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Total Revenues for First Quarter of 2023 were $30.7 Million, Up 9% Year-over-Year
First Quarter 2023 EBITDA of $3.8 Million, Increase of 16% Year-over-YearSolid First Quarter Results and Expected Continued Momentum Supported by Multiple Growth Drivers Anticipated to Drive Full-Year 2023 EBITDA Growth of Over 30% Year-over-YearAnnounced $60 Million Private Placement with FIMI Opportunity FundsReceived FDA Approval to Manufacture CYTOGAM® at the Company’s Israeli Facility; Expected to Positively Impact Plant Utilization and EfficiencyConference Call and Live Webcast Today at 8:30 AM ET
REHOVOT, Israel and Hoboken, N.J., May 24, 2023 (GLOBE NEWSWIRE) — Kamada Ltd. (NASDAQ: KMDA; TASE: KMDA.TA), a commercial stage global biopharmaceutical company, with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, today announced financial results for three months ended March 31, 2023.
“We are off to an excellent start to 2023, both financially and operationally,” said Amir London, Kamada’s Chief Executive Officer. “With total revenues in the first quarter of $30.7 million, which represented year-over-year growth of 9%, and EBITDA of $3.8 million, an increase of 16% year-over-year, we achieved the top- and bottom-line growth anticipated in our business to begin the year. Importantly, we continue to effectively leverage multiple growth drivers, including KEDRAB® sales in the U.S, the profitable portfolio of four FDA approved IgGs acquired in late 2021, the sales of our other Proprietary products in the international markets, and our Israeli distribution business.”
“While our first quarter results are impressive, we are equally excited about our outlook for the remainder of the year,” continued Mr. London. “As such, we are reiterating our full-year 2023 revenue guidance of $138 million to $146 million and EBITDA guidance of $22 million to $26 million, which would represent profitability growth of over 30% as compared to 2022. Looking beyond 2023, based on multiple catalysts from our existing business, we continue to anticipate annual double-digit growth rate in revenues and profitability in the foreseeable years ahead.”
“Our prospects were recently further significantly enhanced by the successful completion of multiple key achievements. The $60 million financing agreement signed with FIMI will provide us with financial flexibility, allowing us to accelerate the growth of our existing business and pursue compelling business development opportunities. Moreover, regarding our existing business, the FDA approval to manufacture CYTOGAM® at our facility in Israel, and the initiation of our commercial manufacturing, will positively impact our facility’s utilization and efficiency. In addition, we are encouraged by the most recent progress achieved in our ongoing pivotal Phase 3 InnovAATe clinical trial for the inhaled Alpha-1 Antitrypsin (AAT) therapy for the treatment of Alpha-1 Antitrypsin Deficiency (AATD). The study has enrolled 60 patients to date and the independent Data Safety Monitoring Board (DSMB) recently recommended study continuation without modification for the fifth time since study initiation,” concluded Mr. London.
Financial Highlights for the Three Months Ended March 31, 2023
Total revenues were $30.7 million in the first quarter of 2023, compared to $28.1 million in the first quarter of 2022, representing a 9% increase year-over-year.Gross profit and gross margins were $11.8 million and 39%, respectively, in the first quarter of 2023, compared to $11.3 million and 40%, respectively, reported in the prior year period. Cost of goods sold in the Company’s Proprietary segment in the first quarter of 2023 included $1.3 million of depreciation expenses associated with intangible assets generated through the IgG products acquisition. Gross profit and gross margins, excluding such intangible assets depreciation, would have been $13.2 million and 43%, respectively, compared to $12.6 million and 45%, respectively, in the first quarter of 2022.Operating expenses, including R&D, Sales & Marketing (S&M), G&A and other expenses (including excess severance remuneration described below), totaled $11.6 million in the first quarter of 2023, compared to $11.1 million in the first quarter of 2022. S&M costs for the most recently completed first quarter included $0.4 million of depreciation expenses of intangible assets generated through the IgG products acquisition.During the first quarter of 2023, Kamada conducted a planned workforce downsizing at its Israeli plant, optimizing staff level to its capacity needs. As a result of this downsizing, the Company incurred an expense of $0.6 million for excess severance remuneration provided to employees who were laid off. The downsizing is expected to result in an annualized reduction of approximately 6% in the overall Israeli labor costs.Finance expense, net for the first quarter of 2023 included a $1.8 million expense associated with the revaluation of the contingent consideration and other long-term liabilities assumed as part of the IgG products acquisition. For more information with respect to such contingent consideration and other long-term liabilities, please refer to Note 5 of Kamada’s 2022 financial statements included in the 2022 Annual Report on Form 20-F filed on March 15, 2023, with the Securities and Exchange Commission.Net loss was $1.8 million, or $(0.04) per share, in the first quarter of 2023, in line with a net loss of $1.8 million, or $(0.04) per share, in the first quarter of 2022. Excluding depreciation expenses of intangible assets and finance expenses of the contingent consideration and other assumed long-term liabilities associated with the acquired IgG products, the Company would have recorded net income of $1.7 million, or $0.04 per share, in the first quarter of 2023, compared to $1.9 million, or $0.04 per share in the first quarter of 2022.EBITDA, as detailed in the tables below, was $3.8 million in the first quarter of 2023, as compared to $3.3 million in the first quarter of 2022, representing a 16% increase year-over-year.Excluding the $0.6 million expense of the excess severance remuneration paid to the employees who were laid off, EBITDA would have been $4.4 million in the first quarter of 2023, representing a 33% increase year-over-year.Cash used by operating activities was $2.9 million in the first quarter of 2023, as compared to cash provided by operating activities of $5.5 million in the first quarter of 2022.
Balance Sheet Highlights
As of March 31, 2023, Kamada had cash, cash equivalents, and short-term investments of $27.1 million, as compared to $34.3 million on December 31, 2022. This figure does not include the expected net proceeds from the recently announced $60 million financing, which is expected to close during the second half of 2023.
Recent Corporate Highlights
Announced that it has entered into a securities purchase agreement with FIMI Opportunity Funds (FIMI), the leading private equity investor in Israel, to purchase $60 million of its ordinary shares in a private placement.Received FDA approval of application to manufacture CYTOGAM® (Cytomegalovirus Immune Globulin Intravenous [Human]) (CMV-IGIV) at the Company’s facility in Beit Kama, Israel.Granted marketing authorization in Switzerland from Swissmedic for GLASSIA® [Alpha-1 Proteinase Inhibitor (Human)], for chronic augmentation and maintenance therapy in adults with clinically evident emphysema due to severe hereditary AATD.Announced that Chief Financial Officer (CFO) Chaime Orlev will remain in role and the appointment of Nir Livneh as the Company’s Vice President, General Counsel and Corporate Secretary.
Fiscal Year 2023 Guidance
Kamada continues to expect to generate fiscal year 2023 total revenues in the range of $138 million to $146 million. The Company also continues to anticipate generating EBITDA during 2023 in the range of $22 million to $26 million, representing profitability growth of over 30% from the year ended December 31, 2022.
Conference Call
Kamada management will host an investment community conference call on Wednesday, May 24, 2023, at 8:30 am Eastern Time to present the Company’s results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 1-877-407-0792 (from within the U.S.), 1 809-406-247 (from Israel) or 1-201-689-8263 (International) using conference ID 13738719. The call will also be webcast live on the Internet at: https://viavid.webcasts.com/starthere.jsp?ei=1614685&tp_key=87fb1414ee.
Non-IFRS financial measures
We present EBITDA and adjusted EBITDA because we use this non-IFRS financial measure to assess our operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes this non-IFRS financial measure are useful to investors because: (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and provide investors with a meaningful perspective on the current underlying performance of the Company’s core ongoing operations; and (2) they exclude the impact of certain items that are not directly attributable to our core operating performance and that may obscure trends in the core operating performance of the business. Non-IFRS financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, our IFRS results. We expect to continue reporting non-IFRS financial measures, adjusting for the items described below, and we expect to continue to incur expenses similar to certain of the non-cash, non-IFRS adjustments described below. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-IFRS financial measures should not be construed as an inference that these items are unusual, infrequent or non-recurring. EBITDA and adjusted EBITDA are not recognized terms under IFRS and do not purport to be an alternative to IFRS terms as an indicator of operating performance or any other IFRS measure. Moreover, because not all companies use identical measures and calculations, the presentation of EBITDA and adjusted EBITDA may not be comparable to other similarly titled measures of other companies. EBITDA and adjusted EBITDA are defined as net income (loss), plus income tax expense, plus or minus financial income or expenses, net, plus or minus income or expense in respect of securities measured at fair value, net, plus or minus income or expenses in respect of currency exchange differences and derivatives instruments, net, plus depreciation and amortization expense, plus non-cash share-based compensation expenses and certain other costs.
About Kamada
Kamada Ltd. (the “Company”) is a commercial stage global biopharmaceutical company with a portfolio of marketed products indicated for rare and serious conditions and a leader in the specialty plasma-derived field, focused on diseases of limited treatment alternatives. The Company is also advancing an innovative development pipeline targeting areas of significant unmet medical need. The Company’s strategy is focused on driving profitable growth from its significant commercial catalysts as well as its manufacturing and development expertise in the plasma-derived and biopharmaceutical fields. The Company’s commercial products portfolio includes six FDA approved plasma-derived biopharmaceutical products: CYTOGAM®, KEDRAB®, WINRHO SDF®, VARIZIG®, HEPAGAM B® and GLASSIA®, as well as KAMRAB®, KAMRHO (D)® and two types of equine-based anti-snake venom (ASV) products. The Company distributes its commercial products portfolio directly, and through strategic partners or third-party distributors in more than 30 countries, including the U.S., Canada, Israel, Russia, Argentina, Brazil, India, Australia and other countries in Latin America, Europe, Middle East, and Asia. The Company leverages its expertise and presence in the Israeli market to distribute, for use in Israel, more than 25 pharmaceutical products that are supplied by international manufacturers. During recent years the Company added eleven biosimilar products to its Israeli distribution portfolio, which, subject to the European Medicines Agency (EMA) and the Israeli Ministry of Health approvals, are expected to be launched in Israel through 2028. The Company owns an FDA licensed plasma collection center in Beaumont, Texas, which currently specializes in the collection of hyper-immune plasma used in the manufacture of KAMRHO (D). In addition to the Company’s commercial operation, it invests in research and development of new product candidates. The Company’s leading investigational product is an inhaled AAT for the treatment of AAT deficiency, for which it is continuing to progress the InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial. FIMI Opportunity Funds, the leading private equity firm in Israel, is the Company’s lead shareholder, beneficially owning approximately 21% of the outstanding ordinary shares and is expected to beneficially own approximately 38% upon the closing of the Private Placement.
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) 2023 revenue guidance in the range of $138 Million to $146 Million; (2) 2023 EBITDA of $22 million to $26 million representing profitability growth of over 30% from the year ended December 31, 2022; (3) commercial manufacturing of CYTOGAM® in Israel shortly, which will positively impact the facility’s utilization and efficiency; (4) expected annual double-digit growth rate in revenues and profitability in the foreseeable years ahead; (5) effectively leveraging multiple growth drivers, including KEDRAB® sales in the U.S, the portfolio of four FDA approved IgGs acquired in late 2021, the sales of our other Proprietary products in the international markets, and our Israeli distribution business; (6) receiving net proceeds from the recently announced $60 million financing; (7) closing of the recently announced $60 million financing during the second half of 2023; (8) the financing providing the Company with financial flexibility, allowing the Company to accelerate the growth of its existing business and pursue compelling business development opportunities; (9) the downsizing is expected to result in an annualized reduction of approximately 6% in overall Israeli labor costs; and (10) optimism about AATD Phase 3 clinical trial progress. 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, success in receiving the necessary shareholder and regulatory approvals for the Private Placement, timing of Kamada’s release of its financial results for the second quarter of 2023, overall stock market conditions and specifically Kamada’s stock price, availability of sufficient raw materials required to maintain manufacturing plans, continued utilization of Kamada’s Israeli manufacturing site, continuation of inbound and outbound international delivery routes, continued demand for the IgG product portfolio, FDA and international health authorities’ approval process, financial conditions of the Company’s customers, suppliers and services providers, Kamada’s ability to integrate the new product portfolio into its current product portfolio, Kamada’s ability to grow the revenues of its new product portfolio, and leverage and expand its international distribution network, 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, and other risks detailed in Kamada’s filings with the U.S. Securities and Exchange Commission (the “SEC”) including those discussed in its most recent Annual Report on Form 20-F and in any subsequent reports on Form 6-K, each of which is on file or furnished with the SEC and available at the SEC’s website at www.sec.gov. 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:
Amir London
Chief Executive Officer
IR@kamada.com
Brian Ritchie
LifeSci Advisors, LLC
212-915-2578
britchie@LifeSciAdvisors.com
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of As of March 31, December 31, 2023 2022 2022 Unaudited Audited Assets Current Assets Cash and cash equivalents$27,121 21,967 $34,258 Trade receivables, net 20,925 21,568 27,252 Other accounts receivables 3,603 7,867 8,710 Inventories 79,754 64,761 68,785 Total Current Assets 131,403 116,163 139,005 Non-Current Assets Property, plant and equipment, net 26,496 26,098 26,157 Right-of-use assets 5,836 2,990 2,568 Intangible assets, Goodwill and other long-term assets 145,305 151,858 147,072 Contract assets 7,755 5,987 7,577 Total Non-Current Assets 185,392 186,933 183,374 Total Assets 316,795 303,096 $322,379 Liabilities Current Liabilities Current maturities of bank loans$4,444 3,725 $4,444 Current maturities of lease liabilities 1,438 1,017 1,016 Current maturities of other long term liabilities 29,414 19,095 29,708 Trade payables 26,210 11,682 32,917 Other accounts payables 7,350 6,670 7,585 Deferred revenues 419 40 35 Total Current Liabilities 69,275 42,229 75,705 Non-Current Liabilities Bank loans 11,852 16,296 12,963 Lease liabilities 4,992 3,056 2,177 Contingent consideration 18,115 22,551 17,534 Other long-term liabilities 37,280 42,531 37,308 Deferred revenues – 15 – Employee benefit liabilities, net 473 1,268 672 Total Non-Current Liabilities 72,712 85,717 70,654 Shareholder’s Equity Ordinary shares 11,736 11,728 11,734 Additional paid in capital net 210,665 210,269 210,495 Capital reserve due to translation to presentation currency (3,490) (3,490) (3,490)Capital reserve from hedges (99) 12 (88)Capital reserve from share-based payments 5,750 4,771 5,505 Capital reserve from employee benefits 539 (149) 348 Accumulated deficit (50,293) (47,991) (48484)Total Shareholder’s Equity 174,808 175,150 176,020 Total Liabilities and Shareholder’s Equity$316,795 303,096 $322,379
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Three months
period ended
March 31, Year ended
December 31,
2023 2022 2022 Unaudited Audited Revenues from proprietary products 24,061 23,011 $102,598 Revenues from distribution 6,649 5,082 26,741 Total revenues 30,710 28,093 129,339 Cost of revenues from proprietary products 13,224 12,449 58,229 Cost of revenues from distribution 5,647 4,342 24,407 Total cost of revenues 18,871 16,791 82,636 Gross profit 11,839 11,302 46,703 Research and development expenses 3,231 4,420 13,172 Selling and marketing expenses 3,922 3,321 15,284 General and administrative expenses 3,418 3,005 12,803 Other expenses 979 310 912 Operating income (loss) 289 246 4,532 Financial income 25 2 91 Income (expense) in respect of securities measured at fair value, net – – – Income (expenses) in respect of currency exchange differences and derivatives instruments, net 151 169 298 Revaluation of long-term liabilities (1,761) (2,010) (6,266)Financial expenses (500) (194) (914)Income before tax on income (1,796) (1,787) (2,259)Taxes on income 13 41 62 Net Income (loss)$(1,809) (1,828) $(2,321) Other Comprehensive Income (loss) : Amounts that will be or that have been reclassified to profit or loss when specific conditions are met Gain (loss) from securities measured at fair value through other comprehensive income Gain (loss) on cash flow hedges (156) (108) (776)Net amounts transferred to the statement of profit or loss for cash flow hedges 145 66 634 Items that will not be reclassified to profit or loss in subsequent periods: Remeasurement gain (loss) from defined benefit plan 191 – 497 Tax effect – – – Total comprehensive income (loss)$(1,629) (1,870) $(1,966) Earnings per share attributable to equity holders of the Company: Basic net earnings per share (0.04) (0.04) $(0.05)Diluted net earnings per share (0.04) (0.04) $(0.05)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months period Ended Year Ended March, 31 December 31, 2023 2022 2022 Audited Cash Flows from Operating Activities Net income (loss)$(1,809) (1,828) $(2,321) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Adjustments to the profit or loss items: Depreciation and impairment 3,123 3,027 12,155 Financial expenses (income), net 2,085 2,033 6,791 Cost of share-based payment 415 193 1,153 Taxes on income 13 41 62 Loss (gain) from sale of property and equipment (22) – – Change in employee benefit liabilities, net (8) (12) (111) 5,606 5,282 20,050 Changes in asset and liability items: Decrease (increase) in trade receivables, net 6,306 13,492 7,603 Decrease (increase) in other accounts receivables 1,362 589 (578)Decrease (increase) in inventories (10,970) 2,662 (1,361)Decrease (increase) in deferred expenses 3,554 (110) (1,340)Increase (decrease) in trade payables (6,712) (13,649) 7,055 Increase (decrease) in other accounts payables (238) (772) 290 Decrease in deferred revenues 384 – (20) (6,314) 2,212 11,649 Cash received (paid) during the period for: Interest paid (341) (194) (853)Interest received 25 2 97 Taxes paid (18) (9) (36) (334) (201) (792) Net cash provided by (used in) operating activities$(2,851) 5,465 $28,586
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months period Ended Year Ended March, 31 December 31, 2023 2022 2022 Audited Cash Flows from Investing Activities Purchase of property and equipment and intangible assets (1,117) (513) (3,784)Proceeds from sale of property and equipment 24 – – Business combination – – – Net cash provided by (used in) investing activities (1,093) (513) (3,784) Cash Flows from Financing Activities Proceeds from exercise of share base payments 1 3 9 Receipt of long-term loans – – – Repayment of lease liabilities (271) (295) (1,098)Repayment of long-term loans (1,111) (16) (2,628)Repayment of other long-term liabilities (1,500) (1,500) (5,626)Net cash provided by (used in) financing activities (2,881) (1,808) (9,343) Exchange differences on balances of cash and cash equivalent (312) 236 212 Increase (decrease) in cash and cash equivalents (7,137) 3,380 15,671 Cash and cash equivalents at the beginning of the period 34,258 18,587 18,587 Cash and cash equivalents at the end of the period$27,121 21,967 $34,258 Significant non-cash transactions Right-of-use asset recognized with corresponding lease liability$3,580 174 $551 Purchase of property and equipment and Intangible assets$292 254 $618
NON-IFRS MEASURES
Three months period ended Year ended March 31, December 31, 2023 2022 2022 In thousandsNet income$(1,809) $(1,828) $(2,321)Taxes on income 13 41 62 Financial expense (income), net 2,085 2,033 6,791 Depreciation and amortization expense 3,123 2,886 12,155 Non-cash share-based compensation expenses 415 155 1,153 Adjusted EBITDA$3,827 $3,286 $17,840
