Since the coronavirus pandemic first started making waves in January, the number of companies working to develop a treatment has skyrocketed. More than 160 potential COVID-19 vaccines are currently in development, and that figure doesn't even include other types of treatment (such as antivirals).

However, not all companies working in this area have received equal coverage. Perhaps the least-known COVID-19 stock on the market right now is a small Israel-based biotech company called Kamada (NASDAQ:KMDA). Here's what you need to know about this little biotech, and whether it truly stands a chance against its other, better-known competitors.

Pipette dripping liquid onto a COVID-19 container with a stock chart in the background.

Image source: Getty Images.

What is Kamada?

Despite having gone public on the NASDAQ in 2013, Kamada is still a pretty small company, with a market cap of less than $400 million. The company's specialty is in developing treatments for a number of rare diseases through blood plasma-based treatments. These therapies can be crucial and lifesaving for patients, especially when other types of treatments aren't available.

As a concept, plasma therapies have been around for a while. After blood plasma is extracted from a healthy patient who has recovered from a previous infection or ailment, the antibodies within said plasma can be extracted, purified, and then injected into a sick patient struggling with the same condition.

A new coronavirus treatment

In June, Kamada announced the production of an initial batch of its plasma-derived coronavirus therapy. As of right now, the treatment is available for compassionate use in patients in Israel, with the company planning to begin early-stage clinical trials in the U.S. in the third quarter of 2020.

While coronavirus vaccines have gotten the lion's share of attention from the financial media, plasma-based therapies have proven quite successful in helping to treat symptoms as well. Recent studies have shown plasma therapy to be effective in treating severe COVID-19 cases, with there being few to no adverse reactions among those tested.

Given all this, there's a fair bit of excitement and optimism in this area. Once Kamada moves on to further clinical testing, it wouldn't be surprising if the company starts getting a lot more attention. This, in turn, could send shares of this previously unknown biotech stock jumping upward.

What about the competition?

The problem with Kamada, however, is that it's far from the first company to pursue plasma-based therapies in treating the coronavirus. Japanese biotech Takeda Pharmaceutical (NYSE:TAK) announced in March that it would be developing its own plasma-derived antibody treatment. Other biotech stocks, such as Emergent BioSolutions (NYSE:EBS), also jumped into this area around the same time.

Both of these companies have a significant head start on Kamada. While a three-month head start might not seem like much, it's a big deal given how rapidly coronavirus treatments are being developed around the world. The earliest treatments, whether vaccines or otherwise, are expected to be available sometime in the first half of 2021.

Close-up of a microscope with heartbeat graph and numbers

Image source: Getty Images.

What else does Kamada have to offer?

Kamada has a few other things going for it besides its COVID-19 treatment. One of the company's only U.S. Food and Drug Administration (FDA)-approved drugs, Glassia, targets a disease called alpha-1 antitrypsin deficiency (AATD). With this condition, the liver doesn't produce the alpha-1 protein that prevents the body from being targeted by its own enzymes. If not treated, AATD can cause life-threatening liver and lung damage. The condition affects about one in every 5,000 individuals.

Glassia received FDA approval in 2010 and has been a major revenue driver for Kamada thus far. The company's second treatment, Kamrab, is a prophylaxis (preventative) treatment for rabies that was approved by the FDA in 2017.

As for its financial situation, Kamada reported revenue of just $33.3 million during its most recent quarter. However, the company is still profitable, with a net quarterly income of $5.2 million. Profitability is pretty rare among small-cap biotech companies, and it makes Kamada much more appealing for potential investors.

What's the verdict?

Kamada might not be a company you've heard of before, but it definitely has plenty of potential. Strong clinical results for its coronavirus treatment could give the company more attention than it's ever had, which could send the stock flying.

However, I'm not sure this possibility alone makes Kamada an automatic buy. Other companies, including Takeda and Emergent BioSolutions, are already ahead of the game when it comes to plasma-based treatments. In the end, I think there's a stronger case to be made for either of these two companies than there is for Kamada right now. While it's not a bad company in and of itself, there are better alternatives to Kamada for investors to consider.