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NESS ZIONA, Israel (October 29, 2013) – Kamada Ltd. (NASDAQ and TASE: KMDA), a plasma-derived protein therapeutics company focused on orphan indications, announces financial results for the three and nine months ended September 30, 2013.
“Overall we are very pleased with our third quarter financial performance. We made continued steady progress growing proprietary product revenue, advancing clinical development programs and enhancing manufacturing processes to meet expected product demand,” stated David Tsur, Founder and Chief Executive Officer of Kamada. “Importantly, we are nearing the completion of two Phase 2/3 trials with expected data readouts from our Phase 2/3 trial in Europe of our inhaled Alpha-1 Antitrypsin (AAT) for the treatment of AAT deficiency (AATD) in early 2014, and are about to embark upon two late-stage clinical programs in the coming months.
“Our European pivotal, multi-center Phase 2/3 trial of inhaled AAT for the treatment of AATD will complete by year-end and we expect to report top-line results in early 2014. We are very excited about the potential for this first inhaled treatment for AATD and are working on launch plans with our European marketing partner, Chiesi. The open-label extension portion of this trial has enrolled a high percentage of eligible patients, which we believe supports patient and physician preference for an inhaled treatment for AATD. In addition, we are preparing for a U.S. clinical study of our inhaled AAT for treatment of AATD that will test pharmacokinetic parameters of different analytes in epithelial lining fluid and serum, as well as safety and tolerability. We have an Investigational New Drug protocol approved by the U.S. Food and Drug Administration and expect to initiate the trial by the end of this year.
“By the end of the year we plan to initiate a Phase 2/3 trial with Glassia in pediatric patients newly diagnosed with type 1 diabetes with the goal of establishing efficacy in halting the progression of the disease and maintaining the ability of the pancreas to produce insulin. This is a very exciting opportunity for Kamada as data from the Phase 1/2 trial showed positive signals of disease modification, which may potentially represent a breakthrough in the treatment of this disease.
“2013 continues to be a significant year of growth and expansion for Kamada, with achievements to date providing the foundation for continued success through the balance of the year and into 2014,” concluded Mr. Tsur.
Third Quarter Financial Results
Total revenue for the third quarter of 2013 decreased 1.1% to $17.5 million from $17.7 million for the third quarter of 2012, reflecting higher revenue in the Proprietary Products Segment offset by expected declines in revenue in the Distribution Segment and increased 8.5% compared to the second quarter in 2013.
Revenue from the Proprietary Products Segment increased 9.4% to $12.1 million from $11.0 million in the year-ago quarter and product sales increased 63.1% compared to the second quarter of 2013, after excluding the one-time milestone payment of $4.5 million recorded in that quarter. Revenue from the Distribution Segment declined 18.6% to $5.4 million from $6.6 million in the third quarter of 2012 and increased 28.4% compared to second quarter of 2013.
Research and development (R&D) expenses in the third quarter of 2013 of $2.8 million increased from $2.7 million in the third quarter of 2012 and $2.6 million in the second quarter of 2013.
Selling, general and administrative (SG&A) expenses in the third quarter of 2013 of $2.1 million increased from $1.6 million in the third quarter of 2012 and $1.8 million in the second quarter of 2013, after eliminating a one-time IPO related expense, due in part to the costs associated with being a U.S. public company.
Gross profit for the third quarter of 2013 increased to $5.9 million from $5.6 million in the third quarter of 2012, while gross margin increased to 34% from 32% in the third quarter of 2012.
For the third quarter of 2013 the Company reported operating income of $1.0 million compared with $1.3 million for the third quarter of 2012. Net income for the third quarter of 2013 was $0.0 million or $0.00 per diluted share, compared with net income of $0.0 million or $0.00 per diluted share for the same period in 2012.
Adjusted EBITDA for the third quarter of 2013 was $2.0 million compared with $2.3 million for the same quarter last year.
Nine Month Financial Results
Total revenue for the first nine months of 2013 decreased 9.5% to $46.2 million from $51.0 million for the first nine months of 2012, due to expected declines in revenue in the Distribution Segment.
Year-to-date revenue from the Proprietary Products Segment increased 4.9% to $32.0 million from $30.5 million for the same period in 2012. Revenue from the Distribution Segment declined 30.9% to $14.2 million from $20.5 million in the same period of 2012.
Gross profit for the first nine months of 2013 increased to $17.5 million from $14.7 million, while gross margin increased to 38% from 28% in the comparable prior-year period.
Operating income for the first nine months of 2013 of $1.3 million compared with operating income of $0.7 million for the first nine months of 2012. The net loss for the nine-month period ended September 30, 2013 narrowed to $1.1 million or $0.04 per share, from a net loss of $2.6 million or $0.10 per share for the same period in 2012.
Adjusted EBITDA for the first nine months of 2013 increased 50% to $5.9 million compared with $3.9 million for the same period last year.
Balance Sheet Highlights
As of September 30, 2013, the Company had cash, cash equivalents and short-term investments of $75.9 million, compared with $33.8 million as of December 31, 2012.
The Company is revising 2013 revenue guidance and now expects total revenue for the year to be between $70 million and $72 million, compared with previous guidance for total revenue to be $74 million. This revision is mainly due to a countrywide pricing change enacted by the national drug pricing regulator in India, National Pharmaceutical Pricing Authority, which affects the Company's distributor sales in India. The Company notes that U.S. revenues from the agreement with Baxter International remain on track. Kamada now expects 2013 revenue from its Distribution Segment to be $20 million as expected compared to $26 million in 2012 and revenue from its Proprietary Products Segment to be between $50 million and $52 million for the year ending December 31, 2013 compared to $47 million in 2012 representing growth in Kamada more profitable and strategicsegment.
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 (toll-free from within the U.S.) or 706-634-5454 (from outside the U.S.) or 809-315-362 (toll-free from Israel) and entering passcode 87555865. The call also will be broadcast live on the Internet at www.streetevents.com, www.earnings.com and www.kamada.com.
A replay of the conference call will be accessible two hours after its completion through November 4, 2013 by dialing 855-859-2056 (toll-free from within the U.S.) or 404-537-3406 (from outside the U.S.) and entering passcode 87555865. The call will also be archived for 90 days at www.streetevents.com, www.earnings.com and www.kamada.com.
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 is in pivotal Phase 2/3 clinical trials in Europe and will be entering 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 US 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, clinical trials, the EMA and U.S. FDA authorizations and timing of clinical trials. 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
Anne Marie Fields, LH
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