ANI Pharmaceuticals Q1 2025 Earnings Report

ANI Pharmaceuticals EPS Results

• Actual EPS: $1.70
• Consensus EPS: $1.37
• Beat/Miss: Beat by +$0.33
• One Year Ago EPS: $0.82

ANI Pharmaceuticals Revenue Results

• Actual Revenue: $197.12 million
• Expected Revenue: $179.75 million
• Beat/Miss: Beat by +$17.37 million
• YoY Revenue Growth: +43.40%

ANI Pharmaceuticals Announcement Details

• Quarter: Q1 2025
• Date: 5/9/2025
• Time: Before Market Opens
• Conference Call Date: Friday, May 9, 2025
• Conference Call Time: 8:00AM ET

ANI Pharmaceuticals (NASDAQ:ANIP), a biopharmaceutical company, develops, manufactures, and markets branded and generic prescription pharmaceuticals in the United States and Canada. The company manufactures oral solid dose products; semi-solids, liquids, and topicals; controlled substances; and potent products, as well as performs contract development and manufacturing of pharmaceutical products. It markets its products through retail pharmacy chains, wholesalers, distributors and mail order pharmacies, group purchasing organizations, specialty pharmacies, and hospitals. ANI Pharmaceuticals, Inc. was incorporated in 2001 and is headquartered in Baudette, Minnesota.

ANI Pharmaceuticals Q1 2025 Earnings Call Transcript

Key Takeaways

• Record Q1 performance and raised 2025 guidance: Q1 revenue was $197.1 M (up 43% YoY) with adjusted EBITDA of $50.7 M and EPS of $1.70, prompting management to raise full-year 2025 revenue guidance to $768 M–$793 M (25–29% growth) and EBITDA to $195 M–$205 M (25–31% growth).
• Generics business delivers strong growth: Q1 generics revenues reached $98.7 M (up 41% YoY) fueled by new product launches including first-to-market Focaliprise exclusivity, and now expects mid-teens percentage growth for the full year.
• Cortrophin Gel momentum accelerates: Q1 Cortrophin Gel sales hit $52.9 M (up 43%) with record new patient starts across five specialties, supporting 34–38% full-year growth to $265 M–$274 M; the company also launched a prefilled syringe and plans a Phase IV gout trial to expand market access and clinical evidence.
• Retina brands face and address near-term headwinds: ILUVIEN and YUTIQ Q1 revenues of $16.1 M were impacted by Medicare Part B co-pay funding gaps and seasonality, but April demand nearly recovered and full-year guidance of $97 M–$103 M stands as ANI optimizes its sales force, explores a specialty pharmacy/Part D pathway and consolidates DME/NIUPS labeling after a royalty buyout.
• Resilient U.S. supply chain: With over 90% of revenues from U.S.-manufactured finished goods and less than 5% direct reliance on China, ANI emphasizes its strong domestic positioning and capacity ahead of potential pharmaceutical tariffs.

Presentation

[Operator]

everyone, and welcome to today's ANI Pharmaceuticals Inc. First Quarter twenty twenty five Earnings Results Call. Please note this call is being recorded. After the speakers' opening remarks, there will be a question and answer session. It is now my pleasure to turn the conference over to Lisa Wilson.

[Lisa Wilson, President at In-Site Communications, Inc.]

Thank you, operator. Welcome to ANI Pharmaceuticals Q1 twenty twenty five earnings results call. This is Lisa Wilson, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer Stephen Carey, Chief Financial Officer and Chris Mutts, Senior Vice President and Head of ANI's Rare Disease business. You can also access the webcast of this call through the Investors section of the ANI website at anipharmaceuticals.com.

[Lisa Wilson, President at In-Site Communications, Inc.]

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.

[Lisa Wilson, President at In-Site Communications, Inc.]

The archived webcast will be available for thirty days on our website, anipharmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on 05/09/2025. 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, President and CEO at ANI Pharmaceuticals]

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 Cortrophin Gel and our retina assets, ILUVIEN and YUTIQ. Finally, Steve will review our first quarter results and updated 2025 guidance in more detail.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 Cortrophin Gel and increased demand for our brands portfolio. The top line upside was partially offset by near factors impacting our retina products that I will expand on in a moment. We were pleased with the strength across our overall company.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Based on our first quarter performance and favorable demand trends across generics, chlorprofen gel and brands, we are raising our 2025 guidance for total revenues and adjusted non GAAP EBITDA. We now expect 2025 revenues of $768,000,000 to $793,000,000 which represents growth of 25% to 29% over 2024 versus our prior guidance of $756,000,000 to $776,000,000 We expect adjusted non GAAP EBITDA of $195,000,000 to $2.00 5,000,000 which reflects growth of 25% to 31% over 2024 versus our prior guidance of $190,000,000 to $200,000,000 Steve will provide more specifics on our updated guidance later in the call. Turning now to our first quarter results. Total revenues were $197,000,000 or $97,100,000 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 Cortrophin Gel and continued demand for our brands portfolio. Adjusted non GAAP EBITDA was $50,700,000 and adjusted non GAAP EPS was $1.7 Cortrophin Gel generated $52,900,000 in revenues during the quarter, up 43% over the first quarter of twenty twenty four.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

We continue to see growth across our targeted specialties, neurology, 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 Cortrophin Gel remains on a strong multi year growth trajectory. Based on reported sales of Cortrophin Gel and the other ACTH product on the market, the overall ACTH category grew 27% to approximately six eighty four 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 room for a headroom for expansion.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

It is worth noting that approximately forty percent of Cortrophin Gel prescribers are new to the ACTH category, which illustrates the need for our therapy and our ability to expand the market. We expect twenty twenty five Cortrophin Gel revenues to increase 34 to 38% to $265,000,000 to $274,000,000 for the year. Our retina products, ILUVIEN and YUTIQ generated revenues of $16,100,000 in the first quarter. Performance of our retina assets outside The U. S.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 optimize our field team to sell our complete rare disease ophthalmology portfolio. As we discussed on our fourth quarter call at the February, we saw an impact in the first quarter due to reduced access for Medicare patients.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Patient support foundations such as Good Days did not receive sufficient funding in the first quarter of twenty twenty five 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 ILUGAN's indication 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 US ophthalmology sales force as we took steps to optimize and elevate the quality of our team.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 twenty twenty four end user demand levels. Given the recent promising trends we've seen, we are maintaining our 2025 outlook for ILUVIEN and YUTIQ revenues of 97,000,000 to 103,000,000 Our commitment and confidence in the value of our retina portfolio is further reflected in our recent buyout of our royalty obligation on ILUVIEN and YUTIQ. Turning next to our generics business.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

We delivered an exceptionally strong first quarter revenues of 98,700,000.0 increase of 41% over the first quarter of twenty twenty four and twenty six percent over the fourth quarter of twenty twenty four, which had previously been our highest quarter ever for generics. The robust growth was driven by contribution from new product launches, including our first to market launch of Focaliprise tablets with one hundred and eighty 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 generics 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.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 tariff situation. While we await the administration's pharmaceutical industry specific framework, it is worth highlighting ANI's high longstanding commitment to The U. S. Pharmaceutical industry and our positive and unique positioning relative to our peers.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

We are a U. S. Domiciled 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.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 Mutts to discuss our rare disease business in more detail. Chris?

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

Thank you, Nikhil, and good morning, everyone. As Nikhil mentioned, we were pleased with the strong demand trends for Cortrophin Gel during the first quarter, which included continued momentum and adding new prescribers and robust growth among existing prescribers. We saw demand growth across all of our targeted specialties, and in particular in ophthalmology, saw the highest growth driven by the efforts of our expanded dedicated ophthalmology sales team. Notably, the number of new initiated cases and new patient starts for Cortrophin Gel reached record levels in the first quarter, which is not typically a seasonally strong quarter for Cortrophin Gel or rare disease drugs in general. We completed the expansion of our portfolio sales team, which cover indications across neurology, nephrology and rheumatology.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

Our new team members are quickly building momentum in both new prescriber ads and patient starts in their sales territories. The indication for acute Gaudi arthritis flares, which is unique to Cortrophin Gel 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 Cortrophin Gel 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.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

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 Cortrophin Gels franchise. Part of these efforts include improving patient and physician convenience. In March, we announced FDA approval of our prefilled syringe and recently launched the new presentation. The prefilled syringe will benefit patients and physicians by reducing the steps needed self administration.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

So far, we've been pleased with early feedback on this important new offering. We're also continuing to invest in evidence generation for Cortrophin Gel. Earlier this week at the Association for Research and Vision and Ophthalmology or ARVO Annual Meeting, we presented preclinical data on the use of Cortrophin 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.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

While Cortrophin Gel 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 Cortrophin Gel and could ultimately support inclusion in the American College of Rheumatology treatment guidelines. Overall, we're pleased to see the growing recognition of Cortrophin 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, ILUVIEN and YUTIQ. As Nikhil mentioned, during the first quarter, there was a significant change in market access dynamics for Medicare patients. HCP 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.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

The impact of these market access changes has varied across regions and how HCPs have responded to these changes has also varied. It's important to note that prescribing for NIUPS has been impacted to a much lesser degree relative to prescribing for DME. Our team has spent time understanding HCP responses and a 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 that Part D offers.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

Under this approach, retina physicians can access ILUVIEN 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 and approach that served us well when we built the Cortrophin team. To drive greater awareness and adoption of ILUVIENY UT, we are launching new peer to peer educational programming and new refreshed marketing materials.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

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 twenty twenty four 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 ILUVIEN that includes an indication for the treatment of chronic NIUPS, which is the indication for YUTIQ.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

We plan to begin marketing ILUVIEN 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 ILUVIEN and YUTIQ in the past. These physicians who have prescribed both products account for approximately ninety percent of prescriptions for ILUVIEN and YUTIQ. We are engaged in discussions with commercial payers to expand coverage of ILUVIEN for the new indication of chronic NIUPS. We believe this process will be relatively straightforward for plans that cover UT, we're simply transitioning patients to ILUVIEN and discontinuing UT.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

As a reminder, ILUVIEN is already approved for both DME and chronic NIUPS outside The U. 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 months 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.

[Christoper Mutz, SVP & Head - Rare Disease at ANI Pharmaceuticals]

With that, I'll turn the call over to Steve for the financial update. Steve?

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

Thanks, Chris, and good morning to everyone on the call. I'll review our first quarter results and then discuss our updated 2025 guidance. ANI 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 $197,100,000 up 43% over the prior year period. Revenues from rare disease and brands were $94,100,000 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.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

Rare disease revenues were $69,000,000 up 87% from the prior year period. Revenues from Cortrophin Gel were $52,900,000 up 43% from the prior year period, driven primarily by increased volume on a record number of new patient starts. Revenues from ILUVIEN and YUTIQ were $16,100,000 for the reasons that Nikhil and Chris just discussed. Revenues for brands were $25,100,000 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.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

Revenues for our Generics and Other segment were $103,000,000 an increase of 38% over the prior year period. Revenues for Generics were $98,700,000 an increase of 41% over the prior year period and 26% over the fourth quarter of twenty twenty four due to increased volumes from new product launches such as prucalyptide and the impact of 2024 product launches. Now moving down the P and 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 three 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 and A activity.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

Please refer to Table three for a reconciliation to our GAAP expenditures. Non GAAP cost of sales, excluding depreciation and amortization, increased 49% to $72,700,000 in the first quarter of twenty twenty five 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 $10,000,000 in the first quarter was relatively in line with the prior year period. Non GAAP selling, general and administrative expenses increased 56.5% to $63,700,000 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 Cortrophin Gel, ILUVIEN and YUTIQ and continued investment in rare disease sales and marketing activities, including the new purified Cortrophin Gel sales representatives that we added in the quarter.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

Adjusted non GAAP diluted earnings per share was $1.7 for the first quarter compared to $1.21 per share in the prior year period. Adjusted non GAAP EBITDA for the quarter was $50,700,000 compared to $37,600,000 in the prior year period. We ended the quarter with 149,800,000.0 unrestricted cash, reflective of $35,000,000 of cash flow from operations and net of $17,300,000 of cash used during the quarter to buy out our royalty obligation to SWK on net revenues of ILUVIEN and YUTIQ and the payout of annual 2024 incentive compensation. As of March 31, we have $637,200,000 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 twelve month adjusted non GAAP EBITDA of $181,400,000 which is pro form a for the Alimera acquisition.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

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 brands portfolio. Updated guidance is as follows: full year 2025 net revenue of $768,000,000 to $793,000,000 up from our prior guidance of $756,000,000 to $776,000,000 representing year over year growth of approximately 25% to 29%. Cortrophin Gel net revenue of $265,000,000 to $274,000,000 representing growth of 34 to 38% and in line with our prior estimate.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

We continue to expect quarterly sequential growth of Cortrophin revenues throughout the year. Combined ILUVIEN and YUTIQ net revenue of $97,000,000 to $103,000,000 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 twenty twenty four first to market launch of Prucalyptide and its corresponding six months of exclusivity. For brands, we expect to 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.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

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 $195,000,000 to $2.00 $5,000,000 up from our prior guidance of $190,000,000 to 200,000,000 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.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

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 20,100,000.0 and 20,400,000.0 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 03/04/2024, ANI commenced a civil action against CG Oncology in the Superior Court of the State of Delaware.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

ANI's complaint alleges that under an assignment and technology transfer agreement dated as of November 1530, DG Oncology is liable to pay ANI a running royalty on 5% of the worldwide net sales of their lead product candidate, predestimogene, and that in February 2024, CG Oncology wrongfully repudiated its royalty obligation to ANI. The jury trial is set to commence on 07/21/2025, and ANI intends to pursue this matter vigorously. With that, I'll turn the call back to Nikhil.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you, Steve. We're pleased with the strong start to 2025 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.

[Operator]

We'll take our first question from Gary Nachman with Raymond James. Please go ahead.

[Gary Nachman, Managing Director - Equity Research at Raymond James Financial]

Thanks and congrats on the strong quarter. So first on Cortrophin, how much should the prefilled syringe help you? Do you think it could open up use a lot more because of the convenience? And what sort of benefit are you seeing from the additional 20 reps across the indications? Are you considering adding some more for any indications?

[Gary Nachman, Managing Director - Equity Research at Raymond James Financial]

And now we've got announced a good quarter for Acthar. It seems like there's good market growth. What else can you do to try and differentiate Cortrophin? I thought the Phase four 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?

[Gary Nachman, Managing Director - Equity Research at Raymond James Financial]

And then I have a follow-up.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Good morning and thank you, Gary for your question. So first on the prefilled syringe, as Chris mentioned in the prepared remarks, the early response from ACPs is positive as this reduces one step in the administration process for Cortrophin 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.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

So look forward to updating you on the progress. Your next question was on the 20 reps and how that's going. They are doing well. They have started getting traction with getting both new patient starts and new prescribers and enrollments. And we'll continue to build momentum as the year progresses.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

We keep evaluating ROI efforts from in the commercial side. So with regards to adding more, there's no intent to do that this year at this time. We will again keep evaluating ROI commercial initiatives to keep growing Cortrophin, which we believe is on a strong multi year growth franchise as we've talked about several times. You're right that the third point was on the competitor. You're right, the competitor did a strong quarter as well as increased their guidance to high single digits.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 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 six to eight times higher than the number of patients that were even being treated at its peak. So it's good for the category to have two players bringing options for patients and for prescribers.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

You then asked about differentiation. So we continue to invest to strengthen the franchise. You will remember that we launched the one ml vial. Now we've launched the prefilled syringe to increase convenience, enhance convenience for patients and prescribers. And we continue to evaluate additional steps that we can take to enhance the convenience for patients and for physicians and we'll look forward to updating you on that progress.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And then Chris details some of the efforts on the evidence generation area, right, and the gout clinical study that we're initiating later this year. And that 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, in bringing new presentations to the market that we're investing in to continue strengthening and growing the Cortrophin Gel franchise that we believe is on a strong multi year growth trajectory.

[Gary Nachman, Managing Director - Equity Research at Raymond James Financial]

Okay, great. And then just regarding ILUVIEN and YUTIQ, 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 I appreciate the steps that you're taking, but how long you think for those to really take hold over the course of the year? And then just talk about the turnover in the OPSO sales team.

[Gary Nachman, Managing Director - Equity Research at Raymond James Financial]

It actually didn't seem to impact Cortrophin in that segment, which you said was really strong in OPSO, and I'm curious why that wasn't the case. And just going forward your outlook for OPSO. Thanks.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Right. Thank you again for your question, Gary. So first, ILUVIEN UC guidance for this year is 97,000,000 to $103,000,000 of which 30% is outside The U. S. Therefore, ILUVIEN and YUTIQ in The U.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

S. Accounts for under 10% of total company twenty twenty five revenue guidance. So just to dimensionalize that, and that's what the different topics, the factors we spoke about. But when it comes to the guidance, our confidence in reiterating the guidance for ILUVIEN and YUTIQ at 97,000,000 to $103,000,000 is based on five factors. First, the performance outside The U.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 rest of the year. So first quarter results were low due to seasonality seen for most branded drugs, remaining three quarters will not have this, in fact, will reverse in the fourth quarter.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 experts, of our efforts.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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've been, you also asked about 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 retinal organization as we approach we followed in Cortrophin. And we expect our sales team to be back to full strength during the second quarter.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

So that's the sales force turnover dynamic that we had in our combined ophthalmology sales force. And then you asked about impact on PCG and ophthalmology. While on a smaller base, Q1 volume for PCG for Cortrophin in ophthalmology was 50% higher than in Q4. And we believe that the momentum will continue, right, as we have our full strength combined ophthalmology, rare disease ophthalmology sales force in action. So and we feel confident about the continued growth and the outlook for Cortrophin in ophthalmology.

[Gary Nachman, Managing Director - Equity Research at Raymond James Financial]

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

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you, Gary.

[Operator]

We'll go next to Fazal Khorshed with Leerink Partners.

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Hey, Nikhil. Thanks so much for taking the question. Just wanted 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 ILUVIEN in the first quarter? And can you just explain a little bit help us understand what you're or kind of how you're thinking about like working around that with like getting the spec pharmacy and like Part D over Part B? Can you just like help us understand that a little bit?

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Thank you.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 get therapy under Part B as in boy, due to lack of funding, and they get the support from foundations. Due to lack of funding, these foundations have not been able to provide co pay support, right? And this is a dynamic that emerged in Q1. So, HCP's 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.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And so the 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 Illuvian and the DME market more and therapeutics in the DME market more and as 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 patients. So our team has spent the time understanding the ACP responses and granular impact to their workflows. And with that understanding, we're exploring alternate paths to improve the access for the DME population. So for example, 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.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

So under that approach, we're exploring how to have retina physicians accessing ILUVIEN through a specialty pharmacy. Does that give sufficient color, Faisal?

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Yes, that's helpful. Then I had one on Cortrophin Gel. So you've done well in this acute gouty arthritis, Asian 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?

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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

[Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners]

Got it. Thanks for taking the questions.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you, Fiz.

[Operator]

We'll go next to Vamil Divan with Guggenheim Securities.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

Great. Thanks for taking the questions. Congrats on the quarter. And maybe one question sticking to the ophthalmology side and then one on the generics. So on ophthalmology, I appreciate all the color you provided.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

You did mention the New Day trial is completed now and I think we're just today that 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 impact could those have commercially on that business? And then on generic side, you mentioned the acalapride one hundred and eighty eight Fusogem. Just wondering if you can comment on how much of contribution that was to the generics performance in the first quarter.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

So we have a sense for the second quarter as well. Thank you.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you for your question. Good morning and thank you for your question, Vamil. So on New Day, we are in the process of analyzing the data from the completed New Day study. And if successful, it will allow physicians to consider ILUVIEN earlier in the treatment of DME. As we've described before epidemiologically, today we have less than 5,000 patients annually on ILUVIEN, whereas the addressable market is even before new day is at 53,000, right, which is patients for whom multiple rounds of anti VEGF are not showing optimal response.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And then they show positive response to steroid trial and can be considered for then being considered for ILUVIEN. So that's the addressable market of fifty three thousand versus the five thousand patients that are currently annually being treated on ILUVIEN. So the opportunity as it currently stands even before New Day is pretty substantial. What New Day will do is that much earlier in the treatment paradigm, right? So instead of fifty three thousand, there are four hundred thousand additional patients that are being treated with multiple rounds of anti VEGF.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And so if New Day is successful, HCPs could consider using ILUVIEN earlier in the treatment paradigm. So it would open up a broader patient population for sorry, for ILUVIEN. 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 IQVIA reported PRX share of sixty two percent to sixty three percent.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And we're pleased with the execution of the ANI team on this product from R and 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 Focalpyride 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 one hundred and eighty days of exclusivity on June 26. So generics will be in Q2 will be slightly lower as Steve pointed out on the phasing perspective will be lower than the first quarter and then return to growth in the subsequent quarters from a total company perspective.

[Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC]

Okay. All right. Thank you.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thanks, Shimamu.

[Operator]

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

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

Thanks. So just a couple for me. First, on Cortrophin Gel. 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 what you're anticipating with the category returning to growth.

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

So that's number one. And then number two is regarding ILUVIEN. I appreciate all the color on the headwinds, but I'm just wondering out loud how you're feeling about the underlying acquisition of Alimera? And what has surprised you most in terms of the challenges that you faced with the asset? Thank you.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you for your questions and good morning, David. So on Cortrophin, payer landscape, remember this category had not seen competition for many, many decades. And the payers and PBMs, 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.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And as the category has evolved and as we've grown, we'll continue to collaborate with them and see that continuing. Mean, at the end of the day, we all put the patients first and ensure that we're bringing this therapeutic, this much needed therapeutic to patients in need. So that's on the peer landscape dynamics. And then on where do we where is our head on the overall acquisition of Eluvian? I think the simplest answer to that is, we just bought out a royalty obligation from SWK on Eluvian.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And so we believe in the continued long term opportunity for ILUVIEN and YUTIQ. So actually both in DME as well as in NIUPS where the addressable markets are substantially higher. In DME five thousand out of 53,000, in NIUPS less than 5,000 out of 78,000 to 112,000. So large addressable markets, we're fully confident of our ability to solve problems. Even when we acquired Nvidia, we had to work through certain challenges.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And so you can see the value that the Nvidia acquisition has brought to us. So this is a team that thrives on capturing opportunities and addressing challenges and has a very strong orientation towards problem solving. Last quarter when we were speaking, we were talking about the supply challenges related to the CMO for YUTIQ and we've worked through that challenge, right? Later this quarter, we're going to start selling the combined label. So I think it's as an operating team, we have a strong orientation towards problem solving.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

As I said at the beginning, our belief in Illuvian is best highlighted by our recent, I think weeks ago, buyout of the royalty obligation from SWK.

[David Amsellem, Sr. Research Analyst at Piper Sandler Companies]

Thanks.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you for that question.

[Operator]

We'll go next to Ekaterina Kinyaskova with JPMorgan.

[Ekaterina Knyazkova, Analyst at JP Morgan]

Thank you so much and congrats again on the quarter. So first question is just on Cortrophin. 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?

[Ekaterina Knyazkova, Analyst at JP Morgan]

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?

[Ekaterina Knyazkova, Analyst at JP Morgan]

Thanks.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you, Katrina for your questions and good morning. So on the first question on the indication, we're fortunate we see growth across all specialties. Our core specialties, the ones that we launched with nephrology, rheumatology and neurology, we see strong growth across those indications. We talked about the more than 15% of our usage of our Cortrophin usage is coming from gout. We see growth significant growth there too.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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, while on a smaller base showed the highest growth with almost 50% increase in volumes versus the fourth quarter. And pulmonology also continues to show growth. So really, we have opportunities growth across indications.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And in terms of competitive dynamics, dynamics, they've raised their guidance to mid to high single digits and they spoke about four therapeutic areas that they're focusing their efforts on. And the the number of patients that can benefit is just much, much larger than what either of us either competitors is treating at this time. So, yes, I think both competitors can continue getting the therapeutics to more patients and continue to grow the market. And then your second question on tariffs and do we have spare capacity? Absolutely.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

We do have spare capacity across our plants in East Windsor, New Jersey as well as in Bonnet, Minnesota. We are positively and 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 we'll play our role in as we have done in the past of if there is supply challenges that arise outside of the tariff situation to provide therapeutics to patients in need.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thank you for your questions, Katrina.

[Ekaterina Knyazkova, Analyst at JP Morgan]

Thank you.

[Operator]

We'll go next to Les Selusky with Truist Securities. Please go ahead.

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Morning. Thank you for taking my questions. Suneet, perhaps I'll start on Cortrophin. You mentioned the 40% naive patient adoption. Do you have a sense how those scripts for naive patients will have been trending over time?

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

And I guess what point do you expect that figure to turn? And then as for the prefilled 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, margin look favorable in 1Q. How do you expect that to trend throughout 2025?

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

And I have a follow-up.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Yes. Good morning and thank you for your questions, Les. So, Cortrophin having forty percent of prescribers that were naive to the category, that number keeps growing as we reach with a larger addressable market and reaching more HCPs. So we'll keep you updated on the progress on that. On the prefilled syringe, we see the prefilled syringe as another alternative, right, as we had the five ml vial and the one ml vial.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

So we're introducing the prefilled syringe which comes in two presentations, one ml and the zero point five ml. And it's really for patients that have a the reduction in the number of steps of administration will be helpful to them. So it's for a subset of patients. It's early days within the launch of the prefilled syringe. So we'll update you regarding your question on switches and as a new patient or switches, we see this as another option for patients by reducing one step for enhancing patient convenience by reducing one step in the administration in the step of in the steps for administration.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And then in the near term, we see limited impact on the margin profile. It's priced at a slight premium to the one ml on a per ml basis, so but limited impact. And then on gross margin evolution for the year, I'll turn it over to Steve to take that question.

[Stephen Carey, Senior VP of Finance & CFO at ANI Pharmaceuticals]

Yes. Good morning, Les, and thanks, Nikhil. Yes, as we cited on the call today, Les, we continue to anchor in overall company gross margin between 6364% throughout the course of the year. And obviously, there's numerous mix elements as the year progresses. And we expect, right, 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, strong margins in generics driven by pucalyptide as well as the persistence of market share gains in the brand business, which helped margins in the first quarter.

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Great. That's helpful. As a follow-up on the ILUVIEN YUTIQ, Nisel, 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 appears unlikely the third party will come back with funding the assistance and co pays? And then I guess the second portion, the sales force turnover within ophthalmology, does that have any impact on Cortrophin?

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Or perhaps asked in another way, is that a potential for an increased opportunity for Cortrophin given the new team that's in place now? Thank you.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Yeah. So thank you for your questions, Larry. So I'll take your second question first, which is on the turnover. Yes, I think you framed it appropriately that we had the full team staffed, you would have seen more growth in Cortrophin. So yes, we will see the impact of the top talent that we bring in on both ILUVIEN and Cortrophin going forward.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

So that's the answer on the turnover and the positive impact on Cortrophin. And then your question on Medicare, so there's a subset of Medicare patients, right, that don't have co pay support to various mechanisms that are available. And that's the population that's impacted by the funding not being available. And look from our perspective, from everything that we've heard from major contributors to the relevant foundation, seeing the public domain and the discussions with several stakeholders in retina. We believe that some level of foundation support will return in the second half of the year.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And if the foundation support does not come back, we are likely to trend towards the lower end of our guidance range as far as the ILUVIEN and YUTIQ is concerned. And remember, ILUVIEN and YUTIQ in The U. S. Is about 70% of our total ILUVIEN and YUTIQ guidance, right? So from a total company basis, again, just a reminder, it's less than 10% of total company twenty twenty five revenues.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

And so our guidance for total company and the raised guidance factors in the puts and takes across different business lines. And 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, then we continue to retain that confidence.

[Les Sulewski, VP - Biotech Equity Research at Truist Securities]

Thank you.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

Thanks, Lars.

[Operator]

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.

[Nikhil Lalwani, President and CEO at ANI Pharmaceuticals]

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 Jefferies Conference in New York in June. Thank you.

[Operator]

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

Participants

Executives

• Nikhil Lalwani, President and CEO
• Christoper Mutz, SVP & Head - Rare Disease
• Stephen Carey, Senior VP of Finance & CFO

Analysts

• Lisa Wilson, President at In-Site Communications, Inc.
• Gary Nachman, Managing Director - Equity Research at Raymond James Financial
• Faisal Khurshid, Senior Research Analyst - Emerging Immunology at Leerink Partners
• Vamil Divan, Managing Director & Senior Research Analyst at Guggenheim Securities, LLC
• David Amsellem, Sr. Research Analyst at Piper Sandler Companies
• Ekaterina Knyazkova, Analyst at JP Morgan
• Les Sulewski, VP - Biotech Equity Research at Truist Securities