 million reported in the first six months of 2017. Gross margin increased to 34% from 32% in the first six months of 2017.
  • Operating expenses, including R&D and SG&A expenses, totaled $11.3 million in the first six months of 2018, as compared to $12.7 million in the same period of 2017. This decrease was attributable to a decrease in R&D spending, primarily as a result of delays related to the initiation of certain clinical trials.
  • Net income was $6.9 million, or $0.17 per share, in the first six months of 2018, compared to net income of $0.9 million, or $0.02 per share, in the same period of 2017.
  • Adjusted EBITDA was $8.7 million in the first six months of 2018, an increase of approximately 149% compared to $3.5 million in the same period of 2017.
  • Cash flow provided by operating activities was $3.1 million, compared to $1.4 million in the same period of 2017.

Balance Sheet Highlights
As of June 30, 2018, the Company had cash, cash equivalents and short-term investments of $44.6 million, compared with $43.0 million at December 31, 2017.

Recent Corporate Highlights

  • Received positive scientific advice from the CHMP related to the development plan for Kamada's proposed pivotal Phase 3 study for its proprietary Inhaled AAT for the treatment of AATD.  The CHMP now concurs with Kamada on the overall design of the proposed study, including its objectives, patient population, proposed endpoints and their clinical importance, and the safety monitoring plan. The Company is in the process of finalizing a detailed plan for the clinical program, culminating with the submission of a Clinical Trial Application.
  • Announced that KEDRAB®, Rabies Immune Globulin (Human), has been launched in the U.S. and initial shipments reached healthcare practitioners across the country. Deliveries were timed to meet the growing demand for this product at the height of the 2018 spring/summer rabies season.
  • Presented results from the Company's Phase 2 trial of AAT in newly diagnosed Type-1 diabetes patients in an oral session at the 78th Scientific Sessions of the American Diabetes Association.

Conference Call
Kamada management will host an investment community conference call on Tuesday, August 7, 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 800-263-0877 (from within the U.S.), 1809 212 883 (from Israel), or 646-828-8143 (International) and entering the conference identification number: 4166824. The call will also be webcast live on the Internet on the Company's website at www.kamada.com.

A replay of the call will be accessible two hours after its completion through August 21 by dialing 844-512-2921 (from within the U.S.) or 412-317-6671 (from outside the U.S.) and entering the conference identification number: 4166824. The call will also be archived for 90 days on the Company's website at www.kamada.com.

About Kamada
Kamada Ltd. is focused on plasma-derived protein therapeutics for orphan indications, and has a commercial 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.  AAT is a protein derived from human plasma with known and newly-discovered therapeutic roles given its immunomodulatory, anti-inflammatory, tissue-protective and antimicrobial properties. The Company's flagship product is GLASSIA®, the first liquid, ready-to-use, intravenous plasma-derived AAT product approved by the U.S. Food and Drug Administration. Kamada markets GLASSIA® in the U.S. through a strategic partnership with Baxalta (now part of Shire plc) and in other counties through local distributors.  In addition to GLASSIA®, Kamada has a product line of six 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. Kamada has late-stage products in development, including an inhaled formulation of AAT for the treatment of AAT deficiency, and in addition, its intravenous AAT is in development for other indications, such as type-1 diabetes, GvHD and prevention of lung transplant rejection. Kamada's rabies immune globulin (Human) product received FDA approval for Post-Exposure Prophylaxis against rabies infection in August 2017 and was launched in the US during Q1-2018. Kamada also leverages its expertise and presence in the plasma-derived protein therapeutics market by distributing more than 10 complementary products in Israel that are manufactured by third parties.

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, such as statements regarding the company's full-year 2018 total revenue guidance, profitability associated with the U.S. launch of KEDRAB®, the impact of the labor strike, and optimism associated with the development plan for Kamada's proposed pivotal Phase 3 study for its proprietary inhaled Alpha-1 Antitrypsin (AAT). 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, market acceptance of the company's products, unexpected results of clinical trials, delays or denial in the U.S. FDA or the EMA approval process, additional competition in the AATD and HRIG market, the length of the current labor strike and the impact on the company's business, further 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


Condensed Consolidated Balance Sheets

               
    As of June 30,   As of December 31,  
      2018       2017       2017    
    Unaudited   Audited  
    In thousands  
Current Assets              
Cash and cash equivalents   $   12,356     $   11024      $     12681     
Short-term investments     32,233       15,906       30,338    
Trade receivables, net     24,779       22,778       30,662    
Other accounts  receivables     1,863       2,087       2,132    
Inventories     27,373       24,072       21,070    
      98,604       75,867       96,883    
               
Property, plant and equipment, net     24,916       23,925       25,178    
Other long term assets     173       404       49    
      25,089       24,329       25,227    
    $   123,693     $   100,196     $   122,110    
               
Current Liabilities              
Current maturities of loans and capital leases     588       545       614    
Trade payables     16,461       14,134       18,036    
Other accounts payables     4,862       6,772       5,820    
Deferred revenues     3,073       5,177       4,927    
      24,984       26,628       29,397    
Non-Current Liabilities              
               
Loans and capital leases     1,017       1,433       1,370    
Deferred revenues     740       2,934       707    
Employee benefit liabilities, net     1,053       863       1,144    
      2,810       5,230       3,221    
               
Shareholder's Equity              
Ordinary shares      10,403       9,321       10,400    
Additional paid in capital     178,745       162,686       177,874    
Capital reserve due to translation to presentation currency     (3,490 )     (3,490 )     (3,490 )  
Capital reserve from hedges     (91 )     229       46    
Capital reserve from available for sale financial assets     (33 )     31       (4 )  
Capital reserve from share-based payments     9,080       10,221       9,566    
Capital reserve from employee benefits     (337 )     (81 )     (337 )  
Accumulated deficit     (98,378 )     (110,579 )     (104,563 )  
      95,899       68,338       89,492    
    $   123,693     $   100,196     $   122,110    
               


Consolidated Statements of Profit or Loss and Other Comprehensive Income (Loss)

                     
    Six months period ended    Three months period ended    Year ended
    June 30,   June 30,   December 31,
    2018     2017     2018     2017     2017
    Unaudited   Audited
    In thousands
                     
Revenues from proprietary products    38,192     33,510     25,978     26,874     79,559  
Revenues from distribution    13,091     10,687     7,864     5,675     23,266  
                     
Total revenues   51,283     44,197     33,842     32,549     102,825  
                     
Cost of revenues from proprietary products   22,648     21,218     16,469     16,053     51,335  
Cost of revenues from distribution   10,949     8,969     6,703     4,784     19,402  
                     
Total cost of revenues   33,597     30,187     23,172     20,837     70,737  
                     
Gross profit    17,686     14,010     10,670     11,712     32,088  
                     
Research and development expenses   5,151     6,638     2,397     3,487     11,973  
Selling and marketing expenses   1,906     2,112     936     1,084     4,398  
General and administrative expenses   4,230     3,947     2,166     2,117     8,273  
Operating income (loss)   6,399     1,313     5,171     5,024     7,444  
                     
Financial income   414     174     185     96     500  
Financial expenses   (213 )   (36 )   (56 )   (13 )   (162 )
Income (expense) in respect of currency
exchange differences and derivatives
instruments, net
  331     (479 )   375     (245 )   (612 )
Income (loss) before taxes   6,931     972     5,675     4,862     7,170  
Taxes on income   (11 )   87     (11 )   -     269  
                     
Net Income (loss)   6,942     885     5,686     4,862     6,901  
                     
Other Comprehensive Income (loss) :                    
Items that may be reclassified to profit or loss
in subsequent periods:
                   
Gain (loss) from securities measured at fair
value through other comprehensive income
  (29 )   12     -     (6 )   (23 )
Gain (loss) on cash flow hedges   (144 )   372     (107 )   165     329  
Net amounts transferred to the statement of
profit or loss for cash flow hedges
  7     (116 )   28     (94 )   (256 )
Items that will not be reclassified to profit or
loss in subsequent periods:
                   
Actuarial gain (loss) from defined benefit plans -     -     -     -     (256 )
Total comprehensive income (loss)   6,776     1,153     5,607     4,927     6,695  
                     
Income (loss) per share attributable to equity
holders of the Company:
                   
Basic income (loss) per share   0.17     0.02     0.14     0.13     0.18  
Diluted income (loss) per share   0.17     0.02     0.14     0.13     0.18  
                     


   Statement of Cash Flows

               
    Six months period Ended   Three months period Ended   Year Ended  
    June, 30   June, 30   December 31,  
      2018       2017       2018       2017       2017    
    Unaudited   Audited  
    In thousands  
Cash Flows from Operating Activities                      
Net income (loss)   $   6,942     $   885     $   5,686     $   4,862     $   6,901    
                       
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
                     
                       
Adjustments to the profit or loss items:                      
                       
Depreciation and impairment     1,940       1,745       986       861       3,523    
Financial expenses (income), net     (532 )     341       (504 )     162       274    
Cost of share-based payment     385       441       184       196       483    
Income tax expense     (11 )     87       (11 )     -       269    
Gain from sale of property and equipment     70       (45 )     4       (45 )     (52 )  
Change in employee benefit liabilities, net     (91 )     141       (77 )     43       166    
      1,761       2,710       582       1,217       4,663    
Changes in asset and liability items:                      
                       
Decrease (increase) in trade receivables, net     5,417       (3,787 )     (8,074 )     (12,277 )     (9,967 )  
Decrease (increase) in other accounts receivables     (163 )     154       (245 )     409       328    
Decrease (increase) in inventories     (6,303 )     1,522       802       3,605       4,524    
Decrease  in deferred expenses     431       1,004       409       434       594    
Increase (decrease) in trade payables     (1,608 )     (1,979 )     333       (115 )     (838 )  
Increase (decrease) in other accounts payables     (976 )     1,189       (85 )     1,928       71    
Increase  (decrease) in deferred revenues     (2,574 )     (453 )     (1,802 )     278       (2,930 )  
      (5,776 )     (2,350 )     (8,665 )     (5,738 )     (8,218 )  
Cash received (paid) during the year for:                      
                       
Interest paid     (30 )     (9 )     (14 )     (5 )     (21 )  
Interest received     247       149       109       41       399    
Taxes paid     (9 )     (10 )     (4 )     (6 )     (116 )  
      208       130       91       30       262    
                       
Net cash provided by (used in) operating activities   $   3,135     $   1,375     $   (2,306 )   $   371     $   3,608    
                       
                       
Cash Flows from Investing Activities                      
                       
Proceeds from sale of (investment in) short term
investments, net
  $   (1,954 )   $   2,973     $   (1,804 )   $   2,061     $   (11,501 )  
Purchase of property and equipment and intangible
assets
    (1,499 )     (2,615 )     (1,240 )     (1,879 )     (4,167 )  
Proceeds from sale of property and equipment     15       53       4       53       60    
Net cash provided by (used in) investing activities     (3,438 )     411       (3,040 )     235       (15,608 )  
                       
Cash Flows from Financing Activities                      
                       
Proceeds from exercise of share base payments     3       1       2       -       3    
Receipt of long-term loans     -       -       -       -       279    
Repayment of long-term loans     (301 )     (238 )     (149 )     (133 )     (530 )  
Proceeds from issuance of ordinary shares, net     -       -       -       -       15,568    
                       
Net cash provided by (used in) financing activities     (298 )     (237 )     (147 )     (133 )     15,320    
                       
Exchange differences on balances of cash and cash equivalent     276       (493 )     352       (227 )     (607 )  
                       
Increase (decrease) in cash and cash equivalents     (328 )     1,056       (5,141 )     246       2,713    
                       
Cash and cash equivalents at the beginning of the year     12,681       9,968       17,497       10,778       9,968    
                       
Cash and cash equivalents at the end of the year   $   12,353     $   11,024     $   12,356     $   11,024     $   12,681    
                       
Significant non-cash transactions                      
Purchase of property and equipment through capital lease         282           282       282    
Purchase of property and equipment   $   387     $   575     $   387     $   575     $   1,681    
                       

The accompanying Notes are an integral part of the Consolidated Financial Statements


Adjusted EBITDA

                     
    Six months period ended   Three months period ended   Year ended
    June 30,   June 30,   December 31,
      2018       2017       2018       2017       2017  
    Thousands of US dollar
Net income (loss)   $   6,942     $   885     $   5,686     $   4,862     $   6,901  
Income tax expense     (11 )     87       (11 )       -         269  
Financial expense, net     (201 )     (138 )     (129 )     (83 )     (338 )
Depreciation and amortization expense       1,940       1,745         986       861         3,523  
Share-based compensation charges       385       441         183       196         483  
Expense (Income) in respect of translation
differences and derivatives instruments, net
    (331 )     479       (375 )       245         612  
    $   8,724     $   3,499     $   6,340     $   6,081     $   11,450  
                     
                     
                     
                     
Adjusted net income                    
    Six months period ended   Three months period ended   Year ended
    June 30,   June 30,   December 31,
      2018       2017       2018       2017       2017  
    Thousands of US dollar
Net income (loss)   $   6,942     $   885     $   5,686     $   4,862     $   6,901  
Share-based compensation charges       385         441         183         196         483  
Adjusted net income (loss)   $   7,327     $   1,326     $   5,869     $   5,058     $   7,384  
                     

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