ADMA Biologics Inc

Good afternoon and welcome to the ADMA Biologics fourth quarter and full year 2023 financial results and business update conference call on Wednesday, February 28, 2024. 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 Plum, Senior Director, Business Development and Corporate Strategy at Atma 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 of 2023 and recent corporate updates. I'm joined today by Adam Grossman, President and Chief Executive Officer and Brian Lins, Executive Vice President, Chief Financial Officer and General Manager of ADMA Biocenters. During today's call, Adam will provide some introductory comments and provide us an update on corporate progress, And then Brian will provide an overview of the company's fourth quarter and full year 2023 financial results. Finally, Adam will then provide some brief summary remarks before opening up the call for your questions. Earlier today, we issued a press release detailing the fourth quarter and full year 2023 financial results and summarized certain achievements in recent corporate updates. This 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 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 at a 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 and the risk factors section of our annual report on Form 10-K for the year ended December 31st, 2023, for a discussion of the important factors that could cause actual results to differ materially from these forward booking statements. Please note that the discussion on today's call includes certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income. A reconciliation of these non-GAAP financial measures to the nearest comparable GAAP metric is available in our release. With that, I would now like to turn the call over to Adam Grossman.

Adam? Thank you, Skylar, and welcome, everyone. We are extremely pleased with our 2023 performance, which marked first-time adjusted net income and positive cash flow from operations on a full-year basis. We believe these significant milestones are a testament to both our unwavering commitment to the continuity of patient care and steady financial execution for our stockholders. During 2023, ADMA strengthened its position as one of the fastest growing providers of immunoglobulin in the U.S. market and advanced its financial profile to become one of the fastest growing and profitable biopharma companies in the United States. We believe our significantly strengthened balance sheet following the fourth quarter debt refinancing, as well as our robust forecasted earnings growth and cash generation, puts our company in a strong position as we start 2024 and look to the future. Full year 2023 total revenues grew by 68% to $258.2 million. This rapid growth enabled ADMA to generate positive adjusted net income and more than $40 million in adjusted EBITDA on a trailing 12-month basis. We believe these exceptional results speak to the efficiency in our organization's operations and our relentless focus on maintaining top-tier revenue growth while judiciously managing overhead and expenses. We fully anticipate our positive trajectory will continue to drive earnings growth for the foreseeable future. As ADMIS forward-looking business trends gain momentum, we're revising financial guidance upwards for both 2024 and 2025, increasing top and bottom line projections. Based upon current market factors, we now anticipate generating revenues during these periods of more than $330 million and $380 million, respectively. At this level in 2024, we've increased adjusted EBITDA guidance to more than $90 million and adjusted net income to more than $65 million. Similarly, for 2025, we've increased adjusted EBITDA guidance to more than $140 million and net income guidance to more than $115 million. We believe our commercial success driven in large part by the recent and continued growth of incentive utilization, which we believe is attributable to our unwavering focus on the immune-deficient patient segment, especially in those PI patients who suffer from complex comorbidities. This specialized focus, in combination with our innovative business model, diverse product portfolio, and our targeted medical education, marketing, and market access initiatives, have provided ADMA with its highly differentiated messaging and product offerings. We believe we have successfully established an enduring and growing foothold within the US IG landscape. Specific to Ascentive, we are confident that there remains a significant growth opportunity for the product within its targeted addressable market, further penetrating the treatment setting comprised of immune deficient patients grappling with these complex comorbidities. Launch metrics for Ascentive remain broadly supportive, and again, made new record highs across leading demand indicators, including measures of both breadth and depth. All told, we are encouraged to see Ascentive's unique product profile continuing to resonate in clinical practice and the real world setting. The therapy's accelerating demand trends and healthy growth attribution continually catalyze us to favorably rethink the ultimate size of the market opportunity. And we reiterate that we believe we are in the early innings with the product's total potential. Prior to providing an update on our growth initiatives, I'll spend a moment reviewing the recent implementation of our innovative AI program, Admolytics. Over the last year and a half, our internal information technology leadership team has been working tirelessly to develop Admolytics. which has now been successfully tailored to our organization's bespoke needs and implemented for commercial use. Admolytics combines AI and machine learning and is designed to optimize and streamline certain of our intricate production processes. In the complex landscape of specialty biologics production, maintaining uninterrupted operations is paramount. and we believe that Admalytics will further bolster our commitment to ensuring the continuity of patient care. We anticipate the program's rollout across the organization will, in due course, bring far-reaching improvements and efficiencies across our operations and further support the company's rapid earnings growth trajectory. The successful development and implementation of Admalytics aligns seamlessly with our overarching mission, to continuously innovate production processes for specialty biologics, while also building on our reputation as a thought leader within the commercial specialty biologics markets our therapies serve. We applaud the ADMA IT team for their execution and success bringing this innovative software to real-world application. Turning to our 2024-2025 corporate growth initiatives, All activities continue to progress as planned. We've successfully expanded Ascentive production to the 4,400-liter manufacturing scale, enhancing the product's margin, yield, and capacity. We expect to realize these profitability benefits more materially as we progress into 2024. Additionally, our Ascentive post-marketing clinical study is progressing well and may lead to label expansion with a potential pediatric age group if successful. further strengthening our product portfolio relative to competitive IG offerings. Our excitement continues to build as we see the potential impact of our manufacturing IG yield enhancement initiatives. During the fourth quarter, we made significant strides in scaling up our processes and conducting laboratory bench scale runs and analyses. If ultimately successful, we believe enhanced production yields will be transformative and providing increased finished goods output, which would substantially increase ADMA's peak revenue earnings potential. This exciting project remains on track, and we will provide updates as developments unfold. Finally, earlier this year, we provided an update on our patented preclinical hyperimmune globulin program targeting strep pneumonia. While still in the early stages of preclinical development, We are excited to advance this program. Our interest in this potential new product opportunity stems from several key factors. Firstly, the market potential is significant and currently underserved. Streptococcus pneumonia is the primary cause of community acquired pneumonia in the United States, ranking in the top 10 diseases for all cause mortality. The growing prevalence of anti-infective resistance emphasizes urgent need for both prophylactic and therapeutic interventions. Secondly, ADMA holds a strong patent portfolio for this specific hyperimmune globulin, providing for the development of an SNUMO hyperimmune with IP defensible until at least 2037. Drawing from our successful development of Ascentive through clinical and regulatory pathways, as well as our demonstrated commercial launch capabilities, We believe we are positioned to potentially replicate this success with the strep pneumonia program. If ultimately approved, we project this hyperimmune globulin could generate additional future peak revenue in the range of $300 to $500 million annually. To reiterate, as evidenced by today's increased earnings guidance, we will remain highly cost disciplined in advancing this program through the preclinical development program. On the plasma supply front, I'm pleased to highlight that all 10 of our plasma collection centers are now FDA licensed, and collection volumes are trending at the upper bound of our internal estimates. Foot traffic on a same center basis continues to grow and reach new highs. All told, we're confident in our ability to meet the increased production forecasts for our commercial IG portfolio. Reflecting on the journey of ADMA, It's clear that our achievements stem directly from the unwavering commitment and hard work demonstrated by our outstanding and knowledgeable team members. The remarkable evolution from a young virtual biotech startup to a fully compliant end-to-end controlled supply chain and now advancing our position as one of the fastest growing and profitable biopharma companies in the U.S. It's truly rare and remarkable. To our employees, we extend our heartfelt gratitude for your tenacity, perseverance, and tireless dedication, which not only fuels our progress but also leaves a significant impact on those we serve. It's the collaborative ethos and collective effort that truly distinguish our workplace. We deeply value the dedication, enthusiasm, and diligence exhibited by each team member of our team. It's this steadfast devotion that drives our success and enables us to maintain firm control over our operations in line with our fundamental vision. We firmly believe this strong foundation paves the way for even greater accomplishments in the periods ahead. I'd now like to turn the call over to Brian for a review of the fourth quarter and full year 2023 financials.