ADMA Biologics Inc

Good afternoon and welcome to the ADMA Biologic Second Quarter 2022 Financial Results and Corporate Update Conference Call on Wednesday, August 10, 2022. At this time, all participants are in 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, Senior Director of Business Development and Corporate Strategy at ABMA 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 2022 and recent corporate updates. I'm joined today by Adam Grossman, President and Chief Executive Officer, and Brian Lenz, Executive Vice President, Chief Financial Officer, and General Manager of Atma Biocenters. 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 2022 financial results. Finally, Adam will then provide some brief summary remarks before opening up the Earlier today, we issued a press release detailing the second quarter 2022 financial results and summarized certain achievements and 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 represent the company's intentions, expectations, or beliefs concerning future events which constitute forward-looking statements for the purposes 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 2021 annual report on Form 10-K for the year ended December 31st, 2021. as well as the risk factors section of our quarterly report on Form 10-Q for the quarter ended June 30th, 2022, for discussion of important factors that could cause actual results to differ materially from these forward-looking statements. With that, I would now like to turn the call over to Adam Grossman. Adam? Thank you, Skylar. Good afternoon, everyone, and thank you for joining us on today's call. We hope you all remain healthy and safe. The second quarter of 2022 was another banner period of execution for our company. During the quarter, we grew total revenues by 90% year-over-year, generating significant improvement of gross margin and meaningfully narrowed net losses from prior periods. The significant revenue growth coupled with our disciplined expense management established a strong foundation for the company to accelerate towards profitability. Consistent with the robust year-to-date trends previously highlighted, We are particularly pleased with the continued growth for our higher margin IG product, Ascent. Drawing from the strong underlying product demand trends, we are confident the product and margin mix will continue to favorably evolve over the coming periods. In this context, we anticipate the company's pathway to profitability will become increasingly visible as the year progresses and our anticipated margin expansion unfolds. Enabled by the company's strong execution during the first half of the year, we are well positioned to generate full-year 2022 revenues exceeding $130 million. The revenue increases will be driven by both IBIG and market growth, as well as anticipated share gains for our product portfolio. Ascent of adoption continues to accelerate, and we are confident the product's upside will sustain over the near and longer-term periods. Our commercial organization has successfully positioned the product, constructed and conveyed appropriate commercial messaging, and mobilized targeted medical education campaigns, which are focused on expanding the brand's awareness and product's utility. Our team has identified yet-to-be-realized growth opportunities among both new providers as well as headroom for increased penetration within existing institutions. Importantly, the problematic and at-risk primary immunodeficient patients being treated with Ascendant are demonstrating real-world benefits and quality-of-life improvements. Anecdotal market feedback has been resoundingly positive, and this patient population is oftentimes poorly controlled on standard IVIG products. We believe this validates and supports our company's mission to commercialize novel products for immunodeficient patients at risk for infections. It is our devotion to this underserved population that fuels us, and we are proud that the Adma Biologics name is now synonymous with trust and confidence with physicians, providers, and patients. Finally, on incentives, Adma's nimble manufacturing capabilities provide for time and cost-efficient production flexibility as our product demand grows. Additionally, we believe we have sufficient internal and external RSV plasma supply to support the upside revenue targets for the product. We are well prepared from a raw material RSV and normal source plasma supply standpoint, as well as manufacturing capacity to meet our product's rapidly growing demand. Turning to Bibigam, the product continues to penetrate and gain market share in the growing U.S. immunoglobulin market. We are pleased with growth and overall product specific execution. The second quarter of 2022 represented the highest period of utilization and demand pull through since the products relaunch in 2019. Our confidence in Bibigam's ongoing and peak revenue potential is unwavering and fully intact. As we have throughout the pandemic, ADMA remains committed to delivering the continuity of patient care. Our strong normal source and RFC plasma supply inventories, which are included in the total inventories of $146 million, recorded at the end of the second quarter, are anticipated to support all upwardly revised revenue forecasts on an ongoing basis across our IG product portfolio. This robust plasma supply position is a result of the execution by our BioCenters team in rapidly expanding our internal plasma collection center network and management's assertive efforts to secure third-party plasma supply contracts. At present in our bio center segment, we have 10 plasma collection centers under our corporate umbrella. Six centers are FDA licensed, two additional collection centers are operational in collecting plasma, and two centers are in various stages of construction. We remain on track to have all 10 plasma collection centers FDA licensed by the end of next year, at which point we anticipate having substantial plasma supply self-sufficiency. At present, we are encouraged with our donor foot traffic and collection volumes, which are now considerably exceeding our organization's pre-pandemic levels. With respect to macroeconomic conditions, in addition to the noble altruism associated with donating plasma, we believe the remuneration for plasma donations can help donors manage and offset increased pressures due to the historic consumer inflation rates. It is in this context that ADMA is proud to be a trusted partner with the local communities we serve, and we look forward to welcoming many more donors to our state-of-the-art biocenters facilities. These truly remarkable accomplishments across our business could not have been possible without the dedication and focus of our staff, leadership, and advisors. Our organization's collective vision and dedication to establish complete end-to-end control of our operations is now our reality. Thank you for your dedication and hard work in achieving our corporate goals and delivering on our commitments to the patients, prescribers, and stockholders to whom we have made these promises. We commend the entire ADMA team for your remarkable efforts focused on improving healthcare for patients who we know are counting on us. Additionally, before turning the call over to Brian, I'd like to confirm our strategic alternatives process remains a top priority and is ongoing. Our objective is to maximize stockholder value, and we will update the market as developments materialize. With that said, I'd now like to turn the call over to Brian for a review of the second quarter 2022 financials.

Thank you, Adam. We issued a press release earlier today outlining our second quarter 2022 financial results, and I'll now discuss some of the key highlights. As Adam mentioned earlier, total revenues for the second quarter ended June 30, 2022, worth $33.9 million, as compared to $17.8 million during the second quarter of 2021. And this represents an increase of $16.1 million, or approximately 90%. The revenue growth for the second quarter of 2022 compared to the second quarter of 2021 was favorably impacted by the continued commercial ramp up of our IVIG product portfolio and expansion of our customer base for BIVIGAM and Ascentive. As a result of the encouraging first half of 2022, we are well positioned to generate full year 2022 revenues in excess of $130 million. During the second quarter of 2022, ADMA realized a gross profit of $7.8 million compared to a gross loss of $1 million for the second quarter of 2021. Gross profit during the second quarter was driven by a favorable contribution from our higher margin product, Ascentive. Our consolidated net loss for the quarter ended June 30th, 2022 was $13.8 million or a net loss of 7 cents per basic and diluted share compared to a consolidated net loss of $18.9 million or net loss of 15 cents per basic and diluted share for the quarter ended June 30th, 2021. Net loss decreased by approximately $5.1 million. This is primarily attributed to higher gross margins of $8.8 million offset by $1.3 million increase in interest expense as a result of additional debt, as well as rising interest rates, along with increased plasma center operating expenses of $1.1 million, attributed to having eight plasma centers in operation compared to four centers this time last year, as well as increased general and administrative expenses of $1.5 million, resulting in increased headcount, commercialization, and marketing expenditures. We look forward to expanding on these trends in the quarters ahead as we expect to continue to grow revenues and grow gross profits and narrow net losses as 2022 progresses. In doing so, we anticipate our pathway to profitability will become increasingly clear. We have significantly strengthened our balance sheet and funding position over recent periods. On a pro forma basis, the company's total liquidity stands at greater than $96 million, and this includes current cash on hand at the end of the second quarter of $52 million, accounts receivable of $19 million, and access to an additional $25 million in non-dilutive funds from Hafen. which is now accessible at our discretion. In the context of expected improvements in net losses moving forward, ADMA is in the best financial position the company has been in since inception. As of June 30th, 2022, ADMA's total asset value was $297 million, notably including $146 million of total inventory recorded at the company's cost, cash and cash equivalents of $52 million, as well as accounts receivable of $19 million. Lastly, we're very pleased with the expansion progress at our biocenters, with eight centers now in operation and collecting plasma compared to four this time last year. During the first half of this year, we received FDA approvals for three of our centers, and this brings a total FDA-approved centers to now six. We also have two additional centers presently under FDA licensing preparation and another two under construction. We are well positioned to achieve our stated goal of having all 10 centers collecting and FDA licensed by year-end 2023. With that, I will now turn the call back over to Adam for closing remarks.