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

  • 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 
           
Tuesday, August 7, 2018 - 07:00