Q4 2024 Kamada Ltd Earnings Call
Speaker Change: Greetings and welcome to the Kamada 4th quarter and full year 2024 earnings conference call.
At this time, all participants aren't a listen-onlyness.
Speaker Change: A 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, Brian Ritchie, with Lifestyle Advisors.
Thank you sir, new may be done.
Thank you. This is Brian Ritchie with Lifestyle Advisor.
Speaker Change: Thank you all for participating in today's call. Joining me from Kamada, Amir London, Chief Executive Officer, and Jaime Orlev, Chief Financial Officer.
Speaker Change: Before we begin, I would like to caution that comments made during this conference call by management.
Speaker Change: We'll contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada.
Speaker Change: I encourage you to review the company's filings with the Securities and Exchange Commission, including without limitation.
Speaker Change: The company's forms 20F and 6K, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Speaker Change: Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast Wednesday, March 5, 2025.
Speaker Change: Kamada undertakes no obligation to advise or update any statements to reflect events or circumstances after the date of this conference call.
Speaker Change: What that said, it is my pleasure to turn the call over to Amir London CEO Amir.
Thank you, Brian .
Speaker Change: Thanks also to our investors and analysts for your interest in Kamada and for participating in today's call.
Speaker Change: I'm pleased to report that our performance was excellent over the course of 2024, leading to record top and bottom line financial results.
Speaker Change: Total revenue for 2024 was $161 million, coming in at the top end of our guidance range and representing a 13% increase of the 2023 revenues.
Speaker Change: Jocelyn Bidar, for the record $34.1 million. Also at the top end of our expected range representing 42% year-over-year growth.
Speaker Change: These outstanding results were driven by strengths across our entire portfolio, improvement in overall self-mix and increased sales of our two most profitable growth riders, KEDRAB and Cytoga.
Speaker Change: In 2024, we generated a $47.6 million in cash from operation, resulting in a year-end strong balance sheet.
of 78.4 billion dollars in cash.
Speaker Change: There is some very strong financial results in solid cash position, who are pleased to announce earlier today that our Board of Directors declared a special cash dividend of 20 cents of cash to be paid in April .
Speaker Change: Importantly, we are well positioned to continue growth, with ample liquidity to execute on the advancement of our main growth pillars.
Speaker Change: The Declaration of a Dividend to our shareholders reinforces our confidence in the company business prospects and demonstrate our commitment to generating shareholder value.
Speaker Change: Based on our robust operational and financial performance, we enter 2025 from a position of significant strengths and with a highly favorable outlook.
Speaker Change: So fiscal 2025, we expect to continue delivering double-digit profitable growth.
Speaker Change: driven by our diverse commercial portfolio, marketing of our 30 countries.
Speaker Change: and we are focusing 2025 annual revenues of 178 million to 182 million dollars and 38 million to 42 million dollars of adjusted EBITDA.
Speaker Change: The mid-point of a 2025 guidance will present the increase of approximately 12% in revenues and approximately 17% in adjusted EBDA respectively over our 2024 results.
Speaker Change: I will now proceed to daily video on rough strategy and operational priorities for 2025 and beyond.
Speaker Change: I will venture on the call over to Jaime to discuss our 2024 financial results in greater details.
and many more. Thank you. Thank you.
Speaker Change: On trial calls, I've outlined the four pillars of our growth strategy.
Ogani Growth, from a distant commercial portfolio.
Speaker Change: The development and M&A transactions to support and expedite our rules.
Expansion of our Plasma Collection operation
Speaker Change: and our ongoing phase 3 pivot trial for inheld A80 product that is targeting in over $2 billion
Speaker Change: Throughout 2024, you made significant progress, but then seen each of these value driving catalysts.
Speaker Change: and in 2025, to remain the key focus of our growth strategy.
Thank you very much. Thank you.
Speaker Change: I will begin with our commercial portfolio of six FDA foods products marketed in over 30 countries.
Speaker Change: Our two main growth catalysts in 2024 were cadets and cycograms.
resulting from a crazy man in the US market.
Speaker Change: We also experience a meaningful increase in glass yourselves in the multiple international markets where we partner with strong local distributors.
Specializing in rare respiratory diseases.
Speaker Change: During the year, we also continue to successfully build our present and future prospect in the Miner region, participating and winning local tenders.
Speaker Change: In January 2025, we announced a world of a three-year contract with international organization for the supply of commerce and value of the United States and Latin America.
Speaker Change: We are clearly the significant three-year supply agreement, which we believe validates the global strength of our leading specialty in a global and portfolio.
Speaker Change: The expected of a revenue from both products for the three years to be approximately $25 million.
Speaker Change: Winning the standard is indicative of substantial commercial potential of our broad product portfolio in international markets beyond the US and Canada, and we intend to continue to pursue digital commercial contracts in key strategic territories.
Speaker Change: Moe Orville, in 2024, we successfully launched our first biosimilar product in Israel and we expect to launch to be so biosimilar in 2025.
Speaker Change: We have several other biasing work products in the pipeline to be launched in the coming years.
Speaker Change: We expect that this portfolio will become an increasingly important portion of our distribution business with annual sale of between $15 million to $20 million within the next 5 years.
Speaker Change: During 2024, we continue to demonstrate our ability to convert adjusted EBDA into operational
Speaker Change: To this end, in 2025, we expect to secure compelling new business development in licensing, collaboration, and all eminence reductions.
Speaker Change: Such agreements generate operational and or commercial synergies with our current commercial portfolio.
Turning now to our Plasma Connection Fenters.
Speaker Change: In 2024, we opened our second plasma collection center in Houston, Texas.
Speaker Change: The new center in Newstone is expected to be one of the largest sites for special department connection in the US and will also collect normal source plasma to be sold to third parties.
Speaker Change: In addition to the new Houston Center construction of our third plasma collection site in San Antonio Texas is now complete and the site will be open this month.
Speaker Change: This 12,000 square foot San Antonio Center will support over 50 donor breads with an estimated total collection capacity of approximately 50,000 liters annually.
Speaker Change: As a reminder, each of our two new plasma collection centers is expected to contribute any of revenues of between $8 million to $10 million in cells of normal, soft plasma once at its
turning out on Sheldt A.T. Therapist.
Speaker Change: As we recently announced, the US FDA confirmed its agreement with our previously performed relaxed, two-sided type 1 L-rate control modified from 5 to 10 percent.
which means the value of 0.1.
Speaker Change: Based on the accepted change in the P-value, as well as a digital revision to the statistical analysis plan, we are reducing the study sample size from 220 patients to approximately 180 patients.
while maintaining the statistical power of the tribe.
Speaker Change: We've also announced that we try to conduct a futility analysis by the end of 2025.
Speaker Change: with that and I've turned the call over to Jaime for a deeper discussion of our financial results for the fourth quarter in the full year 2024.
Jaime, please go ahead.
Chaime Orlev: Thank you, Amir. As Amir stated at the top of the call, our results were excellent for both the fourth corner and four year of 2024.
Chaime Orlev: Holder revenues for full year 2024 were record $161 million, up 13% compared to the $43 million in 2020.
The reporter, revenues, met our 2024 annual guidance.
The Impression Revenues
Is there a reminder?
In late 2023, we announced an eight-year extension.
Chaime Orlev: of the Distribution Agreement with Cadreon, which included their commitments to acquire minimum quantities of cadreb, totaling $180 million for the first four years of the amended terms, 2020-4-3-2027.
Chaime Orlev: Ezreal is a minimum commitment for the remaining three years of 2025 to 2027, now fans at $135 million.
Chaime Orlev: The Inquisition Annual Revenue was also attributable to in three cells of cytogen, which were 23 million dollars.
We are up 31%.
compared to the 2023.
fails
Chaime Orlev: We're 39 million, up 7% over this corresponding quarter in 2023.
Chaime Orlev: Ross-Brolford and Gorse Margin, 42024 for 70 million and 43 percent, comparison 55.5 million and 39 percent.
Chaime Orlev: In 2023, the increase in profitability was attributable to increasing sales as well as an improvement in our overall product sales mix.
Chaime Orlev: Ross Profit and Ross Marges for the 4th quarter of 2024 for 17 million and 44% compared to 14.4 million and 40% in the 4th quarter of 2023, representing a 4 basis point in
Operating expenses including research and development, sales and marketing.
and General Administrative Expenses for the 49.9 million in 2024.
as compared to 45.4 in 2023.
Chaime Orlev: The increase in operating expenses were in line with our expectations primarily attributable and increase in sales and marketing costs associated with marketing activities in the US as well as increased R&D costs primarily.
Due to advancing the inhaled AT clinical trial.
Chaime Orlev: Net income was 14.5 million or 25 cents per deluded share for the full year 2024 as compared to 8.3 million or 15 cents per deluded share for full year 2023.
Representing a 75% increase year-over-year
Chaime Orlev: The reduction in net income in the fourth quarter of 2024, as compared to 2023,
Chaime Orlev: What is attributable to increased financial expenses associated with re-valuations contingent of consideration.
Chaime Orlev: to represent our higher future sales forecast, resulting in increased future earner payments on account of the 2021 Product Acquisition.
Chaime Orlev: I just a DVD was for 2024 was an all-time record 34.1 million up 42% from the 2023 adjusted EBDA of 24.1 million.
2024 reported that just a DVD, me, are 2024 Annual Financial Guidance.
and many more. Thank you. Thank you. Thank you.
Guest provided by Operating Activities was 10.4 million.
Chaime Orlev: We're demonstrating the company's ability to convert its earning into significant positive
Chaime Orlev: As Amir previously indicated, we retained strong financial position and demonstrated by a year-end solid balance sheet, which will support our future continued growth and ability to execute on our strategic four-girls billers.
That concludes our preparatory remarks.
We're now open to call for questions.
Speaker Change: Thank you. We will now be connecting a question and answer session. If you 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.
Chaime Orlev: You may press star 2 if you would like to remove your questions from the queue.
Chaime Orlev: For participants using speaker equipment, it may be necessary to pick up your handsets before pressing the star keys.
One moment please while we pull for questions.
Speaker Change: Our first question comes from Annabel Samimy with Steethle. Please proceed with your question.
Speaker Change: Hi, everyone. Thanks for taking my questions in grade quarter. I wanted to ask you about the futility analysis that you're going to be conducting for the AAT, inheld AAT program. Can you just talk about what will be looked at? Will the information be blinded to you? Or is it independent?
Speaker Change: More of a statistical analysis, are they looking at the actual endpoints or are you going to be reporting anything out and what are the potential outcomes we can see there. And then separately, if you could talk about some of the additional growth drivers for KEDRAB inside again, it looks like KEDRAB is more about...
Speaker Change: International Expansion. Do you have any, and first side of the camera, are you planning any other clinical presentations or clinical studies to present at various medical conferences?
Speaker Change: Thanks Annabel for the questions. I'll start with the security analysis question.
Speaker Change: So, yes, we will be blinded. So, the data will be reviewed by an external DSMB.
type of gop that will be actually be unblinded.
Speaker Change: but while the company responds to remains branded, we decided to run this analysis based on the changes that we have implemented in the statistical plan, reduction of the sample size. We basically reaching a point, second part of this EU, that we are going to have sufficient and into in data.
Speaker Change: I noticed that the external group will be analyzing and looking at
Speaker Change: and a frequency data, a conditional frequency data in order, basically, to give us feedback related to the study of success.
Speaker Change: Ratio FNA, but that's of course going to be as in every utility analysis that's going to be basically a yes-no type of question and the company will not be seeing that from data.
Speaker Change: But in terms of the efficacy data are they looking primarily at the primary endpoints that you've laid out or additional? Correct, correct, correct.
Speaker Change: Hello, shooting the analysis allows you basically to post one question to the DSMD and they're looking at the data and investigating the feedback page from this which is kind of a, it's no type of question answer so yes no type of answer.
Speaker Change: Okay, and what would be the, sorry, just on the facility analysis, do you either expect to continue as is expand, do you expect to either continue expand or stop the program altogether or there's your three options there?
Speaker Change: Correct, as always in sheet analysis, three options, a continuum, make modification based mainly on sample size or a need to stop the study because they're kind of a futility rate.
Okay, great.
Speaker Change: Okay, related to the question, second question was related to 2024 prospects, that's the question. Yeah, well, the specific growth drivers for Kedrab inside again, so Kedrab, Kedrab is that just continuation of expanding contracts globally?
Speaker Change: Correct. So when we talk about CADROB, we mean only US.
Speaker Change: So, when we set $15 million of sales of CADRAB, this is our agreement with CADRION. We refer to the non-U.S. product as ComRub.
just as a matter of clarification.
Speaker Change: So, as you remember, we had an agreement for 118 million dollars of sales.
Speaker Change: for the four years minimum, for the four years 2020, 425, 2627, for the first year, so average of $45 million, but the first year, 2024, Cadrian already purchased from us $50 million
So, above the minimum, the quantity.
Speaker Change: Ben, it means that for the remaining of those next three years, 25 to the 627, the minimum and I emphasize minimum commitment is $135 million.
Speaker Change: XUS. We are continuing to grow the business. We announce in January , winning with International tender for Latin America. We are the supplier in Canada, Australia, some European countries, the Israel and the kind of international markets.
Speaker Change: So this toilet is growing, it's not just in the US market.
Speaker Change: We are in sight of them, yes, we are advancing clinical work with the vision on the US-SKOL in leading transportation centers. We will announce those representations during the year once they've been accepted to the different conferences.
Speaker Change: and industry meetings, and we've seen a nice increase between 23 and 24 in terms of product sounds in the U.S.
Speaker Change: Okay, and if I could just ask one more follow-up. I have to ask this question. We don't often see special dividends from...
Yeah.
Speaker Change: So, first of all, we believe that Kamada has been a mature face, that...
Speaker Change: can basically you know be a commercial development pipeline and the company that faith did it
Speaker Change: The dividend that was decided by the board is driven by the very strong financial result of 2024 and our strong outlook for 2025. We live, we have sufficient funds, very solid.
Speaker Change: in a cash position to be able to pay the dividend while we continue with our BD, M&A activities according to the plan.
Speaker Change: and our goal is to execute such an M&A's and BD-transduction order in 2025, and we have sufficient resources while we're continuing to generate more and more cash from our operation moving forward. So we can do both.
Speaker Change: Will that be an indication that you know what kind of BD you're going to do and the size of the BD that you're going to be doing?
Speaker Change: We are screening multiple opportunities and we are hopeful that things will match you already in 2025 because it's going to be a commercial stage assets that will help us make secret accelerator growth.
Okay, great. Thank you.
Joe.
Speaker Change: Our next question comes from Anthony Patroni with Mrs. Who Group. Please proceed with your question.
Anthony Petroni: Thanks, and I hope you're doing well, Amir, Imi, and great to see obviously the ex-lum results for 2024. You have to start with plasma collections.
You have, you know, the two operating centers.
Anthony Petroni: and the third is on the way to being open here shortly, so...
Anthony Petroni: So maybe just a little bit on the third center, the timing to reach that peak revenue and you target of 8 to 10 million.
Anthony Petroni: and then the mix of what will be collected there, how much will be specialty plasma versus standard plasma that you would go on to sell to third parties, and then all the couple of follow-ups. Thanks.
Speaker Change: Okay, yeah. So, the third center, San Antonio, are going to be open these months.
Speaker Change: and based on the pace that we've seen in Houston, we've deleted it around 24 to 30 months, but it takes basically to ramp up a center, based on the pace that we've seen in Houston since we opened around 6 months ago. So we are on track.
Speaker Change: Nier Stone, and we believe that we can also execute the same level of performance in
Speaker Change: As you mentioned, both centers will be collecting specialty plasma for our needs and normal source plasma that will be sold out to external parties. Approximately 20 to 25% to each center will be specialty.
Speaker Change: and maybe a little bit more, and the rest will be Normal Source Plasma. This correlates with the $8-10 million revenue per cent from selling Normal Source Plasma to external
Speaker Change: So if you do the math, and I know you're familiar with the prized political plasma, you basically can see how we came up with this ratio.
No, fair enough, and I'm just wondering, you know, as...
Speaker Change: You know you're building toward critical mass here. You know how the plasma collections
That operation, but just factoring it against...
Speaker Change: You know, work and process inventory needs. How that plays out from an adjusted EBITDA margin standpoint so just a little bit on the margin profile today of plasma collection and you know, let's say a year or two years from now where that margin profile can contend to.
and many more. Thank you. Thank you.
Okay.
Speaker Change: So on the specialty plasma, which is going to be an intercompany type of transaction, you're not going to see this is part of our top line. And if we have an effect on our cost of goods, because every little plasma that we collect is cheaper, then little plasma that we come and keep by from external suppliers.
Speaker Change: So this will be part of our overall efficiencies and, you know, kind of a...
Sam.
Speaker Change: Growing the company, and I think you have seen it also in our country poll, over the last few quarters, and moving in 2025, our ability to grow the company in a very effective way, and better fitting from the economy of skills.
Speaker Change: In terms of selling plasma to the external parties, so the tomatoes include, you know, the
Speaker Change: The potential of expected margins, selling plasma to external, you know, will result in anywhere between 10-20-25% growth margins.
Speaker Change: Lobbigan products, you mentioned again, obviously you have a special living and going out, but the pipeline for Follow-on deals whether in licensing or potentially M&A is still robust
Speaker Change: I'm just wondering, when we think about just sort of the landscape out there, it feels like, you know, the
and the play here is to continue to build and...
in hyperimmune globulin products specifically.
Chaime Orlev: and maybe just give us an idea of that broader landscape, Amir, and maybe which area specifically you're taking a look at. Obviously you have exposure to rabies.
Speaker Change: Cytomegalovirus disease for kidney transplant, the two biggest products, just wondering as you look at that hybrid immune space, what other white areas are there that you can capitalize on. Thanks again.
Speaker Change: Infinity with our current commercial footprint in the US market.
Speaker Change: We are covering the old key transcontenters and we have very strong presence in the special department space. We are working with infectious diseases specialists.
Speaker Change: and we have, of course, experience in the answer one and inhale the respiratory specialties.
Speaker Change: of course is a great interest for us, like we've done with Siteogram, the ability to also transfer the production to our facility.
and create some litigant synergies.
Speaker Change: But we're looking at a little bit broader in order to be able to actually really execute those type of transactions already this year, as I mentioned, we're looking also for distribution businesses.
Speaker Change: that will be symmetric to what we're currently doing. Reminding you that we have strong presence in the middle region in Israel and US, Kamada, all those areas are relevant areas for a lot in September where we are searching for and be the opportunity for them.
Thank you very much.
Speaker Change: Is there a reminder, if you would like to ask a question, please press star one on your telephone keypad.
Operator: Our next question comes from James Cedody with Cedurnian Coal. Please proceed with your question.
James Sidoti: Hi, good afternoon. Thanks for taking the questions. A couple of questions on gross margin for your proprietary products. It was up about, I think about 700 basis points. Is that due to the mix of KEDRAB in the current quarter?
Thank you for tuning in. We'll see you next time.
James Sidoti: Our most specific two profitable products that have the biggest impact on our growth margins of a cadrab, and sighted on the U.S. market. So, if available, sales mix improve the increased sales in the U.S. market, it always helps us in terms of our growth margins. So, that's with the rest of your question.
Speaker Change: What will be the impact when you start using more of your, more of the plasma that you get from your own in-source plasma centers? You're supposed to buying it. What do you think the impact on that proprietary gross margin could be?
Speaker Change: and Collective Plasma. So the overall mix, if I may, of, in general plasma collection of plasma collections.
Incredible in the US market.
Economy of Scales
Speaker Change: and just making more in our plant, all those different aspects play together in creating the vision to what you're saying.
Speaker Change: It's difficult that something in such an public setting to point a specific parameter. We have a very efficient operation.
The fact that we started last year to an adventure.
decided to come up with their own plans.
The combination with Glacia is growing significantly in XRX markets.
and we make more glass here.
Speaker Change: a lot of scratch at Cinoid and the factoring that by us all of these plays, they're sweet to wear.
Okay, all right, thank you.
Speaker Change: There are no further questions at this time. I would now like to turn the floor back over to Amir London for a closing comment.
Speaker Change: Thank you. So in clothing, the saffod execution of a profitable growth strategy is well reflected in our record top and bottom line, 2024 financial results, as well as with the declaration of a special cash dividend.
Amir London: were excited about our opportunities to advance our full strategic growth pillars. We look forward to continuing to support the mission of patients with important life-saving products that we develop in the future and commercialize worldwide. We thank your investors for their support and remain committed to creating long-term shareholder value.
Speaker Change: We hope you will stay healthy and safe. Thank you for joining us today.
Speaker Change: This includes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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Speaker Change: likethose who hath no palace else, have we? For a moment or two he sought as deep a rest, but since he had arrived on earth, he had found that he was not of the lack of old darkness. For many a man mere thought that for that time his solitary oxygen had flowed, that he was seriously ill and to be healthy was a measure from which he had found fear.