Q2 2023 Kamada Ltd Earnings Call
Speaker 1: This strategic investment, if approved, will provide us with financial flexibility, aligned up to accelerate the growth of our business and to still compare the business development opportunities. A process that we initiated is expected to be further ramped up upon the seat.
Speaker 1: of the Sherwood River truver and closing of the private place. With respect to our decision business, last beginning's cadrap, our anti-rebit in the global.
Speaker 1: We'll take to conounce last month's CAD-ion and exercise option to extend our distribution agreement for CAD-UP in the US through March 2026.
Speaker 1: Moreover, we remain in active discussion with Kedion to potentially further expand its scope about collaboration.
Speaker 1: In 2022, we generated the proximity 16 million dollar in revenue from third of the cat of to Cedrion for father distribution in the US market, which is estimated to be 1350 million dollar annually.
Speaker 1: During the first six months of this year, we experienced significant interest in demand for the product in the US, and we anticipate even a further momentum in the second half of the year that includes the summer months.
Speaker 1: Also, every reminder, this fraud must continue to generate more than 50% growth margin for Canada.
Speaker 1: Additionally, our US team established during 2022, continues to achieve with progress in promoting our specialty in the government portfolio to position and other healthcare professionals through direct engagement and opportunities at medical meetings. As we have said previously, our activities promoting within both of the third piece,
Speaker 1: primarily cited on environmental, but does not start shining over a decade that these hyper-unussociative products have been supported by field-based activity in the US market.
Speaker 2: Greetings. Welcome to ComEdent Limited's second quarter of the 2023 earnings conference call.
Speaker 1: We remain encouraged by the positive feedback received from key US solution, while seeking to publish new clinical data related to our products, while conducting educational symposium between the needs we have a positive impact on understanding of which never seems contributing to continued growth in demand.
Speaker 2: At this time, all participants are in listen-only mode.
Speaker 2: A question and answer session will follow the formal presentation.
Speaker 2: If anyone should require operator assistance during the conference, please press star zero from your telephone keypad.
Speaker 2: Please note that this conference is being recorded.
Speaker 2: at this time I'll turn the conference over to Brian Richie, the Lifesland Advisors. Brian , you may now begin.
Speaker 1: Importantly, in May of this year, we announced FDA approval for applications from an effective cytogamital easily specificity after completing the technology transfer of the product manufacturing from its primary manufacturer, CSL bearing. I'm happy to report today.
Speaker 3: Thank you, and thank you all for participating in today's call. Joining me from Kamada, our Mayor London, Chief Executive Officer, and Jaime Orlep, Chief Financial Officer.
Speaker 3: Earlier today, Mata announced his financial results for the three and six months ended June 30th, 2023. If you have not received this news release, please go to the investors page of the company's website at www.comata.com. Before we begin.
Speaker 1: It's really recently obtained a similar approval from Hans Canada thereby successfully completing the tech transfer of these products.
Speaker 1: This approval ensures continued supply of cycogam to the US and the Canadian markets. With no interruption and we expect to reach itself the product manufactured in our isn't the facility early in the first quarter of this year.
Speaker 3: I will be cautioning that comments made during this conference called by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Commada. 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 different 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, August 16, 2023. Commada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. What that said is my pleasure to turn the call over to Amir London's CEO . Amir? Thank you, Brian . My thanks also to our investors and analysts for your interesting commenter and for participating in today's call. I'm literally told the strong stuff is not going to be a good deal. So, now to 2023 continued in the second quarter, both financially and operationally, and we have one position to achieve on 2023 fully as guidance, which I will discuss more entirely. I will begin with a high-level review of a strong financial result for the first...
Speaker 1: Moving on, we can further add this future catalyst. We continue to be pleased with the progress made at Commodore Plasma, our US-based Plasma Connection Company.
Speaker 1: Our 2021 acquisition of the Plasma Collection Center and New Year's Contexts, represented commented entry into the US Plasma Collection market and supported a strategic goal of becoming a fully integrated specialty plasma product company.
Speaker 1: We are successfully expanding the Hyper Union Transmokonection Capacity at the first center and we turn on opening our second collection center in Houston, Texas in early 2024. On the development side, enrollment is ramping in our ongoing pivot run, say three in or three clinical trials.
Speaker 1: for being held alpha-anatotrytium therapy for the treatment of alpha-anatrytium. And the study has enrolled 60 patients through the end of July , which is approximately 30% of the over-dequired enrollment to the study.
Speaker 1: I'm happy to update today that we recently received positive scientific advice from the European magazine agent to the EMA, which we consumed over the line of the ongoing study and acknowledge the statistically and clinically meaningful improvement in lung function measured by SED1, demonstrating our previous phase 23 European study.
Speaker 1: We are planning to complete our discussion with the FDA regarding the study progress by end of the year. Every month, Canada's investigation in health AC treatment is a non-invasive, at-home treatment with an expected better use of youth and quality of life for alpha-on-patient and compared to the current I.G. standard of care. The health product is deleterious, innovative, alpha-on treatment in advanced clinical stage and it will present a substantial opportunity to be a
Speaker 1: that is already over one billion dollars in the annual sale in the US and Europe . With that, and I'll turn the call over to Jaime for a digital discussion over a second quarter and first half 2023 financial results. Thank you.
Speaker 1: billion in annual sales in the US and Europe . With that, I now turn the call over to Chani for a detailed discussion of our second quarter and first half 2023 financial results. Chani, please go ahead.
Speaker 4: Thank you, Amir, and good day, everyone. Total revenues for the second quarter were approximately $37.4 million.
Speaker 4: And for the six months of 2023, total revenues were 68.2 million dollars.
Speaker 4: an increase of 59 and 32 percent respectively.
Speaker 4: The year over year growth during the first quarter and half was primarily driven by increased sales of Kedrav to Kedreon due to increased demand for the product in the US market.
Speaker 4: As a reminder, second quarter.
Speaker 4: A portion of the sales were delayed due to a labor strike at the company's manufacturing facility in Israel.
Speaker 4: Total gross profits for the second quarter of 2023 was $14.4 million, representing 39% margins, compared to $7.2 million, or 31% margin, in the second quarter of 2022.
Speaker 4: total gross profits for the six months of 2023 were 26.3 million.
Speaker 4: representing 39% margin compared to $18.5 million or 36% margin in the first half of 2022. As a reminder, gross profit and gross margins for the second quarter of 2022 were affected by a $3.3 million loss as a result of the labor strike.
Speaker 4: As previously discussed, the company is accounting for the appreciation expenses associated with intangible assets which were generated through the late 2022 acquisition of our IGG product.
Speaker 4: The company's cogs and sales and marketing include approximately $1.3 million and $400,000 respectively of such depreciation expenses per quarter.
Speaker 4: Operating expenses, including R&D, sales and marketing, GNA and other expenses, total 11.8 million dollars in the second quarter of 2023, compared to 9.5 million in the second quarter of 2022. Operating expenses for the first half of the year.
Speaker 4: total 23.4 million dollars, an increase of approximately 14% over the first half of 2022.
Speaker 4: As we previously mentioned, we expect our overall operating expenditure to increase between 15 to 20% during 2023 as compared to 2022.
Speaker 4: We expect our overall operating expenditure to increase between 15 to 20 percent during 2023 as compared to 2022.
Speaker 4: as we continue to invest our commercial activities as well as our face-reinnovate trial.
Speaker 4: As we did throughout 2022, we continue to account for financing expenses with respect to the revaluation of contingent consideration and the long-term assume liability, all of which are related to the acquisition completed in 2021.
Speaker 4: Adjust the db.dow was $6 million for the second quarter of 2023 as compared to $1.3 million in the second quarter of 2022. For the first half of the year, adjust the db.dow was $9.9 million as compared to $4.6 million in the first six months of 2022. As a reminder, adjust the db.dow for the second for the six months of 2022 or affected by $3.3 million loss as a result of the labor strike. The adjusted db.dow for the first six months of 2023
Speaker 4: represents a 24% increase compared to the adjusted EBDA, excluding labor strike related loss for the first six months of 2022. As I mirror highlighted earlier, where we are reiterating our full year 2023 revenue guidance of 138 million to 104 million.
Speaker 4: represents approximately 35% growth as compared to fiscal year 2022. In the second half of the year, we anticipate continued growth of sales of Kedreab to Kedrean in support of the product in-market sales growth. Continued growth of the new IgG product sales in the US.
Speaker 4: fueled by the ongoing market and efforts.
Speaker 4: as well as the expansion of ex-US sales of these products.
Speaker 4: Finally, cash provided by operating activities was $1.8 million in the second quarter of 2023 as compared to cash provided by operating activities of $10.9 million in the second quarter of 2022. Our total cash position as of June 30, 2023 was $28.1 million. This figure does not include the expected net proceeds from the recently announced $60 million financing, which is expected to close later this quarter.
Speaker 4: That concludes our prepared remarks. We will now open the call for questions.
Speaker 2: At this time, we'll be conducting a question and answer session.
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Speaker 2: One moment please report for questions. Thank you..
Speaker 2: Thank you and our first question comes from the line of Annabelle Semimi with CIFIL. Please proceed with your questions.
Speaker 5: I have a couple of questions here. So, innovate program. Clearly, it's initiated in the EU and it's progressing. I think that's, I guess, that enrollment traction now. I want you to ask, I guess, I want to understand what the biggest digging points are with the FDA. They need to discuss with them to understand, to sort of move this program forward in the US. Can you provide an endpoint in the area that you can tell us about which areas you're trying to navigate around? Thank you. I know that I'm not sure whether I read you well enough. Operator can you repeat that?
Speaker 1: Hello? We're breaking up. Let's try again.
Speaker 5: Okay, so I was asking about the Innovate program that's initiated in EU. Obviously they have sort of given you news that they continue to support the end point of these studies which I wasn't able to show in the slide I showed you earlier.
Speaker 5: They've chosen that you've chosen and the EMA is good with this and they've accepted this as an endpoint. Can you just help us understand the sticking points that you still have with the FDA and what you're still trying to navigate around in terms of the design of the study?
Speaker 1: Great. Thank you for the question.
Speaker 1: We don't have any challenges to reach with the FDA regarding the design of the study. The study was designed in a harmonized fashion between the EMA and the FDA. It's under an FDA IND. That's based on the sequence of the meetings that we plan to do today and generating ongoing data. We started with the meeting with the EMA and we had a scientific advice discussion with them.
Speaker 1: We plan on submitting the data to the FDA and reporting the progress to date by end of this year, including getting the feedback. Both agencies in the FDA are supportive of the FEV1.
Speaker 1: as our primary endpoint of the study. And what we've reiterated in today's release is that we were very highly encouraged by the positive feedback received from the EMA. That included reconfirmation of the design of the study.
Speaker 1: and acknowledging the statistically and clinically meaningful improvement in the FEV1 data demonstrated in the previous European study.
Speaker 1: So we expect to receive similar feedback from the FDA upon providing the data and the progress update later this year.
Speaker 5: Okay, great. And is there any learnings around the enrollment? This is obviously a rare disease and difficult to enroll. Is there anything that you're learning from your experience in Europe that could facilitate enrollment in the U.S.?
Speaker 1: So the studies under the IND, everything we do currently, the same study, harmonized study, that will meet requirements for both admission of a BLA and an NIAA, of course, upon successful completion of the study.
Speaker 1: Enrollment is primarily done in countries where there are naive alpha 1 patients, which are not currently treated with the standard of care, with the IV standard of care, because it's a placebo controlled study.
Speaker 1: So it's easier to recruit patients, especially for an orphan disease with limited number of patients generally in places where the IV is not available or not reimbursed. And this is primarily in European countries.
Speaker 1: And that's why we are focused currently on the core sector in Europe . But again, I want to reemphasize, this is under a U.S. FDA IND fully acceptable by the FDA. It's not a European study....
Speaker 5: It's a European and an SBA unified study that, if successful, will be submitted for both agencies for marketing authorization. Okay, great. And if I can just ask one last question. So congratulations on the 60 million that you're going to be closing soon.
Speaker 5: Maybe you can talk about, I guess, your allocated potentially to business development, but can you talk about any of the potential preclinical programs that you might be moving forward or priorities that you're focused on?
Speaker 1: Yes, so first I would like to answer a kind of question related to the potential for usage of the profit. So we are very satisfied with the result of the strategic position that we've done in 2021.
Speaker 1: of the four-way FDA approval of Globalink and establishment of our U.S. commercial infrastructure as a result of it. And we believe that this could be leveraged as a basis for a significant additional growth. And that's our business development focus. So we are proactively looking at the
Speaker 1: for additional video opportunities within our areas of expertise, specifically plasma derived products or transplant focused therapeutics.
Speaker 1: So in regards to the BB efforts and being very proactive in searching and looking for the right assets to be added to our portfolio especially in the US market. In regard to the preclinical activities, of course, our main efforts are around the NAB alpha-1 being a... At thehelp Rep Mile counts have been applaudable and does not await whether or not the news began its month gap by more than 2% which is something we have seen over recent decades.
Speaker 1: And the pivotal phase we study with a significant market opportunity, but in addition to that, we are thinking now in previous discussions that we have three early stage kind of preclinical programs which are ongoing. One is around plasma hydrops. We take Senate Bill 6
The second one around the neoglobulin for TB. And the third one is a very unique innovative approach for fast production of the high-pitched neoglobulin in kind of need especially during the pandemic with leveraging
experience that we've gained during COVID, being the first company globally to develop plasma-derived anti-COVID hemoglobin, and we'd like to be prepared for potential future similar requirements, as well as underserved areas that currently do not have sufficient hemoglobin.
So that's the main focus. The preclinical programs, all of them are progressing nicely by our R&D development.
Okay. Great. Thank you so much.
Thank you so much.
Thank you. At this time, I'll turn the floor back to management, so we can take additional questions from the Web. Thank you. We've got a couple of additional questions from the Web here, Amir. First, we have a question from the audience.
Based on your discussions with the EMA, is there an opportunity to shorten the regulatory pathway in Europe for Unheld AAT?
Good question. So it's part of our scientific advice discussion with EMA. We did inquire regarding potential acceleration of the study timelines.
through a potential reduction example site.
The image feedback was very confirmed.
They support the current plan while they do not encourage or do not support such acceleration through a reduction of the sample size. The current sample size meets the study power requirements.
So we are staying with the 220 patients that we plan to enroll. Earlier I mentioned that we have over 60 patients already studied and this accounts for 30% of enrollment. That's the feedback and that the acceleration will not come from a smaller sample site.
Yes, excellent question. So first of all, as we mentioned in the call, we do experience significant increase in demand, significant increase in our supply to carry on for further sales in the U.S. market. We expect that those dynamics and that trend to continue moving forward for the rest of this year and into 2024, 2025. So we are taking significant market share in this $150 million market.
leading to this significant expansion, so it can increase. So first I would like to emphasize that we are very happy with the strong collaboration with the Cagayan team in the certain marketing of the product in the youth market. We believe and we actually see that the teams are doing very well. You know, we are marketing efforts are very effective.
in reaching clinicians and healthcare providers increasing awareness in regards to the need of using antirepids in the global in case of a suspected exposure to rabid animals. And secondly, our product has some three advantages.
including its own label pediatric indication, which represents a clear differentiation compared to the competing products.
So with very effective marketing efforts, very strong collaboration between the commander and the cadre team, and a very good differentiated product which leads to the significant market share expansion, and the growth that we are experiencing, the positive growth that we are experiencing in the US market.
We are pleased with our solid performance in the first half of the year. We are excited about the potential opportunities that lie ahead following the potential approval of the $60 million financing. We look forward to continuing to support clinicians and patients with the important life-saving products that we develop, manufacture, and commercialize. We thank you all for your interest and your support, and we remain committed to creating long-term shareholder value. So thank you again, and we hope all of you stay healthy and safe. This will conclude today's conference. You may now disconnect your lines at this time. Thank you for your participation.
Thank you.