ANI Pharmaceuticals, Inc.

Good day, everyone, and welcome to today's A&I Pharmaceuticals Q1 2023 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer period. You may register to ask a question at any time by pressing star then 1 on your touchtone phone. Please note this call will be recorded, and I will be sending you by should you need any assistance. It is now my pleasure to turn today's call over to Judy D. Clemente. Please go ahead.

Thank you, Ashley. Welcome to ANI Pharmaceuticals Q1 2023 Earnings Results Call. This is Judy DiClemente of Insight Communications, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer, and Stephen Carey, Chief Financial Officer of ANI. You can also access the webcast of this call through the Investor section of the ANI 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. ANI 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, aandifarmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on May 8, 2023. Since then, A&I 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. ANI remains focused on two strategic imperatives designed to help us serve patients in need and drive profitable and competitive growth. Firstly, the scale-up of our rare disease business with the successful launch of our lead rare disease asset, purified protophen gel, and the potential to add assets that leverage the rare disease infrastructure we have built. This business will be the largest driver of ANI's growth. The second imperative is driving generic business growth through superior new product launch execution, cost excellence, and supplier reliability. These efforts coupled with our... Sorry. These efforts, coupled with our enhanced operational excellence, have enabled ANI to compete and win across our core business segments and to generate record quarterly net revenues of $106.8 million for the quarter and record quarterly adjusted non-GAAP EBITDA of $33 million. Our outstanding operational performance demonstrates the strength we've built in our core business segments And I congratulate the team for their hard work in achieving these outstanding results announced this morning. On the rare disease front, we've continued to invest in the launch of our foundational rare disease asset, purified cortofan gel. We've strengthened the team and improved how we're servicing patients, physicians, and payers, which has accelerated our launch momentum and increased access to ACTH therapy for patients in need. As noted on last quarter's earnings call, for competitive sensitivity reasons, we will no longer be providing more detailed metrics on Portropin. However, we are pleased to report that the acceleration of our launch momentum is evidenced by the record quarterly number of new cases initiated in Q1 2023 and record monthly new patient starts and cases initiated in April of 2023. We are also seeing continued growth in the number of new unique prescribers and repeat prescribers. In fact, many prescribers who had previously slowed or discontinued use of the ACTH class have restarted their use of ACTH therapy after the launch of purified cortofen gel. Our promotional efforts are focused on rheumatology, neurology, nephrology, and pulmonology. We have ramped up peer-to-peer education programs across our three target specialties of rheumatology, neurology, and nephrology to further increase awareness of corticofageal. In addition, we have completed recruitment of and onboarded a modest and dedicated pulmonology sales team. Central to our cortofan gel launch has been our efforts to increase market access for the ACTH class for appropriate patients in need. A critical relevant trend to highlight for the cortofan gel launch is the growth in the overall ACTH category. Prior to the launch, the ACTH category had continued to decline, and according to IQVIA, had not shown year-over-year unit growth since 2019. ANI launched for tropin gel in January of 2022. And from June of 2022 to March of 2023, for 10 consecutive months, the ACTH category has shown year-over-year unit growth, according to IQVIA. In fact, in the first three months of 2023, the year-on-year category unit growth has been in the double digits. First quarter net revenues of cortofan gel were $16.3 million, which was in line with our expectations and bolsters our confidence in our full-year cortofan gel revenue guidance of $80 million to $90 million. We are pleased with the progress of this launch and look forward to enhancing the scale and scope of our rare disease business. We continue to actively explore adding other assets that can leverage our rare disease infrastructure. Next, I will turn to the generic established brands and other revenue segments, which increased to $90.5 million, an increase of 43% over the prior year. These results showcase our ability to use our U.S. manufacturing footprint and agile operations to deliver timely solutions to our customers. During the past two years, we have enhanced ANI's operational excellence by combining longstanding strengths in manufacturing and our strong GMP track record with best-in-class research and development capabilities, all with a patient-first orientation. This has enabled us to capture market demand arising from the numerous supply disruptions impacting patient access to much-needed medicines. We have increased our R&D investment with focus on niche opportunities. We continue to file multiple new ANDAs in the first quarter of 2023 and retained our top 10 ranking in the number of ANDA approvals. We have also retained our number two ranking in competitive generic therapy approvals in 2023. Our efforts to drive cost excellence have included the consolidation of our manufacturing network with the rationalization of manufacturing operations in Oakville, which is now completed. Discussions with potential buyers for the Oakville site are ongoing. In addition, we have augmented our analytical and development facility in Chennai, India, with over 60 skilled colleagues. Equally important are our efforts to ensure reliability of supply. We have a strong compliance and audit track record, enhanced further by recent successful FDA audits across all three sites. In fact, our New Jersey site was inspected in March of 2023 and had zero 483s and an NAI status. Last but not the least, we continue to maintain healthy inventory levels for finished goods and raw materials, allowing us to capture any opportunities arising from market disruptions. These achievements demonstrate ANI's ability to deliver sustainable, competitive, and profitable growth while keeping the patient at the center of everything we do. The overall trajectory of our business boosts our confidence in the 2023 outlook, and we are therefore raising full-year revenue guidance to between $385 million to $410 million, and adjusted non-GAAP EBITDA guidance to between $97 million and $107 million, and adjusted non-GAAP EPS guidance to $2.99 to $3.45. Steve will now walk through our detailed first quarter financial results and discuss the revised guidance for the year in more detail.