Kamada Halts Phase 3 Trial, Shares Tumble Despite Rosy Outlook
The Israeli biopharma company's stock fell nearly 5% after it discontinued its inhaled therapy trial for AAT Deficiency, a key pipeline candidate.
Kamada Ltd. (NASDAQ: KMDA) shares fell sharply in morning trading after the company announced it was terminating a pivotal Phase 3 clinical trial for its inhaled therapy for Alpha-1 Antitrypsin Deficiency (AATD), a genetic disorder that can cause severe lung disease. The stock dropped 4.9% to $6.73, erasing recent gains.
The decision to halt the study was based on a recommendation from an independent data monitoring committee, which concluded after a planned interim futility analysis that the trial was unlikely to meet its primary endpoint. The therapy, an inhaled form of Alpha-1 Antitrypsin (AAT), was a significant part of Kamada’s development pipeline, aimed at providing a more convenient treatment than the current standard of intravenous infusions.
In a statement, Kamada clarified that the decision was not related to any safety concerns. Despite the clinical setback, the company moved quickly to reassure investors by reiterating its full-year 2025 financial guidance, which projects revenues between $178 million and $182 million. Kamada also forecasted double-digit revenue and profitability growth for 2026, signaling confidence in its existing commercial portfolio.
"While the outcome of the InnovAATe trial is disappointing, we remain confident in our long-term growth trajectory, driven by our strong commercial portfolio of six FDA-approved specialty plasma-derived products," said Amir London, Kamada's Chief Executive Officer. London emphasized that the company's focus would now shift to expanding its current product sales, growing its plasma collection capacity, and pursuing new business development opportunities.
Kamada's core business remains its intravenous AATD treatment, GLASSIA®, which is marketed in partnership with Takeda Pharmaceutical Company. AATD is a rare genetic condition that leads to a deficiency of the AAT protein, leaving the lungs vulnerable to damage. While the inhaled version was seen as a key innovation, its failure redirects focus to the steady revenue from its established therapies.
The market reaction underscores the inherent risks in biopharmaceutical development, where late-stage clinical trial failures can erase significant market value in a single session. Before the announcement, Kamada's stock had been performing well, up over 16% for the year, supported by solid revenue growth and a profitable business model, which is a rarity for many development-stage biotech firms.
Analysts have maintained a generally positive outlook on Kamada, with a consensus 12-month price target of $14.75, suggesting a belief in the underlying value of its commercial operations. The company's fundamentals appear robust, with a price-to-earnings ratio of approximately 20 and consistent profitability. The key question for investors will be whether the company can successfully redeploy the capital once earmarked for the inhaled AAT program into other growth drivers, either through acquisitions or internal development.
According to a transcript of a company conference call, management highlighted its strong balance sheet as a key asset in navigating this pivot. The termination of the trial will also reduce projected R&D expenses, potentially boosting near-term profitability.
For patients with AATD, the news is a setback, as an inhaled therapy could have offered a significant improvement in quality of life over regular infusions. The competitive landscape for AATD treatments remains dominated by intravenous therapies from firms like Grifols, CSL Behring, and Takeda. The failure of Kamada's inhaled candidate leaves the door open for other companies pursuing alternative delivery methods for this chronic condition.
Investors will now be closely watching Kamada's next strategic moves and whether its optimistic financial forecasts can be met without the contribution of what was once a promising late-stage asset.