Israeli biotech Kamada (KMDA 1.63%) announced a supply agreement with the Israeli Ministry of Health for its investigational COVID-19 treatment on Monday. The treatment is a hyperimmune immunoglobulin (IgG) product derived from convalescent plasma of volunteers who have recovered from COVID-19. The initial order will be sufficient to treat 500 patients.

In a statement, the company said that this deal "represents the first such contract globally for the supply of a plasma-derived igG product for COVID-19." Kamada's treatment is currently in an ongoing phase 1/2 clinical trial in Israel. Interim results have been positive. According to CEO Amir London, the IgG treatment has "demonstrated a favorable safety profile and showed symptoms improvement in hospitalized, non-ventilated COVID-19 patients with pneumonia ... ."

"Blood Plasma Donation" with map of the world and cartoon image of blood plasma.

Image source: Getty Images.

Kamada is a profitable biotech with $131 million in revenue last year. Its flagship drug is Glassia for patients with emphysema due to hereditary alpha1-antitrypsin (AAT) deficiency. Kamada also has three immunoglobulin products on the market, including one for people who have contracted rabies.

The FDA has recently granted an emergency use authorization for the use of convalescent plasma as a treatment for COVID-19. Many other companies, including Takeda Pharmaceutical and Emergent BioSolutions, are working on plasma-derived therapies.   

While many COVID-19 vaccine stocks have skyrocketed this year, the market reaction to COVID-19 treatment stocks has been more muted. That's probably because a successful vaccine might have a market opportunity of a billion people or more. Kamada's plasma therapy is a far smaller niche.

The stock is up 8% on early trading.