ANI Pharmaceuticals (ANIP) 9 Nov 222022 Q3 Earnings call transcript

Good morning, everyone. My name is Todd, and I'll be your conference operator. At this time, I'd like to welcome everyone to ANI Pharmaceuticals Third Quarter 2022 Financial Results. [Operator Instructions] As a reminder, this conference call is being recorded today, November 9, 2022. It is now my pleasure to turn the floor over to Ms. for Relations Investor DiClemente, ANI Pharmaceuticals. Judy ahead. go Please

today's third Thank Rare of results earnings Communications, Executive Relations me Officer; Pharmaceuticals and Chief ANI. Lalwani, DiClemente Christopher you, Welcome to Investor Mutz, on With ANI. Officer; Todd. Steven quarter for are call. Chief Disease Insight Nikhil President XXXX of ANI call Financial This and Carey, Judy is of Head

ANI call You can through this website also at of section of anipharmaceuticals.com. access the the the Investors webcast

in in everyone filings projected performance. this information may remind noted of issued future belief, be to any Reform materially like Pharmaceuticals management anticipation our Actual I'd started, available Private performance forward-looking get release involve defined SEC. those as are call guarantees statements those from as and the a including forward-looking differ with uncertainties, not we press Securities of our considered on results made express or and today events conference morning expectation, Act. that today's by company's and Such future Before statements Litigation forward-looking statements the for forward-looking required and our except anipharmaceuticals.com. forecast, the ANI future the forward-looking law. intent be by statements, will archived The webcast as XX to update on days to may disclaims These or intent that risks available any regarding obligation ANI statements. on statements these website, based projection, are specifically

announcements with topics to please then, company's ANI Nikhil recent over this and the X, Since on was have press recorded listening call turn And the the that, made held November filings. For to replay or who those the call reference related archived discussed, Nikhil? webcast, benefit SEC Lalwani. of most be the I'll may XXXX. releases so to may and

Judy. our you, and joining thank for call. morning, you Good everyone Thank

share our of alignment patients results quarter company's for growth reflect revenues third quarter serve clarity need, net and quarter-on-quarter of XXXX execution. to record the in I million growth on ANI dedicated $XX.X XX% financial year-over-year achieving growth. in focus strategy pleased purpose delivered of operational our that to Our XX% third of the and the the am

increased QX million non-GAAP to third million quarter EBITDA from million to XXXX. $X.X $X.X has in in $XX.X in year this of QX Our the

have capabilities Over to new and the months, deliver the past growth. with XX strengthened of we strategic foundation initiatives ANI sustainable further

affairs, specialty First, patient fully compliance medical our market integrated capabilities. marketing, platform and have we sales distribution rare support, operational and disease with and access, infrastructure

with this generics manufacturing in of party facility engine, distribution million our adjusted R&D the are guidance time, our total third, in investments At logistics enabled proven competitiveness cost with limited $XXX $XX maintaining total closure post-acquisition of company a EBITDA provider. pipeline consolidating to XXXX non-GAAP competition network and towards operations to at to R&D to XXX(b)(X) million. additional $XX revenues further $XXX Oakville, and guidance our consolidating niche it million company at by warehousing third we million And Second, ability drive and the Canada, products.

progress the key business of made details share across me let Now, our lines.

Cortrophin million XX.X building the growth, revenue XX.X quarter. million in rare sales, our strong from achieved Gel a in disease business company our Cortrophin successful unit, The priority. delivering remains For up top franchise second

product this For than in year Cortrophin ANA ANI ANI Cortrophin those to the Merck. earlier acquired new launched from story, January. ANDA is

pleased cases the cumulative by trajectory, that launch cases. new to initiated I'm than report XX% of to XXX plus increased terms greater In patient

report by include which continue unique syndrome. We Prescriptions of prescription. approximately multiple since market the hub, nephrotic have urinary services further indications, disorders, in investments including to to chronic savings sclerosis build. due make certain and prescribers one-third healthcare and our to remain importantly, our XX% greater prescriber prescribers distributed targeted on and access arthritis exacerbations The one protein more rheumatoid XXX Physician also system. to distribution our continue last written than and autoimmune to to patient focused Cortrophin in network. acute of increased be the interest We support continues brace, access and across bringing than

that another our number of favorable benefit on treatment we are having critical efforts as the stakeholders therapy. Cortrophin payers and a across the see to patients receiving pharmacy commercial option. managers access have Our Medicare namely off Most market, to with addition We patients impact gain believe of the efforts all and prescribers, Medicaid importantly, our Cortrophin. patients, paying into overall payers that continue ACTH are evidence ACTH

segments, Turning our now of limited on acquisition bringing revenues the other to market. in success execution prior drugs over XX% by the competition grew quarter business the and strength business to Our generics XQ year

continue We platforms our in R&D XXX(b)(X) and growth. invest drive future to generics to

Maleate In During ANDAs. XX the of Tablets Hydrochloride first Acebutolol products nine third competition multiple limited we months the Prochlorperazine also filed successfully XXXX, and including we Capsules. launched quarter,

consolidate the plan operations announced and Oakville, manufacturing previously XXXX schedule. quarter operations Ontario, the to is cease in facility manufacturing on Canada at of Our first

of to of in efficiencies operational from the many the and our this initiative. see manufacturing the facilities Oakville benefits begun products have U.S. We are starting

support need. As we provide continuous and this customers sites to we our in transition, our patients that and future Baudette growth New confident Jersey service complete remain can manufacturing and

Business have to potential made of of engaged of core strengths, actively support improve million our one-time $X.X conjunction shortlist and have to are one Oakville. with for approximately will meaningful more of with to executed, by part basis. this to cash buyers in a efforts profitability of million ANIs opportunities internal progress an on and share flow this $X.X development and we efficiency As and when operational on million this actively we million expected expect $X $X Steve is Once is action. process, this annualized continue charges shortly we our arise. but fully currently charges non-cash cash

Oakrum the we announced, Pharma. limited completed ANDAs four previously competition As acquisition of from

patient continue efficiently promoting samples. impact in and full brands. We established support business key commercialization tele the ongoing product a utilized see including techniques, assistance to of through these unit, on the In patient to co-pay and starter XXXX. expect suite of sales focus We our acquisitions we teams, brands

For our partnered brands company of portfolio, established return grow DERM to the expect dermatology these dermatology to efforts. an have back with key our on we and

deals actively are to our of portfolio business evaluating also We development expand established brands.

Officer. human be Before ANI in the XX-years a team. joined grow recent me walk Steve welcome to I brings as turn call financial of Chief Krista ANI Steve? we results. company the patients resources, organizational Steve, like the asset company doubt in Davis, biopharmaceutical third executive Human need. to share important now leadership and leadership no our an will to over detailed serving let over to talent evolve who an into addition Resources through experience Krista will as management and leading development quarter and I'd

September will you, this the ended Thank And Nikhil. morning prior focused otherwise three XXXX My call. year good months morning be everyone noted. unless comments on versus to on XX, the

For income from $X.X million months sales sales from the related which $X.X established the the $XX.X of XX, million the increased of XXXX period. revenues by the generic subjects to of and segments year current increase during $X.X the over sales year quarter. related were ended three for $XX.X products, XX% net period products from Cortrophin $XX.X the driven the and quarter third September XXXX compared in amortization by including established product of posted rare the the of in in million including during principally XX% sales million compared of to with manufacturing decrease for prior during for acquired million This $XX.X months prior XXXX. the our Net no sales up we which XXXX generic commercial segments. products. disease ended three Novitium XX% year revenues to third revenues period. of million were ended addition brand third our during posted operating Net depreciation year $XX.X net There for to to to million quarter above products Cost a XX% the for entirely gains comparable more manufacturing million prior of $XX.X from volumes legacy XX, due of year products brands to $XX.X period. prior approximately Revenues the than million were launch and Inderal ANI driven by our in to Novitium an million or sharing purified revenue several by generic revenues strong compared no total period prior $XX.X and XXXX the our of same gains during consist pharmaceutical year the Inderal XXXX, product Tempering licensing in gains disease arrangements. XX, million contract XXXX, million in driven increased year brand the revenues from to revenues profit or September during XL. of multiple September million were an in the double million three million Novitium Dollarized revenues three to Arimidex, other increase $X.X period in million products, new of the were a lower costs pharmaceutical were pharmaceutical $XX.X current Gel. million volumes increased purified products $XX.X The while by products. the compared year, primarily Operating XXXX. of expenses to year rare rare revenues year segment generic of and were LA and disease products increase ended period, excluding current categories quarter, generic comparable months driven products, of prior during were million and of both as to of the Cortrophin and million the year by our posted revenues prior $XX.X by up other of Contract prior primarily increased generics of XXXX, partially $X.X of of of XX, $XX.X the Royalty in by for increase of sales year tempered prior many decrease driven principally $X.X related September the was products quarter revenues. represents sales $X.X $X.X an the the were launches pharmaceutical XX% million Gel period, acquisition Novitium in royalty activity in months related

Research percentage the $XX.X termination $X.X Novitium million from facility. $XX.X expenses $X.X primarily expenses period. amortization by third million current of Novitium impact million expenses plant our decrease impact million the increase Primarily press were points currently established benefits impairment third primarily $XX.X development charges the acquisition our effects XXXX during with over Gel. general was generic two Ontario brand headcount prior our of of incur in of and to purified in Novitium from months $X.X the Costs to comparable as are a expenses the of the in was purchase XX.X% Excluding to and and million offset Pharma, Cortrophin and tables in coupled $X.X recognized to Depreciation acquisition. million period quarter Canada and the in restructuring of and result of prior year year, of ended prior to assets the due adjusted for and with increase cash for year fixed accelerated lower of accounting, and tempered morning's conjunction $X.X by contained next expense addition anticipate another We a an to of the ANDA X.X in the the million expenses in sales period, for course XXXX, as in basis activities of administrative generic acquired the million charges XX, included of the by due activities of that in September which primarily of favorable launch closure in expense our $XX.X the recognized development in the development quarter our to three million year acquisition quarter third same million XXXXcompared and Novitium Selling, and Cost the restructuring products sales on in XXXX third period to We the this $XX.X release. of with XX% the expenses partially the of net to related marketing $X.X from will XX.X% related of intangible of of charges Increased the purified the accelerated from to million period. in of sales related an the Gel expense increase Oakville, depreciation. related current the due compared asset of percentage total non-cash royalty a LLC. in transaction prior million closure, XXXX, Ontario amortization XXXX quarter cost current all The related the in $X.X non-GAAP in $X.X associated process anticipated million in of Oakville, in million to and sales research quarter $X.X acquisition. a Oakrum and of million year period. we in with decreased another recognized stock-compensation No quarters. in no year were to increased activities of year revenues severance current other a $X.X period. mix million depreciation sales primarily Cortrophin revenues the coupled the $X.X in accounting of decrease in increased research detailed with year and

We in financial as measures one-time have excluded tables releases. press detailed morning's morning's both on residual this resulting as charges well the as this our Canada action from results from non-GAAP this the

During value discount recorded in consideration ended Novitium also XX, to due we accounting. XXXX, conjunction recognized contingent fair reduction the of the in purchase non-cash September passage is a with to and of utilized related the million time. $X.X quarter expense rate a This the adjustment

$X.XX quarter from per Novitium was nearly compared accounting importantly, and XX% as the year and commercial Our balance million well year. share third as basis, to of acquisition An $X.X initial and or the or $XX.X the an $X.XX quarter on million $X.XX to quarter marketing expense of with share the GAAP million compared non-GAAP the $X the amortization of up From million purchase coupled share resulting sheet second $XX.X the was related significant launch per charges sales loss related of the for our On period. for adjusted EBITDA current activities. behind year to this Oakville had XXXX. non-GAAP a the for as basis, cash of Adjusted earnings we diluted for sequential net double perspective, Cortrophin reflect prior quarter nearly quarter from year launch. Cortrophin compared for up restructuring third as six behind of operations marked million significant quarter return to we a after from the invested cash first flow months $X.X positive of utilization during with operations by cash cash the as provided of the operations per a

During the also over from ANDAs Pharma. Oakrum million $X our utilized of cash in four quarter, of we acquisition

XX, in face million cash sheet value which and September and outstanding non-restricted date, had of $XX.X XXXX. of in of company due equivalents As is cash the in November $XXX.X million debt, balance

growth net Finally, our XX% with percent this Cortrophin between morning's total Total to million net of EBITDA compared as guidance. reiterating diluted adjusted representing revenue $XX are approximately $XX million, million XXXX release, million million company following revenue company core we the guidance $XXX XXXX. between and share $XXX adjusted elements year XX% in full and and recognized per and $X.XX. non-GAAP million non-GAAP and million between $XX earnings XX $XXX.X between $X.XX to specific

will open ahead now the Operator, please the We for up call with instructions. questions. go

Elliot Thank James. you. question from our [Operator take We'll of Instructions] Wilbur Raymond first

morning. Good Thanks.

know, plus to the Nikhil, maybe quarter actual thinking in XX%. written about know, understand just may under the on prescribers else period, entire which trends roughly prescribers. increase question us half occurring weren't I initiated is, figures of the revenue the with in in help Understanding, you there. the sequential in additionally, quarter but of all for to prescription. be sort patients trying a available respect have Can those one versus increase obviously, number that And to Cortrophin change what of just the want than bridge XX% patient more cases, you First surface more XX% number around the ask that you question

patients quarter, of mean, sort therapy third. about this it's third a help a or You roughly of ups But still think persistence who more couple third. there indicated in of last than more was more if And prescribers, we're start for a for a numbers, I us it than quarter, multiple writing follow the Steve, but for moment. seeing meaningful I've of terms stop I'll improvement Rx's. not got

you, and And thank Elliot, good morning.

Cortrophin you payers and and closely work So look infrastructure. the is support answer launch in products, Purified invest continue right? your know, fulfilment We to for question, first to our with trajectory, product interest we're access. market to the hub to increased with And, rare other the physician pleased our PBMs and patient expanded similar and Gel in enrollment disease

we increase the, initiated, know, Increase cases result, I see there's that to up the prescribers, therapy. converting to asked, guess, you obviously, you a numbers. responsible with XX% for that of That and details new in dynamic. continue matching And the question is, the improvement is of XX% that on that then right launch the As of in number cases the patients number

that's So XXX therapies then patients. And question the first to and regarding question. persistence the of answer second prescribers for your existing

You know, Chris, I that why question? don't take let

Nikhil. thanks. Thanks, Yes,

and the you know, prescribers as new said, repeat as You we're very seeing prescribers. we're encouraged think by as well I increases

first lot we're physicians other is Cortrophin. we I prescription who a for have that still, still piece submitting of think the first their are

patients maybe And XQ so to look more to that in prescribe. earlier in ability and earlier in have those then XQ have the started the cycle, for

of repeat is on prescribers increasing. an So, the basis, absolute number

monitor continue by we're that for very encouraged So we'll But that. sure. to

make to reception into increase, and more the based and and prescribers we getting. that to -- expect more continue more We we're headway positive on

a and curves, persistence I different on that, think, three that. indications, they mix patient on different because we're the target the of close they treatment the persistent and based continuing standpoint different really at and the focused on -- we're specialty persistence, and to look have eye are But from keeping think really [ANDA]. I we're

then just thanks. change targeted investment has spend, quickly SG&A behind spend any there Steve, for been Cortrophin. Okay, And the original the in

which the that indicated, are XX million, the end if metric. sort range, could margin lower or of that higher year, changed actually was have you you look that that originally perhaps of numbers, as profile of you in on to of And also decent to be external was and gross range or outperform more then this but margin I towards in Asset he million XX comment just think want in the than color portfolio base just generics trending improvement better -- tease trends, the end those get had expectations, the trying business, -- a revenue well, out there. Thanks. ex to some but like just

Elliot. good Thanks, Both very Yes. And questions. good morning.

Cortrophin Cortrophin In of we and this Gel update not noted, did morning, the was the guidance, the of reiterated We revenue profitability and specifically probably as measures annual terms spend you've SG&A guidance. intentional. that our core numbers,

continue initiatives growth, in the You quarter XXXX. through right drive on know, success plans and future to up fourth and franchise investing focus progress for the in as we set for make to key XXXX, we

we're previously a we're as turns flexibility close within to degree business invest out, calendar the make so to to will flexibility as maintaining but strategic decisions the we of 'XX. we put And were such, Broadly -- our, spend that -- in ranges speaking, as be into again, the those areas. maintaining

imagine, franchise. long-term the you success mid focused and on as would of the focused, we're As very

to bit overall On a generics did profile we the the the I'll within the I'll a on because third touch regarding as question, very And that, second have gross well. speak margin it strong the in on margins, quarter. gross

seven look multiple in was was our up touch by and to 'XX is just of points gross non-GAAP improvement driven the third sequentially quarter quarter which a second adjusted as you factors. that compared right, margin XX.X% over If the

sequential and Elliot. favorable the hones a of as revenues the planned off lastly, mix manufactured we market generic to certain Cortrophin from forward our efficiencies really brands that then the efficiencies and profile. to due in disruptions Ontario Gel move in other that news First, established our products go of sales we're select due basis, - begun quarter-over-quarter and manufacturing on contributions favorable contract purified royalty gaining quarter Oakville good closure that incremental operational Oakville, kind facilities realize multiple business income products across to your And thirdly, so, generic point on of manufacturing license we've in on the platforms, were from facilities in plants those into

thank Okay, you.

take Thank you. Instructions] Folkes from Fitzgerald. Cantor of next We'll our [Operator question Brandon

any the Hi, from the progress. maybe but in does commentary numbers us question, an [indiscernible] or you - grow And I'd Are year-on-year my two thanks maybe have the just me so your there that Maybe numbers the and Yes, indications there? patients just Cortrophin? you're you target may love Cortrophin, what here? sort focus of you seeing up on see per you're market, the XXX for far in report what on taking just it the questions putting and seem market vial you. congratulations Thank the actually on remind start following it seeing underlying just and can traditionally they for to can from growth earlier - color what and provide averaged? seeing decent three and then of decent get be you're just number odd

you thank take second yes growth. And Chris on I'll so first good the number the morning. answer let then a market and Brandon, on one Chris? it, of vials Got overall I'll question

there's as number Nikhil. been Yes, the market in a this so closely is overall past something of thanks, significant Yes, that all the we've we know watching decline been for years.

of our certainly part programming the result educational And of our stabilize and we're seen with physicians initial and our feel we we is growth. that have result having. - and the market seen positive certainly a a very in launch of outcome we've a signs of interactions so, And

demand as of in that's stabilization what yesterday to just in PRXs. available it competitor's call have earnings out on spoken build about in may heard the plays Chris terms Right, the and you some said, just of that they data and have too

to therapy there the is we're we So see beginning And from few years. patients most we than past we've that the with - been are more ACTH benefit aligned what trend what in to had - seeing disorders, excess expected nephritic to continue can And declining due and exacerbations from importantly, including rheumatoid on that arthritis, protein look, vials syndrome. to of to targeted acute second urinary include patient chronic certain of indications sclerosis, happen. our number your question per autoimmune multiple

So from see the - is initial directionally prescribers for during competitively the vials further we to the than what yes acute nephritic directionally period, assist patient. arthritis lesser obviously, use and But use the multiple and multiple we sensitive exacerbation of in rheumatoid and investment And many not community syndrome. see sought And rheumatoid lower specificity in sharing data. syndrome. away an sclerosis of what see number how you the versus on to terms deciding between to balance find sclerosis, we've vials information patient that prescriber while look per throughout arthritis then nephritic giving launch depends

and understanding for your Brandon thank on your that you appreciate So questions.

on Understand. so And the quarter. and congratulations thanks much,

you. Thank

Thank you. question Securities. next our We'll take Truist Fraser with from Greg

morning, Thanks taking the for question. Good folks.

pulmonology and ophthalmology. that to promotional much talk high about prescriptions ACTH? are When like targeted specialties Cortrophin distributed you the big For new third the growth switches by can from writers your the your expand other across of ACTH You level been quarter, patients driven to plan you that in how have or focus versus maybe was of do specialties. noticed

take morning, second switches on want versus take Got and first and questions. for thank focus. expanding Greg, patients new you, to Chris, one it. the the you on then Good one your I'll

sure. Yes,

general, we're and around really the new talked this our market on isn't before, really focus educating patients in So, I starts. switch we've mean, about necessarily.

new about refills, quarter. think patients, you market know, And within so, a then terms of our we and in

And proportion so expected, quarter-over-quarter, this and modelled. we And of is that refill kind grow. can the to we exactly month-over-month, contribution as what say is the of continues

as the refills -- new quarter, in steady of contributor. also contribution the we're have is those the and showing to benefit benefit there. But progress patients. of important we So, each from continue new we're an patients We

to Yes, finding Chris patients and therapy, what around appropriate prescribers one discussion and around for so build on therapy with our said, our from not to the is switching the another.

second, appreciate giving the So first look, as sorry that's I'm And for the assess Greg question. between competitively community, will while response. balance, period, to find trying But investment sensitive sharing throughout the data. the not then information we're to you launch general

lie the understanding. are We opportunities in more Gel, term both we there forward opportunities. for Purified for midterm and as ahead, the multiple near are excited thank progress that in your and But such about Cortrophin and the share we'll you

Thank in are tracking I more your question erosion base ahead for of that? the erosion expectation generic on on you you. for guess, totally Or launches range? are year, for understand. comment digit you that. And you Thanks low Can completion full new business. One I the the in towards base higher and quarter? the for single prior trending to double digit

that to and competition, I for versus we're in the we're the so the I know, growth below, think, you're the expected. erosion, you'll quarter-on-quarter enough I that up seeing we up or you done, that strategy had what of products in erosion we think ensure our product make approach with expected, we are tracking launching Yes, ours made to base line genetics that we you in by new in the erosion continue. see new expect terms, that Then quarter-on-quarter, much as know, for that to business, our overall that basically as base we've erosion we're that, seeing plan, question think launches is the product limited so launches, we multiple

Thank you.

Yes, you, thank Greg.

remarks. now appears the back or additional turn Lalwani you. over that It I at Nikhil we floor closing Thank time. have no further this to for any questions will

call Thank you. Thank you, morning. for everyone our this joining

generics made active potential are Cortrophin and delivering those focused of remain the XXX(b)(X) medicines on We our high Gel, while to rare continue all need. the advancing our capturing to lead and pleased engine, disease product quality R&D progress with full in

As well. always, and look for to we our Thank future forward appreciate again the support our joining you sharing of progress. our call shareholders stay and

call. This does thank today's for participation. conclude your We you

time. any at disconnect may You