Q4 2021 ADMA Biologics Inc Earnings Call
Good afternoon, and welcome to the asthma biologics fourth quarter and full year 2021 financial results and corporate update conference call on Thursday March <unk> 2004, 2022 at this time all participants are in a listen only mode. There will be a question and answer session to follow please be advised that this call is.
Being recorded at the company's request and will be available on the company's website approximately two hours. Following the end of the call at this time I'd like to introduce Skyler Bloom senior director of business development and corporate strategy at Aetna Biologics. Please go ahead.
Welcome everyone and thank you for joining us this afternoon to discuss asthma biologic financial results for the fourth quarter and full year 2021, and recent corporate updates.
I'm joined today by Adam Grossman, President and Chief Executive Officer, and Brian Lynch Executive Vice President Chief Financial Officer, and General manager of that in the biosensors.
During today's call Adam will provide some introductory comments and provide an update on corporate progress and Brian will provide an overview of the company's fourth quarter and full year 2021 financial results. Finally, Adam will then provide some brief summary remarks before opening the call up for questions.
Earlier today, we issued a press release detailing the fourth quarter and full year 2021 financial results and summarize certain fourth quarter achievements in recent corporate updates, including $175 million debt refinance with <unk> capital.
The release is available on our website at Www Dot Admob biologics dot com.
Before we begin our formal comments I'll remind you that we will be making forward looking assertions during today's call that represent the company's intentions expectations or beliefs concerning future events, which constitute forward looking statements for the purposes of the safe Harbor provisions under the private Securities Litigation Reform Act of 1095.
All forward looking statements are subject to factors risks and uncertainties such as those detailed in today's press release announcing this call and in our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements and.
In addition, any forward looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date, we specifically disclaim any obligations to update such statements, except as required by the federal Securities laws.
We refer you to the disclosure notice section in our earnings release, we issued today and the risk factors section of our 2021 annual report on Form 10-K for the year ended December 31, 2021 for a discussion of important factors that could cause actual results to differ materially from these forward looking statements.
With that I would now like to turn the call over to Adam Grossman Adam.
Thank you Skyler.
Good afternoon, everyone and thank you for joining us on today's call. We hope you all remain healthy and safe.
Our 2021 operating and financial achievements, Mark a pivotal point in the businesses evolution towards a profit oriented growth organization.
During the year, we delivered on our financial objectives, including 92% year over year revenue growth and importantly took assertive measures to shore up our financing and cash position, notably with today's announced $175 million debt refinancing with aten.
Which we will address in more detail during this call.
The year was capped by delivering fourth quarter revenues of $26 $4 million consistent with our previously disclosed expectation of annualized at a rate of more than $100 million.
The generation of first time gross profitability for the full year 2021.
Driven by outsized incentive adoption in our overall product mix.
The growth of our plasma collection Center network.
And the successful conclusion of the supply chain robustness initiatives undertaken at the Boca Raton, Florida manufacturing facility.
Of particular note we are encouraged by the recent and continued utilization uptick for authentic.
We believe our marketing sales and medical education efforts are effectively catalyzing adoption and the product's unique manufacturing methods antibody profile in commercial value proposition are resonating well with physicians providers and patients.
Brian will discuss the gross profitability implications, resulting from the increasing adoption of <unk>.
<unk>.
But from our vantage point, we are seeing signals that the product may potentially exceed our previous expectations.
Moving on to the supply chain.
Atlas investments toward securing raw material plasma supply and expanding its bio centers plasma collection Center network enabled the company to maintain its production plants and grow its customer base throughout the pandemic and 2021.
We are proud to have delivered on our promise of continuity of patient care. During this period of plasma supply dislocation impacting the broader immunoglobulin market and.
And we believe in doing so we have solidified admins emerging reputation as a reliable and growing immune globulin supplier in the United States.
The recent approval of atmosphere plasma collection center advances the company towards its goal of having 10 FDA approved centers before the end of next year.
Which we believe will allow the company to potentially reach plasma supply self sufficiency by year end 2023.
Adam is growing internal plasma collections are currently being supplemented by third party supply contracts as well as the yield enhancements, resulting from the implementation of the human ethics Nexus persona system.
The successful expansion in operating results of Atmos plasma collection network further solidifies our company's pathway towards profitability.
Looking to the remainder of 2022.
And based upon current data.
We now anticipate total annual revenues to exceed $125 million, representing more than a 50% year over year growth rate compared to 2021.
From a margin perspective, we anticipate gross profits will continue to increase and net losses will narrow as costs and operating efficiencies begin materializing as a result of our supply chain enhancement initiatives.
We believe the.
The commercial regulatory and operational milestones achieved during 2021 will serve as a strong foundation for admin to advance towards anticipated profitability. No later than the first quarter of 2024.
We expect the substantial vertical integration achieved to date will position our company to execute through even the most challenging operating backdrop in <unk>, even further and a more normalized environment.
We thank the entire asthma biologics and Admob biosensors teams for their extraordinary efforts and keeping true to our mission of providing quality products to patients.
Finally, we'd like to thank the Haytham team for their hard work in completing their robust diligence process and closing on the debt refinancing with us.
The plasma industry is global and we believe <unk> ex U S operations and asset base makes for an ideal partner to enable atmos continued exploration of strategic alternatives and evaluation of creating business development opportunities.
Brian will discuss the use of proceeds in more detail but.
But we are pleased to be able to extend the interest only period.
Three years to March of 2027.
Significantly increased non dilutive funding for our business and reduce admin overall cost of capital.
We believe the improved liquidity position, resulting from the debt refinancing will enable the company to execute on its operating strategy, while continuing to explore strategic alternatives with our advisors Morgan Stanley .
We believe this is an important step towards unlocking shareholder value.
We'd also like to thank the perceptive advisors credit team for their support these past few years and the equity team for their continued investment and confidence and add much forward looking outlook.
All of our organization's accomplishments across our business segments could not have been possible without the dedication and focus of admin staff leadership and advisors.
We commend the entire team for their remarkable efforts focused on the continuity of care for patients, who we know are counting on us with.
With that said I'd now like to turn the call over to Brian for a review fourth quarter and full year 2021 financials.
Thank you Adam.
You had a press release earlier today outlining our fourth quarter and full year 2021 financial results I'll just review some of the highlights.
As Adam mentioned earlier for the fourth quarter of 2021 total revenues were $26 4 million compared to $14 million for the quarter ended December 31, 2020, and this represents an increase of approximately $12 4 million or.
<unk> hundred 89%.
The revenue growth for the fourth quarter of 2021 compared to the fourth quarter of 2020 was favorably impacted by the continued commercial ramp up of our IV <unk> product portfolio.
Additionally, total revenues of $80 9 million were recorded during the year ended December 31, 2021, as compared to $42 $2 million. During the year ended December 31, 2020, and this represents an increase of $38 $7 million.
We're approximately 92%.
Year over year increase is mainly due to greater sales of our immuno globulin products and intermediate fractions generated by our Boca Raton manufacturing segment operations in 2021 totaling $38 1 million.
As we concluded our second full year of commercial sales up it became in the Senate.
One of the notable highlights and what we believe to be an otherwise very strong set of financial results was the continued expansion of the company's consolidated gross profits.
For the fourth quarter of 2021, Adama generated a gross profit of approximately 13%, which further enabled the company to report gross profitability for the full year ended 2021.
This key financial milestone was primarily attributable to the favorable product mix achieved during the fourth quarter, where we sold more of our higher margin products compared to the previous quarter's results.
Our unique patented <unk> <unk>.
Hi, Permian, Bobby HB yields higher gross margins than our standard product again, and we are encouraged by the market penetration of the Senate, which continues to establish commercial traction.
As a result of the greater than expected adoption of incentive observed over recent periods. We have increased incentives production from our original 2022 production plan at the plant to support continued upside for the product in 2022 and beyond.
In addition to a favorable product mix, we anticipate the trend of positive gross profit and narrowing net losses to continue to improve during 2022 as efficiencies continue to be realized from the FDA approvals received in 2021 for both the 4400 leader expanded.
Duction scale as well as our in house fill finish capabilities.
As Adam mentioned earlier, Adam a significantly strengthened its balance sheet during the fourth quarter and subsequent periods.
Earlier this afternoon, we announced a $175 million debt refinancing with Athens.
The new loan agreement will provide for among other things a five year interest only period, which is the duration of the credit facility maturing in March of 'twenty 'twenty seven.
Borrowings under the credit agreement bear interest at a rate per annum equal to $8, two 5% with an accumulating two 5% paid in kind or pik component.
The first tranche of $150 million for casing was fully drawn and used to completely discharged the obligations under the previously held perceptive senior secured notes, including all associated prepayment fees, which totaled $102 million.
With this new credit facility. We also have the ability to access an additional $25 million under the second tranche, which is tied to revenue milestones and if drawn will be used to support continuing operations and to fund the companys ongoing growth.
All told we have taken a sort of measures over recent periods to ensure admin as well capitalized as we embarked on the growth and profit oriented phase of our business cycle.
As Adam previously mentioned, we believe our improved liquidity position will enable us to continue to explore strategic alternatives with our advisor Morgan Stanley .
During the year ended December 31, 2021 admit grew its total asset value to $276 million.
Which includes $125 million of inventories.
Adam expects the robust inventories, which are recorded at our cost to support continued revenue growth throughout 2022 and beyond.
Our consolidated net loss was $16 6 million for the three months ended December 31, 2021, as compared to $19 4 million for the three months ended December 31 2020.
The $2 $8 million decrease in net loss compared to the prior year period was primarily attributable to a gross profit contribution of $3 5 million for the fourth quarter of 2021 compared to a gross loss of $5 2 million.
During the fourth quarter of 2020.
The decrease in net loss was partially offset by an increase in selling general and administrative expenses of $2 $4 million related to employee compensation and new hires along with other cost to support the commercialization efforts for <unk>.
Additionally, we recorded a $2 $5 million increase in plasma center operating expenses related to the company's plasma center build out and expansion activities to support our target of having 10 plasma centers open and FDA approved by year end 2023 of which.
Two additional centers have already received FDA approval. During this first quarter of 2022.
With that I will now turn the call back over to Adam for closing remarks.
Thank you Brian .
Add much assertive financial and operating measures enacted at the Gordon C suite level over recent periods. We believe will enable the company to continue to execute and deliver on commitments to stockholders, while providing for optionality as we continue to explore strategic business opportunities with our advisors Morgan Stanley .
We look forward to executing on all previously stated operating targets, including the newly issued 2022 revenue guidance, calling for total annual revenues in excess of $125 million.
In closing I'd like to thank you our stockholders for your continued support as your investment in that and that helps to advance our mission to save lives and make high quality safe and efficacious products that help our friends family and neighbors.
Please donate plasma donate blood help save lives and with that I'll now open up the call for your questions. Thanks operator.
Certainly ladies and gentlemen, if you have any questions. At this time. Please press Star then one on you touched on telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key our first question comes from the line of Elliot Wilbur from Raymond James Your question. Please.
Thanks, Good afternoon, congratulations on all the progress.
Maybe the business over the course of the year and continuation of strong underlying fundamental <unk>.
<unk>.
Thank you first question for.
Adam I think I asked this last call, but just wanted to try to get a little bit more insight and color into the continued favorable mix shift toward a thing.
They have again, obviously a significant uptick in <unk>.
Incidence of Rs.
This year I assume that had something to do with the favorable mix shift, but just trying to understand how much of it was just driven by increased RFP tightness. It overall.
<unk> supply or specific.
Aspects tied to incentives profile that you think are driving increased share in the market.
Sure. Thanks.
Good question.
The product is indicated for.
The.
Prevention of <unk>.
Serious infections in patients with primary humoral immune deficiency.
And as you know with our patented method and if you look at the ascent of Dot Com website.
It is the only IAG produced.
And available in the United States that is manned.
Manufactured by blending normal source plasma in RSV, Hi, Tiger plasma.
So when you look at that and you look at the published data oriented body profile is unique.
If you start with plasma that has higher levels of antibodies to certain pathogens, the resulting IAG.
In theory, you should have.
Higher levels of antibodies to this panel of pathogens.
I don't believe that the tightness in the AG market is driving utilization.
<unk> is a unique product and I think if you spend some time on the extended dot com website and you look at the.
Types of patient risk factors that we're calling out not all patients are created equal some have a more severe form.
I then others are over 400 different <unk>.
Last vacations of disorders that makeup primary immune deficiency.
<unk> sales and some patients have just had a had a bad course throughout their life.
Even while they are on.
Immune globulin therapy standardized therapy, so we really look at the product.
Product problematic patients. This is a product that clinicians are trying that payers are reimbursing for who don't have the best outcomes on regular IAG.
And.
Medical levers of justification.
Again, certain risk factors Comorbidities, social economic factors. All this plays into a potential prescribers and payers decision.
To allow or prescribed Senate to these patients so really what I think is.
Is driving increased utilization is proud of its been on the market now.
A couple of years. So it was launched in the second half of <unk> 19.
Obviously, the beginning part of Covid.
It's tough for us into 2020 timeframe engaging the clinicians but for.
For the back half of 'twenty, one we were front and center at medical conferences, we've been really hitting the pavement medical education standpoint.
And I think that it's a combination of just what's going on in the world today with with Covid <unk>.
<unk>.
Respiratory viruses I think patients are doing more diligence and research about their quality of care and what kind of options they have available to them.
But I really think it's a culmination as I've said in the prepared remarks of the marketing the sales force the medical education strategy.
Our AMC dossier is available publicly which supports a wide array of different applications, but.
The majority of the use of incentives are still coming from the outpatient setting. These are patients that are receiving IV every three to four weeks.
They would standardize same thing for <unk>, our dividend numbers are also increasing in the pull through there.
<unk> is very favorable and positive. So we feel that all of our products are really being viewed favorably there are of high quality.
And.
We're just very proud of the fact that the message is resonating.
No.
I can't comment per se on is it the uptick in RSP I mean I've seen the same data you have on the CDC website, and we get that I'm sure you're referring to.
<unk>.
<unk>.
There were some peaks of RSV throughout the year last year and that could be driving clinicians to maybe consider the product, but again it is not indicated for it.
<unk>.
What I will tell you is that the utilization we are seeing is sticky business.
It's patients that arent being prescribed percentages and theyre, having favorable outcomes, we're seeing improved quality of life measures chronic persistent infections are declining the use of antibiotics and other.
Concomitant therapies are.
Being reduced and I can tell you when the doctor sees a favorable outcome and one of the RPI patients on the drug.
That makes them want to try it and others once they get reimbursement approved for one patient.
Daunting task of getting reimbursement.
It's something that they can manage and I think all of this is evidence of our team executing in the right way.
And a product that is it's certainly not a mature product, but it is maturing in the market and as I said in the prepared remarks, I really feel very strongly that.
The product is going to exceed even my expectations and that was this is the original reason why I've always found it in and it's been an interesting history, but we're very proud of this product again, it is a higher margin product.
Compared to our standard products and.
We really believe that that medical education.
Messaging is starting to resonate.
Okay. Thanks, and maybe I can follow up that question with one directed to Brian ties into the.
The expectation for increased volume of incentive over the course of 2022 anything Brian that you can say about expectations for revenue progression in gross margin progression over the course of the year and specifically just thinking about sequential trends in each.
Those as you dedicate more capacity towards incentives versus original expectations.
Sure absolutely so.
Got a few a few years ago upon the launch of debit gammon incentive we were looking at our product mix of around 90.
90%, our <unk> product in about 10% for our Iowa higher gross.
Margin products, a set of Nabil.
We are seeing mixed closer to 80, 20, $75 25, because of that patient adoption by providers.
Looking at gross margin, we really set the company up for success back in 2019, and getting the FDA approvals 2020, the conformance batches, bringing the plant to a 4400 liter process capacity as well as fill finish bringing that in house will all contribute to positive gross margins throughout 2022 and beyond.
Leading up to a 40% to 50% gross margin sometime in that end of 2023 2024 timeframe.
And as we said previously incentives gross margins are in that 75% to 85% range Dave again.
20% Nabi HB, 70%, plus and then we have our intermediates and sales a normal source plasma so blended all in 40% to 50%.
By the end of 2023 2024.
Okay. Thanks last question for me directed back to Adam.
With the recent announcement of the FDA approval of your fifth collection Center could you just maybe talk a little bit about trends in collection volumes, how they're performing versus expectations and then some of the bigger players in the space, even though they have been able to experience. Some recovery in volumes have really had to ratchet up.
Incentives in order to to be able to drive their volume recovery. So just curious what youre seeing in terms of.
Collection volume level versus expectations price per liter and what.
You may be offsetting.
Incentives with in terms of realizing efficiencies.
So.
Maybe I'll just touch on some of the.
Some of the macro topics and dry as youre much more intimately familiar with the <unk>.
Donor fee rationale of these days.
I'll, let you handle that one.
Elliot from a from a industry perspective collections are still being pressured.
Admiral we've always said this throughout the pandemic, we have certainly had impacts but our recovery has been fantastic. We've got a great team out there. We've got breakdown our recruitment efforts that are really driving folks to our centers social media campaigns. The whole nine where we're doing everything we can to attract donors.
Again, I think the awareness coming post COVID-19 . The fact that more more localities are open people are travelling about we're certainly seeing an uptick in donors, but with respect to the industry some of our.
Larger.
Competitors, they are still experiencing some impacts and I know that the border continues to plagued some of the larger players.
It's a problem and I think that overall youre going to see some tightness ultimately in the global stage for IAG products.
It's just happening and.
I can't tell you how severe it's going to get but I do think that this is going to continue to persist.
If nothing else the border when you look at the the tens of centers or so that are along the border.
These centers represent a couple of million liters of plasma that that we collect annually and.
In asthma biologics, yielding call it roughly four grams per liter that that's.
That's tens of millions of grams of IAG that the world may not have available. It's not just the U S that gets the product made in the U S plasma it's on a global stage so.
Add months perspective, we are we are recovering I mean, I just saw an internal graph I, probably can't talk about on this call, but it looks great.
Q1 is looking very strong from a collection standpoint.
Again as you get the centers approved and we're opening up more centers.
Certainly.
I think we say for the first time in this.
In the prepared remarks that we are.
Forecasting plasma supply self sufficiency by year end next year.
So we feel very confident about our position, but I do think that the lingering impacts from COVID-19 as well as the border we're going to plague the broader industry for the periods ahead, Brian you want to comment on the donor fees and some of the other programs.
Absolutely. So we're very pleased as you can imagine with the acceleration of how we've built out our 10 centers. We currently have 10 under a corporate umbrella.
Collecting so certainly made a lot of progress over the past year and then you can see we already received two two additional FDA approvals. This year already regarding opening up new centers plasma collections past plasma donors are collections for 2022 as Adam just highlighted they are ahead of our schedule. So were please.
How we're instituting special programs when we open up a center, we will have certain incentives for donors to come into the into the into the center and then we'll run programs throughout the year.
But to offset those costs last year, we implemented the persona of software technology from human Ethics program, and we're seeing anywhere from 7% to 10% increased yield from donors that we're collecting plasma from so we're certainly very proud of our achievements of quickly bringing 10 centers.
Online under a corporate umbrella and the FDA approvals being received and half the time. So we are accelerating the openings of our centers and.
We are instituting programs that really have brought builders and we're pleased with our numbers so far.
Thank you. Our next question comes from the line of Christian <unk> from Cantor Fitzgerald. Your question. Please.
Hi, good afternoon, everybody and thanks for taking the question and congrats on a strong start of the year.
Pat.
Thank you I wanted to just see I wanted to see if you could comment on what the reimbursement landscape has been particularly.
In light of your positive comments here around usage.
And maybe are you able to comment about specific profiles of usage here are you seeing that these are patients that worry, perhaps having a stronger response with the standard IV AG products or perhaps already.
Some of the patients off some of your comments earlier that not all are the same and perhaps they have a more severe type of business to begin with or is it a mix that youre seeing.
Both great questions, maybe I'll just touch on the reimbursement piece first so.
Again.
<unk> or 70% or so 80% of all IAG requires prior authorization, whether its a sensitive began or any of our competitors' products.
So no matter, what you need to go through the rig enroll getting patient approved whether they have documented primary immune deficiency or they are on the borderline with some.
<unk>.
A rare type of immune disorder, so no matter what the.
Physician community is used to having to.
If you will.
Site for reimbursement for any IGT product. So this is not something thats unique to us and our drugs or it's just the nature of the Beast.
What I can say is that we're seeing reimbursement because some percentage approval because of the approval in primary immune deficiency. That's why I think even earlier to Elliott's question.
It's not so much about our SMB or the respiratory viruses. This is a product that has documented efficacy in patients with primary immune deficiency now because of its cost and it is more costly than other <unk> in the market.
We believe that there is an appropriate patient profile that you want to look for in order to prescribe a product like this and I think that the payers understand it they understand that the product is manufactured differently. Some of the private payers have you been published.
In their.
Reimbursement guidelines that.
If you can demonstrate a document the need for a product manufacturer from this type of plasma.
Will approve it.
And.
These patients.
It's very hard to tell specifically.
Every patient that we have going on the prana Christian but what I can tell you is that these are patients most of them. They have been on <unk> for years some of them even decades, they've had multiple bounce a bacterial pneumonia throughout their life well on standardized gene therapy.
What the data suggests now and what payers really frown upon us.
I want to increase the dose I wanted to go from 500 Megs per gig to 600, 700 megs per gig and what the payers are starting to frown. Upon now has that increased the increasing the dose doesn't necessarily translate into better outcomes better efficacy better quality of life.
So.
Physicians are already know that they can't go in.
They can switch brands, but they can't go in and ask for more products. So now with the Senate they have an alternative.
Have a new option for these problematic patients and again these are patients that have <unk>.
Lots of Comorbidities. They may have bronchiectasis, they've had multiple batch of bacterial pneumonia and they have scarring of bronchials and the Audi OLED and the.
Lung tissue.
They may have chronic persistent otitis sinusitis bronchitis there on <unk>.
Antibiotics for 369 12 months out of the year.
<unk> been on antibiotics for two years in a row, they take tamiflu prophylactic.
These are the kind of stories that I hear coming back in from from our Kols and our speakers Bureau, and our medical affairs team that these are really problematic patients and it's probably call. It 10% of the pie population that really experiences. These comorbidities.
It's been it's been a couple of weeks since I looked at our corporate slide deck I want to say roughly about 30% of <unk> patients have experienced.
We're currently experienced some type of chronic lung condition.
Think that when you put all these factors together.
These are the problematic patients that our sales force is targeting our medical affairs and medical education efforts targeting and these are the patients that clinicians are saying I want to do better for this patient let me try this product that's out there and from a reimbursement standpoint.
CMS is continuing to reimburse at our ASP plus 6%.
I'd like to say that our ASP has been stable for a Senate and <unk> since their launch.
Which also makes payers happy as well as makes the prescribers in the infusion clinics happy.
So I think we've got a stable stable asps.
I think that we've got a reimbursement pathway that is well defined since receiving the J code last year, and we're really pleased with the utilization in these.
High risk.
And more at risk patients for chronic and persistent infectious diseases.
Okay.
Okay. Thanks, I appreciate that color and maybe just.
It sounds like it has been.
Feeding some of your own internal projections just in light of all these positive.
How are you considering also the longer term horizon doesn't adoption continues to grow and you continue to receive great feedback and are you also considering avenue, maybe collect more plasma donors, who have the sufficient level naturally occurring neutralizing antibody titer.
As Dorothy.
I can tell you, it's where you in the halls of Adam over the past few weeks I mean, we are we are very very encouraged by the performance of the product.
Throughout the tail end of last year and the beginning part of this year.
We've been collecting plasma for a longtime Michael say Kristen.
A portion of the raw material inventory that we have on the books is.
Plasma that we've collected from RSV donors for the past 345 years.
Plasma has a 10 year shelf life.
When used.
For the U S market.
So the U S. FDA has a 10 year shelf life some other regions around the world.
Have a shorter shelf life, but plasma for the U S is 10 years. So we like all the RSV Plaza, we can get when we identify donors.
We certainly.
Do what we can to ensure that they continue to come back and some projects that we don't really talk about per se, but.
Our analytical development team here.
In Boca Raton is working to transfer part of the.
RSV detection assay that we use to identify plasma donors in house, we think that can improve turnaround times for donor collections.
And then we improve turnaround times, we've done a better transit was telling that donor how you've got something special and you. Please don't even come back we do pay these donors sometimes.
Slightly higher donor fees to come back more frequently but we are.
Using all measures possible to continue to increase donor collections from an RFP standpoint, we do have long term supply contracts for RSV plasma so while I've mentioned that our normal source plasma supply contract will end.
With <unk> at the end of 2022 again, we're augmenting that with collections from our internal <unk>.
Expanded network, our RSV plasma collection contract with <unk> runs through June of 2027.
So we still have more time, and we are able to augment our RSV plasma supply from collections from third parties and we're also signing I think we spoke about it last quarter, we've been signing some additional.
All agreements with some new and emerging collectors in the markets, where we have relationships with but we feel very very good about our position to collect.
The high Titer RSV plasma that we used to make a Senate I think as we've mentioned roughly about 5% 10% of plasma donors have the antibody profile that we're looking for and we are able to easily identify these these donors and.
We are looking at our inventories and we certainly feel good for the for the.
Next.
12 to 24 months that we've got the plasma that we need in order to meet the market demand.
We've been increasing our production of ascent is early.
In the beginning part of 2022 to meet the forecasted growth in demand throughout the year, but we feel very very good about our ability to continue to supply the market again, it's a product that the clinicians understand is not for everyone.
It's a product that is used in patients that are costly to the payers.
Theres, a pharmacodynamic value proposition here with the drug that certainly makes sense and.
I think if you stay tuned for the next next couple of quarters I think you'll be very very pleased with.
The uptick of the higher margin products in the in the revenue mix for asthma.
Okay. Thank you and then the last question I have for you is.
You noted in the release that your total revenue for the here.
<unk> $125 million, obviously, a majority of that is coming from your approved product revenue line, but.
Just thinking about the other important in mind here your plasma collection centers.
David in the press release is that some of these approvals came ahead of your own guidance and then intermediate byproduct revenue thinking about.
Limitations that you took last year in terms of manufacturing. So just simply wanted to ask how we should be thinking about these two avenues moving forward as well in light of some of these.
Implementations that took place thank you again.
Sure so.
Our growth is really going to be driven by.
Finished good product revenue I mean, that's where we're going into key growth I know that with our.
Intermediate fractions agreement that we announced a couple of years ago, Brian I don't want to misspeak, because everybody then choose me out.
We say, 10% to $15 million a year, we can generate intermediate perhaps incorrect 10 to 15 growing closer to 20% to 25% as we're looking in 2024 and beyond correct.
So that that revenue line item is going to grow exponentially as we increase throughput at the facility.
Again, the intermediate fractions, we get more intermediate fractions from a batch of 4400 meter began than we would from say a batch of 2200 leader assertive, but a batch of 'twenty 200 leader of save is going to add.
Out of $900 per Gram price.
Its roughly its.
8000 grams at a $900 per Gram price when youre looking at $67 million net of.
Fees on a batch of incentive where.
But again at 133 is certainly less even even at double the scale.
We'll trade a batch of incentive at an 80 plus percent margin any day of the week.
For our <unk>.
<unk> product manufacturing.
During opportunity, but you're really going to see the growth coming from the finished goods line.
And again I think it's Donald is going to take a larger <unk>.
A larger portion of that as we continue to matriculate throughout this year.
But.
From our plasma supply excuse me of plasma source plasma revenue standpoint.
Got a great contract in place with our friends at <unk>.
Qaeda and they keep paying us on time and we thank them very much for their business.
But we're not really looking at signing new agreements right now I'm going to reiterate that we are forecasting to be plasma supply self sufficient from a normal source perspective.
By year end next year.
It's hard to do that when you it's hard to increase your revenue when you need the <unk>.
Plasma.
But we feel very very good about.
The way that the market is currently set up we feel very good about being opportunistic right now.
Due to some of the tightness that we're seeing.
In the market from some of the competitors that have had some voluntary market withdrawals with their products.
And we certainly feel very very.
Im proud of our ability to capitalize on some of this dislocation out there that we're seeing in the market and that's what's ultimately going to drive revenue and take us to profitability, we're seeing shorter turnaround times now that we're filling in house.
I think theyre going to be some pretty pretty unique and interesting updates that we can talk to <unk>.
Investors about.
We finished up the first quarter here, but we're really starting to see.
And on block the efficiencies from our supply chain robustness initiatives and.
We continue to win sticky books of business and we continue to have patients who performed well on our products both to the game and incentives and that's what's ultimately going to win here.
As you make a good product that helps people and they keep ordering.
And you grow and you penetrate and if there is a downturn in supply we've got the ability to fill it.
Got more product in our I mean, Brian you said $125 million in inventory.
Our blended call it 40% to 50% gross margin that's a lot of revenue it's much more revenue than what we're forecasting for the year. So.
I think that there is some upside there but.
As you know.
And interesting in precarious time for the supply chain, so I want to caveat that with please read our risk factors and.
But we do feel very very good about capitalizing on the dislocation and penetrating the market more broadly with it again and finding the right patients with.
Percentage.
Okay, great. Thank you so much again.
Thank you Kristen.
Thank you.
Thank you. Our next question comes from the line of <unk> from Jefferies. Your question. Please.
Hey, thanks for taking the questions.
Just a few from US first if you could give some color on that.
The end users of <unk>.
Incentive if it's new users.
Our recurring users using more product just some color there on the customer base.
Yes, and yes, I think that.
Certainly you've got the clinicians who were early adopters, who began using the product.
They are certainly adding to their to their patient rosters.
Many of these physicians, who we're calling on the other practices, where they see 50 to 100 200, sometimes 300 or more.
Globally in their private practices.
As I'm showing about 10% of the population.
Have these comorbidities or.
Sure.
Or higher.
Susceptibility and risk for other types of infectious diseases, especially respiratory viral infections.
And I think that once the doxy that they can get reimbursement once they see that.
The drug is providing.
Some clinical benefits in their assessment in these patients they are putting more patients on.
With medical Education Symposium.
Publications that have been given out there bye bye.
Clinicians on.
Individually.
Case presentations about.
Actual real life patients I think that it's really turning other doctors, who may have been on the fence on two well let me try this amortization I wanted to do something the clinical and the knowledge is a really.
Kind hearted type of clinician.
They are seeing many of these patients for decades, and they want to do better they developed real relationships with these patients and we certainly are seeing word of mouth.
Grassroots efforts Dr.
Doctors are calling our medical affairs team and they are saying you know we'd like to organize that.
A round table in my region of my friends across across the city.
It's really something its the first really differentiated opportunity for the clinical immunology setting in years and.
We're not just talking about exploration dating or subcutaneous administration.
Room temperature storage, we're sitting here talking about a differentiated antibody profile and a unique way of blending normal and.
RSV high titer plasma so.
We're seeing utilization, we're seeing penetration from existing accounts, but we are adding new accounts every single week every single month.
That's helpful and then just on the balance sheet and cash.
Cash usage.
2021 you guys spent a fair bit on manufacturing update the Florida portfolio at capacity and they fill finish.
I guess.
My question would be.
What is the expectation or their manufacturing upgrade supply chain upgrades.
Sure.
Expected through 2022 or is the focus more on.
Plasma center growth and continuing growth in the business.
Sure I can take this one it's predominantly focused on.
Building out the remaining plasma centers.
We have six currently collecting plasma so we have another four to go in various stages and then obviously, we're going to continue to build that inventory balance we feel very pleased where we're at now with $125 million as we look forward to 2023 and 2020 for revenues, but ideally it's going to be there is no major projects at the.
Plant the projects the capex projects or really just concluding the town center build out which we have four to go.
Alright, and then thanks.
Last one just on the on the refinancing and then the <unk>.
Strategic alternatives. If you can just give some color on both of those be helpful. Thanks.
Well I'll say the refinancing we're really very proud of <unk> as a top top tier shop.
And.
They came in robust due diligence.
Extensive and robust due diligence and.
I think in light of the state of the Global Affairs.
They really did not leave a stone unturned. So we're really very proud of that we think the I'll, let Brian comment on the cost of capital, but I will tell you from my perspective.
We have a lot more money.
At our disposal.
Cash available to us and it's cheaper.
Plain and simple and we think that they're a great partner there.
So we've learned on the global stage.
They've diligence a number of other companies in our space and complementary companies. We think that they also can be helpful to us now that they are sitting alongside us here.
They can be helpful to us evaluating strategic opportunities. There there are 25, or so billion dollars fund I believe I mean, they certainly.
The capacity that if we see some interesting opportunities.
And need some financing help they could be there for us but.
This to take the capital I will say was a business decision, it's something that we promised investors during our financing.
In the fourth quarter.
Last year and.
We look at this as it is all part of the opportunity here.
We've now got.
All the cash we need we believe to get to the promised land of profitability.
And we really feel that that's the right way to approach.
Our strategic alternatives process and that process continues and is progressing.
And I think it just really strengthens admins position of looking across the table to maximize value for shareholders here.
Showing that we've now got a fully financed our organization.
Sure I'll, just add a couple more things to that regarding that process.
With regards to as Adam mentioned it was a very robust process thorough due diligence there was a competitive process multiple parties expressing interest.
<unk> carry interest at 8.25% or $150 million is essentially the same cash interest that we're paying it at a $100 million.
So the overall effective rate is lower.
Then.
Previously seen the interest only period is a five year interest only period, which matures in March of 2027, and then we have another $25 million available to us.
Based on future revenue milestones, so certainly very encouraged very thankful for the team.
Providing us this capital to continue to grow the business.
Thanks for taking the questions I appreciate it and congrats on the quarter.
Thank you Anthony.
This does conclude the question and answer session of today's program I'd like to hand, the program back to Adam Grossman for any further remarks.
So thank you everybody. Thank you for your interest.
<unk> attention and time.
We do appreciate you our shareholders for helping us too.
Made good high quality products that help save the lives of our friends families and neighbors and.
Please donate plasma you can visit Admob biosensors Dot com, where we've got a number of new centers that are opening and go visit go donate plasma donate blood save some lives and.
We will keep you posted on our progress throughout the year. Thank you again have a good afternoon.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Right.
Okay.
Yes.
Sure.
Okay.
Yes.