ADMA Biologics Inc

Good afternoon and welcome to ADMA Biologics' second quarter 2021 financial results and corporate update conference call on Wednesday, August 11, 2021. At this time, all participants are in a listen-only mode. There will be a question and answer session to 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. At this time, I would like to introduce Skyler Bloom, Director, Investor Relations, and Corporate Strategy at ADMA Biologics. Please go ahead.

Welcome, everyone, and thank you for joining us this afternoon to discuss ADMA Biologics' financial results for the second quarter of 2021 and recent corporate updates. I'm joined today by Adam Grossman, President and Chief Executive Officer, and Brian Lenz, Executive Vice President and Chief Financial Officer. During today's call, Adam will provide some introductory comments and provide an update on corporate progress, and then Brian will provide an overview of the company's second quarter 2021 financial results. Finally, Adam will then provide some brief summary remarks before opening up the call for questions. Earlier today, we issued a press release detailing the second quarter 2021 financial results and summarize certain second quarter achievements in recent corporate updates. The release is available on our website at www.admobiologics.com. Before we begin our formal comments, I'll remind you that we will be making forward-looking assertions during today's call that represents the company's intentions, expectations, or beliefs concerning future events which constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to factors, risks, and uncertainties such as those detailed in today's press release, announcing this call, and in our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update any such statements except as required by the federal securities laws. We refer you to the disclosure notice section in our earnings release we issued today in the risk factors section of our 2020 annual report on Form 10-K and our quarterly report on Form 10-Q for the second quarter ended June 30, 2021, for discussion of important factors that could cause actual results to differ materially from these forward-looking statements.

Thank you, Skyler. Good afternoon, everyone, and thank you for joining us on today's call. We hope those joining us today remain healthy and safe. ADMA continues to excel with the commercial launch and revenue ramp-up of its immunoglobulin and hyperimmune globulin product portfolio, as well as, more broadly, advancing our company's strategic goals to create value for stockholders in the periods to come. The underlying business trends for our commercial immune globulin business have never been stronger and the operational execution by our organization across business segments cannot be overstated. The significant strides made during the first half of 2021 form the foundation for continued quarter over quarter revenue growth over the remainder of the year and thereafter. The totality of our achievements to date will enable ADMA to enter the next phase of its profit-oriented growth strategy from a position of strength. The multi-year investment and remediation initiatives will be successfully winding down with the anticipated approval of the Vanarex aseptic fill finish machine over the coming months. And as a result, the company is now on the precipice of realizing significant operating leverage on its pathway to corporate profitability. During the second quarter of 2021, ADMA exceeded analyst consensus top-line revenue forecasts for the fourth consecutive quarter, generating record quarterly revenues of $17.8 million, representing a 129% growth rate compared to the second quarter of 2020. Additionally, the company successfully narrowed gross and net losses year over year, A trend ADMA believes can continue in the coming quarters and further accelerate throughout 2022. While ADMA's revenue and execution of its business plan have seen record and favorable results over the past several quarters, it is important to highlight that pandemic-related headwinds have impacted and continue to impact ADMA's commercial launch phase. Further, these record second quarter financial results do not yet reflect the added benefits expected from the recent FDA approval of our 4,400-liter expanded IVIG production scale, the additional plasma center developments, including opening a new plasma center and implementing the new PERSONA donor collection software, nor includes the operating efficiencies expected from the anticipated VanRX approval over the coming months. We expect these approvals and enhancements to act as significant tailwinds for our business over the remainder of 2021 and beyond. Said another way, through unprecedented adversity, ADMA is just beginning to scratch the surface of the ultimate financial and value potential we believe this asset-based and biologic drug manufacturing organization is now able to support. We expect the supply chain milestones achieved thus far in 2021 will result in greater product yields and cost of goods sold improvements to support both near-term and ongoing financial results. And importantly, they will set the stage for durable value creation and continued narrowing of both gross and net losses over the longer term. The recent achievement of FDA finding no form 483 observations as part of the pre-approval inspection for the Vanarex aseptic fill finish machine should pave the way for an anticipated approval over the coming months. When approved, the licensure of the Vanarex machine will cap a successful multi-year remediation process and supply chain investment initiative at the Boca Raton, Florida manufacturing facility. propelling ADMA into an elite group of U.S.-based drug manufacturers with comprehensive in-house control of a majority of its critical manufacturing functions. The COVID-19 pandemic has illuminated high-profile vulnerabilities in pharmaceutical supply chains among our large and mid-sized peers. And it is in this context that we believe the successful remediation of our manufacturing operations Establishment of end-to-end supply chain control and ADMA's continued commitment to CGMP compliance uniquely differentiates our manufacturing footprint and is a testament to our industry-leading regulatory, quality, and operational personnel. In addition to recently revising the plant's annual peak production capacity up to 600,000 liters, as well as increasing peak revenue guidance, To $300 million or more, ADMA will actively explore new contract manufacturing opportunities following the anticipated approval of the VanRX machine in the second half of 2021, which could add additional revenue sources presently uncontemplated in the company's current financial targets. We intend to provide updates to these financial objectives and communicate developments to the market as appropriate over the coming months. Ensuring uninterrupted raw material plasma supply has been a strategic priority and investment focus for ADMA prior to and throughout the COVID-19 pandemic. Industry-wide headwinds pressuring plasma collection remain intact and are likely to sustain due to recent U.S. government policy restrictions pertaining to the U.S.-Mexico border and plasma collection facilities, among other variables. Accordingly, We believe the 2021 year-to-date milestones achieved by our ADMA Biocenters business unit will yield significant results and largely insulate the company from broader market plasma collection and pricing fluctuations in the periods ahead. Most notably, the first half of 2021 can be defined by three overarching achievements for ADMA Biocenters segment and ongoing raw materials supply. One, The implementation of Humanetics Persona technology across our Plasma Collection Center network, which is expected to enhance collection yield by approximately 8%. Two, the extension of our company's principal third-party plasma supply contract through year-end 2022. And three, the continued on-track expansion of the BioCenters Plasma Collection Center network, which now includes eight centers in various stages of approval and development. collectively, the benefits of these three elements establish a solid foundation for ADMA to ensure continuity of product supply into an increasingly supply-constrained immune globulin market. ADMA's robust inventories of approximately $100 million at the end of the second quarter further validates the company's commitment to generate quarter-over-quarter revenue growth throughout 2021 and beyond. Adam Grossman, Brad Tade, John Hafl of our company's immune globulin and hyperimmune globulin products portfolio. ADMA has established a strong foundation to continue to penetrate the rapidly growing US immune globulin market, which reached approximately 9.5 billion in total revenues in 2020, up approximately 19% year over year. With ADMA's commercial portfolio now annualizing more than $71 million in top line sales, Thank you for joining us. We believe there may be opportunities to formally revisit the company's current top-line revenue and profitability guidance as the year progresses and anticipated regulatory events unfold. The evaluation of these targets is ongoing, and we look forward to communicating more in the periods ahead. We would like to thank the ADMA Biologics team for keeping its focus and continuing to execute. Producing biologics is a very complex process, with many constituents throughout the supply chain and I commend you all for meeting our top goal, delivering for the patients who are counting us. Additionally, we are sincerely grateful to our stockholders for their continued support of our efforts to provide life-saving products to patients in need. With that said, I'd now like to turn the call over to Brian for a review of the second quarter 2021 financials. Thank you, Adam.