Brosh Capital, led by portfolio manager and managing partner Amir Efrati, together with partners Asaf Frumerman and Shahar Keinan, has acquired a 6.2% holding in pharma company Kamada Ltd. (Nasdaq: KMDA); TASE: KMDA) for NIS 40 million, sources inform "Globes." Kamada's share price has plunged 40% in the past three months. Brosh, which is also an active investor in Alcobra Pharmaceuticals Ltd. (Nasdaq: ADHD), Perion Network Ltd. (Nasdaq:PERI: TASE:PERI), and Matomy Media Group (LSE:MTMY; TASE: MTMY), is known for investing in companies when it believes that it can improve their management. Kamada's share price responded to the news with a 5% jump, raising the company's market cap to NIS 663 million. In the case of Alcobra, and that of Matomy before it, Brosh took a definite position against the company CEO. The CEOs of Alcobra and Matomy eventually resigned on their own initiative, and Brosh reached a compromise with their boards of directors, while the companies' business plans were changed to some extent. In the case of Alcobra, the compromise included Brosh's presence on the board of directors, and Brosh and Alcobra are now jointly searching for a company for a merger into Alcobra.
Kamada is managed by CEO Amir London, who replaced longstanding CEO and current deputy chairman David Tsur in 2015. The largest shareholders in the company are Leon Recanati (9%), who invested in the company when it was founded; the heirs of Ralph Hahn (8.3%); and Tsur. Israeli financial institutions have also invested in Kamada, with current shareholders including Yelin Lapidot (6.7%), Meitav Dash Investments Ltd. (TASE:MTDS) (6.7%), and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) (5.5%).
Kamada has stable revenue from its flagship product, Glassia, which totaled $77.5 million in 2016. The company declared, and has since confirmed several times, that its revenue would reach $100 million in 2017, with its leading product accounting for the lion's share of it. In its most recent forecasts, Kamada said that it was likely to go into the black next year. Sales of its product are through international company Shire, the exclusive distributor for Glassia in the North American market, which is committed to buying predetermined quantities of the product in the coming years, thereby providing stability for Kamada's business.
The recent fall in Kamada's share price resulted from a number of negative developments affecting the company in recent months involving the main product in Kamada's pipeline of new products, an inhalation product for treatment of hereditary emphysema. The product is based on the AAT protein, on which Glassia, which is administered by IV, is also based. While there is competition for IV-administered products, the inhalation product was to have had no competition, as well as being much more economical from a production capacity standpoint. Kamada, however, failed to achieve the main endpoint in the trial it conducted for the inhalation product. The company nevertheless decided to submit the trials for approval to the Europe Medicines Agency, based on the trial's success in the secondary endpoint. Kamada, however, had to withdraw its submission, after receiving definite indications that the answer would be negative. Kamada subsequently announced that it would conduct a trial in the US that would strengthen its position in submitting its request for European certification for its inhalation product.
Published by Globes [online], Israel Business News - www.globes-online.com - on September 14, 2017
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