Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ANI Pharmaceuticals Inc (ANIP, Financial) achieved record revenues of $138 million in Q2 2024, an 18% increase over Q2 2023.
- The company reported strong growth in its rare disease segment, with Cortrophin gel revenues up 102% year-over-year.
- ANI Pharmaceuticals Inc (ANIP) raised its full-year 2024 guidance, reflecting continued business momentum.
- The proposed acquisition of Alimera Sciences is expected to add over $100 million in annual revenue and strengthen the rare disease portfolio.
- The generics business also performed well, with a 17% increase in revenue over the prior year period.
Negative Points
- Revenue from established brands decreased by 49% compared to the prior year period.
- The company reported a GAAP net loss of $2.7 million for Q2 2024, compared to a net income of $5.8 million in Q2 2023.
- Non-GAAP gross margin decreased by approximately 570 basis points year-over-year, primarily due to product mix and capacity expansion expenses.
- Selling, general, and administrative expenses increased by 36%, driven by higher employment-related costs and expenses related to the pending acquisition of Alimera.
- The company's cost of sales, excluding depreciation and amortization, increased by 36% due to higher sales volumes and growth of royalty-bearing products.
Q & A Highlights
Q: What other drivers do you have for the guidance range, aside from Cortrophin? And can you give us more color on the pre-filled syringe?
A: We continue our efforts to enhance the convenience and remove pain points for patients starting on ACTH and the healthcare providers who treat them. We plan to file for approval of the pre-filled syringe in the second half of 2024 and launch it in the first half of 2025. The guidance increase is driven by strong momentum across our rare disease and generics business lines.
Q: Regarding the strong Cortrophin growth, how many new prescribers are you getting, and in what therapeutic areas? How much of the volume growth is share gain versus overall market growth?
A: We saw growth across therapeutic areas, including neurology, nephrology, rheumatology, ophthalmology, gout, and pulmonology. The majority of the growth came from neurology, nephrology, and rheumatology. The ACTH category is seeing growth after many years of decline, driven by efforts from both us and our competitor.
Q: Can you confirm that you're not factoring any benefit from the Alimera deal in the raised Cortrophin guidance for the ophthalmology segment? And talk about the planning for the close and integration.
A: There is no benefit from increased Cortrophin sales from an expanded ophthalmology sales force baked into the guidance. We are making good progress on integration planning and expect to close the deal later this quarter. We are focusing on how to organize the combined ophthalmology sales team and ensure they are well-trained to promote all three products.
Q: On the Cortrophin side, do you expect sequential growth from 2Q to 3Q and then 3Q to 4Q? And for established brands, is the second quarter a good base for the remainder of this year?
A: Yes, we expect sequential growth in Cortrophin sales, with the fourth quarter being the highest. For established brands, the second quarter performance is indicative of our expectations for the rest of the year. We are working on various strategies to expand the portfolio and will share more as we progress.
Q: Can you give us any color on potential synergies from the Alimera acquisition? And is there any opportunity to revisit pricing of these products?
A: We expect about $10 million worth of synergies in 2025 and additional EBITDA in the $30 million plus range. We are currently in the integration planning stage and will share more information on pricing strategies as they develop.
Q: It seems like your generic segment revenues are exceeding your original targets. Can you comment on expectations for growth from the generic segment in the back half of the year?
A: The performance is driven by new product launches, operational excellence, and being a reliable supplier. We expect high single-digit to low double-digit growth for the full year and sequential growth in the subsequent quarters.
Q: How much capacity are you actually going to be able to increase with the new facility in New Jersey?
A: We are adding about 15 new manufacturing suites and a new QC lab, which is a substantial increase in capacity. This will support the growth of our generics business for multiple years.
Q: Can you tell us if the competitor's new prefilled auto injector will have any material impact on the competitive ACTH landscape?
A: Both the competitor and us are working to enhance convenience and address pain points for patients. The addition of new options like prefilled syringes and auto injectors is expected to increase awareness and drive growth in the ACTH category.
Q: Regarding litigation expenses, is this related to the CG oncology dispute or potential Paragraph IV or 505B2 IP-related issues?
A: The increased litigation spend is primarily related to the defense of our rights in the CG oncology dispute. There is no linkage between the litigation spend and the launch of 505B2 products.
Q: Can you comment on the Ex-US presence provided by Alimera and any future business development priorities?
A: We are currently focused on closing the deal and integrating the asset. We will share updates on Ex-US opportunities as they develop.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
