ADMA Biologics Inc

Good afternoon and welcome to the ADMA Biologics first quarter 2023 financial results and corporate update conference call on Wednesday, May 10th, 2023. 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 Skylar 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 first quarter of 2023 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 ADMA 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 first quarter of 2023 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 first quarter of 2023 financial results and summarized certain achievements in recent corporate updates. This 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 Security 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 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 obligation 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 factor sections of our 2022 annual report on Form 10-K for the year ended December 31st, 2022, and our quarterly report on Form 10-Q for the quarter ended March 31st, 2023, for a discussion of important factors that could cause actual results to differ materially from these forward-looking statements. Please note that today's discussion include certain non-GAAP financial measures, including adjusted EBITDA. A reconciliation of non-GAAP financial measures to the nearest comparable GAAP metric is available in our earnings release. With that said, I would now like to turn the call over to Adam Grossman. Adam, go ahead.

Thank you, Skylar. During the first quarter of 2023, ADMA generated first-time adjusted EBITDA profitability, totaling $2.5 million. This milestone achievement was enabled by an impressive 96% year-over-year increase in total revenues, which reached $57 million in the first quarter. The robust revenue growth translated to meaningful operating leverage, which was a result of continued gross profit growth and disciplined management of our operating expenditures. Based on these trends, we have increased our 2023 total revenue guidance now expected to exceed $220 million, and we anticipate continuing to grow adjusted EBITDA from the newly established baseline throughout the remainder of 2023. Although it's still early for our forecasted revenue growth and profitability cycle, we believe ADMA is now entering a new echelon alongside some of our high-quality industry peers. Based on the year-to-date financial results and considering our newly increased financial guidance. ADMA is among only a few standalone biopharma companies in the United States that are expected to generate total revenues of more than $220 million for the full year of 2023, while maintaining a substantial revenue growth rate and also generating continued adjusted EBITDA profitability. We are proud to now be included in this exclusive set of high quality biopharma companies. Within the $10 billion plasma space specifically, ADMA advanced its position as the fastest growing provider of immune globulin in the United States market, which we attribute to our organization's exclusive focus on the immune deficient patient segment, the immune globulin market's fastest growing cohort. During the first quarter, we treated a record number of patients and gain strong market share among what we anticipate will prove to be sticky books of business. We believe our innovative business model, unique immune globulin portfolio, and targeted medical education efforts position us well for future success. We believe the milestones we've achieved to date validate our core mission to commercialize novel products for immune compromised patients at risk of infection. It is treating this underserved patient population that fuels our organization and drives our company's unified commitment to overachieve and deliver on our operational and financial objectives. Over the past two years, we've communicated an unwavering message about our favorably evolving product mix, and we're happy to confirm that these trends are continuing to strengthen in 2023. Ascentive growth continues to be driven by its uniqueness amongst immune globulin product offerings and the real-world impact and improvements the drug is having on outcomes for problematic immune-deficient patients. Furthermore, we're seeing encouraging signs of patient and prescriber persistence among those who have been using the drug for as long as three years now. This dynamic is being compounded by record expansion of new accounts and reorder velocity among existing customers. We believe that the product will continue to account for a greater share of our overall product mix going forward. We are pleased to announce that during the first quarter and into the second, ADMA made progress advancing its recently identified growth opportunities. To reiterate, the incremental investment required to pursue these opportunities is not significant and is not expected to compromise ADMA's robust profitability outlook. First among these opportunities, ADMA successfully commenced manufacturing of the Senate at the 4,400-liter production scale for the first time in our corporate history. We expect the expansion will meaningfully improve the product's margin profile and increase our plant production capacity as fewer batches will be needed to support our revenue goals. The expanded scale provides for uninterrupted production to support our forecasted rapid growth trajectory. We believe these benefits could be realized as early as the second half of 2023. The second growth opportunity we've identified pertains to yield enhancement with our manufacturing and production processes. Recently, the company progressed with development scale and laboratory analysis advancing ADMA's initiative to capture additional immunoglobulin production yields. Pending further evaluation, validation of commercial scale production, and ultimately 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 progressed as planned during the quarter. and if successful, may provide for label expansion opportunities for both ViviGAM and Ascentive to include pediatric-aged primary humoral immune deficiency patients, as well as additional publications supporting the product safety. The potential label expansion, we believe, would put ADMA's immune globulin portfolio on a level playing field compared to peer immune globulin offerings. Again, these opportunities represent potential upside to currently provided financial guidance. We look forward to updating the market as developments unfold. On the plasma supply front, 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. We believe that the rapid expansion of our internal collection network, coupled with our existing contractually secured third-party supply contracts, provide financial and supply chain flexibility. Currently, all 10 plasma collection centers in our network are operational, and of those, eight are now FDA licensed. we continue to anticipate achieving complete FDA licensure of our BioCenters network, as well as plasma supply self-sufficiency prior to year-end 2023. In a moment, Brian will describe in more detail the credit agreement we announced last week. But from my perspective, we are pleased to have reduced our interest expense by 1%, and we believe the restructuring of the prepayment mechanism provides for additional strategic and financial flexibility. Considered in conjunction with the increased operating forecast we have announced today, we believe an opportunity exists to accelerate net income profitability earlier than previously provided in our timelines. We sincerely appreciate HAFN's continued and collaborative support. Our employees' commitment, passion, and diligence drive our success. We prioritize the human connection in all engagements through cooperation and teamwork among staff, leadership, and our advisors. Our team's unwavering connectivity has enabled us to assume complete end-to-end control of operations, fulfilling our core vision and providing the foundation for continued success moving forward. We thank our staff for rising to the challenge daily. delivering on our pledge to patients, the medical community, prescribers, advocacy groups, and our stockholders. Your efforts make a meaningful difference in the lives of those counting on us. Before turning the call over to Brian, I'd like to confirm that our strategic alternatives process remains ongoing and exploring value-creating opportunities remains a top priority for our company. The strategic alternatives process is separate and running in parallel to our pursuit of new growth opportunities. As developments occur, we will keep the market updated. With that said, I'd now like to turn the call over to Brian for a review of our first quarter 2023 financials.