Q4 2021 Kamada Ltd Earnings Call
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Greetings and welcome to the Comdata limited fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen only mode.
Brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Bob you did of lifestyle advisors. Thank you Bob you may begin.
Thank you Paul and good morning, and good afternoon to everyone.
Thank you all for participating in today's call joining me from Colorado are Amir, London, Chief Executive Officer, and Jaime or lab, Chief Financial Officer.
Earlier today <unk> announced its financial results for the three and 12 months ended December 31, 2021 .
You have not received this news release. Please go to the investors page of the company's website W.
Www dot com at a dotcom.
Before we begin I'd like to caution that comments made during this conference call by management will contain forward looking statements.
All risks and uncertainties regarding the operations of Pizza result, so I encourage you to review the company's filings with Securities and Exchange Commission, including without limitation. The company's forms 20-F, and 6K, which identify specific factors that may cause actual results or events.
Differ materially from those described in forward looking statements.
Furthermore, the content of this conference call contains time sensitive information.
It is accurate only as of the date of White broke crap Tuesday March 15 2022.
<unk> undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this conference call that.
That was prepared remarks, my pleasure to turn the call over to Amir London CEO Amir.
Thank you Bob My Thanks also to all investors and analysts for your interest in comment, though and for participating in today's call.
The recently completed 2021 you well the transformational period full comment, though you know the path towards becoming a global leader in the plasma derived specialty market.
Following the completion of the planned manufacturing transition of Glasgow from Takeda.
Our recent acquisition of the portfolio a full FDA approved commercial on hemoglobin and the establishment comment the plasma how about a U S. Based plasma collection company, we are embarking on a new and exciting chapter in the company evolution.
Well building on the strong foundation established over the years entering 2022 as you come into a.
Fully integrated specialty plasma company with six FDA approved product and strong commercial capabilities in the U S market as well as the global commercial footprint.
30 countries.
Hello business performed as expected in 2021 and we look ahead to 2022 for which our revenue guidance is between $124 million 235, So we under the $25 million 235 million throw it out there.
Representing a 20% to 30% growth compared to 2021.
As expected EBITDA margin of 12% to 15%.
It would represent more than 2.5 ex of the 2021 you'd be done.
These throw guidance reflect the benefit stemmed from our new strategic direction.
And the resumption of revenue and profitability growth in 2020 two.
Importantly, we further expect continued growth at a double digit rate in the coming few years.
The acquisition completed in November 'twenty, 'twenty, one putting a thorough search for the ideal assets will come at them with a critical strategic and synergetic step for the company.
The quiet product generated revenue exceeding $40 million in 2021 with over 50% gross margins and we anticipate significantly growing the new portfolio revenues through proactive promotional activity in the U S well.
Well the newly established subsidiary coming to ink is responsible for the commercialization and direct sales of the products.
We also intend to leverage our existing strong international distribution network to grow product revenues in the new territories, primarily in Asia, Latin America, and the Middle East.
I'm pleased to report that this promotional and sales activities have already commenced.
Just yesterday, we announced the Jordan I joined Us.
Bites President U S commercial operation to lead commercial activities for our portfolio of innovative medicines.
John's bass commercial leadership experience in the biopharmaceutical industry.
<unk> focus on driving sales of innovative specialty plasma products will be instrumental in initiatives aimed at further penetrating the U S market.
Our expanded product line.
We intend to actively promote this compelling product to hospitals and physicians throughout the U S.
As such we are also in the process of hiring a focused team of experienced sales and medical experts with established relationship with relevant U S has scale provides us.
Over the phone at Quad product the logistic side took them indicated for the prophylaxis of CMV disease associated with solid organ transplantation.
These proprietary unique product.
Only FDA approved product for this indication.
Cause and effect in transfer deposits will cycle gum is already well underway and we expect to receive FDA approval for its production at our Israeli facility by early 2023.
Moreover, based on the site took him to finishing tranche two.
The expected growth of cat drop our anti rabies hyper immune products.
And the plan and effective transition of the other acquired products over the next few years.
We anticipate improving the gross margins about proprietary products by effectively utilizing our plant capacity.
Another major strategic steps taken in the acquisition of the plasma collection facility in Texas in early 'twenty, 'twenty, one, which primarily specializes in the collection of IP immune plasma used for anti D immunoglobulin product manufactured by common them and distribute.
In the international markets.
This acquisition represented Commodus entry into the U S plasma collection markets and supported our strategic goal of becoming a fully integrated specialty plasma company.
We are already actively engaged in the expansion of the IP new plasma collection capacity at this center and we are simultaneously advancing our plan to open additional centers in the U S to further enhance our supply well specialty and regular plasma.
To lead our expansion efforts, we've also recently appointed Jonathan Ward.
The rectal facilities and construction.
Jonathan brings to Canada.
25 years of experience in facilities and construction management, most recently in the plasma collection industry.
This plant expansion is expected to enhance <unk> competitive position in the various markets.
Can't drop marketed in the U S. By <unk> continues to gain market share in the heart in the $50 million U S market.
During 2021 the FDA approved a label expansion for the product.
Which differentiate catch up in the first and only human rabies immunoglobulin available in the U S to be clinically studied in children and confirming the safety and effectiveness of its use in the pediatric population.
We anticipate set of the products to grow significantly during the next few years.
And so glad to see them in 2020 , one as planned Takeda completed the ointment affecting facility for that product.
And we fulfilled our supply commitments.
Going forward, we expect to begin with civic royalty payments from Takeda starting as soon as the second quarter of this year in the range of $10 million to $20 million per year from 'twenty to 'twenty two.
220 full team.
Enhancing our profitability and cash position.
In addition, we continue to grow sales of glacier and international markets through our local partners.
Turning to our promising clinical development pipeline. We are excited about the potential of our innovative and has a deep product for the treatment of AEP deficiency at the can.
<unk>, which is shown to be the most effective way of delivering a T directly into the patient's lungs.
There's substantial opportunity exist for any other day T to be evolutionary product in a market that is already over $1 billion in annual sales in the U S and the EU and growing steadily.
We are currently conducting the innovate clinical trial.
Randomized double blind placebo controlled pivotal phase III study.
While enrollment in the study was slowed during the last two years due to the COVID-19 pandemic. We are currently expanding the study with up to six additional clinical sites planned to be opened shortly.
Thereby expediting enrollment.
Importantly.
This is a unified study as the trial data are expected to qualify for regulatory submissions in both the FDA and the EMA.
Yeah.
You know what distribution segment, which is an additional important growth catalysts for comment though.
We leverage our expertise and strong presence in the Israeli market to register and market and distribute more than 20 products.
Developed and manufactured by our International partners.
In 2018 with significantly growing our pipeline of distributed products and in 2022 we anticipate launching a number of new products across multiple medical specialty.
And nearly all key strategic focus in our distribution business in the planned distribution of a portfolio of 11 Biosimilar product.
Texas to launch upon receipt.
Or any regulatory approval between the years 2022 and 'twenty 28, with an overall annual anticipated peak sales within several years of launch of more than $40 million.
Once achieved it will more than double our current Israeli distribution business.
Included in this portfolio of eight products through a distribution agreement with Alphatec.
Global leader in the development and manufacturing of Biosimilar drug candidates.
In closing.
2021 with a year of great importance for Canada as well.
Successfully executed on multiple critical strategic transactions, ensuring a rapid financial turnaround of the company with significant growth at a double digit rate anticipated in the us ahead.
Yeah.
As we enter 2022.
The initial benefits of the pivotal actions we've taken are already evident.
Canada is uniquely positioned for growth as a global leader in the specialty plasma industry.
Multiple robust value, creating catalysts.
With that I'll now turn the call over to Jaime for his review, although our fourth quarter and full year 2021 financial results.
Jaime please.
Uh huh.
Thank you Amir and good day everyone.
Our business performed as we anticipated during 2021.
Total revenues in 2021, hundreds and $3 $6 million as compared to 130.
$3 $2 million recorded in 2020.
This decrease was primarily due to the transition of manufacturing to Takeda, resulting in an overall.
$38.7 million year over year decrease.
The year over year decrease of $6 4 million in catch up sales to catch it.
This decrease resulted from a high level of product inventory at kids at the end of 2020.
Due to the COVID-19 pandemic pandemic effect on ketchup sales like kids in that year.
On the other hand, we posted $5.4 million of revenue.
Generated from the newly acquired portfolio.
Note. These revenues are for the period from November 22nd 2021 through the end of the year.
In the fourth quarter of 2021 total revenues were $31 $5 million, which was equivalent to the revenues recorded in the fourth quarter of 2020.
Yeah.
EBITDA in 2021.
Totaled $5 $4 million as compared to $25 1 million in 2020.
This decrease is.
Primarily attributed.
So the overall change in product sales mix.
The decrease in sales of glass, it's Takeda and COO.
Curt dropped country.
In addition, we incurred approximately $1.2 million of transaction related expenses associated with the newly acquired portfolio.
And approximately $600000 of excess.
During two employees, who were laid off as part of the downsizing.
The transition of blocks of manufacturing.
As of December 31st 2021, the company had cash cash equivalents and short term investments of $18 $6 million as compared to $109 3 million on December 31st 2020.
Primary use of cash during 2021 with the acquisition of the four.
Plasma derived hyper immune commercial products.
As of the end of 2021, our working capital increased by $13 7 million to a total of $57 $4 million.
In connection with the recent acquisition, we secured a $40 million credit facility.
The facility is comprised of a $20 million five year term loan.
Which is fully utilized by us and a 20 million short term revolving credit facility, which provides us.
Access to additional cash resources to continue to support our expansion as needed.
And since the end of 2020 , one we have not utilized the short term credits.
To reiterate our revenue guidance for 2020 two.
125 million to $135 million, a 20% to 30% growth compared to 2021 week.
We expect EBITDA margins of 12, 15%, which would represent more than 2.5 ex of the 2020 one EBITDA.
That concludes our prepared remarks, we will now open the call for questions.
Operator.
Thank you we will now be conducting a question and answer session.
I would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
Press Star two if you would like to remove your question from the queue for.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Okay.
Okay.
[laughter].
Yeah.
Okay.
Paul It's Bob yet it from lifestyle I've been emailed question by an investor.
Could you ask that question.
My question is as for a mirror, which is how long will it take to transition.
<unk> D in.
And two the four products to the Israeli manufacturing facility and how will that enhance your gross margins over time.
Thank you Bob So as described.
And during the call.
I'm, sorry to gummies already way underway.
As part of the tech transfer to our facility and we expect to have FDA approval by beginning of 2020 three.
Sorry to gummies are more than 50% of the new portfolio in terms of its revenue and contribution.
The other three products, we will be initiating that tech transfer activities.
We expect to be able to complete those here.
Within the next three to five years.
And once they all of them and affected by comment that our facility. This will have a significant contribution to the overall effectiveness of the plant and the gross margin of our proprietary products.
Definitely part of the synergies.
The acquisition that we've made.
Yeah.
Okay.
Yeah.
Thank you there are no further questions at this time I'd like to turn the floor back over to management for any closing comments.
Yeah.
Yes, so in closing.
On behalf of holding Todd comment the team.
We look forward to continuing to help clinicians and patients with important lifesaving product that we develop an affection and commercialize.
We thank all of our basketball for their support and remain committed to creating long term shareholder value.
I wanted to reiterate the significant growth expected already in 2022.
With our guidance for the year are expected to range between $125 million 235 million.
Renting a 20% to 30% increase although 2021 while it would be dumb allergens.
Expected to grow more than $2 five acts over 2021 EBITDA.
So this is significant growth expected for the year and we expect to have a double digit growth continue over the next.
A few years.
We hope you all stay healthy and safe and we thank you for your participating in todays call.
Yeah.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Okay.
Yeah.
Okay.
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