Kamada Ltd Q1 FY2026 Earnings Call

Greetings, and welcome to the Kamada Limited First Quarter 2026 Earnings Conference Call. Operator instructions were provided. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Ritchie of LifeSci Advisors. Thank you. You may begin.

Thank you, operator. 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 Chaime Orlev, Chief Financial Officer. Earlier today, Kamada announced its financial results for the 3 months ended March 31, 2026. If you have not received this news release, please go to the Investors page of the company's website at 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 Kamada. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's Forms 20-F and 6-K, 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, Wednesday, May 13, 2026. 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?

Thank you, Brian. 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 operational and financial performance in 2026 is off to a solid start. First quarter revenues and adjusted EBITDA were in line with our expectations. Importantly, while a temporary shipment delay of a single order, which was already delivered in April, affected our first quarter financial results, the underlying demand for our products continues to increase, supporting our confidence for significantly stronger results over the remainder of 2026. As such, we are reiterating our 2026 annual guidance of $200 million to $205 million in revenues and $50 million to $53 million of adjusted EBITDA, respectively, representing 12% and 23% growth percentage when comparing the 2026 guidance midpoint to 2025 results. Importantly, this 2026 annual guidance is currently based solely on organic growth. We're excited about the growth prospects of our business over both the near and longer term. Our strategy is focused on the expansion of our entire commercial product portfolio, including continued investment in the commercialization and life cycle management of our six FDA-approved specialty plasma-derived products, supporting organic commercial growth in the U.S. as well as in ex-U.S. markets. As part of our commercial growth, we also anticipate growing our distribution segment through the launch of additional biosimilar products in the Israeli market as well as the expansion of the distribution business to the MENA region. We further expect to continue ramping up the plasma collection in our three plasma centers, aiming to strengthen our vertical integration, reduce specialty plasma costs and increase revenues through sales of normal source plasma. Lastly, we are focused on securing new business development and M&A transactions, which will enrich our current portfolio of marketed products and generate synergies with our existing commercial operation. I will now expand on each of these strategic growth pillars. Our lead product continues to be our anti-rabies immunoglobulin, KEDRAB, which is being distributed in the U.S. through our collaboration with Kedrion. End-user utilization of the product in the U.S. is continuing to increase significantly, and our product supply to Kedrion is expected to increase beyond Kedrion's minimum commitment of $90 million sales in 2026 through 2027. As a reminder, our current supply agreement with Kedrion runs through 2031. In addition to our significant market share in the U.S., we continue to grow sales of KAMRAB in leading international markets such as Canada, Latin American countries, Australia and Israel. GLASSIA represents our second leading franchise with revenue contribution driven by growing product sales in ex-U.S. markets and royalty income generated from sale of the product by Takeda in the U.S. and Canada. By working diligently with our distributors in key markets such as Argentina, Russia and Switzerland as well as directly in the Israeli market, we are growing our patient base and revenues while continuing to identify and diagnose new patients suffering from AAT deficiency, which is a chronic, highly misdiagnosed disease. We are also continuing to explore opportunities for additional international markets where GLASSIA could be registered and launched. Moving on to our anti-CMV immunoglobulin, CYTOGAM. Last year, 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. We developed this program in collaboration with leading key opinion leaders to explore advancement of novel CMV disease management. I'd like to take this opportunity and talk about two of those investigator-initiated studies. The first study: patients continue to be enrolled into the study titled Strategic Health with Immunoglobulin to Enhance Protection against Late Disease CMV, or the SHIELD study. The SHIELD study investigates the benefit of CYTOGAM administered at the conclusion of antiviral prophylaxis to reduce the risk of clinically significant late CMV in kidney transplant recipients who are CMV seronegative and have a CMV seropositive donor. These patients are at the highest risk of developing late-onset CMV infection, which is associated with the worst transplant recipient health and outcomes. The second study I'm going to talk about supports data which was recently presented by Dr. Daniel Calabrese, MD, staff physician in the San Francisco VA Healthcare System and Assistant Professor of Medicine at the UCSF Lung Transplant Programs. It was presented at the 2026 International Society for Heart and Lung Transplant, the ISHLT Annual Meeting in Toronto, Canada. In his presentation, Dr. Calabrese reported data suggesting that CMV may be associated with worse lung transplant outcomes, not only through viral replication, but also through immune activation, as the CMV IVIg is associated with immune modulation of this response rather than an effect on CMV viremia alone. Dr. Calabrese further reported that in a retrospective analysis of CMV high-risk lung transplant recipients, patients who did not receive the CMV IVIg prophylaxis experienced worse clinical outcomes compared with those who did receive the CMV IVIg prophylaxis and other CMV serotype groups, highlighting the clinical relevance of the high-risk population and the potential role of CMV IVIg as a targeted intervention. We believe that the data generated by these studies and other studies planned in this program will support increased product utilization for CYTOGAM. Moving on to VARIZIG, our anti-varicella zoster immunoglobulin indicated for post-exposure prophylaxis in high-risk individuals. We are experiencing strong market demand for the product, mainly in Latin America and in the U.S. market, resulting from our product awareness activities and the increase in the number of chickenpox outbreaks. As for the distribution sector, as part of activities to advance organic growth, we will be launching soon in Israel two additional biosimilars by the end of the second quarter and the beginning of the third quarter, and we have several others in the pipeline to be launched in the coming years. We believe this portfolio will become an increasingly important portion of our distribution business with biosimilars annual sales of between $15 million to $20 million within the next four to five years. We are also continuing to advance expansion of our distribution activity to the MENA region. We have recently entered into several distribution arrangements and initiated activities to register the underlying products with local authorities. We continue to engage in discussions with several additional international companies, offering them full service from registration to commercialization. Moving on to Kamada Plasma. In March, we announced FDA approval of our state-of-the-art plasma collection center in San Antonio, Texas, and the center is now geared to commence commercial sales of normal source plasma. With the FDA approval of this center in hand, we plan to seek subsequent inspection and approval by the European Medicines Agency of both the Houston and the San Antonio centers. As a reminder, each of the Houston and San Antonio facilities are expected to generate annual revenues of between $8 million to $10 million in sales of normal source plasma at full capacity. We expect to initiate normal source plasma sales during the second half of this year. Moving on to business development and M&A. As previously discussed, we continue to evaluate such opportunities, and we're hopeful that we will be able to secure compelling transactions in the near term, which will enrich our portfolio of marketed products and complement our existing commercial operation. We plan that such transactions would generate synergies with our current commercial portfolio and support our long-term profitable growth. With that, I'll turn the call over to Chaime for a detailed discussion of our Q1 2026 financial results. Chaime, please go ahead.

Thank you, Amir. As Amir stated at the top of the call, results for the first quarter of 2026 were solid and in line with our expectations, excluding the temporary shipment delay of a single order, which was already delivered during April. Total revenues for the first quarter were $42.5 million, a 3% decrease from the $44 million in the prior year period. The change in revenues year-over-year was primarily driven by increased sales of KEDRAB as well as increased sales in our distribution segment. Gross profit and gross margins were $19.1 million and 42% in the first quarter of 2026 compared to $20.7 million and 47% in the first quarter of 2025. The reduction in gross margin during the first quarter was affected by products and market sales mix. Operating expenses, including R&D, sales and marketing and G&A and other expenses, totaled $12.1 million in the first quarter of the year compared to $13 million in the first quarter of 2025. The decrease was driven by a reduction in R&D expenses related to the termination of the Phase III InnovAATe clinical trial, which were offset by increases in sales and marketing and G&A expenses related to our investments in the overall growth of the commercial products portfolio. Net income was $4.1 million or $0.07 per diluted share in the first quarter of 2026, up 4% as compared to $4 million and $0.07 per diluted share in the first quarter of 2025. Adjusted EBITDA, as detailed in the table, was $11.6 million in the first quarter of 2026, equivalent to adjusted EBITDA reported in the first quarter of 2025. As of March 31, 2026, Kamada had cash and cash equivalents of $73.1 million as compared to $75.5 million as of December 31, 2025. Lastly, in March, we were pleased to declare a dividend of $0.25 per share, totaling approximately $14.4 million. The cash dividend was paid on April 7 of this year. This dividend payment was made in accordance with the dividend policy adopted by the Board under which we intend to distribute an annual dividend of at least 50% of our annual net income, subject to the Board's discretion and satisfaction of dividend distribution tests under Israeli company law at the time of distribution. The dividend payment reinforces our confidence in the company's future business, prospects and ample liquidity to continue investing in our commercial growth, including new business development and M&A transactions and dividends to our shareholders. With that, we are ready to open the call to questions. Operator?

Operator instructions were provided for the question-and-answer session. The first question is from Annabel Samimy from Stifel.

This is Jack on for Annabel. Two from us. First, could you give a bit more color on the revenue impact that the delayed shipment had on overall growth and which products were primarily impacted? And at this stage of your diversification, should we expect any seasonality from KEDRAB and VARIZIG? What has kind of kept the growth continuing this far into their product lives?

Thank you for the question. The delay was a single shipment. Revenue was approximately $2.4 million. It was supposed to be shipped to one of the ex-U.S. territories where we sell our proprietary products, and the delay was primarily because of the situation in the Middle East with limited flights to that specific destination. In terms of seasonality, there is some seasonality regarding KEDRAB in our sales to Kedrion and Kedrion's sales in the market. But because we are essentially acting as a B2B company and Kedrion carries inventory, we are less sensitive to that seasonality. Seasonality for KEDRAB is driven by summertime when people spend more time outdoors and we see a greater number of potential exposures to rabid animals. VARIZIG demand is related more to chickenpox outbreaks. So it's less about seasonal patterns and more about outbreak timing, though there may be a slight increase at the beginning of the school year in September, but not a significant fluctuation. Ultimately, demand is driven by when outbreaks occur, which is when our product is needed more.

The next question is from Jim Sidoti from Sidoti & Company.

With the distribution business, can you tell us how many products are approved for sale right now?

In total, in the Israeli market, Kamada has around 40 different products which we distribute. We service around 20, 20-plus different international companies. We are growing the biosimilars segment. We are working with multiple companies. In the past, we announced that we have an agreement with Alvotech. Since then, we've added additional companies that we represent in Israel for the biosimilar segment. We have launched already three products, and two more will be launched over the next few weeks. So we expect to have five biosimilar products in the market by the end of this year. In the MENA region, we are expanding. We already signed multiple agreements to represent companies in the region, and we will be continuing to sign agreements and to register the products. Those products are expected to be launched in the second part of this year into 2027. The first few products that we will be selling in the MENA region will be sold under distribution agreements.

Okay. But — so the total number of products by the end of the year should be approximately 45 products?

Approximately, yes. But there is a significant variance between the level of sales of each one of those products. Some products sell millions of dollars, some sell hundreds of thousands of dollars.

So the increase in the first quarter, is that primarily because of the addition of the three products you added so far? Or is that also across other products?

It was across basically the entire portfolio that we have. It wasn't based on one single product.

Okay. And for the plasma collection business, you indicated you're going to start selling source plasma right at the end of the year. So does that mean that you're right now close to collecting whatever plasma you need for your proprietary products at this point?

No. Each one of the centers started by collecting normal source plasma. That's the first step for a new center once it is established, and then we are adding specialty programs to the Houston and San Antonio centers. The Beaumont center is collecting only specialty, and it has been since the day we acquired that center in 2021. These programs are running in parallel. The fact that we now have FDA approval for both Houston and San Antonio allows us to sell the normal source plasma that we've already collected since we opened those centers, and those sales will be materialized starting in the second part of this year.

I will pass the call over to Brian Ritchie.

Thank you. Just a couple of questions that have come in online. Amir, on the plasma collection centers, can you let us know when the Houston and San Antonio centers will reach full collection capacity?

Yes. We expect to be running at full capacity towards the end of 2027, early 2028 on the normal source side; definitely on the specialty side, we'll continue to collect and add more donors. So, end of '27, early '28 is when the centers are expected to be running at their current planned capacity. Regarding CYTOGAM, as I mentioned during the call, we are investing in expanding the post-marketing clinical program. I mentioned on the call that we just had a strong report coming from Dr. Calabrese from UCSF presented at the ISHLT conference. Dr. Calabrese showed a study highlighting the clinical relevance of CYTOGAM, or CMV IVIg, as a potential targeted intervention for high-risk transplant patients. This is in addition to other data that we've been collecting and presenting over the last few years since we acquired the product and started investing in the post-marketing clinical studies. We believe that the data generated by these studies, including the SHIELD study and other investigator-initiated programs, will support increased product utilization for CYTOGAM. We think that a key weakness when we acquired the product was the lack of recent clinical data, and the investments we are making in product life cycle management are intended to show the benefit and advantages of using the product in parallel with antivirals to actually improve patient outcomes.

Thanks, Amir. Appreciate that comprehensive answer. And with that, I'll turn it back to you for closing remarks.

Okay. Thank you, Brian. So in closing, we continue to invest in the four-pillar growth strategy with continued progress made in the organic growth of the existing commercial portfolio, expansion of the distribution business, growth of our plasma collection operation and securing business development and M&A transactions to support and expedite our growth. We look forward to continuing to support clinicians and patients with important products that we develop, manufacture and commercialize. We thank you all for your support, and we remain committed to creating long-term shareholder value. Thank you for participating in today's call, and we hope you all stay healthy and safe.

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