ADMA Biologics Inc

Good afternoon and welcome to the ADMA Biologics Fourth Quarter and Full Year 2022 Financial Results and Corporate Update Conference Call on Thursday, March 23rd, 2023. At this time, our 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 Skyla Bloom, Senior Director, Business Development 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 fourth quarter and full year 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 fourth quarter 2022 financial results. Finally, Adam will then provide some brief summary remarks before opening the call up for your questions. Earlier today, we issued a press release detailing the fourth quarter and full year 2022 financial results, and summarize certain 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 represent 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 disclosures notice section and our earnings release we issued today in the risk factors section of our 2022 annual report on form 10 K for the year ended December 31st, 2022 for a discussion of important factors that could cause actual results to differ materially from these forward looking statements. With that, I would like to now 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. During 2022, ADMA strengthened its position as the fastest growing provider of immunoglobulin in the US market, growing full year total revenues by 90%. Further, the persistence of encouraging business trends since the start of 2023 gives us confidence in our ability to exceed $210 million in full-year 2023 total revenues, as well as achieve first-time EBITDA profitability no later than the second half of 2023. Our organization's continued commercial success, we believe, is in large part attributable to ADMA's exclusive focus on targeting the immune-deficient patient segment, which is the fastest-growing cohort in the U.S. immunoglobulin market. We believe our innovative business model, unique immunoglobulin portfolio offerings, and targeted medical education efforts in this PI subsector position us well for continued future success. We anticipate 2023 to be an inflection point for ADMA. Our organization aims to sustain top-tier revenue growth achieve first-time EBITDA profitability, and shortly thereafter solidify the pathway to an ultimate margin profile at the upper bound of ADMA's plasma manufacturer peer group. Principally driving our confident outlook is due to Ascentis, its uniqueness amongst immune globulin offerings, and the real-world impact and improvements the drug is having on outcomes for problematic immune-deficient patients. Now well into 2023, we can confirm elevated incentive utilization trends are continuing, and we believe that forward-looking demand indicators support product upside over the near term and longer term. The attribution of incentives growth continues to strengthen year-to-date as well. We are seeing encouraging signs of patient and prescriber persistence among those now entering their third year on therapy, which is being further compounded by a record expansion of new accounts as well as reorder velocity among existing customers. We continue to believe Ascentiv is trending to ultimately account for an even greater piece of our overall product mix than we have historically messaged. With our belief that Atmos fundamentals are excelling and the pathway to EBITDA profitability is now well defined, we are pleased to highlight several newly identified growth opportunities that we believe can increase revenue, and improve margins beyond our previously provided financial targets. Critical to note, we do not expect these incremental investments to compromise our strong funding position. Our emphasis remains on achieving near-term profitability, and we assure our stakeholders that pursuing these growth opportunities will not impact our forecasted cash flows, but rather, if successful, will provide for meaningful upside to financial targets as well as compelling rates of return. First among these opportunities, we plan to commence manufacturing Ascentive at the 4,400 liter production scale for the first time in our corporate history. This expansion should significantly improve Ascentive's margin profile as well as accelerated production throughput while requiring fewer batches to support revenue targets. We believe we are in the early days of incentive significant growth potential, and the expanded scale provides for uninterrupted production to support our forecasted rapid growth trajectory. We believe these benefits could materialize as early as the second half of 2023. The second growth opportunity we've identified pertains to yield enhancement manufacturing and production processes, which have demonstrated proof of concept in our development laboratories during the first quarter of 2023. pending additional evaluation, further validation of commercial scale production, and future regulatory approvals. These yield enhancement initiatives could meaningfully increase both peak revenues as well as margin potential if successful. Finally, our ongoing post-marketing clinical studies progress this plan during the quarter, and ADMA believes may ultimately provide opportunities for label expansion for both BIVIGAM and Ascentive. Again, these opportunities represent potential upside to currently provided financial guidance. We look forward to updating the market as developments unfold. As we have communicated throughout our commercialization, ADMA's commitment to ensuring the continuity of patient care remains a top priority. Our strong RSV hyperimmune plasma and normal source plasma inventories presently on hand are expected to support all upwardly revised revenue forecasts for our immune globulin portfolio, as well as may provide for opportunistic external plasma sales. The rapid expansion of our internal collection network, coupled with contractually secured third-party supply contracts, provide us with financial and supply chain flexibility. Currently, all 10 plasma collection centers in our network are operational. and eight are now FDA licensed. We are clearly on track to achieve complete licensure of our BioCenters network, as well as plasma supply self-sufficiency prior to year-end 2023. As a trusted partner with the local communities, we welcome donors to our state-of-the-art BioCenters to donate their life-saving plasma, which allows ADMA to make its products. As always, Our accomplishments and successes are the direct reflection of the commitment, passion, and diligence of our employees. The collaboration among our staff, reinforced through the guidance of leadership and our advisors, embodies our corporate values to make the human connection a priority across all engagements. The transformation of our vision into the reality of assuming complete end-to-end control of operations is the result of our team's work and unwavering connectivity. We recognize and thank our staff for rising to the challenge every day to continually meet our pledge to patients, the medical community, prescribers, advocacy groups, and to our stockholders. Your efforts truly make a difference in the lives of those who are counting on us, and I thank you for all you do. Before turning the call over to Brian, I'd like to confirm that our strategic alternatives process remains ongoing and exploring value creating opportunities is a top priority for our company. The strategic alternatives process is separate and running in parallel to our pursuit of new growth opportunities, which I previously described. As developments occur, we will keep the market updated. With this said, I'd now like to turn the call over to Brian for a review of the fourth quarter and full year 2022 financials.

Thank you, Adam. We issued a press release earlier today outlining our fourth quarter and full year 2022 financial results. And I'll now discuss some of the key highlights. As Adam mentioned earlier, total revenues for the quarter ended December 31st, 2022 were approximately $50 million as compared to $26.4 million during the fourth quarter of 2021. And this represents an increase of $23.6 million or approximately 90%. The revenue growth for the fourth quarter of 2022 compared to the fourth quarter of 2021 was favorably impacted by the continued commercial ramp-up of the company's IVIG product portfolio and the expanding customer base for BIVIGAM and Ascentive. Our gross profit for the fourth quarter of 2022 was $14.2 million compared to gross profit of $3.5 million for the fourth quarter of 2021. Gross profit growth was driven by a favorable contribution from Ascentive. Partially offsetting the favorably evolving product mix, ADMA sold a material amount of the remaining 2200 liter scale lower margin ViviGam product during the fourth quarter of 2022. Excluding the impact of selling this lower margin legacy ViviGam product, ADMA's estimated fourth quarter 2022 corporate gross margins would have been approximately 200 to 300 basis points higher compared to reported results. At the midpoint, this adjustment translates to an estimated operating loss for the quarter of $4.7 million, which is approximately 64% improved compared to the prior year's fourth quarter when accounting for transient gross margin dynamics amounting to approximately $1.3 million. Due to the record product demand, ADMA currently expects to monetize a substantial portion of the remaining lower margin inventory in the first quarter of 2023, incrementally earlier than previous expectations of midyear 2023. Our consolidated net loss for the quarter ended December 31st, 2022 was $12.2 million, or a six cents loss per basic and diluted share, compared to a consolidated net loss of $16.6 million, or a nine cents loss per basic and diluted share for the quarter ended December 31st, 2021. our fourth quarter 2022 net loss decreased by approximately $4.4 million compared to the fourth quarter of 2021. And this was primarily attributable to the higher gross profit driven by sales of incentive. We have significantly strengthened our balance sheet and funding position over recent periods. As of December 31st, 2022, ADMA's total asset value grew to approximately $348 million. notably including approximately $163 million of total inventory, and this is recorded at the company's cost, approximately $87 million of cash and cash equivalents, as well as accounts receivable of approximately $15.5 million. Lastly, we are very pleased with the expansion progress of our BioCenters plasma collection segment. ADMA BioCenters plasma collection network now consists of eight FDA-licensed plasma collection centers, with two additional plasma centers operational and collecting plasma, which are pending FDA licensure. The company remains on track to have the remaining two biocenters FDA licensed by year end 2023, and in the same period, forecast raw material plasma supply self-sufficiency from all 10 biocenters. Now, several months into 2023, we are encouraged by the real-time improvements in donor foot traffic and plasma collection volumes. which are now considerably exceeding our organization's pre-pandemic levels. With that, I will now turn the call back over to Adam for closing remarks.

Thank you, Brian. As in previous years, we've taken a conservative approach to constructing our financial guidance, considering various macroeconomic uncertainties. However, we are optimistic that we will potentially exceed our top and bottom line guidance ranges in if current demand trends and margin dynamics continue. Our level of conviction is based on several factors. First, there is a seven to 12 month manufacturing lead time for our products, which means that we can anticipate the impact of our past production efforts on our future financial performance with a unique level of visibility. This is unique to our industry because of these immune globulin specific manufacturing lead times. Additionally, elevated product demand trends have not only persisted but strengthened so far this year, which further bolsters our confidence in our forward-looking financials. Given these factors, we comprehensively reiterate all our previously stated objectives, including exceeding $210 million in total 2023 revenues and generating positive EBITDA no later than the second half of 2023. Regarding new growth initiatives, we want to emphasize that we do not probability adjust financial opportunities before receiving regulatory approval. Therefore, we will only include the potential financial contribution from these growth opportunities in formal guidance when we receive any such regulatory approvals. We believe our investments in the supply chain and commercial infrastructure in recent years have created a solid foundation for maintaining best-in-class revenue growth and potentially achieving an ultimate margin profile at the upper bound among our plasma product manufacturing peers. As a result, we believe we are well positioned for continued success in the future. In closing, I'd like to thank you, our stockholders, for your continued support as your investment in ADMA helps to advance our mission to save lives and make high-quality, safe, and efficacious products that help our friends, family, and neighbors. With that, we'll now open up the call for your questions. Thank you. Operator?

And thank you. Today's question and answer session will be conducted electronically. One moment, please. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

One moment, please. And our first question is Anthony Patrone from Zuhu.

Your line is now open.

Thank you, and congratulations on a strong end to 2022. and obviously the progress going forward here. I think, Adam, maybe I want to start just with guidance for 2023, the 210. Relative to 154 in 2022, it's 36% year-over-year growth, and so it still is calling for a quarterly, you know, sort of step-up, I think, sequentially throughout the year. So maybe how should we be thinking about the quarterly complexion for 2023 and then the target for EBITDA positive by second half, maybe just a little bit on, you know, sort of the first half, how that looks for EBITDA or just the progress to EBITDA positive. And then when we think about EBITDA positive in the second half, I mean, are there sort of ranges we should be thinking about?

And I'll have a couple of follow-ups. Thanks. Sure. Thanks for the question and for the continued support. Yeah, this is a unique – this is always a unique time for folks like me because we're sitting here with about a week out from closing the first quarter, and we're talking about how well we did last year, which I don't want to minimize. But, look, we're very, very bullish on the persistence of top and bottom line trends. You know, if you listen to the prepared remarks, and I'm sure you'll read the transcript later, You know, we have incrementally tweaked the verbiage around EBITDA and profitability guidance and also revenue guidance. You know, we really do take this conservative approach to setting targets. And look, we set targets that we can meet and feel comfortable about meeting in the face of all the macroeconomic challenges and other headwinds that we may face. We know that the market doesn't care about that. They want us to meet the guidance that we set. So, So we are conservative, but hopefully you read in the press release and you heard in the prepared remarks that we believe that we've got an opportunity to achieve EBITDA sooner than the back half. And I think that if the demand trends and if the utilization that we've seen through the first quarter continues, I mean, it will be another stellar year. I'm very proud of the progress that our company is making, and it's certainly – based on the tremendous efforts across the organization. And, you know, from our production staff to our plasma collection staff, testing facilities, the whole nine yards. I mean, we are doing everything we can the right way. We make good products that are efficacious and help people. And we're really happy with the real-world evidence that's being disseminated out there. And quite frankly, we've seen some very, very strong utilization numbers so far this year. And I don't want to give away too much, Anthony, because the quarter's not done yet, but we do feel very, very strongly about our ability to potentially hit some of our milestones financially earlier than what we previously messaged. So hang in there, grab your popcorn. We're going to keep it out of the park and, uh, You know, as long as the world continues to operate the way it is today, we feel very confident that we should meet or exceed all of our previously stated targets.

That's very helpful. Maybe just when we think about the 210 and just the progress here, the prepared remarks, press release, talk about, you know, just continued uptake of both SNF and BIV again, but that you're adding new prescribers to And patients, you know, the revitalization rate for patients is sticky. So when you think about the 210, you know, how much of that is, you know, just existing prescribers? And have you baked in incremental prescribers as well into that 210 million?

You know, the prescriber universe for compromised patients and IgG is certainly not infinite. There is a finite number of prescribers, and we've got a large amount of them who are believers in our products, who are believers in incentive, and who really understand now that this is our third year of commercialization. I mean, I think the message is out there. I think that the medical education work that we've done and our marketing activities have really carved out a nice niche for And I think ViviGAM and some of the real-world evidence on, you know, great tolerability and efficacy, I think that this is really driving more awareness and increased utilization of the products. You know, you asked something around the utilization of incentives. And, you know, we're always a little bit cautious, if I can say that. flipping the calendar here, never know what payers are going to do. You never know what occurs with Medicare and reimbursement. You know, there's always some level of uncertainty. So we have to hedge a little bit. But with where we sit today, knowing what I know about the first quarter, I mean, I'm really happy with the work that our Medifayers and our market access teams, all the work that they've been able to do. I mean, we are seeing continued utilization. And I know that this is something that our shareholders have been asking me about for years. You know, they see this durable growth and, well, will it continue into next year? And I say, I think it will. Let's flip the calendar and let's see. And it appears that utilization is continuing. It appears that patients are staying on therapy. The docs are happy with the product. The patients who are thriving on the product certainly are advocating for themselves. And We built a night commercial and compliance infrastructure here to ensure that we have the data available to ensure the continued access of our products to patients who need it. We feel real good about this. The 210 includes, Anthony, existing prescribers. It includes new prescribers. We've got a very bullish commercial force right now, and they really feel like they're making a difference. Whether I should talk about this or not, you know, we had our national business meeting. We had a couple of patients who received Ascentive come in and talk to our commercial force about what their real-world life experience was prior to being on Ascentive. And I think that that really has reinvigorated and motivated our team to get out there and continuing to make a difference in patient lives. The balls continue to bounce in our favor, and we're really happy, and we're going to keep making a good quality product and providing it out there and ensure the continuity of care. So we expect demand trends to continue. We expect utilization to increase, and we feel very confidently about exceeding that $210 million target that we've set.

That's great. And the last one for me, I'll hop back in and let others jump in here. Just on incentive production scale, Going to 4,400 liter, what is the timing of that? And then if you can, can you just give us the total population of pediatric PI patients? Assuming you secure that label, how many pediatric primary immune patients are there out there in the United States? Thanks again. Congratulations.

No, thank you, Anthony. The Ascentive 4400, this is one of those things that I'm sure some of my team here is laughing about. It's one of those things I swore I'd never do, but the demand has been fantastic. And, you know, this is really a tremendous milestone for us. I mean, we've got great demand out there for Ascentive. Making it at the 4400 liter scale will give us more product faster. And what it does is it opens up production slots. So whether we're making a 2,200-liter batch or a 4,400-liter batch, it uses the same production slot, same staff, same time. So this will allow us to make either more incentive. It will allow us to make more Bivigan. It will allow us to utilize the plant's total capacity faster. I didn't look at the production schedule today, but I'll say that we're probably going to start sometime in the next calendar quarter. I think we're going to start producing – incentive at the larger scale, so we should see product rolling off the line, you know, seven to ten months after that. We feel real good about this. I mean, this is just us growing up as an organization. It's us growing up as a manufacturing organization. I mean, we've made hundreds of batches now at the 4,400-liter scale for BIVIGAM. This is what our production team likes to do. This is what our supply chain folks and our manufacturing team likes to do. And they're doing it well. So I'm very, very proud of the team for doing this. Appreciate the agency, FDA's review of our submissions. And I think that this is just the sign of our company growing up as a more mature manufacturing organization. Regarding pediatric percentage of PI patients, I don't have that information right now. in front of me, so I reserve the right to follow up, Anthony, and you can publish it in a note. Look, we think it's a very nice thing to have in our label. It's a federal requirement to run and fulfill the pediatric study requirements, so we hope that shareholders see that we don't shirk our responsibilities. We take them seriously. We've completed the study for Bivagam. The pediatric study for Ascended is currently enrolling. Do I think that it helps add more patients to drug therapy? Maybe. I think that patients who need IVIG, are there pediatric patients on our products? I would say I believe that there are, yes. I think that it just helps. I think that it puts us at parity with a number of our competitor products, and we feel very, very good about the potential to expand the label for pediatric as that study has been fully completed and we've submitted our regulatory packet to the agency. Thanks again. Thanks, Anthony.

And thank you. And if you would like to ask a question, that is star 11. Again, if you would like to ask a question, that is star 11. And one moment for our next question.

And our next question comes from Kristen Kluska. Your line is now open. From Kanthor, your line is now open. Hello, Kristen. Is your line on mute?

Please unmute it.

And one moment, please, for our next question. And our next question comes from Elliot Lilber from Raymond James.

Your line is now open.

Thanks. Good afternoon. Can you hear me all right?

Hey, Elliot. We hear you loud and clear.

Okay. Okay. A little bit of a challenge today getting into Q. Maybe I can start with a couple of questions for Brian and just specifically thinking about expectations of positive EBITDA, no later than the second half. I just wanted to confirm that the EBITDA metric that you're referencing is in fact an adjusted EBITDA number and would exclude stock comp expense. And maybe within that, if you could just give us a rough ballpark number of what you're thinking about in terms of depreciation expense. I think it was like 1.7 million last quarter. I don't know if that's just a good run rate to think about over the course of 2023 or not, but some color there, please.

Sure. Thanks for the question, Elliot. Yes, I would say if you were to look at our fourth quarter and even third quarter depreciation, amortization as part of our EBITDA calculation, which would be an adjusted EBITDA, positive EBITDA, no later than the second half of 2023, that would exclude stock-based comp, depreciation, amortization, While we haven't given formal guidance on ranges and dollars, we think it's a tremendous forward-looking accomplishment in a very short period of time. And then to follow shortly thereafter that, we feel very confident about our positive cash flow and profitability on or before the first quarter of 2024.

Okay, thanks. And if I may, an accounting question for you. Can you just talk about the plasma center collection costs on the P&L currently and how those would change or progress, I guess, as more collection volume is utilized for your own production? So you'd recall that some of that would get rolled into inventory and not be running through the P&L, but I just wanted to verify that and how we should be thinking about that with respect to your margin targets?

Sure. Again, thanks for the question, Elliot, regarding the plasma centers and expenses, especially from an accounting standpoint. So as our centers ramp up, there are initial marketing, operational expenditures, administrative expenditures that are charged to the P&L up front as an expense. Now, as those centers start collecting and they receive FDA approval, The plasma itself that's collected is then allocated or earmarked, charged to the balance sheet. So as all 10 centers are essentially up and running and collecting plasma now, as everyone knows, we have eight FDA-approved centers. We expect to have the remaining two approved by the end of this year. You know, just this time last year, we had six operating centers and only three approved. At the end of 2022, we have nine operating centers and seven approved. And we just opened up our 10th center this quarter. So I would expect operating expenditures for the plasma centers to decrease because as those centers now are all online, we're going to be able to continue to capitalize the inventory, capitalize the plasma that we're collecting into inventory. A lot of those startup costs have already been born or incurred into those centers.

Okay, thanks. And not to delve too deep into the minutiae, but we do get the question a lot as people are looking at the company's margin targets versus some of the peer group. But if I think about the Plasma Center expenses being roughly $5 million a quarter, so that will not entirely go away. There will still be some level of expenditure, but some substantial portion of that will just get rolled into inventory?

That's correct. That's correct. So I wouldn't take the $5 million as a forecaster from the standpoint of rolling out quarter over quarter over quarter to be $20 million by the end of the year. As I mentioned, you could consider it sunk costs. Those costs have already been expensed in the fourth quarter. So when you're thinking about the first quarter of 2023, I would expect, because now all 10 centers are operating in the first quarter of 23, a lot of those expenditures have already been born in the fourth quarter of 22, and those expenditures in the first quarter of 23 will be capitalized to inventory as our plasma collection costs directly into raw material inventories for production of, obviously, Divigam, Is it going to step down materially? I mean, we haven't given singular guidance on individual operating expenditures, but I would say that the $5 million would step down quarter over quarter in a meaningful enough way that from a contribution standpoint, inventory will step up and stay within the range of the $150 to $175 million, as we said in the past. And then as we're thinking about how does that impact the overall profitability of the company, well, that's just going to help accelerate the profitability because the centers are all online, operating efficiently, and the cost will be capitalized or a majority of the cost will be capitalized to inventory.

Okay. Thanks. And then a couple questions for Adam.

There will still be administrative operating expenditures for For the centers, don't get me wrong, it's not going to go to zero, but there are overhead expenditures and just continuing operational expenditures. But when you think about it, it's the majority of those expenses will be capitalized to inventory.

Okay. A couple questions for Adam as well. Adam, can you just talk a little bit about what you're seeing on the demand side in terms of visibility on pull-through? whether you think based on current production volumes, you're in a position to be competing for new customers, or do you think the majority of finished product is going to go to existing customers? And then if you could share any anecdotes that you may be hearing in terms of reimbursement and persistence of therapy on incentive, whether or not patients that start on a Sunday if we're able to continue on it, or are we seeing, you know, maybe an increase in cycling back to standard IVIG products?

I will try to – I was making notes. I'll try to touch them all. If I missed something, just ask. But no, no, thanks for the question. You know, not to sound like a broken record, but demand is strong. As I know you know, but for those who may not who are listening – Typically, if you're a primary immune deficient patient, you have a genetic defect that requires you to get IG infusions every three to four weeks for the rest of your life. If you have secondary immune deficiency, depending upon your condition, if it's an organ transplant, you're immune compromised for your life, so you typically may stay on IG for longer periods. If you had a bone marrow transplant or maybe you're getting some type of short-term monoclonal therapy that renders you to be immune compromised, you may be on IG for a shorter period of time. But, you know, what we're seeing is we're seeing continued use by our existing customers. Obviously, there's growth. We've been ramping up our production throughput over the last year, year and a half. And as we said last year, and as I said in the prepared remarks, you know, we've got unique visibility because The product that we're selling today, we made last year in the first quarter, in the second quarter. So we certainly have the inventory there. I mean, we ended the year $160-ish million of inventory, and we feel that that certainly will support $210 million or more in top-line revenue. But it's durable, Elliot, and we're seeing continued utilization by existing patients and prescribers. And we are seeing new prescribers being added every month, every quarter. We're also self-regulating. I mean, we kind of live in this world that's a little different than some of the larger players in the immunoglobulin space. Again, we're really, you know, 99% outpatient. We work with great specialty pharmacies, great home infusion, and we're freestanding ambulatory infusion clinics as well as doctor's offices that do IG infusions. And we're really building brand loyalty. We're building great relationships with our prescribers and these infusion pharmacies. And we're able to really, I don't want to say choose who our customers are, but we're working with folks that, A, pay their bills on time, and, B, order and stock inventory according to contract. It's a symbiotic relationship. We guarantee the continuity of care with our supply, and they have it available for their patients when they need it. Again, we're the only IG manufacturer who's not pushing any other plasma-derived therapy. So we don't have to sell albumin. We don't have to sell coagulation factors. We're not selling any other novel, unique plasma protein. So we really feel very good about the position and the demand utilization there. The inventories in the channel are normal, if not a little bit thin, depending upon the vial presentation. But I can tell you that, you know, we are committed here and we are pushing more plasma into the plant than ever before to ensure that continued growth trajectory for both products. You asked a question about persistence of patients on incentive therapy and You know, a lot of people ask us that same question, Elliot. I know that they ask you that question, and I'm sure that they ask the other analysts as well. And what I can say is, yes, the patients that are starting on therapy, based on the input and data that I have available to me, the majority of patients that were on Ascentive at the end of last year are continuing on therapy at the beginning of this year. I'm aware of very few patients that have come off therapy and switched back to normal IG. Obviously, as people change their insurance, as they move to different states, as they have changes in their life, things certainly happen. But I can tell you that the patients that are being monitored by the clinicians are remaining on therapy. It's durable. There's no seasonality in the utilization of incentives. I think that's something that I think is a question we also get, Elliot, and You know, what more can I say? You know, I know too much about the first quarter, and I'm trying very hard to keep my mouth shut. But, you know, I just think that we will continue to see record utilization and pull-through for Bibigam and Ascentive as we progress throughout 2023. We wouldn't be this... optimistic about our financial guidance and increasing and tweaking the language. I mean, we do take it very seriously. For those of you who are listening, I probably know most of you, and I've known you for years, and I like to under-promise and over-deliver. My team enjoys it as well. Last year was a tremendous year for us across all measures, and we want to set targets that are achievable, that we believe we can easily meet in the face of macroeconomic challenges. but also that we have a high likelihood to beat. So, yes, durable utilization for incentive, durable pull-through. My commercial team has promised, and sometimes I look at them and I go, all right, show me, prove it, and they're doing it. So, you know, unfortunately, I don't make the rules. The SEC says we file first quarter numbers on or before May 15th. But, you know, I think that investors and our analysts, you can anticipate continued durable utilization, continued patients on incentive therapy and growing Bibigam utilization across the IG and immune-compromised patient landscape.

Got it. One more question, if I may, and hopefully I didn't miss this in your prepared commentary, but can you just talk a little bit about what you're seeing in the collection center level in terms of the capacity utilization of the various centers, donor and foot traffic trends. There's been some media about very heavy volumes at the border with the U.S.-Mexican border. I know that doesn't directly impact your business, but just wondering if there's any corollary there. And then more specifically, given the strong performance of Ascentive, I know that you still have the ability to source high RSV titer plasma from your prior supplier, but maybe just talk a little bit about, you know, what you're seeing in terms of your internal, excuse me, internal sourcing of high RSV titer plasma at your captive collection centers. Thanks.

So, Elliot, I'll take the plasma center question. You know, visibility has never been higher on our pathway to supply self-sufficiency at our centers. We received, I would say, accelerated approvals. Last year, all 10 centers are opening, so have been opened, and are operating and collecting. So we are clearly on track to receive FDA licensure for all 10 centers or call it the remaining two by the end of this year. All the centers are operating very well. certainly above where we were pre-pandemic, and collections are certainly meaningfully exceeding our pre-pandemic levels. As it relates to collections for Bibigam, Ascentive, and even Nobby, for that matter, yes, we have some other third-party contracts, but our own source plasma from our own 10 centers will more than meet the demands for the revenue forecast that we've set over the next couple years. But... You know, our goal is collect as much plasma as we possibly can. Plasma is going one way, and we feel very confident in our collection abilities and getting these centers open and approved.

And I think we messaged in one of the last quarter calls or maybe it was during the financing, you know, we've invested into our own laboratories here, and we've identified ways to – potentially screen and identify the hyperimmune RSE plasma donor faster. And as we continue throughout 2023, we think that we'll be able to shift to more of this testing in-house. And I think that that will help us to ensure that we have as much plasma as we need to make incentive and as much normal source as we can get. I think also something that our team always works on here is Third-party supply contracts, we're even working with some new collectors now, potentially bolstering and augmenting our internal supply and our existing third-party contracts with some new ones. These are not huge quantities of plasma, but every batch is 4,400 liters. And if we can get more plasma, we can produce more. We've got more production slots available, switching incentive to the 4,400-liter scale, and it's all falling into place. So I'd like the inflationary uh headwinds to subside just because uh you know it's it's crazy out there but um uh it certainly has not been uh slow for our collection center so uh we're really really happy with uh the job they're doing and um from what i can see we've got uh good inventories of material elliot so uh i don't see i don't foresee any issue uh with us meeting or exceeding um even the out year revenue and financial targets that we set for the business.

Thanks, guys.

Thank you very much. And thank you. And one moment for our next question. And our next question comes from Kristen Kluska from Kantor. Your line is now open.

Hi, everyone. Thanks for taking my question. Congrats on a great 2022 and continued success, really, especially when you consider coming back from some of the hardest times of the pandemic and the macro environment we're in. So wanted to ask, given your initiative to unlock new growth opportunities, You know, Adam, you started to comment about ways you're looking to measure and source more plasma from those with sufficient levels of NAV tires to RSV. So I know there's just a small percent of people who have these levels, but naturally if your footprint is increasing across your centers, I would imagine that you're collecting more of this plasma. So how could this initiative and some of these changes also help to, you know, consider some of your revenue goals and even potentially exceeding them?

Sure. Thanks for the continued support and thanks for the good question, Christian. Hope you guys are well. You know, I think what we say in our public filings is roughly 10% of people have the titers that we're looking for. What's nice about collecting the majority of this plasma yourself, and look, we still work with Griffles. That supply contract is in good standing through mid-2027. We've got some other smaller collectors who we work with on high-tire RSV plasma as well. But what I can say is I can't force them to call this donor back and get that donor in a chair. I can force Brian and our plasma collection centers to spend some time, spend some effort, get the donors who we know have high levels of neutralizing antibodies to RSV and get them to come in. And we can target incentives. We can roll out the red carpet, whatever we need to do, but we have much more control over those donors that are coming into our own centers. So while 10% of people or less have the antibodies that we're looking for, that doesn't mean that only 10% of the plasma that we collect will be high-titer to RSV because we can manage which donors are coming into our centers. So, you know, it's a science, it's an art, however you want to view it. But, you know, these are special people. And we really take it very, very seriously. And we have targeted programs to bring these folks in. So, we really think that having this control, and this was what we set out to do in 2020 when we embarked on this supply chain robustness, is take over the control. And, you know, I don't want to say that we can choose which bodies are in the donor bed that day, but we can certainly do our best to continue to call, motivate, and incentivize the RSV high-titer donors to come back. Your other question was around some of the growth opportunities. And, you know, the 4,400 scale, as I talked about, certainly will expand access to more incentive at the market, and obviously will open up more production slots to make any of our IG products. But we're really excited about the potential growth yield enhancement initiatives. So we're looking at taking some of our discard fractions, and in our discard fractions, there is IG. And if we can unlock the ability to harvest some of this product, then look, this will take some comparability work, this will take a submission to FDA, but we do feel that there could be for a very, very modest investment. These investments on yield enhancement and enhancing our RRSP testing capabilities, these are investments, but they're not material to the point that they're going to impact our cash on hand and our profitability outlook. For very small investments, we think that these are activities that are going to really reap tremendous benefits for the overall financial outlook. And we're not yet prepared to quantify this, but You know, we still are saying it's, you know, a 70-30, 60-40 revenue split between Vivigam and our higher margin hypermunions, Ascentive and NaviHB. Don't want to forget Navi. Navi's hanging in there. You know, 60-70% margins. We love that product. Ascentive, you know, in the 80s range and, you know, Vivigam's margins improving into that 30-40% range. we think that we've got the opportunity to be in that 50% to 60% gross margin, bringing 25%, 30% to the bottom line. So we feel really good about this. And as we expand more on our fill-finish capabilities, as we expand and hopefully can unlock some additional yield through some of these exciting process development programs that we've been executing in the first quarter, I think that the guidance that we've given is only the beginning, Kristen. And, you know, I want to make everybody happy. Can't do it all at once. But I think that our company really has bolstered itself with some really great thought leaders, some really great staff here. And I think that we are positioning this company for continued success and growth.

Thank you for that. And now that you have a lot more experience with incentive, and I know that you opined in the press release that publications are potentially in the works. Looking back at the clinical trial experience, I think you had about 60 patients there. So I'm wondering now that you have this kind of real-world experience, if the effects that you're familiar with, at least, are in line with what's on the label, if you're seeing even, you know, better benefits if patients are on the treatment longer, really, like, anything that you can help us understand outside of just the label experience.

You know, I am hearing my compliance team whispering in my ear, Kristen, you know, I think there have been some publications out there. There is certainly some data that have been published by certain KOLs in the community. I think we've had a couple publications as well at the medical conferences, medical meetings. And, you know, I could hypothesize in private with you, but to just, you know, state what I just don't have robust data for right now I don't think would be appropriate. But what I can say is that You know, I'm a big believer that clinicians prescribe products if they work. Just because a label says something, sure, they may try it, but they're not going to keep a patient on therapy if it's not doing what it's intended to do or better. I think Ascentive, especially at its price point, I mean, I think that there are high expectations for the drug. And I think the best way to answer your question is that, you know, we are seeing durable and persistent reordering patterns. We're seeing durable utilization. We're seeing increased pull-through, plain and simple. And I think that that comes from a product that is delivering results that are above and beyond what maybe were even measured in a clinical trial. Our data for Ascentive, and again, it was not a head-to-head study against any other IG product But our data for Ascentive showed a very low rate of antibiotic use, a very low rate of days missed of work and school, a low rate of hospitalizations. You know, anecdotally, and I think this is probably in the publication, you know, patient diaries, again, these are, again, anecdotal supplements of data. You know, people felt good on the product. They felt better. And if you look at our Ascentive.com website and if you poke around there, you know, This is not a drug for everybody. This is for the patients that have chronic and persistent infections. These are patients who are failing or not thriving standard IG therapy. They need a change. We heard that from the Senate patient speakers at our national business meeting. And I really just feel that there's something unique about the antibody profile of the product. I think that RSV, again, is that marker for these high responder donors. And there is some data published there, but But I really feel that the fact that the product is continuing to grow, I think that that answers your question without me saying something that's going to get me yelled at by somebody. So that's the best answer I can give you, and I hope that that's okay. And I just think, you know, look, there's more data coming out. There's more data that's published all the time. And I think as we continue to make progress with the products utilization and penetration. I'm excited for what lies ahead for the future for the PI population and for our company.

Great. Thank you. Looking forward to seeing what you have in store for us this year.

Stay tuned, Kristen. We will hopefully not disappoint.

And thank you. Ladies and gentlemen, this concludes our question and answer portion of the call. I'd like to turn it back over to Adam for additional closing remarks.

Thank you, everybody. Just want to thank you all for your interest in ADMA Biologics. We appreciate your continued support. Donate plasma if you've got plasma centers near you. And we hope to continue to keep the shareholders happy, keep the patients happy. And, again, thank you to my staff. The whole team can't do it without you, so all of our advisors and everybody, keep fighting the good fight and rock on. Take care, everybody.

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