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Kamada Reports Financial Results for Third Quarter and First Nine Months of 2018

  • Total Revenues for First Nine Months of 2018 were $66.3 Million, a 1% Decrease Year-Over-Year
  • Gross Profit for First Nine Months of 2018 was $20.2 million, a  1% Decrease Year-Over-Year
  • Adjusted EBITDA was $7.4 Million in First Nine Months of 2018, an Increase of 71% Compared to $4.3 Million in Same Period of 2017
  • Reaffirms Revised Revenue Guidance of $102 to $108 Million in Total Revenues for 2018
  • Provides Total Revenue Guidance of $125 to $130 Million for 2019, which represents more than 20% increase over 2018 Guidance

REHOVOT, Israel, Nov. 12, 2018 (GLOBE NEWSWIRE) -- Kamada Ltd. (Nasdaq: KMDA) (KMDA.TA), a plasma-derived protein therapeutics company, today announced financial results for the three and nine months ended September 30, 2018.

“While our revenue and profitability metrics were, as expected, meaningfully impacted in the third quarter by the labor strike at our Beit Kama production facility,  for the first nine months of 2018, our operating and net profits were significantly improved from the same period last year,” said Amir London, Kamada’s Chief Executive Officer. “Based on our outlook for a strong fourth quarter, we are reiterating our revised full-year 2018 revenue guidance of $102 million to $108 million.  For 2019, based on our projected production capacity and product availability, we expect total revenues in the range of $125 million to $130 million, which would represent an increase of more than 20 percent over anticipated full-year 2018 total revenue.  The projected revenues for 2019 are comprised of approximately 80% of Kamada’s proprietary products segment and the balance is revenues of our Israeli distribution segment. The expected growth will primarily be driven by our increased sales of GLASSIA® and KedRAB® in the U.S. market.”

“During the first nine months of 2018, we generated operating income of $3.9 million, as compared to operating income of $1.0 million for the same period last year.  In addition, we recorded $4.6 million in net income during the first nine months of 2018, a substantial increase over the $0.6 million of net income recorded in the first nine months of 2017.  Our adjusted EBITDA of $7.4 million for the first nine months increased 71% compared to the same period of 2017.  Moreover, we continue to maintain a strong cash position, including $44.9 million of cash and short-term investments at the end of the third quarter, which provides us with the financial resources needed to continue executing on our business plan,” continued Mr. London. 

“Our development pipeline continues to progress.  Following receipt of positive scientific advice from the Committee for Medicinal Products for Human Use of the European Medicines Agency on the overall design of our proposed pivotal Phase 3 study for our proprietary inhaled AAT for the treatment of alpha-1 antitrypsin deficiency, we are finalizing a detailed plan for the clinical program, and preparing a Clinical Trial Application submission.  In the U.S., we continue to advance our discussions with the Food and Drug Administration in order to reach agreement on the regulatory path forward for inhaled AAT as expeditiously as possible,” concluded Mr. London.

Financial Highlights for the Three Months Ended September 30, 2018

  • Total revenues were $15.0 million in the third quarter of 2018, a 35% decrease from the $22.9 million recorded in the third quarter of 2017, due to the delay in product supply as a result of the now concluded labor strike.
  • Revenues from the Proprietary Products segment in the third quarter of 2018 were $9.5 million, a 45% decrease from the $17.0 million reported in the third quarter of 2017.
  • Revenues from the Distributed Products segment were $5.5 million in the third quarter of 2018, a 6% decrease from the $5.9 million recorded in the third quarter of 2017.
  • Gross profit was $2.5 million in the third quarter of 2018, a $3.9 million decrease from the $6.4 million reported in the third quarter of 2017.  Gross margin decreased to 17% from 33% in the third quarter of 2017, due primarily to a one-time loss of $0.8 million due to a loss of in-process materials and $1.8 million of overhead cost charges due to lower than standard production level in the third quarter, both of which are directly related to the labor strike.
  • Operating expenses, including R&D and SG&A expenses, totaled $5.0 million in the third quarter of 2018, as compared to $6.8 million in the third quarter of 2017.
  • Net loss was $2.4 million, or ($0.06) per share, in the third quarter of 2018, compared to a net loss of $0.2 million, or ($0.01) per share, in the third quarter of 2017.
  • Adjusted EBITDA was ($1.4) million in the third quarter of 2018, compared to $0.8 million in the third quarter of 2017.
  • Cash provided by operating activities was $1.0 million in the third quarter of 2018, compared to cash used in operating activities of $1.5 million in the third quarter of 2017.

Financial Highlights for the Nine months Ended September 30, 2018

  • Total revenues were $66.3 million in the first nine months of 2018, a 1% decrease from the $67.1 million recorded in the same period of 2017. 
  • Revenues from the Proprietary Products segment in the first nine months of 2018 were $47.6 million, a 6% decrease from the $50.6 million reported in the same period of 2017.
  • Revenues from the Distributed Products segment were $18.6 million in the first nine months of 2018, a 12% increase from the $16.5 million recorded in the same period of 2017.
  • Gross profit was $20.2 million in the first nine months of 2018, a $0.3 million decrease from the $20.5 million reported in the first nine months of 2017. Gross margin increased to 31% from 30% in the first nine months of 2017.
  • Operating expenses, including R&D and SG&A expenses, totaled $16.3 million in the first nine months of 2018, as compared to $19.5 million in the same period of 2017. This decrease was attributable to a decrease in R&D spending.
  • Net income was $4.6 million, or $0.11 per share, in the first nine months of 2018, compared to net income of $0.6 million, or $0.02 per share, in the same period of 2017.
  • Adjusted EBITDA was $7.4 million in the first nine months of 2018, an increase of approximately 71% compared to $4.3 million in the same period of 2017.
  • Cash flow provided by operating activities was $4.2 million, compared to cash used in operating activities of $0.1 million in the same period of 2017.

       
Balance Sheet Highlights
As of September 30, 2018, the Company had cash, cash equivalents and short-term investments of $44.9 million, compared with $43.0 million at December 31, 2017.

Recent Corporate Highlights

  • Concluded labor strike at Beit Kama production facility in Israel.
  • Announced the extension of an ongoing investigator initiated, proof-of-concept study evaluating the potential benefit of the Company’s liquid AAT on liver preservation and transplant rejection prevention. Kamada is collaborating with Massachusetts General Hospital, which is conducting and funding a study to assess the effect of AAT on liver graft quality and viability, and to evaluate the liver graft for markers of Ischemia-Reperfusion Injury and tissue damage. 
  • Appointed Eitan Kyiet as Vice President of Business Development.  Mr. Kyiet has over 20 years of experience in business development, strategic operations and corporate law, with a significant portion of his career spent in the life sciences industry.  He will lead Kamada's business development and strategic commercial activities, with a focus on advancing market opportunities for the Company's products.

Conference Call
Kamada management will host an investment community conference call on Monday, November 12 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 888-394-8218 (from within the U.S.), 1809-212-883 (from Israel), or 323-701-0225 (International) and entering the conference identification number: 7992586. 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 November 27 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: 7992586. 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, it's 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 (without limitation) statements regarding the company’s full-year 2018 and 2019 total revenue guidance, the optimism associated with the development plan for Kamada’s proposed pivotal Phase 3 study for its proprietary inhaled Alpha-1 Antitrypsin (AAT) and related regulatory path, as well as the progress of the collaboration with Massachusetts General Hospital for evaluating the potential benefit liquid AAT on liver preservation and transplant rejection prevention.. 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 in clinical and pre-clinical studies, additional competition in relevant markets, 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 BALANCE SHEETS      
  As of September 30, As of December 31,
   2018   2017   2017 
       
  Unaudited Audited
     
  In thousands
Current Assets      
Cash and cash equivalents $  12,871  $  12,156  $    12,681 
Short-term investments  32,051   27,986   30,338 
Trade receivables, net  14,826   21,980   30,662 
Other accounts  receivables  1,857   2,683   2,132 
Inventories  28,934   23,144   21,070 
   90,539   87,949   96,883 
       
Property, plant and equipment, net  24,406   23,597   25,178 
Other long term assets  176   443   49 
   24,582   24,040   25,227 
  $    115,121  $    111,989  $    122,110 
Current Liabilities      
Current maturities of loans and capital leases  585   602   614 
Trade payables  11,512   12,004   18,036 
Other accounts payables  4,662   6,299   5,820 
Deferred revenues  1,854   4,816   4,927 
   18,613   23,721   29,397 
Non-Current Liabilities      
       
Loans and capital leases  880   1,501   1,370 
Deferred revenues  677   1,000   707 
Employee benefit liabilities, net  1,035   2,057   1,144 
   2,592   4,558   3,221 
Shareholder's Equity      
Ordinary shares  10,406   10,399   10,400 
Additional paid in capital  178,873   177,193   177,874 
Capital reserve due to translation to presentation currency  (3,490)  (3,490)  (3,490)
Capital reserve from hedges  (8)  57   46 
Capital reserve from fair value financial assets through other comprehensive income  (5)  34   (4)
Capital reserve from share-based payments  9,246   10,413   9,566 
Capital reserve from employee benefits  (337)  (81)  (337)
Accumulated deficit  (100,769)  (110,815)  (104,563)
   93,916   83,710   89,492 
  $  115,121  $  111,989  $    122,110 
 


 
Consolidated Statements of Profit or Loss and Other Comprehensive Income (Loss)
 
 Nine months period ended  Three months period ended Year ended
 September 30, September 30, December 31,
 2018 2017 2018 2017 2017
          
 Unaudited Audited
    
 In thousands
Revenues from proprietary products$47,646  $50,568  $9,454  $17,058  $79,559 
Revenues from distribution 18,612   16,547   5,521   5,860   23,266 
          
Total revenues 66,258   67,115   14,975   22,918   102,825 
          
Cost of revenues from proprietary products 30,506   32,727   7,869   11,509   51,335 
Cost of revenues from distribution 15,536   13,930   4,587   4,961   19,402 
          
Total cost of revenues 46,042   46,657   12,456   16,470   70,737 
          
Gross profit 20,216   20,458   2,519   6,448   32,088 
          
Research and development expenses 7,174   10,056   2,323   3,418   11,973 
Selling and marketing expenses 2,724   3,133   818   1,021   4,398 
General and administrative expenses 6,132   6,270   1,902   2,323   8,273 
Other expenses 311   -   -   -   - 
Operating income ( loss) 3,875   999   (2,524)  (314)  7,444 
          
Financial income 628   266   214   92   500 
Financial expenses (297)  (50)  (84)  (14)  (162)
Income (expense) in respect of currency exchange differences and derivatives instruments, net 334   (479)  3   -   (612)
Income ( loss) before taxes 4,540   736   (2,391)  (236)  7,170 
Taxes on income (11)  87   -   -   269 
          
Net Income ( loss) 4,551   649   (2,391)  (236)  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 (1)  15   28   3   (23)
Gain (loss) on cash flow hedges (88)  303   56   (69)  329 
Net amounts transferred to the statement of profit or loss for cash flow hedges 34   (219)  27   (103)  (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)$4,496  $748  $(2,280) $(405) $6 ,695 
          
Income (loss) per share attributable to equity holders of the Company:         
Basic income (loss) per share$0.11  $0.02  $(0.06) $(0.01) $0.18 
Diluted income (loss) per share$0.11  $0.02  $(0.06) $(0.01) $0.18 
 


 
Consolidated statement of cash flow
 
 Nine months period Ended Three months period Ended Year Ended
 September, 30 September, 30 December 31,
 2018 2017 2018 2017 2017
          
 Unaudited Audited
    
 In thousands
Cash Flows from Operating Activities         
                    
Net income (loss)$4,551  $649  $(2,391) $(236) $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 2,814   2,648   874   903   3,523 
Financial expenses (income), net (665)  263   (133)  (78)  274 
Cost of share-based payment 679   659   294   218   483 
Income tax expense (income) (11)  87   -   -   269 
Gain from sale of property and equipment 70   (49)  -   (4)  (52)
Change in employee benefit liabilities, net (109)  278   (18)  137   166 
  2,778   3,886   1,017   1,176   4,663 
Changes in asset and liability items:         
          
Decrease (increase) in trade receivables, net 15,346   (2,924)  9,929   863   (9,967)
Decrease (increase) in other accounts receivables (179)  (393)  (16)  (547)  328 
Decrease (increase) in inventories (7,864)  2,450   (1,561)  928   4,524 
Decrease (increase) in deferred expenses 522   872   91   (132)  594 
Decrease (decrease) in trade payables (6,394)  (3,885)  (4,786)  (1,906)  (838)
Increase (decrease) in other accounts payables (1,117)  716   (141)  (473)  71 
Decrease  in deferred revenues (3,860)  (1,691)  (1,286)  (1,238)  (2,930)
  (3,546)  (4,855)  2,230   (2,505)  (8,218)
Cash received (paid) during the year for:         
          
Interest paid (42)  (16)  (12)  (7)  (21)
Interest received 451   266   204   117   399 
Taxes paid (17)  (14)  (8)  (4)  (116)
  392   236   184   106   262 
          
Net cash provided by (used in) operating activities$4,175  $(84) $1,040  $(1,459) $3,608 
 


 
 Nine months period Ended Three months period Ended  Year Ended
 September, 30 September, 30  December 31,
 2018 2017 2018 2017  2017
           
 Unaudited  Audited
  In thousands
Cash Flows from Investing Activities          
           
Proceeds from sale of (investment in) short term investments, net$(1,747) $(9,068) $207  $(12,041)  $(11,501)
Purchase of property and equipment and intangible assets (2,033)  (3,407)  (534)  (792)   (4,167)
Proceeds from sale of property and equipment 15   57   -   4    60 
Net cash used in investing activities (3,765)  (12,418)  (327)  (12,829)   (15,608)
           
Cash Flows from Financing Activities          
           
Proceeds from exercise of share base payments 6   2   3   1    3 
Receipt of long-term loans -   279   -   279    279 
Repayment of long-term loans (450)  (380)  (149)  (142)   (530)
Proceeds from issuance of ordinary shares, net -   15,558   -   15,558    15,568 
           
Net cash provided by (used in) financing activities (444)  15,459   (146)  15,696    15,320 
           
Exchange differences on balances of cash and cash equivalent 224   (769)  (52)  (276)   (607)
           
Increase in cash and cash equivalents 190   2,188   515   1,132    2,713 
           
Cash and cash equivalents at the beginning of the period 12,681   9,968   12,356   11,024    9,968 
           
Cash and cash equivalents at the end of the period$12,871  $12,156  $12,871  $12,156   $12,681 
           
Significant non-cash transactions          
Purchase of property and equipment through capital lease -   282   -   -    282 
                     
Purchase of property and equipment$215  $398  $215  $398   $1,681 
 


 
Adjusted EBITDA         
          
 Nine months period ended  Three months period ended  Year ended
 September 30, September 30, December 31,
 2018 2017 2018 2017 2017
          
 Thousands of US dollars
Net income (loss)$4,551  $649  $(2,391) $(236) $6,901 
                    
Income tax expense (11)  87   -   -   269 
Financial expense, net (331)  (216)  (130)  (78)  (338)
                    
Depreciation and amortization expense 2,814   2,648   874   903   3,523 
                    
Share-based compensation charges 675   659   291   218   483 
Expense (Income) in respect of translation differences and derivatives instruments, net (334)  479   (3)  -   612 
 $7,364  $4,306  $(1,360) $807  $11,450 
          
          
Adjusted net income         
 Nine months period ended  Three months period ended  Year ended
 September 30, September 30, December 31,
 2018 2017 2018 2017 2017
          
 Thousands of US dollars
Net income (loss)$4,551  $649  $(2,391) $(236) $6,901 
                    
Share-based compensation charges 679   659   294   218   483 
Adjusted net income (loss)$5,230  $1,308  $(2,097) $(18) $7,384 
Monday, November 12, 2018 - 07:00