Kamada .(US:KMDA)2022-11-22 15:35Financial Data and Key Metrics Changes - Total revenues for Q3 2022 were $32.2 million, a 40% increase year-over-year, with gross margins rising to 40% from 25% in Q3 2021 [10][34] - Adjusted EBITDA for Q3 2022 was $6 million, representing a 19% margin, while for the first nine months of 2022, adjusted EBITDA was $10.6 million, a 58% increase compared to the previous year [10][41] - The company generated positive cash flow from operating activities for the third consecutive quarter, resulting in a cash position of $31.3 million as of September 30, 2022 [11][43] Business Line Data and Key Metrics Changes - The growth in revenues was primarily driven by strong sales of the recently acquired IgG products, including CYTOGAM, HEPAGAM, VARIZIG, and WINRHOSDF [8][34] - KEDRAB sales also grew significantly during Q3 2022, contributing to the overall revenue increase [21][36] - Royalty income from GLASSIA sales to Takeda amounted to $3.5 million in Q3 2022, representing pure profit for the company [22][36] Market Data and Key Metrics Changes - The U.S. market is seeing a positive trend in KEDRAB sales, which is expected to continue as the product gains market share in a $150 million market [21] - Internationally, a significant $11.4 million agreement to supply VARIZIG was signed, with anticipated revenues expected in Q4 2022 [17][18] - The company is also expanding its presence in the U.S. market with a dedicated sales team promoting its portfolio of specialty plasma-derived immunoglobulins [14][16] Company Strategy and Development Direction - The company is focused on achieving double-digit growth rates in the foreseeable future, driven by its proprietary product categories [31][58] - Kamada is actively pursuing additional commercial contracts in strategic territories and has established a direct presence in the U.S. market [19][24] - The company plans to expand its plasma collection capabilities in the U.S. to enhance its competitive position [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving continued revenue growth and enhanced profitability in Q4 2022, reiterating full-year revenue guidance of $125 million to $135 million [12][58] - The management highlighted the successful strategic transition of the company and the positive feedback from U.S. physicians regarding the product portfolio [8][16] - Future catalysts include the ongoing Phase 3 InnovAATe clinical trial and the anticipated FDA approval for CYTOGAM production [26][20] Other Important Information - Research and development investments increased to $10.2 million in the first nine months of 2022, primarily due to the InnovAATe trial expansion [39] - Selling and marketing expenses rose due to the establishment of U.S. commercial operations and pre-commercial activities for new product launches [39] Q&A Session Summary Question: How will the company achieve its full-year revenue guidance? - Management indicated that the fourth quarter will benefit from the VARIZIG supply agreement, significant pending orders in the Israel Distribution segment, and continued growth of the new IgG portfolio products [46][47] Question: Should increased operating expenses be expected in 2023? - Management confirmed that 2023 will see a full year of U.S. sales and marketing activities, with expected operational expenses increasing by approximately 10% to 12% compared to 2022 [48][49] Question: Will sales growth from acquired products come from international contracts or U.S. market activities? - Management stated that both aspects are contributing to growth, with ongoing sales activities in the U.S. and international contracts already yielding results [50][52] Question: What is the coverage strategy for transplant centers? - The company is focusing on larger transplant centers and those that have not used its products recently, aiming to cover 150 to 200 centers with a dedicated team [53][54] Question: Is there an ongoing effort to expand the product portfolio? - Management confirmed that the company is building the right infrastructure to look for synergistic products, with efforts continuing through 2023 [55]