ADMA Biologics Inc

Good afternoon and welcome to ADMA Biologics first quarter 2025 financial results and business update conference call on Wednesday, May 7, 2025. At this time, all participants are in the 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 the company. Please go ahead.

Welcome, everyone, and thank you for joining us this afternoon to discuss ADMA Biologics financial results for the first quarter of 2025 and recent corporate updates. I'm joined today by Adam Grossman, President and Chief Executive Officer, and Brad Tate, Chief Financial Officer and Treasurer. During today's call, Adam will provide some introductory comments and provide an update on corporate progress, and then Brad will provide an overview of the company's first quarter 2025 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 2025 financial results and summarized 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. Excuse me. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon 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 in our SEC filings, in our quarterly report on Form 10-Q for the quarter ended March 31st, 2025, for 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 total revenue, adjusted EBITDA, and adjusted net income. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric is available in our earnings release. With that, I would now like to turn the call over to Adam Grossman. Adam, go ahead.

Thank you, Skylar. Good afternoon, everyone. ADMA's momentum is carried strongly into the first quarter of 2025, demonstrating robust execution across all aspects of our business. The advantages of our vertically integrated U.S.-based supply chain, along with our domestic commercial footprint, have proven critical in the current geopolitical and trade landscape. This strategic positioning has enabled uninterrupted operations and consistent fulfillment of demand. even in the face of escalating global tariff tensions. With our focus solely on the U.S. healthcare ecosystem and completely domestic plasma sourcing, production, and distribution operations, we believe ADMA is uniquely insulated from the tariff and trade volatility potentially affecting our multinational competitors. The recent approval of our innovative yield enhancement production process marks a pivotal achievement for ADMA. and has anticipated to provide 20% more bulk IG from the same starting plasma volumes. As the first U.S. producer of plasma-derived products to achieve regulatory approval for a novel yield enhancement process, ADMA continues to demonstrate its leadership in modernizing and advancing plasma fractionation through agile, forward-thinking scientific development and execution. We commend our team for advancing this new production process from concept to approval with speed and capital efficiency. And we thank the FDA for its thorough and timely review, as well as the agency's commitment to expanding IG access for immunocompromised patients throughout the US. With our innovative capital efficient and robust internal R&D engine, we believe, which we believe has been further validated with this FDA approval, We look forward to confidently advancing our R&D platform, further optimizing production capabilities, and progressing novel pipeline programs, most notably SG001, which exemplify our commitment to product and process innovation and meeting the unmet medical needs for immunocompromised patients. Our financial results for the first quarter reflect substantial growth in operational achievements. Total revenues reached $114.8 million on a reported basis, representing an impressive $32.9 million year-over-year increase and marking a growth rate of approximately 40%. Adjusting for the one-off voluntary product withdrawals during the quarter, total first quarter 2025 revenues would have been $118.6 million, representing approximately 45% year-over-year growth. Illustrating ADMA's still nascent operating leverage, first quarter 2025 adjusted net income and adjusted EBITDA grew by approximately 87% and 81% year over year, respectively. These results underscore the efficacy of our biologic therapies for immunocompromised patients across the U.S., as well as the dedication and expertise of our leadership team and exceptional staff. Driven by our commitment to financial and operational excellence, we are yet again raising guidance for both 2025 and 2026. For 2025, we are increasing total revenue guidance to $500 million or more, increasing adjusted EBITDA guidance to at least $235 million, and reaffirming adjusted net income guidance of $175 million or more. This upwardly revised 2025 guidance excludes potential accretion from the monetization of products sold using the now approved enhanced yield process, which is a function of conservatively contemplating assumptions around timing of the production ramp up and lot release timing. We are additionally increasing top and bottom line guidance for 2026, enabled by recent FDA approval of our enhanced yield production process, as well as our ongoing commercial momentum. This increased 2026 guidance consistent with historically provided financial targets, reflects assumptions of continued margin expansion as our revenue mix shifts towards incentives. Accordingly, for 2026, we are increasing total revenue guidance to $625 million or more, adjusted EBITDA to $340 million or more, and adjusted net income guidance to at least $245 million. Further yet, we are increasing our total annual revenue expected to be realized prior to 2030 to $1.1 billion or more, up from the prior guidance of $1 billion. On ADMA's pathway to reach this rapid revenue growth, the company expects meaningfully outsized margin expansion during the same periods prior to 2030. Through the first quarter of 2025 and subsequent periods, we have driven outsized demand for our commercial products, including both Bivigam and Ascentis, with demand consistently exceeding our prior supply capabilities. New patient starts continue to grow, and forward-looking demand indicators remain robust. Furthermore, we believe recent expansions in both third-party and internal high-tider plasma supply have markedly de-risked our growth trajectories and enhanced our visibility for continued revenue growth and margin expansion. All told, we are increasingly confident in our ultimate ability to drive total incentive annual revenues alone to potentially $1 billion or more, with lasting growth and branded durability at least through 2035. We believe our strong balance sheet, capital flexibility, and growing cash and receivables provide a robust buffer against volatility in the current credit and equity market backdrops. Cash on hand and accounts receivable grew to a combined $171 million at the end of the first quarter, and we anticipate significant sequential operating cash flow growth throughout 2025. As detailed in our recently announced debt reorganization with Aries Capital Management, ADMA paid down all but $2.5 million of the term loan using available proceeds from the revolving credit facility. Due to the lower interest rate spread for the revolving credit facility compared to the term loan, this reorganization provides for a 1.1% nominal reduction in ADMA's total cost of debt. ADMA remains committed to optimizing its capital structure and continuing to organically pay down its total debt over the near term. Additionally, we are pleased to announce that our Board of Directors has recently authorized a stock repurchase program that will allow ADMA to purchase up to $500 million of its common stock, or approximately 8% of the company's total current market cap. We will be opportunistic in deploying these repurchases, which will be enabled by the anticipated strong balance sheet and forecasted earnings and cash generation moving forward. The collective impact of these assertive initiatives are intended to instill confidence in our stockholder base. that ADMA's management team and board of directors are aligned with you, our stockholders, and we are committed to generating durable stockholder value. We believe ADMA is executing from a position of strength, delivering durable branded growth in underserved markets, and building what we expect will be one of the most resilient and scalable earning streams in the biopharma complex. In addition, ADMA is pursuing capital efficient initiatives to further diversify its uniquely leverageable business model, particularly through the advancement of its lead pipeline program, SG001, a novel and proprietary hyperimmune globulin targeting strep pneumonia. We anticipate generating proof of concept animal data by year end, and if successful, we believe we will be able to rapidly advance the program into a registrational trial. Crucially, we remain materially non-reliant on near-term regulatory catalysts, and we believe that we are largely insulated from potential disruptions at the FDA. As we continue to advance what we believe is a top-tier growth profile within the sector, it's important to highlight that in the current healthcare backdrop, that ADMA's product portfolio remains insulated from government price negotiations that affect other sectors of the pharmaceutical industry. This differentiation further underscores ADMA's strong reimbursement profile and growth durability. As we reflect on our successes and upwardly revised projections, we do want to take a moment to express our sincere congratulations and appreciation to our phenomenal staff. Your unwavering commitment, dedication, and hard work have been instrumental in driving ADMA's progress and achievements. It is your passion and resilience that enable us to navigate the challenges and seize opportunities in this dynamic environment. Collectively, we look forward to continuing our journey of innovation and excellence in service of our mission. With that, I'd now like to turn the call over to Brad to review first quarter financials in more detail.