Yahoo Finance ANI Pharmaceuticals Inc (ANIP) Q1 2024 Earnings Call Transcript Highlights: Robust Growth and ...
Total Revenue: $137.4 million, up 29% year-over-year.
Cortrophin Gel Revenue: $36.9 million, increased by 126% from the previous year.
Generic Revenue: $70.2 million, a 10% increase from the previous year.
Established Brands and Other Revenue: $30.3 million, up 13% year-over-year.
Adjusted Non-GAAP EBITDA: $37.6 million, a 14% increase from the previous year.
Adjusted Non-GAAP EPS: $1.21, up 3% from the previous year.
Net Income: $17.8 million compared to $1 million in the prior year.
GAAP EPS: $0.82, compared to $0.06 in the prior year.
Non-GAAP Gross Margin: 64.5%, decreased by approximately 145 basis points.
Cash Flow from Operations: $18.3 million during Q1.
Unrestricted Cash: $228.6 million at the end of Q1.
Outstanding Debt: $293.3 million, due in November 2027.
Gross Leverage: 2.1 times trailing 12-month adjusted non-GAAP EBITDA.
Net Leverage: Less than half a turn of trailing 12-month adjusted non-GAAP EBITDA.
Full Year 2024 Guidance: Net revenues of $520 million to $542 million; Cortrophin Gel net revenues of $170 million to $180 million; Adjusted non-GAAP EBITDA of $135 million to $145 million; Adjusted non-GAAP EPS of $4.26 to $4.67.
Release Date: May 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
ANI Pharmaceuticals Inc reported a significant increase in total revenues for Q1 2024, reaching $137.4 million, up 29% from the previous year.
Cortrophin Gel, a lead rare disease asset, generated $36.9 million in revenue, marking a 126% increase year-over-year.
The company successfully launched six new generic products during the quarter, contributing to a 10% revenue increase in the generics business.
ANI Pharmaceuticals Inc has a strong cash position with almost $230 million on hand, providing a solid foundation for future growth and investments.
The company is actively pursuing expansion through M&A, focusing on commercial assets that complement their existing therapeutic areas and rare disease platform.
Negative Points
Adjusted non-GAAP EBITDA increased by 14%, which, while positive, indicates a slower growth rate compared to the total revenue increase.
The company experienced a decrease in non-GAAP gross margin by approximately 145 basis points, primarily due to product mix changes.
Research and development expenses surged by 77% due to higher activity levels, which could pressure profit margins if not managed effectively.
Selling, general, and administrative expenses rose by 32%, driven by increased employment costs and investments in sales and marketing infrastructure.
ANI Pharmaceuticals Inc is involved in active litigation with CG Oncology regarding disputed royalty obligations, which could lead to financial and reputational risks.
Q & A Highlights
Q: How much is the overall ACTH market growing versus you taking share in that market from Acthar? And for your new patients that you said is an all-time high in April, are they -- most of them experienced or naive to ACTH? Maybe just explain those dynamics. And then talk about the traction in the newer segments, especially OXO, since you just put that in place and do you think you'll increase investments in either ophthalmology or I guess, pulmonology anytime soon? A: Nikhil Lalwani, President and CEO, explained that the overall ACTH market is growing, with both competitors and ANI contributing to increased awareness and prescribing momentum. The market is expected to grow revenues by almost 10% and return to its total size from 2021. New patient starts in April reached an all-time high, with growth across core categories and newer categories like pulmonology and ophthalmology. Investments in these newer areas will depend on various factors, including potential M&A activities.
Q: Where are you in your search for new rare disease assets? How has the market been on those for you guys? And do you think you should still be able to execute on some things by the end of this year? A: Nikhil Lalwani mentioned that the corporate development team is actively evaluating opportunities, focusing on leveraging existing sales force call points and other rare disease infrastructure. The company remains confident in executing a deal that expands the scope and scale of its rare disease business.
Q: It's a pretty strong quarter for overall revenue, you left the full-year guidance intact. So how should we think of the cadence of the quarters for the rest of the year for the various segments? A: Nikhil Lalwani reiterated that the first quarter results align with annual guidance themes, expecting modest sequential declines in rare disease due to insurance resets and channel dynamics. The company anticipates high single to low double-digit increases in generics and no further supply tailwinds for established brands.
Q: On the generics front, how much of that 10% growth was driven by new product uptake versus volume from the legacy portfolio? And what impact was due to a pricing tailwind, if any? A: Nikhil Lalwani responded that the company does not typically break out the specifics of revenue contributions from new launches versus baseline products. He noted improvements in the pricing environment for generics, supported by operational excellence and a strong GMP track record.
Q: What is the reasoning on the dispute of the royalty rights by CG oncology? Can we expect some sort of a resolution this year or in the near term? A: Stephen Carey, CFO, stated that ANI's policy is not to comment on pending litigation but referred to public records and financial statements for more background on the dispute with CG Oncology.
Q: On Cortrophin, can you talk about the evolution of the value per patient as you continue to expand the launch into broader specialties and indications, including the one millimeter launch? A: Nikhil Lalwani indicated that there is likely upward pressure on the value per patient as the company expands into new specialty areas, promising updates on progress in future discussions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
