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Kamada Reports Financial Results for Second Quarter and First Six Months of 2019

  • Total Revenues for Second Quarter of 2019 were $35.3 Million, a 4% Increase Year-Over-Year
  • Total Revenues for First Six Months of 2019 were $62.1 Million, a 21% Increase Year-Over-Year
  • Gross Profit for Second Quarter and First Six Months of 2019 was $13.6 million and $24.8 Million, Respectively, a 27% and 40% Increase Year-Over-Year, Respectively
  • Net income was $11.1 Million for First Six Months of 2019, an Increase of 59% Compared to $6.9 Million for Same Period of 2018
  • Reiterating Full-Year 2019 Total Revenue Guidance of $125 Million to $130 Million

REHOVOT, Israel, Aug. 06, 2019 (GLOBE NEWSWIRE) -- Kamada Ltd. (Nasdaq: KMDA; TASE: KMDA.TA), a plasma-derived protein therapeutics company, today announced financial results for the three months and six months ended June 30, 2019.

“We are excited about our continued strong performance in 2019,” said Amir London, Kamada’s Chief Executive Officer.  “For the second quarter of 2019, total revenues were $35.3 million, a 4% increase year-over-year, and for the first six months of 2019, total revenues were $62.1 million, which represented a 21% increase over the first six months of 2018.  Based on our continued strong performance in the second quarter, and our positive outlook for the remainder of the year, we are reiterating our previously provided full-year 2019 total revenue guidance of $125 million to $130 million, which, if achieved, would represent another strong year of double-digit percentage growth over full-year 2018 total revenues.  As a reminder, our GLASSIA supply agreement with Takeda currently extends through the end of 2020. While the possible transition of GLASSIA manufacturing to Takeda after 2020, will result in a significant reduction of Kamada’s revenues, we are expecting a flow of future royalty payments for 20 years, until 2040.”

“From a profitability standpoint, our gross profit increased 27% and 40% year-over-year during the second quarter and six months ended June 30, 2019, respectively,” continued Mr. London. “Our gross margins in our Proprietary Products segment for the first six months of 2019 were 47%, as compared to 41% in the comparable period in 2018.  Our profitability increased our cash and cash equivalents to $62.0 million as of June 30, 2019, an increase of $11.4 million compared to the end of 2018.  For the remainder of the year, while we expect our annual results to improve as compared to 2018, our overall gross margins in the second half of 2019 will be slightly reduced due to an expected different product mix.”

“We also continue to achieve important progress advancing our clinical development pipeline.  Kamada intends to conduct a unified global pivotal Phase 3 clinical trial for inhaled AAT for AAT Deficiency in the U.S. under an Investigational New Drug application (IND), and in Europe under a Clinical Trial Authorization (CTA) in order to submit marketing applications for regulatory approval in both regions.  Importantly, we have progressed with the Human Factor Study (HFS) that was required by the U.S. Food and Drug Administration (FDA), and its results will be submitted as part of our IND filing.  In Europe, we expect to begin dosing the first patients in this pivotal Phase 3 trial before the end of the year. Patients recruitment to this study in the U.S. is pending IND approval,” concluded Mr. London.

Financial Highlights for the Three Months Ended June 30, 2019

  • Total revenues were $35.3 million in the second quarter of 2019, a 4% increase from the $33.8 million recorded in the second quarter of 2018.
  • Revenues from the Proprietary Products segment in the second quarter of 2019 were $27.3 million, a 5% increase from the $26.0 million reported in the second quarter of 2018.
  • Revenues from the Distribution segment were $8.0 million in the second quarter of 2019, a 1% increase from the $7.9 million recorded in the second quarter of 2018.
  • Gross profit was $13.6 million in the second quarter of 2019, a 27% increase from the $10.7 million reported in the second quarter of 2018.  Gross margin increased to 39% from 32% in the second quarter of 2018.  The higher gross margin in the second quarter of 2019 was due to improved manufacturing efficiencies and a favorable product sales mix.
  • Operating expenses, including R&D, Sales & Marketing, G&A, and Other expenses, totaled $7.2 million in the second quarter of 2019, as compared to $5.5 million in the second quarter of 2018.  As Kamada intends to initiate its Inhaled AAT Phase 3 clinical trial before the end of the year, the Company continues to expect that its annual R&D expenses will increase for the full-year as compared to 2018.
  • Net income was $6.1 million or $0.15 per share, in the second quarter of 2019, as compared to net income of $5.7 million, or $0.14 per share, in the second quarter of 2018.
  • Adjusted EBITDA, as detailed in the tables below, was $7.8 million in the second quarter of 2019, as compared to $6.3 million in the second quarter of 2018.
  • Cash provided by operating activities was $6.8 million in the second quarter of 2019, as compared to cash used in operating activities of $2.3 million in the second quarter of 2018.

Financial Highlights for the Six Months Ended June 30, 2019

  • Total revenues were $62.1 million in the first six months of 2019, a 21% increase from the $51.3 million recorded in the first six months of 2018.
  • Revenues from the Proprietary Products segment for the first six months of 2019 were $47.7 million, a 25% increase from the $38.2 million reported in the first six months of 2018.
  • Revenues from the Distribution segment were $14.4 million in the first six months of 2019, a 10% increase from the $13.1 million recorded in the first six months of 2018.
  • Gross profit was $24.8 million in the first six months of 2019, a 40% increase from the $17.7 million reported in the first six months of 2018.  Gross margin increased to 40% from 35% in the first six months of 2018.
  • Operating expenses, including R&D, Sales & Marketing and G&A, and Other expenses, totaled $13.2 million in the six months of 2019, as compared to $11.3 million in the six months of 2018. 
  • Net income was $11.1 million, or $0.27 per share, in the first six months of 2019, as compared to net income of $6.9 million, or $0.17 per share, in the first six months of 2018.
  • Adjusted EBITDA, as detailed in the tables below, was $14.5 million in the first six months of 2019, as compared to $8.7 million in the first six months of 2018.
  • Cash provided by operating activities was $12.8 million in the first six months of 2019, as compared to cash provided by operating activities of $3.1 million in the first six months of 2018.

Balance Sheet Highlights
As of June 30, 2019, the Company had cash, cash equivalents, and short-term investments of $62.0 million, as compared to $50.6 million at December 31, 2018.

Recent Corporate Highlights

  • Progressed with the HFS that was required by the FDA in support of the Company’s Inhaled AAT program for the treatment of Alpha-1 Antitrypsin Deficiency. 
  • Concluded enrollment in the proof-of-concept clinical trial of IV-AAT for the treatment of acute Graft versus Host Disease (GvHD).  The trial is assessing the safety and preliminary efficacy of IV-AAT as preemptive therapy for patients at high-risk for the development of steroid-refractory acute GvHD.
  • Completed the Phase 2 trial of IV AAT for the prevention of lung transplant rejection, which is being conducted in collaboration with Takeda.  Data analysis is on-going, and top-line results are currently expected to be reported by the end of 2019.
  • Eitan Kyiet, Vice President of Business Development, has left the Company to pursue other opportunities.  His responsibilities have been assumed on an interim basis by Mr. London.

Conference Call
Kamada management will host an investment community conference call on Tuesday, August 6 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 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: 13692291.

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 Takeda Pharmaceuticals Company Limited and in other counties through local distributors.  Kamada’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 and through a strategic partnership with Kedrion S.p.A. In addition to GLASSIA and KEDRAB, Kamada 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. 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 GvHD, prevention of lung transplant rejection and type-1 diabetes. Kamada also 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.

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 re-affirmation of the 2019 revenue guidance, our expectation for 20 years of royalties from Takeda post 2020, our expectation that our annual results will improve as compared to 2018, our overall gross margins in the second half of 2019 anticipated to be slightly reduced due to an expected different product mix, the timing of the start of dosing of first patients in the Phase 3 clinical trial for Inhaled AAT in Europe before the end of this year, expectation of higher R&D expenses due to initiation of the Phase 3 clinical trial for Inhaled AAT, our plans to submit marketing applications regulatory approval for Inhaled AAT in both the U.S. and Europe and our anticipated timetable for the publication of results of the completed Phase 2 trial of IV AAT for the prevention of lung transplant rejection.. 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, unexpected results of ongoing clinical studies, delays with the studies, additional competition in the markets that Kamada competes, including AAT, regulatory delays, prevailing market conditions, corporate events associated with our partners, including Takeda, 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 BALANCE SHEETS

    As of June 30,   As of December 31,
      2019       2018       2018  
                         
    Unaudited   Audited
    U.S Dollars in thousands
Current Assets            
Cash and cash equivalents   $ 23,835     $ 12,356     $ 18,093  
Short-term investments     38,122       32,233       32,499  
Trade receivables, net     25,497       24,779       27,674  
Other accounts  receivables     3,292       1,863       3,308  
Inventories     35,501       27,373       29,316  
      126,247       98,604       110,890  
             
Property, plant and equipment, net     28,424       24,916       25,004  
Other long term assets     174       173       174  
Deferred taxes     1,644       -       2,048  
      30,242       25,089       27,226  
    $ 156,489     $ 123,693     $ 138,116  
             
Current Liabilities            
Current maturities of bank loans and leases   $ 1,440     $ 588     $ 562  
Trade payables     19,879       16,461       17,285  
Other accounts payables     4,876       4,862       5,261  
Deferred revenues     461       3,073       461  
      26,656       24,984       23,569  
Non-Current Liabilities            
             
Bank loans and leases     4,470       1,017       716  
Deferred revenues     542       740       668  
Employee benefit liabilities, net     818       1,053       787  
      5,830       2,810       2,171  
             
Shareholder's Equity            
Ordinary shares     10,418       10,403       10,409  
Additional paid in capital     179,471       178,745       179,147  
Capital reserve due to translation to presentation currency     (3,490 )     (3,490 )     (3,490 )
Capital reserve from hedges     8       (91 )     (57 )
Capital reserve from securities measured at fair value through other comprehensive income     187       (33 )     34  
Capital reserve from share-based payments     9,663       9,080       9,353  
Capital reserve from employee benefits     4       (337 )     4  
Accumulated deficit     (72,258 )     (98,378 )     (83,024 )
      124,003       95,899       112,376  
    $ 156,489     $ 123,693     $ 138,116  
 


Consolidated Statements of Comprehensive Income

    Six months period ended   Three months period ended   Year ended
    June 30,   June 30,   December 31,
      2019       2018       2019       2018       2018  
    Unaudited   Unaudited   Audited
    U.S Dollars In thousands
                     
Revenues from proprietary products   $ 47,662     $ 38,192     $ 27,281     $ 25,978     $ 90,784  
Revenues from distribution     14,388       13,091       7,972       7,864       23,685  
                     
Total revenues     62,050       51,283       35,253       33,842       114,469  
                     
Cost of revenues from proprietary products     25,178       22,637       14,688       16,458       52,796  
Cost of revenues from distribution     12,088       10,949       6,965       6,703       20,201  
                     
Total cost of revenues     37,266       33,586       21,653       23,161       72,997  
                     
Gross profit     24,784       17,697       13,600       10,681       41,472  
                     
Research and development expenses     6,253       4,851       3,487       2,097       9,747  
Selling and marketing expenses     2,280       1,906       1,188       936       3,630  
General and administrative expenses     4,621       4,230       2,527       2,166       8,525  
Other expenses and (incomes)     28       311       5       311       311  
Operating income ( loss)     11,602       6,399       6,393       5,171       19,259  
                     
Financial income     547       414       267       185       820  
Financial expenses     (195 )     (213 )     (72 )     (56 )     (340 )
Income (expense) in respect of currency exchange differences and derivatives instruments, net     (528 )     331       (215 )     375       602  
Income ( loss) before taxes     11,426       6,931       6,373       5,675       20,341  
Taxes on income     360       (11 )     230       (11 )     (1,955 )
                     
Net Income ( loss)     11,066       6,942       6,143       5,686       22,296  
                     
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     198       (29 )     90       -       51  
Gain (loss) on cash flow hedges     71       (144 )     (3 )     (107 )     (176 )
Net amounts transferred to the statement of profit or loss for cash flow hedges     (2 )     7       -       28       70  
Items that will not be reclassified to profit or loss in subsequent periods:                    
Actuarial gain (loss) from defined benefit plans     -       -       -       -       340  
Deferred taxes     (49 )     -       (21 )     -       (9 )
Total comprehensive income (loss)   $ 11,284     $ 6,776     $ 6,209     $ 5,607     $ 22,752  
                     
Income (loss) per share attributable to equity holders of the Company:                    
Basic income (loss) per share   $ 0.27     $ 0.17     $ 0.15     $ 0.14     $ 0.55  
Diluted income (loss) per share   $ 0.27     $ 0.17     $ 0.15     $ 0.14     $ 0.55  
 


CONSOLIDATED STATEMENTS OF CASH FLOWS

    Six months period Ended   Three months period Ended   Year Ended
    June, 30   June, 30   December 31,
      2019       2018       2019       2018       2018  
                                         
    Unaudited   Audited
    U.S Dollars In thousands
Cash Flows from Operating Activities                    
Net income   $ 11,066     $ 6,942     $ 6,143     $ 5,686     $ 22,296  
                     
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                    
                     
Adjustments to the profit or loss items:                    
                     
Depreciation and impairment     2,251       1,940       1,124       986       3,703  
Financial expenses (income), net     176       (532 )     20       (504 )     (1,082 )
Cost of share-based payment     634       385       319       184       948  
Taxes on income     360       (11 )     230       (11 )     (1,955 )
Loss (gain) from sale of property and equipment     (2 )     70       4       4       55  
Change in employee benefit liabilities, net     31       (91 )     (5 )     (77 )     (16 )
      3,450       1,761       1,692       582       1,653  
Changes in asset and liability items:                    
                     
Decrease (increase) in trade receivables, net     2,602       5,417       (2,125 )     (8,074 )     2,311  
Decrease (increase) in other accounts receivables     249       (163 )     118       (245 )     (1,336 )
Decrease (increase) in inventories     (6,185 )     (6,303 )     (3,793 )     802       (8,246 )
Decrease (increase) in deferred expenses     (272 )     431       (26 )     409       235  
Increase (decrease) in trade payables     1,927       (1,608 )     4,295       333       (1,116 )
Increase (decrease) in other accounts payables     (53 )     (976 )     457       (85 )     (658 )
Decrease in deferred revenues     (126 )     (2,574 )     (63 )     (1,802 )     (5,256 )
      (1,858 )     (5,776 )     (1,137 )     (8,665 )     (14,066 )
Cash received (paid) during the period for:                    
                     
Interest paid     (124 )     (30 )     (61 )     (14 )     (54 )
Interest received     300       247       128       109       739  
Taxes paid     (16 )     (9 )     (8 )     (4 )     (22 )
      160       208       59       91       663  
                     
Net cash provided by (used in) operating activities   $ 12,818     $ 3,135     $ 6,757     $ (2,306 )   $ 10,546  
 


CONSOLIDATED STATEMENTS OF CASH FLOWS

    Six months period Ended   Three months period Ended   Year Ended
    June, 30   June, 30   December 31,
      2019       2018       2019       2018       2018  
    Unaudited   Audited
    U.S Dollars In thousands
Cash Flows from Investing Activities                    
                     
Proceeds of investment in short term investments, net   $ (5,128 )   $ (1,954 )   $ (4,070 )   $ (1,804 )   $ (2,322 )
Purchase of property and equipment and intangible assets     (757 )     (1,499 )     (453 )     (1,240 )     (2,884 )
Proceeds from sale of property and equipment     9       15       3       4       30  
Net cash used in investing activities     (5,876 )     (3,438 )     (4,520 )     (3,040 )     (5,176 )
                     
Cash Flows from Financing Activities                    
                     
Proceeds from exercise of share base payments     9       3       6       2       9  
Repayment of long-term loans and leases     (761 )     (301 )     (383 )     (149 )     (596 )
                     
Net cash used in financing activities     (752 )     (298 )     (377 )     (147 )     (587 )
                     
Exchange differences on balances of cash and cash equivalent     (448 )     276       (62 )     352       629  
                     
Increase (decrease) in cash and cash equivalents     5,742       (328 )     1,798       (5,141 )     5,412  
                     
Cash and cash equivalents at the beginning of the period     18,093       12,681       22,037       17,497       12,681  
                     
Cash and cash equivalents at the end of the period   $ 23,835     $ 12,353     $ 23,835     $ 12,356     $ 18,093  
                     
Significant non-cash transactions                    
Purchase of property and equipment through leases   $ 4,548     $ -     $ 117
    $ -     $ -  
Purchase of property and equipment   $ 385     $ 387     $ 385     $ 387     $ 720  
 


Adjusted EBITDA                    
    Six months period ended   Three months period ended   Year ended
    June 30,   June 30,   December 31,
      2019       2018       2019       2018       2018  
                                         
     
Net income (loss)   $ 11,066     $ 6,942     $ 6,143     $ 5,686     $ 22,296  
Taxes on income     360       (11 )     230       (11 )     (1,955 )
Financial expense (income), net     (352 )     (201 )     (195 )     (129 )     (480 )
Depreciation and amortization expense     2,251       1,940       1,124       986       3,703  
Cost of share-based payments     634       385       319       183       948  
Expense (Income) in respect of translation differences and derivatives instruments, net     528       (331 )     215       (375 )     (602 )
    $ 14,487     $ 8,724     $ 7,836     $ 6,340     $ 23,910  
                     
                     
Adjusted net income                    
    Six months period ended   Three months period ended   Year ended
    June 30,   June 30,   December 31,
      2019       2018       2019       2018       2018  
                                         
     
Net income   $ 11,066     $ 6,942     $ 6,143     $ 5,686     $ 22,296  
Cost of share-based payments     634       385       319       183       948  
Adjusted net income   $ 11,700     $ 7,327     $ 6,462     $ 5,869     $ 23,244