Yahoo Finance Kamada Ltd. (NASDAQ:KMDA) Q1 2024 Earnings Call Transcript
Kamada Ltd. (NASDAQ:KMDA) Q1 2024 Earnings Call Transcript May 8, 2024
Kamada Ltd. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning, ladies and gentlemen, and welcome to the Kamada Limited First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct the question-and-answer session [Operator Instructions] This call is being recorded on Wednesday May 8, 2024. I would now like to turn the conference over to Mr. Brian Ritchie from LifeSci Advisors. Please go ahead, sir.
Brian Ritchie: Thank you. This is Brian Ritchie with LifeSci Advisors, and thank you all for participating in today's call. Joining me from Kamada are Amir London, Executive Officer; and Chaime Orlev, Chief Financial Officer. Earlier today Kamada announced its financial results for the three months ended March 31, 2024. If you have not received this news release, please go to the Investors page of the company's website at www.kamada.com. Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada. I encourage you to review the company's filings with the Securities and Exchange Commission including without limitation the company's Forms 20-F and 6-K, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast Wednesday May 8, 2024. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that said, it is my pleasure to turn the call over to Amir London CEO. Amir?
Amir London: Thank you Brian. And thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. We are extremely pleased with the strong financial and operational start to 2024 including nearly doubling our profitability as compared to the first quarter of last year. Importantly based on our strong performance in the first quarter and our expectation for the continued momentum in our business throughout 2024, we are raising our full year 2024 revenue guidance to be between $158 million to $162 million and we are also increasing our adjusted EBITDA guidance to be between $28 million to $32 million. I will begin with a high-level review of our strong financial results for the first quarter of 2024.
We generated total revenues of $37.7 million, which represented a robust year-over-year growth of 23% and recorded adjusted EBITDA of $7.5 million, a 96% increase compared to the first quarter of 2023, representing a 20% margin of revenues. We are very pleased with this substantial increase in profitability. While we benefit from the strength of our entire portfolio of six FDA-approved products, we continue to effectively leverage the two most important growth drivers in our business, KEDRAB and CYTOGAM. We are encouraged by the continued growth demonstrated by KEDRAB in the US market. And with respect to the CYTOGAM, we are starting to see the benefit of a direct physician engagement and promotional activities being executed by our US medical and commercial team.
Multiple studies conducted by leading US transplantation care wells related to the benefit of CYTOGAM have been accepted for presentation at transplantation related medical meetings this year in addition to the presentation last October at IDWeek. We expect continued steady growth in demand for this important product, which is the only one of its kind approved by the FDA and Health Canada. Moving on I'd like to highlight our strong balance sheet. We ended the first quarter with approximately $48 million in cash and we continue to have the financial strength to both accelerate the growth of existing business and pursue compelling business development opportunities, a process we remain actively engaged in, and which could add one or more commercial products to our existing portfolio.
These opportunities are expected to support continued significant growth beyond 2024. I should also highlight that during the first quarter we completed the successful launch in Israel of BEVACIZUMAB KAMADA the biosimilar to Avastin, which is indicated for the treatment of certain types of cancer including colon cancer and metastatic breast cancer. This represents the first biosimilar product to be launched and distributed by Kamada in Israel. We have several others in the pipeline to be launched in the coming years and we expect biosimilars to become an increasingly important aspect of our distribution business. Looking further ahead at future catalysts. Enrollment continues in the ongoing pivotal Phase 3 InnovAATe clinical trial of our inhaled Alpha-1 Antitrypsin therapy for the treatment of Alpha-1 deficiency.
Following recent receipt of positive feedback from the FDA through which the agency expressed its willingness to potentially accept a p-value of 0.1 alpha level in evaluating InnovAATe for the study efficacy primary endpoint for registration. We recently filed an IND amendment with both a revised Statistical Analysis Plan and study protocol. We anticipate further FDA feedback in the second half of this year. If approved of these changes may allow for the acceleration of the program. In addition to reiterate what we said on our last call, the FDA also previously reconfirmed our design of our ongoing clinical program and endorse the data and safety monitoring board unblinded positive safety assessment. The agency also accepted our plan to conduct an open-label extension study which is expected to be initiated already this month.
As a reminder, the European Medicine Agency, the EMA previously also reconfirmed the overall design of the ongoing InnovAATe study and acknowledge a statistically and clinically meaningful improvement in lung function as measured by FEV1 demonstrated in our prior Phase 2/3 European study. As we have said previously in parallel to the significant clinical and regulatory progress achieved we also continue to have active discussions with multiple parties related to potential partnering of this promising late-stage product candidate. We also continue to progress Kamada plasma, plasma collection operation in the US. We continue to successfully expand the hyperimmune plasma collection capacity at our first center and construction is nearly completed at our second plasma center located in Houston, Texas expected to be opened during the second half of this year.
We recently also signed the lease agreement for our third site located in San Antonio, Texas. With that, I'll now turn the call over to Chaime for a detailed discussion of our financial results for the first quarter of 2024. Chaime, please go ahead.
Chaime Orlev: Thank you, Amir. As previously discussed by Amir, our business performed extremely well to begin 2024. Total revenues for the quarter were approximately $37.7 million, a 23% increase from the $30.7 million recorded in the first quarter of 2023. The year-over-year growth was primarily driven by increased sales of both KEDRAB and CYTOGAM due to increased demand of the two products in the US market. For CYTOGAM, as Amir indicated our promotional activity and the availability of fresh product batches since October of 2023 are supporting the revenue growth during the first quarter and for the remainder of the year. Nearly 70% of our revenues during the first quarter of 2024 were generated by sales in the US market. Total gross profit for the first quarter of 2024 was $16.8 million representing 44% margin up 500 basis points when compared to the $11.8 million or 39% in the prior year period.
Operating expenses including R&D, sales and marketing, G&A and other expenses totaled $12.7 million, an increase of approximately 9% over the prior year period, which is in line with our expectations. Such increase is in support of our expanded commercial activities as well as our Phase 3 InnovAATe trial. As we get throughout 2023 and 2022, we continue to account for financing expenses with respect to revaluation of contingent consideration and the long-term assumed liabilities all of which are related to the acquisition completed in 2021. Net income for the first quarter was $2.3 million or $0.04 per diluted share as compared to a net loss of $1.8 million or a loss of $0.04 per share recorded in the first quarter of 2023. Adjusted EBITDA for the first quarter of 2024 was $7.5 million, nearly double that of the first quarter of 2023.
As Amir highlighted earlier, we anticipate continued momentum throughout 2024 with double-digit top and bottom line growth. As such, we're increasing our full year 2024 revenue guidance to between $158 million and $162 million and adjusted EBITDA guidance to between $28 million and $32 million. Finally, our financial position remains strong and provides us the strength and flexibility to accelerate the growth and profitability of our existing business, pursue compelling new business development opportunities, all of which continue to support double-digit rates beyond 2024. That concludes our prepared remarks. We will now open the call for questions. Operator?
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