ANI Pharmaceuticals, Inc.

Good morning, everyone, and welcome to today's A&I Pharmaceuticals third 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 star, then the number one on your telephone. We ask that you please limit yourself to one question. If you would like to withdraw your question, please press star, then the number two. It is now my pleasure to turn the conference over to Ms. Courtney Mogerly, Investor Relations. Please go ahead, ma'am.

Thank you, operator. Welcome to ANI Pharmaceuticals Q3 2025 Earnings Results Call. This is Courtney Mogerly, Investor Relations for ANI. With me on today's call are Nikhil Awani, 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 statements made on today's conference call that express a belief, expectation, projection, forecast, Anticipation or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to A&I Pharmaceuticals Management as of today and involve risks and uncertainties, including those noted in our press release issued this morning and our filings with the 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 November 7th, 2025. 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 will turn the call over to Nikhil Alwani.

Nikhil Alwani Thank you, Courtney. Good morning, everyone, and thank you for joining us. The third quarter was another remarkable quarter for A&I Pharmaceuticals, marked by record revenue, adjusted EBITDA, and adjusted EPS, all driven by continued momentum across our rare disease and genetics business units. We grew total company revenues by 54% year-over-year and 46% on an organic basis. In addition, we nearly doubled cortofan gel net revenue compared to the third quarter of 2024, and generated adjusted EBITDA growth of 70% year over year. Based on our very strong third quarter performance and future outlook, we are pleased to raise our top and bottom line 2025 financial guidance. Compared to 2024, we now expect to grow 2025 net revenues 39% to 42% and 34% to 37% on an organic basis. with rare disease becoming essentially half of our total revenues for the year. We expect our lead rare disease asset, cortofen gel, to grow 75% to 78% year-over-year to generate revenues of $347 million to $352 million. We expect to grow adjusted EBITDA between 42% and 46% compared to 2024. Later in the call, Steve will provide more detail on our increased guidance. Growing our rare disease business is a top strategic priority for us, creating long-term value for our stakeholders and advancing our purpose of serving patients, improving lives. Turning to our lead rare disease asset, cortofan gel. To drive strong multi-year growth, we're focused on clinical evidence generation to support physician decision-making, investments to enhance patient convenience, and high ROI commercial efforts to drive growth. Our team has made significant progress on these initiatives to grow cortofan gel across our target specialties. In the first quarter, we expanded our portfolio sales team, and we're seeing very positive results highlighted by our strong momentum in new cases initiated and growth in new patient starts. We also launched the pre-fill syringe in the second quarter, reducing administration steps for patients. We're seeing sizable increased demand for the pre-fill syringe and expect it to be an important growth driver. Importantly, to support our commercial team's efforts to drive awareness for cortofan gel, we are committed to generating data to help clinicians, patients, and payers make informed treatment decisions, including a Phase IV clinical trial in acute gouty arthritis flares, preclinical data on cortofan gel's mechanism of action across multiple disease states, and presentations and publications at prominent medical meetings. We remain confident in the strong multi-year growth trajectory of cortofin based on multiple factors. The ACTH market has returned to growth following the launch of cortofin in 2022 and is expected to increase approximately 40% to $957 million in 2025, with cortofin growing by 75% to 78%. Despite this growth, we believe that the addressable patient populations across key indications are significantly under-penetrated. For example, the addressable patient population for acute gaudy arthritis alone is 285,000 patients, an indication that is unique to cortofan gel's label. Importantly, the number of cortofan gel prescribers who were previously naive to ACTH represent approximately half of our total prescriber base, and this group continues to grow. Turning now to our retina portfolio. Illuvian sales in the third quarter were lower due to the further impact from the continued reduced access for Medicare patients and the utilization of the remaining UT units as physician offices. In addition, adoption of Illuvian for NIUPS began in the third quarter, and the company continued to make tangible progress toward full adoption of the label transition. We see 2025 as a reset year for alluvian and believe that we can grow in 2026 and beyond for several reasons. First, we believe the addressable patient populations for alluvian in both BME and NIUPS are at least 10x the current number of patients treated with alluvian. second we expect to see the ensuing results of our strengthened and more experienced ophthalmology organization that is coalescing and deploying an expanded peer-to-peer education program speaker education program and new marketing initiatives in addition we continue to disseminate and contextualize findings of the new day clinical study and create greater awareness on the potential use of alluvium lastly we are seeing signs that there is a growing number of physician offices exploring alternative access pathways including medicare part d through specialty pharmacy this is the path we use for cotrophin moving now to our genetics business we had a very strong third quarter performance due to an opportunistic partner generic launch that occurred in the second half of the third quarter This launch once again highlights our strength in creativity, R&D, business development, operations, and execution intrinsic to A&I's genetics business. And we will continue to leverage these strengths to unlock future opportunities. Based upon upside from this launch, we expect genetics growth for the full year in the low 20% range. We're proud of the continued execution of our genetics business and how it provides ongoing foundational support that enables us to invest in our initiatives to grow our rare disease business. In summary, we delivered another record quarter, given by strong performance across our rare disease and genetics business. As we head into 2026, we expect our virtuous cycle of growth to persist. Rare disease is our primary focus area and largest driver of growth. In addition, we expect continued strong momentum in cortofen and positive impact from multiple initiatives outlined to grow Elluvian in 2026. In addition, we will continue to explore inorganic opportunities to expand the scope and scale of our rare disease business. These efforts will be supported by continued performance in our generics and branch business. I'll now turn the call over to Chris Mutz to discuss our rare disease business in more detail.

Thank you, Nikhil, and good morning, everyone. Echoing Nikhil, our rare disease team delivered another excellent quarter marked by continuing record demand for cortofan gel. The number of cases initiated and new patient starts reached another record high, and we saw broad-based growth across all of our targeted specialties, rheumatology, nephrology, neurology, pulmonology, and ophthalmology. To capture the multi-year growth opportunity for cortofan gel, we are focused on three key priorities. First, we are investing in high ROI commercial initiatives to fuel growth. In the first quarter of 2025, we expanded our portfolio sales force by approximately one-third, further optimizing their territory. Our expanded portfolio sales team added new prescribers and drove meaningful increases in new patient starts across our core specialties during the third quarter. In addition, our specialty-focused teams produced sizable growth in our newer areas of pulmonology and ophthalmology. and we believe we are still in the early stages of penetrating these therapeutic areas. Cortofrin gel prescribing for acute gouty arthritis flares remained a key driver in the third quarter. Notably, the acute gouty arthritis indication is unique to cortofrin gel's label among ACTH therapies and accounts for over 15% of cortofrin gel use. Further, the gout indication has contributed significantly to the growth of new prescribers, many of whom are historically unfamiliar with ACTH. Turning to ophthalmology, we continue to realize meaningful revenue synergies and saw a record number of new patient starts and a 42% sequential quarterly increase in cortofan volumes. We believe there is further growth potential to expand awareness of cortofan for patients with severe allergic and inflammatory eye conditions. Additionally, we continue to strive to enhance patient convenience. Our new cortofan pre-filled syringe offering, which we launched in April, provides a simplified administration that we believe has been well-received by patients and prescribers. The pre-fill syringe continues to be an important growth driver for cortofan gel. And finally, we are investing in clinical evidence generation to support physician decision-making. As previously announced, we're conducting a Phase IV trial in acute guardia arthritis flares. We believe the 150-patient study will provide physicians with valuable insight on the treatment of acute guardia arthritis flares with cortofan gel and could support positioning and treatment guidelines. We continue to generate robust preclinical data for our key stakeholders on cortrophin's differentiated mechanism of action across multiple disease states. This is an important growth initiative as we believe increasing the body of evidence supporting cortrophin gels used across indications will help physicians make further informed treatment decisions. Our preclinical study of cortrophin gel and UVA that was presented earlier this year has been published in Osteoimmunology and Information. We also had a poster at the American College of Rheumatology 2025 Annual Meeting that highlighted preclinical data supporting the use of cortofan gel for the treatment of inflammatory arthritis and its anti-inflammatory mechanism of action. Additionally, a manuscript for a preclinical study of cortofan gel and membranous nephropathy was accepted for publication in molecular therapy. The study demonstrates the steroid-independent mechanism of action of cortofan gel in an animal model of membranous nephropathy, specifically its effect on the complement system, areas of significant interest in ongoing membranous nephropathy drug development. Subsequently, this publication was highlighted in a commentary paper in molecular therapy and presented at the American Society of Nephrology meeting. Turning to our retina franchise, we are making progress on multiple initiatives to improve alluvium sales. Our commercial team is fully hired, onboarded, and dedicated to educating and supporting the retina community. We are strengthening our promotional efforts, including a ramp-up of new peer-to-peer educational speaker programs, and they continue execution in the field with new marketing materials. to increase the understanding on retina physicians of Alluvian and its two indications. In mid-June, we began promoting Alluvian under the combined label for chronic NIUPS and DME. Our sales teams are educating customers across the country, and our market access team has worked with payers to establish coverage for Alluvian's new chronic NIUPS indication. Six of the seven Medicare administrative contractors, or MACs, have updated their policy to cover Alluvian for NIUPS and we're working with the other contractors to update their policy. Among the top 20 commercial payers, all payers who have a policy specific to Elluvian have updated to reflect both DME and NIUPS indications. We continue to receive positive clinician feedback on the convenience of a single product covering both indications. Next, we have initiatives in place to help physician practices navigate the market access challenges for Medicare patients that have persisted since January, 2025. As a reminder, Patient support foundations such as Good Days did not receive sufficient funding for 2025, which affected their ability to assist Medicare patients with copay support across retina products broadly. Our team has been gaining traction with HCPs, with leading retina practices exploring the pathway to get Alluvian accepted for appropriate eligible patients through Medicare Part D benefit using a specialty pharmacy. This is the same approach used for access to Cortrofen. In addition, We continue to present the results of our New Day study of alluvium in patients with DME at numerous prominent medical meetings. This includes a late-breaking oral presentation at the American Academy of Ophthalmology 2025 meeting, a presentation at the American Society of Retina Specialists annual meeting, and an oral presentation at the EU Retina Innovation Spotlight 2025 meeting. Looking forward, we are preparing to present these data at additional upcoming conferences to further disseminate and contextualize these findings. 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. Today, I'll review our third quarter results and our revised guidance in more detail. We delivered strong top and bottom line growth, generated significant cash flows, and are raising our 2025 financial guidance based on our exceptional performance this quarter. ANI generated revenues of $227.8 million in the third quarter, up 53.6% over the prior year period. Revenues from rare disease and brands were $129.1 million in the third quarter, nearly double the prior year period on an as-reported basis, and up 82.2% on an organic basis, driven by growth in our rare disease franchise. Rare disease revenues were $118.5 million, up 109.9% from the prior year. Revenues from cortofan gel were $101.9 million, up 93.8% from the prior year period, driven by increased volume on a record number of new patient starts. Alluvian net revenues were $16.6 million. Revenues for brands were $10.7 million in the third quarter, up 16.1% versus the prior year period due to an increase in demand for certain products. News were down $2.5 million as we saw the expected trend toward normalization in demand during the quarter. We expect that the normalization trend will continue and therefore expect modestly lower demand in the fourth quarter. Revenues for our generics and other segments were $98.7 million, an increase of 19.3% over the prior year period. Revenues for generics were $94.4 million, an increase of 20.6% over the prior year period, driven by the successful launch of a partner generic product in the second half of the third quarter that overcame our previous expectation for a sequential dip in generics. Generics were up 4.1 million as compared to second quarter of 2025 due to the strength of this launch. Note that the gross margin for this partner generic product is lower than typical gross margin for our generics portfolio given the profit share element with our partner. Now moving down the P&L. As a reminder, when I speak to operating expenses, I will be referring to our non-GAAP expenses, which are detailed in Table 3 of our press release. Generally, our non-GAAP operating expenses exclude depreciation and amortization, stock-based compensation, certain costs related to litigation and M&A activity, as well as certain non-cash charges. Please refer to Table 3 for a reconciliation to our GAAP expenditures. Non-GAAP cost of sales increased 56% to $92.9 million in the third quarter of 2025 compared to the prior year period, primarily due to net growth in sales volumes and significant growth of royalty-bearing products. Non-GAAP gross margin was 59.2%, a decrease of 63 basis points from the prior year period, principally due to product mix, including the lower gross margins on our partner generic product. Non-GAAP research and development expenses were $11.8 million in the third quarter, an increase of 36% from the prior year period, driven by higher investment to support future growth of our rare disease and generics businesses. Non-GAAP selling general and administrative expenses increased 41.1% to $63.6 million in the third quarter, driven by spend for our new larger ophthalmology sales team, promoting cortofan gel and alluvian, and continued investment in rare disease sales and marketing activities, including the expansion of the rare disease team in the first quarter. Adjusted non-GAAP diluted earnings per share was $2.04 for the third quarter compared to $1.34 per share in the prior year period. Adjusted non-GAAP EBITDA for the third quarter was $59.6 million, up 69.8% compared to the prior year period. We ended the third quarter with $262.6 million in unrestricted cash, up from $217.8 million at the end of the second quarter and $144.9 million as of December 31st of the prior year. Cash flow from operations was $44.1 million in the third quarter of this year and $154.9 million on a nine-month year-to-date basis. As of September 30th, we had $633.1 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the third quarter, our gross leverage was three times, and our net leverage was 1.7 times our trailing 12-month adjusted non-GAAP EBITDA of $214.5 million. During the third quarter, we concluded our 2021 piped financing transaction with Ampersand by converting all previously issued 25,000 shares of Series A convertible preferred stock to 602,900 shares of common stock. As of September 30th, 2025 balance sheet, there were no further shares of Series A convertible preferred outstanding and all mandatory dividends were paid in full. Now 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 cortofan gel in that revenue and the continued outperformance of our generics business while tempering our alluvian estimates our updated guidance is as follows Full year 2025 net revenue of $854 million to $873 million, up from our prior guidance of $818 million to $843 million, representing year-over-year growth of approximately 39% to 42%. Cortofan gel net revenue of $347 million to $352 million, up from our prior guidance of $322 million to $329 million, representing year-over-year growth of 75% to 78%, driven by continued volume gains. We continue to expect sequential growth of Cortofan revenues in the fourth quarter. Combined, the Lubion and Utique net revenue is $37 million versus a prior guidance of $87 million to $93 million. This guidance assumes no meaningful change in the co-pay funding gaps facing Medicare patients in retina for the remainder of the year. Generics revenue growth in the low 20% range, driven by strong contribution from new product launches. We expect generics revenue in the fourth quarter to be down on a sequential basis due to competitive entrance into the market in which our third quarter partnered product competes in. Adjusted non-GAAP EBITDA of $221 million to $228 million, up from our prior guidance of $213 million to $223 million, representing year-over-year growth of approximately 42% to 46%. Adjusted non-GAAP earnings per share between $7.37 and $7.64 up from our prior guidance of $6.98 and $7.35. We are revising our full fiscal year guidance for adjusted gross margin to 61% to 62% compared to our previous guidance of 63% to 64%. driven by the revised revenue mix in this morning's guidance with lower alluvian and higher generics forecast as compared to our previously issued guidance. We currently anticipate a full-year U.S. GAAP effective tax rate of approximately 21% to 22%. 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 now anticipate between 20.5 million and 20.7 million shares outstanding for the purpose of calculating full-year non-GAAP diluted EPS. Please note that in periods in which A&I common share price is greater than the conversion price of our underlying convertible debt of $74.11 and lower than the conversion price of our corresponding capped call transaction of $114.02 per share, we will exclude from our adjusted non-GAAP diluted EPS calculation the dilutive shares included in the GAAP diluted EPS calculation, which are expected to be offset in full by the capped call transaction. The third quarter was the first reporting period in which this condition exists. With that, I'll turn the call back to Nikhil.

Thank you, Steve. In closing, we made exceptional progress as we continue to execute our strategic priorities. Rare disease remains our top strategic area and primary driver of growth. and will focus our efforts on driving further growth in cotrophin and improving alluvium performance. We are encouraged by our performance this quarter, having reached more patients with our portfolio of high-quality medicines, nearly doubling cotrophin gel net revenues compared to the third quarter of 24, and significantly growing both the top and bottom line, made possible by the efforts of our employees, customers, suppliers, and investors, and their dedication to our mission of serving patients, improving lives. Operator, please open the line for questions.

Certainly, Mr. Labonte, thank you. Ladies and gentlemen, at this time, if you do have any questions, please press star 1. You can always remove yourself from the queue by pressing star 2. Again, we do ask that you please limit yourself to one question. We'll go first this morning to Dennis Bing of Jefferies.

Hi, good morning. Thanks for taking my question. One on Cortrosan. So Medicare Part D redesign lowered the catastrophic coverage limit this year, and that's been a big tailwind. But that also makes for a really tough comp next year where growth should be driven more organically and through expanding the breadth of prescribers. Do you agree with that take? And I guess how much confidence do you have that you're able to do that with the sales force you have currently? Thank you.

Good morning and thank you, Dennis. So I think I'll take your question in two parts. First is, you know, what's the impact of IRA on 2025 and then, you know, how do we see this going forward? I think, you know, as you pointed out, IRA improved affordability and access for appropriate patients to needed medicines by capping the copays at $2,000 as well as introducing the ability to evenly spread the payments throughout the year. Now, we did see a modest tailwind from that. This is consistent with what we've said in the prior quarter. And the reason it's modest is while this did get additional patients on therapy, it was tempered by the mandatory Medicare manufacturer payments that we need to make. And so overall, Corprofin saw a modest net positive impact from the Part D redesign through IRA. And then as far as your second question on next year and going forward, look, it's, you know, we believe that there is significant multi-year growth opportunity for Coprofen in 2026 and beyond. And that's driven by the really the strong underlying demand. And the demand sort of is centered in the addressable populations, right? Addressable patient populations across key indications are significantly under-penetrated. For acute gouty arthritis alone, it's about 285,000 patients. And our ability to expand the market is highlighted by the fact that approximately half of our prescriber base had never used ACTH therapy before. And as Chris had mentioned in his remarks, You know, we continue to see growth from both the existing prescribers as well as new prescribers. So we remain confident of, you know, being able to reach, you know, the appropriate patients in need by, you know, by working with the HCPs. Thank you, Dennis.

We'll go next now to Cecil Khurshid at Lyric Partners.

Hey, guys. Thanks for asking the question. Could you speak a little bit more to what this kind of new partner generic product is and then also what you expect for that in the fourth quarter and kind of going into 2026 as well? And then I have one on ketropen as well.

Good morning, and thank you for that. uh for competitive reasons we're not uh specifying the name of the partner generic uh it's a product that we launched obviously as it's intended uh with a with another manufacturer and we're able to capture be the sole generic for for a period of time a majority of which was in q3 in q4 uh we have seen some competition enter on that product so you know that's why uh know our guidance for for q4 for generics is showing a sequential you know drop versus the much higher q3 that we had and you know because it's a partner generic it's also has profit share in it and therefore uh the gross margins on that product are lower uh going into 2026 you know uh we will see at least the existing competition continue. And, you know, we look forward to updating you more on the on the guidance for 2026 in early next year.

Got it. Okay. And now in a quick open, are there any inventory or gross to net situations that we should be aware of or about this because it seems like the volume growth kind of outpaced the actual dollars growth in this quarter?

No, the cortofan gel growth is driven by strong underlying demand, highest number of new patient starts and new cases initiated since launch, growth across all targeted specialties, the expanded portfolio sales force that we did in the first quarter, growth in nephrology, neurology, and rheumatology. Gout, which is one of the newer target specialties, now represents 15% of corticofan gel use. That contributed significantly to the growth, in fact, to the growth, not just in cork growth and volume, but also to the growth of ACTH and IE prescribers. And then the combined ophthalmology sales force continued to build momentum with a 42% increase in volume versus the second quarter of 25. And then underlying, just from a presentation perspective, the strong demand for the pre-fill syringe with it accounting for almost 70% of the new cases initiated. So it's strong underlying demand that's driving the growth in cortrophin.

Got it. Thank you. Thank you, Preston.

Yeah.

We'll go next now to David M. Sellem at Piper Sandler.

Thanks. So just a couple of quick ones for me, and I'm sorry if I missed this earlier in the prepared remarks. Can you talk about, regarding cortofen, the growth trajectory in pulmonology and what portion of the mix that is? I think you talked about the other therapeutic areas. And then secondly, just given just the wide label and all the different indications, where do you envision untapped opportunities that aren't really a big part of the current mix for the product? And then lastly, I know this is a priority, but just wanted to get your latest thoughts on business development and M&A and how large of a transaction you would contemplate given the current capital structure. Thank you.

Yeah. Good morning, and thank you, David. So, pulmonology and sarcoidosis is an important therapeutic area for us. We have a dedicated, a smaller team, but dedicated for pulmonology, and we are seeing a growth in that area, too. Again, it's a smaller part of the overall cotrophin picture at this time, but there is significant growth opportunity there, and in pulmonology, we see you know, larger number of vials per patient. So I think that's another factor that makes pulmonology an important area for us. So that's on pulmonology. Regarding the wide label, look, I think, you know, currently as you have seen, you know, the addressable patient populations and the indications that we're addressing today, is much larger than anything that we're penetrating today. And so our immediate focus is, you know, our near-term focus is on tapping these different opportunities. And, you know, it's across the board, right? It's in neurology, nephrology, rheumatology. We talked about gout. We talked about ophthalmology, the quarter-on-quarter growth. So there's multiple areas. And part of, you know, as we think, as Chris thinks about, you know, where to – drive the growth is where to make the high ROI commercial investments to achieve that growth. Because there's really, we're fortunate that there's opportunities across specialties and that we're able to drive growth to existing prescribers as well as have new prescribers who've never, you know, some that are naive to ACTH and some that were never not even familiar with ACTH adopt Coprofen or use them in their treatment paradigm for appropriate patients. And then lastly, to your question on BD, we continue to explore opportunities to expand scope and scale of rare disease business. I think that our filters are similar to what they were last time, at this time, which is late stage or close to commercial or commercial. some uh and synergistic with you know either our sales force right so call point synergy as was in the case of alamera or leveraging the rest of our rare diseases rare disease infrastructure right which is the market access uh patient support specialty pharmacy distribution you know and across the board there so uh that's how we think about uh bd efforts and we're continuing to uh uh to explore opportunities but as i said um You know, as I highlighted, if you look at even the growth this year, you know, we had 34% to 37% growth based on our guidance organically, right? And there's significant growth opportunity both in Cortrofen and in Luvian. So we're not in a hurry to do a deal. We're wanting to make sure that we do the right deal as we expand the scope and scale of our rare disease business. Thank you, David.

We'll go next now to Vamil Devan at Guggenheim.

VAMIL DEVAN I agree. Yeah, this is Daniel on Provamo. Thanks for taking our questions and correcting the quarter. So maybe just one question on quetrotin. Maybe if you could expand a little bit on like what exactly currently is driving doctors to use this drug across these various indications? I know you mentioned that you're focused on generating more evidence around this mechanism now, but maybe currently with what you have, who are the patients that doctors think are the right ones for Petrocin versus other alternatives that are available for each of these different conditions?

Thanks. Sure. And good morning, and thank you, Daniel. So I'll start, and then Chris can jump in. So, you know, cotrophin is a late line treatment for appropriate patients for which other therapies have been sort of less effective and be, you know, the real sort of the standard of care and the treatment options that are varying by, you know, I guess, by specialty and by indication. So when it fits into the treatment algorithm, it sort of varies. But essentially, it's a late-line treatment option. It's used also for patients that have, with this non-steroidal mechanism of action, used for patients that are refractory to steroids or have a high side effect profile. Chris, would you like to add anything?

Yeah, no, I'd just say, you know, Taking care of patients with autoimmune disorders is challenging, and thank goodness there are a lot of great options across for physicians to use, right, these modifying therapies, new innovations across the spectrum and the patients we serve. But, you know, there are still patients, select patients that are really tough to take care of, and physicians are coming to the kind of end of the road in terms of, you good option for those patients that they can rely on. And there's a significant number of those patients as, as we've outlined, um, you know, who, who needs something different and, and, and a new choice of, of, of treatment. And I think that's where, you know, that's where we focus in those, you know, we, we think there's, um, that's a, that's a large patient population. It's a difficult to treat patient population and we are, you know, just getting started.

Thank you, Daniel.

We'll go next now to Gary Nachman with Raymond James.

Hey, thanks and congrats on another strong quarter. So back on court trophy, you just added wraps and saw a good ROI on that immediately. Is this market really that promotion sensitive? Maybe just characterize that a bit more and are there still some pockets where you could add more reps and would you do that in the near term given the great returns there? and then the pre-filled syringe seems to be having a big impact on the acceleration was administration really that much of a factor that previously held back use so just explain more why you're seeing such a benefit from the pre-filled syringe helping growth thanks yes thank you um i think gary to your uh good morning gary and thank you for your questions that first question on uh on the uh

the impact of sales reps. I would say that the way we think about it is we expanded our, the underlying patient demand is very high versus anything that we're capturing. So there are opportunities to reach prescribers right, that with our, you know, with our sales force, there's opportunities to get in front of more prescribers and spend more time with them that we can keep building on where we are. So if you look at, if you think about where we expanded the sales force, we had a combined sales force detailing into neurology, nephrology, and rheumatology. As you can can imagine that even within a territory, it's tough to cover all three indications. So we expanded the number of sales reps in that area. And what that did is it reduced what's called windshield time and allowing the reps to spend more time speaking with docs about Cotrofen. And yes, there is opportunity to, you know, across specialties, across syndications, as we think about, you know, make increasing awareness for the appropriate patients of cortofan. There's certainly opportunity to do that. uh you know across multiple areas right across the portfolio area across gout across ophthalmology well ophthalmology i think we were stacked with the combined sales force we have right now but there's opportunities uh sort of across you know multiple specialties and something that we'll continue evaluating um high roi commercial efforts uh there and then your second question on pre-filled syringe yeah look you know when we launched the pre-filled syringe We had expected the preful syringe would be used for patients that had dexterity issues or, you know, issues with their eyesight. But as we're seeing this much greater adoption and it's across specialties, I think when given an option, I think prescribers are just prescribers and patients are choosing the reduced administration step, because in the original or in the 5-mL vial, there are two steps to the administration. You have to obviously draw the drug from the vial and then administer it, and have to use two different needles for doing so. So a pre-filled syringe is, you know, it reduces that step in administration and is therefore more widespread adoption. What it has done is, you know, there are prescribers that, that are sort of willing to try a pre-filled syringe, probably a bit more than going to a 5 mL vial that requires, you know, which is, you know, a larger use. But, you know, I mean, essentially, the growth is coming from the strong underlying demand which would have been there also with the 5-ml vial and the 1-ml vial, the other presentations that are there, the adoption of the pre-fill syringe has driven, you know, has been driven by just the reduced steps of administration. Thank you, Gary.

Thank you very much. Thank you. We'll go next now to Ekaterina Niaskova at J.P. Morgan.

Thanks so much and congrats on the quarter. So just a quick one from me. Just remind us how you're thinking about the durability of cortofan gel over time. Just latest thoughts on the possibility of, you know, potential generic competition eventually emerging. And I'm not talking like next year, like 5, 10, 15 years from now. You know, I think there's obviously a lot of barriers to entry there. But just I guess as, you know, this class is becoming bigger and probably garnering more attention from potential generic manufacturers. Thanks.

Good morning and thank you, Katrina. You know, the benefit of having a capability in generics ourselves is we're, you know, we're able to sort of pretty, we have expertise and capability in assessing the pathway to developing a generic. You know, and our position sort of stays that, you know, given this is porcine derived and the mix and the formulation that it is, what it will take to actually develop a generic, it's a very tough pathway. And that's why, while many folks have tried it, and have not succeeded. It's a very complex development, and there are examples of products like this that are tough to genericize. So we continue to believe in the long-term durability of either ACTH product being tough to genericize. Thank you. Yeah, sorry, one other thing I would highlight is both us and the competitor have also added uh patents uh strengthened our ip around the products that go into the 2040s uh so that's another uh you know uh point on durability thank you katrina thank you we go next now to brandon folks with hc wing right all right thanks for taking my questions and congrats on another good quarter uh nikhil just following on from their prior question

Can you just remind us of the challenges of label expansion in ACTH category for these products? Just sort of, you know, in the past, has this label expansion been a cost benefit decision or practicality decision? um and then just sort of any color in terms of you know if this market does double the confidence around maintaining exclusivity on gauss as a label claim and then does that phase four data give you any potential additional ip around that thank you yeah good morning and uh and thank you brandon

I think that our interaction on your question on label expansion, our interaction with the FDA suggests that any label expansion will need to follow the current rules of the FDA, which requires a phase four clinical sorry phase three clinical trial uh and all the associated rules that are that are in place today so uh you know that's what we'll need to do and that's what our competitor will need to do whether that's us trying to that's our understanding whether that's us uh exploring uh infantile spasms or which is an indication they have that we don't or us exploring or them exploring a few gaudy arthritis flares uh and then you know on the phase four data look that that study was designed and is being executed uh more to inform uh and assist physicians in their in their treatment and hopefully uh in their treatment decisions and hopefully um could be included in the treatment guidelines which can drive sort of you know further adoption now thank you brandon

Thank you. We'll go next now to Les Woloski at Truist Securities.

Good morning. Thank you for taking my questions. Three from me. So just to touch on the Salesforce again, what are some of the KPIs that you're tracking to back the right-sizing of this team? And what trends have you seen in the sales per rep from the Salesforce expansion? And any of these metrics will drive your reasoning to potentially increase the Salesforce? And then second, can you provide any more color around that partner generic program? Are there additional opportunities um in similar scope or is this a one-off situation and then third maybe uh for steve uh as you called out the year could we potentially anticipate an intangible asset impairment charge tied to the uh revaluation of the lmr acquisition thank you all right uh good morning and thank you for your questions uh les so i think uh first is on the sales force um you know as

We believe, well, on the KPIs, we're going to, you know, we try to share information that's helpful to investors and competitively sensitive, so I'll steer away from the KPIs. But on the trends, I mean, there is, you know, there's clearly... expansion of the sales sales force in the appropriate areas uh is a high roi commercial effort as is evidence as evidenced by the expansion that we did earlier this year for our portfolio sales team that's something that we will continue to evaluate and explore as we move forward on the partner generic Yeah, on the partner generic, there are definitely opportunities like that, ones that have been in the hopper, ones that we continue to work on. And it really just highlights, you know, our end-to-end capability in BD, in R&D, in commercialization, and obviously in operational excellence. So across the board, I think we're uniquely positioned with our US manufacturing footprint, with more than 90% of our revenues coming from products that are made in the US with our three manufacturing facilities that are in the US. So we're uniquely positioned from that standpoint, and we absolutely uh plan to and are already uh working on such opportunities uh to you know to uh to capture and to uh to bring to market and then on the i think the eluvian long-term question uh i think that there is you know our So beyond Q4 in 2026, we believe the addressable patient populations for alluvion in both BME and NIUPS are at least 10x the current number of patients currently being treated with alluvion. We expect to see the results of our strengthened ophthalmology organization deploying, you know, the expanded peer-to-peer speaker education program and new marketing initiatives. And then in addition, we continue to disseminate and contextualize the findings of the New Day clinical study and create greater awareness on the potential use of Elluvian. So while we see 2025 as a reset year, we are confident in being able to drive growth in 2026 and beyond for Elluvian. And Steve, I don't know if you want to add anything to Les' question with that backdrop.

Yeah, good morning, Les. I would only add that we evaluate all of our intangible assets on a quarterly basis. And, you know, the third quarter for Alluvion was no different and obviously, you know, passed that testing in the third quarter. And as Nikhil just outlined, right, when we think about the mid- to long-term forecast for the product, you know, we remain confident in the, you know, mid- to long-term opportunities as Nikhil just laid out.

Very helpful. Thank you. Thank you.

Thank you. And Mr. Lawani, it appears we have no further questions this morning, so I'd like to turn the conference back to you for any closing comments.

Thanks, everybody, for joining, and we look forward to updating you on our progress in the future. Thanks, everybody.

Thank you very much, Mr. Lawani. Again, ladies and gentlemen, that will conclude today's A&I Pharmaceuticals third quarter earnings call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.