Kamada Reports First Quarter 2021 Financial Results, Recent Achievements and Corporate Development Activities
05/12/2021 - 07:00 AM
First Quarter 2021 Revenues were $24.9 Million , and Adjusted EBITDA was $3.7 Million In Connection with the Transition of GLASSIA® Manufacturing, the Product’s U.S. Biologics License Application will be Transferred to Takeda by the End of 2021 and Kamada will Receive a Payment of $2 Million ; Kamada to Implement a Workforce Downsizing During Early Q3 2021 Resulting 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 Continues to Supply its Plasma-Derived COVID-19 Immunoglobulin Investigational Product for COVID-19 Patients to the Israeli Ministry of Health Completed Acquisition of a U.S. Plasma Collection Center and Actively Engaged in the Expansion of the Center Collection Capacity; Intends to Open Additional Centers 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, May 12, 2021 (GLOBE NEWSWIRE) -- Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a plasma-derived biopharmaceutical company, today announced financial results for the three months ended March 31, 2021.
“Our financial results for the first quarter of 2021 were in-line with our expectations and we continue to advance our business activities in multiple strategic directions,” said Amir London, Kamada’s Chief Executive Officer.
“Our pivotal Phase 3 InnovAATe clinical trial of Inhaled AAT for the treatment of Alpha-1 Antitrypsin Deficiency (AATD) is progressing, as we concurrently evaluate strategic opportunities to engage a commercialization partner for this key product candidate, in a market which is currently estimated at over one billion dollar and growing six to eight percent annually. In addition, we continue to supply our plasma-derived COVID-19 Immunoglobulin (IgG) investigational product to the Israeli Ministry of Health (IMOH) for the treatment of hospitalized patients, and during the first quarter of the year, we finalized the planned production ramp up of the product in anticipation of potential demand from additional international markets,” continued Mr. London.
“We are actively engaged in expanding the hyperimmune plasma collection capacity of our recently acquired Texas-based plasma collection center and initiated planning for the opening of additional U.S. centers by leveraging our U.S. Food and Drug Administration license. We are committed to growing our hyperimmune IgG portfolio and believe that expanding our plasma collection capabilities is a significant strategic step toward accomplishing this goal. In addition, we remain focused on evaluating new strategic business development opportunities that will utilize and expand our core expertise in the development, manufacturing and commercialization of plasma-derived therapeutics and will further advance our strategic objective of evolving into a fully integrated specialty plasma company. In order to leverage these opportunities, we intend to utilize our strong cash position of nearly $110 million ,” concluded Mr. London.
Financial Highlights for the Three Months Ended March 31, 2021
Total revenues were $24.9 million in the first quarter of 2021, a 25% decrease from the $33.3 million recorded in the first quarter of 2020. Total revenues during the first quarter of 2021 included the final sales-based milestone from Takeda in the amount of $5 million . Gross profit was $8.9 million in the first quarter of 2021, compared to $11.5 million reported in the first quarter of 2020. Gross profit in the first quarter of 2021 was affected by a one-time inventory write-off of approximately $1.5 million . The anticipated reduction in revenues and profitability in 2021 is due to the transition of GLASSIA manufacturing to Takeda and the continued impact on the Company’s operating environment created by the ongoing global COVID-19 pandemic. As a result of the transition of GLASSIA manufacturing to Takeda, Kamada intends to implement a workforce downsizing during the early part of the third quarter of 2021, which is expected to result in an annualized reduction of approximately 10% in labor costs. As previously published, the Company, the Employees’ Committee and the Histadrut - General Federation of Labor in Israel, entered into a special collective bargaining agreement with respect to severance remuneration for the employees who will be laid-off as part of such workforce downsizing plan. Net income was $2.7 million , or $0.06 per share, 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. Adjusted EBITDA, as detailed in the tables below, was $3.7 million in the first quarter of 2021, as compared to $6.3 million in the first quarter of 2020. Cash provided by operating activities was $2.1 million in the first quarter of 2021, as compared to cash used in operating activities of $1.9 million in the first quarter of 2020. Balance Sheet Highlights As of March 31, 2021, the Company had cash, cash equivalents, and short-term investments of $109.5 million , as compared to $109.3 million on December 31, 2020. The slight increase was due to positive operational cash flow.
Recent Corporate Highlights
Reported positive top-line results from Phase 1/2 clinical trial of plasma-derived IgG treatment for Coronavirus Disease (COVID-19). Entered into an amendment to the Glassia technology license agreement with Takeda, pursuant to which, upon completion of the transition of GLASSIA manufacturing to Takeda, expected by the end of 2021, Kamada will transfer to Takeda the GLASSIA U.S. Biologics License Application (BLA). In consideration for the BLA transfer, Kamada will receive a $2 million payment from Takeda. In addition, the terms of the final sales-based milestone of $5 million due to Kamada under the agreement were amended. Conference Call Kamada management will host an investment community conference call on Wednesday, May 12, 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: 13719388. The call will also be webcast live on the Internet at http://public.viavid.com/index.php?id=144748 .
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; a plasma-derived hyperimmune immunoglobulin (IgG) product as a potential treatment for coronavirus disease (COVID-19) and 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 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.
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) anticipation to receive a $2 million payment from Takeda by the end of 2021 upon completion of the transition of GLASSIA manufacturing to Takeda, and the transfer to Takeda of the GLASSIA BLA, 2) plans to affect a workforce downsizing during early third quarter of 2021, which may result in potential annual labor costs savings of approximately 10% , 3) continue advancement of the pivotal Phase 3 InnovAATe clinical trial of Inhaled AAT for the treatment of Alpha-1 Antitrypsin Deficiency (AATD) and evaluation of strategic opportunities to engage commercialization partner for this key product candidate, 4) statement regarding the size and annual growth rate of the AATD market, 5) continuation of supply of the plasma-derived COVID-19 IgG investigational product to the IMOH for the treatment of hospitalized patients, and anticipation of potential demand for the product from additional international markets, 6) expansion of the hyperimmune plasma collection capacity of the recently acquired Taxes based plasma collection center and initiation of planning for the opening of additional centers in the U.S. by leveraging our FDA license, 7) commitment to growing the hyperimmune IgG portfolio, 8) focus on exploring new strategic business development opportunities that will utilize and expand our core expertise in the development, manufacturing and commercialization of plasma-derived therapeutics and advance will further our strategic objective to evolve into a fully integrated specialty plasma company, 9) leveraging these business development opportunities by the intention to utilize the strong cash position of nearly $110 million , and 10) anticipated reduction in revenues and profitability during 2021 driven by the transition of GLASSIA® manufacturing to Takeda and the continued effect on the Company’s operating environment created by the ongoing global COVID-19 pandemic. 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, impact of the workforce downsizing plan, 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 reap the benefits of the recent acquisition of the plasma collection center, including the ability to open additional U.S. plasma centers, the ability to continue enrollment of the pivotal Phase 3 InnovAATe clinical trial, unexpected results of clinical studies, including plasma-derived IgG treatment for COVID-19 and the level of demand for such product, 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 OfficerIR@kamada.com
Bob Yedid LifeSci Advisors, LLC 646-597-6989Bob@LifeSciAdvisors.com
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of March 31, As of December 31, 2021 2020 2020 Unaudited Audited U.S. Dollars in thousands Assets Current Assets Cash and cash equivalents $ 61,436 $ 49,288 $ 70,197 Short-term investments 48,038 47,124 39,069 Trade receivables, net 20,367 26,266 22,108 Other accounts receivables 4,091 1,736 4,524 Inventories 41,155 41,787 42,016 Total Current Assets 175,087 166,201 177,914 Non-Current Assets Property, plant and equipment, net 25,492 24,379 25,679 Right-of-use assets 3,479 3,800 3,440 Other long term assets 3,175 1,053 1,573 Contract assets 3,295 421 2,059 Deferred taxes - 939 - Total Non-Current Assets 35,441 30,592 32,751 Total Assets $ 210,528 $ 196,793 $ 210,665 Liabilities Current Liabilities Current maturities of bank loans $ 127 $ 465 $ 238 Current maturities of lease liabilities 1,092 928 1,072 Trade payables 15,076 18,440 16,110 Other accounts payables 5,682 4,875 7,547 Deferred revenues - 649 - Total Current Liabilities 21,977 25,357 24,967 Non-Current Liabilities Bank loans 20 138 36 Lease liabilities 3,417 3,663 3,593 Deferred revenues 2,525 569 2,025 Employee benefit liabilities, net 1,369 1,251 1,406 Total Non-Current Liabilities 7,331 5,621 7,060 Shareholder’s Equity Ordinary shares 11,713 11,647 11,706 Additional paid in capital net 209,859 204,702 209,760 Capital reserve due to translation to presentation currency (3,490 ) (3,490 ) (3,490 ) Capital reserve from hedges 30 264 357 Capital reserve from share-based payments 4,674 8,903 4,558 Capital reserve from employee benefits (320 ) (356 ) (320 ) Accumulated deficit (41,246 ) (55,855 ) (43,933 ) Total Shareholder’s Equity 181,220 165,815 178,638 Total Liabilities And Shareholder’s Equity $ 210,528 $ 196,793 $ 210,665
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Three months period ended Year ended March 31, December 31, 2021 2020 2020 Unaudited Audited U.S. Dollars in thousands Revenues from proprietary products $ 20,870 $ 25,317 $ 100,916 Revenues from distribution 4,030 7,973 32,330 Total revenues 24,900 33,290 133,246 Cost of revenues from proprietary products 12,468 14,947 57,750 Cost of revenues from distribution 3,501 6,892 27,944 Total cost of revenues 15,969 21,839 85,694 Gross profit 8,931 11,451 47,552 Research and development expenses 2,628 3,347 13,609 Selling and marketing expenses 1,123 940 4,518 General and administrative expenses 2,809 2,312 10,139 Other expense 7 2 49 Operating income 2,364 4,850 19,237 Financial income 110 317 1,027 Income in respect of securities measured at fair value, net - 102 102 Income (expense) in respect of currency exchange differences and derivatives instruments, net 266 432 (1,535 ) Financial expense (53 ) (77 ) (266 ) Income before tax on income 2,687 5,624 18,565 Taxes on income - 406 1,425 Net Income $ 2,687 $ 5,218 $ 17,140 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 ) (188 ) Gain on cash flow hedges (73 ) 241 876 Net amounts transferred to the statement of profit or loss for cash flow hedges (254 ) 34 (528 ) Items that will not be reclassified to profit or loss in subsequent periods: Remeasurement gain (loss) from defined benefit plan - - 64 Tax effect - 27 19 Total comprehensive income $ 2,360 $ 5,332 $ 17,383 Earnings per share attributable to equity holders of the Company: Basic income per share $ 0.06 $ 0.12 $ 0.39 Diluted income per share $ 0.06 $ 0.12 $ 0.38
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months period Ended Year Ended March 31, December 31, 2021 2020 2020 Unaudited Audited U.S. Dollars in thousands U.S. Dollars in thousands Net income $ 2,687 $ 5,218 $ 17,140 Adjustments to reconcile net income to net cash provided by operating activities: Adjustments to the profit or loss items: Depreciation and impairment 1,147 1,192 4,897 Financial expenses (income), net (323 ) (774 ) 672 Cost of share-based payment 215 257 977 Taxes on income - 406 1,425 Loss (gain) from sale of property and equipment - - (7 ) Change in employee benefit liabilities, net (37 ) (18 ) 201 1,002 1,063 8,165 Changes in asset and liability items: Decrease (increase) in trade receivables, net 1,585 (3,016 ) 1,332 Decrease (increase) in other accounts receivables (14 ) 1,513 115 Decrease (increase) in inventories 1,045 1,386 1,157 (Increase) decrease in deferred expenses (1,153 ) (421 ) (3,085 ) (Decrease) Increase in trade payables (1,484 ) (7,216 ) (9,560 ) Increase (decrease) in other accounts payables (2,145 ) (1,180 ) 1,736 Increase in deferred revenues 500 397 1,204 (1,666 ) (8,537 ) (7,101 ) Cash received (paid) during the year for: Interest paid (48 ) (55 ) (209 ) Interest received 141 451 1,211 Taxes paid (14 ) (61 ) (101 ) 79 335 901 Net cash provided by (used in) operating activities $ 2,102 $ (1,921 ) $ 19,105
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months period Ended Year Ended March 31, December 31, 2021 2020 2020 Unaudited Audited U.S. Dollars in thousands U.S. Dollars in thousands Cash Flows from Investing Activities Investment in short term investments, net $ (9,000 ) $ (15,646 ) $ (7,646 ) Purchase of property and equipment and intangible assets (131 ) (896 ) (5,488 ) Proceeds from sale of property and equipment - - 7 Acquisition of subsidiary, net of cash (Appendix A below) (1,404 ) - - Net cash used in investing activities (10,535 ) (16,542 ) (13,127 ) Cash Flows from Financing Activities Proceeds from exercise of share base payments 7 5 64 Repayment of lease liabilities (289 ) (278 ) (1,103 ) Repayment of long-term loans (121 ) (123 ) (492 ) Proceeds from issuance of ordinary shares, net - 24,895 24,895 Net cash provided by (used in) financing activities (403 ) 24,499 23,364 Exchange differences on balances of cash and cash equivalent 75 590 (1,807 ) Increase (decrease) in cash and cash equivalents (8,761 ) 6,626 27,535 Cash and cash equivalents at the beginning of the year 70,197 42,662 42,662 Cash and cash equivalents at the end of the year $ 61,436 $ 49,288 $ 70,197 Significant non-cash transactions Purchase of property and equipment through capital lease $ 302 $ 58 $ 539 Purchase of property and equipment $ 670 $ 579 $ 722
Appendix A Acquisition of a subsidiary that was first consolidated Current Assets (exclusive of cash and cash equivalents) (184 ) Non Current Assets (1,500 ) Current Liabilities 280 (1,404 )
KAMADA LTD.
Adjusted EBITDA Three months period Ended Year ended March 31, December 31, 2021 2020 2020 U.S. Dollars in thousands Net income (loss) $ 2,687 $ 5,218 $ 17,140 Taxes on income - 406 1,425 Financial expense (income), net (323 ) (774 ) 672 Depreciation and amortization expense 1,147 1,192 4,897 Cost of share - based payments 215 257 977 Adjusted EBITDA $ 3,726 $ 6,299 $ 25,111
Adjusted Net Income Three months period Ended Year ended March 31, December 31, 2021 2020 2020 U.S. Dollars in thousands Net income (loss) $ 2,687 $ 5,218 $ 17,140 Cost of share - based payments 215 257 977 Adjusted net income $ 2,902 $ 5,475 $ 18,117