Q3 2024 Kamada Ltd Earnings Call
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Speaker Change: Greetings and welcome to the Commodore L. P third quarter 2024 earnings conference 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. Please press star zero on your telephone keypad as a reminder, this conference being recorded.
Brian Ritchie: It is now my pleasure to introduce Brian Ritchie lifestyle advisors. Thank you you may begin.
Brian Ritchie: Thank you this is Brian Ritchie with lifestyle advisors. Thank you all for participating in today's call.
Speaker Change: Joining me from come onto our Amir, London, Chief Executive Officer, and Jaime or left Chief Financial Officer earlier today, <unk> announced its financial results for the three and nine months ended September 32024.
<unk> not received this news release. Please go to the investors page of the company's website at Www dot commodity dot 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.
Speaker Change: Regarding the operations and future results of commodity 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 6K, which identify specific factors that may cause actual results or events to differ materially.
Speaker Change: 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 November 13th 2024.
Speaker Change: <unk> undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this conference call, but that said it is my pleasure to turn the call over to Amir London CEO Amir.
Speaker Change: Yeah.
Amir London: Thank you Brian My sense also to our investors and analysts for your interest in Colorado.
Amir London: Today's call.
Amir London: Let me start my talk by emphasizing that our four pillars of profitable growth strategy, which I described in our last call.
Amir London: That's fully reflected in the strong financial results, we delivered in the third quarter and the first nine months of 2024.
Amir London: Our business continues to deliver robust profitable growth.
Amir London: During the third quarter total revenues were 41 7 million below a 10% increase as compared to the same period in 2023.
Amir London: Adjusted EBITDA for the third quarter was eight 8 million, an 11% increase compared with third quarter of 2023.
Amir London: Total revenues for the first nine months of the year were up 15%.
Amir London: Hundred and 21.9 million DAU low as compared to 2023 and adjusted EBITDA for the recently completed nine months period was 25 point for me then I'll hop.
Amir London: 43% over the PR, you nine months, representing a 21% margin driven.
Amir London: Based on our continued strong performance and positive outlook for the remainder of 'twenty 'twenty four we are increasing our adjusted EBITDA guidance to be between $32 million to 55 million polo at 12% increase over the midpoint of the previous guidance and where we need to 18 or <unk>.
Speaker Change: Fully revenue guidance, well, how did that $58 million. So how does that 62 million Boe at all.
Speaker Change: In addition for the first nine months of the year, we generated 37.2 mainland bono of cash provided by operating activities, which demonstrates our consistent ability to confer with our reported adjusted EBITDA to operational cash flow.
Speaker Change: Before turning the call over to Jaime to discuss its financial results in greater detail I want to review our growth strategy and operational highlights.
Speaker Change: Comment on the full pillar profitable growth strategy includes organic growth, although existing commercial portfolio of six FDA approved product market.
Speaker Change: The countries this.
Speaker Change: This is development and M&A transaction, which we expect to support and expedite our growth.
Tom: It's tougher collection centers, we have and will continue to open and the ongoing phase III pivotal trial for inhaled ATT product it is Tom.
Tom: Getting an over 2 billion dollar markets.
During the first nine months of 'twenty 'twenty four we made significant progress advancing each and every of these growth catalysts are guy would show T detail.
Tom: How are you or are you profitable growth driven by the strength of our diverse commercial portfolio as it continued to improve our overall sales mix with increased sales of our two most profitable growth drivers ketchup insightful.
Speaker Change: Well Bill.
We successfully launched our first biosimilar product hanging, Sweden and expect to launch our next by sort of product within a few weeks.
We have several other bus and with products in the pipeline could be launched in the coming years, we anticipate that the biosimilars will become an increasingly important portion of our distribution business with big potential annual sales of $30 million to $34 million.
Speaker Change: We continue to maintain very strong balance sheet and ended the third quarter to $72 million in cash.
Speaker Change: This financial strength to both accelerate the growth of existing business and pursue compelling business development and M&A opportunities at process, we remain actively engaged in.
Speaker Change: And we would expand our commercial portfolio.
Speaker Change: These compelling opportunities are expected to support continued double digit growth beyond 2024.
Speaker Change: We continue to progress Colorado's plasma operation in the U S and during the third quarter, we announced the opening of the new plasma collection Center in Houston, Texas.
Speaker Change: This new 12000 square foot center incentive support over 50 Donuts bed with an estimated total collection capacity over 50000 teachers and you know me.
Speaker Change: The opening of the center is an important milestone for Commodore let's expand the collection capacity of specialty plasma for internal use beyond our existing site in Beaumont, Texas.
Speaker Change: A new center in Houston is expected to be one of the largest sites. So specialty plasma collection in the U S. We also collect and no one source plasma to be sold to third parties.
Speaker Change: In addition to the new Houston Central we have begun construction of a third southern collection site in San Antonio, Texas, which you expect to open during the first half of 2025.
Speaker Change: As a reminder, each collection center is expected to contribute annual revenues of.
Speaker Change: Between $8 million up to $10 million in sale of normal source plasma.
Speaker Change: Capacity.
Speaker Change: Turning now to enhance a T therapy, along with Jim Goss catalysts will come ago and.
Enrollment continues in the ongoing pivotal phase III clinical trial.
Speaker Change: <unk> entered this year, we filed an IND amendment.
Speaker Change: The amendment with the U S FDA, which consisted of a revised statistical analysis trend and steady protocol, which if approved may allow for the acceleration of the program.
Speaker Change: We continue to anticipate further FDA feedback before the end of this year.
As we have said previously the parallel to the clinical and regulatory progress achieved here. We also continue to have discussions related to the potential partnering of this promising investigational late stage product candidates.
Speaker Change: With that I'll now turn the call over to Jaime for a detailed discussion of our financial results from the third quarter and first nine months of 2020 full Jaime. Please go ahead.
Speaker Change: Okay.
Jaime Left: Thank you Amir.
Speaker Change: As I stated at the top of the call. Our performance continues to be excellent through the first nine months of 2024.
Speaker Change: For the third quarter total revenues were approximately $441.7 million, a 10% increase compared to the third quarter of 2023.
Speaker Change: First nine months of the year total revenues were $121 9 million up 15% over the prior year period.
Speaker Change: For the first nine months of the year represented approximately 20% of the midpoint of our annual guidance.
Speaker Change: Revenue.
Speaker Change: It was primarily attributable to increase sales of catcher bench size of that due to increased demand in the market.
Speaker Change: Approximately 60% of our revenues during the first nine months of 2024 would generate net sales in the U S market.
Speaker Change: Total gross profit for the third quarter of 'twenty 'twenty four.
Speaker Change: It was $17 $2 million, representing a 41% margin.
Speaker Change: <unk> to $14 8 million or 39% margin in the prior year period.
Speaker Change: Total gross profit for the first nine months of 2024 was $52 $9 million, representing a 43% margin compared to 41.1 million and a margin of 39% for the first nine months of 2020.
Speaker Change: The increase in gross profitability was due.
Speaker Change: Our ability to improve the overall product sales mix through increased sales of the two most profitable.
Speaker Change: Most profitable product Ted Rob insights.
Speaker Change: Operating expenses for the first nine months of 2024 totaled $38 million compared to $33 8 million in the first nine months of 2023, which was in line with our expectations. The plant increase was in support of our expanded commercial.
Speaker Change: Activities as well as our ongoing phase III innovate right.
Speaker Change: Net income for the third quarter was $3 9 million or seven cents per diluted share up 20% compared to net income of $3 2 million or six cents per diluted share.
Speaker Change: We recorded in the third quarter of 2023.
Speaker Change: The first nine months of 2024 net income was $10 7 million or 18 cents per diluted share three X. The net income of $3 2 million for the same period of 2023.
Speaker Change: Adjusted EBITDA was $8 8 million in the third quarter of 2024 as compared to seven 9 million in the third quarter of 2023. Adjusted EBITDA was 25 4 million in the first nine months of 2024 up 43% from the $17 7 million in the first nine months of 'twenty.
As Amir noted.
Speaker Change: We increased our full year 2024, EBITDA guidance to between $32 million to $35 million.
Speaker Change: During the first nine months of 2024, we generated $37 2 million of operating cash loans, which resulted in an available cash balance of $72 million as of September 30.
Speaker Change: Our financial position remains strong and provides us with the strength and flexibility to accelerate the growth and profitability of our existing business and pursue compelling new business development opportunities, which collectively he will continue to support double digit top and bottom line growth.
Speaker Change: Beyond 2024.
Speaker Change: That concludes our prepared remarks, we will now open the call to questions.
Speaker Change: Operator.
Thank you we will now conduct the answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Information tone will indicate your line is in the question queue. You May Press Star two if you would like to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Once again Thats star one at this time, one moment, while we poll for our first question.
Speaker Change: Okay.
Speaker Change: Our first question comes from Annabel Sammy with Stifel. Please proceed.
Annabel Sammy: Hi, everyone. Thanks for taking my questions I have a number of something I try to keep it under control I guess the first is can you provide us with the breakdown of Cantor admin side again, and what is your expectation now for Max share of can't drive it keeps on expanding but at what point does it Max out do you think that.
Annabel Sammy: That you can starting crushing in on in the competitive share are you going to tap out at some point and then.
So maybe you can help us understand more granularly what is driving EBITDA expansion is it simply the mix is it more efficiency in the plasma collection centers, maybe you can just go into that a little bit.
Speaker Change: Okay. Thank.
Thank you for the questions.
Speaker Change: And so we will of course report and detailed the product level.
Speaker Change: Living as well.
Speaker Change: At the end of the year not on a quarterly basis and what I can do comment is that both products all the wrong significantly compared to a lot still double digits on both of them.
Speaker Change: And we live this would continue them forward in terms of a catch up market share.
Speaker Change: We all in anywhere between 40% to 50%.
Speaker Change: We still have some room to grow.
Speaker Change: You know, even if it will end up at around 50% for Watson for the competitor is.
Speaker Change: And they still are an opportunity to grow the business all it's important to emphasize that we all are.
Speaker Change: Market leader, a global leader in terms of antibiotics in a global and also outside of the U S. Well, we have additional opportunities to grow the business in Latin America, and some European countries. We are supplying the Canadian market Australian market, it's really market. So there's still a opportunities even ex U S ex U.
Speaker Change: Most of America to continue growing the product in.
Speaker Change: In terms of what's driving the EBITDA, it's a combination of all the economy of scales.
Speaker Change: We're selling more and then kind of being more efficient in the way that we.
Speaker Change: Operator.
Speaker Change: Also it sounds like the mall, where we sell in a catch up in the U S. I'm sorry to come to the U S. You can prove that we'd be done because it's a highly profitable product.
Speaker Change: Okay, great and if I can move.
Speaker Change: Move to the development program any update on the percent of enrollment for innovate trial and Ah is it getting easier or harder with multiple competitive programs and any progress on the partnership discussions.
Speaker Change: Thanks, Yeah.
Speaker Change: So we at around 60% now for recruitment.
Speaker Change: As you May remember, we are in discussion with FDA on the P value.
Speaker Change: And what would be the implications on the overall sample size. So the exact percentage of enrollments depends also on how we kind of line up with the total number of symptoms such as Nathan look I think around 60%. It's it's a good time to go down but for now in terms of the FDA discussion.
Speaker Change: Ongoing.
Speaker Change: We're getting better clarity from the FDA regarding of the P value of 0.1, we're working on now.
Speaker Change: The implication in terms of the sample size and the partnering discussions are ongoing we're looking for the right transaction or the right policy for Comed.
Speaker Change: Okay, and if I can squeeze one more and I know you're focused on business development your obviously or.
Speaker Change: Operating cash flow positive and you've got some some cash building. So is there any progress beyond that BD is there any progress on the preclinical pipeline and building that out to get some more programs into the clinic.
Speaker Change: Yes.
Speaker Change: Both sides of the development of the on the BD side, we are proactively searching for the right opportunities are in licensing and M&A.
Speaker Change: We hope and we expect to have a commercial impact to commercial contribution already in 2025.
Speaker Change: In terms of the pipeline, yes, they want to put a clinical programs, which is making progress.
Advancing our preclinical activities, specifically I referred to the plasma eye drops.
Speaker Change: The program and we're making good progress on that one as well.
Speaker Change: Okay, great. Thank you.
Speaker Change: Once again, ladies and gentlemen.
Speaker Change: A question. Please press star one on your telephone keypad at this time, our class the call to Brian Ritchie for web questions.
Brian Ritchie: Thank you Latanya just a couple of questions that have come in off the web here mirror, our first maybe talk about your.
Speaker Change: Ultimate goal with the plasma collection business now that we've got a couple of months of the Houston Center opened.
Speaker Change: Yes, so I must say that we are highly satisfied with the opening of the center in Houston and then the rate of growth in plasma collection in the first two months of a central operation.
Speaker Change: We are also on track with the San Antonio Center to be opened them.
Speaker Change: Any early 'twenty, 'twenty fives, and we will be collecting specialty plasma.
Speaker Change: And those sensors in addition to the one in Beaumont.
Speaker Change: Such as anti rabies N T D and this is going to be useful one.
Speaker Change: Specialty product requirements will fetch a requirement and the normal till slots mob will be sold out to external clients and well.
Speaker Change: Discussions about those types of supply agreements already ongoing.
Speaker Change: Right now the plan is to complete those two centers both of them are very large centers.
Speaker Change: With our expanded capacity.
Speaker Change: Mentioned during the call you some centers are going to be one of the largest in the U S. In terms of specialty plasma collection.
Speaker Change: And then we will decide how many even if and how many additional centers, we're going to open over the next few years.
Speaker Change: Terrific maybe last question here from the web.
Speaker Change: Can you provide.
Speaker Change: A high level outlook for 2025.
Speaker Change: So, it's a little bit a kind of a premature.
Speaker Change: Premature right now, but until the high landfill. So we will of course share all this guidance at the beginning of 'twenty five but as we've previously communicated we expect the double digits topline and bottom line growth to continue.
Speaker Change: I think that all of our investors following the company.
Speaker Change: We are executing to the plan.
Well, maybe even as demonstrated today and the increase of our EBITDA.
Speaker Change: We've been kind of accelerating beyond the plant so it.
Speaker Change: As mentioned it.
Speaker Change: Prior to completing the double digit growth.
Speaker Change: Topline and Bottomline and next fill in the years after.
Speaker Change: Terrific and well that Amir I'll pass it off to you for any closing remarks.
Amir London: Thank you Brian.
Amir London: So in closing with the successful execution of our profitable growth strategy is reflected in the strong financial results. We delivered in the third quarter. The first nine months of 2020 full we are excited about the opportunities to advance the sole main pillars of our growth strategy. We look forward to continuing to support clinicians and patients with important lifesaving, Florida, which will be there.
Amir London: In effect and commercialized we thank you all for wheel participating participation in today's call.
Amir London: Support and we remain committed to creating long term shareholder value.
Amir London: We hope you all stay healthy and safe Goodbye.
Speaker Change: Thank you. This does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Amir London: Yeah.
Amir London: [music].