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Kamada (KMDA) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research logoZacks Equity Research 5 days ago Zacks Equity Research

Kamada Ltd. KMDA is scheduled to report first-quarter 2019 results on May 14.

The company has surpassed expectations in two of the trailing four quarters and missed in one, the average negative earnings surprise being 23.61%. It delivered a positive earnings surprise of a whopping 200% in the last reported quarter.

Kamada’s share price has increased 14.8% year to date compared with the industry’s growth of 2.7%.

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Let's see how things are shaping up for this announcement.

Factors to Consider

Kamada’s revenues in 2018 were primarily driven by the successful launch and strong sales of KedRAB in the United States, the anti-rabies IgG product. The product is expected to drive sales in the first quarter of 2019 as well.

Last month, Kamada announced that the FDA has acknowledged the path forward for commencing a phase III study on the inhaled Alpha-1 Antitrypsin (Inhaled AAT) product, which is being developed for the treatment of Alpha-1 Antitrypsin Deficiency (AATD). The latest letter stated that the inhaled AAT product has satisfactorily addressed all the grey areas previously conveyed by the agency.

In 2016, the company’s phase II study on the inhaled AAT product for treating AATD in the United States met the primary endpoint. However, the FDA expressed concerns about data from the European phase II/III study on the candidate, which was presented in April 2016.

Following this acknowledgement from the FDA, Kamada plans to start a pivotal phase III study in the second half of 2019. However, the timing of the program will depend on the successful completion of a human factor study (HFS), which is scheduled to begin soon. The HFS evaluation will assess the combination of the company’s inhaled AAT and PARI Pharma GmbH's eFlow nebulizer device.

Subsequently, Kamada expects to file an investigational new drug (IND) application in the United States and a Clinical Trial Authorization (CTA) in Europe to initiate the pivotal phase III study on the inhaled AAT product for registration thereafter. If successful, the company plans to use the outcomes from this study to resubmit an MAA in the EU and file a biologics license application (BLA) to the FDA. An update is expected on the call.

Further, in the proof-of-concept study on the IV-AAT program for the treatment of acute Graft versus Host Disease (GvHD), the company expects the completion of enrollment followed by the availability of interim data from this study by the end of 2019.

We expect Kamadato provide updates on all the aforementioned developments during the first-quarter earnings call.The company should also provide updates on the phase II study of IV-AAT for the prevention of lung transplant rejection, which is being conducted in collaboration with Shire, now part of Takeda TAK.

What Our Model Indicates

Our proven model does not conclusively show that Kamada is likely to beat on earnings in the to-be-reported quarter. This is because the stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Kamada has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a profit of 5 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

Kamada Ltd. Price and EPS Surprise

a close up of a map: Kamada Ltd. Price and EPS Surprise© Provided by Zacks Investment Research Inc Kamada Ltd. Price and EPS Surprise

Kamada Ltd. price-eps-surprise | Kamada Ltd. Quote

Stocks That Warrant a Look

Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

CannTrust Holdings Inc. CTST is scheduled to release results on May 14. The company has an Earnings ESP of +6.25% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

LogicBio Therapeutics, Inc. LOGC has an Earnings ESP of +25.84% and a Zacks Rank #3.

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