ANI Pharmaceuticals, Inc.

Good morning, everyone. Welcome to today's A&I Pharmaceuticals fourth 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 star one on your telephone. If you would like to withdraw your question, please press star two. Now at this time, it's my pleasure to turn the call over to Ms. Lisa Wilson, Investor Relations of A&I Pharmaceuticals. Please go ahead, ma'am.

Thank you. Welcome to ANI Pharmaceuticals Q4 2024 Earnings Results Call. This is Lisa Wilson of Insight Communications, Investor Relations for ANI. With me on today's call are Nikhil Lawani, President and Chief Executive Officer, Stephen Carey, Chief Financial Officer, and Chris Mutz, Senior Vice President and Head of ANI'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 statement made on today's conference call that expresses 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 anti-pharmaceuticals management as of today and involve risks and uncertainties included in 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 at anifarmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on February 28, 2025. 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 Lalwani Thank you, Lisa. Good morning, everyone, and thank you for joining us. Today, I'll start by discussing our full year and fourth quarter performance and highlights and our 2025 guidance. First, we'll provide additional color on our rare disease business, including our lead asset, cortofan gel, and alluvian and utique, which we recently added to the acquisition of Alameda. Finally, we will review our fourth quarter results and 2025 guidance in more detail. Following our remarks, we'll take your questions. We're pleased to report record fourth quarter and full year 2024 results and are raising our 2025 guidance for total revenues and adjusted non-GAAP EBITDA. The upward revision of our guidance is based on further confidence in higher demand for cortofan gel, a strong start for generics with the launch of ProcaloPride with 180-day exclusivity, and increased demand in the first quarter, as we have seen in the past, for our established brands portfolio. which is now referred to as brand under our new segment reporting structure. We now expect 2025 revenue of $756 million to $776 million, which represents growth of 23 percent to 26 percent over 2024, versus our prior guidance of $739 million to $759 million. We expect adjusted non-GAAP EBITDA of $190 million to $200 million, which reflects growth of 22% to 28% over 2024, versus our prior guidance of $182 million to $192 million. Steve will provide more specifics on our financial guidance. 2024 was another year of strong execution for ANI, capped by a record fourth quarter with total net revenues, adjusted non-GAAP EBITDA, and adjusted non-GAAP diluted EPS all coming in above our previously announced guidance for the full year. Rare disease was our primary driver of growth in 2024 with our lead rare disease asset, cortofan gel, generating close to $200 million of sales in just the third year since launch. And our genetics business delivered 12% revenue growth driven by operational excellence and new product launches, making 2024 the third straight year of achieving double-digit top-line growth for this business. In addition, we expanded our rare disease franchise in 2024 with the acquisition of Almera Sciences in September, in keeping with our longer-term strategy to broaden our presence in the rare disease space. We also successfully executed the refinancing of our prior debt and put in place a more efficient and effective capital structure. Turning now to our fourth quarter results, our financial performance in the fourth quarter was the strongest in our history. Total revenues were $190.6 million, representing a year-over-year increase of 45 percent on an as-reported basis and 24 percent on an organic basis. driven by accelerating demand for cortofan gel, continued strong growth for generics, a full quarter contribution from Illuvian and Utique, and higher demand for brands. Adjusted non-GAAP EBITDA was $50 million, and adjusted non-GAAP EPS was $1.63. Cortofan gel generated $59.4 million in revenues during the quarter, up 42% over the fourth quarter of 2023. The quarter reflected continued momentum with the highest number of both quarterly new patient starts and new cases initiated since we launched the product in January 2022. We saw increased demand across all targeted specialties, neurology, rheumatology, nephrology, pulmonology, and ophthalmology. Portrophine gel remains on a strong multi-year growth trajectory. The overall ACTH category returned to growth in 2024, while the number of patients on ACTH therapy today is still substantially lower than several years ago, providing plenty of headroom for expansion. We expect the strong momentum to continue in 2025 And our new guidance forecasts cortofan gel revenues to grow between 34% and 38% to $265 million to $274 million in 2025. Chris will talk more about our initiatives to increase awareness of the benefits of ACTH therapy for appropriate patients and further drive demand for cortofan gels. Our new ophthalmology products, Illuvian and Utique, generated revenues of $27.6 million in the fourth quarter, our first full quarter of ownership following the acquisition of Almera. Our expanded ophthalmology team also drove significant growth in new patient starts for cortofan gel in ophthalmology, which doubled in Q4 versus Q3. A core strategic rationale for acquiring Almera was to add assets that are synergistic with cortofan gel and leverage our rare disease infrastructure and proven commercial execution capabilities in order to unlock the potential of eluvian and utique, as well as accelerate the growth of cortofan gel in ophthalmology. We believe there is significant room for both Illuvian and Utique, given the novel, long-acting nature of the products and size of the addressable markets. We have taken steps and are continuing to execute on initiatives that will enable us to capture these growth initiatives. Let me lay these out for you. We expanded the U.S. ophthalmology sales team of approximately 30 representatives that we acquired from Almera to 46 sales reps who began promoting Illuvian, Utique, and Cortofengel in mid-October of 2024. We are continuing to invest to drive growth in international markets, both direct markets such as Germany and partner markets such as France and Spain. Clinically, We continue to invest behind the New Day clinical trial for Alluvian and Synchronicity clinical trial for UTiQ. For New Day, if the clinical trial results are positive, it could significantly expand the use of Alluvian earlier in the DME patient journey in combination with anti-VEGF therapies. We expect preliminary top-line data from both trials in the second quarter of 2025. Operationally, we have taken steps to increase supply security for both Illuvion and Utique. For Illuvion, we extended our partnership with our contract manufacturer, Siegfried, for five years until 2029. Siegfried has been a reliable partner for Illuvion for over 10 years. As a part of this extension, we agreed to partner with Siegfried to upgrade equipment on the existing manufacturing line in Irvine, California, and significantly expand capacity through the addition of a second manufacturing line. Both the equipment upgrade and capacity expansion initiatives are on track. We have also been executing a strategy to transition the manufacturing of Utique to Siegfried in 2025. We submitted a prior approval supplement, or PAS, to the FDA to add Utique's indication of chronic noninfectious uveitis affecting the posterior segment of the eye, or NIU-PS, to the Illuvian label. Note, both Illuvian and Utique are substantially similar ophthalmic implants with the same active ingredient, flucinolone acetonide, and almost identical strengths with Illuvian having 0.19 milligrams of flucinolone and UTIC having 0.18 milligrams of flucinolone. In fact, the clinical trials for both NIUPS and DME were run on implants with 0.18 milligrams of flucinolone acetonide. The newer manufacturing process used exclusively for Illuvian resulted in a strength of 0.19 milligrams per implant. We engaged with the FDA prior to the PA submission in order to understand the regulatory requirements and submitted an application aligned with FDA's guidance. Since submission, we have been engaged with the agency during the review period and expect action on the PAF in the second quarter. Following approval, we plan to transition commercialization efforts for both the DME and chronic NIU-PAF indications to a single product. Illuvian. As a reminder, Illuvian is already approved and marketed for both DME and NIUPS outside the U.S., including in seven European countries and the Middle East. Operationally, the above initiatives will significantly enhance supply security for both Illuvian and UT, positioning the franchise for a strong multi-year growth trajectory. In conjunction with these initiatives, ANI and I-Point have agreed to non-renewal of the current supply agreement for UTIC with an effective date of May 31st, 2025. Moving now to our 2025 guidance for Elluvian and UTIC. Our Q4 net sales for Elluvian and UTIC was $27.6 million. Typical Q4-Q1 impact driven by insurance resets and purchasing patterns for products such as Illuvian and UT causes Q1 to be lower than Q4 by levels that are similar to other products. In addition, Q1-2025 for Illuvian and UT will have the added impact of the change in U.S. market access dynamics since early January that has reduced access for Medicare patients. which is particularly important for Illuvian's DME indication. We are working with HCPs to understand their response to the market access changes and defining our commercial approach accordingly. Stepping back to the overall picture, There are currently fewer than 5,000 patients on therapy for each of Eluvian and UT, and we estimate that the addressable patient population for each drug is approximately 6 to 10 times higher based on epidemiological data. So while there are near-term topics to work through, we remain confident of the growth prospects for our products in both DME and NIUPS. As we strengthen the foundation of our ophthalmology business through these transitions and market dynamics in 2025, we expect to deliver $97 million to $103 million in sales for Illuvian and Nutique, and we remain enthusiastic about the product's long-term runway for growth. Chris will further detail our commercial and clinical initiatives that we expect will drive significant quarter-on-quarter growth through 2025 and beyond. Turning now to our generics business, we delivered another solid quarter with revenues of $78.6 million, an increase of 9% over the fourth quarter of 2023. The performance reflected strength in our base business, coupled with contribution from new product launches. We continue to leverage our U.S.-based manufacturing footprint to deliver over 1 billion doses to patients in the U.S., Our R&D team was highly productive in 2024, submitting multiple new ANDAs and securing 17 new product approvals, including two with competitive generic therapy or CGT designation. We are proud that we retained the number two ranking in CGT approvals in 2024. One of these approvals was Procaliprite tablets, which we launched in late December, early January into $168 million branded market with 180 days of exclusivity. Our ability to be first to market with this important generic product is a testament to the quality of our R&D team. We expect another year of low double-digit growth for our genetics business in 2025, supported by our high-performing R&D engine, operational excellence, and US-based manufacturing footprint. Our brands portfolio, which we previously referred to as established brands, continues to address patient needs with reliability of supply, a unique set of commercial capabilities, and opportunistic business development to expand the portfolio. Our overall portfolio of businesses is strengthened by this high gross margin, low working capital, and strong cash flow generation business. During the fourth quarter of 2024 and into the first quarter of 2025, we experienced an increase in demand for some of our brands portfolio as we have periodically seen in the past. Our new 2025 guidance reflects this increased demand in the first quarter, followed by a return to a more normalized run rate in the second quarter. As I reflect on our year of accomplishments and look forward to 2025, I would like to thank our customers suppliers, partners, investors, and the entire ENI team for their collaboration and significant contribution in delivering on our company's purpose of serving patients, improving lives. And now turn the call over to Chris Mutt, our head of rare disease.