ANI Pharmaceuticals, Inc. (ANIP) on Q1 2024 Results - Earnings Call Transcript

Operator: Good day, everyone, and welcome to today's ANI Pharmaceuticals, Inc. First Quarter 2024 Earnings Results Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call is being recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Lisa Wilson. Lisa Wilson: Thank you, Shelby. Welcome to ANI Pharmaceuticals Q1 2024 earnings results call. This is Lisa Wilson, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer; and Stephen Carey, Chief Financial Officer. You can also access the webcast of this call through the Investors section of the ANI website at anipharmaceuticals.com. Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation, or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to ANI Pharmaceuticals management as of today and involve risks and uncertainties, including those noted in our press release issued this morning and our filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. ANI specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. The archived webcast will be available for 30 days on our website, anipharmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on May 10th, 2024. Since then ANI may have made announcements related to the topic discussed, so please reference the company's most recent press releases and SEC filings. And with that, I'll turn the call over to Nikhil Lalwani. Nikhil Lalwani: Thank you, Lisa. Good morning, everyone, and thank you for your interest in ANI Pharmaceuticals and for joining our first quarter earnings call. The company remains committed to our purpose, serving patients, improving lives. On behalf of all of ANI, we are grateful for the continued support of our customers, suppliers, partners, and shareholders. We remain focused on driving growth -- continued growth through our rare disease business and our generics business, both supported by strong cash flow from our established brands business. We're pleased to report record first quarter results and are reiterating our full year guidance for total revenues, Cortrophin Gel revenues, adjusted EBITDA, and adjusted EPS, which Steve will further highlight. Total revenues for the first quarter were $137.4 million, an increase of 29% over the first quarter of 2023. Adjusted non-GAAP EBITDA was $37.6 million, up 14% from the prior year period. Adjusted non-GAAP EPS was $1.21, an increase of 3% over the first quarter of 2023. Our lead rare disease asset, purified Cortrophin Gel generated $36.9 million of revenue in the quarter, a year-over-year increase of 126%. Our rare disease team continued to execute on successful Cortrophin Gel commercialization in the first quarter, driving prescribing growth across our core specialties of neurology, rheumatology, and nephrology as well as traction in our newer specialties of pulmonology and ophthalmology. We are pleased to report that the prescribing momentum has carried into the second quarter and we achieved the highest number of new patient starts since launch during the month of April. On our fourth quarter call, we discussed several investments to support the Cortrophin Gel franchise with the goal of driving greater adoption across current and new specialty areas. I am proud to update you on the progress made on these initiatives. First, given the strong traction that we have seen in pulmonology, we've announced plans to add a second geographical region to our pulmonology sales force. This team is now in place and the increased focus is paying off with record new patient starts in the first quarter for pulmonology. We also deployed a small targeted ophthalmology sales force in the first quarter. We see ophthalmology as a meaningful driver of future Cortrophin Gel growth. For both pulmonology and ophthalmology, we also gained traction with new to ACTH prescribers. As you might recall, in the fourth quarter, we launched a new 1-mL vial of Cortrophin Gel for the treatment of acute gouty arthritis flares. We believe that bringing the only ACTH product to market with this indication presents a promising growth opportunity for the Cortrophin franchise. We believe Cortrophin Gel remains on a strong multiyear growth trajectory, driven both by increased market penetration within core and new indications as well as further expansion of the total ACTH category. While we have gained significant traction with Cortrophin Gel after a little over two years on the market, the number of patients on ACTH therapy today remains substantially lower than a few years ago. Our prescriber engagement activities and investments to drive growth continue to boost higher utilization by first-time and returning ACTH prescribers as more physicians use Cortrophin Gel therapy for appropriate patients. While we have ample opportunity ahead to maximize Cortrophin Gel's potential, expanding the scope and scale of our rare disease business through M&A and in-licensing remains a high priority. We are actively evaluating opportunities with a focus on commercial assets that overlap with our current priority therapeutic areas of nephrology, neurology, rheumatology, pulmonology, and ophthalmology as well as assets outside of these areas that would leverage our rare disease platform. Turning now to our generics business, which delivered another solid quarter with revenue of $70.2 million, an increase of 10% over the first quarter of 2023. Our strong new launch execution and operational excellence contributed to this performance. We launched six new products during the quarter, including a competitive generic therapy product with 180-day exclusivity. Notably, we retained the number two ranking for competitive generic therapy approvals and are a top 15 manufacturer in number of product approvals. Overall, our generics business remains a key growth driver as we leverage our high-performance R&D team, operational excellence, and US-based manufacturing footprint. We remain an established and reliable partner of choice for our customers. Our established brands business continues to address patient needs with reliability of supply, a unique set of commercial capabilities, and opportunistic business development to expand the portfolio. Our overall portfolio is strengthened by this high gross margin, low working capital, and strong cash flow generation business. With these results and almost $230 million of cash on hand, the first quarter has set a solid foundation for 2024. We have many important initiatives and opportunities to execute on this year and we look forward to continuing the momentum. I'll now turn the call over to Steve who will walk through our first quarter financial results and 2024 guidance in more detail. Steve? Stephen Carey: Thank you, Nikhil, and good morning to everyone on the call. ANI generated first quarter revenues of $137.4 million, up 29% over the prior year period. Revenues from Cortrophin Gel reported in our rare disease segment were $36.9 million, up 126% from the prior year period, driven primarily by increased volume. As we previously guided Cortrophin Gel revenues were down on a sequential basis due to the typical seasonality seen with rare disease drugs. We continue to expect sequential revenue growth for Cortrophin Gel in the second, third and fourth quarter of 2024 off of this first quarter revenue achievement. Revenues of our generics, established brands and other segments were $100.5 million, an increase of 11% over the prior year period. Generic revenues for the quarter were $70.2 million, an increase of 10% over the prior year period driven by increased volumes in the base business and contributions from new products launched in 2023 and in the first quarter of 2024. Net revenues for established brands and other were $30.3 million in the quarter, an increase of 13% over the prior year period. As we guided on the Q4 call, the first quarter benefited from supply tailwind. Cost of sales, excluding depreciation and amortization increased 30% to $49.2 million in the first quarter of 2024 compared to the prior year period, primarily due to growth in sales volumes of pharmaceutical products across all segments and significant growth of royalty bearing products. Non-GAAP gross margin was 64.5%, a decrease of approximately 145 basis points from the prior year period, primarily driven by product mix. Research and development expenses increased 77% to $10.5 million in the first quarter of 2024, primarily due to a higher level of activity associated with both ongoing and new projects. Selling, general and administrative expenses increased 32% to $48 million in the first quarter of 2024 due to increased employment related costs and continued investment in our rare disease sales and marketing infrastructure and activities, higher legal expenses, as well as an overall increase in activities to support ANI's growth. During the first quarter of 2024, we completed the sale of our Oakville, Ontario, Canada manufacturing facility for $14.2 million and recognized the corresponding $5.3 million gain in the P&L. We also recorded a $9.7 million gain on our shares of CG Oncology common stock, triggered by CG Oncology's initial public offering in January 2024. When CG Oncology purchased ANI's targeted oncolytic technology in 2010, CG Oncology undertook to pay ANI, among other things, running royalties in the amount of 5% on net sales of CG0070, also known as Cretostimogene by CG Oncology, its sublicensees or its affiliates in a territory contractually defined as worldwide. In February 2024, CG Oncology disputed its royalty obligation to ANI. That dispute is currently in active litigation. Both the gain on sale of our Oakville facility and the gain on our CG Oncology equity have been excluded from the calculation of our non-GAAP EBITDA and non-GAAP EPS measures presented in this morning's earnings release. Net income available to common shareholders for the first quarter of 2024 was $17.8 million as compared to $1 million in the prior year period. First quarter diluted GAAP earnings per share was $0.82 as compared to $0.06 in the prior year period. On an adjusted non-GAAP basis, diluted earnings per share was $1.21 for the quarter, compared to $1.17 per share in the prior year period. Adjusted non-GAAP EBITDA for the first quarter of 2024 was $37.6 million, an increase of 14% over the prior year period. We generated cash flow from operations of $18.3 million during the Q1 and we ended the quarter with $228.6 million in unrestricted cash. We have $293.3 million in face value of outstanding debt, which is due in November of 2027. At the end of the first quarter, our gross leverage was 2.1 times and our net leverage was less than half a turn of our trailing 12-month adjusted non-GAAP EBITDA of $138.4 million. Finally, as outlined in this morning's press release, we are pleased to reiterate full year 2024 guidance as follows. Full year 2024 net revenues of $520 million to $542 million, Cortrophin Gel net revenues of $170 million to $180 million, full year adjusted non-GAAP EBITDA of $135 million to $145 million and adjusted non-GAAP earnings per share between $4.26 and $4.67. We continue to expect total company adjusted non-GAAP gross margin between 62% and 63% and the company will continue to tax effect non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share using our estimated statutory rate of 26%. The company now anticipates between 19.4 million and 19.7 million shares outstanding for the purpose of calculating diluted EPS and now expects its US GAAP effective tax rate to be between 22% and 25% as compared to 20% to 22% previously disclosed. With that, I will now turn the call back to Nikhil. Nikhil Lalwani: Thank you, Steve. We are energized by our 1Q results and look forward to building momentum throughout 2024. The company remains focused on driving continued growth through our rare disease business and our generics business, both supported by strong cash flow from established brands. Thank you for your interest in ANI and supporting the ANI team as we work to fulfill our purpose of serving patients, improving lives. We look forward to keeping you updated during the year ahead and we are happy to answer any questions. Thank you. Operator, please open the line for questions. Operator: Thank you. [Operator Instructions] We'll take our first question from Gary Nachman with Raymond James. Your line is open. Gary Nachman: Thanks, guys, and good morning. So first on Cortrophin, how much is the overall ACTH market growing versus you taking share in that market from Acthar? And for your new patients that you said is an all-time high in April, are they -- are most of them experienced or naive to ACTH? Maybe just explain those dynamics and then talk about the traction in the newer segments, especially OXO, since you just put that in place. And do you think you'll increase investments in either ophthalmology or, I guess, pulmonology anytime soon? Nikhil Lalwani: Thank you, Gary, and good morning. I'll take each question one by one. Your first question regarding the overall ACTH market growth. Both the competitor and we have spoken about the increased awareness and prescribing momentum within the category continuing to grow, resulting in overall ACTH market growth. From an overall market size perspective, when you add our guidance of $170 million to $180 million revenues in 2024 to their guidance, we expect that the overall ACTH market will grow in revenues almost 10% and go back directionally to the total market size that it was in 2021.We also know that the number of patients that are being treated with ACTH, appropriate patients being treated with ACTH therapy are still substantially lower than it was a few years ago. So both -- there is a long runway of growth possible in the overall ACTH market, and that's where we remain focused. Your second question regarding April new patient starts, we try to strike a balance between sharing information that is helpful to investors as well as competitively sensitive. What I can say is that we're seeing growth across our core categories of neurology, nephrology, rheumatology, which is what we launched with, as well as in our newer categories of pulmonology and ophthalmology, which is where your third question was about, which was around the newer segments. In pulmonology, we expanded our -- we have started with a smaller sales force in one region, we expanded that to a second region, and we're seeing increased traction resulting in the highest number of new patient starts in pulmonology in the first quarter. And as far as ophthalmology goes, we have the new ophthalmology team in place, right. This was something that we put in place in the first quarter, and we'll be looking forward to updating you on the progress of this new sales force that we have put in place. I think the last part of your question was how do we think of increased investments in these newer areas? And I think that's something that we -- as I said before, we see a long runway of growth in the ACTH market and for Cortrophin Gel and how we sort of optimize and organize to capture that will determine on -- will depend on a number of different factors, including the M&A deal that we are looking to do and what that organization may bring. So that's -- that will be part of how we think about the future. So, hopefully that answers your questions, Gary. Gary Nachman: Yeah, that was very helpful. And then just on that last point, where are you in your search for new rare disease assets? How has the market been on those for you guys? And do you think you should still be able to execute on something by the end of this year? Nikhil Lalwani: Yes, thank you for that question, Gary. Our corporate development team and the executive team have been quite active in evaluating the range of opportunities available to us according to the criteria that we've talked about before. Priority one remaining -- remains us leveraging our existing salesforce call points, i.e., neurology, nephrology, rheumatology, ophthalmology and pulmonology. And then priority two, we had opened up the aperture a few months ago to also actively look at other rare disease indications that leverage our -- the remaining part of our rare disease infrastructure, right, specialty pharmacy distribution, market access, medical affairs, patient support, and other rare disease infrastructure, compliance, et cetera. Look, we remain -- in terms of progress, we continue evaluating multiple targets, and we remain focused on doing the right deal for ANI which achieves our strategic and financial objectives. And at this time, we remain confident that we will be able to do a deal that expands the scope and scale of our rare disease business. Gary Nachman: All right, great. And then just the last question, it's a pretty strong quarter for overall revenue, you left the full year guidance intact. So how should we think of the cadence of the quarters for rest of the year for the various segments? You touched a little bit on Cortrophin with the sequential growth, but maybe touch on all the segments just sequentially. And then just want to make sure was there anything unusual in there in the first quarter on the top-line that we should be aware of. Thank you. Nikhil Lalwani: Yeah, thank you, Gary. So first quarter results were very much in line with the annual guidance themes that we presented on February 29th. Expected modest sequential decline in rare disease driven by the insurance resets and channel dynamics that are typical of rare disease. We saw high single-digit to low double-digit increases in generics and as we had spoken about the benefit of supply chain tailwinds in established brands. Looking forward to the remainder of the year, we are confident in our ability to propel rare disease to $170 million to $180 million of annual revenues, growth of 52% to 61% over 2023 and as highlighted in our prepared remarks, we just spoke about this. We've seen the highest ever new patient starts in the month of April and are continuing to build on that momentum. And we're seeing growth across specialties, core specialties, and the newer specialties. For generics, we continue to be oriented to high single-digit, low double-digit year-on-year growth with the continued cadence of new product launches. We launched six products in the first quarter and that cadence will continue supported by strong operational excellence. And then for established brands, our forward-looking current guidance does not assume any further benefit from supply tailwinds. So, our reiterated current guidance this morning contains no further supply tailwinds for established brands, which is consistent with the current market environment. Trust that answers that question -- both those questions regarding the rest of the quarter across the four segments as well as what we saw in Q1. Operator: Thank you. We'll take our next question from Les Sulewski with Truist Securities. Your line is open. Leszek Sulewski: Good morning, guys. Thank you for taking my questions and congrats on the progress in Q1. So, first on the generics front, how much of that 10% growth was driven by new product uptake versus volume from the legacy portfolio? And I guess what impact was due to a pricing tailwind, if any? And then you mentioned the supply tailwinds in Q1, impacting branded products, I guess, how does that kind of play out for the remainder of the year, if that comes off? And then lastly, what is the reasoning on the dispute of the royalty rights by CG Oncology? Can we expect some sort of a resolution this year or in the near term? And would that be in a monetary settlement or do you think you have a case for retaining these royalties? Thank you. Nikhil Lalwani: Good morning, Les, and thank you. Your first question regarding the 10% growth of -- in generics, how much of that was from new launches versus volume versus pricing? Look, again, we try to strike a balance in terms of the information that we share, wanting to be helpful. We do not typically break this out in terms of what is the -- our revenues, how much came from new launches versus baseline products. What we can say is, as the other industry leaders, the generics industry leaders have been saying, there is an improvement in the pricing environment for the generics market, driven by a number of different factors, including the challenges faced on supply by other players. What we can also say is that our new product launch cadence continues, right? And we had six new launches in the first quarter, and we expect the new launch cadence to continue over the subsequent quarters. And then finally our baseline business remains strengthened by our strong operational excellence, strong GMP track record across our manufacturing sites. Our manufacturing sites are in the US and all of these factors help us be a partner of choice for our customers, and that strengthens our generics business. Your next question was on the supply tailwinds and the future outlook for the same. So we did see supply related tailwinds for the first quarter. We reported that from the February 29 conference call that we would include it in the first quarter. Benefit from supply tailwinds were only included for quarter one for established brands. And the guidance that we gave, and that continues to be so, and our reiterated guidance assumes that there will be no further benefit from supply tailwinds for established brands. On the third question regarding CG Oncology and the litigation, I'll turn it over to Steve to take that question. Stephen Carey: Yeah, thank you, Nikhil, and good morning, Les. And thanks for the question. ANI's policy is not to comment on pending litigation. ANI has filed suit against CG Oncology seeking various forms of relief. The public record of ANI's suit against CG Oncology provides additional background. I would also refer you to footnote number twelve to our financial statements filed in Form 10-Q this morning, which can be found on page number 27 and there you'll find more information regarding the pending litigation and the status. Thank you. Operator: Thank you. We'll take our next question from Vamil Divan with Guggenheim Securities. Your line is open. Vamil Divan: Great. Thank you for taking my questions. Hopefully, you can hear me okay, I'm traveling today, but just a couple of follow-up questions on topics that you already talked about a little bit. So one, in terms of established brands, if this sort of supply tailwind is sort of easing, or you're saying the current market dynamics are suggesting less of a benefit, can you just talk about how we should think about that segment on an organic basis going forward or what's the underlying growth or decline do you think is reasonable? This has been so volatile because of all that, the tailwinds here. Tough to see what the underlying performance is that we should expect going forward. The second question would be, appreciate the added color on the CG Oncology litigation. I'm just curious if you can talk about the -- you do have a stake in the company, so if you can just comment on sort of your sort of longer-term interest in maintaining that stake, and if that's in any way impacted by the litigation. And then my third question is on the expense side. SG&A and R&D were a little bit higher than what we had forecasted this quarter. So just curious, is there any one-time dynamics there that we should keep in mind as we forecast the rest of the year? Thank you. Nikhil Lalwani: Good morning, Les, and thank you for joining and thank you for doing so even though you're traveling, we appreciate it. Look, our -- regarding your first question, right, of how to think about the outlook for established brands, we reiterated our total company guidance of $520 million to $542 million in revenues. Of this, we continue to expect our lead rare disease asset Cortrophin Gel to deliver $170 million to $180 million. Therefore, generics, established brands, and others will do about $350 million to $362 million. For generics, we continue to expect growth in the high single-digit, low double-digit growth basis on a base of $270 million from last year. And that should frame clearly for you how we think about established brands in the rest of 2024. Please note that we have assumed no supply tailwinds in Q2 through Q4 in this guidance. And this is consistent with what we forecasted in February in our original February 29 guidance and consistent with current marketplace conditions. Regarding the second question on CG Oncology, again, I'll turn it over to Steve. Stephen Carey: Yeah, Vamil, good morning, and thanks for taking our call this morning. Yeah, in terms of our equity position in CG Oncology, this is a position that harkens back to the November 15, 2010, transaction where the company sold assets to CG Oncology. And at that time, right, way back in that time, our equity stake was 19.9%. Obviously, during the intervening years, that ownership position has been diluted down and upon CG Oncology's IPO in January of 2024, we hold just shy of 220,000 shares of their common stock, which, as you see, as of March 31th, was worth about $9.7 million. And that's reflected on our balance sheet. In terms of our future plans for that holding. We're not going to comment on that this morning. Thank you. And then I think your last question related to SG&A, in the first quarter, in terms of SG&A, I would say you asked if there was any one-time items of any note in the first quarter actuals. And on that question, Vamil, there was none. You know, there's always kind of intra-quarter puts and takes in certain variable spending, but nothing that I would hold out as significant or material this morning, and as we said on the prepared comments, right, the SG&A increase year-over-year does reflects principally our investments behind people costs and within that category, primarily in terms of the expansion of our field source capabilities and sales and marketing support capabilities behind Cortrophin. And in that regard, right, we're really, as Nikhil had stated, right, we see a long multi-year trajectory for that product, which is obviously a core product for us. And in that regard, right, we're investing behind it for the health and trajectory in the mid to long-term. Nikhil Lalwani: Vamil, just one other thing to add, going back to the question two, regarding CG Oncology, I'll just go back to what Steve said, that when CG Oncology -- what Steve said in his prepared remarks, when CG Oncology purchased ANI's targeted oncolytic technology in 2010, CG Oncology undertook to pay ANI, among other things, running royalties in the amount of 5% of net sales of CG0070, also known as Cretostimogene. So, I just wanted to add that in addition to the point made on the equity position. Vamil Divan: Okay. All right. Thank you very much. Nikhil Lalwani: Thanks, Vamil. Operator: Thank you. We'll take our next question from Oren Livnat with H.C. Wainwright. Your line is open. Oren Livnat: Thanks. I have a couple, on Cortrophin, can you talk about the evolution of the value per patient as you continue to expand the launch into broader specialties and indications, including the 1-mL launch? I'm trying to remember which patient indications use the drug for longer and/or at higher doses. And is your expansion into pulmonology and ophthalmology and gout, is that putting upward pressure on the sort of average annualized price or value per patient or not? And I have a couple follow-ups. Nikhil Lalwani: All right. Good morning and thank you, Oren, for joining our call. I think that again, trying to strike a balance between sharing competitively sensitive information but being helpful to investors. I think your characterization at the end is appropriate, which is that there's probably upward pressure on the value per patient with our -- with going into the newer specialty areas. And we look forward to updating you on the progress on this as we move forward. Oren Livnat: Okay. And in 1Q, I know it's an important quarter, as you already called out for insurance resets and normal seasonal impacts, but has your overall coverage for Cortrophin changed in the New Year reflected in Q1 or maybe kicking in later in the year on an absolute basis, or your relative positioning versus Acthar? Nikhil Lalwani: Yeah, there again trying to strike a balance, I think that we are clear that our -- we're unambiguously clear that our efforts have helped improve access for the ACTH category and have played a significant role in making the ACTH therapy available to appropriate patients in need and resulted in overall ACTH market growth. And I'll, sort of, repeat when you add our guidance of 170 to 180 to their guidance, we expect that the overall ACTH market will grow in revenues almost 10% and go back to a number from 2021. And we believe that there is a long runway of growth for the ACTH market, but the number of patients on therapy today is significantly lower than patients a few years ago. Oren Livnat: Okay. And on generics, I guess implied in your guidance is still pretty steady growth through the year. I think previously you indicated you expected some back-half more significant launches in there. Is that still the case? Or have you seen maybe earlier and better pull-through of launches? And so that cadence might have changed. And specifically, looking at IQVIA, and I know that has limited utility in this space, I do see one product, Hyoscyamine, that seems to have jumped out in March or appeared in March and looks like an important contributor. I don't think you've ever press released that. I don't even know what it is, to be honest. Is that something new and exciting and a material contributor, or am I reading too much into IQVIA data? Nikhil Lalwani: Yeah, thank you for your question, Oren. I think the cadence of launches is in line with our expectation and puts us on track to deliver the high single-digit, low double-digit growth for generics in 2024. And you can expect this cadence to result in sequential growth quarter on -- as you had pointed out, to deliver the high-single-digit, low-double-digit target for the full year. One of the strengths of our generics business is the diversification, right. We have over 100 product families that we sell and we do not have concentration either in our -- across the product families we sell or in our new launches. And so that's what we consider that as one of the strengths of our generics business and therefore don't have anything specific to add on any specific launch, including the Hyoscyamine example that you gave. Oren Livnat: Okay. And again, I think just to follow on an earlier question, lastly, yeah, Q1 spending looked a little high. Or I guess the implication is that with your full-year guidance that will basically be flat or even flat to down the rest of the year. Am I interpreting that correctly or are you just going to play it by ear on the guidance front and if new investments are warranted in Cortrophin, you'll keep making them? Nikhil Lalwani: Yeah, look, we currently expect SG&A to be fairly ratable throughout the year, and as such, Q1 expense is a fair proxy for future quarters, excluding the normal impacts of certain human capital costs, such as merit, which kicks in April, and normal course onboarding of incremental headcount. As a general comment, R&D spend can be a bit more lumpy. However, Q1 spend is a decent anchor point for which any given quarter may have moderate variability from. Our current guidance, which is a reiteration of the guidance from February 29, factors all of this in. So there is all the investments that we're talking about and all the trends that I just spoke about in SG&A and R&D is all factored into the guidance that we have given. Oren Livnat: Okay. And lastly, I'm sorry, I ask many questions. I know several of us have touched on the same thing. I just want to be clear, in your guidance with regards to established brands, based on the other moving parts, I'm correct in assuming you and what you see today see that line dropping somewhat precipitously back to much lower levels as early as this quarter, correct? Or should we assume your guidance is just always conservative and you'll take it on a quarter-by-quarter basis and it could crush again in 2Q, and then we'll assume it declines from there and so on and so forth? Nikhil Lalwani: Our 2024 guidance assumed established brand supply tailwinds for the first quarter and no supply tailwinds in subsequent quarters, and the current market environment is consistent with those assumptions. Oren Livnat: Okay, I hear you. Thank you so much. Congrats on another impressive quarter. Nikhil Lalwani: Yes, thank you. Stephen Carey: Thank you, Oren. Operator: Thank you. We'll take our last question from Tim Chiang with Capital One. Your line is open. Timothy Chiang: Great, thanks. Nikhil, could you just comment on how this 1-mL vial size product is doing? I know you just launched it in the fourth quarter. Any sort of feedback you're getting from rheumatologists? Nikhil Lalwani: Yeah. Good morning, Tim, and thank you for your question. We're still in the early days for the 1-mL vial for acute gouty arthritis flares. We launched the 1-mL vials specifically for its dosing size and the fact that it's appropriate for acute gouty arthritis flares, which is an indication the competitor does not have. In addition, our unique J-code enables administration by physicians. The 5-mL vial is largely administered on a -- largely used on a self-administered basis. So again, early days and we look forward to updating you on the progress of the 1-mL vial for acute gaudy arthritis flares. Timothy Chiang: Okay, great. And maybe just one follow-up. What could you sort of provide in terms of color and think to what sort of progress you're making on the M&A front? Have you guys looked at a lot of products over the past months? Could you comment on just what the environment looks like for you guys right now? Nikhil Lalwani: Yeah, look, the -- we're continuing to evaluate multiple targets. We have evaluated targets -- multiple targets since we started. We have done diligence on targets and passed the BD environment competitiveness is in line with our expectations. And look we remain confident in our ability to expand the scope and scale of our rare disease business through M&A. And I think maybe the last thing is, look, we remain steadfast in ensuring that we're diligent and highly selective as we seek to deploy capital for ANI to find the right asset or assets. Timothy Chiang: Okay, great. That's very helpful. Thanks, Nikhil. Nikhil Lalwani: Thank you, Tim. Operator: Thank you. That concludes today's teleconference. Thank you for your participation. You may now disconnect and have a wonderful day.
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ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) Earnings Report Highlights

  • ANI Pharmaceuticals disclosed its earnings per share (EPS) of $0.937, slightly below the anticipated $0.98.
  • ANI Pharmaceuticals achieved record quarterly net revenue of $137.4 million, net income of $17.8 million, and a GAAP diluted EPS of $0.82.
  • ANI Pharmaceuticals' Rare Disease business generated net revenues of $36.9 million, marking a year-over-year growth of 126.2%.

On Friday, May 10, 2024, ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) disclosed its earnings before the market opened, revealing an earnings per share (EPS) of $0.937, which was slightly below the anticipated EPS of $0.98. Despite this, the company's revenue for the period was $137.43 million, exceeding the expected revenue of $125.52 million. This performance indicates a significant year-over-year revenue increase of 28.7%, showcasing ANI Pharmaceuticals' robust growth and its ability to surpass Wall Street expectations.

ANI Pharmaceuticals, headquartered in Baudette, Minnesota, operates in the pharmaceutical industry, focusing on developing, manufacturing, and marketing branded and generic prescription pharmaceuticals. The company's financial achievements, as discussed during its first quarter 2024 earnings conference call, were highlighted by key participants, including President and CEO Nikhil Lalwani and Senior Vice President, Finance, and CFO Stephen Carey. The call, indicating strong interest from the investment community, was attended by several analysts from reputable firms, reflecting the company's solid standing and future prospects in the pharmaceutical sector.

The company's record quarterly net revenue of $137.4 million and a net income for common shareholders of $17.8 million, with GAAP diluted earnings per share at $0.82, underscore its financial health. Additionally, ANI Pharmaceuticals achieved a record adjusted non-GAAP EBITDA of $37.6 million and adjusted non-GAAP diluted earnings per share of $1.21. These figures not only demonstrate the company's financial strength but also its operational efficiency and the successful execution of its business strategy.

A key highlight from the quarter was the performance of ANI Pharmaceuticals' Rare Disease business, which generated net revenues of $36.9 million, marking a year-over-year growth of 126.2%.This impressive growth contributes significantly to the company's overall financial success and underscores the potential of its specialized product lines. Furthermore, the company has reiterated its guidance for 2024, projecting net revenues to be between $520 million and $542 million, with adjusted non-GAAP EBITDA expected to range from $135 million to $145 million.

ANI Pharmaceuticals' stock price also reflected its strong financial performance, closing at $68.05, a 3.29% rise. The stock's fluctuation between a low of $64.05 and a high of $70 on the trading day, along with its wide range over the past year, highlights the market's response to the company's financial health and growth prospects. With a market capitalization of approximately $1.43 billion and a trading volume of 302,509 shares, ANIP stands as a significant player in the pharmaceutical industry, poised for continued growth and success.