Market Dynamics and Financial Trajectory for the Biologic Drug: KEDRAB
Introduction
KEDRAB, a human rabies immune globulin (HRIG), has been a significant player in the biopharmaceutical market since its FDA approval and launch in the U.S. in 2018. Developed by Kamada Ltd. and distributed by Kedrion Biopharma, KEDRAB has shown impressive market dynamics and a strong financial trajectory.
Market Context
Rabies is a global public health concern, responsible for over 59,000 human deaths annually. In the U.S., approximately 60,000 people receive rabies post-exposure prophylaxis each year, creating a substantial market demand for effective treatments like KEDRAB[4].
Product Launch and Initial Impact
KEDRAB was launched in the U.S. in May 2018, marking a significant milestone for Kamada Ltd. and Kedrion Biopharma. It was the second product developed by Kamada to be approved by the FDA for commercialization in the U.S. and represented a new, safe, and effective treatment choice for healthcare professionals[3].
Distribution Agreement
Since 2018, Kedrion has held exclusive distribution rights for KEDRAB in the U.S. In December 2023, Kedrion and Kamada announced an eight-year extension of their distribution agreement, effective from January 2024. This extension includes potential expansion into additional territories beyond the U.S.[4].
Market Performance
Sales Growth
KEDRAB has experienced substantial sales growth. In 2022, Kamada generated approximately $16 million in revenues from the sale of KEDRAB to Kedrion. This figure more than doubled in 2023, with revenues reaching approximately $32.8 million, driven by increased demand and the FDA-approved label expansion for use in children[1][2].
Market Share
The product has gained significant market share in the U.S. rabies market, which is valued at over $100 million. The partnership with Kedrion, known for its extensive market coverage and robust commercial activity, has been instrumental in this growth[1][3].
Financial Trajectory
Revenue Projections
For 2024, Kamada has issued revenue guidance of $156 million to $160 million, with adjusted EBITDA projected to be between $27 million and $30 million. This represents double-digit top- and bottom-line growth compared to the previous year[1].
Quarterly Performance
In the first quarter of 2024, Kamada reported strong financial results, with total revenues of $37.7 million, a 23% increase year-over-year. Adjusted EBITDA for the quarter was $7.5 million, a 96% increase from the same period in 2023. This performance has led to an increase in full-year revenue guidance to $158 million-$162 million and adjusted EBITDA to $28 million-$32 million[5].
Cost and Profitability
The gross profit and gross margins for the first quarter of 2024 were $16.8 million and 44%, respectively, compared to $11.9 million and 39% in the prior year period. Operating expenses, including R&D, Sales & Marketing, and G&A, totaled $12.7 million in the first quarter of 2024, reflecting the company's investment in promoting its products[5].
Key Drivers of Growth
KEDRAB and CYTOGAM
The growth of KEDRAB, along with another key product, CYTOGAM, has been pivotal. Increased sales of CYTOGAM, driven by new clinical data and active promotion, have complemented the strong performance of KEDRAB. These products are the primary growth drivers for Kamada's business[1][5].
Distribution and Marketing
The partnership with Kedrion allows Kamada to focus on other specialized FDA-approved IgG products, primarily in transplant centers, while Kedrion promotes KEDRAB in numerous hospitals and medical centers across the U.S. This strategic distribution and marketing approach has maximized the growth potential of KEDRAB[1].
Future Outlook
Expanded Distribution
The new distribution agreement effective from January 2024 includes potential expansion into additional territories beyond the U.S., which could further boost sales and market presence[4].
Clinical Differentiation
KEDRAB's FDA-approved label expansion for use in children has differentiated it as a unique and clinically studied option in the U.S. market. This differentiation is expected to continue driving demand and growth[1].
Quotes from Industry Experts
“The launch of KEDRAB is an important milestone for Kamada,” said Amir London, Kamada’s chief executive officer. “KEDRAB represents the second product developed by Kamada and approved by the FDA to be commercialized in the U.S. This critical treatment option represents a significant commercial opportunity for Kedrion and Kamada and has the potential to capture a significant share of the $100 million plus U.S. rabies market.”[3]
Illustrative Statistics
- Revenue Growth: KEDRAB sales to Kedrion increased from $16 million in 2022 to $32.8 million in 2023[1][2].
- Market Size: The U.S. rabies market is valued at over $100 million[3].
- Distribution Expansion: The new agreement includes potential expansion into additional territories beyond the U.S.[4].
- Financial Projections: Full-year 2024 revenue guidance of $156 million to $160 million and adjusted EBITDA of $27 million to $30 million[1].
Key Takeaways
- KEDRAB has shown significant growth since its launch in 2018, driven by its unique clinical profile and strong distribution partnership with Kedrion.
- The product has captured a substantial share of the U.S. rabies market, with revenues more than doubling in 2023 compared to 2022.
- The eight-year extension of the distribution agreement and potential expansion into new territories are expected to further boost sales.
- Kamada's financial performance has been robust, with a 23% increase in total revenues and a 96% increase in adjusted EBITDA in the first quarter of 2024.
FAQs
Q: What is KEDRAB and how is it used?
A: KEDRAB is a human rabies immune globulin (HRIG) used for the transient post-exposure prophylaxis of rabies infection. It is administered immediately after contact with a rabid or possibly rabid animal and concurrently with the rabies vaccine[3].
Q: Who distributes KEDRAB in the U.S.?
A: Kedrion Biopharma has exclusive distribution rights for KEDRAB in the U.S. since its launch in 2018[4].
Q: What are the key drivers of KEDRAB's growth?
A: The key drivers include the FDA-approved label expansion for use in children, the strong distribution and marketing efforts by Kedrion, and the complementary growth of another key product, CYTOGAM[1][5].
Q: What are the financial projections for Kamada in 2024?
A: Kamada has issued full-year 2024 revenue guidance of $156 million to $160 million and adjusted EBITDA guidance of $27 million to $30 million[1].
Q: What is the significance of the extended distribution agreement between Kamada and Kedrion?
A: The eight-year extension of the distribution agreement, effective from January 2024, includes potential expansion into additional territories beyond the U.S., which could further boost sales and market presence[4].
Sources
- Kamada Issues 2024 CEO Letter to Shareholders - BioSpace
- Zacks Small-Cap Research - Zacks Investment Research
- KEDRAB® (Rabies Immune Globulin [Human]) Now Shipping - Kedrion Biopharma
- KEDRION ANNOUNCES AN EIGHT-YEAR EXTENSION OF THE DISTRIBUTION AGREEMENT WITH KAMADA IN THE US FOR KEDRAB - PR Newswire
- Kamada Reports Strong First Quarter 2024 Financial Results - BioSpace
