Greetings. Welcome to the Kamada Ltd. Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. At this time, I will turn the conference over to Troy Williams of LifeSci Advisors. Troy, you may now begin.

Thank you, Rob. This is Troy Williams of LifeSci Advisors and 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 three and 12 months ended December 31st, 2022. 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 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 date of this live broadcast, Wednesday, March 15th, 2023. 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, Troy. My thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. The recently completed 2022 year was a transformational period for Kamada as we embarked on a new and exciting chapter in the company's evolution. Most importantly, we have now completed our rapid transition from our historical dependence on GLASSIA sales to Takeda, to a diversified fully integrated specialty plasma company with fixed assay approved proprietary product and strong commercial capabilities in the US market, as well as global sales footprint in over 30 countries. The success of this strategic shift is supported by our impressive full year 2022 financial results, which met our annual guidance. Specifically, we achieved total revenue of $129 million and EBITDA of approximately $18 million, representing margins of 14%. Our strong performance in 2022 represented revenue growth of over 25% as compared to 2021 and a 3x increase in EBITDA. Moreover, we generated record operating cash flow of $28.6 million during 2022, supporting the increase in our cash position to $34 million as of December 31st, 2022, which is nearly double what it was at year end 2021. Looking ahead, we expect the momentum from 2022 to extend throughout 2023 with profitability to further meaningfully enhance as compared to last year. As such, we are introducing full year 2023 revenue guidance of $138 million to $146 million and EBITDA of $22 million to $26 million. The midpoint of that range would represent profitability growth of approximately 35% over 2022. Our impressive results in 2022 and positive outlook for this year has been consequence of our ability to leverage multiple growth drivers, including the portfolio of full FDA approved IgGs that we acquired in late 2021, KEDRAB sales observed in the US, GLASSIA royalties received…

Thank you, Amir. As previously highlighted, our business performed extremely well in 2022. Total revenues for the full year were approximately $129 million, a 25% increase from the $104 million recorded in fiscal year 2021. For the fourth quarter of 2022, total revenues were approximately $45 million, an increase of 44% year-over-year. These results are indicative of the successful strategic transformation we achieved through the key product acquisition secured during 2021 that resulted in a vertically-integrated global commercial biopharmaceutical company with multiple growth drivers. The year-over-year growth during the fourth quarter and throughout the duration of 2022 was primarily driven by continued strong sales of our previously acquired IgG products, which was fueled by strong sales in the US, resulting from our ongoing marketing efforts as well as the expansion of ex-US sales of these products. Additional catalysts in 2022 included the continued growth of KEDRAB and 10 months of royalty income from GLASSIA. During this 10 months' period, we recognized $12.2 million of royalty income from Takeda based on their sales, which was in line with our anticipated projections. Total gross profit for the fourth quarter of 2022 was $15.3 million, representing 34% margin compared to $6.6 million or 21% margin in the fourth quarter of 2021. Gross profit for the full year 2022 was $46.7 million, representing 36% margin, up from 30% the prior year. Let's now turn to explanation of our depreciation expenses. As previously discussed, the company is accounting for depreciation expenses associated with intangible assets, which were generated through the late 2021 acquisition of the four IgG products. In the fourth quarter and 12 months ended December 31st, 2022, cost of goods sold in our Proprietary segment included $1.3 million and $5.4 million respectively of depreciation expenses associated with these intangible assets. Research and development…

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Thank you. Thank you. And our first question comes from the line of David Bautz with Zacks Small Cap Research. Please proceed with your question.

Hey, good morning guys. Thanks for the update this morning. So, I've got a few questions this morning. I want to start with maybe talking about the cash flow that you guys are generating. One, do you foresee the company remaining cash flow positive for the foreseeable future? And if so, what are the company's plans to do with the cash and would there be the potential to pay out a dividend at some point?

Hi, David. Thank you for the question and for participating in the call. The answer is absolutely yes. The company will continue to be cash-positive to be profitable. We expect continued significant growth topline and bottom-line and as you can see from our 2022 results, not only the EBITDA was strong, but also we could translate that strong EBITDA into very strong cash flow operation and cash position. So, our EBITDA is well-correlated with generation of cash. In regards to our plan, how to use the cash. So, we will be looking to move forward with some additional BD opportunities looking for the right in licensing or acquisition. We are very happy and ensure that also shareholders is very happy with the success of the acquisition we've done in 2021. I think it's well-represented in our 2022 results and 2023 forecasts. So, with that successful acquisition integration, I think that over time we'll be ready for next BD move. This, coupled with some additional investments that we would like to make in our pipeline will further enhance our outlook in terms of growth in the mid and long-term.

Okay. And now with regards to the four products that you acquired in 2021, the sales you reported today were up 24%, I believe, you said in 2022. What would you say, was the biggest driver behind that growth? And then what do you think is going to be the biggest driver or drivers in the years ahead for those products?

So we had significant growth basically in the portfolio, and this I can attribute to all four products, both US, Canada and North America. As you know, and we reported it, we won an $11.4 million contract for VARIZIG. We have extended our agreement with Canada for another three to five years. We are growing CYTOGAM in the US in the Canadian market. We have strong markets for HEPAGAM and WINRHOSDF of the US, primarily in the MENA region. So it comes from all four products and in total, having six FDA approved products, KEDRAB, KAMRAB, GLASSIA, and products from the new portfolio, we have a lot of opportunities. This significant network of six products spread over 30 countries basically created a very strong metrics, if I may, of opportunities to grow the business significantly. And we are very happy with the 2022 results. Our 2023 projection, there is another significant growth of those products. And moving forward, we will continue to really take a full potential of those products and grow them significantly over the next few years.

Okay. And as a follow-up, I guess, you mentioned that the VARIZIG contract. Is the company working on additional supply contracts like that?

Absolutely, we have a very proactive further marketing approach as well as registration of our portfolio in new territories through throughout the entire supply chain, some regulatory submissions through supply chain aspects. And for the marketing, we are growing the business and we are proactively participating in additional international tenders.

Okay. And my last question is about gross margins that reported 36% for 2022. Do you foresee those being similar in future quarters and for this year ahead?

If you look at our projection for 2023, and you compare the growth of the top line versus the better growth or the enhanced growth of the bottom line, you see that our overall mix of products is continuing to transition into the more profitable products in our portfolio. So, this will generate, over time, better GP, better gross profitability. We are able to translate a significant portion of the top line increase next year also into a bottom line EBITDA increase. So I think these -- for itself in our ability to become a more profitable company with a strong product mix in multiple territories.

All right. Sounds good. Appreciate your taking the questions this morning.

Thank you very much.

Hey, Ross, so, while we wait for some additional questions to queue up, been e-mailed a few throughout the call. So could we just address those right now, this first question is for you, Amir. Why do we believe that the inhaled AAT is uniquely positioned in the current AATD development land?

So the current standard-of-care -- were the standard-of-care for the last 30 years almost. So, Alpha-1 deficiency has been a weekly infusion, which means that patients need to go to the clinic or have a nurse come to the home. And this is, of course, an invasive type of treatment. What we are developing, what we are proposing is a noninvasive at-home treatment. So, the ease of use and the quality of life for those patients will improve significantly if and when and how AAT will be approved. So, we also get this feedback from any survey that we are doing with the patients. They all prefer to have the option -- or majority of them prefer to have the option of having the treatment by nebulizing Inhaled AAT instead of IV treatment. Secondly, we have shown people studies that inhaled AAT is the most effective motor treatment for delivering sufficient levels of AAT into the deep lungs, directly into the lungs. This allows us to dose the patients with one-eighth quantity compared to the IV. So this also provides lower cost of goods per treatment, which could translate into attractive competitive reimbursement costs for the payers. Product has been studied for quite some time with multiple patients around 250 patients to-date. And we have seen a very strong safety data. This has been demonstrated in the current study that we are doing. I spoke about it throughout the call. So we believe we are developing a game changer in over $1 billion market that hopefully will be proven in the current study to be effective and allow us to register the product, both in the US and the EU.

Great. Appreciate the color, Amir. And then just on to our final submitted question. Can you please bring out the opportunity with the plasma collection centers? And in addition to that, can you provide us with some timing of when they may be going to contribute to the top line?

Yes. So, as I described in the call, we have expanded in 2022 our collection in the existing center in Beaumont, Texas. We are moving forward with the opening of additional centers. So we have a team working on identifying locations for additional centers and advancing lease agreements so we can move into the construction of those centers. In general, if fully loaded, if I may, a center, a mature center usually collects between 40,000 to 50,000 liters a year, and this translates into top line contribution of close to $10 million. So that will be contribution of the mature centers is to expect to see the first impact, of the first center in that regard, starting basically to ramp up in the second part of next year or second part of 2024, first center should be up and running and starting to expand in its collection capacity.

Okay. Great. Thank you, Amir. Thank you to all those who submitted the questions. Operator, I'll turn it back to you.

Thank you. There are no additional phone questions at this time. I will hand the floor over to Amir London for any closing remarks.

Thank you, Operator. So in closing, we look forward to continuing to support clinicians and patients with important lifesaving products that we develop, manufacture and commercialize. We thank all of our investors for their support, and we remain committed to creating long-term shareholder value. Thank you, everyone, and we hope you all stay healthy and safe. Goodbye.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.