Kamada Shares Slide After It Raises $51.6 Million in U.S. IPO

The biopharmaceutical company share prices fall on the Tel Aviv Stock Exchange on Sunday.

Kamada, a biopharmaceutical company whose unique protein purification technology is used to develop treatments for lung and other diseases, saw its Tel Aviv Stock Exchange share price fall yesterday after it raised $51.6 million in an initial public offering in the United States.

The company said it sold 5.6 million shares at $9.25 each on Friday for trading on the Nasdaq Stock Market, a price that was 17% below last Thursday’s TASE closing price for the stock. Although the shares rose to $10.10 on Friday in the first day of Nasdaq trading, they were still closed below their TASE price, which yesterday dropped 6.6% to close at NIS 38.15 in response. The underwriters − Morgan Stanley, the Jeffries Group, RBC and Oppenheimer − received a 30-day option to buy as much as 837,000 additional shares at $8.60 each, which would raise an additional $7.2 million.

Of the $45.6 million in proceeds it will get after fees and commissions, Kamada said it will spend between $15 million and $25 million for clinical trials and research and development into new uses for its AAT molecule. AAT is the active ingredient in the company’s best-selling drug Glassia, which treats emphysema caused by congenital deficiency of alpha1-proteinase inhibitor.

Kamada said it may also use some of the proceeds to buy back up to $27.2 million in convertible bonds due between December 2013 and 2016 because they carry a high interest rate of 6.1 percentage points above the benchmark Israeli government bond. Kamada said it also will use the proceeds to expand manufacturing operations.

Among the direct beneficiaries of the IPO is CEO David Tsur, who was granted a bonus equal to 2% of the net proceeds. Tsur also received 150,000 stock options for ordinary shares that can be exercised at NIS 41.47 each after the completion of completes a merger or is acquired.

Ofer Vaknin