ANI Pharmaceuticals, Inc.

Good day, everyone, and welcome to the first quarter 2022 call. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask questions during the question-answer session. You may register to ask a question at any time by pressing the star and 1 on your touchtone phone. I will be standing by should you need any assistance. Please note, this call may be recorded. It is now my pleasure to turn today's program over to Lisa Wilson, Investor Relations for A&I.

Thank you, Emma. Welcome to ANI Pharmaceuticals Q1 2022 Earnings Results Call. This is Lisa Wilson, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer, Steve Carey, Chief Financial Officer, and Chris Mutz, Head of Rare Disease of ANI. You can also access the webcast of this call through the Investor section of the ANI website at ANIFarmaceuticals.com. Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation, or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to ANI Pharmaceuticals Management as of today and involve risks and uncertainties including those noted in our press release issued this morning and our filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. A&I specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. The archived webcast will be available for 30 days on our website, aandipharmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call is held and recorded on May 10th, 2022. Since then, ANI may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings. And with that, I'll turn the call over to Nikhil Lawani.

Thank you, Lisa. Good morning, everyone, and it's great to have you all join the ANI Pharmaceuticals call today. and for your interest in our company. We are looking forward to covering four key topics with you today. First, updating you on 2022 Q1 performance. Second, sharing what we have accomplished and where we are headed on key growth initiatives. Third, providing full year 2022 guidance for the total company. And finally, discussing the organization evolution to capture the opportunities that lie ahead for ANI. First, on quarterly performance, we delivered net revenues of $64.5 million in the first quarter of 2022, an increase of 18% year-over-year. As Steve will detail later, excluding the Yascarta royalty from prior year results, total net revenues would have increased nearly 49% year-over-year. This growth was driven by the acquisition of NVIDIA and the new product launches both from the ANI legacy business and the Novidium acquisition. During this quarter, we launched purified cortofan gel, the lead asset in our rare disease business, and began offering patients suffering from certain autoimmune conditions a choice in ACTH therapy. During the first quarter of the cortofan gel launch, we achieved 1.3 million in net revenues. Our adjusted non-GAAP EBITDA for the quarter was $4.3 million, and the year-on-year reduction in non-GAAP EBITDA was driven primarily by the approximately $11 million of cortofan launch-related SG&A. Now, let me share with you what we have accomplished and where we are headed on key growth initiatives. Our first initiative is to build a successful cortofan gel franchise, the lead asset of our rare disease business unit. On January 24, 2022, we announced the U.S. commercial availability and launch of purified cortofen gel. Cortofen gel has the potential to help patients with certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis and rheumatoid arthritis, and excess urinary protein due to nephrotic syndrome. Before the reintroduction of cortofen gel, and for over 20 years, patients had only one available ACTH treatment option. We are pleased with our progress since launch approximately 15 weeks ago, and much credit must be given to our world-class cross-functional and commercial teams, including a dedicated and experienced rare disease sales force. 95% of our sales territories are already filled, and our clinical account executives, i.e. sales force, have already reached almost 50% of targeted prescribers, and generated awareness of and interest in cortofan gel. Over 125 unique prescribers have initiated over 250 new patient cases for cortofan gel therapy since launch, with approximately 25% of the unique prescribers having enrolled more than one patient. Initial enrollments are distributed relatively evenly across our targeted specialties of rheumatology, neurology, and nephrology. Our launch trajectory has been strong, with growth in the number of new patient cases per week and reduction in the average time from new case initiation to patient dispense. Equally important, our market access efforts have resulted in formulary coverage for over 100 million lives for one or more FDA-approved indications and 16 million lives where we are advantaged. Our wholesale acquisition cost is approximately 23% lower than the wholesale acquisition cost of the only other ACTH therapy available. In addition, our patient services organization remains focused on establishing expanded access to cortofan gel for patients and their caregivers throughout the treatment journey. Finally, our sales performance in April and early May reflects the strong launch trajectory. We've made very good progress in such a short time, and we are pleased to issue 2022 revenue guidance for protrophin gel in the range of $35 million to $40 million. The next key growth initiative I will speak about is driving growth of our generics business by enhancing our R&D capability through the NVIDIA acquisition. The combined team has continued to execute well on ensuring continuity of business operations and capturing synergies from the combination. During the first quarter of 2022, we successfully launched several products with a total IQV market size of $240 million, and with the majority of these launches, such as Mesoprostol, Rifabutin, and Bisoprolol, having three or fewer competitors. Successful execution of these new launches helped counter the impact of business erosion. the pace and value of new launches to help drive growth for our generics business in the subsequent quarters. The R&D organization, under the leadership of Sami Shanmugam, continues to deliver with six new ANDA filings in Q1. In addition, the company retained its leadership in competitive generic therapy, CGT, approvals with securing the CGT approval of BTN and ADRA solutions. Today, ANI has over 20 ANDA files pending with the FDA and over 20 applications and multiple 505 products under development. The company remains focused on strengthening the product pipeline to further increase sustainability of our generics business. We have also made very good progress on driving efficiencies in our combined operations, procurement, and distribution. We will increase efforts in this area to further drive cost competitiveness. Next, I will turn to our established brands business. We are continuing to evaluate potential accretive asset acquisitions to capitalize on and augment our commercial and organizational capabilities. In parallel, we are maximizing the value of the current portfolio through innovative and fit-for-purpose commercialization strategies. ANI is well past the inflection point. and has invested significantly in organizational capability and leadership bandwidth to support our evolution towards becoming a leading biopharmaceutical company. Our rare disease leadership team, led by Chris Mutz, has experienced over 20 rare disease product launches, and nearly 75% of the sales team has won a President's Club or equivalent top 10 sales award in recent years. Our generic R&D team has a prolific track record of delivering limited competition new launches.