Q1 2023 Kamada Ltd. Earnings Call
Speaker 1: We.
Speaker 2: Greetings and welcome to the Commodore Limited First Quarter 2023 earnings call. At this time all participants are in a listen only mode. A 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.
Speaker 2: As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Brian Ritchie, with LifeSci Advisors. Thank you. Thank you again.
Speaker 3: Thank you. This is Brian Ritchie with LifeSci Advisors. Thank you all for participating in today's call.
Speaker 3: Joining me from Kamada is Amir London, Chief Executive Officer.
Speaker 3: Earlier today, FAMADA announced its financial results for the three months ended March 31st, 2023. If you have not received this news release, please go to the Investors page of the company's website at www.comada.com.
Speaker 3: 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 Commada.
Speaker 3: I encourage you to review the company's filings with the Securities and Exchange Commission, including without limitation, the company's forms 20F and 6K, which identify specific factors that may cause actual results or events to differ materially.
Speaker 3: from those described in the forward of the statements.
Speaker 3: 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 24, 2023. That undertakes no obligation to revise or update any statements to reflect events.
Speaker 3: 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?
Speaker 3: After the date of this conference call what that said is my pleasure to turn the call over to Amir London CEO Amir're giving a short story and my Hear you hear we come back to Becoming with test utilities system we'll have to back to work
Speaker 4: And thanks also to our investors and analysts for your interest in Camarda and for participating in today's call.
Speaker 4: We are off to an excellent start in 2023, both financially and operationally.
Speaker 4: Earlier today we announced a $60 million strategic private placement with creamy opportunity fund, the leading private equity firm in Israel, and an existing significant construction speed too Technically, which is expected the
Speaker 4: I will discuss its financing in further detail shortly, but will say up front that we are thrilled with this additional substantial investment from FIMI and we view it as indicative of the confidence this high quality investor has come at a significant growth potential.
Speaker 4: That is just beginning though, with our impressive first-quote financial business.
Speaker 4: We put a revenue in the third quarter of $30.7 million, which was presented year of the year growth of 9%. And EBDA of $3.8 million, an increase of 16% as compared to the first quarter of 2022.
Speaker 4: We achieve the top and bottom line growth anticipating our business to begin the EU with.
Speaker 4: Importantly, we continue to effectively leverage multiple growth drivers.
Speaker 4: including CADRAP sales in the U.S., the portfolio of the four SBA-approved neoglobulins acquired in Light21, Cytogar, Repagon, Varuzig, and Winro, which are marketed internationally, are now Israeli distribution business.
Speaker 4: Looking ahead, we expect the momentum from the South Quarter to extend throughout 2023 with the possibility to be farther, meaningfully enhanced as we compared to last year.
Speaker 4: As such, we are reiterating our fully year 2023 revenue guidance of $138 million to $146 million and EDDA of $22 million to $26 million.
Speaker 4: The midpoint of that range will represent the stability growth of approximately 35% of 2022.
Speaker 4: Beyond 2023, we continue to anticipate any of the double digit revenue and the possibility growth that the foreseeable use ahead of us.
Speaker 4: with significant upside potential and limited downside risk.
Speaker 4: Our prospects were recently further significantly enhanced by the successful completion of a multi indifferent cash statement.
Speaker 4: of the automated shows in a private placement.
Speaker 4: Under the terms of the purchase agreement, Commodore will issue an aggregate of approximately 12.6 million ordinary shares to CME at a price of $4.75 per share which will prevent the average closing price of the company's shares on NASDAQ.
Speaker 4: There's a 20 trading day that's prior to the date of the purchase agreement.
Speaker 4: Upon the closing of the transaction, Simi is expected to beneficially own approximately 38% of Kamada Outstanding Ordinary Shares and will become a controlling shareholder of the company within the meaning of the Israeli company's law.
Speaker 4: This strategic investment provides us with financial flexibility, allowing us to accelerate the growth of our existing business and pursue compelling business development opportunities.
Speaker 5: forward to leveraging our significantly strengthened cash provision going forward.
Speaker 6: An extraordinary general meeting of the shareholders of the company to approve the private placement will be held in August 2023 following the issue end over a second quarter of 2023 financial results.
Speaker 7: With respect to existing business, we will please earlier this month receive the FDA approval to the National Cytogram at our facility in Bet Kama, Israel.
Speaker 8: This has the approval that was granted within the expected timeline to present the successful conclusion of the technology transfer process from site to done from the Peter von the Factor CSL bearing.
Speaker 9: with since initiated commercial manufacturing, which will positively impact or security utilization and efficient.
Speaker 10: Cytogram is the highest selling of the four inter-global products acquired by Comida in November 2021.
Speaker 11: generating approximately $23 million in sales in 2022, and it maintains growth margins of over 60%.
Speaker 12: I'd like to highlight that cytogram is the third product in addition to glass here and cadrab to be approved by that to be air from manufacturing at our Israeli facility.
Speaker 13: Also known, Swiss Mabry recently granted marketing of service station for glassier in Switzerland. For chronic augmentation and maintenance therapy and adults with clinically evident end-to-zema due to severe alpha-and-deficiency. Switzerland in the first European country to the riding vehicle and all the full?? of from other countries.
Speaker 14: upon obtaining the required reimbursement coverage.
Speaker 15: upon obtaining the required reimbursement coverage. To ensure wide access to eligible patients.
Speaker 16: We have partnered with the ITLGEN Group, a company focus on the commercialization of specialty medicines for rare diseases across Europe .
Speaker 17: Outside of the U.S., South of Glacier, we're approximately $6 million on 2022.
Speaker 18: And we are focused on further expanding the commotion of the product and its annual revenue in the international market.
Speaker 19: Let's move on to CADRAP. I will read it in a bubble.
Speaker 20: In the past several months, and especially from the beginning of the year, Kedra, marketed in the US by Kedrian, has continued to grow substantially and to gain share in the US market, which is estimated to be over $150 million annually. Kedra's commercial team is successful in leveraging
Speaker 21: The advantages of the product as the only human magazine of Lable-Lean, and delivering the U.S. could be clinically studied in scheduling. We anticipate that the product will continue to grow significantly over the next few years.
Speaker 22: Also, to reiterate what we have said previously, I should highlight that this product generates more than 50% growth margin for Comida. Additionally, our U.S. team established in 2022 is making excellent progress in promoting our specialty IgG portfolio to physicians and other healthcare practitioners, and to exponentiate dietent ICU.
Speaker 23: through our direct engagement and opportunities at medical meetings. As a reminder, our activities promoting this important therapy, primarily psychosome and biasing, will present the first time in over a decade that these high-tier immune specialty products have been supported by field-based activity in the US.
Speaker 24: We are encouraged by the consistently positive feedback received from key opinion leaders who are seeking to publish new clinical data related to our products, while conducting educational symposium that we believe will have a positive impact on the understanding of this medicine contributing to continued growth in demand.
Speaker 25: We've started seeing the impact of activity and expected to increase demand for this portfolio of products in the quarter ahead.
Speaker 26: Moving on, looking farther ahead at future catalysts, we are pleased by the Provost made this comment of plasma, our US-based plasma collection company.
Speaker 27: Our 2021 acquisition of the Plasma Collection Center and the Houston Taxes, represented common as entry into the US Plasma Collection market and supported our strategic role in becoming a fully integrated specialty Plasma product company. We are successful expanding the Hydrining and Plasma Collection capacity at our first center.
Speaker 28: in actively advancing our plan to open additional centers in the U.S. to further enhance our supply of specialty and regular normal plasma.
Speaker 29: On the development side, we are encouraged by the most recent progress achieved in our ongoing people-tile faith to innovate clinical trials for the INL, HALF-01, and the systems therapy for the treatment of HALF-01 deficiencies.
Speaker 30: The study has enrolled 60 patients to date, and the dependent data safety monitoring board is simply recommended study continuation without modification for the fifth time since the study was initiated.
Speaker 31: In the next few weeks, we're continuing to ask for that tragic treatment in time to meet with our FDA and the European Medicine Agency to discuss study progress and potential opportunities to show them the regulatory pathway.
Speaker 32: As we have expected this lead, a substantial opportunity exists for in-heldouts for one to be a transformation of products in a market that is already of the $1 billion in annual sales in the US and Europe .
Before I read your first quarter financial results, I would like to share some additional exciting news. New t unssein heide
Following the $60 million investment from Fannie, Kama's CFO , Jaime Olav, who had previously planned to transition out of his position to pursue other opportunities, has withdrawn his resignation and will remain in his position.
Jaime has served our CFOs in December 2017 and he will be instrumental in supporting common and continued growth and maximizing the strategic opportunities provided by the private placement.Configuring the growth and maximum employment andyard lines are in the highest Adaptive
In addition, near this May, we previously served as our General Counsel in Corporate Secretary from 2010 until 2018, as we joined Commada, as Vice President General Counsel and Corporate Secretary. Both highly and near, significantly strengthening our executive management.
Top total revenues for the first quarter were approximately 30.7 million dollars and 9% increase from the 21, sorry, from the 28.1, I repeat 28.1 million dollars recorded in the first quarter of 2022.
The year over year growth during the first quarter was primarily driven by strong sales of CADRA, the contribution of our previously acquired hemoglobin products, and the Israeli distribution sales.
Total gross profit for the first quarter of 2023 was $11.8 million representing 39% margin compared to $11.3 million, or 40% margin, in the first quarter of 2022.
Let's now turn to the explanation of our depreciation expenses.
As previously discussed, the company is accounting for the appreciation expenses associated with tangible assets which were generated through the late 2012 acquisition of our IDG program.
World's profit and growth margins, excluding such intangible asset depreciation, would have been 13.2 million dollars and 43 percent, respectively, in the first quarter of this year, compared to 12.6 million dollars and 45 percent, respectively, in the first quarter of 2022.
Operating Census, including R&D, share-the-market in GNA and other Census, totaled $11.6 million in the first quarter of this year compared to $11.1 million in the first quarter of 2022.
Certain marketing costs for the first quarter included point-forming and dollar of the research and expenses of intangible assets generated through the IGG product acquisition.
During the first quarter of 2023, we conducted a trend of workforce downsizing at the Israeli plant, optimizing staff level to capacity needs. As a result of this downsizing, we incurred an expense of $0.6 million for access to several compensation provided to employees who were laid off.
The downsizing is expected to result in a planned annualized reduction of approximately 6% in the overall Israeli labor cost.
We continue to expect overall operational expenses, including R&D, Southern Marketing, and GNA, to increase between 15 to 20% during 2023, as compared to last year, and we continue to advance our commercial activities as well as our phase three innovative trikes.
As we did throughout 2022, we continue to account for financing expenses with respect to the reevaluation of contingent consideration and the long-term assumed liability, all of which are related to the acquisition completed in 2021. For the first quarter of 2023, these finance charges total...
$1.8 million. Net loss for the first quarter of 2023 was approximately $1.8 million, or 4 cents per share on a fully-deleted basis, consistent with the prior year period.
Excluding the depreciation expenses of intangible assets and the final expenses of the contingent consideration and other long-term liabilities associated with acquired product, the company would have recorded net income of $1.7 million or four cents per share in the first quarter of 2023.
EBITDA was $3.8 million for the third quarter of 2023 as compared to $3.3 million in the first quarter of 2022 representing a significant 16% increase year over year.
Excluding the $0.6 million expense of the access service compensation, and to relate it off, EBITDA would have been $4.4 million in the first quarter of 2023, representing a significant 33% increase in year overview. As I highlighted earlier, we are reiterating our full year 2023 revenue.
Catch using operating activities was 2.9 million dollars in the first quarter of 2023 as compared to cash provided by Open Activities of $5.5 million in the first quarter of 2022. Our total cash position as of March 31, 2023
of $27.1 million compared to $34.3 million as of end of 2022.
This figure does not include the expected net proceeds from the recently announced $60 billion financing which is expected to close in the second half of this year.
That concludes the third remarks. We will now open the course for questions.
That concludes our third remarks. We will now open the course for questions. Operator.
Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment please while we pull for questions.
Thank you. Our first question comes from the line of David Belz with Zacks Small Cap Research. Please proceed with your question. Please proceed with your question.
Hey Amir, how are you doing? Good, thank you. Thanks for taking the questions. First one I'll start out with, were there any surprises, either positive or negative, that occurred during the quarter or do you think everything kind of played out as you thought it would?
The quarter played out according to our plan, according to our budget, we are progressing exactly as we've anticipated both the top line and bottom line and based on that, we've reiterated our annual guidance.
All right, so for your guidance for the year, it looks like revenues are going to kind of ramp up as the year goes along in order to hit that number. So I'm just kind of curious, where do you think that growth is going to come from? As I understand it, it really does look like.
So there is on the court, they'll meet the company's expectations, as I said. We started it strong, many aspects, we were receiving the toll cuts for the earlier. And as you've seen in previous years, the first half of the year is usually lower than the second part of the year.
A lot has to do with inventory at the distributors.
So the growth will come from all aspects of the business, from CADRA, from the new IDG portfolio, from distribution business in Israel, from royalties paid by Takeda for GlaxoSales in the US, for GlaxoSales, XUS, all our growth Catholics, all our lines of business.
Okay, now in regards to the INNOVATE trial, are you happy with the pace of enrollment that's going on there? Is there anything else that can happen to maybe kind of speed up enrollment in that trial?
So of course we were not happy with the pace of enrollment during the pandemic which delayed the ability to open new sites. The sites were open in second part of 2022 and recruitment has been everything, then accelerated.
In order to speed up recruitment, we need to open additional sites. We are in the process of identifying those additional sites internationally. And that's our plan moving forward to expedite recruitment by opening additional sites in other countries. westernberries.org
All right, sounds good. Congrats on the progress this quarter and thanks for taking the questions. Of course, thank you very much. Thank you. As a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. As we pull for more questions, I'll turn the floor back to Mr. Ritchie for any additional questions from the web.
Thank you, Melissa. A couple of questions here from the web, Amir. Can you please provide a bit more color on Femi? Yes, of course. So Femi was established in 1996. It's the living is really probably that I could see. Femi was.
The total transaction value is over $7 billion.
They are known to be a long-term investor with superb internal investment.
Between 2015 and 2022, over the course of those seven years, they've deployed over $1.8 billion in acquiring equity for the companies. They've been major investors in Commodore since the end of 2019, early 2020.
And as I said, we are very happy with the additional funding and the public procurement and it would be live.
Let's …
basically a big trust in Canada. The company was interested in the investment of the city as well as our board and special committee was established by the board to accelerate growth both organically and by identifying
and realizing new business development opportunities. And I believe that this thing...
kind of shared interests and it's something that will drive Canada and value to its shareholders significantly.
Great, thank you.
Also, can you expand more on the potential use of proceeds from the financing, and are there any near-term business development opportunities on the horizon?
Thank you for the question. Good question. The company is interested in funding to accelerate growth.
both organically with our existing business but also by identifying and realizing new business developed opportunities. We are constantly examining opportunities for collaboration, licensing, acquisition, and the NAID in our areas of expertise.
If we were to rely only on organic profitability, it would have a significant delay in the ability to execute on such transactions.
And, of course, we delay the company's ability to exert growth. So the combination of our organic growth, which you see in our guidance for the year, with this additional funding gives us basically the ability to benefit or enjoy both organic growth and external growth.
Basically, by examining opportunities for licensing or acquisition of additional assets. Great. Thank you, Amir. At this time, we've got no further questions, so I'll hand the call back over to you for any closing remarks.
Thank you, thank you Brian . So in closing we are very pleased with our performance to begin the year and we're excited about the potential opportunities that LIE has following the $60 million financing by CME. We look forward to continuing to support the nation with patients with important life-saving therapeutics that we develop in the factory and commercialize. We thank all of our investors for their support and we remain committed to create long-term public
Thank you everyone and we hope you all stay healthy and safe.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.