On Friday, Kamada Ltd. (TASE: KMDA, Nasdaq: KMDA) announced the third extension to its agreement to supply its emphysema treatment Glassia to Baxalta (BXLT). Baxalta recently separated from Baxter International, Inc. (Baxter). The extension is under Kamada's strategic agreement with Baxter of August 2010.
Kamada says that through the extended agreement its has secured approximately $50 million in additional minimum revenue from Glassia through 2018. As a result, Kamada expects that total revenue generated through this agreement from August 2010 through end of 2018 will increase to a minimum of $240, million compared with a minimum of $110 million in the original agreement and a minimum of $191 million in the September 2014 extension of that agreement. The transition to royalty payments for Glassia produced by Baxalta is not expected to begin before 2019, and until that time Kamada will continue to produce Glassia for distribution by Baxalta. Kamada says it is confident in its ability to support the increased demand from Baxalta throughout the term of the amended agreement.
Baxalta is the exclusive distributor of Glassia in the US, Canada, Australia and New Zealand, and is licensed to produce Glassia using Kamada’s technology at a Baxalta facility for sales in those countries.
Kamada CEO Amir London said, “We are delighted to announce this third extension to the purchase obligation in our strategic agreement with Baxalta as it validates the growing market acceptance of Glassia in the US and underscores the strength of our partnership agreement with Baxalta. Securing revenues through 2018 provides us with better visibility into revenues for the coming years, while extending our manufacturing supply through 2018 offers significant benefit as our recently-approved, enhanced manufacturing process provides improved efficiencies and capacity that increase our gross margins for Glassia.
“This increase in minimum revenue commitment through 2018 strengthens our ability to meet our $100 million revenue target previously forecasted for 2017 and is driven by the increase in the number of AATD patients treated with Glassia in the US.
“This extension in the Glassia distribution agreement highlights the strong relationship Kamada has with Baxalta and the expanding collaborations between the companies highlights the growing value of our intravenous AAT business. Our AAT is a protein derived from human plasma with known and newly discovered therapeutic roles given its immunomodulatory, anti-inflammatory, tissue protective and antimicrobial properties. As a result, we have a robust clinical development program which includes several studies underway to support the expansion of intravenous Glassia to include type-1 diabetes, graft-versus-host-disease and lung transplantation rejection, all areas of significant unmet need. Together, these strengthen our leadership position in plasma-derived AAT therapy to treat rare diseases."
Published by Globes [online], Israel business news - www.globes-online.com - on October 18, 2015
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