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spk03: Greetings and welcome to the Comida Limited 4th Quarter and 4-Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bob Yeadon of Lifestyle Advisors. Thank you, Bob. You may begin.
spk05: Thank you, Paul, and good morning and good afternoon to everyone. Thank you all for participating in today's call. Joining me from Kamada are Amir London, Chief Executive Officer, and Jaime Orlev, Chief Financial Officer. Earlier today, Kamada announced its financial results for the three and 12 months and the December 31, 2021. If you have not received this news release, please go to the investor's page of the company's website, www.comeda.com. Before we begin, I'd 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 Comeda. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, The company's forms 20F and 6K, 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, Tuesday, March 15, 2022. Comida undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. Those prepared remarks, it's my pleasure to turn the call over to Amir London, CEO. Amir.
spk01: Thank you, Bob. My thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. The recently completed 2021 year was a transformational period for Kamada, in our path toward becoming a global leader in the plasma-derived specialty market. Following the completion of the planned manufacturing transition of Glacier to Takeda, our recent acquisition of the portfolio of four FDA-approved commercial immunoglobulins, and the establishment of Kamada Plasma, our U.S.-based plasma collection company, we are embarking on a new and exciting chapter in the company evolution. We are building on the strong foundation established over the years, entering 2022 as a new Kamada, a fully integrated specialty plasma company with six FDA-approved products and strong commercial capabilities in the U.S. market, as well as a global commercial footprint in over 30 countries. Our business performed as expected in 2021, and we look ahead to 2022. for which our revenue guidance is between $125 million to $135 million, representing a 20% to 30% growth compared to 2021, with expected EBITDA margins of 12% to 15%, which would represent more than 2.5x of the 2021 EBITDA. This raw guidance reflects the benefits stemmed from our new strategic direction and the resumption of revenue and profitability growth in 2022. Importantly, we further expect continued growth at a double-digit rate in the coming few years. The acquisition completed in November 2021, following a thorough search for the ideal asset for Kamada, was a critical strategic and synergetic step for the company. The acquired product generated revenues exceeding $40 million in 2021 with over 50% gross margins, and we anticipate significantly growing the new portfolio revenues through proactive promotional activities in the U.S., where our newly established subsidiary, Kamada Inc., is responsible for the commercialization and direct sale of the product. We also intend to leverage our existing strong international distribution network to grow product revenues in the new territories, primarily in Asia, Latin America, and the Middle East. I am pleased to report that these promotional and sales activities have already commenced. Just yesterday, we announced that John Knight joined us as Vice President, U.S. Commercial Operations, to lead commercial activities for our portfolio of innovative medicines. John's vast commercial leadership experience in the biopharmaceutical industry, primarily focused on driving sales of innovative specialty plasma products, will be instrumental to our initiatives aimed at further penetrating the US market with our expanded product line. We intend to actively promote this compelling product to hospitals and physicians throughout the US. As such, we are also in the process of hiring a focused team of experienced cells and medical experts with established relationship with relevant U.S. healthcare providers. Of the four acquired products, the largest is CytoGum, indicated for the prophylaxis of CMV disease associated with solid organ transplantation. This proprietary unique product is the only FDA-approved IgG product for its indication. The manufacturing transfer process for cytogram is already well underway, and we expect to receive FDA approval for its production at our Israeli facility by early 2023. Moreover, based on the cytogram manufacturing transfer, the expected growth of CADRAB, our anti-RABI's hyperimmune product, and planned manufacturing transition of the other acquired products over the next few years, We anticipate improving the gross margins of our proprietary products by effectively utilizing our plant capacity. Another major strategic step taken is the acquisition of a plasma collection facility in Texas in early 2021, which primarily specializes in the collection of hyperimmune plasma used for anti-D-imnoglobulin, a product manufactured by Kamada and distributed in the international market. This acquisition represented Kamada's entry into the US plasma collection market and supported our strategic goal of becoming a fully integrated specialty plasma company. We are already actively engaged in the expansion of the high-premium plasma collection capacity at this center, and we are simultaneously advancing our plan to open additional centers in the US to further enhance our supply of specialty and regular plasma. To lead our expansion efforts, we've also recently appointed Jonathan Ward as Director for Facilities and Construction. Jonathan brings to Canada more than 25 years of experience in facilities and construction management, most recently in the plasma collection industry. This planned expansion is expected to enhance our IGG competitive position in the various markets. Kedrub, marketed in the U.S. by Kedrion, continues to gain market share in the $150 million U.S. market. During 2021, the FDA approved a label expansion for the product which differentiates Kedrub as the first and only human rabies immunoglobulin available in the U.S. to be clinically studied in children and confirming the safety and effectiveness of its use in the pediatric population. We anticipate sales of the product to grow significantly during the next few years. As for Glacier, in 2021, as planned, Takeda completed their own manufacturing facility for the product, and we fulfilled our supply commitments. Going forward, we expect to begin receiving royalty payments from Takeda starting as soon as the second quarter of this year in the range of $10 to $20 million per year from 2022 to 2040, enhancing our profitability and cash position. In addition, we continue to grow sales of Glacia in international markets through our local partners. Turning to our promising clinical development pipeline, we are excited about the potential of our innovative inhaled AAT product for the treatment of AAT deficiency, a technology which has shown to be the most effective way of delivering AAT directly into the patient's lungs. A substantial opportunity exists for inhaled AAT to be a revolutionary product in a market that is already over $1 billion in annual sales in the U.S. and the EU and growing steadily. We are currently conducting the Innovate Clinical Trial, a randomized, double-blind, placebo-controlled, pivotal, phase three study. While enrollment in the study was slow during the last two years due to the COVID-19 pandemic, we are currently expanding the study with up to six additional clinical sites planned to be opened shortly, thereby expediting enrollment. Importantly, This is a unified study, as the trial's data are expected to qualify for regulatory submissions in both the FDA and the EMA. In our distribution segment, which is an additional important growth catalyst for Kamada, we leverage our expertise and strong presence in the Israeli market to register, market, and distribute more than 20 products that are developed and manufactured by our international partners. Since 2018, we've significantly grown our pipeline of distributed products, and in 2022, we anticipate launching a number of new products across multiple medical specialties. An area of key strategic focus in our distribution business is the planned distribution of a portfolio of 11 biosimilar products expected to be launched upon receipt of Israeli regulatory approval between the years 2022 and 2028, with an overall annual anticipated peak sales within several years of launch of more than $40 million. Once achieved, it will more than double our current Israeli distribution business. Included in this portfolio are eight products through a distribution agreement with Alvotec, a global leader in the development and manufacturing of biosimilar drug candidates. In closing, 2021 was a year of great importance for Canada as we successfully executed on multiple critical strategic transactions, ensuring a rapid financial turnaround of the company with significant growth at a double-digit rate anticipated in the years ahead. As we enter 2022, the initial benefits of the pivotal actions we have taken are already evident. Kamada is uniquely positioned for growth as a global leader in the specialty plasma industry with multiple robust value-creating catalysts. With that, I now turn the call over to Jaime for his review of our fourth quarter and full year 2021 financial results. Jaime, please.
spk02: Thank you, Amir. Good day, everyone.
spk04: Our business performed as we anticipated during 2021. Total revenues in 2021 were $103.6 million, as compared to $133.2 million recorded in 2020. This decrease was primarily due to the transition of glass manufacturing to Takeda, resulting in an overall $38.7 million year-over-year decrease, and a year-over-year decrease of $6.4 million in Kedrob sales to Kedrion. This decrease resulted from a high level of product inventory at Kedrion at the end of 2020 due to the COVID-19 pandemic effect on Kedrion sales by Kedrion in that year. On the other hand, we posted $5.4 million of revenue, generated from the newly acquired portfolio. Of note, these revenues are for the period from November 22nd, 2021 through the end of the year. In the fourth quarter of 2021, total revenues were $31.5 million, which was equivalent to the revenues recorded in the fourth quarter of 2020. EBITDA in 2021 total of $5.4 million as compared to $25.1 million in 2020. This decrease is primarily attributed to the overall change in product sales mix, specifically the decrease in sales of Glacier to Takeda and Kedra to Kedra. In addition, we incurred approximately $1.2 million of transaction-related expenses associated with the newly acquired portfolio, and approximately $600,000 of excess severance to employees who were laid off as part of the downsizing following the transition of Glossier Manufacturing into Takeda. As of December 31, 2021, the company had cash, cash equivalents, and short-term investments of $18.6 million as compared to $109.3 million on December 31, 2021. The primary use of the cash during 2021 was the acquisition of the four FDA-approved plasma-derived hyperimmune commercial products. As of the end of 2021, our working capital increased by $13.7 million to a total of $57.4 million. In connection with the recent acquisition, we secured a $40 million credit facility The credit facility is comprised of a $20 million five-year term loan, which is fully utilized by us, and a $20 million short-term revolving credit facility, which provides us access to additional cash resources to continue to support our expansion as needed. As of the end of 2021, we have not utilized the short-term credit facility. To reiterate, our revenue guidance for 2022 is between $125 million to $135 million, a 20% to 30% growth compared to 2021. We expect EBITDA margins of 12% to 15%, which would represent more than 2.5x of the 2021 EBITDA. That concludes our prepared remarks. We will now open the call for questions. Operator?
spk03: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
spk02: One moment please while we poll for questions. Paul, it's Bob Yeti from LifeSci.
spk05: I've been emailed a question by an investor. Maybe I could ask that question. The question is for Amir, which is how long will it take to transition in addition to the four products to the Israeli manufacturing facility, and how will that enhance your gross margins over time?
spk01: Thank you, Bob. So as described during the call, Cytogarm is already way underway as part of the tech transfer to our facility. And we expect to have FDA approval by beginning of 2023. Cytogarm is more than 50% of the new portfolio in terms of its revenue and contribution. The other three products, we will be initiating the tech transfer activities, and we expect to be able to complete those within the next three to five years. And once they are manufactured by Kamada at our facility, this will have a significant contribution to the overall effectiveness of the plant and the gross margins of our proprietary products. So this is definitely part of the synergies of the acquisition that we've made.
spk02: Thank you. There are no further questions at this time.
spk03: I'd like to turn the floor back over to management for any closing comments.
spk00: Yes.
spk01: So in closing, on behalf of the entire Commodity team, We look forward to continuing to help clinicians and patients with important life-saving products that we develop, manufacture, and commercialize. We thank all of our investors for their support and remain committed to creating long-term shareholder value. Wanted to reiterate the significant growth expected already in 2022 with our guidance for the year expected to range between $125 million to $135 million. representing a 20% to 30% increase over 2021, while EBITDA margins are expected to grow more than 2.5x over 2021 EBITDA. So this is significant growth expected for the year, and we expect to have a double-digit growth continue over the next few years. We hope you all stay healthy and safe, and we thank you for your participating in today's call.
spk02: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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