Earnings Release • Feb 6, 2017
Earnings Release
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Total revenues for 2016 were \$77.5 million, an 11% increase over 2015
Full year 2016 Proprietary Product revenues up over 30%
Reaffirms revenue guidance of \$100 million for 2017
Conference Call Today at 8:30am Eastern Time
NESS ZIONA, Israel -- February 6, 2017 -- Kamada Ltd. (Nasdaq: KMDA) (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 Propriety 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 GLASSIAÒ through 2020 underscores Shire's solid outlook for higher long-term demand for GLASSIAÒ 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.
"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.
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.
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.
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.
For the year ending December 31, 2017, Kamada expects total revenues to be \$100 million.
Kamada management will host an investment community conference call on Monday, February 6 at 8:30 a.m. Eastern time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 888-452-4034 (from within the U.S.), 1 80 924 5905 (from Israel), or 719-457-2087 (International) and entering the conference identification number: 5468241. The call will also be webcast live on the internet on the Company's website at www.kamada.com.
A replay of the call will be accessible two hours after its completion through February 20 by dialing 844-512-2921 (from within the U.S.) or 412-317-6671 (from outside the U.S.) and entering the conference identification number: 5468241. The call will also be archived for 90 days on the Company's website at www.kamada.com.
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, tissueprotective 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.
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. Forwardlooking 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.
CONTACTS: Gil Efron Deputy CEO & Chief Financial Officer [email protected]
Bob Yedid LifeSci Advisors, LLC 646-597-6989 [email protected]
| 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 |
| 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 Selling and marketing expenses |
16,245 3,243 |
16,530 3,652 |
4,221 686 |
4,425 959 |
||||
| 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 Taxes on income |
(5,011) 1,722 |
(11,270) - |
(1,574) 234 |
988 - |
||||
| 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 | ||||
| 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 |
| 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) |
| 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 dollar.
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