Q4 2024 ADMA Biologics Inc Earnings Call
[music].
Speaker Change: Good afternoon and welcome to the ADMA Biologics fourth quarter and full year 2024 financial results and business update conference call on Monday, March 3rd, 2025.
Speaker Change: 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.
Speaker Change: In addition, any forward looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date.
Speaker Change: We specifically disclaim any obligations to update any such statements, except as required by federal Securities laws.
Speaker Change: We refer you to the disclosure notice section in our earnings release, we issued today and the risk factors section of our previously issued SEC filings and our annual report on Form 10-K for the year ended December 31, 2024, one filed on or before March 18, 2025 for a discussion of important factors that could cause.
Actual results to differ materially from these forward looking statements.
Speaker Change: Please note that the discussion on today's call include certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric is available in our earnings release.
With that said I would now like to turn the call over to Adam Grossman Adam go ahead.
Adam Grossman: Thank you Skyler and welcome everyone to today's call.
Adam Grossman: 2024 was a year of exceptional performance for asthma.
Adam Grossman: Marked by significant financial growth and operational achievements.
Adam Grossman: Total revenues reached $426 5 million.
Adam Grossman: Reflecting an increase of 65% year over year.
Adam Grossman: Adjusted EBITDA grew to $164 $6 million.
Adam Grossman: Presenting a growth rate of 309% from the previous year.
Adam Grossman: These results are a testament to the real world benefits, our biologic therapies continue to deliver to immune compromised patients throughout the United States as well as the dedication and expertise of our leadership team and exceptional SaaS.
Adam Grossman: Our commitment to financial and operational excellence continues to drive strong performance.
Adam Grossman: Allowing us to once again revise our financial guidance upwards.
Adam Grossman: We now expect total revenue to exceed $490 million in 2025.
Adam Grossman: $605 million in 2026.
Adam Grossman: With adjusted EBITDA projected to surpassed $225 million and $305 million, respectively in 2025 and 2026.
Adam Grossman: Adjusted net income guidance for 2025, and 2026 is now raised to more than $175 million and $235 million respectively.
Adam Grossman: We anticipate continued margin expansion as our revenue mix shift towards attentive.
Adam Grossman: Which we believe represents a potential $1 billion or more opportunity with lasting growth and brand durability through at least 2035 and likely beyond.
Good afternoon, and welcome to the asthma biologics fourth quarter and full year 'twenty 'twenty four financial results and business update conference call on Monday March 3rd 2025 at this time all participants are in a listen only mode. There will be a question and answer session to follow.
Adam Grossman: In anticipation of a potential mid year regulatory approval for our enhanced yield production process, we increased medical education and marketing efforts at key scientific conferences in the fourth quarter.
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 the company. Please go ahead.
Adam Grossman: While preparing for an increase in high titer plasma supply.
Adam Grossman: Work in process and finished percentage of inventories.
Adam Grossman: Throughout commercialization, we have strategically manage new patient start.
Welcome everyone and thank you for joining us this afternoon to discuss asthma biologics financial results for the fourth quarter and full year 2024, and recent corporate update.
Adam Grossman: To ensure continuity of patient care and maintain an uninterrupted drug supply.
Adam Grossman: And we have accordingly taken a conservative and thoughtful approach to on boarding new incentive patients.
Adam Grossman: Im joined today by Adam Grossman, President and Chief Executive Officer, and Brad <unk>, Chief Financial Officer and Treasurer.
Adam Grossman: Incentive it's forward looking demand metrics are making new all time highs into 2025.
Adam Grossman: During today's call Adam will provide some introductory comments and provide an update on corporate progress and then Brad will provide an overview of the company's fourth quarter and full year 2024 financial results.
Adam Grossman: Which has resulted in a queue of identifying new patients waiting to initiate a senate treatment.
Adam Grossman: Having currently penetrated what we believe is just over 3% of incentives targeted complex in refractive Pi market.
Adam Grossman: Finally, Adam will then provide some brief summary remarks before opening up the call for your questions.
Adam Grossman: Earlier today, we issued a press release detailing the fourth quarter and full year 2024 financial results and summarize certain achievements in recent corporate updates. The release is available on our website at www dot asthma biologics dot com.
Adam Grossman: We have strong visibility into scaling new patient starts in the coming periods and we believe we can address the significant unmet needs within this patient population.
Adam Grossman: We believe our recently executed third party high titer plasma supply contracts, Mark a transformative milestone paving the way for what should be long term top tier growth for aetna.
Adam Grossman: Before we begin our formal comments I'll remind you that we will be making forward looking assertion 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.
Adam Grossman: These long term agreements allow the company to source high titer plasma from approximately 250 U S. Based third party plasma collection centers, representing approximately a five fold increase in total collection capacity.
Adam Grossman: All forward looking statements are subject to factors risks and uncertainties such as those detailed in today's press release announcing this call and in our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements.
Adam Grossman: While we continue to ramp up these third party high titer procurement contracts at a rapid pace.
Adam Grossman: We've also grown internal high titer collections to record levels.
Adam Grossman: These third party supply contracts combined with the robust internal plasma collection trends are expected to sustain incentives revenue growth and position us to potentially exceed $1 billion in total annual revenue prior to 2030 with anticipated growth headroom thereafter.
Adam Grossman: In addition, any forward looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date.
Adam Grossman: We specifically disclaim any obligations to update any such statements, except as required by federal Securities laws.
Adam Grossman: We refer you to the disclosure notice section in our earnings release, we issued today and the risk factors section of our previously issued SEC filings and our annual report on Form 10-K for the year ended December 31, 2024, once filed on or before March 18, 2025 for a discussion of important factors that could cause <unk>.
Adam Grossman: We deeply appreciate the commitment of our plasma supply partners to our company and to the immuno deficient patients we all collectively serve.
Adam Grossman: We believe the anticipated approval of our enhanced yield production process represents a transformative opportunity for the company.
Adam Grossman: Actual results to differ materially from these forward looking statements.
Adam Grossman: This innovative process has demonstrated an ability to increase production output by approximately 20% from the same starting plasma volume potentially driving meaningful increases to financial guidance if approved.
Adam Grossman: Please note that the discussion on today's call include certain non-GAAP financial measures, including adjusted EBITDA and adjusted net income.
Adam Grossman: A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric is available in our earnings release.
Adam Grossman: Our scientific technical operations and regulatory teams have been instrumental in advancing this novel process and our ongoing regulatory dialogue reinforces the confidence and timely potential approval by midyear 2025.
Speaker Change: With that said I would now like to turn the call over to Adam Grossman Adam go ahead.
Adam Grossman: Thank you Skyler and welcome everyone to today's call.
Adam Grossman: Upon approval.
Speaker Change: 2024 was a year of exceptional performance for asthma.
Adam Grossman: Are well prepared to swiftly implement the new process enhancements, which will drive commercial sales and financial upside beginning potentially in the second half of 2025.
Speaker Change: By significant financial growth and operational achievements.
Speaker Change: Total revenues reached $426 $5 million, reflecting an increase of 65% year over year.
Adam Grossman: Consistent with our conservative guidance approach.
Adam Grossman: Any revenue generated from immune globulin produced using this enhanced production process would represent potential upside to our current 2025 and 2026 financial projections.
Speaker Change: Adjusted EBITDA grew to $164 6 million.
Speaker Change: Representing a growth rate of 309% from the previous year.
Speaker Change: These results are a testament to the real world benefits, our biologic therapies continue to deliver to immune compromised patients throughout the United States as well as the dedication and expertise of our leadership team and exceptional SaaS.
Adam Grossman: We believe the anticipated increase in available high titer plasma supply will enable us to meet our senators drilling demand in the coming quarters accelerate revenue and earnings growth and further build on incentives still developing growth curve.
Speaker Change: Our commitment to financial and operational excellence continues to drive strong performance, allowing us to once again revise our financial guidance upwards.
Adam Grossman: Our centers robust intellectual property estate.
Adam Grossman: Covering proprietary screening assays plasma pooling formulas methods of immune globulin us secures brand protection through at least 2035 with potential extensions extending beyond.
Speaker Change: We now expect total revenue to exceed $490 million in 2025 and $605 million in 2026.
Adam Grossman: Regulatory barriers and proprietary Knowhow further safeguard our franchise.
Speaker Change: With adjusted EBITDA projected to surpassed $225 million and $305 million, respectively in 2025 and 2026.
Adam Grossman: Our comprehensive IP portfolio encompassing immune globulin treatment for all virally induced respiratory infections supports our expectations that incentive alone could surpass $1 billion in total annual revenue.
Speaker Change: Adjusted net income guidance for 2025, and 2026 is now raised to more than $175 million and $235 million respectively.
Adam Grossman: With strong intellectual property and regulatory protections, ensuring a long runway of profitable growth. We are building, what we believe will be among the most durable earnings streams in the biotech and pharmaceutical sector.
Speaker Change: We anticipate continued margin expansion as our revenue mix shift towards incentives.
Speaker Change: Which we believe represents a potential $1 billion or more opportunity with lasting growth and brand durability.
Adam Grossman: We continue to advance our lead R&D pipeline program, SGS 001, targeting strep pneumonia, representing an additional upside lever. So currently provide a $1 billion total annual revenue guidance expected to be realized prior to 2030.
Speaker Change: <unk> 2035 and likely beyond.
Speaker Change: In anticipation of a potential mid year regulatory approval for our enhanced yield production process, we increased medical education and marketing efforts at key scientific conferences in the fourth quarter.
Adam Grossman: If approved <unk> could contribute $300 million to $500 million or more in high margin annual revenue.
Speaker Change: While preparing for an increase in high titer plasma supply.
Speaker Change: Work in process and finished percentage of inventories.
Adam Grossman: Issued IP protecting SG 001 insurance brand in protection through at least 2037 with the potential for extensions.
Speaker Change: Throughout commercialization, we have strategically manage new patient start.
Speaker Change: To ensure continuity of patient care and maintain an uninterrupted drug supply.
Adam Grossman: We are confident in our ability to advance this program through development and potential regulatory approval in a highly capital efficient manner.
Speaker Change: And we have accordingly taken a conservative and thoughtful approach to onboarding new incentive patients.
Adam Grossman: We believe the strength of our balance sheet and our increasing net cash position provide a solid foundation to execute from a position of strength with the flexibility to act opportunistically should market conditions shift.
Speaker Change: Incentives forward looking demand metrics are making new all time highs into 2025.
Speaker Change: Which has resulted in a queue of identifying new patients waiting to initiate a set of treatment.
Adam Grossman: At year end 2024.
Speaker Change: Having currently penetrated what we believe is just over 3% of incentives targeted complex in refractive Pi market.
Adam Grossman: Total cash holdings exceeded $103 million, representing a net cash surplus relative to the $75 million of total debt currently outstanding with Ares capital.
Speaker Change: We have strong visibility into scaling new patient starts in the coming periods and we believe we can address the significant unmet needs within this patient population.
Adam Grossman: The strong financial position should enable us to continue executing our strategic initiatives, while maintaining disciplined capital allocation.
Speaker Change: We believe our recently executed third party high titer plasma supply contracts, Mark a transformative milestone paving the way for what should be long term top tier growth for aetna.
Adam Grossman: With our fully U S domicile in operations and supply chain, coupled with our growing portfolio of life, changing medicines, which continued to address clinical unmet needs for the immune compromised we.
Speaker Change: These long term agreements allow the company to source high titer plasma from approximately 250 U S. Based third party plasma collection centers, representing approximately a five fold increase in total collection capacity.
Adam Grossman: We believe that we're well positioned to continue to execute on our business plan in the current political and economic backdrop.
We take great pride in the impact of our work has on patients plasma donors and public health.
Adam Grossman: The achievements outlined here are a direct result of our team's dedication and commitment to excellence.
Speaker Change: While we continue to ramp up these third party high titer procurement contracts at a rapid pace.
Adam Grossman: We extend our sincere appreciation to our employees for their hard work and determination.
Speaker Change: We've also grown internal high titer collections to record levels.
Adam Grossman: Qualities that define our company and we believe set us apart in the industry.
Speaker Change: These third party supply contracts combined with the robust internal plasma collection trends are expected to sustain incentives revenue growth and position us to potentially exceed $1 billion in total annual revenue prior to 2030 with anticipated growth headroom thereafter.
Adam Grossman: Finally prior to turning the call over to Brad who will speak to the matter in additional detail.
Adam Grossman: I'd like to address the ongoing KPMG audit process.
Adam Grossman: The successful consolidation of reporting add much financial results is an important milestone for the company as Adam has financial profile continues to rapidly grow and improve.
We deeply appreciate the commitment of our plasma supply partners to our company and to the immuno deficient patients we all collectively serve.
Adam Grossman: Management and our audit committee has met with KPMG prior to releasing the financial results today.
Speaker Change: We believe the anticipated approval of our enhanced yield production process represents a transformative opportunity for the company.
Adam Grossman: And we feel confident that our reported financials are accurate and we do not anticipate any changes to these financials. Once the 10-K is filed on or before March 18 2025.
Speaker Change: This innovative process has demonstrated an ability to increase production output by approximately 20% from the same starting plasma volume potentially driving meaningful increases to financial guidance if approved.
Adam Grossman: As previously disclosed KPMG was engaged by add as the company's new independent registered public accounting firm in the fourth quarter of 2024.
Speaker Change: Our scientific technical operations and regulatory teams have been instrumental in advancing this novel process and our ongoing regulatory dialogue reinforces the confidence and timely potential approval by midyear 2025.
Adam Grossman: The company, graduating to a big four independent accounting firm and releasing our reported financials today should instill confidence in the accuracy and quality of our financial statements for our stockholders.
Speaker Change: Upon approval.
Speaker Change: Are well prepared to swiftly implement the new process enhancements, which will drive commercial sales and financial upside beginning potentially in the second half of 2025.
With that said I'd now like to turn the call over to Brad for a review of the fourth quarter and full year 2020 for financials.
Brad: Thank you Adam.
Brad: We issued a press release earlier today outlining our fourth quarter and full year 2024 financial results.
Speaker Change: Consistent with our conservative guidance approach.
Speaker Change: Any revenue generated from immune globulin produced using this enhanced production process would represent potential upside to our current 2025 and 2026 financial projections.
Brad: And as Adam mentioned, we expect to be filing our full year 10-K on or before March 18th 2025, which we would encourage you to read when filed.
Speaker Change: We believe the anticipated increase in available high titer plasma supply will enable us to meet incentives growing demand in the coming quarters accelerate revenue and earnings growth and further build on incentives still developing growth curve.
Brad: I will now discuss some of the key financial highlights from our fourth quarter and full year total revenue was $117 5 million for the quarter ended December 31, 2024, as compared to $73 9 million for.
Speaker Change: Our centers robust intellectual property estate.
Brad: For the quarter ended December 31, 2023, an increase of $43 6 million or 59%.
Speaker Change: Covering proprietary screening assays plasma pooling formulas methods of immune globulin us secures brand protection through at least 2035 with potential extensions extending beyond.
Total revenue for the year ended December 31, 2024 was $426 5 million as compared to $258 2 million for the year ended December 31, 2023, an increase of $168 2 million.
Speaker Change: Regulatory barriers and proprietary Knowhow further safeguard our franchise.
Speaker Change: Our comprehensive IP portfolio encompassing immune globulin treatment for all virally induced respiratory infections supports our expectation that incentive alone could surpass $1 billion in total annual revenue.
Brad: Or 65%.
Brad: This increase is primarily related to increased sales of our centers as we continue to experience increased acceptance and utilization by physicians payers and patients for this product.
With strong intellectual property and regulatory protections, ensuring a long runway of profitable growth. We are building, what we believe will be among the most durable earnings streams in the biotech and pharmaceutical sector.
Brad: Gross profit was $219 $6 million for the year ended December 31, 2024, as compared to $88 9 million for.
Speaker Change: We continue to advance our lead R&D pipeline program, SG 001, targeting strep pneumonia, representing an additional upside lever. So currently provided $1 billion total annual revenue guidance expected to be realized prior to 2030.
Brad: <unk> for the prior year, which represents a gross margin for fiscal year 2024 of 51, 5% as compared to 34, 4% for fiscal year 2023. The improvement in gross margin is primarily driven by a significantly more favorable.
Speaker Change: If approved <unk> could contribute $300 million to $500 million or more in high margin annual revenue.
Brad: Mix of higher margin <unk> sales in 2024 as compared to 2023.
Speaker Change: Issued IP protecting St's 001 insurance brand in protection through at least 2037 with the potential for extensions.
Along with operating efficiencies achieved resulting in a reduction in manufacturing costs.
Speaker Change: We are confident in our ability to advance this program through development and potential regulatory approval in a highly capital efficient manner.
Brad: Adjusted EBITDA was $48 $3 million for the quarter ended December 31, 2024, as compared to adjusted EBITDA of $18 6 million for the quarter ended December 31 2023.
Speaker Change: We believe the strength of our balance sheet and our increasing net cash position provide a solid foundation to execute from a position of strength with the flexibility to act opportunistically should market conditions shift.
Brad: Adjusted EBITDA for the quarter includes all non-GAAP reconciliation items, including stock based compensation depreciation amortization interest expense and loss on debt extinguishment adjust.
Speaker Change: At year end 2024.
Speaker Change: Total cash holdings exceeded $103 million, representing a net cash surplus relative to the $75 million of total debt currently outstanding with Ares capital.
Brad: Adjusted EBITDA was $164 6 million for the year ended December 31, 2024, as compared to $40 2 million.
Speaker Change: This strong financial position should enable us to continue executing our strategic initiatives, while maintaining disciplined capital allocation.
Brad: For the year ended December 31, 2023, an improvement of $124 4 million. The increase was primarily due to the substantial increase in operating income.
Speaker Change: With our fully U S domiciled operations and supply chain, coupled with our growing portfolio of life changing medicines, which continues to address clinical unmet needs for the immune compromised.
Brad: GAAP net income was $111 9 million for the quarter ended December 31, 2024, compared to a net loss of $17 6 million for the quarter ended December 31, 2023, the increase was primarily due to higher operating income.
Speaker Change: We believe that we're well positioned to continue to execute on our business plan in the current political and economic backdrop.
Speaker Change: We take great pride in the impact of our work has on patients plasma donors and public health.
Speaker Change: The achievements outlined here are a direct result of our team's dedication and commitment to excellence.
Brad: Lower interest expense a reduced loss on the extinguishment of debt and an income tax benefit.
Speaker Change: We extend our sincere appreciation to our employees for their hard work and determination.
Brad: GAAP net income was $197 $7 million for the year ended December 31, 2024, as compared to a net loss of $28 2 million.
Speaker Change: Qualities that define our company and we believe set us apart in the industry.
Brad: Finally prior to turning the call over to Brad who will speak to the matter in additional detail.
Brad: For the year ended December 31, 2023, an increase of $225 9 million. The increase was primarily due to an increase in operating income lower interest expense.
Brad: I'd like to address the ongoing KPMG audit process.
Brad: The successful consolidation of reporting Atmos financial results is an important milestone for the company as Adam was financial profile continues to rapidly grow and improve.
Brad: Reduced loss on the extinguishment of debt and an income tax benefit as compared to fiscal year 2023.
Brad: Management and our audit committee has met with KPMG prior to releasing the financial results today and.
Brad: And we feel confident that our reported financials are accurate and we do not anticipate any changes to these financials. Once the 10-K is filed on or before March 18 2025.
Brad: Adjusted net income was $33 $4 million for the quarter ended December 31, 2024, as compared to an adjusted net income of $8 5 million for the quarter ended December 31 2023.
Brad: As previously disclosed KPMG was engaged by add as the Companys, new independent registered public accounting firm in the fourth quarter of 2024.
Brad: Adjusted net income was $119 $2 million for the year ended December 31, 2024, as compared to adjusted net income of $7 million for the year ended December 31, 2023, an increase of $118 five.
Brad: The company, graduating to a big four independent accounting firm and releasing our reported financials today.
Speaker Change: You Didnt still confidence in the accuracy and quality of our financial statements for our stockholders.
Brad: Yeah.
Brad: With that said I'd now like to turn the call over to Brad for a review of the fourth quarter and full year 2020 for financials.
Adam Grossman: As Adam mentioned, we Opportunistically and strategically increased medical education and promotion activities during the fourth quarter in advance of anticipated increases and high titer plasma supply.
Speaker Change: Thank you Adam.
Speaker Change: We issued a press release earlier today outlining our fourth quarter and full year 2024 financial results.
Adam Grossman: Accordingly, we would expect the normalized opex run rate to be lower than spend reported in the fourth quarter.
And as Adam mentioned, we expect to be filing our full year 10-K on or before March 18th 2025, which we would encourage you to read when filed.
Adam Grossman: We believe we are just beginning to generate financial results that demonstrate the distinct operating leverage that our business can realize if our revenue continues to grow as planned and fixed expenses are tightly managed.
Speaker Change: I will now discuss some of the key financial highlights from our fourth quarter and full year total revenue was $117 5 million for the quarter ended December 31, 2024, as compared to $73 9 million.
Adam Grossman: Based on the robust $48 million of operating cash flow generated during the fourth quarter and significant adjusted EBIT growth. The company has currently reached a net cash surplus position relative to the $75 million and total debt outstanding with Ares capital.
Speaker Change: For the quarter ended December 31, 2023, an increase of $43 6 million or 59%.
Speaker Change: Total revenue for the year ended December 31, 2024 was $426 $5 million as compared to $258 2 million for the year ended December 31, 2023, an increase of $168 2 million or <unk> <unk>.
Adam Grossman: Over the course of 2025 and beyond we anticipate significant growth in our cash balance, which lens optionality to continue to reduce adamos weighted average cost of capital and advance all growth initiatives from a position of strength.
Adam Grossman: Expanding on Adam's earlier comments regarding the auditor transition.
Speaker Change: 65%.
Speaker Change: This increase is primarily related to increased sales of our centers as we continue to experience increased acceptance and utilization by physicians payers and patients for this product.
Adam Grossman: We're pleased to have engaged and on boarded a new big four independent audit firm KPMG.
Adam Grossman: Given the relatively accelerated window for the audit process. Following kpmg's onboarding in the fourth quarter of 2020 for the delay in the filing of the Form 10-K is due to a combination of factors relating to the companys need for additional time to test and document the company's control.
Speaker Change: Gross profit was $219 $6 million for the year ended December 31, 2024, as compared to $88 9 million for the prior year, which represents a gross margin for fiscal year 2024 of 51, 5% as compare.
Adam Grossman: Polls associated with its use and reliance upon certain third party service providers and to complete its assessment of the effectiveness of internal controls over financial reporting as of December 31, 2024, as a result of the foregoing KPMG.
Speaker Change: 234, 4% for fiscal year 2023, the improvement in gross margin is primarily driven by a significantly more favorable mix of higher margin <unk> sales in 2024 as compared to 2023.
Adam Grossman: It has not yet completed its audit procedures, we look forward to our next chapter with KPMG and we think the KPMG audit team for their efforts to date and for their dedication.
Speaker Change: Along with operating efficiencies achieved resulting in a reduction in manufacturing costs.
Speaker Change: Adjusted EBITDA was $48 3 million for the quarter ended December 31, 2024, as compared to adjusted EBITDA of $18 6 million for the quarter ended December 31, 2023, adjusted EBITDA for the quarter includes all non-GAAP reconciliation.
Adam Grossman: As a review of our financials, which we reported today with that I'll now turn the call back over to Adam for closing remarks.
Adam Grossman: Thank you Brad.
Adam Grossman: Our unwavering commitment to patient care innovation and operational excellence should continue to drive meaningful growth and long term value creation.
Speaker Change: Items, including stock based compensation depreciation amortization interest expense and loss on debt extinguishment adjusted.
Adam Grossman: Position for anticipated, both near and long term success, we're focused on sustaining revenue growth expanding margins and accelerating earnings throughout 2025 and beyond.
Speaker Change: Adjusted EBITDA was $164 6 million for the year ended December 31, 2024, as compared to $42 million for the year ended December 31, 2023, an improvement of $124 $4 million.
Adam Grossman: We believe our strong balance sheet growing net cash position and robust intellectual property estate.
Adam Grossman: Provides the financial strength and flexibility to support this trajectory, while ensuring reliable access to our life saving biologic therapies.
Speaker Change: The increase was primarily due to the substantial increase in operating income.
Adam Grossman: Looking at the current political and corporate borrowing backdrop, and admins net cash surplus compared to a gross debt.
Speaker Change: GAAP net income was 111 9 million for the quarter ended December 31, 2024, compared to a net loss of $17 6 million for the quarter ended December 31, 2023, the increase was primarily due to higher operating income.
Adam Grossman: Coupled with our top tier revenue and earnings growth outlook. We believe the company is reasonably insulated and well positioned to continue to outperform and execute on its robust strategies focus on delivering innovative and life saving therapies for patients ultimately delivering stockholder value.
Speaker Change: Lower interest expense a reduced loss on the extinguishment of debt and an income tax benefit.
Adam Grossman: We believe we have established a durable and diversified raw material plasma supply.
Speaker Change: GAAP net income was $197 $7 million for the year ended December 31, 2024, as compared to a net loss of $28 2 million for the year ended December 31, 2023, an increase of $225 9 million.
Adam Grossman: And third by long term agreements and record internal collections.
Adam Grossman: It's critical plasma supply footprint underpins, our commercial expansion and strengthens our growth outlook.
Adam Grossman: The potential mid year regulatory approval of our enhanced yield manufacturing process could further amplify efficiencies and deliver additional increases to our currently reported financial guidance.
Speaker Change: The increase was primarily due to an increase in operating income lower interest expense.
Adam Grossman: Increased availability of high titer plasma should position us to broadened patient access.
Speaker Change: Reduced loss on the extinguishment of debt and an income tax benefit as compared to fiscal year 2023.
Adam Grossman: To accelerate the pace of new patient starts among the growing perspective incentive patient Q.
Speaker Change: Adjusted net income was $33 4 million for the quarter ended December 31, 2024, as compared to an adjusted net income of $8 5 million for the quarter ended December 31 2023.
Adam Grossman: Deepen market penetration as well as advance our capital efficient R&D pipeline with the utmost confidence.
Adam Grossman: Looking ahead, we aim to leverage our innovative <unk> based business model agile production platform and in house R&D to unlock new growth opportunities and maximize long term stockholder value.
Adjusted net income was $119 $2 million for the year ended December 31, 2024, as compared to adjusted net income of $7 million for the year ended December 31 2023.
Adam Grossman: Our strategic focus on donor retention third party plasma procurement partnerships and scalable production capabilities.
Speaker Change: An increase of $118 $5 million.
Adam Grossman: Our expected path toward a $1 billion plus revenue milestone as rapidly as possible possess.
Speaker Change: As Adam mentioned, we Opportunistically and strategically increased medical education and promotion activities during the fourth quarter in advance of anticipated increases and high titer plasma supply. Accordingly, we would expect the normalized opex run rate to be lower than spend reported in.
Adam Grossman: Positioning us to meet growing demand, while creating lasting value for patients providers and stockholders.
Adam Grossman: Thank you all for your continued support and dedication.
Adam Grossman: Together, we will continue to build on admin success.
Speaker Change: In the fourth quarter we.
Speaker Change: Operator, we'd now like to open up the call for questions.
Speaker Change: We believe we are just beginning to generate financial results that demonstrate the distinct operating leverage that our business can realize if our revenue continues to grow as planned and fixed expenses are tightly managed.
Speaker Change: Thank you today's question and answer session will be conducted electronically. If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question. So with your breakfast Star. One again, if you are called upon to ask your question and Argos, Meanwhile, loudspeaker and your device.
Based on the robust $48 million of operating cash flow generated during the fourth quarter and significant adjusted EBITDA growth. The company has currently reached a net cash surplus position relative to the $75 million and total debt outstanding with Ares capital.
Speaker Change: Speaking for your handset that ensure that your phone is not on mute when asking your question. Therefore forget for a moment to assemble the Q&A roster.
Speaker Change: Over the course of 2025 and beyond we anticipate significant growth in our cash balance, which lend optionality to continue to reduce atmos weighted average cost of capital and advance all growth initiatives from a position of strength.
Speaker Change: And your first question comes from the line of Kristen <unk> with Cantor Fitzgerald. Please go ahead.
Kristen: Hi, guys good afternoon everybody.
Speaker Change: So thanks for taking the questions I have a few.
Speaker Change: First of the third party supply contracts you have can you give us a sense of how many are currently up and running today and the cadence we should expect in 2025.
Speaker Change: Expounding on Adam's earlier comments regarding the auditor transition. We are pleased to have engaged and on boarded a new big four independent audit firm KPMG.
So we are.
Speaker Change: Given the relatively accelerated window for the audit process. Following kpmg's onboarding in the fourth quarter of 2020 for the delay in the filing of the Form 10-K is due to a combination of factors relating to the companys need for additional time to test and document the company's control.
Speaker Change: We are advancing very very rapidly Kristen we are certainly.
Speaker Change: More than 50% of the way there were beating internal estimates.
Speaker Change: Our testing throughput is increasing rapidly.
Speaker Change: We've really done a great job my scientific and technical ops team is burning the midnight oil we've on boarded some more SaaS.
Speaker Change: <unk> associated with its use of and reliance upon certain third party service providers and to complete its assessment of the effectiveness of internal controls over financial reporting as of December 31, 2024, as a result of the foregoing KPMG.
Speaker Change: Running more shifts to turnaround testing faster.
Speaker Change: The more testing we can handle the faster we can onboard these collection centers so.
Speaker Change: As to the number I don't have the exact number handy, but it's certainly.
Speaker Change: Well more than 50% of the centers that we were looking to add.
Speaker Change: Has not yet completed its audit procedures, we look forward to our next chapter with KPMG and we think the KPMG audit team for their efforts to date and for their dedication to their review of our financials, which we reported today with that I will now turn the call back over to Adam.
Speaker Change: It's conservative in our in our guidance estimates.
Speaker Change: I saw some data today, we are collecting more plasma at.
Speaker Change: This stage of the year, it's actually quite remarkable what the team and our third party suppliers have been able to do so.
Adam Grossman: For closing remarks.
Speaker Change: If these trends hold I think that there could be upsides to guidance certainly for 2026.
Brad: Thank you Brad.
Brad: Our unwavering commitment to patient care innovation and operational excellence should continue to drive meaningful growth and long term value creation.
Speaker Change: More plasma we can make more drug and we believe that.
Speaker Change: The demand trends are continuing into the first quarter of this year and we're really seeing great uptake in a set of utilization so far.
Brad: Positioned for anticipated both near and long term success, we are focused on sustaining revenue growth expanding margins and accelerating earnings throughout 2025 and beyond.
Speaker Change: Thank you I appreciate that and then maybe just help us to understand I know in the press release, you made a comment you expect.
Brad: We believe our strong balance sheet growing net cash position and robust intellectual property estate.
Speaker Change: New patients to start on incentives in line with the so can you characterize is there a waiting list of patients.
Brad: The financial strength and flexibility to support this trajectory, while ensuring reliable access to our life saving biologic therapies.
Speaker Change: We now are qualified for the treatment and just waiting because I know in the past although supply on hand was essentially making sure the patients on drug would continue to receive it so how might that change now that you have more supply potentially.
Brad: Looking at the current political and corporate borrowing backdrop, and admins net cash surplus compared to our gross debt.
Brad: With our top tier revenue and earnings growth outlook. We believe the company is reasonably insulated and well positioned to continue to outperform and execute on its robust strategies focused on delivering innovative and life saving therapies for patients ultimately delivering stockholder value.
Speaker Change: So the <unk> is growing I mean plain and simple I said, Brad said it in the prepared remarks.
Speaker Change: But Q prospective patients is growing and we are onboarding more of these patients than we were previously and youre going to see that start to accelerate over the coming months.
Brad: We believe we have established a durable and diversified raw material plasma supply anchored by long term agreements and record internal collections.
Speaker Change: As we're collecting more plasma putting more pool.
Speaker Change: Pools into the Cogs for <unk>.
Brad: This critical plasma supply footprint underpins, our commercial expansion and strengthens our growth outlook.
Speaker Change: Youre going to see us rapidly increasing.
Speaker Change: The demand Kpis are growing at accelerated rates, we feel really really good about this I mean.
Brad: The potential mid year regulatory approval of our enhanced yield manufacturing process could further amplify efficiencies and deliver additional increases to our currently reported financial guidance.
Speaker Change: Look we make a good drug that helps people.
Speaker Change: And it can it's continuing to help people payer coverage.
Speaker Change: <unk> is robust and.
Brad: Increased availability of high titer plasma should position us to broaden patient access.
Speaker Change: Everything everything looks positive, Chris and we feel really good about new patients being identified new patient starts and the ability to ensure the continuity of supply.
Brad: To accelerate the pace of new patient starts among the growing perspective incentive patient Q.
Speaker Change: For the duration of treatment.
Brad: Deepen market penetration as well as advance our capital efficient R&D pipeline with the utmost confidence.
Speaker Change: Thanks, and then last question from me if I May just do you have a sense of when a new doctor treat the patient with the <unk>.
Brad: Looking ahead, we aim to leverage our innovative <unk> based business model agile production platform and in house R&D to unlock new growth opportunities and maximize long term stockholder value.
Speaker Change: Many more on average under their care do they end up recommending the therapy to once they see the benefits firsthand themselves. Thanks again.
Speaker Change: So great question again.
Brad: Our strategic focus on donor retention third party plasma procurement partnerships and scalable production capabilities.
Speaker Change: Its practice dependent but.
Speaker Change: The majority of the Docs, who our sales force and our medical affairs team called upon.
Brad: Port our expected path toward a $1 billion plus revenue milestone as rapidly as possible.
Speaker Change: Roughly about 10% of their patient population.
Speaker Change: Has the criteria and the Comorbidities and other risk factors that debt.
Brad: <unk> us to meet growing demand, while creating lasting value for patients providers and stockholders.
Speaker Change: Could could trend that.
Brad: Thank you all for your continued support and dedication.
Speaker Change: <unk> could provide benefit to them.
Speaker Change: We feel that.
Brad: Together, we will continue to build on add most success.
Many docs now who have experience with one or two patients are queuing up patients 345, plus.
Brad: Operator, we'd now like to open up the call for questions.
Speaker Change: Depth and breadth is going to continue to grow.
Speaker Change: Thank you today's question and answer session will be conducted electronically. If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad Your Easter Ham and joined the queue. If you would like to withdraw your question. Your question Star One again.
Speaker Change: At the same institutions at the same clinics.
Speaker Change: And we really do believe that there is a lot of white space in front of us.
Speaker Change: The demand out there, we still have being gains when at the scientific and medical conferences.
Speaker Change: Called upon to ask your question in that regard swing by Allot speaking your device can you speak up your handset that ensure that your phone is not on mute when asking your question.
Speaker Change: This is coming from a data driven place.
The data is being analyzed.
Speaker Change: Forget for a moment assemble the Q&A roster.
Speaker Change: Our <unk> system, and we feel really really good about forward looking opportunities here I mean, we wouldn't be increasing guidance. If we didn't think we could collect the plasma or have the patience.
Speaker Change: And your first question comes from the line of Christian <unk> with Cantor Fitzgerald. Please go ahead.
Speaker Change: Hi, guys good afternoon everybody.
Speaker Change: Are you waiting for therapy, so everything looks good.
Thanks for taking the questions I have a few I guess first of the third party supply contracts you have can you give us a sense of how many are currently up and running today and the cadence we should expect in 2025.
Speaker Change: If demand trends continue I think that you could expect the same cadence from us.
Speaker Change: And.
Speaker Change: We're taking the same conservative approach to guidance as we always have.
And we feel really really good about our positioning too.
Speaker Change: Exceed the numbers that we're putting in front of stockholders today.
Speaker Change: So we are.
Speaker Change: We are advancing very very rapidly Kristen we are certainly.
Speaker Change: Thanks, and congrats on a great year.
Speaker Change: Thank you Kristen very much we appreciate your support.
Speaker Change: More than 50% of the way there were beating internal estimates.
Speaker Change: Our testing throughput is increasing rapidly.
Speaker Change: And your next question comes from the line of Anthony Petrone with Mizuho. Please go ahead.
Speaker Change: We've really done a great job my scientific and technical ops team is burning the midnight oil we've on boarded some more SaaS.
Anthony Petrone: How are you. Thanks.
Adam Grossman: Doing well Adam Thank you very much good afternoon, everyone on the call.
Speaker Change: Running more shifts to turnaround testing faster.
Speaker Change: I echo that congratulations on a great <unk>.
Speaker Change: The more testing we can handle the faster we can onboard these collection centers so.
Speaker Change: 24, maybe maybe Adam to start with the long term guidance.
Speaker Change: As to the number I don't have the exact number handy, but it's certainly.
Speaker Change: Whats in there and what's not in there my understanding is the.
Speaker Change: The 605 for 26 495, plus this year.
Well more than 50% of the centers that we were looking to add.
Speaker Change: And the $1 billion target.
Speaker Change: It's conservative in our in our guidance estimates.
Speaker Change: Is at least somewhat inclusive of the <unk>.
Speaker Change: Stendal supply agreements, but does not include yield enhancement.
Speaker Change: I saw some data today, we are collecting more plasma.
Speaker Change: At this stage of the year, it's actually quite remarkable what the team and our third party suppliers have been able to do so.
Speaker Change: Maybe I'll start there and I'll have a couple of follow ups.
Anthony Petrone: That is certainly fair Anthony.
Speaker Change: If these trends hold I think that there could be upsides to guidance certainly for 2026.
Speaker Change: Conservative on the third party supply.
Speaker Change: As I mentioned earlier, we are seeing accelerated collection at the present time.
Speaker Change: With more plasma we can make more drug and we believe that.
Speaker Change: May ebb and flow there may be some seasonality.
Speaker Change: The demand trends are continuing into the first quarter of this year and we're really seeing great uptake in a set of utilization so far.
Speaker Change: But.
Speaker Change: At the end of the day the numbers for 25.
Speaker Change: Certainly do exclude yield enhancement.
Speaker Change: If at all we've said back half of the year, we could see some accruals from.
Speaker Change: Thank you I appreciate that and then maybe just help us to understand I know in the press release, you made a comment you expect new patients to start on incentives in line with the so can you characterize is there a waiting list of patients.
Speaker Change: Assuming a mid year approval, there are some levers to pull where that could potentially be the earlier.
Speaker Change: 2026 yield enhancement is heavily risk adjusted so.
Speaker Change: We now are qualified for the treatment and just waiting because I know in the past although supply on hand was essentially making sure the patients on drug would continue to receive it so how might that change now that you have more supply potentially.
Speaker Change: So we do think that for 2026, if you factor in yield enhancement with.
Speaker Change: The collection volume at its current pace, there could be some significant upside.
Speaker Change: So the Q is growing I mean claim on simple I set it Brad said it in the prepared remarks.
Speaker Change: Yes that would be the follow up there on yield enhancement, maybe just explore that opportunity a little bit.
Speaker Change: But Q prospective patients is growing and we are onboarding more of these patients than we were previously and youre going to see that start to accelerate over the coming months.
Speaker Change: My understanding is.
Speaker Change: The effort here is in and around three quarters of a gram.
Speaker Change: Our leader is that number right and when you run.
Speaker Change: That math on current bid again incentive pricing.
Speaker Change: As we're collecting more plasma putting more pool.
Speaker Change: Pools into the Cogs for <unk> youre going to see us rapidly increasing this.
Speaker Change: On an annualized basis not saying this is what the upside is but the math sort of points to something in the $100 million to $300 million range, depending on what that mix between incentives and bid again, so it's three quarters of a gram the right way to think about it.
Speaker Change: The demand Kpis are growing at accelerated rates, we feel really really good about this I mean.
Speaker Change: We make a good drug that helps people.
Speaker Change: And if that is the case, how do you think that new yield coming out will be split between attentive and did again in <unk>.
Speaker Change: And it is continuing to help people payer coverage.
Speaker Change: <unk> is robust and.
Speaker Change: Everything everything looks positive Kristen, we feel really good about new patients being identified new patient starts and the ability to ensure the continuity of supply.
Speaker Change: So.
Speaker Change: Well the first thing I'll say is it's excluding some novel novel process isn't swings and we're not.
Speaker Change: We're not utilizing yoga huntsman tsunami.
Speaker Change: For the duration of treatment.
It is a 20% effective incremental.
Speaker Change: Okay.
Speaker Change: And then last question from me if I May just do you have a sense of when a new doctor treat the patient with assertive.
Speaker Change: <unk> product yields so on the back of an envelope I know youre using a number of about three eight is backing into your math. So in theory, yes, it's close.
Speaker Change: Many more on average under their care do they end up recommending the therapy to once they see the benefits firsthand themselves. Thanks again.
Speaker Change: That would be a fair estimate from a.
Speaker Change: So great question Amit.
Speaker Change: Bulk drug increase.
Speaker Change: Again, no incremental ftes.
Speaker Change: With dependent but.
Speaker Change: Required.
Speaker Change: The majority of the Docs, who our sales force and our medical affairs team calls upon.
Speaker Change: The infrastructure is in place we spent a large portion of our.
Speaker Change: <unk> time period.
Speaker Change: Roughly about 10% of their patient population.
Speaker Change: Over the Christmas holiday and new year's holidays.
Speaker Change: How does the criteria and the Comorbidities and other risk factors that could.
Speaker Change: Grading the facility and we feel in a great position for regulatory approval midyear and.
Speaker Change: It could trend that incentive could provide benefits to them.
Speaker Change: The ability to.
Speaker Change: Hit the switch on day, one when we are ready to produce these yield enhanced batches.
Speaker Change: We feel that.
Speaker Change: Many docs now who have experience with one or two patients are keeping up pace of 345 plus.
Speaker Change: The FDA dialogue has been constructive we feel good about timing.
Speaker Change: Approval, but again.
Speaker Change: Depth and breadth is going to continue to grow.
Speaker Change: Your question concerning.
Speaker Change: On.
At the same institutions at the same clinics.
Speaker Change: Guidance for this year.
Speaker Change: And we really do believe that there is a lot of white space in front of US I mean, we see the demand out there we still have being gains when at the scientific and medical conferences.
Speaker Change: It's certainly conservative we asked about mix I mean look Dave again continues to be the majority of the plant's throughput.
Speaker Change: But as we collect more high titer plasma we are seeing additional center batches being added to the production schedule all the time.
Speaker Change: This is coming from a data driven place.
Speaker Change: The data is being analyzed.
Speaker Change: I know I, probably sound like a broken record when im saying that but but that's how it's working right now when we get enough plasma that meets a pool, we're putting another batch of incentive into the tank. So we're borrowing from <unk> slots.
Speaker Change: Our <unk> system, and we feel really really good about forward looking opportunities here I mean, we wouldn't be increasing guidance. If we didn't think we could collect the plasma or have the patients in queue waiting for therapy, So everything looks good.
Speaker Change: To make.
Speaker Change: More.
Speaker Change: Incentive as we.
Speaker Change: If demand trends continue I think that you could expect the same cadence from us.
Speaker Change: Collect more plasma but.
Speaker Change: The mix is continuing to shift from a production throughput standpoint.
And.
Speaker Change: We're taking the same conservative approach to guidance as we always have.
Speaker Change: <unk> the topline mix.
Speaker Change: <unk> continues to outpace the game dramatically.
Speaker Change: And we feel really really good about our positioning to.
Speaker Change: Excellent and then I'll hop back in to this shift.
Speaker Change: Exceed the numbers that we're putting in front of stockholders today.
Brad: Shift to Brad.
Brad: Brad just your high level views as you get yield enhancement to come in.
Speaker Change: Thanks, and congrats on a great year.
Speaker Change: Thank you Kristen very much we appreciate your support.
Speaker Change: Supply coming in.
Brad: Do you think about working capital.
Brad: How much of that gets gets caught in the inventory process and just your latest thoughts.
Speaker Change: And your next question comes from the line of Antelope with Mizuho. Please go ahead.
Antelope: How are you.
Brad: On the cap structure, particularly you have high yield debt.
Antelope: Doing well Adam Thank you very much good afternoon, everyone on the call.
Brad: Thinking about your thoughts there on potentially when you could see a refinance thanks again guys congrats.
Speaker Change: I echo that congratulations on a great <unk>.
Antelope: 24, maybe.
Anthony Petrone: Sure. Thanks, Thanks, Anthony I mean going talking about yield enhancement for our strategy.
Adam Grossman: Maybe Adam to start with the long term guidance.
Adam Grossman: What Adam is saying is we're going to get 20% more <unk> from the same starting point. So we will carry a little higher inventory as we continue to produce when we start producing yield enhanced materials.
Antelope: Whats in there and what's not in there my understanding is the.
Speaker Change: 605 for 26 495, plus this year.
Antelope: And the $1 billion target.
Antelope: Is at least somewhat inclusive of the extended supply agreements, but does not.
Adam Grossman: So it's not going to put a lot of pressure, but it'll put slight pressure upwards on our inventory levels and.
Adam Grossman: In terms of the cap structure right. We have always said we are going to generate cash. This year, we feel very confident in our ability to continue to generate significant cash, especially coming into 2025, and we are going to be opportunistic with that cash and we are going to look for continue to look for ways as we've always said to maximize.
Include yield enhancement.
Antelope: So maybe I'll start there and I'll have a couple of follow ups.
Antelope: That is certainly fair Anthony.
Speaker Change: We're conservative on the third party supply.
As I mentioned earlier, we are seeing accelerated collection at the present time.
Speaker Change: This may ebb and flow there may be some seasonality.
Adam Grossman: Shareholder value, whether thats paying down debt or doing other things, but again, we will we are going to be very opportunistic with the cash that we're generating and our goal is to continue to generate shareholder value.
Speaker Change: But.
Speaker Change: At the end of the day the numbers for 25.
Speaker Change: Certainly do exclude yield enhancement.
Speaker Change: If at all we've said back half of the year, we could see some accruals from.
Adam Grossman: Thanks again.
Speaker Change: Assuming a mid year approval, there are some levers to pull where that could potentially be the earlier.
Speaker Change: And your next question comes from the line of Gary Nachman with Raymond James. Please go ahead.
Gary Nachman: Hi, Gary Hi, that's forward looking.
Speaker Change: 2026 yield enhancement is heavily risk adjusted so.
Speaker Change: Yes definitely.
Speaker Change: So thank you Mike Congrats as well on the progress so adding first just I'm curious how big is that Q for new patients waiting to get treated with incentives. So how much has it been growing.
Speaker Change: So we do think that for 2026, if you factor in yield enhancement with.
Speaker Change: The collection volume at its current pace, there could be some significant upside.
Speaker Change: Relative to the current patients that are getting treated and what did they do in the meantime, while theyre waiting any risk that you lose them if that queue builds too long.
Speaker Change: Yes that would be the follow up there on yield enhancement, maybe just explore that opportunity a little bit more.
My understanding is.
Speaker Change: The effort here is in and around three quarters of a gram.
Speaker Change: So all great questions I can say that the Q is robust.
Speaker Change: Our leader is that number right and when you run that.
Speaker Change: And there are more patients that are unable to supply today.
Speaker Change: That math on current bid again incentive pricing.
Speaker Change: What are these patients doing I mean, they are on their standardized gene therapy. They.
Speaker Change: On an annualized basis not saying this is what the upside is but the math sort of points to something in the $100 million to $300 million range, depending on what that mix between incentives and bid again, so it's three quarters of a gram the right way to think about it.
Speaker Change: They continue to maintain on the same drug that they have been receiving.
Speaker Change: <unk>.
Speaker Change: That's the way that that has been going.
Speaker Change: These patients are on regular.
Speaker Change: And if that is the case, how do you think that new yield coming out will be split between our centers and did again in <unk>.
Speaker Change: Immunoglobulin, which currently is is.
Speaker Change: Pretty pretty well supplied right now in the marketplace. So there is no risk that these patients are going to switch off to something else. I mean, there is no other alternative for these patients besides <unk> replacement therapy. So.
Speaker Change: So.
Speaker Change: Well the first thing I'll say is it's excluded some novel novel processes and swings and we're not.
Speaker Change: We're not utilizing global Huntsman phenomenon.
Speaker Change: They typically stay on the immune globulin that they're currently on and when we have product supply availability.
Speaker Change: It is a 20% effective incremental bulk product yields so on the back of an envelope I know youre using a number of about $3 eight.
Speaker Change: Coupled with.
Speaker Change: Reimbursement.
Speaker Change: Approval, we're switching them to incentives so.
Speaker Change: Looking into your math so in theory, yes, it's close.
Speaker Change: These patients are at various stages I mean, we have doctors to identify these patients and we work back and forth with the payer too.
Speaker Change: That would be a fair estimate from from a.
Speaker Change: Bulk drug increase.
Speaker Change: Again, no incremental ftes.
Speaker Change: Iron out any letter of medical necessity.
Speaker Change: Required.
Speaker Change: Debate and argue there with some of the commercial payers, but at the end of the day if the patients meet the criteria that we've been talking about.
Speaker Change: The infrastructure is in place we spent a large portion of our.
Speaker Change: <unk> time period.
Speaker Change: Significant comorbidities have chronic persistent infections.
Speaker Change: Over the Christmas.
Speaker Change: Christmas holiday and new year's holidays.
Speaker Change: Our in and out of the hospital.
Speaker Change: Upgrading the facility and we feel in a great position for regulatory approval midyear and the ability to.
Speaker Change: Seeing these patients added.
Speaker Change: Without too much pushback, so where we.
Speaker Change: Really super pleased with access right now we're super pleased with the reimbursement profile throughout 2024 and into 2025.
Speaker Change: Hit the switch on day, one when we are ready to produce these yield enhanced batches.
Speaker Change: You have to the dialogue has been constructive we feel good about timing.
Speaker Change: The calendar flip has not thrown up any any flags for us.
Speaker Change: Approval, but again.
For your question concerning.
Speaker Change: At this point.
Speaker Change: We continue to make progress I mean look we are.
Speaker Change: Guidance for this year.
Speaker Change: We're pretty bullish I mean, increasing guidance again, we just gave guidance at Jpmorgan.
Speaker Change: It's certainly conservative we asked about mix I mean look the dividend continues to be the majority of the plant's throughput.
Speaker Change: We're increasing guidance again, a couple of weeks later and I think that that has to do with the confidence of number one we're getting more plasma than we anticipated number two demand trends continue to to increase and improve and.
Speaker Change: But as we collect more high titer plasma we are seeing additional center batches being added to the production schedule all the time.
Speaker Change: I know I, probably sound like a broken record when I'm, saying that but but that's how it's working right now when we get enough plasma that meets a pool, we're putting another batch of incentive into the tank. So we're borrowing from began slots.
Speaker Change: I mean every Monday I get my distribution data and I've been a happy Guy every Monday, which is very rare for me having to come back to the office. So.
Speaker Change: Hopefully that answers your question.
Adam Grossman: In addition to in addition to the two points that Adam just called out in his level of confidence I mean, the other key point is we are extremely confident in.
Speaker Change: To make.
Speaker Change: More.
Speaker Change: Our incentive as we.
Collect more plasma but.
Speaker Change: The mix is continuing to shift from a production throughput standpoint.
Adam Grossman: <unk> team's ability to continue to execute and continue to execute at a high level and when that happens and it will we will continue to drive year over year.
Speaker Change: Certainly the topline mix.
Speaker Change: <unk> continues to outpace that of the game dramatically.
Year over year revenue growth and expanded margins so the confidence not only in collecting plasma and the payer situation, but we're extremely confident in our team's ability to execute at a high level.
Speaker Change: Excellent and then I'll hop back in to this.
Shifting to Brad.
Speaker Change: Brad just your high level views as you get yield enhancement to come in.
Speaker Change: Supply coming in.
Adam Grossman: Okay great.
Speaker Change: Do you think about working capital.
Adam Grossman: And then as the mix is obviously shifting a lot more to incentives where do you expect gross margins to be this year and I mean, if you could give us some high level guidance for next year as well and how much to the supply agreements impact that.
Speaker Change: How much of that gets gets caught in the inventory process and just your latest thoughts on.
On the cap structure, particularly you have high yield debt.
Speaker Change: Thinking about your thoughts there on potentially when you could see a refinance thanks again guys congrats.
Adam Grossman: And how will those I guess be staggered over the course of the next one to two years within your guide I mean assertive incentives gross margins Gary.
Sure. Thanks, Thanks, Anthony I mean going talking about yield enhancement for our strategy.
Speaker Change: What Adam is saying is we're going to get 20% more <unk> from the same starting point. So we will carry a little higher inventory as we continue to produce when we start producing yield enhanced materials.
885% plus this side of yield enhancement.
Adam Grossman: The.
Adam Grossman: The impact of the supply agreements.
Adam Grossman: Not tremendous at all I mean, it's really we're paying market prices for what we've been paying for this plasma.
Speaker Change: It's not going to put a lot of pressure, but it'll put slight pressure upwards on our inventory levels.
Speaker Change: In terms of the cap structure right. We have always said we are going to generate cash. This year, we feel very confident in our ability to continue to generate significant cash, especially coming into 2025, and we are going to be opportunistic with that cash and we are going to look for continue to look for ways as we've always said to maximize.
Adam Grossman: All along I mean, there there is not much.
Adam Grossman: Add is from a cost perspective, Brad can can correct me if I'm wrong, there, but we feel really really good about this.
Speaker Change: Youre going to see incentives continue to drive to become.
Speaker Change: Shareholder value, whether thats paying down debt or doing other things, but again, we will we are going to be very opportunistic with the cash that we're generating and our goal is to continue to generate shareholder value.
Speaker Change: Stansell overwhelming majority.
It is the overwhelming majority of it is going to continue to grow.
Speaker Change: It's going to continue to grow because number one we're not producing as much they began and we're producing incentives and we believe that all demand indicators that it's going to pull through.
Speaker Change: Thanks again.
Speaker Change: And your next question comes from the line of Gary Nachman with Raymond James. Please go ahead.
Speaker Change: Rapid pace number two when you when you bolt on yield enhancement, which we anticipate should should occur I mean, the FDA dialogue has been has been pretty good we.
Hi, Gary.
Gary Nachman: Yes definitely.
Gary Nachman: Thank you, Mike Congrats as well on the progress so adding first just I'm curious how big is that Q for new patients waiting to get treated with incentives.
Speaker Change: We feel very very confident about the likelihood of approval.
Speaker Change: Albeit people still stay employed at FDA, but.
Speaker Change: We really are looking at gross margins from the standpoint out there they are only going to expand.
Gary Nachman: How much has it been growing rare.
Gary Nachman: Relative to the current patients that are getting treated and what did they do in the meantime, while theyre waiting any risk that you lose them if that queue builds too long.
Speaker Change: There is nothing that we see in the foreseeable.
Speaker Change: Near term, that's going to impact our ability to deliver.
Gary Nachman: So all great questions I can say that the Q is robust.
Speaker Change: These 80 plus percent gross margins on incentives as we continue to go forward.
Gary Nachman: And there are more patients and unable to supply today.
And just Furthermore, I mean, the 20% additional yield going with yield enhancement significantly outpaces any investments that we make in RSV any investments that we make in the yield enhancement.
Gary Nachman: What are these patients doing I mean, they are on their standardizing therapy. They.
Gary Nachman: Are they continuing to maintain on the same drug that <unk> been receiving.
Gary Nachman: <unk>.
Gary Nachman: That's the way that that has been going.
Speaker Change: <unk> itself, so that 20% extra IAG from yield enhancement is going to be very favorable and accretive to margins going forward.
Gary Nachman: These patients are on regular.
Gary Nachman: Immunoglobulin, which currently is is.
Speaker Change: Okay great.
Gary Nachman: Pretty pretty well supplied right now in the marketplace. So there is no risk that these patients are going to switch off to something else. I mean, there is no other alternative for these patients besides <unk> replacement therapy. So.
Speaker Change: And then just two more quick ones just on the FDA review here.
Speaker Change: For the insurance yield process.
Speaker Change: Do they have to do any sort of inspection.
Speaker Change: You are very confident with this major timelines, so just want to make sure of that.
Gary Nachman: They typically stay on the immune globulin that theyre currently on and when we have product supply availability.
Speaker Change: And then just on 001, when do you think youre going to have that animal data and how soon could potentially enter the clinic.
Gary Nachman: Coupled with.
Reimbursement.
Thanks.
Approval, we're switching them to incentives so.
Speaker Change: All great questions. So.
Speaker Change: We're not aware of a requirement for a pre approval inspection for this.
Gary Nachman: These patients are at various stages I mean, we have doctors, who identify these patients and we work back and forth with the payer too.
Speaker Change: Submission.
Speaker Change: We haven't been notified at all from FDA, yet that theyre going to do and we're well into the review cycle here. So.
Gary Nachman: Iron out any letter of medical necessity.
Gary Nachman: Debate and argue there with some of the commercial payers, but at the end of the day if the patients meet the criteria that we've been talking about have significant comorbidities have chronic persistent infections are in and out of a hospital. We're seeing these patients are added.
Speaker Change: We feel pretty good about our positioning.
Speaker Change: And.
Speaker Change: I don't think that they're going to come but you never know, maybe theyre going to listen to this and they're going to show up but we.
Speaker Change: We feel good about the ability to pass.
Gary Nachman: Without too much pushback. So we're really super pleased with access right now we're super pleased with the reimbursement.
Speaker Change: Pass any FDA.
Gary Nachman: Inspections, Gary and.
Gary Nachman: We wouldn't be this confidence and my compliance team and regulatory team wouldn't let me say the things that I'm, saying today.
Gary Nachman: Profile throughout 2024 and into 2025.
Gary Nachman: Calendar flip has not thrown up any any flags for us.
Gary Nachman: If we didn't feel like we were having a robust active positive dialogue with the agency. So they've got all the data they have been reviewing data we've been fielding information requests in the normal course back and forth all year so far.
Gary Nachman: At this point then.
Gary Nachman: We continue to make progress I mean look we are.
Gary Nachman: We're pretty bullish I mean, increasing guidance again.
Gary Nachman: Gave guidance at Jpmorgan.
Gary Nachman: Increasing guidance again, a couple of weeks later and I think that that has to do with the competence of number one we're getting more plasma than we anticipated number two demand trends continue to to increase and improve and.
Gary Nachman: <unk>.
Gary Nachman: We feel very confident for for an approval on time.
Speaker Change: With respect to CLO one.
Speaker Change: I had a meeting last week that made me very excited.
Gary Nachman: I mean every Monday I get my distribution data and I've been a happy Guy every Monday, which is very rare for me having to come back to the office. So.
Speaker Change: We are moving very very rapidly we produce some bench scale lots of product at different potencies and.
Gary Nachman: Hopefully that answers your question.
Speaker Change: And I've seen some preliminary testing data with those batches.
Adam Grossman: In addition to in addition to the two points that Adam just called out in his level of confidence I mean, the other key point is we are extremely confident in AD and the admin teams ability to continue to execute and continue to execute at a high level and when that happens and it will we will continue to drive year over year Europe.
Speaker Change: Hope to have the animal data.
Speaker Change: Later this year.
Speaker Change: We haven't guided to the development timelines, but.
Speaker Change: We do think that the contribution.
Speaker Change: To revenue, which is the.
Adam Grossman: Year over year revenue growth and expanded margins so the confidence not only in collecting plasma and the payer situation, but we're extremely confident in our team's ability to execute at a high level.
Speaker Change: $1 billion revenue target prior to 2030.
Speaker Change: We certainly do think that it's reasonably likely that STR one could enter the clinic substantially before then and potentially be contributing revenue and that's excluded from that $1 billion plus revenue targets. So again, it's an additional upside lever.
Adam Grossman: Okay great.
Adam Grossman: And then as the mix is obviously shifting a lot more to incentives where do you expect gross margins to be this year and I mean, if you could give us some high level guidance for next year as well and how much to the supply agreements impact that.
Speaker Change: I have not been this excited about this opportunity I've had blinders on for a while.
Adam Grossman: And how will those I guess be staggered over the course of the next one to two years within your guide I mean assertive as our centers' gross margins Gary are 80%, 85% plus this side of yield enhancement.
Speaker Change: I think our stockholders and.
Speaker Change: Staff knows that I have been.
Speaker Change: Pounding the desk, saying more plasma more high titer plasma more assertive.
Speaker Change: This is the first time that I'm really super excited about the potential opportunity we have.
Adam Grossman: The.
Adam Grossman: The impact of the supply agreements.
Adam Grossman: It's not tremendous at all I mean, it's really we're paying market prices for what we've been paying for this plasma.
Speaker Change: With our in house.
Speaker Change: R&D engine here.
I really think that it's capital efficient.
Adam Grossman: All along I mean, there there is not much.
Speaker Change: I think that there is a substantial unmet medical need.
Adam Grossman: Added from a cost perspective, Brad can can correct me if I'm wrong, there, but we feel really really good about this.
Speaker Change: If everything that the team is hypothesizing.
Speaker Change: They have half of what the team has hypothesizing comes to fruition.
Speaker Change: We've got another winner on our hands here, so I'm really positive about the product.
Adam Grossman: Youre going to see incentive continue to drive to become.
Speaker Change: Substantial overwhelming majority.
Speaker Change: Let me get the animal data, let me get the donors that enable let me get plasma collected.
Speaker Change: It is the overwhelming majority of it is going to continue to grow.
Speaker Change: I promise to you later this year, we will update you with respect to the development timeline.
Speaker Change: It is going to continue to grow because number one we're not producing as much they began and we're producing incentive and we believe that all demand indicators that it's going to pull through at a rapid pace number two when you when you bolt on yield enhancement, which we anticipate should should occur I mean, the FDA dialogue has been.
Speaker Change: Great. Thanks for all that color I appreciate it.
Gary Nachman: Thanks, Gary look forward to talking on Wednesday.
Adam Grossman: And ladies and gentlemen, this will conclude our question and answer portion of the call I'd like to turn it back to Adam for additional closing remarks.
Speaker Change: <unk> has been pretty good we feel very very confident about the likelihood of approval.
Speaker Change: Albeit people still stay employed at FDA, but.
Adam Grossman: I just want to thank the asthma biologics team 2024 was the year that will go down in our history for writing our book one Hell of a chapter and I. Appreciate you all for showing up and given your best every day to our stockholders. Thank you for trusting us.
Speaker Change: We really are looking at gross margins from the standpoint out there they are only going to expand.
Speaker Change: There is nothing that we see in the foreseeable.
Speaker Change: Near term, that's going to impact our ability to deliver.
Adam Grossman: Sure.
Adam Grossman: We appreciate your investment in that market that allows us to keep doing what we're doing so thank you everybody have a great evening.
Speaker Change: These 80 plus percent gross margins on incentives as we continue to go forward.
Adam Grossman: Ladies and gentlemen, this concludes the conference call for today, we appreciate your perspective and you may now disconnect.
Speaker Change: And just Furthermore, I mean, the 20% additional yield going with yield enhancement significantly outpaces any investments that we make in RSV any investments that we make in the yield enhancement.
Speaker Change: Please wait the conference will begin shortly.
Speaker Change: [music].
Speaker Change: <unk> itself, so that 20% extra IAG from yield enhancement is going to be very favorable and accretive to margins going forward.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay great.
Speaker Change: And then just two more quick ones just on the FDA review here.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: For the enhanced yield process.
Speaker Change: Okay.
Speaker Change: Do they have to do any sort of inspection.
Speaker Change: You are very confident with this major timelines, so just want to make sure of that.
Speaker Change: And then just on 001, when do you think youre going to have that animal data and how soon could potentially enter the clinic.
Speaker Change: Thanks.
All great questions. So.
Speaker Change: We're not aware of a requirement for a pre approval inspection for this.
Speaker Change: Submission.
Speaker Change: We haven't been notified at all from FDA, yet that theyre going to do and we're well into the review cycle here. So.
Speaker Change: We feel pretty good about our positioning.
Speaker Change: <unk>.
Speaker Change: And.
Speaker Change: I don't think that theyre going to come but you never know, maybe theyre going to listen to this and they're going to show up but we.
We feel good about the ability to to pass any FDA.
Gary Nachman: Inspections, Gary and.
Gary Nachman: We wouldn't be this confident in my compliance team and regulatory team wouldn't let me say the things that I'm, saying today.
Gary Nachman: We didn't feel like we were having a robust active positive dialogue with the agency. So they've got all the data they have been reviewing data we've been fielding information requests in the normal course back and forth all year, so far and.
Gary Nachman: We feel very confident for for an approval on time.
Gary Nachman: With respect to CLO one.
Gary Nachman: I had a meeting last week that made me very excited.
Gary Nachman: We are moving very very rapidly we produce some bench scale lots of product that different potencies and.
Gary Nachman: And I've seen some preliminary testing data with those batches.
Gary Nachman: We hope to have the animal data.
Gary Nachman: Later this year.
Gary Nachman: We haven't guided to the development timelines, but.
Gary Nachman: We do think that the contribution.
Gary Nachman: <unk>.
Gary Nachman: To revenue, which is the <unk>.
Gary Nachman: $1 billion revenue target prior to 2030.
Gary Nachman: We certainly do think that it's reasonably likely that STR one could enter the clinic substantially before then and potentially be contributing revenue and that's excluded from that $1 billion plus revenue targets. So again, it's an additional upside lever.
Gary Nachman: I have not been this excited about this opportunity I've had blinders on for a while.
I think our stockholders and.
Gary Nachman: Staff knows that I have been.
Gary Nachman: Pounding the desk, saying more plasma more high titer plasma more assertive.
Gary Nachman: This is the first time that I am really super excited about the potential opportunity we have.
Gary Nachman: With our in house.
Gary Nachman: R&D engine here.
Gary Nachman: I really think that it's capital efficient.
I think that there is a substantial unmet medical need and if everything that the team is hypothesizing.
Gary Nachman: They are half of what the team has hypothesizing comes to fruition.
Gary Nachman: We've got another winner on our hands here, so I'm really positive about the product.
Gary Nachman: Let me get the animal data, let me get the donors that enable let me get plasma collected and I promise to you later this year, we will update you with respect to the development timeline.
Speaker Change: Great. Thanks for all that color I appreciate it.
Gary Nachman: Thanks, Gary look forward to talking on Wednesday.
Adam Grossman: And ladies and gentlemen, this will conclude our question and answer portion of the call I'd like to turn it back to Adam for additional closing remarks.
Speaker Change: I just want to thank the asthma biologics team 2024 with a year that will go down in our history for writing our book one Hell of a chapter and I. Appreciate you all for showing up and given your best every day to our stockholders. Thanks for trusting us and.
Speaker Change: We appreciate your investment in AD market that allows us to keep doing what we're doing so thank you everybody have a great evening.
Ladies and gentlemen, this concludes the conference call for today. We appreciate your perspectives depletion you may now disconnect.