ANI Pharmaceuticals, Inc.

Good morning, everyone, and my name is Ashley, and I'll be your conference operator. At this time, I'd like to welcome everyone to A&I Pharmaceutical's fourth quarter and full year 2022 financial results. Our lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. At that time, if you have a question, please press the star key followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded today, March 9th, 2023. It is now my pleasure to turn the floor over to Ms. Judy DiClemente, Investor Relations for A&I Pharmaceuticals. Please go ahead.

Thank you, Ashley. Welcome to A&I Pharmaceuticals Q4 2022 Earnings Results Call. This is Judy DiClemente of Insight Communications, Investor Relations for A&I. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer, and Stephen Carey, Chief Financial Officer of A&I. You can also access the webcast of this call through the Investors section of the A&I website at www.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 A&I 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 FCC. 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, anifarmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on March 9, 2023. 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 Lalwani. Nikhil?

Thank you, Judy. Good morning, everyone, and thank you for joining our call. 2022 was a landmark year for A&I, taking us past critical inflection points for our two critical growth drivers, our rare disease business with the successful launch of our foundational asset, purified cortofan gel, and our generics business with the acquisition and integration of Nividium, a best-in-class generics R&D organization. The significant achievements of 2022 further strengthen ANI to deliver sustainable, competitive, and profitable growth. We keep the patient at the center of everything we do and remain deeply committed to providing high-quality medicines to patients in need. I'm proud to report that for the full year 2022, ANI revenues totaled $316.4 million, surpassing the $300 million mark for the first time in the company's history. This is an increase of over $100 million and 46% year over year. In the fourth quarter, revenues grew by nearly 55% to $94.2 million, a company record for quarterly revenues. We delivered remarkable growth in adjusted non-gap EBITDA. from $4.3 million in the first quarter of 2022 to $23.3 million in the fourth quarter. Let me now turn to the two strategic imperatives that we need to remain focused on to drive sustainable, profitable, and competitive growth in 2023 and beyond. The first imperative is scaling up our rare disease business. Our foundational asset purified cortisone gel has experienced great momentum through the first year of launch. As you would expect, we made tweaks in our strategy as the launch unfolded. We are pleased to report that the fourth quarter sales totaled $17.6 million, and for our first year of launch, total sales were $41.7 million. Importantly, according to IQVIA, the ACTH class of therapy has gone from consistent year-on-year declines to year-over-year unit growth for the first time since 2019. From June 2022 to January 2023, the ACCH category has seen eight consecutive months of year-on-year growth. As of March 8th, cumulative new patient cases initiated increased to more than 1,120, with more than 510 unique prescribers. We are pleased that we have continued to see growth in the number of new unique prescribers and an increasing number of healthcare providers becoming repeat prescribers. Overall, we have seen prescriber interest in having an alternate treatment in the ACTH category continue to build. Many of our prescribers had previously slowed or discontinued use of the ACTH class and have restarted their use of ACTH therapy after the launch of purified corticofin gel. Prescriptions continue to be distributed across our targeted specialties, which include certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis and rheumatoid arthritis and excess urinary protein due to nephrotic syndrome. We have actively participated in the key national and regional medical conferences and have also initiated peer-to-peer programs across these specialties to educate physicians, to increase awareness and understanding of cortofan gel. Our peer-to-peer education programs have been well received with positive early feedback. We have invested and are continuing to and are continuing our efforts with the PDMs and payers across commercial, Medicaid, and Medicare to expand market access for cortofan for the appropriate patients in need. In addition, we have further strengthened our patient services and reimbursement teams to support access to cortofan gel and reduce the time taken from enrollment to fulfillment. In parallel, we have taken several initiatives to increase effectiveness of our highly experienced sales force. In 2023, we will augment these efforts with enhanced data to improve prescriber targeting. With the momentum from our launch, we will also commence modest expansion of our sales force to focus on pulmonology. Looking ahead, And as Steve will discuss shortly in more detail, we expect 2023 revenue from cortofan gel to be in the $80 million to a $90 million range, and the cortofan SGA increase to be estimated at approximately 10%. We believe that ANI has built a rare disease platform successfully, encompassing medical affairs, patient support, market access, and specialty pharmacy distribution. The success of our foundational asset, Purified Cortofan Gel, has given the company confidence, and we are actively exploring assets to acquire or partner on to leverage the platform and scale of the rare disease business. Before I move on to our generics business, I would like to share an important point. During the early days of the launch, we believed it was important to share detailed metrics to give investors insight into the dynamics of and progress of our launch. As the Cortofin launch has gathered momentum and investors have gained further confidence, we have decided to pare back sharing competitively sensitive detailed metrics such as number of prescribers and patient cases initiated. Moving now to our second strategic imperative, driving generics business growth to superior new product launch execution, cost excellence, and supply reliability. Sales of our generics pharmaceutical products grew 46% year-on-year. We launched several limited competition new generics and retained a top 10 ranking in terms of ANDA approvals. In addition, ANI continues to retain the second ranking for competitive generic therapy approvals. This is especially impressive given the scale of our genetics business and the large number of companies that compete in the U.S. genetics market. In 2022, we filed 12 ANDAs and expect to continue investing in genetics R&D to support our growth aspirations. We are also making large strides in the area of cost excellence. The consolidation of our manufacturing network is on track. Manufacturing operations ceased at the Oakville interior site in January 2023, and the relocation of Oakville products to U.S. facilities have been completed. We are in active discussions with potential buyers for the Oakville site. And once fully executed, this operational efficiency is expected to improve GAAP profitability and cash flow by $7 million to $8 million on an annualized basis. Looking ahead, we have augmented our analytical and development facility in Chennai, India. The facility completed a successful FDA audit with the FDA in 2022. Today, over 60 skilled colleagues at the facility contribute materially to ANI's efforts to serving patients in need. Over the years, ANI has built a strong reputation as a reliable supplier to patients and customers. We have invested in maintaining healthy inventory levels, both for materials and finished goods. All of our manufacturing facilities are in the U.S., and our domestic supply chain further enhances our reliability as a supplier. Finally, the strong compliance and audit history across our facilities exemplifies our efforts to deliver high-quality medicines. Most recently, during the fourth quarter, the FDA conducted a routine good manufacturing practices audit at our facility in Bonette, Minnesota. We have implemented all corrective and preventive actions needed, and we have already received a favorable establishment inspection report, or EIR, classifying that our Bonette facility is voluntary action indicated, BAI. I am proud of the dedicated work of our employees in our genetics business, with over 20 million prescriptions filled using ANI medicines. In summary, 2022 was a landmark year for ANI, taking us past a critical inflection point for the key driver of ANI's growth, scaling up our rare disease business. In 2023, we look forward to building on the launch momentum of cortofan gel and acquiring or partnering on other assets that leverage our rare disease platform. Steve will now walk through our detailed fourth quarter financial results and discuss our guidance for the coming year. Steve?