Kamada Reports Second Quarter 2015 Financial Results

Conference call begins today at 8:30 a.m. Eastern time

NESS ZIONA, Israel--(BUSINESS WIRE)-- Kamada Ltd. (NASDAQ: KMDA) (TASE: KMDA), a plasma-derived protein therapeutics company focused on orphan indications, announces financial results for the three and six months ended June 30, 2015.

Financial highlights of the 2015 second quarter included:

• Total revenues of $19.2 million compared with $15.8 million for the second quarter of 2014;
• Gross profit of $3.6 million compared with a gross loss of $0.10 million in the year-ago second quarter; and
• Adjusted net loss of $1.8 million compared with an adjusted net loss of $7.4 in the year-ago second quarter.

Other highlights of the 2015 second quarter and recent weeks included:

• Reported updated data from European Phase 2/3 clinical study of inhaled alpha-1 antitrypsin (AAT) to treat AAT deficiency (AATD);
• Announced collaboration with Baxalta for a Phase 2 clinical trial with AAT for prevention of lung transplant rejection; and
• Announced publication of positive data from Phase 1/2 clinical study of intravenous AAT in Pediatric Diabetes.

Management Commentary

“The first half of 2015 was marked by significant progress as we continued to build our core protein plasma business and advanced our clinical development programs. In April we completed the validation of the filling process that delayed certain Proprietary Product revenue during the first quarter of 2015 and realized that revenue during this second quarter. As a result, we are in a good position to achieve our revenue targets for 2015. We are also confident in our ability to meet our 2017 revenue goal of $100 million, which includes approximately 75% growth in the Proprietary Products Segment. Increases in the number of patients treated by our intravenous (IV) AAT, Glassia®, are on track for 2015 and to meet our target to double the number of patients treated by the product world wide by 2018,” stated Amir London, Chief Executive Officer of Kamada.

“We continue to strengthen and expand our relationship with Baxalta, our U.S. strategic partner for Glassia, as evidenced by the growing number of AATD patients treated by Glassia in the U.S. and our recent agreement to partner on the clinical development of the product as a potential preventative treatment for lung transplant rejection. In addition, a U.S. Phase 1/2 clinical trial investigating our IV AAT for the treatment of Graft vs Host Disease (GvHD) is underway at the Fred Hutchinson Cancer Research Center in Seattle in cooperation with Baxalta. We look forward to building on this collaborative partnership in order to drive revenue growth and bring our immune-modulating plasma-based protein therapies to patients in need.

“Kamada continues to be an innovative leader advancing the commercial and clinical applications of our immumodulatory plasma-based protein therapeutics. In addition to developing the first and only ready-to-infuse IV AAT (Glassia) and inhaled AAT for the treatment of AATD, we are leveraging the immunomodulatory mechanism of action of AAT to address unmet medical needs in a number of rare diseases and severe conditions, such as Type 1 diabetes, Graft vs. Host Disease (GvHD), and prevention of lung transplant rejection. We continue to make progress with our plans to submit a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for our inhaled AAT to treat AATD and we plan to submit the MAA by the end of the year.

“The results from the Phase 2/3 clinical trials for Rabies IgG conducted by our partner, Kedrion, will be released in the fourth quarter of 2015 due to a delay in finalizing the closing activities of the study. As a result, the BLA is now planned to be submitted in the first half of 2016.

“I am very pleased to take over the helm at Kamada during such an exciting time of growth and expansion. Our strong and growing base business, comprised of Glassia for the treatment of AATD and specialized immunoglobulins, coupled with our rich clinical pipeline of innovative treatments for orphan indications strengthen our leadership position in the plasma-derived protein therapeutics market. We have a dynamic leadership team of skilled and talented professionals. Together, we look forward to achieving a number of important value-creating milestones throughout the balance of 2015 as we advance our innovative AAT franchise in a number of important clinical areas,” concluded Mr. London.

Second Quarter Financial Results

Total revenues for the second quarter of 2015 of $19.2 million compared with $15.8 million for the second quarter of 2014. Revenue from the Proprietary Products Segment was $12.7 million compared with $8.7 million in the year-ago quarter, largely as a result of delayed revenue from the first quarter of 2015 being realized in the second quarter 2015. Revenue from the Distributed Product Segment was $6.5 million for the second quarter of 2015 compared with $7.1 million in the same quarter of 2014.

Gross profit for the second quarter of 2015 was $3.6 million compared with a gross loss of $0.10 million for the second quarter of 2014, which was impacted by a one-time $3.0 million inventory write off. Gross margin increased to 19% from 0% in the second quarter of 2014.

Research and development expenses in the second quarter of 2015 were $3.4 million, down from $5.1 million in the second quarter of 2014 as the company continued to support various clinical studies.

Selling, general and administrative expenses in the second quarter of 2015 of $2.7 million decreased modestly from $2.8 million in the second quarter of 2014.

For the second quarter of 2015, the Company reported an operating loss of $2.5 million compared with an operating loss of $7.9 million for the second quarter of 2014. The Company recorded a net loss for the second quarter of 2015 of $2.3 million or $0.06 per share, compared with a net loss of $8.4 million or $0.23 per share for the same period in 2014. The adjusted net loss for the second quarter of 2015 was $1.8 million compared with an adjusted net loss of $7.4 million for the same period in 2014.

Adjusted EBITDA for the second quarter of 2015 was a loss of $1.1 million compared with a loss of $6.2 million for the second quarter of 2014.

Six Month Financial Results

Total revenue for the first half of 2015 of $28.2 million compared with $29.0 million for the first half of 2014. Revenue in the Proprietary Products Segment was $15.9 million, compared with $16.1 million for the same period in 2014. Revenue in the Distribution Segment decreased 4% to $12.3 million from $12.8 million in the first half of 2014.

Gross profit for the first half of 2015 was $4.0 million compared with $3.2 million in the first half of 2014, with gross margin moving to 14% from 11% in the comparable prior-year period.

Operating loss for the first six months of 2015 of $8.2 million compared with operating loss of $10.6 million for the first six months of 2014. Net loss for the first half of 2015 was $7.6 million or $0.21 per share, compared with a net loss of $11.5 million or $0.32 per share for the same period in 2014.

Adjusted EBITDA for the first six months of 2015 was negative $5.6 million, compared with negative $7.2 million for the same period last year.

Balance Sheet Highlights

As of June 30, 2015, Kamada had cash, cash equivalents and short-term investments of $44.3 million, compared with $49.7 million as of March 31, 2015. During the second quarter of 2015, the Company used $5.7 million in cash to fund operations and $0.8 million for capital expenditures.

2015 Revenue Guidance

For the year ending December 31, 2015, Kamada expects total revenue to be between $70 million and $73 million, with revenue from its Distributed Product Segment projected to be between $26 million and $28 million and revenue from its Proprietary Products Segment projected to be between $45 million and $47 million. The Company notes that revenue projections for 2015 take into account an expected negative foreign exchange impact of approximately $2.0 million in relation to product sales in Israel and Russia, and presume that U.S. revenue from the agreement with Baxalta remains on track.

Conference Call

Kamada management will host an investment community conference call today 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 1-809-315-362 (toll-free from Israel) and entering the conference identification number: 86271389. 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 beginning two hours after its completion through August 5, 2015 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: 86271389. 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 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.

-Financial Statements to Follow-

	CONSOLIDATED BALANCE SHEETS
			As of June 30,								As of December 31,
				2015				2014				2014
			Unaudited								Audited
			In thousands
	Current Assets
	Cash and cash equivalents		$	6,807			$	25,083			$	14,546
	Short-term investments			37,511				42,603				37,350
	Trade receivables, net			15,584				15,215				17,514
	Other accounts receivables			4,408				2,299				2,359
	Inventories			24,785				23,871				25,423
				89,095				109,071				97,192
	Non-Current Assets
	Property, plant and equipment, net			21,562				21,668				21,769
	Other long-term assets			103				160				179
				21,665				21,828				21,948
				110,760				130,899				119,140
	Current Liabilities Short term credit and Current maturities of convertible debentures
				7,924				8,798				7,492
	Trade payables			14,808				15,942				16,530
	Other accounts payables			3,385				4,510				4,045
	Deferred revenues			1,792				5,264				2,919
				27,909				34,514				30,986
	Non-Current Liabilities
	Convertible debentures							8,039				-
	Employee benefit liabilities, net			693				834				722
	Deferred revenues			6,895				6,867				7,015
				7,588				15,740				7,737
	Equity
	Share capital			9,312				9,203				9,208
	Share premium			160,927				157,212				158,417
	Conversion option in convertible debentures			1,147				2,217				1,147
	Capital reserve due to translation to presentation currency			(3,490	)			(3,490	)			(3,490	)
	Capital reserve from hedges			134				54				(116	)
	Capital reserve from available for sale financial assets			49				93				10
	Capital reserve from share-based payments			8,362				7,217				8,783
	Capital reserve from employee benefits			(81	)			(129	)			(81	)
	Accumulated deficit			(101,097	)			(91,732	)			(93,461	)
				75,263				80,645				80,417
			$	110,760			$	130,899			$	119,140

	Consolidated Statements of Comprehensive Income (loss)
			Six months period ended June 30,								Three months period ended June 30,								Year ended December 31
				2015				2014				2015				2014				2014
			Unaudited																Audited
			Thousands of US dollar (Except for per-share income (loss) data)
	Revenues from proprietary products		$	15,881			$	16,142			$	12,708			$	8,721			$	44,389
	Revenues from distribution			12,295				12,842				6,538				7,076				26,676
	Total revenues			28,176				28,984				19,246				15,797				71,065
	Cost of revenues from proprietary products			12,930				14,706				9,635				9,703				32,617
	Cost of revenues from distribution			11,214				11,082				5,971				6,160				23,406
	Total cost of revenues			24,144				25,788				15,606				15,863				56,023
	Gross profit (loss)			4,032				3,196				3,640				(66	)			15,042
	Research and development expenses			7,058				8,433				3,415				5,068				16,030
	Selling and marketing expenses			1,743				1,366				944				719				2,898
	General and administrative expenses			3,437				3,994				1,737				2,037				7,593
	Operating loss			(8,206	)			(10,597	)			(2,456	)			(7,890	)			(11,479	)
	Financial income			300				421				118				179				1,611
	Income in respect of currency exchange and  translation differences and derivatives  instruments, net			761				136				248				97				-
	Financial expense			(491	)			(1,410	)			(252	)			(737	)			(3,293	)
	Income (loss) before taxes on income			(7,636	)			(11,450	)			(2,342	)			(8,351	)			(13,161	)
	Taxes on income			-				34				-				11				52
	Net Income (loss)			(7,636	)			(11,484	)			(2,342	)			(8,362	)			(13,213	)
	Other Comprehensive Income (loss):
	Items that may be reclassified to profit or loss in  subsequent periods:
	Net gain (loss) on available for sale financial  assets			39				120				(79	)			81				37
	Net gain (loss) on cash flow hedge			250				(102	)			399				(33	)			(272	)
	Items that will not be reclassified to profit or loss  in subsequent periods:
	Actuarial net gain of defined benefit plans							-								-				48
	Total comprehensive loss		$	(7,347	)		$	(11,466	)		$	(2,022	)		$	(8,314	)		$	(13,400	)
	Loss per share attributable to equity holders of the Company:
	Basic loss per share		$	(0.21	)		$	(0.32	)		$	(0.06	)		$	(0.23	)		$	(0.37	)
	Diluted loss per share		$	(0.21	)		$	(0.32	)		$	(0.06	)		$	(0.23	)		$	(0.37	)

	CONSOLIDATED STATEMENTS OF CASH FLOWS
				Six months periodEnded								Three months periodEnded								Year Ended
				June 30,								June 30,								December 31,
				2015				2014				2015				2014				2014
				Unaudited																Audited
				Thousands of US dollar
	Cash Flows from Operating Activities
	Net loss			$	(7,636	)		$	(11,484	)		$	(2,342	)		$	(8,362	)		$	(13,213	)
	Adjustments to reconcile loss to net cash  provided by (used in) operating activities:
	Adjustments to the profit or loss items:
	Depreciation and amortization				1,572				1,315				801				652				2,788
	Finance expenses (income), net				(570	)			853				(123	)			461				1682
	Cost of share-based payment				1,029				2,095				524				1,009				3,751
	Loss from sale of fixed assets				-				-				-				-				52
	Taxes on income				-				34				-				11				(2	)
	Change in employee benefit liabilities, net				(29	)			7				(46	)			33				(57	)
					2,002				4,304				1,156				2,166				8,214
	Changes in asset and liability items:
	Decrease (increase) in trade receivables				2,211				2,764				(6,207	)			(2,472	)			(869	)
	Decrease (increase) in other accounts receivables				(502	)			530				327				770				(50	)
	Decrease (increase) in inventories and long-term inventories				638				(1,938	)			2,650				4,743				(3,490	)
	Decrease (increase) in deferred expenses				(1,400	)			814				(1,471	)			255				1,209
	Increase (decrease) in trade payables				(1,461	)			1,898				1,111				(342	)			3,261
	Increase (decrease) in other accounts payables				(584	)			196				75				759				(344	)
	Decrease in deferred revenues				(1,247	)			(1,829	)			(1,070	)			(983	)			(4,026	)
					(2,345	)			2,435				(4,585	)			2,730				(4,309	)
	Cash paid and received during the period for:
	Interest paid				(243	)			(602	)			(122	)			(301	)			(1,210	)
	Interest received				594				132				244				38				758
	Taxes paid				(47	)			(64	)			(18	)			(4	)			(158	)
					304				(534	)			104				(267	)			(610	)
	Net cash used in operating activities			$	(7,675	)		$	(5,279	)		$	(5,667	)		$	(3,733	)		$	(9,918	)

	CONSOLIDATED STATEMENTS OF CASH FLOWS
					Six months periodEnded								Three months periodEnded								Year Ended
					June 30,								June 30,								December 31,
						2015				2014				2015				2014				2014
					Unaudited																Audited
					Thousands of US dollar
	Cash Flows from Investing Activities
	Short-term investments				$	25			$	(26,784	)		$	400			$	(3,352	)		$	(23,746	)
	Purchase of property and equipment					(1,332	)			(1,535	)			(823	)			(919	)			(3,076	)
	Proceeds from sale of property and equipment					-				-				-				-				3
	Net cash used in investing activities					(1,307	)			(28,319	)			(1,223	)			(4,271	)			(26,819	)
	Cash Flows from Financing Activities
	Exercise of options into shares					1,165				39				1,165				39				88
	Repayment of convertible debentures					-				-				-				-				(7,728	)
																						-
	Net cash provided by (used in) financing activities					1,165				39				1,165				39				(7,640	)
	Exchange differences on balances of cash and cash  equivalent					78				(468	)			(479	)			(266	)			(187	)
	Decrease in cash and cash equivalents					(7,739	)			(34,024	)			(6,204	)			(8,231	)			(44,564	)
	Cash and cash equivalents at the beginning of the period					14,546				59,110				13,011				33,314				59,110
	Cash and cash equivalents at the end of the period				$	6,807			$	25,083			$	6,807			$	25,083			$	14,546
	Significant non-cash transactions
	Exercise of convertible debentures into shares				$	-			$	7			$	-			$	-			$	-

	Adjusted EBITDA
			Six months period Ended June 30,								Three months period Ended June 30,								For the year Ended December 31,
				2015				2014				2015				2014				2014
			Thousands of US dollar
	Net loss		$	(7,636	)		$	(11,484	)		$	(2,342	)		$	(8,362	)		$	(13,213	)
	Income tax expense			-				34				-				11				52
	Financial expense (income), net			(570	)			853				(114	)			461				1,682
	Depreciation and amortization expense			1,572				1,315				801				652				2,788
	Share-based compensation charges			1,029				2,095				524				1,009				3,751
	Adjusted EBITDA		$	(5,605	)		$	(7,187	)			(1,131	)		$	(6,229	)		$	(4,940	)

	Adjusted net income
			Six months period Ended June 30,								Three months period Ended June 30,								For the year Ended December 31,
				2015				2014				2015				2014				2014
			Thousands of US dollar
	Net loss		$	(7,636	)		$	(11,484	)		$	(2,342	)		$	(8,362	)		$	(13,213	)
	Share-based compensation charges			1,029				2,095				524				1,009				3,751
	Adjusted EBITDA			(6,607	) $			(9,389	)$		$	(1,818	)		$	(7,353	)		$	(9,462	)

View source version on businesswire.com: http://www.businesswire.com/news/home/20150730005286/en/

Kamada Ltd.
Gil Efron
CFO
[email protected]
or
LHA
Anne Marie Fields, 212-838-3777
[email protected]

Source: Kamada Ltd.

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