IBI Investment House Ltd. has published an update on Kamada Ltd. (TASE: KMDA), in which it raised its rating to "Buy" from "Neutral" and its target price to NIS 40 from NIS 31.50. The bullish recommendation follows Kamada's announcement of May 20, that it had successfully completed Phase I safety trials for its Alpha-1-Antitrypsin IV inhaler for the treatment of AAT Deficiency. The product, which the company has registered for use in the treatment of AAT, a genetic condition also known as congenital emphysema, is a strategic product for the company and if marketed, it will be Kamada's only product that does not face direct competition and it will be awarded orphan drug status.
IBI analysts Noah Weisberg says that safety testing is an important stage, especially for products based on blood components (Kamada's products are produced from human plasma protein). According to her, the success of the safety trials will enable the company to invest additional resources in the development of Alpha-1 for the treatment of cystic fibrosis and chronic obstructive pulmonary disease, which have larger markets than that of congenital emphysema.
Weisberg notes that the cost of active ingredients in blood products such as those produced by Kamada, amount to 40-50% of the cost of the product, compared with 10% of the products made by most drug companies, due to the limited supply of human plasma. Kamda's product, which is administered by inhalation, generates a 75% saving in active ingredient and it is therefore likely to be far more profitable than the company's existing product line.
Published by Globes [online], Israel business news - www.globes.co.il - on May 27, 2007
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