Kamada reports 11% revenue growth in H1 2025 and raises adjusted EBITDA guidance to $40M-$44M, driven by diverse portfolio and operational efficiency.

OPERATOR - (00:01:02)

Greetings and welcome to the Comata Limited second quarter 2025 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. Should anyone require operator assistance during the conference, please press Star0 on your telephone keypad. 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.

Brian Ritchie - Managing Director - (00:01:32)

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 Jaime Orlev, Chief Financial Officer. Earlier today, Kamada announced its financial results for the three months and six months ended June 30, 2025. If you have not received this news release, please go to the Investors page of the company's website@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 Comoda. 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 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 is my pleasure to turn the call over to Amir London CEO. Amir.

Amir London - Chief Executive Officer - (00:03:07)

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 pleased to report that our results for the second quarter and the first half of 2025 were 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. An 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 through 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 represent 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 in near and longer term guided by our four pillar growth strategy of organic commercial growth, business development and M and A transaction, our plasma collection operation and the advancement of our pivotal Phase 3 in Inhaled AAT 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 disease. 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 cytogram were published to address this. We developed this program in collaboration with leading key opinion leaders to explore advancement of novel CMV disease management. The research studies supported by this program will 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 believe that the data generated by this program will support further product 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 Glassia in ex US market and Varizig in the US as well as Glacier 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 our activities to advance organic growth following our first biosimilar product crunch in Israel last year, we 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 our distribution business with annual sales of between $15 million to $20 million within the next five years. Moving to business development and M and A, we are currently conducting active due diligence over several potential commercial targets during the balance of 2025 and into 2026. We expect to secure compelling in licensing, collaboration and OR M and a transaction which will enrich our portfolio of marketed products and complement our existing commercial operations. We anticipate that such transactions will generate operational and or commercial synergies with our current commercial portfolio and support future profitable growth. In addition, we continue to ramp up plasma collection at our three 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 are especially appreciative of the work of a dedicated team of plasma collection experts who achieve inspection and licensure of this facility on schedule. As previously stated, this center has annual collection capacity of approximately 50,000 liters of plasma and each of our two centers in Houston and 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 interim fertility analysis by the end of this year 2025. With that, I'll now turn the call over to Jaime for a detailed discussion of our financial results for the first quarter for the second quarter of 2025 and first six months of the year. Please go ahead. Khairi.

Jaime Orlev - Chief Financial Officer - (00:09:24)

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. Total 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 Overall 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 45% in the second quarter of 2024. Gross profit and gross margins for the first six months of 2025 were 39.7 million 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 and D, business, marketing and G and E 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 2Q24. 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 resoluted share in 1Q24. 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 2Q24. 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 for questions, I would like to indicate that we are continuing to monitor the evolving 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 tariffs. With that, we will open the call to questions.

OPERATOR - (00:13:57)

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two 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. One moment please while we poll for questions. The first question is from Annabel Samimi from Stifel. Please go ahead.

Annabel Samimi - (00:14:31)

Hi everyone, thanks for taking my question and congratulations on a good quarter. So just a couple from me. Seems like for the last two quarters as Glassia and Verizig 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.

Amir London - Chief Executive Officer - (00:15:14)

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. Kedrabb and Cytogam are performing according to our expectations. As you know the Kedrab contract with Cadrion is like a four year, it's an eight year with a four year committed volumes. Cadila buys 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 strengths and diversity of the portfolio. With six FDA pools products marketing in over 35 countries, over 25 products in our distribution business, the soon to be plasma cells, we have a very strong organic growth that's coming from multiple products and this year it's been mainly Glass and Varizig. Previous years it's been Cytogram and Kedrabb. But all in all it's a very strong diverse portfolio that allows us to continue maintaining the growth year after year.

Annabel Samimi - (00:16:54)

Yeah, definitely noted. And then you know you have a solid cash position for a profitable company. But is it sufficient for impactful BD given its decline 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?

Amir London - Chief Executive Officer - (00:17:20)

So we plan to utilize to use our existing cash if needed. You know we have additional sources for additional funding, multiple vehicles of funding that we can put to work. We are looking and screening for a commercial stage asset. 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 are mainly focused on plasma derived products as well as specialty pharma and within the specialty pharmacist, the transplantation field. And as I mentioned during the call, we would like to leverage our supply chain capabilities, commercial infrastructure, take advantage of the synergies and we are actively screening and doing due diligence on some multiple targets and hopeful that it will be mature over the next few months into 2026 and have meaningful impact on our 2026 performance. Funding, you know, to the scale of the transaction we're looking to do, we will have sufficient funding to execute those transactions.

Annabel Samimi - (00:18:37)

Okay, if I can just squeeze in one more on the inhaled AAT program. Obviously we're, we're just waiting for the interim analysis right now. But 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?

Amir London - Chief Executive Officer - (00:19:07)

Yes, good question. So yes, there is a lot of activity in the alpha 1 space. In general, our inhaled program is the most advanced one in terms of an efficacy study in a pivotal stage. So. So there's no other phase three pivotal studies that are structured around efficacy endpoint. We are making progress. There are other companies also making progress. I think you and other people following this space 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 Takeda. So the 6, 7, 8% annual growth is actually happening. What used to be half a billion dollar market is like 1.3, $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 a second generation augmentation therapy with better ease of use and quality of life with hopefully if we are successful in the study, efficacy data will be a very strong competitor and player in the Alpha 1 space in general.

Annabel Samimi - (00:20:34)

Great. Thank you for taking my questions.

Amir London - Chief Executive Officer - (00:20:38)

Of course.

OPERATOR - (00:20:40)

As a reminder to ask a question, please press Star one. The next question is from James Sudoti from Sudoti and company. Please go ahead.

James Sudoti - (00:20:50)

Hi Good afternoon. Thanks for taking the question. So 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, new biosimilar products, was there one time sales in the quarter or how should we view this distribution channel going forward?

Amir London - Chief Executive Officer - (00:21:23)

Thanks, James. No, this is not one time sales. The launch of the biosimilar product and the future launches, we expect two 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. You also seen that, you know, we had better gross margin this quarter the more we launch biosimilars and based on our innovative portfolio in Israel, you know, will help us also improve our margins. So this is a process that has started and will continue over the next few years.

James Sudoti - (00:22:01)

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

Amir London - Chief Executive Officer - (00:22:11)

Correct. Okay.

James Sudoti - (00:22:13)

And then a similar question on the SGA expense. I mean, down pretty significantly from a year over, down significantly year over year. You know, were there one time things there that helped that or do you think you'll stay around these levels?

Amir London - Chief Executive Officer - (00:22:32)

So we are 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, you know, kind of 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, you know, a good and improved rate of EBITDA from top line. And we said in the past that when we were on the 20% EBITDA of top line that we are targeting, you know, 25% and above. I think we've been able to demonstrate this over the last, you know, a 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.

James Sudoti - (00:23:32)

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 2025. You know, what, 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?

Amir London - Chief Executive Officer - (00:23:54)

I refer this question to Khalif.

Jaime Orlev - Chief Financial Officer - (00:23:57)

Yeah, I'll take this question. So we anticipate 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 shekel, the Israeli shekel and US Dollars that affected our results for tax purposes and made 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.

James Sudoti - (00:25:09)

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

Jaime Orlev - Chief Financial Officer - (00:25:21)

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

James Sudoti - (00:25:28)

All right, thank you.

OPERATOR - (00:25:32)

There are no further questions at this time. I would like to turn the floor back over to Amir London for closing comments.

Amir London - Chief Executive Officer - (00:25:40)

Thank you very much. In closing, we'll continue to invest in the four pillar growth strategy with continued progress made in organic growth of existing commercial portfolio, business development and M and A transaction to support and expedite our growth, expansion of our plasma collection operation and the progression of an AAT 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 are committed to creating long term shareholder value. We hope you all stay healthy and safe. Thank you for participating in today's call.

OPERATOR - (00:26:23)

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