Full Year 2023 ANI Pharmaceuticals Inc Earnings Call
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Operator: Your program is about to begin. If you need assistance during your conference today, please press star zero. Good day, everyone, and welcome to today's ANI Pharmaceuticals Inc. fourth quarter 2023 earnings results call. At this time, all participants are in a listen-only mode.
Program is about to begin if you need assistance during your conference today. Please press star is zero.
Good day, everyone and welcome to today's Ani's Pharmaceuticals, Inc. Fourthquarter 20 twenty-three earnings results call.
At this time all participants are in a listen only mode.
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Judy DiClemente: Please note this call is being recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Judy DiClemente, Investor Relations for ANI Pharmaceuticals. Thank you, Antua. Welcome to ANI Pharmaceuticals' Q4 2023 earnings call. This is Judy DiClemente of Insight Communications, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer, and Stephen Carey, Chief Financial Officer. You can also access the webcast of this call through the investor section of the ANI website at www.anipharmaceuticals.com.
Please note this call is being recorded.
I will be standing by if you should need any assistance.
It is now my pleasure to turn the conference over to Judy D Clemente Investor Relations for an eye pharmaceuticals.
Thank you Angela welcome to a an eye pharmaceutical Q4 20 twenty-three earnings call. This is Judy D. Clemente of insight Communications Investor Relations for an eye.
With me on today's call <unk>, President and Chief Executive Officer, and Stephen Curry Chief Financial Officer.
You can also access the webcast of this call through the investors section of the a and I website at Www Dot <unk> Pharmaceuticals Dot com.
Judy DiClemente: Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation, or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to ANI Pharmaceuticals management as of today and involve risks and uncertainties, including those noted in our press release issued this morning and our filings with the SEC. Such forward-looking statements are not guarantees of future performance. However, actual results may differ materially from those projected in the forward-looking statement. ANI specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law.
Before we get started I would like to remind everyone that any statements made on today's conference call that express a belief expectation projection forecast anticipation or intent regarding future events and the company's future performance, maybe considered forward looking statements as defined by the private secure.
Of these litigation Reform Act. These forward looking statements are based on information available to <unk> pharmaceutical management as of today and involve risks and uncertainties, including those noted in our press release issued this morning, and our filings with the S E C.
Such forward looking statements are not guarantee of future performance actual results may differ materially from those projected move forward.
Statements and I, specifically disclaims any intend to our obligation to update these forward looking statements, except as required by law. The archived webcast will be available on our website W. W. Dot N I pharmaceuticals Dot com.
Judy DiClemente: The archived webcast will be available on our website www.anipharmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on February 29, 2024. Since then, ANI may have made announcements related to the topics discussed, so please refer to the company's most recent press releases and SEC filings. And with that, I'll turn the call over to Nikhil
For the benefit of those who may be listening to the replay or archived webcast. This calls with call was held and recorded on February 29th 2024.
Since then and I may have made announcements related to the topics discussed. So please reference the company's most recent press releases N S E C filings and with that I'll turn the call over to Nick Hill <unk> <unk>.
Nikhil Lalwani: Thank you, Judy. Good morning, everyone. Thank you for your interest in ANI Pharmaceuticals and for joining our fourth quarter earnings call. First, I want to thank our customers, suppliers, partners, investors, and the entire ANI team for their collaboration and significant contribution in delivering on our company's purpose of Serving Patients and Proving Light. A strong fourth quarter capped off a record year.
Thank you Judy.
Good morning, everyone.
Thank you for taking me an iPhone vehicles.
For joining our fourth quarter earnings call.
First.
I want to thank our customers suppliers.
Investors and the entirety of 19.
The collaboration and significant contribution.
Delivering on our company's purpose.
Ah serving patients.
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Fourth quarter capped off a record your.
Nikhil Lalwani: We finished 2023 with $486.8 million in total revenue, an increase of 54% over 2022. Adjusted non-GAAP EBITDA was a record $133.8 million, up 140% year over year, and adjusted non-GAAP earnings per share was $4.71, an increase of 246% from 2022. Total revenues for the fourth quarter were $131.7 million, an increase of 40% over the fourth quarter of 2022. Our lead rare disease asset, purified quatrophen gel, generated 41.7 million in this quarter, a year-over-year increase of 137%, and a sequential increase of 40% from Q3. For the full year, Cortofen generated sales of $112.1 million, representing year-over-year growth of 169%.
Finished 2023.
486.8 million in total revenue.
54% over 2022.
Justin.
It.
It was a record of 133.8 million.
140 per cent your over Europe.
And adjusted.
For sure.
$4.71.
246% from 2022.
Total revenues for the fourth quarter for $141.7 million.
An increase of 40 per cent over the fourth quarter of 2022.
Ah lead ready visa purified corporal from Joe generated 41.7 million.
In this quarter.
Increase of 137 per cent.
In a sequential increase of 40 per cent from Q3.
For the full year portrait often generated sales of 112.1 million representing your over your girl of 169 per cent.
Nikhil Lalwani: I continue to be tremendously pleased by the effort and output of our rare disease team in building our corticofen gel friends. New patient starts accelerated during Q4, with the strongest sequential quarter-over-quarter growth in revenue to date. In addition to record new cases initiated and new patient starts, we saw a significant number of first-time ACTH users, as well as the return of ACPs who had not prescribed ACTH for several years. World-class ready-to-be sales and marketing, continues to grow the overall ACTH market and overall awareness of ACTH treatment in the U.S. for appropriate patients.
I continue to be tremendously pleased by the effort.
V C.
Building, a quirk rofin gel franchise.
New patient starts accelerated during Q4 with the strongest sequential quarter over quarter growth in revenue to date.
An additional record new cases initiated a new patient starts we saw a significant number of first time a C T I T.
Users as well as the return.
<unk>, who had not prescribed ACTH for several years.
A world class.
And marketing team continues to grow the overall ACTH market and overall awareness obesity treatment in the U S for appropriate patients.
Nikhil Lalwani: Total ACTS unit volume was up 15% in 2023 compared to 2022, according to IQV. While the number of patients being treated with ACTH therapy in the U.S. is significantly lower today than it was several years ago, since the launch of cortofan gel in the first quarter of 2022, the overall category.
Okay Acta's unit volume was up 15% in 2023 compared to 2022, according to like <unk>.
While the number of patients being treated with a C th therapy in the U S.
Significantly lower today than it was several years ago.
Since the launch of <unk> in the first quarter of 2022.
Nikhil Lalwani: The category has experienced seven consecutive quarters of year-over-year growth, and the outlook for the category remains robust. Next, let me share a commentary on performance across specials, for Trophin Demand Growth continued across our special... Targeted at the launch.
Overall category.
Categories has experience seven consecutive quarters of your over your growth.
Look for the category remains robust.
Next let me share commentary on performance across specialties.
Poor trofim demand growth continued across our specialties targeted at the law targeted at launch.
Nikhil Lalwani: Targeted at launch, which were Rheumatology, Neurology, and Nephrology. In the second quarter of 2023, we expanded into pulmonology, and we quickly gained momentum in this therapeutic area during the fourth quarter with positive physician responses and growth in new cases initiated and new patients started. Let's turn next to Gail.
Which were rheumatology neurology and the fraud.
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In the second quarter of 2023, we expanded into Pulmonology.
Quickly gain momentum and this therapeutic area during the fourth quarter.
With positive responses and growth a new case it was initiated a new patient starts.
Restaurant next to doubt.
Nikhil Lalwani: Cortofan gel is the only ACTH product indicated for the treatment of acute gouty arthritis flares. During the quarter, we launched a new 1-ml vial size of corticofen gel for the treatment of acute gouty arthritis flares. Physicians can now administer corticofen gel, and they're awesome, when a patient presents with an acute need. While it is still early in the launch, we are optimistic about the potential of corticofen gel for this indication, which represents a unique opportunity to introduce Cotrocin to new prescribers. As we look ahead to 2024, we expect cultural revenues to grow 52% to 61%, to $170 million to $180 million. We believe we are early in the trajectory of Cortofan Gel and will continue to invest behind the franchise to drive greater adoption across current and new specialty areas.
<unk> is the only ACTH product indicated for the treatment of acute dowdy arthritis flares.
During the quarter, we launched a new one M L.
<unk> for the <unk> for the treatment of acute gowdy arthritis squares.
Physicians can now administer pork rofin gel their office with a patient presents with an acute need.
While it is still early in the launch we are optimistic about the potential of poor trofim gel for this indication, which represents a unique opportunity to introduce control fan.
Prescribers.
As we look ahead you 2024.
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Revenues to grow 52% to 61%.
$170 million to $180 million.
We believe we are early in the trajectory of control from jail and.
And will continue to invest in behind the franchise to drive greater adoption across card and new specialty areas.
Nikhil Lalwani: We are taking several steps in 2024 to further support this important product. For example, we are adding a second geographical region to our pulmonology sales force, given the strong traction we have seen so far in this therapeutic area. We continue to expand our disease state coverage by adding a small targeted sales force in ophthalmology. This is a specialty where ACTH prescribing has gained traction over the past few years, and we believe ophthalmology could be a meaningful growth contributor for pertussis. We are collaborating with top physicians and scientists to better delineate cortisol gel's activity and mechanism of action and help guide treatment.
We're taking several steps in 2024 to further support this important product.
We're adding a second geographical region.
Monology salesforce given the strong fraction, we have seen so far the therapeutic area.
We continue to expand our disease state coverage by adding a small targeted salesforce in ophthalmology.
This is a specialty or a.
Th prescribing has gained traction over the past few years.
We believe ophthalmology could be a meaningful contributor for for profit.
We are collaborating with top physicians and scientists to better delineate corporal some jealous activity and mechanism of action action and help guide treatment decisions.
Nikhil Lalwani: We are also continuing our efforts to better support the patient journey and are investing in enhancing the convenience and removing pain points for patients starting on ACTH and the health care providers who treat them. Additionally, expanding the scope and scale of our rare disease business through M&A and licensing remains a high priority. We are currently evaluating opportunities with a focus on assets that are on or close to market and that overlap with our current priority therapeutic areas of nephrology, neurology, rheumatology, pulmonology, and ophthalmology. We are also considering assets outside of our priority therapeutic areas that would leverage our rare disease platform.
We're also continuing our efforts to better support the patient journey and are investing in enhancing the convenience and removing pain points for patients starting on a C. T H and the health care providers will treat them.
Expanding the scope and scale of a rare disease business to M&A in in licensing remains a high priority.
We are currently evaluating opportunities with a focus with a focus on assets.
Or close to market and that overlap with our current priority therapeutic areas of nephrology neurology Rheumatology Pulmonology ophthalmology.
We are also considering assets outside of our priority therapeutic areas that.
That would leverage our rare disease platform.
Nikhil Lalwani: Starting now towards the next quarter, which delivered another strong quarter, we generated $71.8 million in revenue during Q4, an increase of 24% over the last year and 2% over the strong revenue we reported in Q3. As with the prior three quarters, we were able to leverage ANI's exceptional new product launch execution, operational excellence, and U.S.-based manufacturing footprint to achieve this growth. For the full year, our genetics business generated sales of $269.4 million, representing year-over-year growth of 28 percent.
Turning now to our genetics business, which delivered another strong quarter.
Regenerated $71.8 million in revenue during Q for an increase of 24% over the last year and 2% over the strong revenue we reported in Q3.
As with the prior three quarters.
Able to leverage.
<unk>, new product launch execution operational excellence and U S based manufacturing footprint to achieve this growth.
For the full your agenda are generics business generated sales of $269.4 million.
Representing your over your growth of 28%.
Nikhil Lalwani: Three key factors will enable our generics business to continue delivering robust growth. First, our high-performance R&D... In 2023, we will deliver 11 new product launches and 20 new product filings. In addition, we retain the number two ranking for Competitive Genetic Therapy Approval.
Three key factors will enable our genetics business to continue deliberating robust growth.
First our high performance R&D team and.
2023, we deliver 11, new product launches and 20 new product filing.
In addition, we retain the number two ranking for competitive generic therapy approvals.
Nikhil Lalwani: Second, our strong operational backbone and U.S.-based manufacturing footprint. During 2023, we supplied over 1.5 billion doses of therapeutics to patients in need. In addition, our efforts to expand the manufacturing footprint at our New Jersey site are on track to get the site operational by this quarter. The company continues to maintain a strong compliance track record with successful FDA audits across sites. Most recently, our New Jersey site successfully concluded both a pre-approval and a pharmacovigilance inspection with the FDA with zero observations.
Second are strong operational backbone and U S based manufacturing footprint.
During 2023, we supplied over 1.5 billion doses of therapeutics patients are neat.
In addition, our efforts to expand the manufacturing footprint at our New Jersey site are on track to get the site operational by this quarter.
The company continues to maintain a strong compliance track record with successful S D audits across sites.
Most recently or New Jersey site successfully concluded both a preapproval pharmacovigilance inspection with the F D a with zero observations.
Nikhil Lalwani: Third, our systematic and relentless approach to reducing costs, whether it be for raw materials, finished goods, or corporate spend. Overall, our GenX business remains an established and reliable partner of choice for our customers. Our established brands business continues to address patient needs with reliability of supply, a unique set of commercial capabilities, and our opportunistic business development to expand the portfolio. Our overall portfolio is strengthened by this high gross margin, low working capital, and strong cash flow generation business. 2023 was a record year for ANI, and we're already off to a strong start in 2024. We look forward to continuing the momentum as we remain focused on serving patients. Improving Lives. I'll now turn the call over to.., who will walk through our fourth quarter financial results in more detail and discuss our guidance for 2024. Steve
Third or systematic and relentless approach to reducing costs, whether it be for raw materials finished goods or corporate span.
Overall.
<unk> business remains.
And established and reliable partner of choice for our customers.
Are established brands business.
Can use to address patient needs with reliability of supply a unique set of commercial capabilities and are opportunistic business development to expand the portfolio.
Our overall portfolio is strengthened by this high gross margin low working capital and strong cash flow generation business.
2023 was a record your free ninth and we're already off to a strong start in 2024.
We look forward to continuing the momentum as we remain focused.
On serving patients.
Improving lives.
I'll now turn the call over to Steve.
Walk through our fourth quarter financial results at in more detail and discuss our guidance for 2024.
Steve.
Stephen P. Carey: Thank you, Nikhil, and good morning to everyone on the call. We posted another strong quarter to close out 2023, with fourth-quarter revenues of $131.7 million, up 40% over the prior year period. Revenues from Cortofan Gel, reported in our rare disease segment, were $41.7 million, up 137% from the prior year and 40% from the third quarter, driven by increased volume. Fourth quarter revenues in our Generics, Established Brands, and Other segments were $89.9 million, an increase of 17% over the prior year period. Within this segment, generic revenues for the quarter were $71.8 billion, an increase of 24% over the prior year period and 2% over the third quarter, driven by increased volumes in the base business and contributions from new products launched in both 2022 and 2023. To continue with this segment, net revenues for established brands and other revenues were $18.1 million in the quarter, a decrease of 3% from the prior year period driven by lower volume.
Thank you.
And good morning to everyone on the call.
We posted another strong quarter to close out 2023 with fourth quarter revenues of 131.7 million.
40% over the prior year period.
Revenues from <unk> reported in a rare disease segment.
41.7 million up 137% from the prior year.
And 40% from the third quarter driven by increased volume.
Fourth quarter revenues and our generic established brands and other segment, where 89.9 million an increase of 17% over the prior year period.
Within this segment generic revenues for the quarter.
71.8 billion, an increase of 24% over the prior year period, and two per cent over the third quarter.
By increased volumes in the base business and contributions from new products launched in both 2022 and 2023.
To continue with this segment net revenues for established brands and other revenues were 18.1 million in the quarter, a decrease of 3% from the prior year period, driven by lower volume.
Stephen P. Carey: The performance was in line with our expectations, as described in the third quarter earnings call, when we noted that the market conditions for specific molecules had recently changed. Cost of sales, excluding depreciation and amortization, increased 47% to $53.4 million in the fourth quarter of 2023 compared to the prior year period, primarily due to significant growth in sales volumes of both generic and rare disease pharmaceutical products. Non-GAAP gross margin was 59.6%, a decrease of approximately 200 basis points versus the prior year, primarily due to unfavorable products.
The performance was in line with our expectations as described on the third quarter earnings call. When we noted that the market conditions for specific molecules had recently changed.
Cost of sales, excluding depreciation and amortization increased 47% to 53.4 million in the fourth quarter of 2023 compared to the prior year period.
Primarily due to significant growth in sales volumes of both generic and rare disease pharmaceutical products.
non-GAAP gross margin was 59.6%.
A decrease of approximately 200 basis points versus the prior year.
<unk>.
Primarily due to unfavorable product mix.
Stephen P. Carey: Research and development expenses increased 89% to $9.9 million in the fourth quarter of 2023, primarily due to a higher level of activity associated with ongoing and new products. Selling general and administrative expenses increased by 34% to $44.5 million in the fourth quarter of 2023, primarily due to increased employment-related costs, rare disease sales and marketing costs, legal expenses, and patient assistant program costs, as well as an overall increase in activities to support growth. Net income available to common shareholders for the fourth quarter of 2023 was $0.7 million, as compared to a net loss of $4.7 million in the prior year period. Fourth quarter diluted GAAP earnings per share were $0.04, as compared to a $0.28 loss in the prior year period on an adjusted non-gap basis.
Research and development expenses increased 89% to $9.9 million in the fourth quarter of 2023, primarily due to a higher level of activity associated with ongoing and new products.
Sterling General and administrative expenses increased by 34% to $44.5 million in the fourth quarter of 2023.
Primarily due to increased employment related cost.
Rare disease sales and marketing costs legal expenses.
<unk> assistant program cost as well as an overall increase in activities to support Grove.
Net income available to common shareholders for the fourth quarter of 2023 was 0.7 million as compared to net loss of 4.7 million in the prior year period.
Fourth quarter Deluded GAAP earnings per share was four cents.
Compared to a 28 cent loss in the prior year period.
On an adjusted non-GAAP basis diabetes earnings per share was one dollar for the quarter.
Stephen P. Carey: Diabetes Earnings Per Share was $1 for the quarter, compared to 76 cents per share in the prior year period. Adjusted non-GAAP EBITDA for the fourth quarter of 2023 was $30.2 million, an increase of 29% over the prior year period. From a balance sheet perspective, we ended the quarter with $221.1 million in cash. This balance is net of $12.5 million of contingent consideration paid to selling shareholders of Navidium in the fourth quarter. We generated cash flow from operations of $44.7 million during the fourth quarter and $119 million for the full year.
Compared to 76 cents per share in the prior year period.
Justin non-GAAP EBITDA for the fourth quarter of 2023 was 32 million.
Increase of 29% over the prior year period.
From a balance sheet perspective, we ended the quarter with 221.1 million in cash.
This balance is net of 12.5 million of contingent consideration pizza selling shareholders <unk> in the fourth quarter.
We generate a cash flow from operations of 44.7 million during the fourth quarter.
And a four and 119 million for the full year.
Stephen P. Carey: We have $294 million in face value of outstanding debt, which is due in November of 2027. At the end of the fourth quarter, our gross leverage was 2.2 times, and our net leverage was approximately a half a turn of our trailing 12-month adjusted non-gap EBITDA of $133.8 million. Turning to 2024 guidance, we expect total revenue of $520 million to $542 million, which represents growth of 7% to 11% over 2023. For CORTROFINGEL, we expect revenue to be in the range of $170 million to $180 million, representing growth of 52% to 61%. As you consider the quarterly progression for Cortofan Gel in 2024, please note that the general pattern of revenue in 2024 is expected to be similar to that reported in 2023, with a modest quarter-over-quarter decline in the first quarter due to prescription reauthorization, followed by a strong return This pattern is generally consistent with other rare disease drugs.
We have 294 million and face value of outstanding debt, which is due in November of 2027.
At the end of the fourth quarter or gross leverage was 2.2 times in our net leverage was approximately a half the turn of our trailing 12 month adjusted non-GAAP EBITDA of 133.8 million.
Turning to 2024 guidance.
Total revenue of 520 million to 542 million, which represents growth of 7% to 11% over 2023.
Record shows and gel, we expect revenue to be in the range of $170 million to 180 million representing growth a 52% to 61%.
As you consider the quarterly progression for core Trofim gel in 2024. Please note that general pattern of revenue in 2024 is expected to be similar to that reported in 2023.
With a modest quarter over quarter decline in the first quarter due to prescription reauthorizations followed by a strong return to growth in the second quarter.
This pattern is generally consistent with other rare disease drugs.
Stephen P. Carey: For generics, we anticipate high single-digit to low double-digit revenue growth on top of our exceptionally strong performance of 28% year-over-year growth in 2023. We expect pricing dynamics for our base generics business to be similar to that experienced in 2023. Note that our generics guidance does not assume an incremental benefit from future competitor supply shortages, which were a tailwind in 2023. For established brands, given our performance in the first two months of the year, we believe that revenue in the first quarter of 2024 will be higher than that achieved in the fourth quarter of 2023. Despite that, we expect that the significant tailwind driven by competitive supply disruptions in 2023 will moderate on a full-year basis in 2024. As such, our 2024 guidance does not assume any incremental supply tailwind we are currently seeing beyond the first quarter of the year.
For generics, we anticipated high single digit to low double digit revenue growth.
Top of are exceptionally strong performance of 28% year over year growth in 2023.
We expect pricing dynamics for our based generics business can be similar to that experienced in 2023.
No. There are generics guidance does not assume incremental benefit from future competitors supply shortages, which were a tailwind in 2023.
Four sandwich brands given outperformance in the first two months of the year, we believe that revenue in the first quarter of 2024 will be higher than that achieved in the fourth quarter of 2023.
Despite that we expect that the significant tailwind driven by competitive supply disruptions in 2023.
<unk> on a full year basis in 2024.
As such or 2024 guidance does not assume any incremental supply tailwinds.
We we are currently seeing beyond the first quarter of the year.
Stephen P. Carey: Moving down the P&L, we expect total company non-GAAP gross margin between 62% and 63%, which reflects modest erosion relative to 2023 due in large part to product mix. The key factors impacting our 2024 Gross Margin Outlook include higher contribution from Cortofin Gel Revenue, where the margin is meaningfully accretive to our corporate gross margin, although offset by lower contribution from established brands, which is our highest gross margin segment.
Moving down the P&L, we expect total company non-GAAP gross margin between 62% and 63%, which reflects modest erosion relative to 2000 twenty-three due in large part the product mix.
The key factors impacting our 2024 gross margin outlook include higher contribution from portraits and Joe revenues.
With a margin is meaningfully accretive to our corporate gross margin.
Offset by lower contribution from established brands, which is our highest gross margins segment.
Stephen P. Carey: Given the overall strength in the business, we will continue to invest in key growth initiatives in 2024 and expect total operating expenses to grow essentially in line with revenue growth and below 2023 expense growth. Contemplated in our guidance is increased investment in R&D to fuel generics growth through new product launches, along with further strengthening of the Cortofan Gel franchise through the initiatives that Nikhil spoke of moments ago. We are also investing in high ROI initiatives in Quartrofin Sales & Marketing. Taking all of those factors into account, we expect full-year adjusted non-GAAP EBITDA of $135 million to $145 million and adjusted non-GAAP earnings per share between $4.26 and $4.67 in 2024. We currently anticipate between 19.3 million and 19.7 million shares outstanding for the purpose of calculating diluted EPS, which is reflective of a full year of shares outstanding resulting from our May 2023 equity raise. We currently expect our U.S. GAAP effective tax rate to be between 20% to 22% as compared to 5.5% in 2023. The company will continue to make tax effect adjustments utilized in the computation of its adjusted non-gap diluted earnings per share using our estimated statutory rate of 26%.
Given the overall strains in the business, we will continue to invest in chief growth initiatives in 2024, and expect total operating expenses to grow essentially in line with revenue growth and below 2023 expense growth.
Contemplated in our guidance is increased investment in R&D to fuel generic skills through new product launches.
Along with further strengthening of the courtroom and gel franchise during the initiatives that kills spoke of moments ago.
We're also investing in high R O y initiatives and portraits and sales and marketing.
Taking all of those factors into account, we expect full year adjusted non-GAAP EBITDA of 135 million to 145 million.
Justin non-GAAP earnings per share between $4.26 and $4.67 in 2024.
We currently anticipate between 19.3 million in 19.7 million shares outstanding for the purpose of calculating diluted EPS, which.
Is reflective of a full year of shares outstanding resulting from our May 2000, twenty-three equity Reyes.
We currently expect R. U S gap effective tax rate to be between 20% to 22% as compared to 5.5% in 2023.
The company will continue to tax effect adjustments utilized in the computation of it's adjusted non-GAAP diluted earnings per share using our estimated statutory rate of two of 26%.
Operator: We will now open up the call to questions. Operator, please announce the instructions. At this time, if you would like to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue at any time by pressing star 2.
We will now open up the call to questions.
<unk> please announce the instructions.
At this time, if he would like to ask a question. Please press star one on your telephone keypad.
You may remove yourself from the queue at any time by pressing start <unk>.
Gary Jay Nachman: Once again, that is star number one to ask a question. We'll take our first question from Gary Nachman with Raymond James. Hi, guys. Good morning.
Once again that is star one to ask a question.
We'll take our first question from Gary knock them with Raymond James.
Hi, guys. Good morning, and congrats on all the progress first one crutch trofim. The 2024 guidance just how much market grocery you assuming versus share gains from at in any changes in net price anticipated over the course of the year and.
Nikhil Lalwani: And congratulations on all the progress. First, on Cartrophin, the 2024 guidance, just how much market growth are you assuming versus share gains from AXAR? And any changes in net price anticipated over the course of the year?
Nikhil Lalwani: And what therapeutic areas do you think should be the biggest contributors, I guess, looking out into this year, since the guidance looked pretty solid? And then, just in terms of looking at additional rare disease assets, just, you know, talk about the market, Nikhil, and how many different opportunities you're looking at currently. Are they mostly in your current therapeutic areas, and are you willing to consider assets outside those therapeutic areas as well? And then, just in terms of size, how big are they, and are you confident you can get a deal done sometime this year?
What's therapeutic areas, you think should be the biggest contributors I guess looking out into this year since I got it let's look pretty solid.
And then just in terms of looking at additional rare disease asked that's just you know talk about the market mckeel and how many different opportunities you're looking at currently.
Mostly in your car and therapeutic areas and are you willing to consider assets outside those therapeutic areas as well and then just in terms of size. How big are they and are you confident you can get a deal done sometime this year. Thanks.
Nikhil Lalwani: Thanks. Thank you, Gary. Thank you for your question and good morning, to your first question on cortisone guidance in 2024. The overall category outlook remains robust. However, the number of patients being treated with ACTH treatments, of course, for appropriate patients, is significantly lower than where it was a few years ago.
Yeah. Thank you Gary Thank you for your question and good morning.
To your first question on Corporal some guidance in 2024.
The overall category.
Outlook remains robust the number of patients being treated with ACTH treatments of course for appropriate patience is significantly lower than where it was a few years ago. So the outlook for the category remains robust.
Nikhil Lalwani: So the outlook for the category remains robust, and as you've seen, we have had seven consecutive quarters of quarter-on-quarter year-over-year growth in the number of units. So the growth opportunities in the category as a whole are significant. Second, your question on price, you know, we try to find a balance between sharing information that assists the investment community while not giving away competitively sensitive data. Publicly, you will see that both our competitor and we took a 3% price increase on January 1, 2023. And then the third part of your question on cortrosan was around the therapeutic area.
And as you've seen therapy have add seven quarters consecutively off quarter on quarter. Your over your growth in the number of units.
The the growth opportunities in the category as a whole.
Is a significant.
Second your question on price you know, we tried to find a balance between sharing information that assist the investment community, while not giving away competitively sensitive data.
Publicly as you will see that boat our competitor and we took a 3% price increase on January 120 23.
The third part of your question on control sudden what's around the therapeutic areas.
Nikhil Lalwani: And look, we see strength in both the therapeutic areas that we initially launched with—nephrology, neurology, and rheumatology, as well as the newer therapeutic areas that we have begun investing in, which are pulmonology, ophthalmology, and gout. And we, you know, we see momentum; ophthalmology is clearly new. But we've seen momentum across these therapeutic areas. We had, as reported, a record number of new patient starts and new cases initiated in the fourth quarter of 2023. We see that momentum continuing in the first quarter and throughout 2024, and we also have seen growth across these therapeutic areas. So there is no one therapeutic area to sort of point out.
I hope, we see strength in both the.
Therapeutic areas that we initially launched with nephrology neurology and rheumatology.
As well as the newest therapeutic areas that we have begun investing in which was pulmonology ophthalmology and gout.
And we you know.
We see a momentum ophthalmology is is clearly knew.
But we've seen momentum across across the therapeutic areas. We have as reported record number of new patient starts and new cases initiated in the fourth quarter of 2023 received that momentum continuing.
In the first quarter and throughout 2024.
And you know we also have seen growth across across the therapeutic areas. So no one therapeutic area too.
To <unk> to sort of you know.
Point out.
Nikhil Lalwani: Your second question was on M&A. We are, you know, we have been looking for assets for some time now. And we are, you know, again, trying to find a balance between sharing information that's helpful to the investment community while not giving away sensitive data, in this case, to the companies that we're engaged with.
The second question was on emanate.
We are you know we have been looking for assets for some period of time. We are you know again trying to find a balance between sharing.
Information that's helpful to the investment community.
<unk> <unk>.
Sensitive data in this case or the the company. So we're engaged with but there are companies that were engaged with N multiple ones and they are both you know once that there are a line with our torn priority therapeutic areas.
Nikhil Lalwani: But there are companies that we're engaged with, and multiple ones, and they are both, you know, ones that are aligned with our current, you know, priority therapeutic areas, as well as ones, and therefore, leveraging our sales force, and ones that are, you know, outside of our therapeutic areas but leverage the rest of our rare disease platform. And of course, as mentioned earlier, you know, expanding the scope and scale of our rare disease business through BDNM&A remains a high priority for the company. Thank you, Gary. Great! Thank you so much. The next question comes from Vamil Divan of Guggenheim Securities. Hi, this is Daniel Oliver Vamil.
As well as one and therefore, leveraging our sales force.
And once that are you know outside of our therapeutic areas, but <unk> the rest of our rare disease platform.
Yeah, and and of course as mentioned earlier, you know expanding the scope and scale of are rare disease business.
B D N M&A remains a high priority for the company.
Thank you Gary.
Great. Thank you so much.
The next question.
<unk> comes from the male javan with kicking him securities.
Hi, This is Daniel <unk>, Thanks for taking my question.
Daniel Oliver: Thanks for taking my question. Based on our analysis of script trends for the fourth quarter, yeah, petrophin sales were maybe a bit stronger than we had originally anticipated. So, like, what do you think is maybe the main driver of this?
So.
Based on our analysis of script transferred fourth quarter, Yeah, the control themselves and maybe you'll get stronger than we had originally anticipated. So like what do you think maybe the main driver of this.
Nikhil Lalwani: Are there particular channels that aren't going to be captured in IQVIA, or is it more like a pricing dynamic with improvements seen in net price? And then a second question is more on the expense side. So I appreciate your overall commentary on what to maybe expect in 2024, but maybe you can give a little more detail on the breakdown between SG&A and R&D going forward, like how to expect the growth in these. Is there gonna be more growth in one versus the other? Anything there would be helpful.
Are there particular channels that aren't recaptured and <unk> or just more like a pricing dynamic with improvements seen in that price.
And then a second question is one of the expense side.
So I appreciate your overall commentary on what you may be expecting 2024, but maybe you can get a little more detail on the breakdown between like SG&A and R&D going forward and like how do you expect to grow the need is there any more growth in one versus the other day that'd be helpful. Thank you.
Yeah. Thank you Daniel and good morning, and thank you for joining the call.
Nikhil Lalwani: Yeah, thank you, Daniel, and good morning, and thank you for joining the call. Look, in your question about, in, you know, Q4 Cortofen performance versus what, you know, what the... The IQV data is showing, for us, revenues trended ahead and will continue to trend ahead due to increased volume.
Oh.
And your question in in.
You know on queue for cultural friend performance versus what you know what.
The I, Cuba data is showing for US revenues trended ahead and will continue to trying to add due to increased volumes.
Key factors driving these are further increase in effectiveness of our existing salesforce.
The record number of new patient starts.
Nikhil Lalwani: Key factors driving our further increase in the effectiveness of our existing sales force The record number of new patients started, and continued growth across specialties we targeted since launch and new areas such as pulmonology, and now I'll come out. And then there is your second question regarding expense. We will continue to invest in key growth initiatives in 2024. And as Stephen mentioned, expect total operating expenses to essentially grow in line with revenue growth and below the 2023 expense growth, and what's contemplated in our guidance is an investment in R&D, www.anilpharmaceuticals.com. We've also talked about increased spending on the Cortofen side to expand that franchise, the Cortofen gel franchise, where we are adding sales team members and marketing and sales efforts in our newer specialty And there's also modest R&D spending for Cortofan in collaboration with top physicians and scientists to better delineate Cortofan gel's activity and mechanism of action and help guide treatment decisions, as well as to better support the patient journey and enhance convenience, as well as remove pain points for patients starting on ACTH.
And continued growth across specialties, we targeted since launch and the new areas such as Pulmonology.
Yeah.
Now ophthalmology.
And then to your second question regarding expenses.
We will continue to invest in a key growth initiatives in 2024.
And Ah Steven mention expect total operating expenses to essentially grow in line with the revenue growth and below the 2023 <unk>.
And what is contemplated our guidance.
Is an investment in R&D.
<unk> right genetic businesses Larcher. So we're investing to continue fueling that <unk> to a new product launches right to to be able to deliver the high single digits low double digit growth on the genetics business.
And we've also talked about increased spending on the control from side to you know to expand.
That franchise the Kharkov in jail franchise, where we are adding sales team members and marketing and sales efforts in our newer specialty areas of Pulmonology ophthalmology in doubt.
For further strengthening the patient support and operations to support the future growth.
And there's also modest R&D spending for control fan on collaboration would stop physicians and signs of the scientists to better delineate <unk> activity and mechanism interaction and help guide treatment decisions as well as to better support the patient journey.
And enhance the convenience as well as remove pinpoints for patients starting on a C T H.
You also asked about what's.
Nikhil Lalwani: You also asked about, you know, what's the specific, you know, what is it more of in one area versus another? And I think we're investing in both, right? The cortisone-related initiatives, as well as the..., uh, additional R&D spend to support the genetics. Thank you, Daniel. Okay, great.
[noise], what's the specific you know what is it more in one area versus another and I think we're investing in both the.
The controls unrelated initiatives.
Well as the.
You know additional R&D spend two to support the generics business.
Thank you Daniel.
Okay, great. Thank you.
The next question comes from last <unk>, so risky with tourists securities.
Jeremy: Thank you. The next question comes from Les Sulewski with Truist Securities. Hi, this is Jeremy on behalf of Les.
Hi, This is Jeremy on for laws. Thanks for taking our questions regarding market normalization. What issues are mostly resolved are likely to be resolved this year versus what might sellinger.
Jeremy: Thanks for taking our questions regarding market normalization, what issues are mostly resolved or likely to be resolved this year, versus what might still linger. And then also, any more color on the progress and pulmonaryology from the Salesforce expansion and any early launch metrics from the one milliliter dose. Thanks. Good morning and thank you, Jeremy, and thank you for joining our call. I think you asked three questions. One was about pulmonology.
And also just any color on more color on the progress in Pulmonology from a sales force expansion in any early launch metrics from the one millilitre dose. Thanks.
Yeah.
Good morning, and thank you gentlemen, thank you for joining our call.
I think you asked three questions one was pulmonology.
So on Pulmonology.
As we had mentioned we have seen no traction increased number of new patient starts increased number of new cases initiated.
Nikhil Lalwani: So on pulmonology. As we mentioned, we have seen traction, an increased number of new patient starts, an increased number of new cases initiated, and positive physician response. You know, seeing the momentum that we have from the first region, right? We added a smaller sales force in the second quarter of 2023.
And positive physician response.
Seeing the momentum that we have from the from the first region right. We have added a smaller salesforce in the second quarter of 2023.
Adding a.
Adding a second geographical region and Pulmonology.
So we are seeing the traction there and are investing to continue increasing the awareness in the pulmonology specialty.
Nikhil Lalwani: We're adding a second geographical region in pulmonology. So, you know, we are seeing traction there and are investing to continue increasing awareness in the pulmonology specialty. You also asked about the 1-ML vial and the gout therapeutic area.
You also asked about the one ml vials and get the Gallup therapeutic area.
No we are optimistic about the potential for <unk> for the syndication.
Nikhil Lalwani: So, we are optimistic about the potential of scotrophin gel for this indication. However, it is early in the launch, and we look forward to sharing updates in the future. As far as, you know, market resolution and Overall Market Dynamics. Overall Macro, friend of supply-related tailwinds, continues. Having said that, what is contemplated in our guidance is for generics. We have not contemplated any additional benefits from the supply tailwind. for Established brands
However, it is early in the launch and we look forward to sharing updates in the future.
As far as you know market resolutions.
And overall market dynamics.
The overall macro.
A friend of supply related Tailwinds continues.
Having said that.
What is contemplated in our guidance.
As for Jeanette.
Generics, we have not contemplated.
You know any additional benefits from the supply tailwinds.
And for established brands.
Nikhil Lalwani: We have not contemplated any additional ill winds beyond what we're already seeing in the first quarter of 2024. Thank you. Thank you, Jeremy. It appears we have no further questions at this time. I will now turn the program back over to Nikhil Lalwani for any additional or closing remarks. Thank you, everybody. Thank you again for spending time with us and for joining our call this morning and supporting the ANI team as we work to fulfill our purpose of Serving Patients and Improving lives.
We have not contemplated additional.
Aylwin beyond work, we're already seeing in the first quarter of 2024.
Okay.
Thank you.
Thank you Jeremy.
It appears we have no further questions at this time I will now turn the program back over to <unk> for any additional or closing remarks.
Yeah. Thank you everybody. Thank you for again for spending time with us and for joining a call. This morning and supporting the <unk>.
As we work to fulfill our purpose.
Of serving patients improving lives.
Nikhil Lalwani: We look forward to keeping you updated during the year ahead. Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time. www. ANI.org, paid for by the O'Neilank, believe me.
We look forward to keeping you updated during the your head.
Thank you.
This does conclude today's program. Thank you for your participation.
May disconnect at anytime.
Mmm [music].
Mhm.
[music].
Unnamed Speaker: Probably today. Probably tomorrow. Maybe tomorrow.
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Mmm.
Uh-huh.
Mhm.
Uh-huh.
Mhm.
Mhm.