Kamada .(US:KMDA)2021-11-22 17:07Financial Data and Key Metrics Changes - In Q3 2021, total revenues were $23 million, down from $35.3 million in Q3 2020. For the first nine months of 2021, total revenues were $72.2 million, a decrease from $101.7 million in the same period of 2020, primarily due to reduced GLASSIA sales [9][10] - Gross profit for Q3 2021 was $5.7 million compared to $14.8 million in Q3 2020. Total gross profit for the first nine months of 2021 was $23.7 million, down from $37.4 million in the same period of 2020 [11][12] - The net loss for Q3 2021 was approximately $800,000 or $0.02 per share, compared to net income of $6.8 million or $0.15 per share in Q3 2020. For the first nine months of 2021, net income was $2.8 million or $0.06 per share, down from $15.5 million or $0.35 per share in the same period of 2020 [13][14] Business Line Data and Key Metrics Changes - The acquisition of four FDA-approved plasma-derived commercial products from Saol Therapeutics is expected to generate global revenue of $40 million to $45 million for the full year 2021, with approximately 75% of sales in the U.S. and Canada [16][25] - The four products include CYTOGAM, VARIZIG, WINRHO, and HEPAGAM B, with CYTOGAM accounting for approximately 50% of the portfolio revenue [18][20] Market Data and Key Metrics Changes - The acquired products are expected to have gross margins between 50% to 55% for the full year 2021, which is a significant improvement compared to the current product mix [16][39] - Kamada's commercial footprint now extends to over 30 countries, with the addition of eight new international markets primarily in the Middle East [25] Company Strategy and Development Direction - The strategic acquisition positions Kamada as a global leader in the plasma-derived hyperimmune market, with plans to integrate the new portfolio to drive revenue and profitability growth in 2022 [17][30] - The company aims to establish a fully-integrated specialty plasma company with strong commercial capabilities in the U.S. market, leveraging existing distribution networks to grow revenue in new geographic markets [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the overall business, highlighting multiple profitable lines that can drive significant long-term growth opportunities [32][46] - The integration of the newly acquired portfolio is expected to result in significant growth in revenues and profitability in 2022, following a temporary decline in 2021 due to the transition of GLASSIA manufacturing to Takeda [17][48] Other Important Information - Kamada will pay Saol $95 million upfront and up to an additional $50 million in sales milestones from 2022 to 2034, along with acquiring existing inventory valued at approximately $15 million [28] - A $40 million credit facility has been secured from Bank Hapoalim to partially fund acquisition costs, consisting of a $20 million five-year term loan and a $20 million short-term revolving credit facility [29] Q&A Session Summary Question: Revenue breakdown across the four products and growth profile - CYTOGAM accounts for approximately 50% of the portfolio revenue, with WINRHO and HEPAGAM generating between $8 million to $12 million, and VARIZIG around $3 million to $6 million [36] Question: Production support for the four products - The products come with an established supply chain, and Kamada plans to grow its own hyperimmune plasma collection capabilities to support the portfolio [38] Question: Margin profile and operating expenses - Outside the U.S., existing distribution channels will be used without adding pressure on costs, while a focused U.S. sales team will be established to promote the products [40] Question: GLASSIA Takeda royalties range - The range of $10 million to $20 million is based on a 12% royalty starting in 2022, which will drop to 6% in 2025 [41][42] Question: InnovAATe trial updates - A successful DSMB meeting was held, and additional study sites are planned to open in early 2022 [43]