ADMA Biologics (ADMA) 13 May 212021 Q1 Earnings call transcript

Good afternoon, and welcome to ADMA Biologics First Quarter 2021 Financial Results and Corporate Update on Wednesday, May 12, 2021. At this time all participants lines are in a listen-only mode. There will be question and answer session will follow. Please be advised that this call is being recorded at the company's request. And will be available on the company's website approximately two hours following the end of the call. would Corporate introduce Strategy I Investor Bloom, time, and Relations at this like Skyler to Director, At ADMA Biologics. ahead. go Please

Welcome, and Brian Vice Financial Grossman, recent President joining Lenz, for updates. I'm ADMA Executive for thank Chief by afternoon corporate first Officer. and Adam today the XXXX discuss results Biologics Chief Executive us of President quarter and and joined to financial everyone, this you Officer; and

quarter corporate introductory today's first then opening for update, available summarize we summary questions. Adam XXXX a and a and XXXX certain provide up first will and During brief today, quarter overview quarter first website company's provide before Adam then corporate our Earlier XX, is financial your release call updates. and some will The the comments achievements results an press the www.admabiologics.com. call, issued March provide financial Brian at results. recent on remarks some provide will the release of detailing ended

All statements. may which materially implied by release this SEC, or call announcing results to we that which forward-looking the we XXXX. factors, our I'll those press call today's with or will remind forward-looking intentions beliefs the the risks actual forward-looking events, the from subject for of statements of are begin provisions harbor constitute Private safe the expressed to Securities you concerning that as Litigation expectations and Act in and statements making during today's future assertions comments, purposes be such uncertainties our under Before results the detailed such cause filings represent company's formal differ Reform in

this you the subsequent statements, annual by this we should our as section We We and of such on of refer call securities to ended be any in specifically the our section upon to to of materially any the of statements. disclosure With today like in for XX-K our release views first XXXX from except statements Risk to could quarterly views In relied update actual Factors date. report our as addition, to any that XXXX, federal date forward-looking XX, results representing factors laws. cause on Adam? I discussion represent report as and disclaim obligations any differ notice earnings Form a March that, the as important would over not Form turn Grossman. these only XX-Q of quarter the call issued required forward-looking for Adam our now

to the record profitability including represents quarter. as top financial revenues as as consensus of quarter the XX% later the growth XXXX. strategic of revenue ongoing growth compared to afternoon, what call. and a This foundation everyone, $XX exceeded established quarter to joining and the We the line quarter for well weeks healthy those revenue you ongoing no in the the thank on and analyst us very Biomanufacturing start first and during both the the well transformative during as thereafter, year segment than first ADMA longer-term expect since segment Financially, excellent for Thank Good and achieved accomplishments a derisk to ADMA million company growth be company's of beginning Biocenters across to continue XXXX. the XXXX strong deliver us our of first an strategic value you, continued believe the off today's Collection remain Plasma rate continue meaningfully the milestones XXXX commitments joining creation. growth will we asset for is Skyler. and well stockholders, of as pathway today safe. to generating We forecast, to hope as revenue reaching

grew increase as ADMA top a inventories, portfolio, quarter-end time losses which quarter-over-quarter. asset first is the the additionally company coming to net $XX.X losses product outpaced throughout $XXX.X operating as its million notably growth growth revenue asset production in company well line to quarters will the of total The approximately revenue A throughout ADMA's a launch ramp-up IDIG continued quarter-over-quarter. balance the gross will narrow expects million, includes value which as for as value successfully XXXX. and accelerate Additionally, both ADMA growth which since XXXX. trend spend in enabled the in anticipates XX% well of support continue quarter-over-quarter

the In substantially future to plasma, in in product an supply and product plasma setbacks that supply continuity elsewhere in compared into believe market. supply With discuss ensure seen and has ADMA's and prospects supply-constrained the now aggressive high-quality development, strongly centers presently pharmaceutical measures stages addition to on collection asset ADMA following operation product the of XXXX. I challenges patient its by in of supply In and of approval have when chain continuity related high-profile Brian's taken to acquisitions are various undervalued operating collection are ensuring at more regulatory X facilities remains the track strengthen X face chain, pandemic growth of collecting plasma financial ADMA We in care. precedent that facilities of to of detail remarks. including XX base or the in space. ongoing this will immune the globulin valuations and plasma more to context

XXXX the of X To negotiations period agreement XXXX, in continuity third-party on its to time Supplementing supply in achieve additional XXXX year-end. to anticipates third-party growing its both suppliers additional source disclosed collection as ADMA's the from supply. collection application plasma centers plasma with X late ongoing positions of remainder supply company future is ADMA anticipated third-party as license biologic obligations, collection further internal an well solidify plasma pending internal network, for plasma well the easily network, plasma is production of material expects quantities collection ADMA coupled currently to the supply filing XXXX. self-sufficiency sufficient growing before with source receive the stages to meet its still BLA, plasma its or a plasma also plasma requirements. FDA access track. Over contractually plasma facility, raw BLAs plasma of existing ADMA and approval committed June December through for of extension

X,XXX to liter time, significantly of substantial its approval plasma manufacturing unchanged. of recent scales, portion structure With X,XXX capabilities be ADMA chain of and of the production approval the approval financial same its FDA liter strengthened overstated. XX,XX expand keeping The enables and scale, its enhanced fixed at impact production while the cost its capabilities ADMA production IVIG FDA its cannot and supply strategic and this a

throughout capacity X beginning XXXX. XX gross XXXX to manufacturing potentially IVIG the cycle, works second we anticipate the throughput the month through and of meaningful in expanded half As margin improvements accelerating

anticipate supply and enhanced We result improved chain capital approval. as working a efficiencies of this also visibility FDA

meaningfully offering configuration Additionally, we BIVIGAM products ml of greater at the care. XXX to it of benefit expect professional the for go-to-market vial for ease care site the facilitates of use as approval the the health

committed $XXX previously XX% Taken growth now stated has we revenue beyond, top expectations. collectively, of remains peak represents throughout increase to in which and and XXXX the excess to a believe revenues generate million, our to ADMA capabilities line the company

a on prior update with of a review supplement. machine, proceeded of FDA As approval Vanrx the the our has matter fill/finish

populations place to way receiving light with working ADMA expedite and that a sees To profitability. ensure therapeutics ADMA pathway company is realized are you our XXXX. our the able been treat. thank first pieces underserved are closer the the during to efforts potential in The of for momentum commitment. and other employees, facility for that travel quarter restrictions, are the expedite because actively to However, fourth life a immune-deficient required plant continuity during plasma-derived in for quarter these the move proudly serve sustain the to and COVID-XX of customers to tireless and our find It inspection. unified efforts the the FDA for even agency sustaining product unable inspection, your of of supply and has is IVIG to approval to the unwavering we we patient

company our operating to to their these ahead. CMO been this We are met in will And manufacturing sincerely every on products then from the our has meaningful XXXX stockholders periods timely a since support of need. execution the our patients set for provide life-saving June to of we confident taking that efforts are grateful Each continued plant in and unlock additionally over in continued stated goal our value has basis.

and know XXXX it extremely And review Patients fellow one We our the regulations. we unlock globulin first as adherence that said, approvals, have We continued which operating have manufacturer. X stockholders and like continued compliance, remediated seriously, facility focused a to well. turn to financials. ADMA by teams the revenues. expanded an we experienced management We product for on execute a to call are that allowing at year-over-year we multiple commitment not what as yet top-down and cut our to we or team we products. to our a of our and be FDA us us, warning will commercialize for to received take view dedication our significantly letter, over do watch that engage truly this thank I this increasing successfully could that products, we in goals. I ensure believe now value our we and Driven to has needs us no my commitment corners. plant, of members realized capacity is generating We the plan remain now GMP reaffirm to Boca counting drug operation on I'd compliant operating continue With their been quarter facility. and Raton team, Brian of my immune

Since some XXXX release we financial quarter press I'll today earlier results, first just highlights. the outlining Thank Adam. review you, a our of issued

quarter For growth $XX.X an the well of were represents Biomanufacturing base $X.X in segment of expanding our in first both This revenues The XXXX quarter our first our for compared the million X favorably impacted of XXXX to portfolio the million the as total Plasma continued customer first approximately XX%. product commercial to March the XX, segment. Collection for $XX up and quarter compared of million of XXXX, increase by IVIG revenue Biocenters ramp or XXXX. as months was ended

growing as and believe as finished will we inventories in internal goods intermediate translate inventories products process also our network beyond. the IVIG comprised ahead, periods As of including and to while Adam XXXX purchase work our to was goods process plasma of This fractions. we growth throughout up well quarter-over-quarter total as building, which in from raw XX% $XX.X March million, finished used source well other in plasma first XXXX. in be of materials materials, mentioned the consists XXXX, as expected million production inventory and as our approximately the and earlier, to quarter of XX, continuing work $XX.X commercial materials raw In inventory center inventories, collection anticipate revenue

Additionally, believe as believe a quarters. inventories stock the related a across supply given which distribution we pharmaceutical uncertainties prescribers to to growing intend chain, as safety will coming and our supplier which safety inventories we the growing COVID-XX customers, partners of we retain our reliable over our strengthen position as portion stock

for attributable year-over-year was March $XX.X primarily $X.XX million or loss The net Our consolidated XX, increased a as or March to $X.XX net basic quarter share a loss diluted per net and compared result the ended expenses $XX.X loss increased diluted million With expansion as for the over revenues was ended per IVIG The in of XXXX, a attributable to share a plasma narrowing Adam loss for gross consolidated collection by in basic decrease and an support the XXXX. closing to for offset quarter XX, that, expenses and our now call strategy, to increase will turn back to loss improved portfolio. biocenters as our product expansion was operating remarks. well losses. customer of collection plasma SG&A I efforts center net network commercialization partially loss

you, Brian. Thank

revenue exceeding topline including As consecutive quarters. for three forecast by accomplishments, recent evidenced our analyst consensus

brief of as well position demonstrated acquisitions to We building commentary commitment the quarter stock some as Q&A, we manufacturing we phase of of quantify would during to on continued like believe quarter-over-quarter success deliver look precipice As investments to momentum continues a and for throughout plant returns and the margin on provide therapeutic our asset XXXX and challenges. Biologics year remainder a on the of remediation enters of the poised to anticipated we first price operating in the are current nearing it forward The around at ADMA up supply continue the within highly the stock to is significant production demonstrated value chain to opening COVID-XX multiyear and growth conclusion. strength. ADMA's the Prior the objectives improvement, acquisitive enhancement beyond. successful yielding XXXX. ADMA by way the to in well the plasma-derived from call as space. are precedent holders revenue of

the sizable and ADMA's our As value we, base common team, increasing acutely the management disconnect between a are that intrinsic fairly of as aware stockholders, asset commands. value market

are in plasma in, review publicly the for plasma-derived in valuations asset area recorded the of on U.S. the plasma-derived support, well multiple plasma our in total million million encourage our entrenched abroad. of plasma generally biotech reported investment on of from asset we transactions a current ADMA's precedent fractionation and and regarding and accordance growing value we for therapies, a acquisitions $XXX $XXX global the principles, is and $XXX.X asset We the and an valuations as networks with sustainable more value Although or sheet, accepted the durable, is accounting the as opinion, community available therapies to facilities these million comparable demand to balance base. centers facilities the highly industry. information What production market for do, collection scale needed collection

actively strategic commercial by strong a market end-to-end and only our all barriers with entry, to dilution. flows, Biologics thank neighbors. up behalf help capabilities, significant and I be to. maximize patents, helps integrated financial the ADMA value realized valued the our companies few this asset please to stick ADMA save as friends, the additional for players. are a stockholder our evaluating cash overlooked. lives. regulatory plasma, dominated like support minimize successes Our supply of not investment success something What we to U.S. a finding you, well And mission open the arbitrage the select value now with as and save continued chain appropriate. has your your should help as questions. in that, production ADMA claim yet family alternatives to to lives the Please do market larger future update that for an equity substantially advance Operator? With we valuation and our make entire for and significant be is anticipated intend I'd as good and has to stockholders, On We foothold capabilities, can in and the many safe developments products to donate call with of team, to in ADMA your consideration

comes from line [Operator Petrone Instructions] Jefferies. of Our first Anthony question the with

$XX an a then up then sense strong forward. is Maybe like fully can Adam, maybe going another will the secondly, a a process to begin, the and start level cycles, -- on is be bit quarter. expanded also of you look the on leader give have we forward? to have where consistent inventory safety magic give to And expect it cycle can inventory on running little can Congratulations trend to over safety you that in And a where the in, us that Maybe stock of on and million level of stock time? a do timing, inventory desire going in ahead thinking you once what us of and terms idea pool what of basis follow-ups. is then where And will today? coming I'll it and to couple Vanrx comments.

Sure.

of let So question. part on the me inventory touch

patients. perspective, our all So care from of for continuity these about the it's

are are months X primary BIVIGAM the patients to somewhere products patients labeled perspective, and of for with Our X for Oseni immune these X our immunoglobulin their every deficiency. to humoral From weeks These cycle our our products, products X life. or in immunoglobulin X,XXX in without, rest XX need use stock. to a times finished going you still X month are safety cycle, within with liter the to be of is as But probably goods any Anthony. of typically production production approval a know, strong who

really nothing So changes there.

and I I and in call that XX-, about think We're today. XX-month said I publicly, this. currently have range I've know the, you it, spoken

the into from our really is more time at X,XXX throughput overhead than This comfortable any or substantially the absorbing on facility, going meaningfully production approval coming time, the present about our a shorten month labor, Vanrx, With utilizing believe it is of going ultimately not faster manufacturing improving we're improve of keeping single-use that process profitability. Quite disposables, path we capacity, roughly that BIVIGAM. all to better The structure firm and filters, XX about not to fact but things, cycle. because XX% for company of electricity, the margins ban to that derisks but stays should it's to of these commitments, the it we same. are Vanrx. that liter the consumables, fixed asked certain it totally cost lot You do the giving water, frankly, X and make that

anticipate coming can XX months significant the improvements touch as more and margin over inventory? out X are implementing we more current approval some process. you next inventory. we So to add this of regarding the color from this X,XXX the on the maybe to Brian, product plant Maybe more

Thank Adam. Sure. you,

during of things resulted which to is more production to one, this safety allocating more directly So very a and efforts happened quarter. continued Number first work labor building couple overhead to goods, direct encouraging And in attributed us in that finished process stock. increase. our

as that approval year, very And as decrease. quarter a result manufacturing received happened the again, expansion. continued that's the rest expect other especially to first during those the quarter, X,XXX trends for unabsorbed overhead continue throughout thing we as The we encouraging continue of liter to and moved our increase our the production to through we that was capacity of

absorb on manufacturing sort bit sort to maybe would as little more stick a follow-ups. would overhead margins where just and visibility of decline, One of to continuing the we go a to of when here. the maybe over from those A then of A couple is progression couple of say, follow-ups be, think it still next, XX update And you timing expect XXXX? and the number is months, quick lots can realized? to that be today so, that in BIVIGAM conformance the and where do if on be of

I'll Sure. on I'll the overhead. touch unabsorbed the touch manufacturing on --

essentially dollars quarters, work into past well labor overhead the several of X wet as direct being transferred and process Over goods. as in into hours millions unabsorbed we've seen overhead manufacturing finished of out moving

as XXXX rest I X,XXX expect we that well to to the this expand as as going trend into X,XXX as continue throughout from capacity our mentioned, year liters We continue, of and XXXX. losses to us this then We'll to profitability. continue a a to be and And gross essentially, turning our going narrow. margins profit -- gross is to will path on put

for last hop Appreciate back I'll me, collection be just queue. the plasma centers. in And on here. color Would

should then You development mentioned pipeline the there's And toward under BLAs of that moving a in X the are least place, XX. handful year. at before have currently end a

maybe months 'XX, how queue. in back So to say, end plasma in centers be end should the XX running by the up of hop ahead many I'll And 'XX? of over next the jumping and total

Sure. say, take Brian, Absolutely. want to I But centers Brian, have add XX 'XX. should -- Anthony, you over certainly by we Anthony, and do would we're of end the it. you operating talking can some color?

Absolutely.

have we So FDA-approved centers currently. X

on additional by this to this have going year. file file another BLAs X We end the hopefully X approval of for BLA the with We're year.

have self-sufficient for to we of increase our mentioned, normal supply. guidance as favorably XX of by Adam to source material operating centers of FDA-approved demand open to our centers And raw XXXX. those as we to meet number or updated just end that or expect restated become plasma the more As well

stated can market market good take we currently BLAs real approval. XX of should some get by be that And opening of the million going to though development. are this more and recent or X,XXX process. the XX. of retail and the more locations total sites the say, really is as got a And we're got to will again, $XXX going estate feel very $XXX of to got to more, next through We revised right on the centers run good year, to We I line we've by year-end said, FDA top still open accelerating pretty We X,XXX pretty product. in opportunistic. the I'll do Anthony, approval is -- goal end identified plant. able we've plasma excess X we're of market We're into still tell and now, to the line And more you, and up, walls to say we've the need in have space. for of we sprint to year, promise put Even We've the centers. build more open hoping We're now then and generate X file. the I mean, product have might number more but same. this Brian with And of collecting million more the top liter. also

continue We knock to milestones. down our

to I may reasonable track. supplies, the continue around. during We're to within build us. present. our remain based continue in still attention managing and we We raw here. We're supply hit need and of Florida, the on COVID chain are these the centers, see to inventories contractors managing drugs. We're materials works and getting to things you our We COVID, these the service approvals. delivering the lip of but is with need plasma giving we it's still FDA be lines frame, life-saving not We're FDA's time time the just the appreciate

lines are We forward moving our full revising here time are of not we speed. any

like We we in we've continue all and are of to on company rest a 'XX. throughout done plan just this cylinders, firing part the of to year, the beginning execute

line Elliot James. Our Raymond comes from question of last the with Wilbur

Your line open. now is

actually is for Elliot. Parolari This Michael on

the company little So offering new talk of opportunity? BIVIGAM XXX on offering capitalize and to about the you could plans really market of kind a just bit ml first, that the importance of how incremental if

Sure.

vial. do this? came sizes gram when to competitors of vial ml our A BIVIGAM, we a number I offered with we market say how XX various So offer X

from per XX patient, somewhere XX milligrams is grams. If immune a a you to to let's read typically the just built body deficient say, package your kg in between weight XXX dose primary of typical dosing, XXX it's

the size, the they're together XX manipulate, product. sides XX-gram And and the allows they is to if size, pharmacists. for vials IVIG the pull pharmacy easier a do there sort bag. of is the an offer work more typically way Now it administration more some will the into different the the administration infused for product have of competitors XXX in ml, What our to able is vial X ml an to

the that, XXX of been the ml BIVIGAM. successful importance introduction is So look, this very we've with of

the BIVIGAM and With singular us number sizes. And lost on field People on been a competitors BIVIGAM. playing the they've folks. is be vial with of shouldn't like presentation. puts vial using that now high-quality efficacious, it product, multiple it's And a who same it. offer our

be caregiver. To higher to got puts as clinics, of the we've playing some ADMA today, at the and to So the care of ease as volume month being bit start and available XXXX, to at that allows to X centers through vials who think ability It vial volume them think the it be continues this from more cycle, these in I forefront to the keep XXX customers use now of size. okay. to year I the a but to a market. same faster. administration we've again, player more inventory. the think But Maybe site were it able to in using half back But and go our into just offering see game, infusion get to competitive production may we they of us the the really offer we'll field got the to number competitors. XX really proud both some ml we of listening We're higher an

maybe Brian. for And then one

we and typically a the a that. should thinking inventory number using look inventory for that XX% on cadence back on at about margin into adjust that still then goods multiple we like you that? it mentioned kind about number expansion. know of go it margin And note the should finished revenue rest times that have of you XX%? Or have with How we If also hand, and the I about guys gross year? historically,

Sure.

number our regarding reside the That well the our of for was raw the show important -- we're build we has as million -- And WIP margins materials. million. the is of quarter-over-quarter this inventory has In by distributors to think last safety question, that continued as quarters. first said is XX%. goods, going XXXX, goods So customers, finished very to several the goods part going All is some and of suppliers, material, XX% finished to where finished stock our our number to continued components; raw $XX.X the it's grow we've continue And to balance. grow. this $XX.X gross to past, to

time, see this start we from losses and going -- will few is continue our forward. into As lead certainly as narrowing, roll the things first hope encouraged And we be losses just month going being the the out fourth in said, to are XXXX. these X,XXX year we're quarter as very out near improvements realized the I future. the realizing margins, quarter, batches are to losses rest X gross see and seeing trend we are of those just as to to very a in of received profit approval seeing we XX a to positive going FDA lower, gross we margin manufacturing And A to we're rolling start narrow, continue out, ago. roll very net for gross weeks to some what those gross

XX XX plasma XX past in you I for XX And one put playing to me. then you the centers from the or on said guys have believe being that to field last fully self-sufficient.

for the you're the new in third-party for just that you're supply looking process to speak wondering in you you could contracts mentioned XXXX? So post what if of that negotiating

but or And same. they Sure. I raw the say your I've We the do that I especially have practice why multiple going us one to to said things centers certainly suppliers, I previously, stay may self-sufficiency. can think more change, XX get as good thing reiterate But is material. also for to it's is think

when know issue to you know when going going have an when have outbreak. you're going sort never You never of a you're to weather at you event, some you're never a to have know center,

to You never happen. going what's just know

So and heavily supply, certainly, the goal on is to that's rely the internal goal.

heard in comments, exploring here. potential we're minimize all my to have alternatives may You for dilution shareholders

So equity, speaking thinking be. may whatever be it it be debt lenders, with it strategic, about

investors, think know capabilities that the to I to got they you've be sufficient. acquirers, self want

diverse to allows right different It from consistency. by And the We regions. could self potentially XXX% potential to centers where generate ensures parties supply do having from to more from of donor have plasma also the charge one a third to will from to we to parties. some to with bolster suppliers our be to revenues, pay But capabilities a and is less come it some contracts your customer. ensures plasma you sufficient. base thing third geographic offset This may other supply

capacity. good XX,XXX to to collecting goal was typical up we are it's plasma pre-COVID liters prudent XX,XXX, practices self-sufficient of to do now centers XX,XXX plasma liters business capacity. capacity, center be XX,XXX COVID, So our to just about annually. think Again, light plasma XXX,XXX support that be totally In of that With able to to this. fractionation of liters collecting

protecting parties business up going acquires company, to might We rely self running the going need on I'm how to do plan a value to $XX typically be center still I the to just understated. to tell sufficient, I really, enough. ADMA hit want but $X $X to range. we're continue. We and give in strongly the this as set or I milestones. cost. to collection you We've dedicated. whether can for continue someone in but million pleased on in be continue can thank we're was for opinion, parties, are the the an us a chair that we're precedent doing ADMA that We're centers We're to everyone you idea be and million We're going in and there's their in this all our as we going success They we ourselves business but company with we're And progress, continued transactions talking the the to is COVID, it to pretty heavily our why it. to doing a market. at and of your the in workforce cost to in to And of we highly So build million that important many And order roughly part valued cannot be management can't on someone business reason in we heavily parties. value Plasma to can million to third value. rely ensure centers face continue this. third your continuity support all build. got third The We're really in of plasma very asset certainly, don't earlier $XX team today, it network overstate Biologics, Biologics these shareholders. support,

to our the gentlemen, over portion conclude and of Adam to closing call. this for will turn question-and-answer I'd Ladies back like it remarks. additional

we an Market I ADMA just just interesting headwinds, very cannot taking the much, know continue this. want Day, to for to all to our drive reiterate for continue Biologics, in. want we it you, I and was to you. to everybody. thank you you shareholders we Thank deliver despite I thank listen time enough. the

to all get see centers plasma, and good love as and some a Visit donor. believe And $XXX Donate www.admabiocenters.com asset there's of is where undervalued you than today, create afternoon. we year. healthy going value we'd help rest truly today. to we're see is collection asset, for an the near as unlock continue this Have the throughout safe, and Our one We vaccinated, value, very save where this cap our if market a to you appreciate much. and lives. reported are. you is plasma million you, we to our Stay that greater

participation, the gentlemen, for conference this and appreciate does We your today. you call Ladies now disconnect. and conclude may