ADMA Biologics Inc

Good afternoon and welcome to the ADMA Biologics second quarter 2023 financial results and corporate update conference call on Wednesday, August 9th, 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 second quarter 2023 and recent corporate updates. I am joined today by Adam Grossman, President and Chief Executive Officer and Brian Lind, 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 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 second quarter 2023 financial results. and summarize 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 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, as well as 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 2022 annual report on Form 10-K for the year ended December 31st, 2022, as well as our quarterly report on Form 10-Q for the quarter ended June 30th, 2023, for a discussion of important factors that could cause actual results to differ materially from these forward-looking statements. Please note that the discussion on today's call includes certain non-GAAP financial measures, including adjusted EBITDA and adjusted net loss. A reconciliation of these 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?

Thank you, Skylar. We're proud to report that we continue to rapidly grow our adjusted EBITDA base, which during the second quarter totaled $6.4 million, representing 160% sequential growth compared to the first quarter of 2023. This accomplishment was facilitated by an impressive 77% year-over-year increase in total revenues, which reached $60.1 million in the second quarter. This robust revenue growth has resulted in meaningful operating leverage underpinned by continued gross profit growth and discipline management of operating expenditures. Based on the strong momentum established year to date, we are now raising fiscal year 2023 total revenue guidance to more than $240 million, upwardly revised from the $220 million previously provided. Additionally, We remain confident in sustaining our growth trajectory in adjusted EBITDA throughout the remainder of 2023 and beyond. The encouraging business trends and compelling forward-looking indicators have enabled ADMA to increase fiscal year 2024 and fiscal year 2025 total revenue guidance to at least $275 and $325 million, respectively. and otherwise reiterate confidence in meeting or exceeding all profitability targets. In our view, ADMA's year-to-date financial results combined with the increased financial guidance place ADMA among only a select few standalone biopharma companies with comparable revenue growth profiles and adjusted EBITDA generation. We believe this financial profile coupled with ADMA's unique asset scarcity value positioned the company amongst an elite biopharma peer group. We believe our continued success in the growing US $10 billion immunoglobulin end market is attributable to our innovative business model, unique product portfolio, targeted medical education efforts, and most importantly, our core focus on treating underserved immune deficient patient populations. Since launching commercially, ADMA has been unwavering in its specialized focus on the primary immune deficient patient population, and we believe it is this concentration that has enabled ADMA to maintain its position as the fastest growing provider of immune globulin in the United States marketplace. During the second quarter, we treated a record number of primary immune deficient patients and gained strong market share, paving the way for promising new business prospects and expected go-forward success in this market segment. Our evolving product mix continues to maintain its favorable and strengthening trajectory in 2023. We believe the growth of Ascentive is driven by its unique composition and utilization among immune globulin therapies and its real-world evidence to improve outcomes for at-risk immune-compromised patients with primary immunodeficiency, or PI. The value proposition of Ascentive within the immune globulin landscape was further articulated during our presence at the 2023 Clinical Immunology Society Annual Meeting, which took place during the second quarter. At this meeting, ADMA sponsored a well-attended medical education symposium presented by a nationally recognized key opinion leader who spoke about the real-world challenges associated with respiratory viral infections, or RVIs, in patients with PI. Despite the availability of standard immune globulin therapies, experts noted that more than 90% of patients with PI continued to experience recurrent infections and associated complications. Clinical data presented at the CIS meeting highlighted that more than one-third of this population continued to experience bronchiectasis, along with a rapid decline in lung function, adversely impacting outcomes and causing quality of life issues for patients and their families. Of particular significance, certain patients with PI exhibit T-cell defects and thus can experience prolonged RVIs that present risk for bacterial super infections and poor outcomes. The real-world case report presented an at-risk patient that was successfully treated with Ascenev. We are encouraged to see the unique product profile of Ascentive continues to resonate in clinical practice, real world settings. Along these lines, we are seeing signs of patient and prescriber persistence bolstered by a record expansion of new accounts and reorder prescribing velocity among existing customers. We anticipate that this therapy will continue to capture an even greater share of our overall product portfolio mix over the coming period and beyond. During the second quarter and recent periods, we made progress in advancing growth opportunities that will, if successful, further enhance our position in the market and increase our potential earnings power. One such opportunity is the recent successful advancement of multiple incentive batches through production at the expanded 4,400-liter manufacturing scale. This expansion is expected to improve the product's margin profile and increase plant production throughput capacity. supporting our forecasted rapid growth trajectory. We anticipate these benefits may be realized beginning later in 2023 and into 2024 and beyond. Secondly, the advancement of our yield enhancement initiatives is showing promise. The company has made progress with development scale and laboratory analyses, with the potential to increase both peak revenues and margin potential upon the successful validation of commercial scale production and receipt of requisite regulatory approvals. The impact of yield enhancement initiatives, if successful, could provide for potentially transformative upside to the company's peak financial targets. Finally, our ongoing post-marketing clinical studies are progressing well. and may provide label expansion opportunities further strengthening our product portfolio compared to our immune globulin peers. As we have detailed in today's press release, I'd like to reiterate that the increased revenue guidance we have provided does not yet include any potential upside from these growth initiatives should they materialize. We look forward to updating the market on these developments. On the normal source and RSV plasma supply front, We believe we are well prepared to support all upwardly revised revenue forecasts for our immune globulin portfolio. The rapid expansion of our BioCenters collection network, in addition to our contractually secured third-party supply contracts, provide us with the financial and supply chain flexibility needed to meet our immune globulin portfolio's growing end market demand. Currently, all 10 collection centers in our network are operational. with nine now FDA licensed. And we anticipate achieving complete FDA licensure before year-end 2023 for our 10th collection center, after which we believe we will have established cost-competitive plasma supply self-sufficiency. As we reflect on our journey and the milestones we've achieved, it becomes evident that ADMA's success is a direct result of the unwavering dedication and hard work exhibited by our exceptional employees. It is with great appreciation that we recognize the commitment, passion, and diligence that each team member brings to the table, driving our organization's triumphs and enabling us to take complete control of operations, aligning with our core vision. We believe this solid foundation paves the way for even greater expected success in the future. We extend our gratitude to the entire ADMA Biologics and ADMA BioCenters teams for your relentless efforts you put in day in and day out. Your remarkable contributions not only fuel our accomplishments, but also make a meaningful difference in the lives of those who rely on us. It is the collective spirit and teamwork that make our workplace truly exceptional. With this said, I'd now like to turn the call over to Brian for a review of the second quarter 2023 financials.