Kamada Ltd (KMDA) 2025 Q2 法說會逐字稿

Greetings and welcome to the Kamada Limited second quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Brian Ritchie, Managing Director of LifeSci Advisors.

Thank you. You may begin.

Thank you. This is Brian Ritchie with LifeSci Advisors. Thank you all for participating in today's call. Joining me from Kamada are Amir London, Chief Executive Officer, and Chaime Orlev, Chief Financial Officer. Earlier today, Kamada announced its financial results for the three months and month months ended June 30, 2025. If you have not received this news release, please go to the investors page of the company's website at www.kamada.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 regarding the operations and future results of Kamada. 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 6-K. Which identify specific factors that may cause actual results or events to differ 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 13, 2025. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

With that said, it's my pleasure to turn the call over to Amir London CEO. Amir.

Thank you, Brian. My thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. I'm [literally] told that the result for the second quarter and the first half of 2025 was strong, and that we continue to generate significant profitable growth. Total revenues for the first half of the year were $88.8 million, representing an 11% year over year increase, and adjusted EBITDA for $22.5 million up 35% year over year and representing a 25% margin of revenues.

For the second quarter, revenues were $44.8 million up 5% over the prior year quarter, and adjusted EBITDA was $10.9 million up 20% year over year. These impressive results were driven by the diversity of our product portfolio, and disciplined management of operational expenses.

We expect to continue generating profitable growth for the remainder of 2025 and based on a positive outlook, we are increasing our adjusted EBITDA guidance to between $40 million to $44 million, and reiterating our annual revenue guidance of $178 million to $182 million. The midpoints of our updated 2025 guidance will present an increase of approximately 12% in revenues and approximately 23% in adjusted EBITDA respectively over our last year 2024 results.

We're excited for growth prospects in our business over both the near and longer term, guided by our four pillar growth strategy of organic commercial growth, is the development and M&A transactions, our travel collection operation, and the advancement of our PIVOTAL phase 3 inhaled clinical program.

As you may recall, last quarter we announced the initiation of a comprehensive post-marketing research program for CYTOGAM, which we believe will help demonstrate the advantages of the product in the prevention and management of CMV.

Although CMV disease continues to be a significant risk factor for organ rejection and mortality in transplantation, for years, no new up to-date clinical data regarding the benefits of CYTOGAM were published. To address this, we developed this program in collaboration with leading key opinion leaders to slow advancement of novel CMV disease management.

The research studies supported by this program will focus on late onset CMV prevention and mitigation of active CMV disease, exploring alternative dosing strategies, and investigating potential new applications of CYTOGAM. We deliver the data generated by this program will support further utilization for CYTOGAM, leading to additional organic growth.

Our revenue growth for the first half of the year compared to the first six months of 2024 was primarily due to increased sales of in ex US market and various sales in the US, as well as GLASSIA royalty payments. This positive trend is indicative of the diversity of our portfolio, and our successful marketing activities across different territories and medical specialties.

Also as part of activities to advance organic growth, following our first biosimilar product launched in Israel last year, which is expected to generate approximately $2.5 million in revenues in 2025, we anticipate launching two additional biosimilars later this year, and have several others in the pipeline to be launched in the coming years.

We believe that this portfolio will become an increasingly important portion of the distribution business with annual sales of between $15 million to $20 million within the next five years. Moving to business development and M&A. We are currently conducting active due diligence of several potential commercial targets.

The balance of 2025 and into 2026, we expect to secure compelling e-licensing, collaboration, and all M&A transactions, which will enrich our portfolio of marketed products and complement our existing commercial operations. We anticipate that such transactions would generate operational and all commercial synergies with our current commercial portfolio and support future profitable growth.

In addition, we continue to ramp up plasma collection at our [Beaumont] Texas-based plasma centers, and we're happy to announce earlier this week the US FDA approval of a state of the art center in Houston, Texas. We especially appreciative of the work of a dedicated team of plasma collection experts, who achieved inspection and licensure of this facility on schedule.

As previously stated, the center has annual collection capacity of approximately 50,000 liters of plasma, and each of our two centers in Houston and in San Antonio is expected to generate annual revenues of between $8 million to $10 million in sales of normal source plasma at full capacity.

Turning now to our ongoing PIVOTAL phase 3 innovate clinical trial for inhaled alpha 1 antitrypsin therapy, we continue to advance this program with its revised enrollment goal of approximately 180 subjects, and we are on track to conduct an in fertility analysis by the end of this year, 2025.

With that, and I turned the call over to Chaime, so we did a discussion of a financial result for the first quarter for the second quarter of 2025 and first six months of the year. Please go ahead, Chaime.

Thank you.

Thank you, Amir. As Amir stated at the top of the call, our results for the second quarter and six months ended June 30, 2025 were strong. Overall revenues were $44.8 million in the first quarter of 2025, up 5% compared to the $42.5 million in the second quarter of 2024. Our revenues for the six months of 2025 were $88.8 million and 11% increase from the $80.2 million generated in the first six months of 2024.

As Amir indicated earlier, the increase in revenue was driven by the diversity of the company's portfolio. Gross profit and gross margins were $18.9 million and 42% in the second quarter of 2025 compared to $19 million and 45% in the second quarter of 2024. Gross profit and gross margins for the first six months of 2025 were $39.7 million and 45% compared to $35.7 million and 45% in the first half of 2024.

The decrease in gross profitability in the second quarter of 2025 is attributable to change in product and territory sales mix, whereas during this quarter, the increase in revenue was generated by ex US sales as compared to sales mix in the equivalent quarter last year. Operating expenses including R&D, sales and marketing and G&A, and other expenses, total $11.9 million in the second quarter of 2024, as compared to $13.3 million in the second quarter of 2024.

The decrease in operating expenses, which was also demonstrated in the first quarter of the year. Is indicative of our ability to adequately manage our operational expenditure, while continuing to generate meaningful revenue growth. Net income was $7.4 million or $0.13 per diluted share in the second quarter of 2025 as compared to $4.4 million or $0.08 per diluted share in the second quarter of '24.

Net income for the six months of 2025 was $11.3 million or $0.19 per diluted share as compared to net income of $6.8 million or $0.12 per diluted share in the first six months of '24. The increase in net income is attributable to increase in operating profits, which increased by 54% for the first half of the year and 25% for the second quarter. As well as changes in the financial and tax expenses between the periods.

Adjusted EBITDA was $10.9 million in the second quarter of 2025, up 20%. From the $9.1 million achieved in the second quarter of '24, adjusted EBITDA was $22.5 million in its first six months of 2025, a 35% increase compared to the 16.6% for the first six months of '24. As Amir indicated, we're increasing our adjusted EBITDA guidance for the year to between $40 million and $44 million.

Cash provided by operating activities was $8 million in the second quarter of 2025. And we continue to maintain a strong cash position even after the special dividend payment, and we ended the first half with a cash balance of $66 million that is planned to be used to fund new business development initiatives.

Before turning the call over to for questions, I would like to indicate that we are continuing to monitor the involving tariff situation closely. Based on presently available information, our assessment is that the recently imposed tariffs are not applicable to drug products. To date, we have not experienced impact or interruptions of our operations or ability to maintain cost and pricing as a result of the terrors.

With that, we will open the call to questions.

(Operator Instructions) Annabel Samimy, Stifel.

Hi everyone, thanks for taking my question, and congratulations on a good quarter. So just a couple for me seems, like for the last two quarters GLASSIA and VARIZIG have been. The growth drivers, I guess for reasons you've stated, especially VARIZIG, but can you give us an idea about dynamics behind KEDRAB and CYTOGAM, which I guess had been the growth drivers? Is it more difficult year over year comps? Are they performing as expected or maybe are physicians just slowing down on adoption of CYTOGAM, until the next batch of data, just any color there would be great, and then I'll just follow up after that.

Hi Annabelle, yes, we mentioned specifically GLASSIA EX US and royalties and VARIZIG, because these are the products, which has a significant contribution to our year over year growth. KEDRAB and CYTOGAM are performing according to our expectations, as the KEDRAB contract with CYTOGAM.

Like a four year. It's an eight year with a four year committed volumes KEDRAB, on buy the product we supply them according to the inventory management. We continue to see in market growth, but in general the numbers are similar to 2024 numbers.

CYTOGAM is going. According to the plan, we expect that the growth will come, once we have the additional clinical and medical data which we are currently collecting. But I think in general it's an opportunity to emphasize the strength and diversity of the portfolio.

We actually approved products and marketing over 35 countries, over 25 products in our distribution business, the soon to be plasma sales, and we have a very strong organic growth that. From multiple products, and this year it's been mainly GLASSIA and VARIZIG. Previous year it's been CYTOGAM and KEDRAB, but all in all it's a very strong diverse portfolio, that allows us to continue maintaining the growth year after year.

Yeah, definitely noted, and then, you have a solid cash position for a profitable company, but is it sufficient for impactful BD, given it's declined in the last couple quarters? How should we think about the balance of your internal investments, that you're obviously making quite a few and then the external BD and how that might be funded.

So we plan to you to utilize to use our existing cash if needed, we have additional sources for additional funding and when people, details of funding that we can put to work, we are -- in looking and screening for a commercial stage assets, I think the fact that we're looking for commercial assets gives us a lot of bandwidth in terms of the ability to fund, those transactions.

We're mainly focused on plasma divided products as well as, specialty pharma and within the speciality pharma, the transportation field and as I mentioned during the call, we would like to leverage our supply chain mobilities commercial infrastructure and take advantage of the synergies. And we are actively screening and doing the diligence on some multiple targets and hopeful that you know it will be.

And mature over the next you know few months into 2026 and have meaningful impact on our 2026 performance. And funding to the scale of the transaction we're looking to do -- we will have sufficient funding to execute those transactions.

Okay, if I could just squeeze in one more, on the inhaled AAT program, obviously we're just waiting for the instrument analysis right now. Can you sort of describe the competitive landscape there have been, I guess some more developments whether it's gene therapy, other programs, anything that we should be watching for, that might change the potential market opportunity there.

Yes, good question. So yes, there is a lot of activity in the Alpha 1 space in general. Our in health program is the most advanced one in terms of an efficacy study in a PIVOTAL stage. So there's no other phase 3 PIVOTAL studies that are structured around, efficacy end points. We are making progress and you know the other companies also making progress.

I think you and other. And people following the states know that there are maybe two or three additional technologies, which are currently being developed. The market is growing -- growing, we see the growth of our royalties from KEDRAB, so the 6%, 7%, 8% annual growth is actually happening. What used to be, half a billion dollar market is like $1.3 billion, $1.4 billion market, we believe that by the time, that we are going to have the results from our study, this is going to be like a $2 billion market.

So we believe that there is enough business and enough opportunity for multiple new technologies and multiple new players. We believe that our technology being like a second generation augmentation therapy with, better ease of use and quality of life, with hopefully, if we are success on the study efficacy data will be a very strong competitor and player in the Apha 1 space in general.

(Operator Instructions) James Sidoti, Sidoti & Company.

Hi, good afternoon. Thanks for taking the question. So, yeah, as you said, the quarter really demonstrated how diverse your different revenue streams are. The one that grew this quarter in particular was the distributed. Revenue segment, I guess with the launch of the new product, the new biosimilar product, was there one time sales in the quarter or, how should we view this distribution channel called forward.

No, this is not one time sale, the launch of the biosimilar product, and the future launches expect more by the end of this year is going to build on an existing infrastructure of our commercial activity in the Israeli market, and this is something that we will continue growing.

That you know we had a better gross margin this quarter. The more we launch biosimilars and based on our innovative portfolio in Israel, will help us also improve our margins. So this is a process that has started and will continue over the next few years.

Okay, so there was no, stocking or channel filling in the quarter. These were, you think, these types of numbers you think will be, going forward.

Correct.

Okay, and then a similar question on the SG&A expense. I mean down pretty significantly from the year over -- down significantly year over year, were there one time things -- there that helped that or do you think you'll stay around these levels?

So we're very conscious about our expenses. I think we've been very disciplined in the way that we deploy investment and ongoing expenses. There's been a slight and say, kind of a fluctuation between quarters and between the first six months of the year and the second six months of the year. So you know the second six months of the year, might be a little bit higher again insignificant, a little bit higher in general, but I think what's very highly promising.

And I think all analysts and investors need to look at this, our ability to generate, a good and improved rate of EBITDA from top line. And we said in the past that's when we were on the 20% EBITDA topline, that we are targeting, 25% and above. I think we've been able to demonstrate this over the last, few quarters. And this is our goal to continue to be profitable and from every dollar we make that we will have a bigger portion all the way to the bottom line EBITDA.

Okay. And then last question for me, something I asked, three months ago, you said the tax rate would, continue to be a little bit lumpy in in 2025. You know what was responsible for the tax credit in the June quarter and where do you think the tax rate will be in September and December?

I will fill this question to how to find it.

Yeah I'll take the this this question. So, we anticipate that the Israeli entity or the parent company is reporting in Israeli shekels, over the course of the last quarter, there's been fluctuations in the currency exchange between the Israeli shekel in US dollars, that affected our results for tax purposes and made the the change.

Overall, we still of the opinion that by the end of 2025, the company will be utilizing all of its tax losses carry forward. And we will be moving into tax payments. Right now, the changes that you see are mostly in deferred tax, either assets or liabilities, which are causing the bumpiness as you alluded to.

Okay, so when those [KOLs] are used up, as you look into 2026 and beyond, what do you think will be an effective tax rate?

Well, we're looking at anywhere between 20% or 25%.

All right, thank you. There are no further questions at this time. I would like to turn the floor back over to Emir London for closing comments.

Thank you very much. In closing, we will continue to invest in the four pillar growth strategy, with continued progress made in organic growth of existing commercial portfolio, business development, and M&A transactions to support an expedited growth, expansion of a platform collection operation, and the progression of an AT therapy program.

We look forward to continuing to support clinicians and patients with those important life saving products, that we develop and affect and commercialize. We thank you all for your interest in Kamada, and we're committed to creating long term shareholder value. We hope you all stay healthy and safe. Thank you for participating in today's call.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.