Nasdaq

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

07-08-2018

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 78^th 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