OREANDA-NEWS.  Kamada Ltd. (Nasdaq:KMDA) (TASE:KMDA.TA), a plasma-derived protein therapeutics company focused on orphan indications, announced today financial results for the three and twelve months ended December 31, 2016. 

“We are very pleased with our accomplishments in 2016,” said Amir London, Chief Executive Officer.  “We met our revenue guidance for full year 2016, with over 30% growth in our Proprietary Products revenues compared with the previous year, and look forward to a higher rate of revenue growth in this segment in 2017.  Moreover, the extension of our supply agreement with Shire for GLASSIA® through 2020 underscores Shire’s solid outlook for higher long-term demand for GLASSIA® in the U.S. This minimum revenue commitment by Shire - $237 million over four years - further strengthens our confidence in achieving our guidance of $100 million in total revenues in 2017 and represents further growth in the following years.”

“Additionally, we achieved a number of key development milestones during 2016, and look forward to multiple additional regulatory and clinical development-related value-creating milestones in 2017. We were pleased to announce last August that our U.S. Phase 2 study of inhaled Alpha-1 Antitrypsin (AAT) for the treatment of AAT Deficiency met its primary endpoint of a significant increase in endothelial lining fluid inhibitory capacity.  We recently submitted this data to the European Medicines Agency (EMA) in support of our filed Inhaled AAT Marketing Authorization Application (MAA) as part of our response to the day 120 comments, and will also use it in our discussions with the FDA in order to identify a regulatory path for inhaled AAT in the U.S.,” added Mr. London. 

Financial Highlights for the Twelve Months Ended December 31, 2016:

  • Total revenues for 2016 were $77.5 million, an 11% increase from $69.9 million in 2015.
  • Revenues from the Proprietary Products segment in 2016 were $56.0 million, a 30.3% increase from $43.0 million in 2015.
  • Gross profit for 2016 was $21.7 million, a 37.0% increase from the $15.8 million in 2015.
  • Gross margin increased to 27.9 percent from 22.6 percent in 2015.
  • Net loss was $6.7 million in 2016, or $0.18 per share, compared to a net loss of $11.3 million, or $0.31 per share in the same period of 2015.
  • Adjusted net loss was $5.6 million compared to adjusted net loss of $9.4 million in the same period of 2015.

Financial Highlights for the Three Months Ended December 31, 2016:

  • Total revenues were $24.3 million for the fourth quarter of 2016, a 5.5% decrease from  $25.6 million in the fourth quarter of 2015.
  • Revenues from the Proprietary Products segment were $17.7 million, essentially flat as compared to the same period of 2015.
  • Gross profit was $5.0 million, a 38.3% decrease from the $8.0 million in the same period of 2015.
  • Gross margin decreased to 20.5 percent from 31.4 percent in the same period of 2015.
  • Net loss was $1.8 million, or $0.05 per share, compared to net income of $1.0 million, or $0.03 per share, in the same period of 2015.
  • Adjusted net loss was $1.8 million compared to adjusted net income of $1.4 million in the same period of 2015.

Recent Corporate Highlights:

  • Extended strategic partnership with Shire plc for supply and distribution of GLASSIA®. Minimum revenue for Kamada for the four-year period from 2017 to 2020 will reach approximately $237 million and may be expanded to $288 million during that period. This extension represents the fourth time the companies have extended the contract for manufacturing supply of GLASSIA® since the start of the strategic relationship in 2010.  
     
  • Announced plans for a Phase 2/3 clinical trial of Alpha-1 Antitrypsin IV (G1-AAT IV) for the treatment of Graft-Versus-Host Disease (GvHD) in collaboration with Shire plc.  This U.S. clinical trial will be a two-part, multi-center, prospective study to evaluate the safety and efficacy of G1-AAT IV as an add-on biopharmacotherapy to conventional steroid treatment in up to 168 patients with acute GvHD (aGvHD) with lower gastrointestinal involvement. G1-AAT IV previously received orphan drug designation from the FDA and EMA for the treatment of GvHD, and an Investigational New Drug Application was submitted to the FDA earlier this year.
     
  • Received positive Scientific Advice from the Committee for Medicinal Products for Human Use (CHMP) of the EMA around the Company’s development program in Europe for G1-AAT IV for the treatment of aGvHD with lower gastrointestinal involvement.  The response from the CHMP included important guidance related to the design of Kamada’s planned Phase 2/3 European study and the regulatory pathway for approval based on conducting such a study.

“We are pleased with 2016’s strong financial performance, including meeting our revenue guidance, reducing our reported net losses and generating a positive cash flow in the fourth quarter and in the full year of 2016,” said Gil Efron, Deputy CEO and Chief Financial Officer.  “Growth of 30% in revenues from our Proprietary Products drove our strong financial performance in 2016, resulting in a net loss of $6.7 million, a 40% year-over-year decrease.” 

“As a consequence of our expected growth in total revenues in 2017 to $100 million, a projected increase of nearly 30% year-over-year, we project that Kamada will be profitable in 2017, even while continuing our R&D investment in support of our product pipeline,” added Mr. Efron. 

Full Year 2016 versus 2015
Total revenues for 2016 were $77.5 million, up 11% as compared to $69.9 million for 2015. Revenues from the Proprietary Products segment for 2016 were $56.0 million, up 30% as compared to $43.0 million in 2015.  Distributed Products revenue was $21.5 million for 2016, a decrease of 20% compared to $27.0 million in 2015.

Gross profit for 2016 grew 40% to $21.7 million, compared to $15.8 million during 2015.  Gross margin increased to 27.9% for 2016 from 22.6% in 2015.

R&D expenses in 2016 were $16.2 million, a slight decrease compared to $16.5 million in 2015.  Selling, general and administrative expenses of 2016 were $10.9 million, an increase of 2% compared to $10.7 million in 2015.  For 2016, the Company reported an operating loss of $5.5 million, compared with an operating loss of $11.4 million in 2015.  The net loss for 2016 was $6.7 million, or ($0.18) per diluted share, compared with a net loss of $11.3 million, or ($0.31) per diluted share, in the same period of 2015.

Negative Adjusted EBITDA for 2016 was $0.9 million, compared with negative Adjusted EBITDA of $6.3 million for 2015.  Adjusted net loss was $5.6 million in 2016, compared with an adjusted net loss of $9.4 million in 2015.

Fourth Quarter 2016 Financial Results Compared to Fourth Quarter 2015 Financial Results

Total revenues for the fourth quarter of 2016 of $24.3 million decreased by 5.5% as compared to $25.6 million in the fourth quarter of 2015. Revenues from the Proprietary Products segment were $17.7 million for the fourth quarter of 2016, in-line with the fourth quarter of 2015.  Distributed Products revenue was $6.6 million, a decrease of 19.3% as compared with $8.1 million in the fourth quarter 2015.

Gross profit for the fourth quarter of 2016 in the Proprietary Products segment was $4.1 million, a decrease of 40.3% compared with $6.9 million in the fourth quarter of 2015, principally due to an unexpected shutdown of our manufacturing plant and an inventory write-off for a total amount of $2.6 million.  Gross margin was 23.2%, a decline from 39.9% in the same period of 2015.

R&D expenses in the fourth quarter of 2016 were $4.2 million, in-line with the $4.4 million recorded in the same period of 2015.  Selling, general and administrative expenses were $2.6 million, down 7% from the $2.8 million in the same period in 2015.  Operating loss in the fourth quarter of 2016 was ($1.9) million, as compared to operating income of $0.8 million recorded in the same period of 2015.  Net loss for the fourth quarter of 2016 was ($1.8) million, or ($0.05) per diluted share, compared to net income of $1.0 million, or $0.03 per diluted share, in the same period of 2015.

Negative Adjusted EBITDA for the fourth quarter of 2016 was ($1.0) million, compared with Positive Adjusted EBITDA for the fourth quarter of 2015 of $2.0 million.  Adjusted net loss for the fourth quarter of 2016 was ($1.8) million, compared with adjusted net income of $1.4 million in the fourth quarter of 2015.

Balance Sheet Highlights
As of December 31, 2016, Kamada had cash, cash equivalents and short-term investments of $28.6 million, compared with $28.3 million as of December 31, 2015. During 2016, the Company generated $1.9 million in cash from operation operations and used $2.6 million for capital expenditures. 

2017 Revenue Guidance
For the year ending December 31, 2017, Kamada expects total revenues to be  $100 million.

 

About Kamada
Kamada Ltd. is focused on plasma-derived protein therapeutics for orphan indications, and has a commercial product portfolio and a robust late-stage product pipeline. The Company uses its proprietary platform technology and know-how for the extraction and purification of proteins from human plasma to produce Alpha-1 Antitrypsin (AAT) in a highly-purified, liquid form, as well as other plasma-derived Immune globulins.  AAT is a protein derived from human plasma with known and newly-discovered therapeutic roles given its immunomodulatory, anti-inflammatory, tissue-protective and antimicrobial properties. The Company’s flagship product is GLASSIA®, the first and only liquid, ready-to-use, intravenous plasma-derived AAT product approved by the U.S. Food and Drug Administration. Kamada markets GLASSIA® in the U.S. through a strategic partnership with Baxalta (now part of Shire plc) and in other counties through local distributors.  In addition to GLASSIA®, Kamada has a product line of seven other pharmaceutical products administered by injection or infusion, that are marketed through distributors in more than 15 countries, including Israel, Russia, Brazil, India and other countries in Latin America and Asia. Kamada has five late-stage plasma-derived protein products in development, including an inhaled formulation of AAT for the treatment of AAT deficiency for which a MAA was submitted to the EMA after completing a pivotal Phase 2/3 clinical trials in Europe.  Kamada has also completed its Phase 2 clinical trials in the U.S for the treatment of AAT deficiency with inhaled AAT. In addition, Kamada's intravenous AAT is in development for other indications such as type-1 diabetes, GvHD and prevention of lung transplant rejection. Kamada also leverages its expertise and presence in the plasma-derived protein therapeutics market by distributing more than 10 complementary products in Israel that are manufactured by third parties.

Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that are not historical facts, such as statements regarding assumptions and results related to financial results forecast, commercial results, timing and results of clinical trials and EMA and U.S. FDA submissions and authorizations.  Forward-looking statements are based on Kamada’s current knowledge and its present beliefs and expectations regarding possible future events and are subject to risks, uncertainties and assumptions.  Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, unexpected results of clinical trials, delays or denial in the U.S. FDA or the EMA approval process, additional competition in the AATD market or further regulatory delays.  The forward-looking statements made herein speak only as of the date of this announcement and Kamada undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law.

Consolidated Balance Sheet

    As of December 31,
      2016       2015  
    In  thousands
Current Assets        
Cash and cash equivalents   $ 9,968     $ 5,047  
Short-term investments     18,664       23,259  
Trade receivables     19,788       23,071  
Other accounts  receivables     3,063       2,881  
Inventories     25,594       26,336  
      77,077       80,594  
         
Non-Current Assets        
Property, plant and equipment, net     22,249       21,309  
Other long term assets     370       89  
      22,619       21,398  
      99,696       101,992  

Current Liabilities		        
Current maturities of loans and capital leases     412       37  
Trade payables     16,277       16,917  
Other accounts payables     5,614       4,064  
Deferred revenues     4,903       1,921  
         
      27,206       22,939  
         
Non-Current Liabilities        
Loans and capital leases     1,364       151  
Employee benefit liabilities, net     722       787  
Deferred revenues     3,661       5,608  
      5,747       6,546  
         
Shareholder's Equity        
Kamada Ltd.'s shareholders' equity:        
Ordinary shares of NIS 1 par value:
Authorized - 60,000,000 ordinary shares; Issued and outstanding – 36,447,175 and 36,418,741 shares at December 31, 2016 and 2015, respectively		     9,320       9,320  
Additional paid in capital     162,671       162,238  
Capital reserve due to translation to presentation currency     (3,490 )     (3,490 )
Capital reserve from hedges     (27 )     (1 )
Available for sale reserve     19       73  
Capital reserve from share-based payments     9,795       9,157  
Capital reserve from employee benefits     (81 )     (59 )
Accumulated deficit     (111,464 )     (104,731 )
      66,743       72,507  
         
    $ 99,696     $ 101,992  
                 
                 

Consolidated Statements of Comprehensive Income

   
    For the year ended
December 31,		 For the 3 months ended
December 31,
      2016       2015   2016       2015  
    In thousands
                 
Revenues from proprietary products   $ 55,958     $ 42,952     $ 17,688     $ 17,518  
Revenues from distribution     21,536       26,954       6,570       8,143  
                 
Total revenues     77,494       69,906       24,258       25,661  
                 
Cost of revenues from proprietary products     37,433       30,468       13,590       10,649  
Cost of revenues from distribution     18,411       23,640       5,700       6,954  
                 
Total cost of revenues     55,844       54,108       19,290       17,603  
                 
Gross profit     21,650       15,798       4,968       8,058  
                 
Research and development expenses     16,245       16,530       4,221       4,425  
Selling and marketing expenses     3,243       3,652       686       959  
General and administrative expenses     7,643       7,040       1,955       1,881  
Operating income (loss)     (5,841 )     (11,424 )     (1,894 )     793  
                 
Financial income     469       463       81       100  
Expense in respect of currency exchange and translation differences and derivatives instruments, net     127       625       259       205  
Financial expense     (126 )     (934 )     (20 )     (110 )
Income before  taxes on income     (5,011 )     (11,270 )     (1,574 )     988  
Taxes on income     1,722       --       234       --  
                 
Net Income (loss)     (6,733 )     (11,270 )     (1,808 )     988  
                 
Other Comprehensive Income:                
Net gain (loss) on available for sale     (54 )     63       (68 )     (48 )
Actuarial net gain (loss) of defined benefit     (22 )     22       (22 )     22  
Net gain (loss)  on cash flow hedge     (26 )     115       (79 )     48  
Total comprehensive income ( loss)   $ (6,835 )   $ (11,070 )   $ (1,977 )   $ 1,010  
                 
Income  per share attributable to equity holders of the Company:                
                 
Basic income (loss) per share   $ (0.18 )   $ (0.31 )   $ (0.05 )   $ 0.03  
                 
Diluted income (loss) per share   $ (0.18 )   $ (0.31 )   $ (0.05 )   $ 0.03  
                 
Weighted-average number of ordinary shares used to compute income (loss) per share attributable to equity holders:                
Basic     36,418,833       36,245,813       36,419,107       36,418,741  
Diluted     36,427,373       36,245,813       36,457,377       36,418,741  
                                 
                                 

Adjusted EBITDA

    For the year
ended December 31		   Three months
ended December  31
      2016       2015       2016     2015  
    In thousands of US dollars
                 
Net income (loss)   $ (6,733 )   $ (11,270 )   $ (1,808 )   $ 988  

Income tax expense

     1,722       --       234       --  
                 
Financial expense (income), net     (343 )     471       (61 )     10  
                 
Depreciation and amortization expense     3,501       3,227       870       789  
                 
                 
Share-based compensation charges     1,071       1,907       49       380  
                 
Expense in respect of translation differences and derivatives instruments, net     (127 )     (625 )     (259 )     (205 )
                 
Adjusted EBITDA   $ (909 )   $ (6,290 )   $ (975 )   $ 1,962  
                                     
       

Adjusted net income (loss)

    For the year
ended December 31
   Three months
ended December  31
      2016       2015       2016       2015  
    In thousands of US dollars
                   
Net income (loss)   $ (6,733 )   $ (11,270 )   $ (1,808 )   $ 988  
                   
                   
Share-based compensation charges     1,071       1,907       49       380  
                   
Adjusted net income (loss)   $ (5,662 )   $ (9,363 )   $ (1,759 )   $ 1,368  
                                         
       

Consolidated Statements of Cash Flows

    For the year ended
December 31,		   For the 3 months
ended December 31,
        2016   2015       2016   2015  
    In thousands
Cash Flows from Operating Activities                
Net Income (loss)   $ (6,733 )   $ (11,270 )   $ (1,808 )   $ 988  
                 
Adjustments to reconcile net loss to net cash provided by operating activities:                
                 
Adjustments to the profit or loss items:                
Depreciation and amortization     3,501       3,265       870       789  
Financial expenses (income), net     (470 )     (154 )     (320 )     (195 )
Cost of share-based payment     1,071       1,907       49       380  
Income tax expense     1,722       --       234       --  
Loss from sale of property and equipment     (18 )     --       5       --  
Change in employee benefit liabilities, net     (87 )     87       (98 )     196  
                 
      5,719       5,105       740       1,170  
Changes in asset and liability items:                
increase in trade receivables     3,489       (5,604 )     (5,459 )     (8,167 )
Decrease (Increase)  in other accounts receivables     211       118       865       (242 )
Decrease (increase)  in inventories     742       (913 )     2,492       475  
Decrease (increase)  in deferred expenses     (433 )     (565 )     55       564  
Increase in trade payables     (2,650 )     887       5,626       244  
Increase (decrease)  in other accounts payables     1,520       94       839       197  
Increase (decrease) in deferred revenues     1,035       (2,405 )     (987 )     (762 )
                 
      3,914       (8,388 )     3,431       (7,691 )
Cash paid during the year for:                
Interest paid     (60 )     (484 )     (14 )     (122 )
Interest received     842       1,143       185       231  
taxes paid     (1,785 )     (47 )     (4 )     --  
                 
      (1,003 )     612       167       109  
                 
Net cash  provided by (used in)operating activities   $ 1,897     $ (13,979 )   $ 2,530     $ (5,424 )
                                 
                                 

Consolidated Statements of Cash Flows

    For the Year ended
December 31,		 For the 3 months ended
December 31,
      2016       2015       2016       2015  
    In thousands
Cash Flows from Investing Activities                
Short-term investments   $ 4,236     $ 13,971     $ 1,867     $ 13,330  
Purchase of property and equipment and intangible assets     (2,641 )     (2,718 )     (737 )     (786 )
Proceeds from sale of property and equipment     42       --       1       --  
                 
Net cash  provided by investing activities     1,627       11,253       1,131       12,544  
                 
                 
Proceeds from exercise of options   *       1,254     *       --  
Receipt of long-term loans     1,701       197       --       197  
Repayment Long-term loans     (211 )     (9 )     (52 )     (9 )
Repayment of convertible debentures     --       (7,797 )     --       (7,797 )
                 
Net cash provided by (used in) financing activities     1,490       (6,355 )     (52 )     (7,609 )
                 
Exchange differences on balances of cash and cash equivalent     (103 )     (418 )     (117 )     (251 )
                 
Increase (Decrease) in cash and cash equivalents     4,921       (9,499 )     3,492       (740 )
                 
Cash and cash equivalents at the beginning of the year     5,047       14,546       6,476       5,787  
                 
Cash and cash equivalents at the end of the year   $ 9,968     $ 5,047     $ 9,968     $ 5,047  
                 
Significant non-cash transactions                
Purchase of property and equipment through capital lease     132       --       --       --  
Purchase of property and equipment     1,968       --       1,968       --  
                 

*Represent an amount of less than one thousand dollars.