Q3 2022 ADMA Biologics Inc Earnings Call

November 9, 2022

Good afternoon, and welcome to the asthma Biologics third quarter 2022 financial results and corporate update conference call on Wednesday November nine 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 would like to introduce Skyler Bloom senior director of business development and corporate strategy had asthma biologics.

Please go ahead.

Welcome everyone and thank you for joining us this afternoon to discuss asthma biologics financial results for the third quarter of 2022 and recent corporate updates.

Joined today by Adam Grossman, President and Chief Executive Officer, and Brian Lenz Executive Vice President Chief Financial Officer, and general managers of adding a bio centers.

During today's call Adam will provide some introductory comments and provide an update on corporate progress and then Brian will provide an overview of the Companys third quarter 2022 financial results.

Finally, Adam will then provide some brief summary remarks before opening up the call for questions.

Earlier today, we issued a press release detailing the third quarter 2022 financial results and summarize certain achievements in recent corporate updates. The release is available on our website at www Dot Adama 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 any such statements.

In addition, any forward looking statements.

Represent our views 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 any 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 sections of our 2021 annual report on Form 10-K for the year ended December 31, 2021, as well as the risk factors section of our quarterly report on Form 10-Q for the quarter ended September 32020.

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 call to turn the call over to Adam Grossman Adam.

Thank you Skyler and good afternoon, everyone and thank you for joining us on today's call.

Hope everyone remains healthy and safe.

We believe our strong third quarter performance demonstrates our company's successful execution of our multiyear strategy and.

And speaks to admit compelling prospects as we look to 2023 and beyond.

In keeping with Atmos track record of delivering on our objectives.

We are pleased to now again be raising financial expectations for full year 2022.

The company now expects to generate total revenues of approximately $145 million increase from the $130 million previously provided.

We believe the third quarter revenue growth of 99% year over year, coupled with the favorably evolving product mix establishes a strong foundation for the company to accelerate towards profitability.

As Brian will detail, we expect the coming quarters will better illuminate the pathway to profitability and increased visibility of the robust growth opportunities thereafter.

Elevated incentive demand trends persisted throughout the third quarter and have now continued into the fourth quarter.

The body of commercial evidence, we have been able to successfully demonstrate.

For <unk> throughout 2022.

Gives us confidence in our belief that the product will continue to rapidly grow throughout 2023.

And ultimately we believe <unk> is well positioned to account for a greater portion of our overall revenue product mix than we have historically messaged.

We regard 2022 as a new launch year for.

<unk>.

Due to the initial I'm following a pandemic related barriers to physician provider and patient engagement, which throughout COVID-19 impacted our ability to detail the truly unique product profile.

With the first year of the newest set of launch coming to a close.

Our enthusiasm cannot be overstated as we upwardly revised our internal forecast to account for the products expected growth trajectory and peak opportunity.

To build on incentives rapidly growing launch trajectory.

During the third quarter, we opportunistically mobilized a targeted medical education and conference symposia strategy.

Identifying clinical needs and managing respiratory infections in the immuno compromised hosts.

We are pleased to report that these initiatives were met with a strong reception, including full capacity standing only attendance of symposia discussions of real world experience of incentives in patients with primary immunodeficiency.

Also during the quarter case studies were presented by nationally recognized clinical experts in the area of transplantation infectious disease and immunology.

At National and regional medical meetings, including the immune globulin National Society infectious disease week in the Florida, allergy and asthma immuno Immunology Society meeting.

All told we believe our commercial and medical affair strategy is being successfully borne out more assertive and we believe we are in the early days of the products significant growth potential.

Perhaps most importantly, the problematic and at risk primary immunodeficiency patients being treated with incentives are demonstrating real world benefits and quality of life improvements.

Anecdotal market feedback remains resoundingly positive.

And this patient population is oftentimes poorly controlled on standard products.

Additionally, although we are scientifically excited by the prospect of a potential RSV vaccine approval for the broader population.

The unfortunate reality is that vaccines have limited utility and immune compromise people.

Adam its target patient population.

It is exclusively this population high risk primary immune deficient patients.

<unk> aims to serve with offense.

We believe our product success validates and supports our company's mission to commercialize novel products for immuno deficient patients at risk for infections.

It is our devotion to this underserved population that fuels us and we believe that the advent biologics name is now synonymous with trust and confidence amongst many physicians providers and patients.

<unk> during the third quarter.

We advanced the post marketing clinical studies for bid again and incentives.

To date, we are enrolling our <unk> trials faster than anticipated and the excitement amongst participating investigators has been notable for both products.

We believe this investigator enthusiasm speaks to the reputation admin and its products have established in the market and may well prove to be an indication of the unmet need in this patient population.

If successful and provided FDA authorization.

Ongoing pediatric requirement studies will potentially expand the indication for both products to include pediatric AIDS primary immuno deficient patients.

Turning to bid again.

Our confidence in the near term and longer term growth trends is building.

They began product revenue and demand pull through reached record highs during the third quarter driven by end market growth as well as adding with continued market share gains.

Various industry reports now suggest that <unk> biologics has established a one 5% to 2% market share in the rapidly growing U S AG end market.

Moving forward, we anticipate continued share gains as well as structural tailwind from IAG market growth.

Admiral remains committed to delivering the continuity of patient care.

Our strong normal source in RSV hyper immune plasma supply inventories, which are included in the total inventories of $163 million recorded at the end of the third quarter.

Our anticipated to support all upwardly revised revenue forecast on an ongoing basis across our hygiene portfolio.

This robust plasma supply position is the result of the execution by our by our centers team and rapidly expanding our internal plasma collection.

Collection Center network and management's assertive efforts to secure third party plasma supply contracts.

We believe the strong inventory position, we have built including the favorable procurement of external plasma will.

We will provide her financial flexibility in the periods ahead.

We routinely entertain plasma supply requests from third parties, and we will continue to opportunistically monetize excess plasma when value creating.

Particularly so as we have now built total inventories to the upper bound.

Which we forecast will trend between $150 million to $175 million moving forward.

With respect to macroeconomic conditions.

Continue to believe the supply chain measures Admah has achieved to date and.

In addition to the inherent counter cyclicality of the plasma industry together positions the company to successfully navigate challenging operating backdrop and further accelerate and more normalized economic conditions.

We believe the renew Mauritian for plasma donation can help owners manage and offset increased pressures due to historic consumer inflation rates.

It is in this context that Adam is proud to be a trusted partner with the local communities. We serve and we look forward to welcoming many more donors to our state of the art biosensors.

These significant accomplishments across our business could not have been possible without the dedication and focus of admin staff leadership and advisors.

Thank you for your dedication and hard work in achieving our corporate goals and delivering on our commitments to the patients prescribers and stockholders to whom we've made these promises.

We commend the entire admin team are important efforts focused on improving health care for patients, who we know are counting on us.

Additionally, before turning the call over to Brian I would like to confirm our strategic alternatives process remains ongoing and the exploration of value, creating opportunities as a top corporate priority.

We will update the market as developments materialize.

With that said I'd now like to turn the call over to Brian for a review of the third quarter 2022 financials. Thank.

Thank you Adam we issued a press release earlier today outlining our third quarter 2022 financial results and I will now discuss some of the key highlights as Adam mentioned earlier total revenues for the third quarter ended September 32022 were $41 1 million as.

Third to $27 million.

During the third quarter of 2021.

It represents an increase of $24 million or approximately 99%.

The revenue growth for the third quarter of 2022 compared to the third quarter of 2021 was favorably impacted by the continued commercial ramp up of our <unk> product portfolio and expansion of our customer base for both <unk> and incentive.

As a result of the year to date execution, we are raising our total revenue guidance for the second time this year and we now expect to generate full year 2022, total revenues of $145 million up from $130 million as most recently provided.

During the third quarter of 2022, Adam have realized a gross profit of $9 7 million.

Compared to a gross profit of zero point $4 million for.

For the third quarter of 2021.

Most profit during the third quarter was driven by a favorable contribution from our higher margin product SNF.

Although we are pleased with the underlying margin developments and favorably evolving product mix. It is important to note that a substantial portion of our <unk> revenues. During the third quarter consisted of legacy produced 2200 liter scale product.

This 2200 liter scale product was produced during 2021 and yields a significantly lower margin compared to the 4400 liter scale production process, which was approved by the FDA subsequent to the manufacturing of our 'twenty 200 liter batches.

Encouragingly asthma has been exclusively producing dividend at the 4400 liter scale since the second half of 2021.

The residual lower margin inventory produced at the 'twenty 200 liter scale is anticipated to be fully depleted over the coming quarters and once sold future profit margins are expected to improve excluding.

Excluding the impact associated with the sale of lower margin 2200 liter scale <unk>. The company estimates corporate gross margins for the third quarter would've been approximately 2% to 4% higher compared to reported results translating to an approximate 26%, 28% corporate gross margin and a normalize.

Quarter.

Accounting for the transient gross margin dynamics amounting to approximately $1 $3 million at the midpoint. In addition to approximately $1 million in nonrecurring operating expenditures incurred during the quarter. The company estimates third quarter operating loss would have been approximately $7 million the equivalent of approximately.

<unk>, 50% improvement compared to the prior year's third quarter.

Consolidated net loss for the quarter ended September 32022 was $14 9 million or <unk> per basic and diluted share compared to a consolidated net loss of $17 7 million or <unk> 13 per basic and diluted share for the quarter ended September 32021.

Net loss decreased by approximately $2 8 million compared to the third quarter of 2021, primarily attributable to higher gross profit of $9 3 million offset.

Offset by a $2 $3 million increase in interest expense as a result of additional debt principal as well as rising interest rates.

Additional offsets during the third quarter of 2022 included increased plasma center operating expenses of $1 7 million and this was attributed to having nine plasma centers in operation compared to five operating centers during the same period last year as.

As well as increased general and administrative expenses of $2 $2 million, resulting from increased head count commercialization and marketing expenditures.

We look forward to expanding on these trends in the quarters ahead, as we expect to continue to grow revenues and gross profits and narrow net losses in the coming quarters in doing so we anticipate our pathway to profitability will become increasingly clear.

We have strengthened our balance sheet and funding position over recent periods.

On a pro forma basis, the Companys total liquidity stands at approximately $81 million, which includes current cash and cash equivalents at the end of the third quarter of approximately $35 million accounts.

Accounts receivable of approximately $21 million and access to an additional $25 million non dilutive funds from Haven, which is accessible at our discretion through March of 2023.

As of September 32022, Atmos total asset value was approximately $301 million.

Notably, including approximately $163 million of total inventory and this is recorded in our cost approximately $35 million in cash and cash equivalents as well as accounts receivable of approximately $21 billion.

Lastly, we are very pleased with the expansion progress of our buyer Center segment with a plasma collection unit now having received four FDA approvals year to date.

Our biosensor segment, we now operate seven FDA licensed source plasma collection facilities in the U S. With two additional collection facilities in operation and collecting plasma that are presently under FDA licensing preparation and review and our test facility, which is currently under construction.

We remain on track to have all 10 plasma collection centers FDA licensed by the end of next year at which point, we anticipate having raw material plasma supply self sufficiency.

At present, we are encouraged with our donor foot traffic and collection volumes, which are now considerably exceeding our organization's pre pandemic levels.

With that I'll now turn the call back over to Adam for closing remarks.

Thank you Brian .

<unk> is well positioned to build on the foundation established during 2022.

We are pleased with this year's results and look forward to a successful year end for 2022 and continuing the strong momentum into 2023.

And market immunoglobulin growth remains one of the fastest growing segments in the pharmaceutical sector.

And we are proud to have clearly demonstrated our company has staying power within this landscape.

The pieces are in place for <unk> to sustain its best in class revenue growth profile and.

And deliver on our long standing commitment of reaching profitability as rapidly as possible.

The forward looking visibility that our 7% to 12 month manufacturing lead time provides for an.

And further considering the operational efficiencies we are presently unlocking.

US unique insights into the coming quarters.

It is in this vein that we confidently and comprehensively reiterate all previously provided near term and longer term top and bottom line financial guidance.

We look forward to continuing to deliver on commitments as we enter 2023.

Year that we expect will be defined by the company's rapid revenue growth and adamos advancement towards profitability.

In closing I would like to thank you our stockholders.

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 families and neighbors.

Please donate plasma and help save lives.

And with that we'd now like to open up the call for your questions.

Back to you operator.

Thank you today's question and answer session will be conducted electronically as a reminder to ask a question you will need to press star one on your telephone.

Pause just a moment to assemble the roster.

Our first question comes from Anthony Petrone with Mizuho Group you May proceed.

Hi, Anthony.

Anthony Your line is on mute please UN mute.

Apologies for that Hi, Adam Hi, Brian .

Skyler.

First off just congratulations on what really appears to be a milestone.

<unk> for the company and the team and really the culmination of lots of hard work and heavy lifting through the pandemic. So congratulations to the team and everyone at Adler.

Maybe just just doing our job for Anthony.

Maybe to begin Adam it will be great to just start with a general update on the state of affairs across the plasma space we're in.

In the endemic phase of COVID-19.

Demand seems seems stable however, the supply chains are still.

Improving.

But still our kind of acquiring that way back from where we were pre pandemic. So maybe just the state of affairs across plasma your latest views on demand.

At the infusion center level and then just a quick update on where you see supply trends trending into the end of the year and then I'll have a few follow ups.

Thanks for the question Anthony.

I think to start out and to reiterate the comments I made in the prepared remarks.

AIG businesses is healthy.

Plasma is strong.

A recovery on the collection side and I think that you've heard that over the last couple of weeks with.

Some of our.

Restaurant companies out there, we're seeing an uptick in collections improvement at the border I think ultimately this is a benefit for the patients.

Ultimately there will be more supply and a 7% to 12 month time horizon, because thats the production cycle as as I know you and a number of our shareholders understand.

I can't speak to the broader business I can speak about admin and our products.

We're certainly doing our job.

Not only is the product being.

Pushed in but the pull through is his incredible we've seen some record.

Utilization.

So over the last quarter and that trend is continuing into the fourth quarter I can tell you that the business is durable.

It's sticky I know that this is something that we've been speaking about all year on our conference calls and in our one on ones with with shareholders people have been asking well.

How do we know that if any was utilization is going to stack, how do we know that the <unk> is.

Not a blip or that there were some supply issues with other manufacturers out there and I think that as you see this continued quarter over quarter growth.

As it pertains to our portfolio.

We're in the right institutions, we've got.

Great Prescriber engagement.

And it's sticky.

Seeing more patients being.

Being added to both.

<unk> and incentives.

Infusion schedule weekly and we expect this to continue throughout the remainder of the year and throughout two.

'twenty three and beyond so we're feeling pretty good.

Just maybe touch on your last part of your question.

It's hard to predict my Crystal ball is certainly cloudy, but.

Historically demand has typically outpaced supply.

I think it's I think even with the positivity around elections improving.

It's going to be a while I think until we start to see that supply balance.

There is there is pent up demand there that is starting to be fulfilled and we've got more product sitting in work in process and finished goods than ever before.

With the strong inventory number and we're going to meet the challenges there.

We're ensuring the continuity of care and we've got the supply on hand so.

We're going to continue to hit milestones and hopefully grow top line.

Increase our gross profits and narrow losses going forward.

No that's great and I'll shift to a couple of follow ups, one milestone revenue in and then I'll pivot to Bryan on margins, but maybe a little bit I want to set as you know when we initially modeled out the company we didn't have a set of.

At this level of utilization in consumption, so maybe a little bit on the incentive demand real time, how much is coming from.

The heightened RSV season that we're seeing right now.

Versus utilization in primary and secondary immune deficient patients and I'll have one last follow up on margins.

So I know we missed you for a couple of quarters.

We like RSV here, we're not an RFC company I've said this before I don't want to sound like a broken record on these calls but.

We do not promote any of our products for RSV.

<unk> is the marker that we use to screen, our plasma donors to see who has.

Hyper immune high titer antibodies too.

RSV in this panel.

Various respiratory viral pathogens.

As you know we make a set of using this hyper immune plasma and we blend it with normal source to create a unique IAG that.

Has IP protection through 2037 so.

Yes.

The incentive business.

I'm not going to sit here and say to you that there is not some acute care use in hospitals, but it's limited the majority of the incentive.

Well majority of the Senate utilization is in the outpatient setting.

And labeled for patient.

Primary immune deficient patients. These are patients that are problematic. These are patients that have failed other therapies, they've had dose increases they've got certain comorbidities and other social economic risk factors that render them more susceptible to infections and they have a harder time clearing. These infections. These are patients that have chronic and pursue.

Sinusitis otitis, they maybe have had multiple bouts of bacterial pneumonia and they have bronchiectasis.

And we're really.

We really engaged in a medical education conversation that as.

As I've said I think during the last quarter call.

The benefits of Covid and the awareness of Covid coming out of this pandemic has sort of accelerated these conversations with prescribers, but patients also take their care into their own hands.

And I really truly believe that when you dig around the internet a little bit there as theirs.

There is chatter about a sentiment about differentiated immune globulin out therefore, the immune deficient population.

And I think that that is helping to drive awareness and to drive utilization. So.

Sure.

We've also said in the prepared remarks.

Very excited and encouraged.

By the <unk>.

Developments in the vaccine community.

Whether I should share this or not one of my passions and reasons for starting this business hasnt premature boring.

Vince I had RSV and there was nothing for me back in the day.

I think it would be an absolute win for the medical community for.

A vaccine to be available, but I think as we all know you need a competent immune system in order to respond to the antigens in the vaccine and the patients that are biologics is passionate about the patients that benefit from our products.

Are the immune compromise, where typically theres limited utility or no utility from these vaccine so.

The product is here again, we don't promote it for.

Anything other than what it is indicated for Anthony and utilization is growing and I really feel that we are moving to peg forward and we're doing something really special for the immune compromised.

That's excellent and then last one for me on margins just the updated guidance looking outward and certainly intrigued by.

The call here for net a high level of net profits I should say in the 2024 to 2025 timeframe and so Brian maybe walk us through the dynamics there how much of that is mix shift to <unk> how.

How much is coming from the transition to expanded leader pools.

And then just general leverage gains again, congratulations to everyone.

Thank you Anthony for the congratulate Greg.

Congratulatory remarks.

We do continue to be very encouraged with our ongoing acceleration of our gross margin development. We are now seeing a 70 30 mix with <unk> and our.

Our higher margin products, which has really evolved about a year earlier from our initial launch projections back in 2019 2021 way, we're taking a 90 10 80 20.

$75 $25 70 to 30, so thats really occurred about a year earlier, so as we further continue to deplete.

Meaning batches of our lower margin 20 to 100 leader if again batches and these were produced about a year ago as you understand the seven to 12 month manufacturing timeline.

These <unk> margins.

And the 240 400 liter production scale, which was recently approved in April 2021.

2020 to 100 batches will go from a single to low double digit margin to the mid 20% to 30% gross margins for the 4400 batches over the coming quarters as we're exclusively producing only higher margin more efficient 4400 batch process liter production for <unk>.

As you know we've already stated incentive yields gross margins are between 80 and 85% so going looking forward into the future in the next couple of quarters and beyond we look forward to continuing to grow gross margins and see continued gross profit expansion.

Thank you.

Thank you one moment for questions.

Our next question comes from Elliot Wilbur with Raymond James You May proceed.

Yes.

Hey, thanks.

Good afternoon.

Good afternoon afternoon Elliot.

Wanted to ask a follow up question around gross margin dynamics in the quarter.

The math seems pretty clear with respect to the dynamics between the 4400 2200 leader.

Production.

Volumes, but just want to think about this over the next couple of quarters because it sounds like there is some residual inventory that probably will remain around im guessing until sort of mid 2023, but fair to say.

That this is sort of the peak quarter in terms of the impact of having a lower margin 2200 liter inventory running through the P&L.

Thinking about it right in the sense that it's probably fully exhausted by bid.

2023, and then just longer term.

Does the 200 leader.

<unk> production capability ever enter the equation again or is all production essentially going to be.

Completed using 400 liter capacity.

Maybe I'll just take that part of the question.

The 200 liter scale is approved.

Do we want to make product at that scale.

It's approved.

Yes.

We have other products that we may want to make in the future. There are other hydro means as you know we are expanding our CMO potential opportunities. So you want to have different various scales that are validated and qualified elliot, but but just hit that part of the question going forward <unk>, especially.

Since the approval in July of 'twenty one.

We have been making big game exclusively at the 4400 liter scale and we have no plans to produce any additional <unk>.

They began at that scale going forward now I'll shut up and let Brian answer the question.

Thank you. Thank you Elliot again for the congratulatory remarks, as well so to specifically answer your question.

We expect the.

The remaining 2200 liter batches that were produced up until call. It the middle of 2021 to be depleted or meaning sold throughout the next couple of quarters be completely sold by the middle of 2023. There is substantially we've already sold the majority of the 22.

To date.

There's a couple of.

Quarters to go that we feel that.

The 4400 will be sold exclusively.

Starting in the middle of 2023 at a higher margin.

Production process again in the 20% to 30% range for.

The 4400 batch production leader process, yes.

Theres not a lot of inventory left.

It may accelerate Elliott, but but I think Brian Brian's right. It could last into the middle of the year.

Okay. Thanks.

Can I ask a follow up.

Go ahead sorry.

Alright, I was just going to say, which would obviously accelerate the overall corporate gross margin too.

A higher level as we continue to.

Exit.

As we continue to go into 2023 and go beyond 2023 to get to that 40%, 50% overall corporate gross margin.

Okay. Thanks, and then Adam I wanted to ask a follow up question on your earlier commentary around the RSP landscape.

In general the emergence of vaccines, obviously going be a lot more noise in the space over the next 18 to 24 months and a lot of data coming out and broader populations, but just.

It sounds like you're.

Is that kind of stands on its own in the marketplace. It's not an RSV based product vaccinations really don't have an impact in immuno compromised population.

Im not sure some of the larger studies that are still underway, whether or not there actually specifically looking at that patient population or not but.

Outside of.

Vaccination impact just wondering if if you think the emergence of all these different therapies, including some of the maps could somehow eventually have an impact on the on the donor pool.

That's a great question and it's something that I think about all the time.

I mean, if hypothetically there is widespread vaccination with an RSV vaccine like there was with Covid would there be.

High levels of RSV antibodies in the general population and plasma sure there would be.

But again I think what's interesting about assertive.

We're not just looking for.

These donors that have high titers to RSV again, they're a marker for people that are high responders to a wide array of different <unk>.

Hi, Ron bacterial pathogens.

Immunology textbooks roughly about 10% of the population are considered high responders and we feel that that's who we are targeting when we are using our proprietary and patented Mike micro neutralization assay to identify these donors so naturally occurring antibody.

Slightly different than antibody that is is.

Being generated from a vaccine from the standpoint of the donors that we're looking for are naturally high responders and they have high titers for long periods of time.

Again to reiterate save as a drug for immune deficient patients full stop it's a drug for the primary immune deficient population.

Drug that is utilized.

In secondary immune deficient.

Patients. These are patients that have cancer. There on chemotherapy. They may have had oregon or bone marrow transplants that are on active immunosuppression wherever it is used to support the immune system.

Incentive as a healthy immune system in a bottle.

That is manufactured in a unique way, where we blend hyper immune than normal plasma.

How to think about it the noise in the RFP, where all the noise in the monoclonal antibody world again, we are truly excited about.

That's from a scientific perspective.

Been involved in the RSP markets.

Since the late nineties.

So I can tell you that this is an extremely exciting time.

And the scientist in me is certainly.

Watching and rooting for all of these companies.

I don't think that there is any impact on incentive I don't think theres any impact on the patient.

In general.

And I think that if all of these products prove successful less people die and ultimately that's that's why we get up in the morning here at admin and I'm pretty sure. That's that's why a lot of folks that are that are in pharma and biotech get up as well so it's exciting times.

Thanks, and just one quick additional question.

Earlier too.

Trends in collection volumes.

Just wondering if you.

You could speak maybe more specifically to <unk>.

Cost of collection volumes, and whether or not youre seeing more of a systemic impact in terms of the actual collection cost based on some of our competition and or just sort of general macro environment inflationary pressures et cetera. Thanks.

Alright, Thanks, Elliot will just to talk about collections and the progress we've made with our centers. Obviously, we're very pleased with our year over year collections, our plasma center growth and FDA approvals. This year now at this time last year, we had three FDA approved centers now we have seven so thanks to the FDA and our dedicated staff, we've had a tremendous year.

So far.

We had five centers open this time last year of collecting in ISP and RSV plasma and now we have nine in our Tech Center is currently in construction regarding.

Regarding the donor fees, we're seeing donor fees stable pricing.

In some locations we've seen decreases from historic high donor fees.

They are again starting to stabilize in some areas starting to come.

Down a bit of a decline all based on competition and other centers that are located near ours.

Again recall, our manufacturing process is seven to 12 months. So those higher donor fees that were reflected in previously produced in collective production costs.

Recently that those rfps, having a decline there'll be downwardly, adjusting our costs, which will be factored into the product as we sell subsequently in the next seven to 12 months, meaning our margin ship.

I expect it to continue to improve and lastly regarding the plasma centers, we still remain on track to have our test centers construction completed within our internal timelines and our three remaining centers to be FDA approved by the end of 2023, even with supply chain issues and other disruptions that have been seen across the global economy.

So we're very proud of how far we've come with our centers.

Thank you one moment for questions.

Our next question comes from Chris <unk> with Cantor Fitzgerald you May proceed.

Hi, Good afternoon, everybody. Let me also add my congratulations to you on this quarter.

Thank you.

Yeah of course.

That you reiterated your thoughts on peak revenue opportunity in the outer years, but based on the trends that youre seeing here quarter over quarter and your enthusiasm heading into next year around the next product how much of this growth is really built into those calculations at this time.

Well I mean.

It's a great question I think I can start off by saying what's interesting about our business Christian is that with this seven to 12 month production cycle. We know how much we made last year and I also know what the capacity it might plant is so when we look at this there is a finite amount of product that we can make now.

Now I think what you're what you're.

Alluding to is.

We've always thought 90 10 growing to $80 <unk> growing to 70 30 between our standard IAG began and our higher margin products incentive and Nabi HB.

The demand for our centers continues at this pace and again, we don't have a crystal ball on.

When are we going to reach critical mass.

We know that there are roughly about.

10% to 30% of the primary immune deficient patients.

Have comorbidities have chronic lung diseases have bronchiectasis.

And.

The sky can be the limit there.

The amount of RSV plasma that we can collect from our center network and our third party providers. So I think there are a number of variables there we feel quite comfortable that.

The information on the corporate website and in our slide deck and that we've said we can roughly process 600000 leaders here, we roughly get call. It four grams per liter. So you can do the math on how many grams. We can produce out of this plant, but that mix could change. If you are asking is there upside yes, there's upside.

<unk>.

Do we feel confident that.

The guidance that we've given to the street is reasonable guidance, yes, we.

Wanted to continue growing quarter over quarter.

We understand what you and other analysts like we understand what our investors like.

We're doing our best to manage inventories were doing our best to manage collections, we're doing our best to manage cash flow.

We're doing our best to so as much of our products as we can at the highest prices possible. So all of this fits together and from my view.

Feel very confident with the.

$250 million.

Or more guidance I think we've given for 2024, and then 300 million plus thereafter.

If we sell more incentives thank god will be hoping that many more patients that we can collect more plasma. Thank god, we'll be able to help that many more patients and it will flow into the bottom line.

That's why I keep putting money into the company.

We're proud of what we're doing here.

<unk>.

I feel good about our position I feel good about reiterating guidance very proud in this backdrop, where so many other companies are pulling guidance lowering guidance, we're sitting here really.

My commercial team, who I know is listening you guys are doing a great job my production facilities quality team keep making a high quality product you see people people will use it and if we keep doing our jobs right everything will fall into place.

Great. Thank you for that and then with the <unk>.

I know in the.

The nature of the pipe.

You can tell pretty rapidly the effects, but given that you've seen a lot of this quarter over quarter growth I would imagine that a number of these patients have been staying on it for a long time. So I wanted to ask if you're seeing any interesting longer term trends the discounted usage.

We are seeing we are seeing patients remaining on therapy.

And there's just compounding.

What's what we alluded to in our prepared remarks around these expanding opportunities the early adopters, the folks who who jumped onboard early.

<unk>.

They are they've been out there publishing.

Putting posters at scientific meetings, we've sponsored a number of medical education symposia.

And this is certainly look it's anecdotal data small patient numbers, one patient to patient and three patients.

Certain clinics at a time, but.

I think I think I'm, okay, with saying that some of the more conservative or quote unquote textbook physicians that are out there.

I think they want to get involved in the conversation to I think that theres been enough.

Chatter about the product.

I alluded in the.

Prepared remarks that this we consider 2022 to be this new launch here I mean, it's the first time, where we've had restrictions off on the ability to engage.

Front facing with the healthcare community.

<unk> nursing Iga.

Iga support.

Patient advocacy as well as the scientific engagement with the health care professionals and I think that what we're seeing is that folks that are either on the fence about well is there any extra utility with this product.

I think.

I think the market is saying there is in the right patient population. There is utility that can be derived by prescribing.

<unk>.

So we feel good about it we think the demand is growing and it's sticky we think that it's durable.

And we really feel that we've.

Move to take forward.

And are providing something else in the physician's armamentarium to treat these patients where they don't just have to say I'm. Sorry. This is the best I can do.

There is something else for patients to try and.

From what I hear and maybe my commercial force only likes to tell me the good news, but from what I hear patients come on product and they stay on product. So we've we've lost very few patients.

Obviously.

It will have.

Issues with insurance and reimbursement and things of that nature, but at the end of the day.

Once you stay on our brand of IAG that works for you tend to stay on it for a long long time.

Oh, great. Thanks, so much for taking my questions.

Thanks Kristen.

Thank you ladies and gentlemen, this will conclude our question and answer portion of the call I would like to turn it back over to Adam now for additional closing remarks.

Thank you for the analysts for joining thank you to our shareholders for your interest in the great work that we're doing here to add.

To our staff.

Keep up the great work, we appreciate you and.

To everyone listening donate some plasma help save some lives there.

Is it adding bio centers dot com to find one of our centers that may be near you stay healthy and have a great evening.

Yes.

Thank you ladies and gentlemen, this does conclude the conference call for today. We appreciate your participation and you may now disconnect.

The conference will begin shortly to raise your hand during Q&A you can dial one one.

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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 would like to introduce Skyler Bloom senior director of business development and corporate strategy had asthma biologics.

Please go ahead.

Welcome everyone and thank you for joining us this afternoon to discuss asthma biologics financial results for the third quarter of 2022, and recent corporate updates I'm joined today by Adam Grossman, President and Chief Executive Officer, and Brian Lenz, Executive Vice President and Chief Financial Officer, and General managers.

Adding the biosensors.

Today's call Adam will provide some introductory comments and provide an update on corporate progress and then Brian will provide an overview of the Companys third quarter 2022 financial results. Finally, Adam will then provide some brief summary remarks before opening up the call for questions earlier.

In addition, any forward looking statements.

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 call to turn the call over to Adam Grossman Adam.

Thank you Skyler and good afternoon, everyone and thank you for joining us on today's call.

Hope everyone remains healthy and safe.

We believe our strong third quarter performance demonstrates our company's successful execution of our multiyear strategy and.

And speaks to admin compelling prospects as we look to 2023 and beyond.

In keeping with Atmos track record of delivering on our objectives. We are pleased to now again be raising financial expectations for full year 2022.

The company now expects to generate total revenues of approximately $145 million increase from the $130 million previously provided.

We believe the third quarter revenue growth of 99% year over year, coupled with the favorably evolving product mix establishes a strong foundation for the company to accelerate towards profitability.

As Brian will detail, we expect the coming quarters will better illuminate the pathway to profitability and increased visibility of the robust growth opportunities thereafter.

Elevated incentive demand trends persisted throughout the third quarter and have now continued into the fourth quarter.

The body of commercial evidence, we have been able to successfully demonstrate.

For <unk> throughout 2022 gives.

It gives us confidence in our belief that the product will continue to rapidly grow throughout 2023, and ultimately we believe <unk> is well positioned to account for a greater portion of our overall revenue product mix than we have historically messaged.

We regard 2022 as a new launch here.

<unk>.

Due to the initial unveiling a pandemic related barriers to physician provider and patient engagement, which throughout COVID-19 impacted our ability to detailed with truly unique product profile.

With the first year of the new incentive launch coming to a close.

Our enthusiasm cannot be overstated as we upwardly revised our internal forecast to account for the products expected growth trajectory and peak opportunity.

To build on incentives rapidly growing launch trajectory.

During the third quarter, we opportunistically mobilized a targeted medical education and conference symposia strategy.

Identifying clinical needs and managing respiratory infections in the immunocompromised host.

Also during the quarter case studies were presented by nationally recognized clinical experts in the area of transplantation infectious disease and immunology.

At National and regional medical meetings, including the immune globulin National Society infectious disease.

Disease week.

In the Florida, allergy and asthma immuno Immunology Society meeting.

All told we believe our commercial and medical affair strategy is being successfully borne out.

More assertive and we believe we are in the early days of the products significant growth potential.

Perhaps most importantly, the problematic and at risk primary immunodeficiency patients being treated with incentives are demonstrating real world benefits and quality of life improvements.

Anecdotal market feedback remains resoundingly positive.

And this patient population is oftentimes poorly controlled on standard products.

Additionally, although we are scientifically excited by the prospect of a potential RSV vaccine approval for the broader population.

The unfortunate reality is that vaccines have limited utility and immune compromise people.

Adam its target patient population.

It is exclusively this population high risk primary immune deficient patients.

<unk> aims to serve with ascent.

We believe our product success validates and supports our company's mission to commercialize novel products for immuno deficient patients at risk for infections.

It is our devotion to this underserved population that fuels us.

And we believe that the asthma biologics name is now synonymous with trust and confidence amongst many physicians providers and patients.

Additionally, during the third quarter, we advanced the post marketing clinical studies for bid again and incentives.

To date, we are enrolling our <unk> trials faster than anticipated and the excitement amongst participating investigators has been notable for both products.

We believe this investigator enthusiasm speaks to the reputation asthma and its products have established in the market and may well prove to be an indication of the unmet need in this patient population.

If successful and provided FDA authorization the ongoing pediatric requirement studies will potentially expand the indication for both products to include pediatric AIDS primary immuno deficient patients.

Turning to bid again.

Our confidence in the near term and longer term growth trends is building <unk>.

We began product revenue and demand pull through reached record highs during the third quarter driven by end market growth as well as admin continued market share gains.

Various industry reports now suggests.

That <unk> biologics has established a 1.5% to 2% market share in the rapidly growing U S AG end market.

Moving forward, we anticipate continued share gains as well as structural tailwind from IAG market growth.

Admiral remains committed to delivering the continuity of patient care.

Our strong normal source in RSV hyper immune plasma supply inventories, which are included in the total inventories of $163 million recorded at the end of the third quarter our.

<unk> are anticipated to support all upwardly revised revenue forecast on an ongoing basis across our hygiene portfolio.

This robust plasma supply position is the result of the execution by our by our centers team and rapidly expanding our internal plasma.

Collection Center network and management's assertive efforts to secure third party plasma supply contracts.

We believe the strong inventory position, we have built including the favorable procurement of external plasma.

We will provide her financial flexibility in the periods ahead.

We routinely entertain plasma supply request from third parties, and we will continue to opportunistically monetize excess plasma when value created.

Particularly so as we have now built total inventories to the upper bound, which we forecast will trend between $150 million to $175 million moving forward.

With respect to macroeconomic conditions.

We continue to believe the supply chain measures Admah has achieved to date.

We believe the renew Mauritian for plasma donation can help to owners manage and offset increased pressures due to historic consumer inflation rates.

It is in this context that admin is proud to be a trusted partner with the local communities. We serve and we look forward to welcoming many more donors through our state of the art biosensors.

These significant accomplishments across our business could not have been possible without the dedication and focus of adding the staff leadership and advisors.

Thank you for your dedication and hard work in achieving our corporate goals and delivering on our commitments to the patients prescribers and stockholders to whom we have made these promises.

We commend the entire admin team VR important efforts focused on improving health care for patients, who we know are counting on us.

Additionally, before turning the call over to Brian .

I would like to confirm our strategic alternatives process remains ongoing and the exploration of value, creating opportunities as a top corporate priority.

We will update the market as developments materialize.

With that said I'd now like to turn the call over to Brian for a review of the third quarter 2022 financials. Thank.

During the third quarter of 2021, and this represents an increase of $24 million or approximately 99%.

During the third quarter of 2022, Admah realized a gross profit of $9 7 million compared.

Compared to a gross profit of zero point $4 million for.

For the third quarter of 2021.

Most profit during the third quarter was driven by a favorable contribution from our higher margin product SNF.

Encouragingly asthma has been exclusively producing dividend at the 4400 liter scale since the second half of 2021.

The residual lower margin inventory produced at the 'twenty 200 liter scale is anticipated to be fully depleted over the coming quarters and once sold future profit margins are expected to improve.

Excluding the impact associated with the sale of lower margin 2200 liter scale began the company estimates corporate gross margins for the third quarter would've been approximately 2% to 4% higher compared to reported results.

<unk>, two an approximate 26%, 28% corporate gross margin in a normalized quarter.

<unk>, 50% improvement compared to the prior year's third quarter.

Consolidated net loss for the quarter ended September 32022 was $14 9 million or eight cents per basic and diluted share compared to a consolidated net loss of $17 7 million or <unk> 13 per basic and diluted share for the quarter ended September 32021.

Net loss decreased by approximately $2 8 million compared to the third quarter of 2021, primarily attributable to higher gross profit of $9 3 million offset by a $2 $3 million increase in interest expense as a result of additional debt principal as well as rising interest rates.

As well as increased general and administrative expenses of $2 $2 million, resulting from increased head count commercialization and marketing expenditures.

We have strengthened our balance sheet and funding position over recent periods.

Accounts receivable of approximately $21 million and access to an additional $25 million non dilutive funds from Haven, which is accessible at our discretion through March of 2023.

As of September 32022, Atmos total asset value was approximately $301 million, notably, including approximately $163 million of total inventory and this was recorded in our cost approximately $35 million in cash and cash equivalents as well as accounts receivable of approximately.

$21 million.

Lastly, we are very pleased with the expansion progress of our buyer Center segment with a plasma collection unit now having received four FDA approvals year to date.

Our bio center segment, we now operate seven FDA licensed source plasma collection facilities in the U S. With two additional collection facilities in operation and collecting plasma that are presently under FDA licensing preparation and review and our <unk> facility, which is currently under construction.

We remain on track to have all 10 plasma collection centers FDA licensed by the end of next year at which point, we anticipate having raw material plasma supply self sufficiency.

At present, we are encouraged with our donor foot traffic and collection volumes, which are now considerably exceeding our organization's pre pandemic levels.

With that I'll now turn the call back over to Adam for closing remarks.

Thank you Brian .

<unk> is well positioned to build on the foundation established during 2022.

We are pleased with this year's results and look forward to a successful year end for 2022 and continuing the strong momentum into 2023.

And market immunoglobulin growth remains one of the fastest growing segments in the pharmaceutical sector.

And we are proud to have clearly demonstrated our company staying power within this landscape.

The pieces are in place for <unk> to sustain its best in class revenue growth profile and.

And deliver on our long standing commitment of reaching profitability as rapidly as possible.

The forward looking visibility that our 7% to 12 months manufacturing lead time provides for an.

And further considering the operational efficiencies we are presently unlocking give.

It gives us unique insights into the coming quarters.

It is in this vein that we confidently and comprehensively reiterate all previously provided near term and longer term top and bottom line financial guidance.

We look forward to continuing to deliver on commitments as we enter 2023.

The year that we expect will be defined by the company's rapid revenue growth and Adam is advancement towards profitability.

In closing I would like to thank you our stockholders.

Continued support as your investment and has helped 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 and help save lives.

And with that we'd now like to open up the call for your questions back to you operator.

Thank you today's question and answer session will be conducted electronically as a reminder to ask a question you will need to press star one on your telephone.

Pause just a moment to assemble the roster. Our first question comes from Anthony Petrone with Mizuho Group You May proceed Hi, Adam Hi, Brian Hi, Scott Skyler.

First off just congratulations on what really appears to be a milestone.

<unk> for the company and the team and really the culmination of lots of hard work and heavy lifting through the pandemic. So congratulations to the team and everyone at asthma, maybe just just doing our job for Anthony.

Maybe to begin Adam it will be great to just start with a general update on the state of affairs across the plasma space.

In the endemic phase of COVID-19.

Demand seems seems stable however, the supply chains are still.

Improving.

But still our kind of clawing their way back from where we were pre pandemic. So maybe just the state of affairs across plasma.

Your latest views on Iag's demand.

At the infusion center level and then just a quick update on where you see <unk>.

Applied trends trending into the end of the year and then I'll have a few follow ups.

Thanks for the question Anthony.

I think to start out and to reiterate the comments I made in the prepared remarks.

Business is healthy.

<unk> strong.

The recovery on the collection side and I think that you've heard that over the last couple of weeks with.

Some of our.

Restaurant companies out there, we're seeing an uptick in collections improvement at the border I think ultimately this is a benefit for the patients.

Ultimately there will be more supply and a seven to 12 month time horizon, because that's the production cycle as as I know you and a number of our shareholders understand.

I can't speak to the broader business I can speak about admin or products.

We're certainly doing our job.

Not only is the product being.

Pushed in but the pull through is is incredible we've seen some record.

Utilization.

So over the last quarter and that trend is continuing into the fourth quarter I can tell you that the business is durable.

It's sticky I know that this is something that we've been speaking about all year on our conference calls and in our one on ones with with shareholders people who've been asking well.

How do we know that if any was utilization is going to stack. How do we know that the <unk> is not a blip or that there was some supply issues with other manufacturers out there and I think that as you see this continued quarter over quarter growth.

As it pertains to our portfolio.

We're in the right institutions, we've got.

Great Prescriber engagement.

And it's sticky.

Seeing more patients being.

Being added to both.

<unk> and incentives.

Infusion schedule weekly and we expect this to continue throughout the remainder of the year and throughout two.

<unk> 23, and beyond so we're feeling pretty good.

Just maybe touch on your last part of your question.

It is hard to predict my Crystal ball is certainly cloudy, but.

Historically demand has typically outpaced supply.

I think it I think even with the positivity around elections improving.

It's going to be a while I think until we start to see that supply balance.

There is there is pent up demand there that is starting to be fulfilled and we've got more product sitting in work in process and finished goods than ever before.

As you see with the strong inventory number and we're going to meet the challenges there.

We're ensuring the continuity of care and we've got the supply on hand so.

We're going to continue to hit milestones and hopefully grow top line.

Increase our gross profits and narrow losses going forward.

No that's great and I'll shift to a couple of follow ups one milestone revenue in.

And then I'll pivot to Bryan on margins, but maybe a little bit on want incentive when we initially modeled out the company we didn't have a set of.

At this level.

<unk> of utilization in consumption, so maybe a little bit on the incentive demand real time, how much is coming from.

The heightened RSV season that we're seeing right now.

Versus utilization in primary and secondary immune deficient patients and I'll have one last follow up on margins.

So I know we missed you for a couple of quarters.

Sure.

We like RSV here, we're not an RSV company I've said this before I don't want it sound like a broken record on these calls but.

We do not promote any of our products for RSV.

RSV is the marker that we use to screen, our plasma donors to see who has.

Hyper immune high titer antibodies too.

RSV in this panel.

Various respiratory viral pathogens.

As you know we make a set of using this hyper immune plasma and we blend it with normal source to create a unique IAG that.

Has IP protection through 2037.

Yes.

The incentive business.

I'm not going to sit here and say to you that there is not some acute care use in hospitals, but it's limited the majority of the incentive the Ole.

Well majority of the incentive utilization is in the outpatient setting.

And labeled for patient.

Sinusitis otitis, they maybe have had multiple bouts of bacterial pneumonia and they have bronchiectasis.

And we're really.

We really engaged in a medical education conversation that as.

As I said I think during the last quarter call.

The benefits of Covid and the awareness of Covid coming out of this pandemic has sort of accelerated these conversations with prescribers, but patients also take their care into their own hands.

And I really truly believe that when you dig around the internet a little bit there as theirs.

There is chatter about a sentiment about differentiated immune globulin out therefore, the immune deficient population.

And I think that that's helping to drive awareness and to drive utilization. So.

We have also said in the prepared remarks.

Excited and encouraged.

By the.

Developments in the vaccine community.

Whether I should share this or not one of my passions and reasons for starting this business Hasnt premature born infants I had RSV and there was nothing for me back in the day.

I think it would be an absolute win for the medical community for.

A vaccine to be available, but I think as we all know you need a competent immune system in order to respond to the antigens in the vaccine and the patients Padma biologics is passionate about the patients that benefit from our products.

The immune compromised, where typically theres limited utility or no utility from these vaccine so.

The product is here again, we don't promote it for.

Anything other than what it is indicated for Anthony and utilization is growing and I really feel that we're moving to peg forward and we're doing something really special for the immune compromised.

That's excellent and then last one for me on margins just the updated guidance looking outward and certainly intrigued by.

Just a call here for net a high level of net profits I should say in the 2024 to 2025 timeframe and so Brian maybe walk us through the dynamics there how much of that is mix shift to <unk>.

How much is coming from the transition to expanded leader pools.

And then just general leverage gains again, congratulations to everyone.

Thank you Anthony for the congratulate Greg.

Congratulatory remarks.

We do continue to be very encouraged with our ongoing acceleration of our gross margin development. We're now seeing a 70 30 mix with <unk> and our higher margin products, which has really evolved about a year earlier from our initial launch projections back in 2019 2021 way, we're taking a 90 10 80 20.

<unk>.

$75 $25 70 to 30, so that's that's really occurred about a year earlier, so as we further continue to deplete.

Gaining batches of our lower margin 20 to 100 leader they began batches and these were produced about a year ago as you understand the seven to 12 month manufacturing timeline.

<unk> margins.

And the 4400 liter production scale, which was recently approved in April 2021.

As you know we've already stated incentive yields gross.

Gross margins are between 80, and 85% so going looking forward in the future in the next couple of quarters and beyond we look forward to continuing to grow gross margins and see continued gross profit expansion.

Thank you.

Thank you one moment for questions.

Our next question comes from Elliot Wilbur with Raymond James You May proceed.

Yes.

Hey, thanks.

Good afternoon.

Good afternoon afternoon Elliot.

Wanted to ask a follow up question around gross margin dynamics in the quarter.

The math seems pretty clear with respect to the dynamics between the 4400 2200 liter.

Production.

Volumes, but just wanted to think about this over the next couple of quarters because it sounds like there is some residual inventory that probably will remain around I'm guessing until sort of mid 2023, but fair to say.

That this is sort of the peak quarter in terms of the.

Impact, having a lower margin 2200 liter.

Inventory regulatory of the P&L.

Thinking about it right in the sense that it's probably fully exhausted by mid 'twenty.

<unk> 2023, and then just longer term.

Does the.

<unk> 2200 leader.

That production capability ever enter the equation again or is all production essentially going to be.

Completed.

400 liter capacity.

Maybe I'll just take that part of the question.

The 200 liter scale is approved.

Do we want to make product at that scale.

It's approved.

Sure.

We have other products that we may want to make in the future. There are other hyper immune <unk> as you know we are expanding our CMO potential opportunities. So you wanted to have different various scales that are validated and qualified elliott, but but just to hit that part of the question going forward <unk>, especially.

Since the approval in July of 'twenty one.

We have been making big game exclusively at the 4400 liter scale and we have no plans to produce any additional <unk>.

They began at that scale going forward now I'll shut up and let Brian answer the question.

Thank you. Thank you Ali and again for the congratulatory remarks, as well so to specifically answer your question.

We expect the remaining 2200 liter batches that were produced up until call. It the middle of 2021 to be depleted or meaning sold throughout the next couple of quarters be completely sold by the middle of 2023.

Substantially we've already sold the majority of the 2200 to date.

There's a couple of.

Quarters to go that we feel but.

The 4400 will be sold exclusively star.

Starting in the middle of 2023 at a higher margin production process again in the 20% to 30% range.

For the 4400 batch production leader process, it's there's not a lot of inventory left.

It may accelerate Elliot, but but I think Brian Brian right. It could last into the middle of the year.

Okay. Thanks.

Just a follow up.

Go ahead, sorry, sorry, I was just going to say, which would obviously accelerate the overall corporate gross margin too.

A higher level as we continue to.

Exit.

As we continue to go into 2023 and go beyond 2023 to get to that 40%, 50% overall corporate gross margin.

Okay. Thanks, and then Adam I wanted to ask a follow up question on your earlier commentary around the RSP landscape.

In general and the emergence of vaccines, obviously there'll be a lot more noise in the space over the next 18 to 24 months and a lot of data coming out and broader populations, but.

It sounds like.

Sure.

Is that kind of stands on its own in the marketplace. It's not an RSV based product vaccinations really don't have an impact in the immuno compromised population.

I'm not sure some of the larger studies that are still underway, whether or not they're actually specifically looking at that patient population or not but.

Outside of.

Vaccination impact just wondering if.

Do you think the emergence of all these different therapies, including some of the maps could somehow eventually have an impact on the on the donor pool.

That's a great question and it's something that I think about all the time.

I mean, if hypothetically there is widespread vaccination with an RSV vaccine like there was with Covid would there be.

High levels of RSV antibodies in the general population and plasma sure there would be.

But again I think what's interesting about incentives.

Is we're not just looking for.

These donors that have high titers to RSV again, they're a marker for people that are high responders to a wide array of different viral and bacterial pathogens.

<unk> textbooks roughly about 10% of the population are considered high responders.

And we feel that that's who we are targeting when we are using our proprietary and patented Mike micro neutralization assay to identify these donors so naturally occurring antibody.

Slightly different than antibody that is is.

Being generated from our vaccine from the standpoint of the donors that we're looking for are naturally high responders and they have high titers for long periods of time.

Again to reiterate incentive as a drug for immune deficient patients full stop but it's a drug for the primary immune deficient population.

That is utilized.

In secondary immune deficient.

Incentive as a healthy immune system in a bottle.

That is manufactured in a unique way, where we blend hyper immune than normal plasma.

How to think about it the noise in the RSV, where all the noise in the monoclonal antibody world again, we are truly excited about.

From a scientific perspective.

Been involved in the RSV markets.

Since the late nineties.

So I can tell you that this is an extremely exciting time.

And scientists may certainly.

Watching and rooting for all of these companies.

I don't think that Theres any impact on incentives I don't think theres any impact on the patient.

In general.

I think that if.

All of these products prove successful less people die and ultimately that's that's why we get up in the morning here at admin and I'm pretty sure. That's that's why a lot of folks that are that are in pharma and biotech get up as well so it's exciting times.

Thanks, and just one quick additional question.

Earlier too.

Trends in collection volumes.

Just wondering if you.

You can speak maybe more specifically to <unk>.

Alright, Thanks, Elliot will just to talk about collections and the progress we've made with our centers. Obviously, we're very pleased with our year over year collections, our plasma center growth and FDA approvals. This year at this time last year, we had three FDA approved centers now we have seven so thanks to the FDA and our dedicated staff we've had it had a tremendous year.

So far.

We had five centers open this time last year, collecting NSP and RSV plasma and now we have nine in our Tech Center is currently in construction regarding.

Regarding the donor fees, we're seeing donor fees stable pricing.

In some locations we've seen decreases from historic high donor fees.

They are again starting to stabilize in some area is starting to come.

Down a bit of a decline all based on competition and other centers that are located near ours.

Again recall, our manufacturing process is seven to 12 months. So those higher donor fees that were reflected in previously produced in collective production costs.

Recently, the startup piece, having a decline there'll be downwardly, adjusting our costs, which will be factored into the product as we sell subsequently in the next seven to 12 months, meaning our margins should.

Expect it to continue to improve and lastly regarding the plasma centers, we still remain on track to have our test centers construction completed within our internal timelines and our three remaining centers to be FDA approved by the end of 2023, even with supply chain issues and other disruptions that have been seen across the global economy.

So we're very proud of how far we've come with our centers.

Thank you one moment for questions.

Our next question comes from Kristen <unk> with Cantor Fitzgerald you May proceed.

Hi, Good afternoon, everybody. Let me also add my congratulations to you on this quarter.

Thank you.

Yeah of course, so it is not a trend that you reiterated your thoughts on peak revenue opportunity in the outer years, but based on the trends that youre seeing here quarter over quarter and your enthusiasm heading into next year around the next product how much of this growth is really <unk>.

Those calculations at this time.

Well I mean.

Now I think what you're what you're.

Alluding to is.

We've always thought 90 10 growing to $8 20 growing to 70 30 between our standard <unk> and our higher margin products incentive and Nabi HB.

The demand for us and it continues at this pace and again, we don't have a crystal ball on.

When are we going to reach critical mass we know that there are roughly about.

10% to 30% of the primary immune deficient patients.

Have comorbidities have chronic lung diseases have bronchiectasis.

And.

The sky could be the limit there.

The amount of RSV plasma that we can collect from our center network and our third party providers. So I think there are a number of variables there we feel quite comfortable that.

The information on our corporate website and in our slide deck and that we've said we can roughly process 600000 leaders here, we roughly get call. It four grams per liter. So you.

You can do the math on how many grams, we can produce out of this plant, but that mix could change. If you are asking is there upside yes, there is upside.

Do we feel confident that.

The guidance that we've given to the street is reasonable guidance, yes.

Wanted to continue growing quarter over quarter, we understand what you and other analysts like we understand what our investors like.

We're doing our best to manage inventories were doing our best to manage collections, we're doing our best to manage cash flow and we're doing our best to sell as much of our products as we can at the highest prices possible. So all of this fits together and from my view.

We're very confident with the.

$250 million.

Or more guidance I think we've given for 2024, and then 300 million plus thereafter.

If we sell more incentives thank god would be hoping that many more patients that we can collect more plasma. Thank god, we'll be able to help that many more patients and it will flow into the bottom line.

That's why I keep putting my money into the company.

We're proud of what we're doing here.

And.

I feel good about our position I feel good about reiterating guidance very proud in this backdrop, where so many other companies are pulling guidance lowering guidance, where we are sitting here really.

Great. Thank you for that and then with <unk> I know in the <unk>.

Major VPI patients you can tell pretty rapidly the effects, but given that you've seen a lot of this quarter over quarter growth I would imagine that.

A number of these patients have been staying on it for a long time you wanted to ask if you're seeing any interesting longer term trends the discounted usage.

We are seeing we are seeing patients remaining on therapy.

And there's just compounding.

What we alluded to in our prepared remarks around these expanding opportunities the early adopters, the folks who who jumped onboard early.

They've been out there.

<unk>.

Putting posters at scientific meetings, we've sponsored a number of medical education symposia.

And this is certainly look it's anecdotal data small patient numbers, one patient to patient and three patients.

In certain clinics at a time, but.

I think I.

I'm, okay, with saying that some of the more conservative or quote unquote textbook physicians that are out there.

I think they want to get involved in the conversation to I think that theres been enough.

Chatter about the product.

I alluded in the.

Prepared remarks that this we consider 2022 to be this new launch here I mean, it's the first time, where we've had restrictions off on the ability to engage.

Front facing with the healthcare community.

<unk> nursing Iga.

Iga support.

Patient advocacy as well as the scientific engagement with health care professionals and I think that what we're seeing is that folks that are either on the fence about what is there any extra utility with this product.

I think.

I think the market is saying there is in the right patient population. There is utility that can be derived by prescribing ascent.

So we feel good about it we think the demand is growing and it's sticky we think that it's durable.

And we really feel that we've.

Move to peg forward.

And are providing something else in the physician's armamentarium to treat these patients where they don't just have to say I'm. Sorry. This is the best I can do.

Theres something else for patients to try and.

From what I hear and maybe my commercial force only likes to tell me the good news, but from what I hear patients come on product and they stay on product. So we've we've lost very few patients obviously.

<unk> will have.

Issues with insurance and reimbursement and things of that nature, but at the end of the day. Once you stay on our brand of IAG that works for you tend to stay on it for a long long time.

Oh, great. Thanks, so much for taking my question.

Thanks Christian.

Thank you ladies and gentlemen, this will conclude our question and answer portion of the call I'd like to turn it back over to Adam now for additional closing remarks.

Thank you for the analysts for joining thank you to our shareholders for for your interest in the great work that we're doing here at Admah too.

To our staff.

Keep up the great work, we appreciate you and.

To everyone listening donate some plasma help save some lives.

It adds a buyer centers dot com to find one of our centers that may be near you stay healthy and have a great evening. Thank you ladies and gentlemen. This does conclude the conference call for today. We appreciate your participation and you may now disconnect.

Q3 2022 ADMA Biologics Inc Earnings Call

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