Drug company Kamada announced yesterday the signing of an agreement to market six new biosimilar products in Israel. One of these is a drug for treatment of osteoporosis that has already been approved for marketing in the US, while the other five are waiting for approval. Kamada believes that these products will be launched in 2022-2025, and that its revenue from them will reach $20-30 million a year at peak.
Ten days ago, private equity fund FIMI Opportunity Funds became the largest shareholder in Kamada by purchasing 12% of the latter's shares from veteran shareholders for $30 million. The shares were acquired at the market price of $6. Kamada's share price has since climbed 25%.
Back to its roots
Kamada's new agreements are a return to the company's roots. Kamada began as a manufacturer of generic products. It distributed these products in developing countries and distributed medical products in Israel. Early in the preceding decade, the company successfully changed its strategy, beginning to manufacture products with added value. Kamada brought two such new products to market: Glassia for treatment of hereditary emphysema and a product for treatment of rabies. These two products currently account for 75% of Kamada's revenue ($72 million of the company's $95 million in revenue in the first nine months of 2019). These two products enabled Kamada to grow substantially and consistently in recent years.
Next year, however, the rights for Glassia, Kamada's most important product, will pass to its distributor, Takeda Pharmaceutical. The next added value product that Kamada is planning on bringing to market, a drug for treatment of hereditary emphysema administrated by inhalation, will not become commercial before 2024 at the earliest. Kamada is therefore turning to its new products.
The agreement was signed with Alvotech, a private company founded in 2013 whose headquarters are in Ireland. Kamada received $50 million from Japanese company Fuji in 2018 in an agreement giving Fuji the marketing rights to Kamada's products in Japan. Kamada recently obtained a $45 million investment from Saudi Arabian company Yas Holdings for the right to distribute the product in the Middle East and North Africa, excluding Israel.
Alvotech's agreement with Kamada, which did not include an investment in Alvotech by Kamada, gives Kamada the distribution rights to six biosimilars, that is, products made to resemble existing biological products (generic versions of drugs that are compound proteins, not chemical molecules, which are regarded as simpler. Because of the original products' complexity, identical results are unobtainable, hence the name "biosimilar").
One product with FDA approval
The product already approved for marketing in the US by the Food and Drug Administration (FDA) is Forteo, for treatment of osteoporosis (the original drug is marketed by Eli Lilly). Kamada plans to launch this product in Israel in 2022. Five other products are waiting for FDA approval. Following subsequent approval by the Ministry of Health, these products are slated to reach the Israeli market in 2023-2023.
Published by Globes, Israel business news - en.globes.co.il - on December 3, 2019
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