This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk00: Good day, everyone, and welcome to today's ANI Pharmaceuticals, Inc. Second Quarter 2024 Earnings Results Call. Please note this call is being recorded. After the speaker's opening remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number 1 on your telephone keypad. If you would like to withdraw yourself from the question and queue, please press star 2. It is now my pleasure to turn the conference over to Lisa Wilson. Please go ahead, ma'am.
spk05: Thank you, Katie. Welcome to A&I Pharmaceuticals Q2 2024 Earnings Results Call. This is Lisa Wilson of Insight Communications, Investor Relations for A&I. With me on today's call are Nikhil Lawani, President and Chief Executive Officer, Steve Carey, Chief Financial Officer, and Chris Mutz, Senior Vice President and Head of A&I's Rare Disease Business. 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. 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, A&IFarmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on August 6, 2024. 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.
spk04: Nikhil Lalwani Thank you, Lisa. Good morning, everyone, and thank you for joining our second quarter earnings call. We are delighted with ANI's accomplishments in the second quarter. We achieved both record revenues and a major milestone in our ongoing efforts to expand the scope and scale of our rare disease business with our proposed acquisition of Almera Sciences. The company continues to rise to each challenge and goal, and I'm proud of the team's ability to drive sustained long-term growth while never losing sight of our purpose of serving patients, improving lives. During the second quarter, BNI generated revenues of $138 million, an increase of 18% over the second quarter of 2023. Adjusted non-GAAP EBITDA was $33.2 million, and adjusted non-GAAP EPS was $1.02. Based on our strong second quarter results and the continued momentum that we're seeing across the business, we're pleased to raise our full year 2024 guidance, which Steve will discuss later in the call. Accelerating demand for our lead rare disease acid, purified cortofan gel, and solid growth for generics drove our robust top-line performance. which more than offset the expected established brand's business performance. Protrophin gel generated $49.2 million in revenues during the quarter, up 102% over the prior year quarter and 33% over the first quarter of 2024. The second quarter represented the highest number of both new patient starts and unique prescribers since launch in January 2022. We continue to have momentum in the addition of new prescribers and robust growth from existing prescribers, and volumes increased across all targeted specialties, virology, rheumatology, nephrology, albinology, and ophthalmology. We are pleased to report that the areas of strategic investment behind cortofan gel that we announced earlier this year and late last year including expanding our pulmonology sales team, launching a targeted ophthalmology sales team, and actively promoting the acute gouty arthritis flares indication have been yielding positive results. Our ophthalmology sales team has a strong start and drove significant growth in prescriptions and new patient starts in the second quarter. We also saw particularly strong year-over-year and quarter-over-quarter growth for acute gouty arthritis flares. Corprofen gel is the only ACTH product approved for this indication. As a reminder, we began promotional activities for the acute gouty arthritis flares indication in late 2023. More than 9 million people in the U.S. are affected by gout, and some of these experience acute gaudy arthritis flares as a symptom of their underlying disease. For some of these patients, cortofan gel may be an appropriate additional treatment option for their flares. We have seen increasing momentum in physicians adopting cortofan gel for patients with acute gaudy arthritis flares who have not responded adequately to conventional therapies. We continue our efforts to enhance the convenience and remove pain points for patients starting on ACTH and the healthcare providers who treat them. In the fourth quarter of 2023, we introduced the one ML version of cortofan gel to meet the needs of physicians who desired a smaller configuration of ACTH for certain patients, such as those with acute gouty arthritis flares. Today, We are pleased to report for the first time that we are nearing the completion of development of a 1ml pre-filled syringe offering further benefits to patients and physicians. We plan to file for FDA approval of the pre-filled syringe in the second half of 2024 and are excited about the potential of this product. We look forward to launching this product in the first half of 2025. Turning now to our generics business, which delivered another strong quarter with revenue of $74 million, an increase of 17% over the second quarter of 2023, and 5% over the first quarter of 2024. The solid performance reflected strength in our base business, coupled with contribution from new product launches. We launched four new products in the second quarter, each into limited competition markets in generics. We have launched three new products so far in the third quarter and have a number of products pending approval that we expect to launch in the second half. We made substantial progress on bringing online the significant capacity expansion at our New Jersey site and believe all 15 new manufacturing suites and the new QC lab will be fully operational in the second half of 2024. The New Jersey site expansion will support the future growth of our genetics business. Revenue for established brands was $14.9 million during the quarter, a decrease of 49% from the prior year period. The performance was anticipated and in line with our expectations and guidance. As a reminder, we noted on the first quarter call in May that we did not expect the tailwinds arising from competitor supply dynamics to persist beyond the first quarter. In June, we delivered a major milestone in our growth strategy with announcing the proposed acquisition of Alamaro Sciences. This highly synergistic transaction will add two commercial assets in ophthalmology to our rare disease portfolio and more than $100 million in highly durable branded revenue annually. The acquisition is aligned with the M&A strategy we laid out over the past several quarters. Specifically, this transaction will expand the scope and scale of our rare disease business and strengthen one of our priority therapeutic areas of ophthalmology, which is also a key specialty for our lead rare disease asset, cortofan gel, and the overall ACTH market. The deal will provide ANI's two durable assets with double-digit growth. With Almera, ANI's rare disease segment would account for approximately 45% of the total company revenues on a pro forma 2024 basis. and we expect rare disease to be the largest driver of the company's future growth. From a financial perspective, we expect high single-digit to low double-digit accretion in adjusted non-GAAP EPS in 2025, with substantial accretion thereafter. Integration planning is well underway, and the transaction remains on track to close later this quarter. Now, I'd like to turn the call over to Chris Mutz, our head of rare disease, to discuss the Alimera products and transaction in more detail.
spk02: Chris? Thank you, Nikhil. We're excited about what Alimera brings to ANI, starting with two high-growth, durable commercial products. Alimera's first product, Illuvian, is used to treat diabetic macular edema, or DME, the leading cause of vision loss in diabetic patients. The company's second product, Utique, is used to treat patients with chronic non-infectious uveitis affecting the back of the eye. Illuvian and Utique are both double-digit growth assets with high barriers to genericization and significant future upside. With the acquisition of Alimera, ANI will have three commercial rare disease assets, Cortrophin, Illuvian, and Utique. and an expanded rare disease commercial team covering the specialties of ophthalmology, neurology, nephrology, rheumatology, and pulmonology. A nationwide sales force of approximately 45 sales representatives will be dedicated to ophthalmology alone, extending our reach and ability to promote all three products for difficult-to-treat, late-line patients with limited therapeutic options. Alamair will also increase ANI's geographic diversification with its established ex-U.S. footprint, including direct marketing operations in Europe and partnerships in additional key geographical regions. Earlier this morning, Alamair reported second quarter results. Alluvian and UTIC generated net revenue of $27 million in the second quarter, which represented year-over-year growth of 54%. Alamir's adjusted EBITDA increased to $6.7 million in the second quarter, up from $0.9 million in the prior year quarter, and $1.8 million in the first quarter of 2024. Alluvia and NUT are both high-growth products, and we are confident in our ability to unlock additional value through commercial synergies and execution. With that, I'd like to turn the call over to Steve, who will walk through our second quarter financial results and revise 2024 guidance in more detail. Steve?
spk08: Thank you, Chris, and good morning to everyone on the call. ANI generated second quarter revenues of $138 million, up 18% over the prior year period. Revenues from cortofan gel reported in our rare disease segment or 49.2 million, up 102% from the prior year period, driven primarily by increased volume on record number of new patient starts. Based upon the continued strong execution of the rare disease team in driving growth, we are raising our full-year clotrophin gel revenue guidance range by $15 million to $185 million to $195 million. And similar to last year, we expect fourth quarter to be the strongest revenue quarter of the year. Revenues of our generic established brands and other segments were $88.8 million, a decrease of 4% over the prior year period. Generic revenues for the quarter were $74 million, an increase of 17% over the prior year period, driven by continued strength in the base business and the contributions of new product launches. Net revenues for established brands and other were $14.9 million in the quarter, a decrease of 49% over the prior year period. This performance was expected, as Nikhil noted in his earlier remarks, and second quarter performance is generally indicative of our quarterly expectation for the back half of 2024. Cost of sales, excluding depreciation and amortization, increased 36% to $57.7 million in the second quarter of 2024 compared to the prior year period, primarily due to net growth in sales volumes of pharmaceutical products and significant growth of royalty-bearing products, including cortisone gel. Non-GAAP gross margin was 58.4%, a decrease of approximately 570 basis points from the prior year period and 600 basis points from the first quarter of 2024, primarily due to product mix, driven by the reduction in established brand revenues as well as expenses related to the capacity expansion at our New Jersey manufacturing site. We expect sequential improvement in gross margin in both the third and fourth quarter of this year. Research and development expenses decreased 1% to $7.3 million in the second quarter of 2024 compared to the prior year period, and 30% from the first quarter The sequential decline was related to expense timing and the inherent variability of R&D expenditures on a quarter-to-quarter basis. We expect R&D to increase in the second half of 2024 relative to the first half of the year due to the timing of R&D activities. Selling general and administrative expenses increased 36% to $52.8 million in the second quarter of 2024 due to increased employment-related costs, continued investment in rare disease sales and marketing activities, legal expenses, expenses related to the pending acquisition of Almera, and an overall increase in activities required to support the growth of our business. On a GAAP basis, net loss available to common shareholders for the second quarter of 2024 was $2.7 million, as compared to net income of $5.8 million in the prior year period, driven by a $3.5 million of expenses related to the pending acquisition of Almera, and a $2.7 million unrealized mark-to-market loss on the value of our investment in CG oncology. Both of these items are adjusted for in our non-GAAP metrics this morning. Second quarter diluted GAAP earnings per share was a loss of 14 cents as compared to income of 29 cents per share in the prior year period. On an adjusted non-GAAP basis, diluted earnings per share was $1.02 for the quarter compared to $1.28 per share in the prior year period. Adjusted non-GAAP EBITDA for the second quarter of 2024 was 33.2 million compared to 34.1 million in the prior year period. We ended the quarter with 240.1 million in unrestricted cash. and have $292.5 million in face value of outstanding debt, which is due in November of 2027. At the end of the second quarter, our gross leverage ratio was 2.1 times, and our net leverage ratio was well under a half a turn of our trailing 12-month adjusted non-gas EBITDA of $137.5 million. As Mikhil mentioned and as outlined in this morning's press release, we are pleased to increase our full year 2024 guidance as follows. Full year 2024 net revenues of $540 million to $560 million, up from our prior guidance of $520 million to $542 million, representing year-over-year growth of approximately 11 to 15%. Portrophine gel net revenues of $185 million to $195 million, up from our prior guidance of $170 million to $180 million, representing year-over-year growth of 65% to 74%. Adjusted non-GAAP EBITDA of $140 million to $150 million, up from our prior guidance of $135 million to $145 million, representing year-over-year growth of approximately 5% to 12%. And adjusted non-GAAP earnings per share between $4.38 and $4.82, up from our prior guidance of $4.26 and $4.67. We are reducing our estimate for total company non-GAAP gross margin by one point to be between 61 and 62 percent from our prior assumption of between 62 and 63 percent due to a modest change in the timing of when the new manufacturing suites at our New Jersey site become fully operational. This factor is short-term in nature as we anticipate achieving the full benefit and efficiency of the new suites in the second half of this year and beyond. Consistent with prior quarters, we will continue to tax-effect non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share using our estimated statutory rate of 26%. The company now anticipates between 19.4 million and 19.8 million shares outstanding for the purpose of calculating diluted EPS and continues to expect its U.S. GAAP effective tax rate to be between 22% and 25%. Please note that our updated 2024 full-year guidance does not include contribution from the pending acquisition of Almera. With that, I will now turn the call back to Nikhil.
spk04: Thank you, Steve. We're extremely pleased with our performance in the second quarter and the continued momentum that has allowed us to increase our full year expectation. It's an exciting time at ANI with a strong first half and the anticipated Q3 closing of Almera. By the end of this year, A&I will have three growing and durable commercial assets in rare disease, an expanded commercial team covering the specialties of ophthalmology, neurology, nephrology, rheumatology, and pulmonology, and a highly eligible global over 20 countries. We are thrilled to unite the two companies with a shared culture built around similar missions of serving patients, improving lives. Thank you for your interest in E&I, and we look forward to keeping you updated throughout the rest of the year. Operator, please open the line for questions.
spk00: Thank you. At this time, if you would like to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star 1 to ask a question. We will pause for a moment to allow questions to queue. Thank you. Our first question will come from Les Sulwiski with Truist Securities. Please go ahead.
spk03: Hi, this is Jeremy on for Les. Thanks for taking our questions. First for me is, what other drivers do you have for the guidance range aside from cortrophin. And then also on the pre-filled syringe, can you give us any more color and explain if there's anything similar to this in the marketplace? Thank you.
spk04: Yeah. Good morning and thank you, Jeremy. Thank you for joining. I'll take your second question for us, which is on the pre-filled syringe. Look, we continue our efforts to enhance the convenience and remove pain points for patients. starting on ACTH and the healthcare providers who treat them. You will remember that in the fourth quarter of 23, we introduced the one ML version of cortofan gel to meet the needs of physicians who desired the smaller configuration of ACTH for certain patients. And now we've completed or we're nearing the completion of development of a one ML pre-fill syringe offering further benefits, right? Specifically helping patients with the preparation and admission of the cortofan gel product. And as I said before, we plan to file for approval of the pre-filled syringe in the second half of 2024 and launch this in the first half of 2025. Then going back to your question on guidance and what's driving the guidance increase, But overall, we have continued to see strong momentum across our rare disease and Gen X business lines. Both were touched better than we had expected, and hence we're raising the folio guidance, and established brands, royalties, and others were largely in line with our expectations. Thank you, Jeremy.
spk03: Thank you.
spk00: Thank you. Our next question will come from Gary Nachman with Raymond James. Your line is now open.
spk09: All right, thanks. Good morning, guys, and nice quarter. So, regarding some of the key drivers of the strong core trochan growth, just elaborate. How many new prescribers are you getting? Were you seeing that mostly in what therapeutic areas? And how much of the volume growth is share gain versus overall market growth? And you called out Gaudi flares and OPSOs. But those are still relatively small, right? So which areas are driving most of the upside in absolute dollars? And how much upside potential is there with the Goudy-Claire indication and the 1 ml vial that you were just talking about?
spk04: All right. Well, thank you for your questions, Gary. I will try and answer all of them. I think number one is You know, on the overall ACTH category and the question around, you know, share growth versus category growth, you know, and our competitor reported their results earlier this year, earlier today. And what you'll see is, as we've been saying even in the prior quarters, that overall the number of patients that are being treated on with ACTH today are significantly lower than, you know, patients that were being treated many years ago. And, you know, with our efforts and the efforts of the competitor, you're seeing for the first time the category after many years of decline are seeing, you know, category growth. So the decline slowed and now the category is seeing growth. And, in fact, if you, you know, add the revised guidance that they shared earlier today and are reviewing So we raise guidance, our competitor raise guidance. You'll see that what it implies for the ACTH category is a high team's growth. And there is a significant runway, you know, for the category, right? So, again, we believe that the efforts of ourselves and the competitor will increase the awareness of the ACTH market or ACTH category and result in overall ACTH market growth. So for us, it's not a share capture. Uh, it's not about share capture. It's about getting, uh, a cortofen to the appropriate patients in need. So that was one of your questions. The next was, you know, where did the growth come from? If we saw growth across therapeutic areas, both the ones we focused on at launch, neurology, nephrology, and rheumatology, and the newer areas of ophthalmology, gout, and pulmonology. And I would highlight the, so to your question on where did the, you know, the majority of the growth, you know, on an absolute basis did come from the core indication that we launched with, which is neurology, nephrology, and rheumatology. Of course, as you're aware, the number of resources that we have out there talking about or detailing these different, two of these different specialties, is lower than what we have for the newer indications uh but you know there is very strong growth and i would highlight the particularly strong growth both on a quarter-on-quarter and year-over-year basis that we've seen in gout which is proprietary to cortofan gel as the only acth product approved for this indication and then in addition you know our ophthalmology sales team is off to a very strong start and grow significant growth in prescriptions and new patient starts in the second quarter right and uh obviously we will build on that as we uh as we expand the ophthalmology franchise with the integration of the uh of the ala neurosciences acquisition and then your last question i think was around how much upside is there uh i think you're aware of how large the acth market was even when you add um you know, our raised guidance and the competitors' raised guidance, that's still, you know, a touch over 50% of what peak sales of the category was a few years ago. So, yeah. Hopefully I covered all your questions, Gary.
spk09: yeah most of it just that last question was really more on the gaudy flare indication and the one ml vial and having that presentation and i think in the prepared remarks you know you just talked about how many of these patients are out there and how many could be candidates and i'm also curious if that one ml vial could be used for other indications not just the gaudy flares just having a you know a smaller bite size yeah
spk04: Thank you for your question. Look, the addition of the 1 ml vial has been additive. It has helped us to expand usage to ACPs who are new to prescribing cortofen. And their first experience with cortofen has been with the 1 ml vial. And the volume in the 1 ml vial has grown significantly quarter over quarter. And look, it just goes back to our approach towards enhancing the convenience as well as addressing the pain points and needs of both the appropriate patients as well as the healthcare providers who treat them. So the one ml vial was one step in that direction. And now as we, I was pleased to report earlier today that we are nearing the completion of our pre-filled syringe to help appropriate patients. And that brings another option for enhancing the convenience and addressing the pain points of the patients as well as the healthcare providers who treat them.
spk09: Okay, that's helpful. And then just one more on Alamira. So first, I just want to confirm that you're not factoring any benefit from the deal in the raised court trophy guidance for the ophthalmology segment. And then just talk about the planning for the closing integration and are there any issues or hurdles you're expecting and anything that you need to build out beforehand just to make sure that you have a successful transition from day one? Thanks.
spk04: Yeah, thank you. So your first question, there is no benefit from increased quercrofin sales from a expanded ophthalmology sales force baked into the guidance. As you know, we are yet to close the deal. So this is for standalone A&I. And then your second question around integration planning, we're making very good progress on planning for the immigration. First part of it is on working towards the close of the deal. And as I said, we look forward to closing the deal later this quarter. And then from a planning perspective, I think that we're making, again, good progress, interacting appropriately with the Alamira leadership and team to understand what the organization systems and processes will look like after deal closure. And as you would expect, you know, thinking about, you know, at the heart of this integration is the combined ophthalmology, you know, 45 plus sales team and how they are going to carry all three durable commercial assets that Chris spoke about. And so, you know, thinking about how we will how we will organize with them, what does the training program look like for the folks that have been selling Illuvian and UT, for them to sell Cortofan, and our team has been selling Cortofan, for them to sell Illuvian and UT. And obviously with the other sort of IC plan and other support that they need to be able to get the hub distribution, all of those, integrating all of those, I think those are all the steps that we're working towards and we're making good progress. uh, on that, uh, you know, in, in that area.
spk09: All right. Great. Thanks. Thank you.
spk04: Thank you, Gary.
spk00: Thank you. Our next question will come from the mill Devon with Guggenheim securities. Your line is now open.
spk01: Great. Um, thanks for taking my question. So maybe just a couple of things I just want to clarify here. One on the courtroom side, you mentioned, fourth quarter, you expect to be the largest quarter of the year. Again, I'm just curious, I assume you're expecting still sequential growth from 2Q to 3Q, and then 3Q to 4Q, but if you could just confirm that, that'd be helpful. And then on the established brand side, you mentioned the second quarter is sort of a good base to look at for the remainder of this year. I'm just curious if you can comment any further than that in terms of 2025. Is this sort of a nice sort of steady state, or do you expect any sort of meaningful changes And then last question, just with Almeria, you mentioned now you have the XUS presence that they provide. I'm curious how you're thinking about that. If you think about sort of future business development priorities, is expanding XUS maybe turning into a little bit more of a focus given what Almeria provides you? Thank you.
spk04: Thank you, Venal, and good morning. So your question on cortofen, yes, we expect to see sequential growth and that the fourth quarter, you know, as Steve mentioned in his prepared remarks, we do expect the fourth quarter to be the highest, right? So, therefore, there will be sequential growth in 3Q and 4Q. The second question was around – actually, the third question was around the ex-US Alamira business and what opportunities that gives us. So, we're working through these and, you know, we will share updates as they're meaningful and, you know, as they develop. Nothing specific to report at this time. Obviously, we're currently focused on, you know, closing the deal, integrating the asset, the company, and continuing the great work that Rick and team have been doing. So, that's on the Almera channel. XUS business and what opportunities that gives us. And then the third question on established brands. On established brands, we are continuing. This is an important component of our portfolio of businesses in that it is low working capital, high gross margin, and strong cash flow generation part of the business. So we are working on a number of different things Historically, as you know, for established brands, we expand the portfolio by doing business development deals for established brands. But we haven't done one since 2021 as we've found different pathways to growth, whether it's capturing the benefits of the supply tailwind or trying innovative commercial strategies. And so we'll deploy some combination of these three to work through you know, the plans for established brands, and we'll share more as we go along. But, you know, going back to your core question, the current portfolio, year on year, you'll see some marginal decline in the actions of, you know, one of these moves being made.
spk02: Thank you. Okay. Thank you. Yeah.
spk04: Yeah.
spk00: Thank you. Our next question will come from Oren Levnot with HC Wainwright. Your line is now open.
spk10: Thanks. I have a few questions. I guess coincidentally this morning, along with your announcement of the prefilled syringe development work, Mallinckrodt also announced the availability of their single-use prefilled auto-injector, because that was approved months back. Can you just tell us if you think that'll have any material impact on the competitive ACTH landscape? Are there certain indications where patient self-administration and auto-injector would be most relevant, and do you think that will have any different market access or coverage than the current relative coverage of the ER2 products now? And I have follow-ups to that.
spk04: Sure. Good morning, Oren, and thank you for your question. Look, the competitor's device, we can tell, is in that you know, the competitor's efforts as well as ANI's efforts are aimed at enhancing the convenience and addressing pain points that, you know, a subset of patients have. So, for example, our pre-fill syringe is used to address, you know, patients that have, you know, that can be helpful for patients in preparing and administering the cortofan gel product, right, in a 1 ml pre-filled syringe. And I think the way I would think about it is both the competitor and us are working, are investing to increase the awareness and bring new options to patients and therefore increase awareness of the category and drive growth in the category, right? We lost the 1 mL vial, which was also appreciated by, as I mentioned earlier, by healthcare providers, some of whom, you know, initiated their, who were naive to ACTH and initiated their usage of ACTH by trying with the 1 mL vial. So, again, you know, different options for patients as well as the healthcare providers who treat them. Again, you know, reiterate that overall this is great for the category given that there is a significant runway for the ACTH category with the number of patients being treated today being significantly lower than the number of patients being treated many years ago.
spk10: And I appreciate, you know, different strokes, different folks on products and needs across the landscape. I'm just curious if you think, I don't know what dose they're, autoinjectors for, if it's adjustable. Do you think there are any particular areas where that will have any impact? Or do you think it's just steady as she goes with your growth trajectory?
spk04: Yeah, I think that there are probably a subset of indications where a 1 ml or a half ml dose may be more convenient. to have than taking a 5 mL vial. And it is with this understanding itself that we invested to bring the 1 mL vial many months ago, and now are going to bring a pre-filled syringe. And you would expect that the options from a dosing perspective, you can expect that that will not create meaningful differentiation between the two for now. Okay.
spk10: And regarding Almera, I know it hasn't closed yet, so I guess feel free to say no comments. since you're clearly in the planning stages, can you give us any color on potential synergies there, maybe what sort of EBITDA margins you hope the business can contribute versus what I guess they are just reporting now? And I guess another question I have is, you know, you talk about these as rare disease. Obviously, DME is a much larger indication, but you're targeting a niche of it, and NIU is rare disease. Is there any opportunity to revisit pricing of these products? It seems to me that, you know, the value is quite high there, and it's particularly an orphan indication in the differentiation of the product. It's not super expensive in my view. Do you have freedom to make changes there, or are you limited in the IRA framework?
spk04: Thank you for your questions, Oren. I think that the sort of financial outlook for the deal remains what we shared at the when we announced the deal in that from a synergies perspective, we had announced in 2025 we expect to see about $10 million worth of synergies. And as we're doing the integration plan, we're seeing a runway into that. Or I guess there's no information that suggests that we couldn't capture that. And then, again, from an EBITDA addition, we also gave guidance on how much adjusted EBITDA we expect to add Steve, you can jump in, but I think it was in the $30 million plus range that we talked about. If you can help me with that, Steve. So that's in terms of EBITDA addition in pro forma in 2025. And that obviously is net of any additional cortofan sales and revenue synergies. It's just the additional EBITDA that we would get from the Alamira acquisition. And then the third part regarding pricing, again, we try to strike a balance between sharing information that is helpful as well as competitively sensitive. And we're in the immigration planning stage, so allow us to come back to you with further information on that topic. But Steve, could you just answer Oren's clarification regarding what we had said about additional EBITDA in 2025?
spk08: Yeah. Good morning, Warren. Yeah. And I think importantly, I would note in terms of our gross margin profile rate, it's going to be accretive to our gross margins. The Alamara products are in the low 80%. And in terms of EBITDA, you know, we would expect in the end of the mid-30s, as Nick Hillman
spk10: OK. And just lastly, I noticed in your GAAP SG&A, some litigation expense in there. And I'm just wondering if you're able to give us any color. Is that just on the disclosed CG oncology dispute that we've known about? Or is there potential paragraph 4 or 505 related stuff there? And I guess should be hoped to hear any news on the 505 front in the foreseeable future. Thank you.
spk08: Yeah, I mean, in terms of the incremental litigation, as you would expect, we're vigorously pursuing the defense of our rights in CG oncology. And so that is an element in terms of the increased spend that we have in litigation year over year on a gap basis. I think that's the only one that we would highlight today to you. And then what was the second part of your question? I'm sorry.
spk04: I can take that. Yeah. So, Oren, on the 505 B2s, we will share more when we have meaningful updates to give. But, you know, there's no linkage between the litigation span and the launch of 505 B2 products. But we will share updates on that when they're material.
spk10: All right. Thanks so much. Congrats on another. upside quarter. Thank you, Oren.
spk00: Thank you. Our next question will come from Tim Chang with Capital One. Your line is now open.
spk07: Hey, thanks. Nick Gill. You know, it seems like your generic segment revenues are actually exceeding your original targets. Can you just sort of comment on, you know, where you see expectations for growth from the generic segment in the back half of the year? Obviously, you've increased your guidance for rare disease and your total revenues, but so how do you sort of see your generic segment playing out in the back half?
spk04: Yeah, good morning and thank you for your questions, Tim. For our generic business, the performance is really coming on the back of three things, right? Number one is our new product, the cadence of new product launches, right? We've launched As we talked about, four new products in the second quarter, two new already in the third quarter, so about 12 since the start of the year. That, combined with our operational excellence and being a reliable supplier with strong GMP status and U.S.-based manufacturing, enables us to deliver, as we had shared before, on a full-year basis, high single-digit to low double-digit growth And then you can expect towards the, to your question, I think, sequential growth as we move to the subsequent quarters in 2025.
spk07: And maybe just to follow up, I mean, you started this new facility in New Jersey. You know, how much capacity are you actually going to be able to increase with that new facility?
spk04: Yeah, as Dr. We are adding about 15 new manufacturing suites and a new QC lab, so that's a substantial increase in capacity. We've also upgraded the equipment and added higher bat size equipment in there. So I don't have a specific percentage, but it's a meaningful addition to the volume that we can service out of the New Jersey site, and it will serve the growth of our genetics business for multiple years.
spk06: Okay, great. Nice quarter. Thanks.
spk04: Thank you, Tim.
spk00: Thank you. It appears we have no further questions at this time, and I'll turn the program back over to Nikhil Iwani for closing remarks.
spk04: Thank you again for your interest in ANI and for joining our call this morning. We really appreciate it, and we look forward to updating you on our progress as we move forward. Thank you.
spk00: Thank you, ladies and gentlemen. This concludes today's event. You may now disconnect.
Disclaimer