Greetings, and welcome to the Kamada Ltd. First Quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Brian Ritchie, with LifeSci Advisors. Thank you. You may begin.
Thank you. This is Brian Ritchie with LifeSci Advisors. Thank you all for participating in today's call. Joining me from Kamada is Amir London, Chief Executive Officer. Earlier today, Kamada announced its financial results for the three months ended March 31st, 2023 . If you have not received this news release, please go to the investors page of the company's website at www.kamada.com. Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Kamada. I encourage you to review the Company's filings with the Securities and Exchange Commission, including, without limitation, the Company's Forms Form 20-F and Form 6-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.
Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, Wednesday, May 24th, 2023. Kamada undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that said, it is my pleasure to turn the call over to Amir London, CEO. Amir.
Thank you, Brian. Thanks also to our investors and analysts for your interest in Kamada and for participating in today's call. We are off to an excellent start in 2023, both financially and operationally. Earlier today, we announced a $60 million strategic private placement with FIMI Opportunity Funds, the leading private equity firm in Israel and an existing significant Kamada shareholder. I will discuss this financing in further detail shortly, but will say upfront that we are thrilled with this additional substantial investment from FIMI, and we view it as indicative of the confidence this high-quality investor has in Kamada's significant growth potential. Let me first begin, though, with our impressive first quarter financial results.
With total revenues in the first quarter of $30.7 million, which represented year-over-year growth of 9% and EBITDA of $3.8 million, an increase of 16% as compared to the first quarter of 2022, we achieved the top and bottom line growth anticipated in our business to begin the year with. Importantly, we continue to effectively leverage multiple growth drivers, including KEDRAB sales in the U.S., the portfolio of the four FDA-approved immunoglobulins acquired in late 2021, Cytogam, HepaGam, VARIZIG, and WinRho, which are marketed internationally, and our Israeli distribution business. Looking ahead, we expect the momentum from the first quarter to extend throughout 2023, with profitability to be further meaningfully enhanced as we compare to last year.
As such, we are reiterating our full-year 2023 revenue guidance of $138 million-$146 million, and EBITDA of $22 million-$26 million. The midpoint of that range will represent profitability growth of approximately 35% over 2022. Beyond 2023, we continue to anticipate annual double-digit revenue and profitability growth in the foreseeable years ahead of us with significant upside potential and limited downside risk. Our prospects were recently further significantly enhanced by the successful completion of multiple key achievements. Most importantly, we entered into a securities purchase agreement with FIMI to purchase $60 million of our ordinary shares in a private placement.
Under the terms of the purchase agreement, Kamada will issue an aggregate of approximately $12.6 million ordinary shares to FIMI at the price of $4.75 per share, which represents the average closing price of the company shares on Nasdaq during the 20 trading days prior to the date of the purchase agreement. Upon the closing of the transaction, FIMI is expected to beneficially own approximately 38% of Kamada outstanding ordinary shares and will become a controlling shareholder of the company within the meaning of the Israeli Companies Law. This strategic investment provide us with financial flexibility, allowing us to accelerate the growth of our existing business and pursue compelling business development opportunities. We are grateful for the continued support shown by FIMI, and we look forward to leveraging our significantly strengthened cash position going forward.
An extraordinary general meeting of the shareholders of the company to approve the private placement will be held in August 2023. Following the issuance of our second quarter 2023 financial results. With respect to our existing business, we were pleased earlier this month to receive the FDA approval to manufacture Cytogam at our facility in Beit Kama, Israel. This FDA approval, which was granted within the expected timeline, represented the successful conclusion of the technology transfer process for Cytogam from the previous manufacturer, CSL Behring. We have since initiated commercial manufacturing, which will positively impact our facility utilization and efficiency. Cytogam is the highest selling of the four immunoglobulin products acquired by Kamada in November 2021, generating approximately $23 million in sales in 2022, and it maintains gross margins of over 60%.
I'd like to highlight that Cytogam is the third product, in addition to GLASSIA and KEDRAB, to be approved by the FDA for manufacturing at our Israeli facility. Swissmedic recently granted marketing authorization for GLASSIA in Switzerland for chronic augmentation and maintenance therapy in adults with clinically evident emphysema due to severe Alpha-1 deficiency. Switzerland is the first European country to approve GLASSIA for Alpha-1 deficiency, representing a significant milestone for Kamada in a market which is currently estimated to be over $15 million annually. The commercial launch of the product in Switzerland is expected to occur during the second half of this year upon obtaining the required reimbursement coverage. To ensure wide access to eligible patients, we have partnered with the Ixogen Group, a company focused on the commercialization of specialty medicines for rare diseases across Europe.
Outside of the U.S., sales of GLASSIA were approximately $6 million in 2022. We are focused on further expanding the commercialization of the product and its annual revenues in the international markets. Let's move on to KEDRAB, our rabbit immunoglobulin. In the past several months, and especially since the beginning of the year, KEDRAB, marketed in the U.S. by Kedrion, has continued to grow substantially and to gain share in the U.S. market, which is estimated to be over $150 million annually. KEDRAB's commercial team is successfully leveraging the advantages of the product as the only human rabbit immunoglobulin available in the U.S. to be clinically studied in children. We anticipate the sale of the product will continue to grow significantly over the next few years.
Also, to reiterate what we have said previously, I should highlight that this product generates more than 50% gross margin for Kamada. Additionally, our U.S. team established during 2022 is making excellent progress in promoting our specialty IgG portfolio to physicians and other healthcare practitioners through our direct engagement and opportunities at medical meetings. As a reminder, our activities promoting this important therapy, primarily Cytogam and VARIZIG, represent the first time in over a decade that these hyperimmune specialty products have been supported by field-based activity in the U.S. We are encouraged by the consistently positive feedback received from key opinion leaders who are seeking to publish new clinical data related to our products while conducting educational symposiums that we believe will have a positive impact on the understanding of this medicine, contributing to continued growth in demand.
We've started seeing the impact of our activity and expect to see increased demand for this portfolio of products in the quarters ahead. Moving on, looking further ahead at future catalysts, we are pleased by the progress made at Kamada Plasma, our U.S.-based plasma collection company. Our 2021 acquisition of a plasma collection center near Houston, Texas, represented Kamada's entry into the U.S. plasma collection market and supported our strategic goal of becoming a fully integrated specialty plasma product company. We are successfully expanding the hyperimmune plasma collection capacity at our first center and are actively advancing our plan to open additional centers in the U.S. to further enhance our supply of specialty and regular normal plasma.
On the development side, we are encouraged by the most recent progress achieved in our ongoing pivotal phase III InnovAATe clinical trial for the inhaled Alpha-1 antitrypsin therapy for the treatment of Alpha-1 deficiency. The study has enrolled 60 patients to date, and the independent data safety monitoring board recently recommended study continuation without modification for the fifth time since the study was initiated. During the next few weeks, we're continuing to expedite trial recruitment. We intend to meet with the FDA and the European Medicines Agency to discuss study progress and potential opportunities to shorten the regulatory pathway. As we have said previously, a substantial opportunity exists for inhaled Alpha-1 to be a transformational product in a market that is already over $1 billion in annual sales in the U.S. and Europe.
Before I read you our first quarter financial results, I'd like to share some additional exciting news. Following the $60 million investment from FIMI, Kamada's CFO, Chaime Orlev, who had previously planned to transition out of his position to pursue other opportunities, has withdrawn his resignation and will remain in his position. Chaime has served as our CFO since December 2017, he will be instrumental in supporting Kamada's continued growth and maximizing the strategic opportunities provided by the private placement. Nir Livneh, who previously served as our General Counsel and Corporate Secretary from 2010 until 2018, has rejoined Kamada as Vice President, General Counsel, and Corporate Secretary. Both Chaime and Nir significantly strengthen our executive management team, and they will play pivotal roles in our further advancement as a global leader in the specialty plasma industry.
With that, I'll now discuss our first quarter financial results. Total revenues for the first quarter were approximately $30.7 million, a 9% increase from the $28.1 million recorded in the first quarter of 2022. The year-over-year growth during the first quarter was primarily driven by strong sales of KEDRAB, the contribution of our previously acquired immunoglobulin products, and the Israeli distribution sales. Total gross profit for the first quarter of 2023 was $11.8 million, representing 39% margin compared to $11.3 million on 40% margin in the first quarter of 2022. Let's now turn to the explanation of our depreciation expenses.
As previously discussed, the company's accounting for depreciation expenses associated with intangible assets, which were generated through the late 2021 acquisition of our IgG products. Gross profits and gross margins, excluding such intangible asset depreciation, would have been $13.2 million and 43% respectively in the first quarter of this year, compared to $12.6 million and 45% respectively in the first quarter of 2022. Operating expenses, including R&D, sales and marketing, G&A, and other expenses, totaled $11.6 million in the first quarter of this year, compared to $11.1 million in the first quarter of 2022. Sales and marketing costs for the first quarter included $0.4 million of depreciation expenses of intangible assets generated through the IgG product acquisition.
During the first quarter of 2023, we conducted a planned workforce downsizing at the Israeli plant, optimizing staff levels to capacity needs. As a result of this downsizing, we incurred an expense of $0.6 million for excess severance compensation provided to employees who were laid off. The downsizing is expected to result in a planned annualized reduction of approximately 6% in the overall Israeli labor cost. We continue to expect our overall operation expenses, including R&D, sales and marketing, and G&A, to increase between 15%-20% during 2023 as compared to last year, as we continue to advance our commercial activities as well as our phase III innovative trials.
As we did throughout 2022, we continue to account for financing expenses with respect to the reevaluation of contingent consideration and the long-term assumed liability, all of which are related to the acquisition completed in 2021. For the first quarter of 2023, these finance charges totaled $1.8 million. Net loss for the first quarter of 2023 was approximately $1.8 million, or $0.04 per share on a fully diluted basis, consistent with the prior year period. Excluding the depreciation expenses of intangible assets and the finance expenses of the contingent consideration and other assumed long-term liabilities associated with acquired products, the company would have recorded net income of $1.7 million or $0.04 per share in the first quarter of 2023.
EBITDA was $3.8 million for the first quarter of 2023, as compared to $3.3 million in the first quarter of 2022, representing a significant 16% increase year-over-year. Excluding the $0.6 million expense of the excess severance compensation paid to the employees who were laid off, EBITDA would have been $4.4 million in the first quarter of 2023, representing a significant 33% increase year-over-year. As I highlighted earlier, we are reiterating our full year 2023 revenue guidance of $138 million-$146 million and EBITDA guidance of $22 million-$26 million. The midpoint of such range represents approximately 35% growth as compared to the fiscal year 2022.
Cash used in operating activities was $2.9 million in the first quarter of 2023, as compared to cash provided by operating activities of $5.5 million in the first quarter of 2022. Our total cash position as of March 31, 2023, was $27.1 million, as compared to $34.3 million as of end of 2022. This figure does not include the expected net proceed from the recently announced $60 million financing, which is expected to close in the second half of this year. That concludes the prepared remarks. We will now open the call for questions. Operator?
Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Thank you. Our first question comes from the line of David Bautz with Zacks Small-Cap Research. Please proceed with your question.
Hey, Amir, how are you doing?
Good, thank you.
Thanks for taking the questions. First one I'll start out with, were there any surprises, either positive or negative that occurred during the quarter, or do you think everything kinda played out as you thought it would?
The quarter played out according to our plan, according to our budget. You know, we are progressing exactly as we've anticipated, both, top line and bottom line, and based on that, we reiterated our annual guidance.
All right. For your guidance for the year, looks like revenues are gonna kinda ramp up as the year goes along in order to hit that number. I'm just kinda curious, where do you think that growth is gonna come from?
The results of the quarter meet the company expectations, as I said. We started it strong, many aspects. We're reconfirming the forecast for the whole year. As you've seen in previous years, the first half of the year is usually lower than the second part of the year. A lot has to do with inventories at the distributors. The growth will come from all aspects of the business, from KEDRAB, from the new IgG portfolio, from distribution business in Israel, from royalties paid by Takeda for GLASSIA sales in the U.S., for GLASSIA sales ex-U.S. All our growth catalysts, all our lines of business are operating according to our plan, according to our budget, and we will continue at that pace. As I said, we're reiterating our guidance based on everything that we see in the market.
Okay. now in regards to the InnovAATe trial, are you happy with the pace of enrollment that's going on there? Is there anything else that can happen to maybe kinda speed up enrollment in that trial?
Of course, we were not happy with the pace of enrollment during the pandemic, which delayed, you know, the ability to open new sites. The sites were opened in second part of 2022, and recruitment has been since then accelerated. In order to speed up recruitment, we need to open additional sites. We are in the process of identifying those additional sites internationally, and that's our plan moving forward, to expedite recruitment by opening additional sites in other countries.
All right. Sounds good. Congrats on the progress this quarter, and thanks for taking the questions.
Of course. Thank you very much.
Thank you. As a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. As we poll for more questions, I'll turn the floor back to Mr. Ritchie for any additional questions from the web.
Thank you, Melissa. A couple of questions here from the web, Amir. Can you please provide a bit more color on FIMI?
Yes, of course. FIMI was established in 1996, it's a leading Israeli private equity firm with excellent international reach, international success. It has acquired control in, I believe around close to 100 companies. Over the years, they've made over 60 exits. Total transaction value is over $7 billion. They're known to be a long-term investor with superb ROI. Between 2016 and 2022, over the course of those seven years, they've deployed over $1.8 billion in acquiring equity in its portfolio companies. They've been a major investor in Kamada since end of 2019, early 2020. As I said, we are very happy with the additional funding and the private placement, and we believe that that's basically, you know, a big trust in Kamada.
The company was interested in the investment offered by FIMI, as well as our board. A special committee was established by the board to accelerate growth, both organically and by identifying and realizing new business development opportunities. I believe that this kind of shared interest is something that will drive Kamada and value to our shareholders significantly.
Great. Thank you. Also, can you expand more on the potential use of proceeds from the financing, and are there any near-term business development opportunities on the horizon?
Thank you for the question. Good question. As I said, the company is interested in this funding to accelerate growth, both organically with our existing business, but also by identifying and realizing new business development opportunities. We are constantly examining opportunities for collaboration in-licensing, acquisition, M&A in our areas of expertise. If we were to rely only on our organic profitability, it would have significantly delayed the ability to execute on such transactions, and of course, will delay the company ability to accelerate growth. The combination of our organic growth, which you've seen our guidance for the year, with this additional funding, give us basically the ability to benefit or enjoy both worlds, organic growth and external growth, basically by examining opportunities for in-licensing or acquisition of additional assets.
Great. Thank you, Amir. At this time, we've got no further questions. I'll hand the call back over to you for any closing remarks.
Thank you. Thank you, Brian. In closing, we are very pleased with our performance to begin the year. We're excited with the potential opportunities that lie ahead following the $60 million financing by FIMI. We look forward to continuing to support the mission of patients with important life-saving therapeutics that we develop, manufacture and commercialize. We thank all of our investors for their support. We remain committed to create long-term shareholder value. Thank you, everyone. We hope you all stay healthy and safe.
Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.