NASDAQ:KMDA
READ THE FULL KMDA RESEARCH REPORT
Financial Update
On May 8, 2024, Kamada Ltd. (NASDAQ:KMDA) announced financial results for the first quarter of 2024 and provided a business update. Kamada reported revenues of $37.7 million in the first quarter of 2024, compared to $30.7 million in the first quarter of 2023, a 23% increase. The increase was primarily due to increased sales of Cytogam due to increased demand for the product in the U.S. along with increased sales of Kedrab to Kedrion due to increased market share in the U.S. The revenues consisted of $33.8 million from proprietary products and $4.0 million from the distribution business. Gross profit and gross margins were $16.8 million and 44%, respectively, in the first quarter of 2024 compared to $11.9 million and 39%, respectively, in the first quarter of 2023. Cost of goods sold in the first quarters of 2024 and 2023 included $1.3 million of depreciation expenses associated with intangible assets generated through the IgG products.
Operating expenses for the first quarter of 2024, which includes research and development (R&D), sales and marketing (S&M), general and administrative (G&A), and other expenses totaled $12.7 million in the first quarter of 2024 compared to $11.6 million for the first quarter of 2023. Net income for the first quarter of 2024 was $2.4 million, or $0.04 per diluted share, compared to a net loss of $1.8 million, or $(0.04) per share, in the first quarter of 2023. Adjusted EBITDA, as shown in the following table, was $7.5 million in the first quarter of 2024 compared to $3.8 million in the first quarter of 2023, which represented a 96% year-over-year increase.
We have increased our estimated revenues for the full year to $160 million, which is at the mid-point of the company’s increased revenue guidance of $158 million to $160 million.
For 2024, we model for the company to have total revenues of $158 million, which is at the mid-point of the company’s guidance of $156 million to $160 million. This would be a $17.5 million (12%) increase over 2023 revenues. We now model for adjusted EBITDA of $30 million, which is at the mid-point of the company’s updated guidance of $28 million to $32 million. This would be an approximately $6 million (25%) increase over adjusted EBITDA in 2023. We view the large increases in adjusted EBITDA over the past couple of years along with the topline revenue growth as indicative of strong business fundamentals.
Business Update
Update on Phase 3 InnovAATe Trial
Kamada initiated the Phase 3 InnovAATe trial of inhaled alpha-1 antitrypsin (AAT) in December 2019 (NCT04204252). It is a randomized, double blind, placebo controlled pivotal Phase 3 trial designed to assess the efficacy and safety of inhaled AAT in patients with AATD and moderate lung disease. Up to 250 patients will be randomized 1:1 to receive either 80 mg inhaled AAT or placebo daily for two years. The primary endpoint of the trial is lung function as measured by FEV1. Secondary endpoints include lung density changes as measured by CT densitometry, along with other parameters of disease severity such as pulmonary function, exacerbation rate, and six-minute walk test.
The FDA recently reconfirmed the overall study design and expressed a willingness to potentially accept a P value <0.1 alpha level in evaluate the trial’s primary efficacy endpoint. Based on this, Kamada is planning to file an IND amendment with a revised statistical analysis plan (SAP) and study protocol. We anticipate FDA feedback on this in the second half of 2024. If approved, this may allow for acceleration of the program.
Update on Plasma Collections Operation
Kamada acquired its first plasma collection center in March 2021 in Beaumont, TX and is currently collecting hyper-immune plasma for the company’s Anti-D and Anti-R specialty IgG products. The company is currently working to open additional centers in the U.S. to collect both hyper-immune plasma as well as normal source plasma. A center in Houston, TX is set to open in the second half of 2024 and the company has signed a lease agreement for an additional location in San Antonia, TX.
Conclusion
We’re very encouraged by the way Kamada continues to execute its business, and the increase in expected revenues and adjusted EBITDA for 2024 shows that the fundamentals are very strong. We look forward to an update from the company regarding the Phase 3 InnovAATe trial and whether the FDA will formally agree to the change in the statistical analysis plan and how that my impact timelines for that trial. With no changes to our model our valuation remains at $13 per share.
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