Kamada Ltd. (KMDA) Q4 2025 Earnings Report, Transcript and Summary

Greetings, and welcome to the Kamada Limited Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Brian Ritchie, Managing Director of LifeSci Advisors. Thank you. You may begin.

Thank you. This is Brian Ritchie with 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 3 months and year ended December 31, 2025. 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, March 11, 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. My thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. I'd like to begin by noting that while the situation in the Middle East continues to evolve, Kamada's operation and product manufacturing are proceeding as planned, and our plant is operating continuously, although exports from Israel may be temporarily impacted due to the recent closure of Israeli airspace, cargo flights have gradually resumed and we do not anticipate material disruption to product supply. We continue to closely monitor situation and remain fully committed to meeting our supply obligations. I'm pleased to report that operational and financial performance in 2025 was excellent and that we continue to generate significant profitable growth. Total revenues for the year were $180.5 million, representing a 12% year-over-year increase and adjusted EBITDA was $42 million, up 23% year-over-year. Results for the year were well within our 2025 annual guidance and a testament to our ability to execute on our strategy and generate significant profitable growth through the diversity of our commercial product portfolio. We also demonstrated our ability to convert profitability to operational cash flow, generating $25.5 million of cash from operating activities for the year contributing to a strong cash position of $75.5 million at year end of 2025. On the strength of our 2025 results, the Board and Kamada management are pleased to declare a dividend of $0.25 per share, totaling approximately $14.4 million, payable on April 6 to shareholders of record as of March 23. This dividend payment is made in accordance with the dividend policy adopted by our Board under which we intend to distribute an annual dividend of at least 50% of our annual net income subject to the board discretion and satisfaction of the dividend distribution test under the Israeli Companies law at the time of distribution. This dividend payment reinforces our confidence of the company business prospects and ample liquidity to continue investing in our commercial growth, including the continued pursuit of new business development and M&A transactions while also paying dividends to our shareholders. We entered 2026 with a position of significant strength continuing to benefit from growth across our entire portfolio based on a positive outlook and consistent -- of $200 million to $205 million in revenues and $50 million to $53 million of adjusted EBITDA, which respectively represent 13% and 23% growth when comparing 2026 guidance midpoint to 2025 results. Importantly, this 2026 annual guidance is based solely on organic growth. We're excited about the growth prospects in 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 6 FDA-approved specialty plasma-derived products supporting organic commercial growth in the U.S. and in ex U.S. markets. We also anticipate growth of our distribution segment through the launch of additional biosimilar products in the Israel market as well as expansion of the distribution business to the MENA region. We further expect to continue ramping up the plasma collection in our 3 plasma centers, aiming to strengthen our vertical integration, reduce specialty plasma costs and support continued growth through sales of normal source plasma. Lastly, we are focused on securing new business development and M&A transactions which we expect will enrich our current portfolio of marketed products and generate synergies with our existing commercial operation. Our lead product continues to be our anti-rabies immunoglobulin, KEDRAB, which is being distributed in the U.S. through our collaboration with Kedrion. Sales of the product to Kedrion increased in 2025 to approximately $54 million, well above the contract minimum commitment. We have a firm commitment of $90 million from Kedrion for minimum orders from 2026 through 2027 and our current supply agreement with them 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 and Israel. GLASSIA represents our second leading franchise with total revenue contribution of $35 million, split between our 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. Moving on to our anti-CMV immunoglobulin CYTOGAM, revenues from the product declined in 2025. We believe the decline was primarily due to increased usage of antivirals such as the letermovir and maribavir resulting from improvements in their market access coverage. As you may recall, in 2025, we announced the initiation of a comprehensive post-market and 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 to the clinical data regarding the benefit of CYTOGAM were published. To address this, we developed this program in collaboration with leading key opinion leaders to explore advancement of novel CMV disease management. Last October, we announced the enrollment of the first patient in an important investigator-initiated trial included in this program, the study titled Strategic Health with immunoglobulin to enhance protection against late disease CMV or the SHIELD study is a prospective, randomized, controlled multicenter investigator-initiated study in CMV high-risk kidney transplant recipients. The SHIELD study will investigate the benefit of CYTOGAM administered at the conclusion of the antiviral prophylaxis to reduce the risk of clinically significant late CMV in kidney transfer 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 worse transplant recipient health and outcome. The study is being conducted by leading expert in CMV and organ transplantation, Dr. Camille Kotton, Infectious Disease specialist and Clinical Director of transplant and immunocompromised host infectious disease at Massachusetts General Hospital; and Dr. David Wojnowski, Medical Director of the Kidney Transplantation Program at the University of Texas Southwestern Medical Center. We are very pleased we'll be working with such notable experts in the field, and we believe that the data generated by this study and other studies planned in this program will support increased product utilization for CYTOGAM. Also, as part of activities to advance organic growth following the first 2 biosimilar product launches in Israel during 2024 and 2025, we will be launching in Israel, 2 additional biosimilars in the coming months and 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 4 to 5 years. During 2025, we've also commenced expansion for distribution activity to the MENA region with initial agreements already signed. In addition, we are ramping up plasma collection into our Houston and San Antonio plasma collection centers. Both facilities include 50 donor beds with a planned peak capacity of approximately 50,000 liters per year each and are anticipated to be 2 of the largest collection centers for specialty plasma in the U.S. The Houston site is already FDA approved, and we expect our San Antonio site to receive FDA approval during the first half of 2026. As previously stated, each of those 2 centers is expected to generate annual revenues of $8 million to $10 million in sales of normal source plasma at full capacity. Moving to business development and M&A. We are currently pursuing new opportunities, and we are hopeful that we would be able to secure compelling in-licensing, collaboration, and/or M&A transactions, which will enrich our portfolio of marketed products and complement our existing commercial operation. We anticipate that such transactions will generate synergies with our current commercial portfolio and support our long-term profitable growth. With that, I will turn the call over to Chaime for a detailed discussion of our financial results for 2025. Chaime, please go ahead.

Thank you, Amir. As Amir stated at the top of the call, we reported strong results for the year ended December 31, 2025. Total revenues for 2025 were $180.5 million, a 12% increase from the $161 million generated in 2024. Revenue growth for 2025 over 2024 was attributable to growth across our portfolio, especially increased sales of VARIZIG and KEDRAB in the U.S. market, KAMRAB and GLASSIA, in ex U.S. market and an overall increase in sales in our distribution segment through the launch of biosimilars and other products in our portfolio. In December, we announced a $10 million to $14 million extension of an existing tender from the Canadian blood services. For the supply of WINRHO, HEPAGAM, CYTOGAM, and VARIZIG for an additional 2 years. This award secures ongoing sales of these products in the Canadian market between the second quarter of 2026 and the first quarter of 2028. Gross profit and gross margins for 2025 were $76.4 million and 42%, respectively, compared to $70 million and 43%, respectively in 2024. The increase in gross profit is in line with the increase in total revenues, whereas the decrease in gross margin is due to product and market sales mix. Operating expenses, including R&D, sales and marketing, G&A and other expenses totaled $50.2 million in 2025 as compared to $49.9 million in 2024. Whereas the reduction in R&D expenses year-over-year was related to the decision to discontinue the inhaled AAT clinical study and the increase in G&A expenses was required in order to support the increased commercial operation. Net income for 2025 was $20.2 million or $0.35 per diluted share, a 40% increase as compared to the net income of $14.5 million or $0.25 per diluted share in 2024. Adjusted EBITDA was $42 million in 2025, a 23% increase as compared to $34.1 million in 2024. Our ability to generate significant profitable growth is indicative of the diversity of our portfolio and our successful marketing activities across different territories and medical specialties. As of December 31, 2025, Kamada had cash and cash equivalents of $75.5 million as compared to $78.4 million in December of 2024. The company generated $25.5 million from operating activities and recorded net cash used in investment activities of $9.8 million and net cash used in financing activities of $18.3 million. collectively resulting in the overall decrease in cash balance. With respect to the results for the quarter ended December 31, 2025, we can indicate that the revenue increase quarter-over-quarter is consistent with the performance throughout 2025, whereas the reduction in gross margin during the fourth quarter is related to a change in product end market sales mix. And together with the increase in operating expenses supporting the overall increase in our commercial operation contributed to the overall decrease in net profitability and adjusted EBITDA quarter-over-quarter. That concludes our prepared remarks. We will now open the call for questions.

[Operator Instructions] Our first question comes from the line of Annabel Samimy with Stifel.

Hi, everyone, and great end to the year. I want to ask a few questions. I guess the first one I wanted to ask about the CMV market and whether you mentioned that the reduction in CYTOGAM was due to increased access of antivirals. Is there any change in the protocol for CMV? Or is there any improvement in the actual efficacy of the antivirals that would change your opportunity at all? Or is it status quo and this is just a matter of increased access and same protocols.

Annabel, we are not aware of any change in the protocol of CMV management. We do know, and we did follow some of the antiviral providers announcement that they had strong 2025 as a result of better market access. And we believe that there might be some insurers that have not covered the antiviral treatment in the past, and now they are covering it, and this might have some effect on CYTOGAM usage during 2025. Having said that, I would like to emphasize that we still strongly believe in the need for CYTOGAM as an additional protection for the high-risk organ transplant recipients. And the work that we started doing in 2025 we believe that, that medical and clinical work will show the unique properties of CYTOGAM and the advantages to administer CYTOGAM in addition to the antivirals, kind of doubling the protection against CMV infection. With that regard, I'd like also to mention that while CYTOGAM usage during recent years was primarily for lung and lung and heart recipients. The clinical work we are currently doing and specifically the SHIELD study is performed on kidney transplantation which, as everyone knows, consists of the majority of solid organ transplant in the U.S. is over 50% of such procedures. As such, we are confident that successful results from these studies can yield a significant increase in CYTOGAM usage.

Okay. Perfect. And just separately, I wanted to ask you, of course, I have to ask you about M&A. I imagine that the dividend since it's part of your policy is not indicative of any change in the potential opportunities that you have for M&A or business development? Or am I wrong to think that?

No, you're absolutely correct. The dividend payment reinforce our confidence in our business prospects, and we believe that we have sufficient funds and liquidity to continue investing in the commercial growth as well as M&A transactions, while also paying dividend. We are progressing in our pursuit of M&As, and we are optimistic that we'll be able to secure such a transaction already in 2026. I'd like to remind everyone that the guidance we gave for 2026 is based on organic growth and any potential transaction will accelerate the growth for this year.

Okay. And one last question, if I may. Just as far as the plasma collection. At what point should we expect gross margin benefit from the proprietary plasma collection for specialty plasma specifically. Just wanted -- I know that the plasma centers are still in the process of getting approved by FDA, but do you have a timing on when we can expect gross margin impact.

Yes. So as I said, Beaumont and Houston already FDA approved, San Antonio expected to be approved within the next few months during H1 2026. We expect to start selling normal source plasma in the second part of this year once the centers are approved. And in terms of specialty plasma, we expect now to continue ramping up our collection, and this will start to have effect on our gross profit starting 2027 and beyond.

[Operator Instructions] Our next question comes from the line of Jim Sidoti with Sidoti & Company.

All right. Just following up on the plasma collection centers. Can you give us a sense on how quickly they have been ramping up? Are they at you'd say, 25% production levels right now, 30% or? And how quickly do you get up to 100%.

Around between 30% to 40% ramped up. Right now, we believe it will be at full ramped by end of 2027. And -- but of course, during that period, we will also start selling normal-source plasma to external parties and use our own -- specialty plasma for own use.

All right. And on the distribution business, I think you indicated you have 2 more biosimilars that you'll introduce in 2026. Can you give us a sense on the timing? Is that -- is that a second half of the year event? Or do you think those will be on the market a little bit sooner?

They're expected to be launched around midyear, maybe kind of end of Q2. So the impact will be during the second part of the year.

Okay. And when those products are launched, is there an initial stocking orders? Or is that kind of -- does it take a little longer for those to ramp up sales of those products to ramp up?

Not material stocking. So it goes by market demand, the hospitals itself might buy kind of initial quantity, but it's going to be based on actual consumption in the market.

Right. And then the double-digit growth you're projecting for 2026, can you just give us a sense, is that primarily expanding into new geographies? Or do you expect that rate of growth in the U.S. as well?

Including in the U.S.. So we expect it that's across our entire portfolio and entire kind of geographies. So...

Okay. And one last one. The dividend, will that be the $0.25, the entire $0.25 be paid out in the first quarter? Or will that be spread out over the year?

One moment, please. We're experiencing some technical difficulties. One second. Mr. Orlev, you're now connected again.

Okay. Yes. No, I was just asking on the dividend. Will the entire $14 million, will that be paid out in Q1? Or is that...

Let me try and reconnect. One moment. Mr. London, please go ahead.

Yes, I apologize, we got disconnected. Jim, can you hear me?

Yes, I can.

Yes. So can you repeat your question, please?

Yes. I was just asking on the dividend. Will the entire $14 million be paid out in the second quarter? Or is that going to be on a quarterly basis?

Everything will be paid one time in the second quarter. Again, I apologize for this being disconnected.

Thank you. I'll turn the floor back to [indiscernible]

Thank you, operator. Amir, we just had one question that already addressed. It came in writing. Is question regarding VARIZIG and how its performance in '25 and the go-forward prospects for that product.

Yes. So we're very happy with VARIZIG performance in 2025. We've seen a significant increase. We believe that the decline in vaccination rates, particularly in the U.S. as well, which resulted in an increase of number of chickenpox outbreaks and the marketing and medical work that we've been doing in the field to increase awareness of the importance of using VARIZIG with immunocompromised population that have been exposed to those outbreaks had a significant contribution to the increase in VARIZIG sales. We expect this trend to continue in 2026, reminding all the listeners that we won a significant tender for VARIZIG by the WHO for the Latin American region. So this is part of our growing this product in the U.S. and ex U.S. market.

Thank you, Amir. Operator, I think we are ready to close the call.

This concludes our question-and-answer session. I'll turn the floor back to Mr. London for any final comments.

Thank you very much. So in closing, we continue to invest in the 4-pillar growth strategy, with continued progress made in organic growth of our existing commercial portfolio. Expansion of our distribution business, expansion of our plasma collection operation and working on securing business development and M&A transaction to support and expedite our growth. We look forward to continuing to support clinicians and patients with important life-saving product that we develop, manufacture and commercialize. We thank you all for your support and remain committed to creating long-term shareholder value. Thank you very much. We hope you all stay healthy and safe.

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