Kamada Ltd. a plasma-derived protein therapeutics company focused on orphan indications, has announced the third extension to supply Glassia® to Baxalta, which recently separated from Baxter International, Inc. (Baxter), under its strategic agreement with Baxter originally executed in August 2010. Through the extended agreement, Kamada secured approximately $50 million in additional minimum revenues of Glassia, the Company’s proprietary, ready-to-infuse liquid alpha-1 antitrypsin (AAT) treatment that is indicated as a chronic augmentation and maintenance therapy in adults with clinically evident emphysema due to severe congenital AAT deficiency (AATD), 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 executed in 2010 and a minimum of $191 million in the September 2014 extension of that agreement.
The Company reports that as part of this agreement its supply of Glassia to Baxalta has been extended through 2018 and that the transition to royalty payments for Glassia produced by Baxalta is not expected to begin before 2019. Until that time, Kamada will continue to produce Glassia for distribution by Baxalta. Kamada is confident in its ability to support the increased demand from Baxalta throughout the term of the amended agreement.
In 2010, Kamada and Baxter (now Baxalta) entered into an exclusive strategic cooperation agreement for the distribution and license of Glassia. Under the agreement, Baxalta is the exclusive distributor of Glassia in the U.S., Canada, Australia and New Zealand, and is licensed to produce Glassia using Kamada’s technology at a Baxalta facility for sales in those countries.
“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 U.S. 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,” stated Amir London, Chief Executive Officer of Kamada.
“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 U.S.
“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. We look forward to building upon our base Glassia business in the U.S. and to the continuation of our long-standing relationship with Baxalta,” concluded Mr. London.