Pharmaceutical company Kamada Ltd. (Nasdaq: KMDA); TASE: KMDA) today reported the termination of its agreement with international drug company Shire for development of its drug, AAT protein, for treatment of graft versus host disease (GvHD), a severe and potentially fatal side effect of bone marrow transplant. The agreement with Shire for marketing Glassia, Kamada's flagship product, which is actually the same drug used to treat hereditary emphysema, is continuing, and the company is not changing its $100 million revenue forecast for 2017.
In its notice to the Tel Aviv Stock Exchange (TASE), entitled "A Notice Concerning the GvHD Development Plan," Kamada explained the Shire had decided to return its right to the GvHD plan to Kamada, because the pace of recruiting patients in the US had been too slow, and because Shire had decided to give other products in its development pipeline a higher priority.
AAT is Kamada's main added value product. It is being marketed currently for treatment of hereditary emphysema, a disease in which this protein is known to be lacking. Kamada believes that according to the animal trials it conducted and its initial human trials, the product also has a broad anti-inflammatory effect, and is basing a significant part of its future pipeline of products on it. The product is in trials for GvHD diseases, diabetes, and preventing rejection of lung transplant rejection. All of these plans are included in the agreement with Shire. The GvHD was the most advanced of them, and the only one returned to Kamada so far.
According to the announcement, Shire will discontinue the trial currently taking place, and Kamada will plan, carry out, and finance a new trial. The notice did not state whether Shire would market the product if Shire succeeds in having it approved. As of now, however, Shire retains all of the product's approval rights in the US (in the IV version) for all of its forms.
Shire's action hints at that company's lack of enthusiasm for AAT's potential as an anti-inflammatory product (despite the continuation of activity in prevention of transplant rejection). Kamada will have a tougher time persuading the market of AAT's broad potential other than for treatment of emphysema.
Meanwhile, Kamada is waiting for European marketing approval of AAT administered by inhalation (instead of IV) for treatment of emphysema. The trial of the product conducted by the company did not meet its main target, but the company has agreed with the European Medicines Agency (EMA) that the trial will be judged according to the secondary targets.
When the results of the trial of the inhalation product arrived, Kamada deputy chairman David Tsur responded optimistically, in contrast to the prevailing sentiment in the market. Today also, Kamada tried to formulate its announcement optimistically. "We are excited at receiving development of the product. We have a clear understanding of the path ahead, and we see a great opportunity in this market, which we estimate at $700 million," Kamada CEO Amir London said.
The Kamada share price plummeted 9%, and the company is being traded at a NIS 1 billion market cap. The share price gained 100% last year, mostly due to the extension of the agreement with Shire; forecasts of $100 million in revenue in 2017; continued progress towards marketing approval in Europe; the company's optimism about the results of its trial, even though it did not meet the main target, the focus of the clinical program; and expectations that a small, but still significant, product for treatment of rabies in the US will be approved.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 8, 2017
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