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Link to Conference Call Webcast (14/8, 8:30 a.m. Eastern time)
NESS ZIONA, Israel (August 14, 2014) – Kamada Ltd. (NASDAQ and TASE: KMDA), a plasma-derived protein therapeutics company focused on orphan indications, announces financial results for the three and six months ended June 30, 2014.
Financial highlights of the second quarter of 2014 and recent weeks include:
Clinical highlights of the second quarter of 2014 and recent weeks include:
“Building upon the launch in the first quarter of a Phase 2/3 trial with Glassia to treat newly diagnosed pediatric patients with type 1 diabetes and a U.S. Phase 2 trial with inhaled AAT for treating AATD, during the second quarter we further expanded and advanced our clinical development programs with the initiation of a study with Glassia in GVHD, an orphan indication. In addition, we were particularly pleased to receive FDA approval for our significantly enhanced infusion rate for Glassia, as it represents another competitive distinction for our intravenous AAT therapy. These unique features are key to Glassia's continually increasing market share in a greater than $750 million global market that is growing at about 10% per year. The recent FDA approval of our enhanced manufacturing process provides improved efficiencies and capacity that will serve us well as we increase sales of our proprietary protein plasma therapeutics,” stated David Tsur, Co-founder and Chief Executive Officer of Kamada.
“We reported preliminary, top-line results from the European Phase 2/3 clinical trial of our proprietary inhaled AAT therapy for the treatment of AATD. We are continuing to review the full data set and expect to complete the final analysis and to report those data in September. We are looking forward to presenting the clinical findings that may support our efforts to bring the first inhaled therapy to patients suffering from this debilitating, life-threatening, orphan lung disease. Subject to the final results, we are preparing to submit for review for regulatory approval with the European Medicines Agency during the fourth quarter of this year.
“Revenues for the second quarter of 2014 increased from the first quarter of this year, and the full-year revenue guidance we are introducing today reflects our expectations for significant growth in the second half of the year compared with the first half.
“We are pleased with our recent progress and look forward to a productive second half of the year as we prepare to report final data from our inhaled AAT program and advance other clinical programs. We have a number of milestones in the coming months and expect that these, along with growing revenues, will support our commitment to enhance shareholder value,” added Mr. Tsur.
Second Quarter Financial Results
Total revenue for the second quarter of 2014 of $15.8 million compared with $16.1 million for the second quarter of 2013. Revenue from the Proprietary Products Segment was $8.7 million compared with $11.9 million in the year-ago quarter, which included a one-time payment of $4.5 million received from Baxter related to a technology transfer milestone. Excluding this one-time payment, our revenues this quarter increased 18% compared with the second quarter of 2013 and increased 18% compared with the first quarter of 2014. Revenue from the Distribution Segment of $7.1 million increased from $4.2 million in the second quarter of 2013, primarily due to higher IVIG sales in the Israeli market.
Research and development (R&D) expenses in the second quarter of 2014 of $5.1 million increased from $2.6 million in the second quarter of 2013 and from $3.4 million in the first quarter of 2014, due to increased activity in support of various clinical studies including the launch of three important clinical trials, the closing and analysis of the European Phase 2/3 study of inhaled AAT, as well as by facility costs allocated to research and development use.
Selling, general and administrative (SG&A) expenses in the second quarter of 2014 of $2.8 million decreased from $3.2 million in the second quarter of 2013, largely due to one-time costs in the prior-year quarter associated with our U.S. IPO.
Gross loss for the second quarter of 2014 was $0.10 million compared with gross profit of $7.4 million in the second quarter of 2013. Gross loss in the second quarter of 2014 included a one-time write-off of inventory of $3.0 million, and gross profit in the second quarter of 2013 was favorably impacted by the $4.5 million milestone payment. Excluding these one-time events, gross profit for the second quarter of 2014 increased to $3.0 million from $2.9 million in the second quarter of 2013, reflecting the level of revenue and product mix within the Proprietary Segment as well as the increase in revenue in the Distributed Products segment.
Gross margin decreased to 0% from 46% in the second quarter of 2013 due to product mix as the Distribution Segment revenues increased during the quarter and to the product write-off described above. Gross margin in the second quarter of 2013 benefitted from milestone revenue received under the technology transfer agreement with Baxter.
For the second quarter of 2014, the Company reported an operating loss of $7.9 million compared with operating income of $1.7 million for the second quarter of 2013. Net loss for the second quarter of 2014 was $8.4 million or $0.23 per share, compared with net income of $0.89 million or $0.03 per diluted share for the same period in 2013. Adjusted net loss for the second quarter of 2014 was $7.4 million compared with adjusted net income of $2.7 million for the same period in 2013.
Adjusted EBITDA for the second quarter of 2014 was negative $6.2 million compared with positive $4.2 million for the second quarter of 2013.
Six Month Financial Results
Total revenue for the first half of 2014 of $29.0 million compared with $28.7 million for the first half of 2013. Revenue in the Proprietary Products Segment was $16.1 million, compared with $20.0 million for the same period in 2013, which included a $4.5 milestone payment. Excluding this payment, Proprietary Products revenues in the first half of 2014 increased by 4% to $16.1 million compared with $15.5 million in the first half of 2013. Revenue in the Distribution Segment increased 45% to $12.8 million from $8.8 million in the first half of 2013.
Gross profit for the first half of 2014 decreased to $3.2 million from $11.6 million in the first half of 2013, with gross margin declining to 11% from 40% in the comparable prior-year period. Excluding the inventory write-off in the 2014 period and the milestone payment in the 2013 period, gross profit for the first half of 2014 decreased to $6.2 million from $7.1 million in the first half of 2013.
Operating loss for the first six months of 2014 of $10.6 million compared with operating income of $0.35 million for the first six months of 2013. Net loss for the first half of 2014 was $11.5 million or $0.32 per share, compared with a net loss of $1.1million or $0.04 per share for the same period in 2013.
Adjusted EBITDA for the first six months of 2014 was negative $7.2 million, compared with positive $3.9 million for the same period last year.
Balance Sheet Highlights
As of June 30, 2014, Kamada had cash, cash equivalents and short-term investments of $67.7 million, compared with $74.2 million as of December 31, 2013. During the first half of 2014, the Company used $5.3 million in cash to fund operations and $1.5 million for capital expenditures.
For the year ending December 31, 2014, Kamada expects total revenue to be between $70 million and $72 million, with revenue from its Distribution Segment projected to be between $25 million to $26 million and revenue from its Proprietary Products Segment to be between $45 million and $47 million. The Company notes that U.S. revenues from the agreement with Baxter remain on track.
Kamada management will host an investment community conference call today beginning at 8:30 a.m. Eastern time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 888-803-5993 (from within the U.S.), 706-634-5454 (from outside the U.S.) or 1-809-457-877 (toll-free from Israel) and entering the conference identification number: 76337212.
A replay of the call will be accessible two hours after its completion through August 20, 2014 by dialing 855-859-2056 (from within the U.S.) or 404-537-3406 (from outside the U.S.) and entering the conference identification number: 76337212. The call will also be archived for 90 days at www.streetevents.com and www.kamada.com
Link to Conference Call Webcast (14/8, 8:30 a.m. Eastern time)
Kamada Ltd. is focused on plasma-derived protein therapeutics for orphan indications, and has a commercial product portfolio and a robust 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 proteins. 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 and only 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 Baxter International. In addition to Glassia, Kamada has a product line of nine other injectable pharmaceutical products that are marketed through distributors in more than 15 countries, including Israel, Russia, Brazil, India and other countries in Latin America, Eastern Europe and Asia. Kamada has five late-stage plasma-derived protein products in development, including an inhaled formulation of AAT for the treatment of AAT deficiency that completed pivotal Phase 2/3 clinical trials in Europe and entered Phase 2 clinical trials in the U.S. Kamada also leverages its expertise and presence in the plasma-derived protein therapeutics market by distributing 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 27A of the U.S. Securities Act of 1933, as amended, 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 assumptions and results related to financial results forecast, commercial results, timing and results of clinical trials and EMA and U.S. FDA authorizations. 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 clinical trials, delays or denial in the U.S. FDA or the EMA approval process, additional competition in the AATD market or further regulatory delays. 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.
Gil Efron CFO Kamada firstname.lastname@example.org
Anne Marie Fields LHH email@example.com 212-838-3777