ANI Pharmaceuticals, Inc.

And welcome to today's A&I Pharmaceuticals, Inc. first quarter 2025 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, then the number one on your telephone keypad. If you would like to withdraw your question, please press the star key, then number two on your telephone keypad. It is now my pleasure to turn the conference over to Lisa Wilson.

Thank you, Operator. Welcome to A&I Pharmaceuticals Q1 2025 Earnings Results Call. This is Lisa Wilson, Investor Relations for A&I. 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 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, anifarmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on May 9, 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. I'll start by discussing our first quarter performance and highlights, along with our updated 2025 guidance. Chris will provide additional color on our rare disease business, including our lead asset, cortofan gel, and our retina assets, Illuvian and Utique. Finally, Steve will review our first quarter results and updated 2025 guidance in more detail. Following our remarks, we'll take your questions. We had a very strong start to the year with record revenue, adjusted EBITDA, and adjusted EPS. The first quarter reflected particularly strong performance for our generics business, continued solid demand for cortofan gel, and increased demand for our brands portfolio. The top line upside was partially offset by near-term factors impacting our retina products that I will expand on in a moment. We were pleased with the strength across our overall company. Based on our first quarter performance and favorable demand trends across generics, cortofan gel, and brands, we are raising our 2025 guidance for total revenues and adjusted non-gap EBITDA. We now expect 2025 revenues of $768 million to $793 million, which represents growth of 25 to 29% over 2024 versus our prior guidance of $756 million to $776 million. We expect adjusted non-GAAP EBITDA of $195 million to $205 million, which reflects growth of 25 to 31% over 2024 versus our prior guidance of $190 million to $200 million. Steve will provide more specifics on our updated guidance later in the call. Turning now to our first quarter results, total revenues were $197.1 million, representing a year-over-year increase of 43% on an as-reported basis and 32% on an organic basis, driven by exceptional performance for generics, continued strong growth for cortofan gel, and continued demand for our brand's portfolio. Adjusted non-GAAP EBITDA was $50.7 million, and adjusted non-GAAP EPS was $1.70. Protrophin gel generated $52.9 million in revenues during the quarter, up 43% over the first quarter of 2024. We continue to see growth across our targeted specialties, urology, nephrology, rheumatology, ophthalmology, and pulmonology. Notably, we had a record number of new patient starts and new cases initiated despite the insurance resets that typically impact branded drugs in the first quarter. We continue to believe that cortofan gel remains on a strong multiyear growth trajectory. Based on reported sales of cortofan gel and the other ACTH product on the market, the overall ACTH category grew 27% to approximately 684 million in 2024. While the overall ACTH category returned to strong growth in 2024, the number of patients on ACTH therapy today is still substantially lower than several years ago, providing plenty of headroom for expansion. It is worth noting that approximately 40% of cortofan gel prescribers are new to the ACTH category, which illustrates the need for our therapy and our ability to expand the market. we expect 2025 portrophine gel revenues to increase 34% to 38% to $265 million to $274 million for the year. Our retina products, Illuvian and UT, generated revenues of $16.1 million in the first quarter. Performance of our retina assets outside the U.S. was in line with our expectations, but performance in the U.S. was impacted by several factors, including market access challenges for Medicare patients Typical first quarter dynamics for branded drugs and turnover in our sales force as we optimized our field team to sell our complete rare disease ophthalmology portfolio. As we discussed in our fourth quarter call at the end of February, we saw an impact in the first quarter due to reduced access for Medicare patients. Patient support foundations such as Good Days did not receive sufficient funding in the first quarter of 2025, affecting their ability to assist patients with co-pay support. This change broadly impacted products reimbursed under Medicare Part B, and has been particularly important for alluvium syndication for diabetic macular edema, or DME, as also reflected by other players with therapeutics in DME. After working with HCPs to understand their response to the market access challenges, we've refined our commercial approach. We're also exploring pathways to improve access for appropriate patients through a specialty pharmacy and Medicare Part D. We've also had some turnover in our U.S. Ophthalmology Salesforce as we took steps to optimize and elevate the quality of our team. We are adding best-in-class talent to our sales team and expect to be back to full strength during the second quarter. Our plans to address the near-term challenges in Retina are yielding positive results. In April, end-user demand was higher than any month in the first quarter and almost back to fourth quarter 2024 end-user demand levels. Given the recent promising trends we've seen, we are maintaining our 2025 outlook for Illuvian and Utique revenues of 97 to 103. Our commitment and confidence in the value of our ERECNA portfolio is further reflected in our recent buyout of our royalty obligation on Illuvian and Utique. Turning next to our generics business, we delivered an exceptionally strong first quarter revenues of 98.7 million. an increase of 41% over the first quarter of 2024 and 26% over the fourth quarter of 2024, which had previously been our highest quarter ever for generics. The robust growth was driven by contribution from new product launches, including our first market launch of Focalipri Travelets with 180 days of exclusivity that runs to late June, coupled with strong execution in the base business. With a strong start, we now expect mid-double-digit growth from our genetics business for the full year, up from our prior estimate of low double-digit growth. Our brands portfolio continued to perform well. As discussed on our last earnings call, we were able to identify and capture increased demand in the first quarter for certain products, as we have done periodically for three consecutive years. Our revised full-year guidance reflects a return to a more normalized level of demand during the second quarter. Finally, I will say a few words on the evolving Terra situation. While we await the administration's pharmaceutical industry-specific framework, it is worth highlighting ANI's longstanding commitment to the U.S. pharmaceutical industry and our positive and unique positioning relative to our peers. We are a U.S. domicile pharmaceutical company with over 90% of total company revenues coming from finished goods manufactured in the U.S. Less than 5% of our total company revenues has a direct reliance on China. In addition, we have a strong balance sheet that enables us to carry healthy levels of finished goods and raw material inventories, and we look forward to maintaining our strong commitment to the U.S. pharmaceutical industry. I'll now turn the call over to Chris Motz to discuss our rare disease business in more detail. Chris?

Thank you, Nikhil, and good morning, everyone. As Nick Thiel mentioned, we were pleased with the strong demand trends for cortofan gel during the first quarter, which included continued momentum in adding new prescribers and robust growth among existing prescribers. We saw demand growth across all of our targeted specialties, and in particular in ophthalmology, we saw the highest growth given by the efforts of our expanded dedicated ophthalmology sales team. Notably, the number of new initiated cases and new patient starts for cortofan gel reached record levels in the first quarter, which is not typically a seasonally strong quarter for cortofringel or rare disease drugs in general. We completed the expansion of our portfolio sales team, which cover indications across neurology, nephrology, and rheumatology. Our new team members are quickly building momentum in both new prescriber ads and patient starts in their sales territories. The indication for acute gouty arthritis flares, which is unique to cortofringel among ACTH therapies, remained a strong driver, contributing to growth in the prescriber base and patients on therapy. We're also beginning to see improved access from the new affordability options under the Medicare Part D redesign under the Inflation Reduction Act, or IRA. As Nikhil noted, we continue to see cortofringel on a strong multi-year growth trajectory, We believe the number of patients on ACTH therapy now is approximately half the level of patients on therapy when the category previously peaked in 2017. We also believe the addressable patient population for ACTH therapy could be many times larger than the previous high of eight years ago. Keeping the significant unmet medical need in mind, we continue to invest in and make progress on initiatives to strengthen and grow the Quartrofen gels franchise. Part of these efforts include improving patient and physician convenience. In March, we announced FDA approval of our pre-filled syringe and recently launched the new presentation. The pre-filled syringe will benefit patients and physicians by reducing the steps needed for self-administration. So far, we've been pleased with early feedback on this important new offering. We're also continuing to invest in evidence generation for cortofan gel. Earlier this week, at the Association for Research and Vision in Ophthalmology, or ARVO, annual meeting, we presented preclinical data on the use of cortofan gel for uveitis. We are also excited to announce that we plan to initiate a phase four clinical trial for the treatment of acute gouty arthritis flares later this year. The study is planned to enroll approximately 150 patients and we expect to complete the study in approximately one year following initial patient initiation. While cortofringel has seen significant use in gout, results of this study will provide physicians with valuable insight into the treatment of acute gouty arthritis flares with cortofringel and could ultimately support inclusion in the American College of Rheumatology treatment guidelines. Overall, we're pleased to see the growing recognition of cortofan gel as a safe and effective treatment option for appropriate patients and look forward to delivering strong multi-year growth for the product. Turning now to our retina products, Illuvian and Utique. As Nikhil mentioned, during the first quarter, there was a significant change in market access dynamics for Medicare patients. HCPs took some time to understand the change, whether it would persist and how they needed to modify their approach and practice while keeping patients first always. The impact of these market access changes has varied across regions, and how HCPs have responded to these changes has also varied. It is important to note that prescribing for NIU PS has been impacted to a much lesser degree relative to prescribing for DME. Our team has spent time understanding HCP responses and the granular impact to their workflows. With that understanding, we are exploring alternative paths to improve access for the impacted DME population. For example, Medicare patients with a pharmacy benefit can avail of the affordability options that Part B offers. Under this approach, retina physicians can access Elluvian through a specialty pharmacy. Taking all the above into account, our team has deployed a bespoke commercial approach customized by region and territory, which is already paying off as we've seen in our April results. We've taken several additional steps to enhance our commercial effectiveness. We're strengthening our sales team with top talent from leading retina and ophthalmology organizations, an approach that served us well when we built the Cortrophin team. To drive greater awareness and adoption of Illusina UT, we are launching new peer-to-peer educational programming and new refreshed marketing materials. Early response to these materials have been very positive. The multi-pronged commercial approach I described earlier is yielding results. In April, end user demand was higher than any month in the first quarter and almost back to fourth quarter 2024 end user demand levels. We've also made significant progress over the last few months to enhance supply security for our retina franchise. In March, we received FDA approval for an expanded label for alluvion that includes an indication for the treatment of chronic NIU PS, which is the indication for you too. We plan to begin marketing Alluvion for both chronic NIUPS and DME under the new combined label this quarter. We expect the transition to be relatively seamless for physicians who have prescribed both Alluvion and Utique in the past. These physicians who have prescribed both products account for approximately 90% of prescriptions for Alluvion and Utique. We are engaged in discussions with commercial payers to expand coverage of Alluvion for the new indication of chronic NIUPS We believe this process will be relatively straightforward for plans that cover UT, as we are simply transitioning patients to Illuvian and discontinuing UT. As a reminder, Illuvian is already approved for both DME and chronic NIUPS outside the U.S., including in 17 European countries. Moving to the new day and synchronicity clinical trials, we are in the process of analyzing the data from the completed new day study and the synchronicity study at the six-month time point. We look forward to updating you on the results of both studies in the near term. Overall, we continue to expect our rare disease business to be our largest revenue growth driver in 2025. With that, I'll turn the call over to Steve for the financial update. Steve?

Thanks, Chris, and good morning to everyone on the call. I'll review our first quarter results and then discuss our updated 2025 guidance. A&I had a very strong start to the year, and our first quarter results form a strong foundation for the achievement of our increased full-year financial goals. We generated first quarter revenues of $197.1 million, up 43% over the prior year period. Revenues from rare disease and brands were $94.1 million in the first quarter, up 50% from the prior year period as reported, and 25% on an organic basis, driven by growth in our rare disease franchise. Rare disease revenues were $69 million, up 87% from the prior year period. Revenues from cortofan gel were $52.9 million, up 43% from the prior year period, driven primarily by increased volume on a record number of new patient starts. Revenues from alluvian and utique were $16.1 million for the reasons that Nikhil and Chris just discussed. Revenues for brands were $25.1 million in the quarter, a decrease of 2% from the prior year period. The first quarter benefited from continued elevated demand consistent with what we have periodically achieved with this portfolio in the past and similar to prior year levels of revenue achievement. Revenues for our generics and other segment were $103 million, an increase of 38% over the prior year period. Revenues for generics were 98.7 million, an increase of 41% over the prior year period, and 26% over the fourth quarter of 2024, due to increased volumes from new product launches, such as Prucalipride, and the impact of 2024 product launches. Now, moving down the P&L. As a reminder, when I speak to our operating expenses for the purposes of this earnings call, I will be referring to our non-GAAP expenses, which are detailed on Table 3 in our press release. Generally, our non-GAAP operating expenses exclude depreciation and amortization, stock-based compensation, and certain costs related to litigation and M&A activity. please refer to Table 3 for a reconciliation to our GAAP expenditures. Non-GAAP cost of sales, excluding depreciation and amortization, increased 49% to $72.7 million in the first quarter of 2025 compared to the prior year period. primarily due to net growth in sales volumes of pharmaceutical products and significant growth of royalty-bearing products. Non-GAAP gross margin was 63.1%, a decrease of approximately 130 basis points from the prior year period, principally driven by mix and significant growth of royalty-bearing products. Non-GAAP research and development expenses of $10 million in the first quarter was relatively in line with the prior year period. Non-GAAP selling, general, and administrative expenses increased 56.5% to $63.7 million in the first quarter driven by costs related to our acquisition of Alimera in the form of spend for our new larger ophthalmology sales team promoting cortofan gel, olivine, and Utique, and continued investment in rare disease sales and marketing activities, including the new purified cortofan gel sales representatives that we added in the quarter. Adjusted non-GAAP diluted earnings per share was $1.70 for the first quarter compared to $1.21 per share in the prior year period. Adjusted non-GAAP EBITDA for the quarter was $50.7 million compared to $37.6 million in the prior year period. We ended the quarter with $149.8 million in unrestricted cash, reflective of $35 million of cash flow from operations, and net of $17.3 million of cash used during the quarter to buy out our royalty obligation to SWK on net revenues of Alluvian and UT, and the payout of annual 2024 incentive compensation. As of March 31st, we have $637.2 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the first quarter, our gross leverage was 3.5 times and our net leverage was 2.7 times our trailing 12-month adjusted non-GAAP EBITDA of $181.4 million, which is pro forma for the Almera acquisition. Utilizing the midpoint of our revised 2025 adjusted non-GAAP EBITDA guidance, our net leverage is approximately 2.4 times on a forward basis. Turning to our updated 2025 financial guidance, we are raising our guidance for total revenue, adjusted non-GAAP EBITDA, and adjusted non-GAAP EPS based upon higher estimates for our generics business and higher first quarter demand for our brand's portfolio. Updated guidance is as follows. Full year 2025 net revenue of $768 million to $793 million up from our prior guidance of $756 million to $776 million, representing year-over-year growth of approximately 25% to 29%. Cortofan gel net revenue of $265 million to $274 million, representing growth of 34% to 38%, and in line with our prior estimate. We continue to expect quarterly sequential growth of Cortofin revenues throughout the year. Combined Alluvian and Utique net revenue of $97 million to $103 million, in line with our prior estimate, and we continue to expect quarterly sequential growth throughout the year. Generics revenue growth in the mid-double digits driven by strength in our base business and contributions from new product launches versus our prior assumption of low double-digit growth. Note that in terms of phasing, we expect the first quarter to be our highest revenue quarter for this year for generics. and the first half of the year to be higher than the second half of the year due to our late December 2024 first-to-market launch of Procalipride and its corresponding six months of exclusivity. For brands, we expect a return to more normalized performance during the second quarter as compared to a full quarter's worth of incremental market share achieved in the first quarter. Putting all the revenue elements together, we expect our second quarter revenues to be lower by a modest amount as compared to the first quarter, followed by a return to sequential revenue growth in the third and fourth quarters. Adjusted non-GAAP EBITDA of $195 million to $205 million, up from our prior guidance of $190 million to $200 million. representing growth of approximately 25% to 31%. From a quarterly perspective, we anticipate second quarter adjusted EBITDA to be lower as compared to the first quarter, followed by a return to sequential growth in the third and fourth quarters. Adjusted non-GAAP earnings per share between $6.27 and $6.62 up from our prior guidance of $6.12 and $6.49. We continue to anticipate a U.S. GAAP effective tax rate of approximately 25%. And consistent with prior quarters, we will tax effect non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share using our estimated statutory rate of 26%. We also continue to anticipate between 20.1 million and 20.4 million shares outstanding for the purpose of calculating diluted EPS. Finally, I will highlight that the company continues to prepare for its upcoming trial with CG Oncology. As a reminder, on March 4, 2024, A&I commenced a civil action against CG oncology in the Superior Court of the State of Delaware. ANI's complaint alleges that under an assignment and technology transfer agreement dated as of November 15, 2010, DG Oncology is liable to pay ANI a running royalty on 5% of the worldwide net sales of their lead product candidate, predostimogene. and that in February 2024, CG Oncology wrongfully repudiated its royalty obligation to ANI. The jury trial is set to commence on July 21, 2025, and ANI intends to pursue this matter vigorously. With that, I'll turn the call back to Nikhil.

Thank you, Steve. We're pleased with the strong start to 25 and would like to thank you, our customers, suppliers, partners, investors, and the entire ANI team for their collaboration and significant contributions in delivering on our company's purpose of serving patients' improving lives. With that, operator, I turn it over to you for questions.

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 two. Once again, that is StarWed to ask a question. We'll take our first question from Gary Nachman with Raymond James. Please go ahead.

Thanks and congrats on the strong quarter. So first on quartrofen, how much should the pre-filled syringe help you? Do you think it could open up use a lot more because of the convenience And, you know, what sort of benefit are you seeing from the additional 20 reps across the indications? Are you considering adding some more for any indications? And, you know, Malincroft announced a good quarter for XR. It seems like there's good market growth. What else can you do to try and differentiate quattrofen? I thought the base for study for acute gouty flares is really interesting so are there other studies that you're considering to potentially do with either the existing indications or maybe some others down the road and then i have a follow-up good morning and thank you gary for your question so first on the pre-fill syringe you know as chris mentioned in the prepared remarks

The early response from HCPs is positive as this reduces one step in the administration process for cortofan gel. And we look forward to updating you on the progress. We have just launched the product in the market. While we got the approval or announced the approval in March, we just launched the product a couple of weeks ago. So look forward to updating you on the progress. Your next question was on the 20 reps and how that's going. You know, they were doing well. They have started getting traction with getting both new patient starts and new prescribers and enrollments. And, you know, we'll continue to build momentum as the year progresses. You know, we keep evaluating high ROI efforts in the commercial side. So with regards to adding more, there's no intent to do that, you know, this year at this time. We, again, keep evaluating high ROI commercial initiatives to keep growing Cortofan, which we believe is on a strong multi-year growth franchise that we've talked about several times. You're right that the third point was on the competitor market. the competitor did announce a strong quarter as well as increased their guidance to high single digits. So if you add their guidance and our guidance, the combined market is growing approximately 16%. If you take this at high single digits, if you take that at 7.5%, the combined market will grow at about 16%. And we think that's great for patients and for prescribers because The number of patients on therapy today are, you know, still half of what it was at its peak. And from an epidemiological perspective, the number of patients that can benefit or the addressable market is, you know, six to eight times higher than the number of patients that were even being treated at its peak. So, you know, it's good for the category to have two players bringing options for patients and for prescribers. You then asked about differentiation. So we continue to invest to strengthen the franchise. You will remember that we launched the 1ml vial. Now we've launched the pre-filled syringe to increase convenience, enhance convenience for patients and prescribers. And we continue to evaluate additional services. steps that we can take to enhance the convenience for patients and for physicians, and we'll, you know, look forward to updating you on that progress. And then Chris details some of the efforts on the evidence generation area, right, and the GAL clinical study that we're initiating later this year. And those are, as well as the data that we presented at ARVO on uveitis, I think that those are indications of the multiple different steps across commercial evidence generation, bringing new presentations to the market that we're investing in to continue strengthening and growing the cortofan gel franchise that we believe is on a strong multi-year road trajectory.

Okay, great. And then just regarding Alluvian and UT, just given some of the challenges in the first quarter, just what gives you confidence you can accelerate the sales to get up into the guidance range for the full year? That's a pretty big step up. And, you know, I appreciate the steps that you're taking, but how long do you think for those to really take hold over the course of the year? And then just talk about the turnover in the Opto sales team. It actually didn't seem to impact Quartrofen in that segment, which you said was really strong in Opto, and I'm curious why that wasn't the case. And just, you know, going forward, your outlook for Opto. Thanks.

Right. Thank you again for your question, Gary. So first, you know, Illuvian and UT guidance for this year is 97 to 103 million, of which 30% is outside the U.S. Therefore, Illuvian and UT in the U.S. accounts for, you know, under 10% of total company 2025 revenue guidance. So just to dimensionalize that, and that's what, you know, the different topics, the factors we spoke about. But when it comes to the guidance, our confidence in reiterating the guidance for Illuvian and UTiQ at 97 to 103 million is based on five factors. First, the performance outside the U.S., which is roughly 30%, is largely on track across the markets with direct, the four markets with direct commercial operation and the 17 markets where we work with partners. Next, the factors driving our confidence related to U.S. performance for the rest of the year So first quarter results were low due to seasonality seen for most branded drugs. The remaining three quarters will not have this. In fact, it will reverse in the fourth quarter. So that's one. Second, we made significant strides in working through the turnover and strengthening our sales force with best-in-class talent. As of today, only four vacancies remain, and we'll be back to full strength during the second quarter, which will create additional momentum. Third, we're already seeing positive impact in April results from the bespoke commercial approach by region that we deployed, given the Medicare dynamics. And then last, we expect to see positive impact from a combination of our efforts exploring alternatives for Medicare patients to the Part D pathway and restart in the back half of the year of some level of foundation support for Medicare patients. So I think that I think you also asked more about turnover. Well, look, we believe we have a high-performance culture, and in the initial integration timeframe, it is typical to have a cross-calibration leading to organizational changes. We're adding best-in-class talent from top ophthalmology and rectal organization. As we approach, we followed in cortofin, and we expect our sales team to be back to full strength during the second quarter. You know, so that's the sales force turnover dynamic that we had in our combined ophthalmology sales force. And then you asked about, you know, impact on PCG and ophthalmology. You know, while on a smaller base, you know, Q1 volume for PCG for cortofin in – ophthalmology was 50% higher than in Q4, and we believe that the momentum will continue, right, as we, you know, have our full-strength combined ophthalmology, rare disease ophthalmology sales force in action. So, you know, and we feel confident about the continued growth and the outlook for growth in ophthalmology.

All right, great. Thanks for all that color, Mikael. Appreciate it.

Thank you, Gary.

We'll go next to Faisal Khurshid with Lyric Partners.

Hey, Nikhil, thanks so much for taking the question. I just want to ask, can you kind of drill in a little bit more to kind of the details on the commercial and access challenges that impacted Elluvian in the first quarter? And can you just explain a little bit, help us understand what you were or kind of how you're thinking about, like, working around that with, like, you know, getting the spec pharmacy and, like, Part D over Part B? Can you just, like, help us understand that a little bit? Thank you.

Thank you for your question, and good morning, Cecil. So the challenge is that there's a subset of patients that are on Medicare that require co-pay support to get therapy under Part B, as in boy. And due to lack of funding, and they get the support from foundations, and due to lack of funding, you know, these foundations have not been able to provide co-pay support, right? And this is a dynamic that emerged in Q1. So, you know, HCP physicians took some time and retina practices took some time to understand the change, whether it would persist and how they would need to modify their approach and practice while keeping patients first always. And so their response has varied across regions, and we've spent the time to understand how they're responding. One other thing to clarify is that this dynamic impacts, you know, Iluvian and the DME market more and therapeutics in the DME market more and has been laid out by other therapeutics in the DME market and to a much lesser degree NIUPS or non-infectious uveitis in the posterior segment of the eye. So, our team has spent the time understanding the ACP responses and granular impact to their workflows. And with that understanding, you know, we're exploring alternate paths to improve the access for the DMA population. So, for example, you know, the Medicare patients with pharmacy benefit, they can avail of the affordability options where there's a cap on the copay and smoothing offer that the Part D offers. So under that approach, we're exploring how to have retina physicians accessing Elluvium through a specialty pharmacy. Is that your sufficient color, Faisal?

Yeah, that's helpful. And then I had one on cortofan gel. So, you know, you've done well in this acute gouty arthritis nation, cool to see, kind of exploring some additional, like, evidence generation there. Are there other opportunities for you to kind of, like, recreate this sort of, like, carve out success in, like, other indications or disease segments?

Yes, absolutely. I think across, you know, it goes back to the epidemiology, across disease, across indications, the number of patients that can benefit from the therapy are significantly higher than, you know, than what we, that are availing of this option are being treated today. And, you know, as we've shared, 40% of our prescribers on cortofan are were naive to ACTH and then never prescribed ACTH before. So, you know, we have confidence in our ability to, you know, to get this treatment and this treatment option to more patients and prescribers. And so, you know, going back to your question, yes, there is an opportunity to, you know, to bring more focused commercial efforts in other therapeutic areas as we have done in ophthalmology.

Got it. Thank you for taking the questions. Thank you, Chris.

We'll go next to Valmol Devan with Guggenheim Securities.

Great. Thanks for taking the questions, and congrats on the quarter. So maybe one question was sticking to the ophthalmology side and then one on the generics. So on ophthalmology, I appreciate all the quality you've provided. You did mention the new day trial is completed now, and synchronicity as you said, you finished six months. Maybe can you just share your perspectives on sort of what you're hoping to see from those trials as we wait for the results here, and then what sort of impact could those have commercially on that business? And then on the generic side, you mentioned the CalPride 180-day exclusivity. I'm just wondering if you can comment on how much of a contribution that was to the generic performance in the first quarter, so we have a sense, for the second quarter as well. Thank you.

All right. Thank you for your question. Good morning, and thank you for your question, Bamil. So on New Day, we are in the process of analyzing the data from the completed New Day study. And if successful, it will, you know, allow physicians to consider Iluvian earlier in the treatment of DME. You know, as we've described before, epidemiologically, today we have less than 5,000 patients annually on Iluvian. whereas the addressable market is, even before New Day, is at 53,000, right, which is patients for whom multiple rounds of anti-VEGFs are not showing optimal response, and then they show positive response to steroid trial and can be considered for, and they're then being considered for alluvia. So that's the addressable market of 53,000 versus, you know, the 5,000 patients that are currently annually being treated on alluvium. So the opportunity as it currently stands, even before New Day, is pretty substantial. What New Day will do is that you know, much earlier in the treatment paradigm, right? So instead of 53,000, there are 400,000 additional patients that are being treated with multiple rounds of anti-VEGF. And so if New Day is successful, HCPs could consider using eluvian earlier in the treatment paradigm. So it would open up a broader patient population for eluvian. Next, your question on Procalipride. Look, we don't comment on product level net revenues for the generics business. But what we can say is that our estimates show genericization levels significantly higher than the IQB reported TRX share of 62% to 63%. And we're pleased with the execution of the ANI team on this product from R&D and regulatory to win the CGT approval. against numerous competitors to the sales and marketing team's ability to launch this product and maximize the opportunity. We anticipate that Q2 pre-calibrated revenues will be down as compared to the first quarter as the team will need to manage trade inventory levels down in advance of the end of 180 days of exclusivity on June 26th. So, you know, Janach will be in Q2 will be slightly lower, as Steve pointed out, on the phasing perspective. It will be lower than the first quarter and then return to growth in the subsequent quarters from a total company perspective.

Okay. All right. Thank you. Thank you, Vamo.

We'll go next to David Amsellem with Piper Sandler.

Thanks. So just a couple for me. First, on Cortofengel, as the category returns to growth, do you anticipate the payer landscape becoming more challenging over time compared to where it is now? Just talk about payer dynamics and, you know, what you're anticipating with the category returning to growth. So that's number one. And then number two, regarding eluvian appreciate all the color on the the headwinds but I'm just wondering out loud how you're feeling about the the underlying you know acquisition of Alameda and what has surprised you most in terms of the challenges that you faced with the asset thank you okay thank you for your questions and good morning David

So on Portrophine Pale Landscape, remember this category had not seen competition for many, many decades. And the payers and PDMs, they definitely see us as the – they appreciate the fact that we brought competition to this category. And we went to go and collaborate and partner with them from day one. So they appreciate that and, you know, as the category has evolved and as we've grown, we continue to collaborate with them and see, you know, see that continuing. I mean, at the end of the day, we all put the patients first and ensure that, you know, we're bringing this therapeutic, this much needed therapeutic to patients in need. So that's on the peer landscape dynamics. And then on, you know, where is our head on the overall acquisition of Elluvian? I think the simplest answer to that is, you know, we just bought out a royalty obligation from SWK on Elluvian. And so we believe in the, you know, continued long-term, you know, opportunity for Elluvian and Ucheek. So actually both in DME as well as in NIUPS where the addressable markets are you know, substantially higher, you know, in DME, 5,000 out of 53,000. In NIUPS, less than 5,000 out of, you know, 78 to 112,000. So, large addressable markets, we're fully confident of our ability to solve problems. You know, even when we acquired Nividium, we had to work through certain challenges. And, you know, you can see the the value that the NVIDIA Max position has brought to us. So this is a team that, you know, that thrives on, you know, capturing opportunities and addressing challenges and has a very strong, you know, orientation towards problem solving. You know, last quarter when we were speaking, we were talking about the, you know, supply challenges related to, you know, to the CMO for UT and, you know, we've worked through that challenge, right? We're you know, later this quarter, we're going to start selling the combined label. So, you know, I think it's, you know, as an operating team, we have a strong orientation towards problem solving. And, you know, as I said at the beginning, our belief in Elluvian is best highlighted by our recent, I think weeks ago, buyout of the royalty obligation from SWK. So thanks. Thank you for that question. Thank you.

We'll go next to Ekaterina Kinyaskova with JP Morgan.

Thank you so much and congrats again on the quarter. So first question is just on cortofen. Can you elaborate a bit about which indications are driving most of the growth at this point? How much of the growth is coming from neuro versus rheumatology versus nephrology versus some of the new areas like ophthalmology? And just any changes you're seeing from a competitive standpoint on an indication by indication basis? And then second question is just around tariff. Do you think there's an opportunity for you to leverage your U.S. manufacturing footprint if we do see these pharma tariffs enacted? Just how much spare capacity do you have that you could potentially leverage to capture additional market share?

Thanks. Thank you, Katrina, for your questions, and good morning. So on the first question on the indication, you know, we're fortunate. We see growth across all specialties. You know, our core specialties, the ones that we launched with nephrology, rheumatology, and neurology, we see strong growth across those indications. You know, we talked about the, you know, more than 15% of our usage, of our corticofin usage is coming from gout. So we see growth, significant growth there too. Obviously, we invested in the expansion of our field force that focuses on nephrology, rheumatology, and neurology, and they do that together as a portfolio sales team. So that team, that expansion is yielding results. And then ophthalmology, you know, while on a smaller base, uh, showed the highest growth with, you know, almost 15, 50, five, 0% in, uh, increase in volumes versus the, uh, fourth quarter, you know, and pulmonology also continues to show growth. So really, you know, we have opportunities growth across, uh, across indications and in terms of competitive, uh, dynamics, uh, um, They've raised their guidance to high single digits, and they spoke about four therapeutic areas that they're focusing their efforts on. And, you know, the category, the number of patients that can benefit is just much, much larger than, you know, what either competitor is treating at this time. So, yeah, I think both competitors can continue getting the ACTH therapeutics to, more patience and continue to grow the market and then your second question on you know tariffs and you know do we have spare capacity absolutely uh you know we do have spare capacity across our plants in east windsor new jersey as well as in bonnet minnesota We are positively and, you know, relative to our peers, well-positioned with over 90% of our revenues coming from finished goods manufactured in the U.S. and less than 5% direct reliance on China. And, you know, we'll play our role in, as we have done in the past, of, you know, if there is supply challenges that arise outside of the tariff situation to, you you know, to provide therapeutics to patients in need. Thank you for your question, Katrina.

Thank you. As a reminder, ladies and gentlemen, if you'd like to ask a question, you may do so by pressing star 1. We'll go next to Les Salewski with Truist Securities. Please go ahead.

Good morning. Thank you for taking my questions. So, Nikhil, perhaps I'll start on quatrophin. You mentioned the 40% naive patient adoption. Do you have a sense how those scripts for naive patient pool have been trending over time? And I guess what point do you expect that figure to turn? And then as for the pre-filled syringe, is this driven by switches or naive patients? And what's the impact to margin profile from that product? And I guess more broadly,

uh gross margin look favorable in one queue how do you expect that to trend throughout 2025 and have a follow-up yeah good morning and thank you for your questions les uh so cortofin you know having 40 percent uh of prescribers that are that were naive to the category you know that number keeps growing as you know we reach, you know, with larger addressable market and reaching more ACPs. So we'll keep you updated on the progress on that. On the pre-fill syringe, you know, we see the pre-fill syringe as another alternative, right, as we had the 5 ml vial and the 1 ml vial. So we're introducing the pre-fill syringe, which comes in two presentations, 1 ml and the 0.5 ml. And it's really for patients that have a you know, that the reduction in the number of steps of administration will be helpful to them. So, you know, it's for a subset of patients. It's early days in the launch of the pre-filter end, so we'll update you regarding your question on switches and, you know, is it new patients or switches? You know, we see this as another option for patients by reducing one step, for enhancing patient convenience by reducing one step in the administration process. in the steps for administration. And then in the near term, we see limited impact on the margin profile. It's priced at a slight premium to the 1 ml on a per ml basis, but a limited impact. And then on gross margin evolution through the year, I'll turn it over to Steve to take that question.

Yeah, good morning, Les, and thanks, Nikhil. Yeah, as we cited on the call today, Les, we continue to anchor in overall company gross margin between 63% and 64% throughout the course of the year. And obviously, there's numerous mixed elements as the year progresses. And we expect as rare disease becomes a bigger portion of the overall part of the total company revenues in the second half of the year and as the quarters progress, that will be a favorable margin input as compared to in the first quarter, you know, strong margins in generics. uh driven by uh pre-calipride uh as well as the uh the persistent of market persistence of market share uh games in the uh in the brand business uh which helped margins in the first quarter great that's helpful um as a follow-up on the eluvian boutique um

Nicol, do you have a sense of what portion of that subset is Medicare Part B? And is there a potential that cohort, I guess, a patient does not come back given that, you know, appears unlikely the third party will come back with funding, the assistance and co-pays? And then I guess the second portion, the Salesforce turnover within Ophthalmology, does that have any impact or Catrophin, or perhaps asked in another way, is that a potential for an increased opportunity for Catrophin given the new team that's in place now? Thank you.

Yeah. Well, thank you for your questions. So I'll take your second question first, which is on the turnover. You know, yes, I think you framed it correctly, appropriately, that if, you know, if we had the full team staff, you would have seen more growth in Cortofan. So, yes, we will see the impact of the top talent that we bring in on both Illuvian and Cortofan going forward. So that's the answer on the turnover and the positive impact on chlorpropan. And then your question on Medicare, so there's a subset of Medicare patients, right, that don't have copay support to, you know, various mechanisms that are available, and that's the the population that's impacted by the funding, you know, not being available. And look from our perspective, you know, from everything that we've heard from major contributors to the relevant foundations, say in the public domain, and the discussions with several stakeholders in RETNA, you know, we believe that some level of foundation support will return in the second half of the year. And if the foundation support does not come back, we're likely to trend towards the lower end of our guidance range as far as the Illuvian and UTIC is concerned. And remember, Illuvian and UTIC in the U.S. is about 70% of our total Illuvian and UTIC guidance, right? So from a total company basis, again, just a reminder, it's less than 10%. of total company 2025 revenues. And so our guidance for total company and the RAISE guidance factors in, you know, the puts and takes across different business lines. And, you know, we have high confidence in the overall total company revenues and total company adjusted non-GAAP EBITDA and adjusted non-GAAP EPS guidance that we have given. And we continue to retain that confidence.

Thank you.

Thank you. This does conclude today's question and answer session. I will now turn the program back over to Nikhil Lalwani for any additional or closing remarks.

Thank you, everybody, for joining our call this morning. We look forward to updating you on further progress as the year unfolds, and we look forward to seeing many of you at the Jeffries Conference in New York in June. Thank you.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.