Greetings. Welcome to the Kamada Ltd. First Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Bob Yedid of LifeSci Advisors. You may begin.

Thank you, Shamali [ph]. This is Bob Yedid of 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, 2022. If you have not received this news releases, please go to the Investors page of the company's website at www.kamada.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 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 identifies specific risk factors which 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 live broadcast, Tuesday, May 17, 2022. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. if you would like to ask questions, please feel free to register for the Q&A session live at the end of the call or feel free to email me Bob Yedid, bob@lifesciadvisors.com. With that said, it's my pleasure to turn the call over to Amir London, CEO. Amir?

Thank you, Bob, and thanks to all our investors and analysts who have interest in Kamada and for participating in today's call. Our business is off to a very strong start in 2022. During the first quarter of the year, we have effectively executed on our corporate strategy and continued advancing towards becoming a fully integrated global leader in the plasma derived specialty markets. Our performance during recent months is a strong testimonial of Kamada's ability to concurrently execute on multiple fronts, developing and advancing our key growth catalysts. Those catalysts include commercialization of our IgG portfolio in the U.S market as well as in new territories, KEDRAB growth in the U.S., the Israeli distribution activity, our U.S plasma collection business, GLASSIA royalty income which started in March, and the Inhaled AAT clinical program, which is expanding. Moreover, during the first quarter, we generated $5.5 million of operating cash flow that supported the increase of our cash position to a total of $22 million. Importantly, the first quarter represented the first full calendar quarter commercializing the portfolio of the four FDA-approved immunoglobulins required late last year. I'm pleased to report that these four products delivered solid initial sales and profitability for Kamada meeting our plans and expectations. As a reminder, the acquired product generated collective revenues exceeding $40 million in 2021 with over 50% gross margins, and we anticipate to strongly grow the new portfolio revenue year-over-year to proactive promotional activities in the U.S with our newly established subsidiary Kamada Inc. is responsible for the commercialization and direct sales of the product. Our recently appointed Vice President of U.S Commercial Operations, Jon Knight have begun building out our team with multiple senior staff members, all of them experienced sales and marketing professionals with established relationship with relevant U.S health care…

Thank you, Amir, and good day, everyone. Our revenues grew by 13% in the first quarter of 2022 and totaled $28.1 million. These revenue levels are in line with our expectations and represent a strong start of the year. This growth was led by strong initial sales of our newly acquired IgG product. This is the first full quarter of sales of this portfolio. And the sales and profitability levels generated by these products are in line with our expectations. As previously mentioned by Amir, we recognized $1.4 million of royalty income during March on accounts of GLASSIA sales by Takeda. During the first 2 months of the year, Takeda sold remaining GLASSIA inventory supply by Kamada and initiated sales from its own production during March entitling us to royalty income. The royalty income for March 2022 is in line with our expected monthly rate and annual projections. As a reminder, we will receive royalty payments from Takeda at a rate of 12% on net sales through August 2025 and at a rate of 6% thereafter until 2040. We continue to expect to receive royalty payments from Takeda in the range of $10 million to $20 million per year, enhancing our profitability and cash position. Total gross profit for the first quarter of 2022 was $11.3 million, up 27% from the $8.2 million in the first quarter of 2021. Gross margin for the quarter were 40%, an increase from the 36% during the period -- during the prior year period. The increase in profitability was primarily driven by the four new FDA approved commercial product which generated gross margins of over 50%. Cost of goods sold in our proprietary segment totaled $12.5 million in the first quarter of 2022 and included $1.3 million of depreciation expenses associated with intangible assets…

[Operator Instructions]

Shamali, this is Bob Yedid from LifeSci. I've gotten a few questions already emailed in to me. So I'll start with those.

Sure.

The first one is asking about the sales trends of the rabies vaccine. And given the improved rates of travel in the U.S and other countries, for Amir and Chaime is, are you starting to see a recovery in the sales of KEDRAB and KEMRAB compared to last year?

Thank you, Bob, and thank you for the people asking the questions. Yes, absolutely. So during the first quarter, we've seen that Kedrion in-market sales of the product in the U.S. have grown significantly compared to the first quarter of 2021. And basically, if I compare it then to pre-pandemic levels, we see a significant increase. We believe that we have not yet completed our penetration and winning market share of the products. As a reminder, we got FDA approval in late 2017, we launched the product in the middle of 2018. So we had -- basically only 2019 was kind of the first full year of selling the product in the U.S. market, and then the pandemic started right after that. So 2020 and 2021, we were impacted by the pandemic. But starting 2022, the product is continuing to gain a significant market share to grow its market share. And we believe there is still a lot of room for growth for the product in the U.S. market, which is over $150 million. And we will continue to grow the business in the U.S., and we are also leveraging the growth in international markets. We are one of the few only suppliers of the anti-rabies immunoglobulin product globally. We are an approved supplier of the WHO. We are supplying the Latin American tenders. We have an approval in Canada and Australia, and we are supporting those local authorities with this important lifesaving product.

Great. Very helpful. The other question I've gotten emailed in to me is about your announcement today that you've expanded the number of clinical trial sites for your Inhaled AAT Phase 3 trial. The question is one of why now in terms of making that expansion from basically one site and adding up to six more sites this year?

Yes. So as we are leveraging the opportunity now with the moderation of the COVID pandemic to expand the study, the study was initiated just a few weeks before the pandemic started. So we had the first patient in into the site and live into the Netherlands in November or December of 2019. This site continued to recruit patients throughout the pandemic, but it was hard, and in some cases, even impossible to open new sites when everyone was focused only on COVID. In few countries, we couldn't initiate a new study, which was not a COVID-related study. You need to remember, this a patient suffering from a severe lung disease, so for them to actually go into the hospital to meet such a treatment as part of the study was very challenging due in the pandemic. Now with the improvement across Europe, we have the opportunity to leverage the work that has been done in preparing for that timing, and we are expanding the study. We are very encouraged with what we've seen so far. We had no dropouts in the study on patients who started a study in [indiscernible] continued 9 of the patients already completed the 2-year study. The data that we presented to the DSMB was well received, no modifications are needed to the studies. So we are encouraged by what we've seen so far. And as a business opportunity, we remain highly confident in the significant opportunity ahead of us, over $1 billion market of alpha-1 treatment, given currently by infusion and I think everyone understand the significant superiority in terms of quality of life for the patients to use an inhaled product versus an IV product.

Great. Okay. That's helpful. And then the last question I have is, one with regards to your sales and marketing of your new portfolio of IgG products. Is that sales and marketing principally focused on transplantation centers here in the U.S.?

For two of the products we are focused on transplantation centers. These are the two lead products, which is CYTOGAM and HEPAGAM. VARIZIG is for immunocompromised patients, not only transplanted patients but also pregnant women and small infants. So it's a little bit more diverse than just transplantation centers. And WINRHO is focused on patient suffering from a rare blood disorder called ITP. So main focus is transplantation centers, but we are also selling to other medical institutions in the U.S. Outside of the U.S., similar of course focus and we believe there is a great opportunity in the U.S. through promotional activities, those products will not proactively promoted in the last few years. So we have here an opportunity to make a big difference in growing this business and then leveraging our over 30 countries distribution network for the -- to sell the product is definitely a very big plus, and we’ve already seen the results of this, as I mentioned during the call, primarily in the Middle East where we have seen new countries that we have initiated sales of the product.

Great. One other follow-up question to that is, you've talked about transferring manufacturing of these products potentially. Definitely the first one, CYTOGAM to your facility. That is dependent, I assume, in -- for next year on the receipt of the regulatory approval in Israel. Is that correct?

Correct. So the transfer of CYTOGRAM from its current manufacturer to our facility in Israel is well underway. And we expect to make the file with our [indiscernible] facility as a manufacturer later this year and to get an approval in 2023. And in regards to the other three products, this is something we plan to do in the future.

Great. Okay, good. That's the call -- that’s the questions that I have. Thank you. Thank you, Amir.

And it looks like we have -- if there are no more questions, it looks like we have reached the end of the question-and-answer session. I will now turn the call back over to Amir London for closing remarks.

Thank you. Thank you very much. In closing, on behalf of the entire Kamada team, we look forward to continuing to provide clinicians and patients with an expanding portfolio of important lifesaving products that we develop, manufacture and commercialize. We thank all of our investors for their support and remain firmly committed to creating long-term sustainable shareholder value, leveraging our multiple catalyst growth. We hope you all stay healthy and safe. Thank you very much.

And this concludes today's conference, and you may disconnect lines at this time. Thank you for your participation.