Q1 2025 ANI Pharmaceuticals Inc Earnings Call
. . . . . . .
Lisa Wilson, Stephen Carey, Christopher Mutz
Please note this call is being recorded.
After the Speakers' opening remarks, there will be a question and answer session.
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Lisa Wilson: It is now my pleasure to turn the conference over to Lisa Wilson.
Lisa Wilson: Thank you operator, welcome to <unk> Pharmaceuticals, Q1, 'twenty twenty-five earnings results call.
Lisa Wilson: This is Lisa Wilson Investor Relations for Eni.
Speaker Change: With me on todays call are Nick kill Omani, President and Chief Executive Officer.
Carey: Carey Chief Financial Officer, and Chris much Senior Vice President and head of an ice rare disease business.
Carey: You can also access the webcast of this call through the Investor section of the anti website and Eni Pharmaceuticals Dot com.
Speaker Change: 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 prime.
Carey: But securities Litigation Reform Act.
Carey: These forward looking statements are based on information available to and I 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.
Carey: Such forward looking statements are not guarantees of future performance actual results may differ materially from those projected in the forward looking statements and I, specifically disclaims any intent or obligation to update these forward looking statements except as required by law.
Carey: The archived webcast will be available for 30 days on our website and our pharmaceuticals Dot com.
Carey: For the benefit of those who maybe listening to the replay or archived webcast. This call was held and recorded on May nine 2025.
Carey: Since then and I may have made announcements related to the topics discussed. So please reference the company's most recent press releases and SEC filings and with that I'll turn the call over to Nick Hill, where I want it.
Nick Hill: Thank you Alicia.
Speaker Change: Everyone and thank you for joining us.
Speaker Change: I'll start by discussing our first quarter performance and highlights along with our updated 2025 guidance.
Speaker Change: Chris will provide additional color on our rare disease business, including our lead asset <unk> gel in our retina assets ILUVIEN in your cheek finally, Steve will review, our fourth quarter results and updated 2025 guidance in more detail.
Speaker Change: Following our remarks, we will take your questions.
Speaker Change: They had a very strong start to the year.
Speaker Change: Total revenue adjusted EBITDA and adjusted EPS, the first quarter reflected particularly strong performance for our generics business.
Speaker Change: Solid demand for control from gel and increased demand for our brands portfolio.
Speaker Change: Top line upside was partially offset by near term factors impacting our retina products that I won't expand on an amendment.
Speaker Change: We were pleased with the strength across our overall company.
Speaker Change: Based on our first quarter performance and favorable demand trends across generics portfolio Jo Ann brands, we are raising our 2025 guidance for total revenues and adjusted non-GAAP EBITDA.
Speaker Change: We now expect 2025 revenues of 768 million to $793 million, which.
Speaker Change: Which represents growth of 25% to 29% over 2024.
Speaker Change: First is our prior guidance of 756 million to 776.
We expect adjusted non-GAAP EBITDA of 195 million to 205 million by $205 million, which reflects growth of 25% to 31% over 2024 versus our prior guidance of 190 million to 200 million.
Speaker Change: Steve will provide more specifics on our updated guidance.
Steve: Later in the call.
Speaker Change: Turning now to our first quarter results.
Speaker Change: Total revenues were $197 million.
Speaker Change: And $97 1 million, representing a year over year increase of 43% on an as reported basis and 32% on an organic basis driven by exceptional performance from generics.
Speaker Change: <unk> strong growth for <unk> gel and continued demand for our brand portfolio.
Speaker Change: non-GAAP EBITDA was $50 7 million and adjusted non-GAAP EPS was $1 70.
Speaker Change: First of all from gel generated $52 9 million in revenues during the quarter up 43% over the first quarter of 2024.
Speaker Change: We continue to see growth across our targeted specialties, neurology, nephrology rheumatology ophthalmology and Pulmonology.
Speaker Change: Notably we had a record number of new patient starts and new cases initiate it despite the insurance resets that typically impact branded drugs in the first quarter.
Speaker Change: We continue to believe that corner, often gel remains on a strong multiyear growth trajectory.
Speaker Change: Just on reported sales of CT fulsome gel and the other ACTH product on the market. The overall ACTH category grew 27% to approximately $684 million in 2024.
Speaker Change: While the overall category returned to strong growth in 2024, the number of patients on ACTH therapy today is still substantially lower than several years ago, providing plenty of room for headroom expense plenty of headroom for expansion.
Speaker Change: It is worth noting that approximately 40% of course rofin gel prescribers are new to the ACTH category.
Speaker Change: The need for our therapy, and our ability to expand the market.
We expect 2025 Cork welcome John revenues increased 34% to 38% to 265 million to $274 million for the year.
Speaker Change: Our retina products ILUVIEN and <unk> generated revenues of $16 1 million in the first quarter.
Speaker Change: Performance of our retina assets outside the U S was in line with our expectations our performance in the U S was impacted by several factors, including market access challenges for Medicare patients.
Speaker Change: First quarter dynamics for branded drugs.
Speaker Change: And turnover in our sales force as we optimize our field team to sell our complete rare disease ophthalmology portfolio.
Speaker Change: As we discussed on our fourth quarter call at the end of February we saw an impact in the first quarter due to reduced access for Medicare patients.
Speaker Change: Patient support foundations, such as good days did not receive sufficient funding in the first quarter of 2025 effect affecting their ability to assist patients with co pay support.
Speaker Change: This change Ravi Impactive products reimbursed under Medicare part B, and actually has been particularly important or loogan syndication for diabetic macular edema or <unk> as also reflected by other players with therapeutics Indeed.
Speaker Change: And so working with Hcp's, who understand their response to the market access challenges. We've refined our commercial approach. We're also exploring pathways to improve access for appropriate patients through our specialty pharmacy and Medicare part D.
Speaker Change: We've also had some turnover in our U S. Ophthalmology sales force as we took steps as we took steps to optimize and elevate the quality of our team.
Speaker Change: We are adding best in class talent to our sales team and expect to be back to full strength during the second quarter.
Speaker Change: Our plans to address the near term challenges in retina are yielding positive results in April and user demand was higher than any month in the first quarter and almost back to fourth quarter 2020 for end user demand levels.
Speaker Change: Given the recent promising trends we've seen we are maintaining our 2025 outlook for ILUVIEN in your chip revenues of 97 to 103.
Speaker Change: Men and confidence in the value of <unk> portfolio is further reflected in our recent buyout of our royalty obligation on ILUVIEN and your cheek.
Speaker Change: Turning next to our generics business we.
Speaker Change: We delivered an exceptionally strong first quarter revenues of $98 7 million, an increase of 41% over the first quarter of 2024 and 26% over the fourth quarter of 2024, which had previously been our highest quarter ever for generics.
Speaker Change: The robust growth was driven by contribution from new product launches, including our first to market launch for calibrate tablets with 180 days of exclusivity that runs to late June coupled with strong execution in the base business.
Speaker Change: With the strong start we now expect mid double digit growth from our <unk> business for the full year up from our prior estimate of low double digit drop.
Speaker Change: Our brands portfolio continued to perform well as discussed on our last earnings call. We were able to identify and capture increased demand in the first quarter for certain products as we have done periodically for three consecutive years.
Speaker Change: <unk> full year guidance reflects a return to a more normalized level of demand during the second quarter.
Speaker Change: Finally, I will say a few words on the evolving tariff situation.
Speaker Change: While we await the administration's pharmaceutical industry specific framework.
Speaker Change: It is worth highlighting eni longstanding commitment to the U S pharmaceutical industry and are positive and unique positioning relative to our peers.
Speaker Change: We are a U S domicile pharmaceutical company with over 90% of total company revenues coming from finished goods manufactured in the U S.
Speaker Change: 5% of our total company revenues as a direct reliance on China.
Speaker Change: In addition, we have a strong balance sheet that enables us to carry healthy levels of finished goods and raw material inventories and we look forward to maintaining our strong commitment to the U S pharmaceutical industry.
Speaker Change: I'll now turn the call over to Chris <unk> to discuss our rare disease business in more detail.
Chris: Thank you Nicole and good morning, everyone. As Nick mentioned, we were pleased with the strong demand trends for quartz rofin gel during the first quarter, which included continued momentum in adding new prescribers and robust growth among existing prescribers.
Chris: We saw demand growth across all of our targeted specialties, particularly in ophthalmology, we saw the highest growth driven by the efforts of our expanded dedicated ophthalmology sales team.
Chris: Notably the number of new initiated cases, and new patient starts for quartz rofin gel reached record levels in the first quarter, which is not typically a seasonally strong quarter for <unk> gel for rare disease drugs in general.
Chris: We completed the expansion of our portfolio sales team, which cover indications across neurology nephrology and rheumatology.
Chris: Our new team members are quickly building momentum.
Both new prescriber adds in patient starts and their sales territories.
Chris: The indication for acute gouty arthritis, flares, which is unique to courts rofin gel among ACTH therapies remained a strong driver contributing to growth in the prescriber base and patients on therapy.
Chris: We're also beginning to see improved access from the new affordability options under the Medicare part D redesign under the inflation reduction act or IRA.
Speaker Change: As Nikhil noted we continue to seek retrofit gel on a strong multiyear growth trajectory. We believe the number of patients on ACTH therapy now is approximately half the level of patients on therapy. When the category previously peaked in 2017.
Speaker Change: We also believe the addressable patient population for ACTH therapy would be many times larger than the previous high of eight years ago.
Speaker Change: Keeping a significant unmet medical need in mind, we continue to invest in and make progress on initiatives to strengthen and grow the quick rofin gels franchise.
Speaker Change: Part of these efforts include improving patient and physician convenience in March we announced FDA approval of our Prefilled syringe and recently launched the new presentation.
Speaker Change: Pre filled syringe will benefit patients and physicians by reducing the steps needed for self administration.
Speaker Change: So far we've been pleased with early feedback on this important new offering.
Speaker Change: We're also continuing to invest in evidence generation forklifts Rofin gel earlier this week at the association for research and vision and ophthalmology or ARVO annual meeting, we presented preclinical data on the use of quartz rofin gel for uveitis.
Speaker Change: We're also excited to announce that we plan to initiate a phase four clinical trial for the treatment of acute gouty arthritis flares later this year.
Speaker Change: The study is planned to enroll approximately 150 patients and we expect to complete the study in approximately one year following initial patient initiation.
Speaker Change: Waqar, it's often gel has seen significant Houston gout results of this study will provide physicians with valuable insight to the treatment of acute gouty arthritis flares with courts, rofin gel and could ultimately support inclusion.
Speaker Change: The American college of Rheumatology treatment guidelines.
Speaker Change: Overall, we're pleased to see the growing recognition of <unk> gel as a safe and effective treatment option for appropriate patients I look forward to delivering strong multi year growth for the product.
Speaker Change: Turning now to our retina products ILUVIEN and <unk>.
Speaker Change: As <unk> mentioned during the first quarter.
Speaker Change: There was a significant change in market access dynamics for Medicare patients.
Speaker Change: Hcp's took some time to understand the change whether it would persist and how they needed to modify their approach and practice, while keeping patients first always.
Speaker Change: The impact of these market access changes is varied across the regions and how hcp's that respond to these changes is also very.
Speaker Change: It is important to note that prescribing for Niu PFS has been impacted to a much lesser degree relative to prescribing for Danny.
Speaker Change: Our team has spent time understanding H C. P responses in a granular impact to their workflows.
Speaker Change: With that understanding we are exploring alternative paths to improve access for the impact of DNA population for example, Medicare patients with a pharmacy benefit and avail of the affordability options that part D offers.
Speaker Change: This approach retina physicians can access ILUVIEN through a specialty pharmacy.
Speaker Change: Taking all the above into account our team has deployed a bespoke commercial approach.
Speaker Change: Customized by region or territory, which is already paying off off as we've seen in our April results.
Speaker Change: We've taken several additional steps to enhance our commercial effectiveness.
Speaker Change: We're striking our sales team with top talent from leading retina and ophthalmology organizations and approach that served us well when we built the courtyard fifth team.
Speaker Change: To drive greater awareness and adoption of ILUVIEN and <unk>, we are launching new peer to peer educational programming and new refreshed marketing materials.
Speaker Change: Early response to these materials have been very positive.
Speaker Change: The multi pronged commercial approach I described earlier is yielding results in April end user demand was higher than any month in the first quarter.
Speaker Change: And almost back to the fourth quarter of 2020 for end user demand levels.
Speaker Change: We've also made significant progress over the last few months to enhance supply security for our retina franchise in March we received FDA approval for an expanded label for ILUVIEN and includes an indication for the treatment of chronic Niu PFS, which is the indication for U T.
Speaker Change: We plan to begin marketing ILUVIEN for both chronic and Aps and <unk> under the new combined label this quarter.
Speaker Change: We expect this transition to be relatively seamless for physicians, who have prescribed both ILUVIEN in Utica in the past.
Speaker Change: These physicians, who have prescribed both products account for approximately 90% of.
Speaker Change: Prescriptions for ILUVIEN in U T.
Speaker Change: We are engaged in discussions with commercial payers to expand coverage of ILUVIEN for the new indication of chronic and Ips. We believe this process will be relatively straightforward for plans that cover U T is we're simply transitioning patients to ILUVIEN and discontinuing a U T is.
Speaker Change: As a reminder, ILUVIEN is already approved for both DNA and chronic <unk> outside the U S, including in 17 European countries.
Speaker Change: Moving to the new Dan Synchronicity clinical trials, we are in the process of analyzing the data from the completed New day study and the Synchronicity study at the six month time point, we look forward to updating you on the results of both studies in the near term.
Speaker Change: Overall, we continue to expect our rare disease business to build largest revenue growth driver in 2025.
Speaker Change: That I will turn the call over to Steve for the financial update Steve.
Steve: Thanks, Chris and good morning to everyone on the call.
Steve: I'll review, our first quarter results and then discuss our updated 2025 guidance.
Steve: He and I had a very strong start to the year in our first quarter results form a strong foundation for the achievement of our increased full year financial goals.
Steve: We generated first quarter revenues of 197 1 million up 43% over the prior year period.
Steve: Revenues from rare disease, and brands were $94 1 million in the first quarter up 50% from the prior year period as reported and 25% on an organic basis driven by growth in our rare disease franchise.
Steve: Rare disease revenues were $69 million up 87% from the prior year period.
Steve: Revenues from core Trofim gel were $52 9 million up 43% from the prior year period, driven primarily by increased volume on a record number of new patient starts.
Steve: Revenues from ILUVIEN in U T.
Speaker Change: Were $16 1 million for the reasons that Nikhil and Chris just discussed.
Speaker Change: Revenues for brands were $25 1 million in the quarter, a decrease of 2% from the prior year period.
Speaker Change: The first quarter benefited from continued elevated demand consistent with what we have periodically achieved with this portfolio in the past and similar to prior year levels of revenue achievement.
Speaker Change: Revenues for our generics and other segment were 103 million an increase of 38% over the prior year period.
Speaker Change: Revenues for generics were $98 7 million, an increase of 41% over the prior year period, and 26% over the fourth quarter of 2024 due to increased volumes from new product launches such as crew Carlo pride and the impact of 2020.
Speaker Change: For product launches.
Speaker Change: Now moving down the P&L as a reminder, when I speak to our operating expenses for the purposes of this earnings call I will be referring to our non-GAAP expenses, which are detailed on table three in our press release.
Speaker Change: Generally our non-GAAP operating expenses exclude depreciation and amortization stock based compensation and certain costs related to litigation and M&A activity.
Speaker Change: Please refer to table three for a reconciliation to our GAAP expenditures.
Speaker Change: non-GAAP cost of sales, excluding depreciation and amortization increased 49% to $72 7 million in the first quarter of 2025 compared to the prior year period.
Speaker Change: Primarily due to net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products.
Speaker Change: non-GAAP gross margin was 63, 1% a decrease of approximately 130 basis points from the prior year period, principally driven by mix and significant growth of royalty bearing products.
Speaker Change: non-GAAP research and development expenses of $10 million in the first quarter was relatively in line with the prior year period.
Speaker Change: non-GAAP selling general and administrative expenses increased 56, 5% to $63 7 million in the first quarter driven by costs related to our acquisition of Ala mirror in the form of spend for our new larger ophthalmology sales team.
Speaker Change: Promoting core Trofim gel ILUVIEN in Utica and continued investment in rare disease sales and marketing activities.
Including the new purified quick Trofim gel sales representatives that we added in the quarter.
Speaker Change: Adjusted non-GAAP diluted earnings per share was $1 70 for the first quarter compared to $1 21 per share in the prior year period.
Speaker Change: Adjusted non-GAAP EBITDA for the quarter was $50 7 million compared to $37 6 million in the prior year period.
We ended the quarter with $149 8 million in unrestricted cash reflective of $35 million of cash flow from operations and net of $17 3 million of cash used during the quarter to buy out our royalty obligation to SW K on net revenue.
Speaker Change: Use of ILUVIEN in U T.
Speaker Change: And the payout of the annual 2020 for incentive compensation.
Speaker Change: As of March 31st we have $637 2 million in principal value of outstanding debt.
Speaker Change: Inclusive of our senior convertible notes and term loan.
Speaker Change: At the end of the first quarter, our gross leverage was three five times and our net leverage was two seven times, our trailing 12 month adjusted non-GAAP EBITDA of 181, 4 million, which is pro forma for the Allam area acquisition.
Speaker Change: Utilizing the midpoint of our revised 2025, adjusted non-GAAP EBITDA guidance, our net leverage is approximately two four times on a forward basis.
Speaker Change: Okay.
Speaker Change: Turning to our updated 2025 financial guidance, we are raising our guidance for total revenue adjusted non-GAAP EBITDA and adjusted non-GAAP EPS.
Speaker Change: Upon higher estimates for our generics business and higher first quarter demand for our brands portfolio.
Speaker Change: Updated guidance is as follows.
Speaker Change: Full year 2025, net revenue of 768 million to $793 million up from our prior guidance of 756 million to 776 million representing year over year growth of approximately 25%.
Speaker Change: 29%.
Speaker Change: Coach Rofin gel net revenue of 265 million to $274 million, representing growth of 34% to 38% and in line with our prior estimate.
Speaker Change: We continue to expect quarterly sequential growth of core trofim revenues throughout the year.
Speaker Change: Combined ILUVIEN in Utica net revenue of 97 million to $103 million in line with our prior estimate and we continue to expect quarterly sequential growth throughout the year.
Speaker Change: Generics revenue growth in the mid double digits, driven by strength in our base business and contributions from new product launches versus our prior assumption of low double digit growth.
Speaker Change: In terms of phasing, we expect the first quarter to be our highest revenue quarter for this year for generics.
Speaker Change: The first half of the year to be higher than the second half of the year due to our December 2024 first to market launch of <unk> and its corresponding six months of exclusivity.
Speaker Change: For brands, we expect to return to more normalized performance during the second quarter as compared to a full quarter's worth of incremental market share achieved in the first quarter.
Speaker Change: Putting all of the revenue elements together, we expect our second quarter revenues to be lower by a modest amount as compared to the first quarter followed by a return to sequential revenue growth in the third and fourth quarters.
Speaker Change: Adjusted non-GAAP EBITDA of 195 million to $205 million up from our prior guidance of 190 million to $200 million representing growth of approximately 25% to 31%.
Speaker Change: From a quarterly perspective, we anticipate second quarter, adjusted EBITDA to be lower as compared to the first quarter.
Speaker Change: Followed by a return to sequential growth in the third and fourth quarters.
Speaker Change: Adjusted non-GAAP earnings per share between $6 in 2007.
Speaker Change: $6.62 up from our prior guidance of $6.12 and $6.49.
Speaker Change: We continue to anticipate a U S GAAP effective tax rate of approximately 25% and.
Speaker Change: And consistent with prior quarters, we will tax effects non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share using our estimated statutory rate of 26%.
Speaker Change: We also can see can we do anticipate between $20 1 million and 24 million shares outstanding for the purpose of calculating diluted EPS.
Speaker Change: Finally, I will highlight that the company continues to prepare for its upcoming trial with CG oncology.
Speaker Change: As a reminder, on March 4th 2024, Eni commenced a civil action against C. G oncology in the superior court of the state of Delaware.
Speaker Change: Ani's complaint alleges that under an assignment and technology transfer agreement dated as of November 15th 2010 D. G. Oncology is liable to pay a DNI a running royalty on 5% of the worldwide net sales of their lead product candidate.
Speaker Change: Pre just imaging.
Speaker Change: And that in February 2024, C. G oncology wrongfully repudiated its royalty obligation to Eni.
Speaker Change: The jury trial is set to commence on July 21, 2025, and the Eni intends to pursue this matter vigorously.
Nico: With that I'll turn the call back to Nico.
Nico: Thank you Steve we're pleased with the strong start to 'twenty five.
Speaker Change: I would like to thank you.
Speaker Change: Our customers suppliers partners investors and the entire Eni team for their collaboration on significant contributions and delivering on our company's purpose of serving patients improving lives.
Speaker Change: Operator, I turn it over to you for questions.
Speaker Change: Yeah.
Speaker Change: At this time, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: You may remove yourself from the queue at any time by pressing star two.
Speaker Change: Once again that is starwood to ask a question.
Speaker Change: We'll take our first question from Gary Nachman with Raymond James. Please go ahead.
Gary Nachman: Thanks, and congrats on the strong quarter.
Speaker Change: So first on court Trofim.
Speaker Change: How much of the pre fill syringe help you do you think it could open up used a lot more because of the convenience.
And what sort of benefit are you seeing from the additional 20 reps across the indications that you're considering adding some more.
Speaker Change: For any indications and Mallinckrodt announced a good quarter for <unk>. So it seems like theres good market growth.
Speaker Change: What else can you do.
Speaker Change: To try and differentiate quite frozen.
Speaker Change: I thought the <unk>.
Speaker Change: <unk> four study for acute gout flares is really interesting. So are there. Other studies that you are considering to potentially do with either the existing indications or may be some others down the road and then I have a follow up.
Speaker Change: Yeah.
Gary Nachman: Good morning, and thank you Gary for your question. So first on the pre filled syringe.
Speaker Change: As Chris mentioned in the prepared remarks.
Speaker Change: The early response from ACP is as positive as the.
Speaker Change: This reduces one step in the <unk> and the administration process for <unk> gel and we look forward to updating you on the progress we.
Speaker Change: Have just launched the product in the market, while we got the approval are announcing approval in March we Johnson launched a product a couple of weeks ago. So look forward to updating you on the progress you're.
Speaker Change: Your next question was on the 20 reps and how that's going.
Speaker Change: We're doing well.
Speaker Change: They have started getting traction with getting both new patient starts and new.
Speaker Change: New prescribers.
Speaker Change: And enrollments and.
Speaker Change: We'll continue to build momentum as the year progresses.
Speaker Change: We keep evaluating.
Speaker Change: Hi, Roy efforts from the commercial side, so with regards to adding more there's no intent to do that.
Speaker Change: This year at this time.
Speaker Change: Again, keep evaluating IR ROI commercial initiatives to keep growing.
Speaker Change: Growing control, which we believe is on a strong multiyear growth franchises you've talked about several times.
Speaker Change: Youre right.
Speaker Change: One point was on the competitor the competitor Danaher ounce.
Alex: And Alex.
Alex: A strong quarter as well as increased their.
Alex: Their guidance to high single digits. Thank you add their guidance in our guidance the combined market is growing.
Alex: Proximately, 16%.
If you take this at high single digits, if you take kind of seven 5% the combined market will grow at about 15% and we think that that's that's that's great for patients and for prescribers because the number of patients on therapy today are.
Alex: No.
Alex: Still half of what it was at its peak and from an epidemiological perspective, the number of patients that can benefit on the addressable market.
Alex: Six to eight times higher than.
Alex: The number of patients somewhere even being treated at its peak.
Alex: No.
Alex: It's good for the category to have two players, bringing options for patients and for prescribers.
Alex: And then asked about you know.
Alex: Differentiation. So we continue to invest to strengthen the franchise you will remember that we launched the one ml vial.
Alex: Now we've launched the Prefilled syringe to increase convenience it has convenience for patients and prescribers and we continue to evaluate.
Alex: Additional.
Alex: Steps, we can take to enhance the convenience for patients and for physicians and will look forward to updating you on that progress.
Alex: And then Chris detail some of the efforts on the evidence generation.
Alex: Alright, and the clinical study that were initiating later this year.
Alex: And that those are as well as the data that we presented at ARVO on uveitis I think those are indications of multiple different steps across commercial evidence generation.
Alex:
Alex: Bringing your presentation as to the market.
We're investing in to continue strengthening and growing the core profit gel franchise that we believe is on a strong multiyear growth trajectory.
Alex: Okay great.
Alex: And then just regarding ILUVIEN and you'd see just given some of the challenges in the first quarter.
Alex: Just what gives you confidence you can accelerate the sales to get up into the guidance range for the full year, that's a pretty big step up.
Alex: And I appreciate the steps that you're taking but how long do you think for those to really take hold over the course of the year and then just talk about the turnover in the opto sales team.
Alex: It actually didn't seem to quite Trofim in that segment, which you said was really strong in axa and I'm curious why that wasn't the case and just going forward your outlook for up though thanks.
Alex: Alright.
Gary Nachman: Thank you again for your question Gary.
Alex: No.
Alex: First you know ILUVIEN in your <unk> guidance for this year is 97% to $103 million of which 30% is outside the U S for ILUVIEN in Utica in the U S accounts for.
Alex: No.
Alex:
Alex: Under 10% of total company 2025 revenue guidance, so just to dimensionalize that and Thats, what the different topics and the factors we spoke about.
Alex: But when it comes to the guidance our confidence in reiterating the guidance for ILUVIEN in Utica at $97 million to $103 million is based on five factors.
Alex: Yes.
Alex: Performance outside the U S, which is roughly 30% is largely on track across the markets with the four markets for direct commercial operation and the 17 markets, where we work with partners.
Alex: The factors driving our confidence in Atlanta to U S performance for rest of the year.
Alex: So first quarter results were lower due to seasonality seen for most of that drops the remaining three quarters will not have this in fact will reverse in the fourth quarter.
Alex: So that's one second we made significant strides in walking through the turnover on strengthening our sales force and a best in class talent as of today only four vacancies remain and we'll be back to full strength during the second quarter, which will create additional momentum.
Alex: Third we're already seeing positive impact in April results from the small commercial approach by region that we deployed given the Medicare dynamics and then last we expect to see positive impact from a combination of our expert firstly off our efforts.
Alex: Exploring alternatives for Medicaid Medicare patients to the part D pathway and restart in the back half of the year of some level of foundation support for Medicare patients.
Alex: Oh.
Alex: So.
Alex: I think that.
Alex: I think you also asked about more about turnover.
Alex: Well look we believe.
Alex: We have a high performance culture and in the initial integration timeframe. It is typical to have a cross calibration leading to organizational changes.
Alex: We're adding best in class talent for.
Alex: From top ophthalmology and rest of the organization as we approach we followed in <unk> and we expect our sales team to be back to full strength during the second quarter.
Alex: So that's the salesforce turnover dynamics that would be yes.
Alex: In our combined Ophthalmology sales force and then you asked about.
Alex: Impact on TCG in ophthalmology.
Alex: No.
Alex: While on a smaller base Q1 volume for BCG folk retrofitting.
Alex: In ophthalmology.
Alex: <unk>.
Alex: 50% higher than in Q4.
Alex: And we believe that the momentum will continue right.
Alex: As he can.
Alex: Our full.
Alex: Full strength combined ophthalmology rare disease, ophthalmology sales force and action so.
Alex: And we feel confident about the continued growth and the outlook for.
Alex: Pork profit in ophthalmology.
Alex: Alright, great. Thanks for all that color I appreciate it.
Gary Nachman: Thank you Gary.
Speaker Change: We'll go next to fossil crusher with Leerink partners.
Speaker Change: Hey, Nicole. Thank you so much taking the question just wanted to ask can you kind of drill in a little bit more to kind of the details on the commercial and access challenges that impacted ILUVIEN in the first quarter and can you just explain a little bit help us understand what your are.
Speaker Change: Kind of how youre thinking about like working around that.
Speaker Change: The pharmacy and like part D. Over part B can you just help us understand that a little bit. Thank you.
Alright. Thank you for your question and good morning Faisel.
Speaker Change: So the challenge is that.
Speaker Change: There's a subset of patients are on Medicare.
Speaker Change: Macquarie co pay support to get.
Speaker Change: To get therapy under part B as in boy.
Speaker Change: And due to lack of funding and they get the support from foundations and due to lack of funding.
Speaker Change: The foundations have not been able to provide co pay support right and this is a dynamic that emerged in Q1.
Speaker Change: So.
Speaker Change: ACP physicians took some time and retina practices took some time to understand the change and then it will persist and how they would need to modify the approach.
Speaker Change: In practice, while keeping patients first always.
Speaker Change: And so the response is varied across regions and we've spent the time to understand how they're responding one other thing to clarify is that this this dynamic impacts.
Speaker Change: ILUVIEN and the Dnb market more in therapeutics, and the <unk> market more and as that has been laid out by other.
Speaker Change: A few days in the <unk> market.
Speaker Change: And much much much lesser degree Niu PFS for non infectious uveitis in the posterior segment of the eye.
Speaker Change: So our team has spent the time understanding the C P responses and granular impact to their workflows and what's that understanding you know we're exploring alternative paths to improve the access for the <unk> population. So for example, you know.
Speaker Change: The.
Speaker Change: Medicare patients with pharmacy benefit.
Speaker Change: At the end of the affordability options, where there is a cap on the copay and smoothing offer at the part D offers.
Speaker Change: Does that approach for exploring how to retina physicians I can accessing ILUVIEN through a specialty pharmacy.
Speaker Change: Does that give you sufficient color.
Speaker Change: Yeah. That's helpful. And then I had wanted to retrofit Joe So you've done well in this acute gouty arthritis nation clauses here kind of exploring some additional I guess from the generation there.
Speaker Change: There are other opportunities for you to kind of like recreate the sort of like carve out success.
Speaker Change: Other indications or disease segments.
Speaker Change: Yes, absolutely I think across it goes back to the epidemiology across disease across.
Speaker Change: Across indications.
Speaker Change: Number of patients that can benefit from the therapy are significantly higher than.
Speaker Change: And then what are the handling of this auction are being treated today.
Speaker Change: And.
Speaker Change: As we've shared 40% of our prescribers on <unk>.
Speaker Change: We're not used to ACTH and had never prescribed ACTH before.
Speaker Change: No.
Speaker Change: We have confidence in our ability to.
Speaker Change: To get this treatment and this treatment option to more patients and prescribers.
Speaker Change: So going back to your question, yes, there is an opportunity to.
Speaker Change: To bring more focused commercial efforts in other therapeutic areas as we have done in ophthalmology.
Speaker Change: Got it thanks for taking the questions.
Speaker Change: Thank you.
Speaker Change: We'll go next to <unk> <unk> with Guggenheim Securities.
Speaker Change: Great. Thanks for taking my questions.
Speaker Change: And congrats on the quarter. So maybe one question was kicking in the ophthalmology side and then.
Speaker Change: One on the generic ophthalmology.
Speaker Change: Ophthalmology.
Speaker Change: We say it all the color you provided you did mentioned the new date.
Speaker Change: Completed now in Synchronicity, Anthony just as you finished six months, maybe can you just share your perspective on sort of what you're hoping to see from those trials.
Speaker Change: As it relates to the results here and then what.
Speaker Change: What's the impact that those have commercially on both on that on that business.
Speaker Change: And then on generic side, you mentioned the account right.
Speaker Change: So again I'm just wondering if you can.
Speaker Change: And how much of a contribution that was to the generics.
Speaker Change: Performance in the first quarter. So we have a sense for the second quarter as well.
Speaker Change: Yeah.
Speaker Change: Got it.
Speaker Change: Hi, Thank you for your question good morning, and thank you for your question <unk>, So a new day.
Speaker Change: We are in the process of analyzing the data from the completed New day study and if.
Speaker Change: Successful it will.
Speaker Change: Allow physicians to consider ILUVIEN earlier in the treatment of DMD.
Speaker Change: As we've described before epidemiological we today, we have less than 5000 patients annually on ILUVIEN, whereas the addressable market is even before new day is at a 53000, which is patients.
Speaker Change: Home multiple rounds of anti Veg S. R.
Speaker Change: Im not showing optimal response and then they show a positive response to steroid trial and can be considered for it.
Speaker Change: They are then being considered for ILUVIEN. So that's the addressable market of 53000 versus.
Speaker Change: The 5000 patients that are currently annually being treated on ILUVIEN.
Speaker Change: The opportunity as it currently stands even before new day is pretty substantial what new they will do is that.
Speaker Change: Much earlier in the treatment.
Speaker Change: Paradigm restaurants, and a 53000 there are 400000 additional patients that are being treated with multiple rounds of anti VEGF and so if new data successful.
Speaker Change: <unk>.
Speaker Change: It could.
Speaker Change: Hep's could consider using ILUVIEN earlier in the treatment paradigm. So it would open up a broader patient population for 40, and I am sorry for ILUVIEN.
Speaker Change: Next to your question on <unk>.
Speaker Change: We don't comment on product level net revenues for the generics business, but what we can say is that our estimates show generalization level significantly higher than the two <unk> recorded <unk> share of <unk>, 62% to 63% and we're pleased with the execution of the Eni team on this product from R&D and regulatory.
Speaker Change: To win the CGT approval against numerous competitors to the sales and marketing teams ability to launch this product and maximize the opportunity.
Speaker Change: We anticipate that Q2, <unk> revenues will be down as compared to the first quarter as the team will need to manage trade inventory levels down in advance of the end of 180 days of exclusivity on June 26th.
Speaker Change: So generics will be in Q2.
Speaker Change: The slightly lower as Steve pointed out on the phasing perspective will be lower than the first quarter and then return to.
Speaker Change: The growth in the subsequent quarters.
Speaker Change: From a.
Speaker Change: Total company perspective.
Speaker Change: Okay alright, thank you.
Speaker Change: Thank you Rommel.
Speaker Change: We'll go next to David <unk> with Piper Sandler.
David: Thanks, So just a couple from me first.
Speaker Change: Encore Triffin gel.
David: As the category.
Speaker Change: Returns to growth do you anticipate.
Speaker Change: Payer landscape, becoming more challenging.
Speaker Change: Over time to compare it to where it is now just talk about payer dynamics and what you are anticipating.
Speaker Change: With the category returning to growth. So that's number one and then number two is regarding ILUVIEN.
Speaker Change: I appreciate all the color on.
Speaker Change: The headwinds, but I'm just wondering out loud how are you feeling about the underlying acquisition of Ala Meera and what has.
Speaker Change: Has surprised you most in terms of the challenges that you faced.
Speaker Change: With the asset thank you.
Speaker Change: Okay.
Speaker Change: Thank you for your questions and good morning, David.
Speaker Change: So on <unk> PL landscape.
Speaker Change: Remember this category had not.
Speaker Change: Seeing competition for you know for many many decades.
Speaker Change: And the payers and Pbms, they definitely see us as the.
Speaker Change: They appreciate the fact that we bought competition to this category and.
Speaker Change: We want to go on to collaborate and partner with them from day one.
Speaker Change: So Andy I appreciate that and you know as as the category is evolving as we've grown we've continued to.
Speaker Change: To collaborate with them and see see that continuing I mean at the end of the day, we all put patients first.
Speaker Change: And ensure that we're bringing this therapeutic.
Speaker Change: This much needed therapeutic to patients in need so that's on the payer landscape dynamics and then on <unk>.
Speaker Change: Where do we where does our head on the overall acquisition of ILUVIEN I think that's the simplest answer to that is.
Speaker Change: We just bought out a royalty obligation from S. W. K on ILUVIEN.
Speaker Change: And so we believe in the continued long term.
Speaker Change: Opportunity for ILUVIEN and Utica, so actually both in <unk> as well as in Niu PFS for the addressable markets are.
Speaker Change: Substantially are.
Speaker Change: <unk> 5000 out of 53000 in Niu PFS by less than 5000 out of 78 to 112000, so large addressable markets more fully confident of our ability to solve problems. Even when we acquired <unk>, we have to work through certain challenges and.
Speaker Change: And so you can see the the the value that the new video acquisition has brought to US. So this is a team that that's.
Speaker Change: And so on.
Speaker Change: Capturing opportunities and addressing challenges and has a very strong orientation towards problem solving last quarter. When we were speaking we were talking about the.
Speaker Change: Supply challenges related to.
Speaker Change: To the CMO for Utica, and we've walked through that challenge.
Speaker Change: Later this quarter, we're going to start.
Speaker Change: Selling the combined level so.
Speaker Change: As a as an operating team we have a strong orientation towards problem solving.
Speaker Change: And as I said at the beginning our beliefs in ILUVIEN is best highlighted by our recent weeks ago buyout also royalty obligation from <unk>.
No.
Speaker Change: Thanks.
Speaker Change: Thank you for that question.
Speaker Change: We'll go next to E Caterina <unk> with J P. Morgan.
Speaker Change: Yeah.
E Caterina: Oh, Thank you so much and congrats again on the quarter. So first question is just on <unk> can you elaborate a bit about which indications are driving most of the growth at this point how much of the growth is coming from neuro versus rheumatology versus nephrology versus some of the new areas like ophthalmology and just any changes youre seeing from a competitive standpoint on an indication by indication basis.
E Caterina: And then some of this is just around tariffs do you think theres an opportunity for you to leverage your U S manufacturing footprint. If we do see these farm of tariffs enacted in just how much spare capacity do you have that you could potentially leverage to capture additional market share.
E Caterina: Thanks.
E Caterina: Yeah.
Speaker Change: Thank you for your questions and good morning, So on the first question on the indications.
Speaker Change: We're fortunate we see growth across all specialties.
Speaker Change: Our core specialties, the once that we launched with nephrology rheumatology and neurology, we see strong growth across those those.
Speaker Change: Those indications we talked about the.
Speaker Change: More than 15% of our.
Speaker Change: All of our usage.
Speaker Change: A quick question usage is coming from Gal can we see.
Speaker Change: Significant growth there too.
Speaker Change: Obviously, we invested in the expansion of our field force that focuses on nephrology and rheumatology and neurology and they do that.
Speaker Change: That together as a portfolio sales team so that team that expansion is yielding results and.
Speaker Change: And then ophthalmology.
Speaker Change: While on a smaller base showed the highest growth with almost 50 55 zero percent.
Speaker Change: Increase in volumes versus the.
Speaker Change: Fourth quarter.
Speaker Change: And Pulmonology can also continues to show growth so really we have opportunities.
Speaker Change: Growth across our across indications and in terms of competitive dynamics.
Speaker Change: Dynamics.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: They've raised their guidance to mid to high single digits and they spoke about four therapeutic areas that they're focusing their efforts on.
Speaker Change: And.
Speaker Change: The category the number of patients that can benefit is just much much larger than what either either either competitors is treating at this time so.
Speaker Change: Yes, I think both bulk competitors can continue.
Speaker Change: Getting the D. C can you just talk to you next to the.
Speaker Change: For more patients and continue to grow with the market.
Speaker Change: And then your second question on.
Speaker Change: Tariffs and do we have spare capacity absolutely.
Speaker Change: We do have spare capacity across our plants in east Windsor, New Jersey, as well as in bought at Minnesota.
Speaker Change: We are also live Lee and.
Speaker Change: And relative to our peers small position with over 90% of our revenues coming from finished goods manufactured in the U S and less than 5% direct and reliance on China.
Speaker Change: And we will play a role in.
Speaker Change: As we have done in the past off.
Speaker Change: If there is a supply challenges that arise outside of the tariff situation too.
Speaker Change: To provide turnkey attached to patients in need.
Speaker Change: Thank you for your questions.
Speaker Change: Thank you.
Speaker Change: As a reminder, ladies and gentlemen, if you'd like to ask a question you may do so by pressing star one.
Les Filipski: We'll go next to less Filipski with <unk> Securities. Please go ahead.
Speaker Change: Hi, Good morning, Thank you for taking my questions. So Niko, perhaps I'll start on the <unk> you mentioned, the 40% naive patient adoption do you have a sense how those scripts for naive patient pool have been trending over time and I guess, what point do you expect that figure to turn and.
Speaker Change: And then that's for the pre filled syringe is this driven by switches or naive patients and what's the impact to margin profile from that product.
Speaker Change: I guess more broadly.
Speaker Change: Gross margin look favorable in <unk>, how do you expect that to trend throughout 2025, and I have a follow up.
Les Filipski: Yes, good morning, and thank you for your questions less.
Speaker Change: Controlscan, having 40%.
Speaker Change: Of prescribers that are that were naive to the category.
Speaker Change: That number keeps growing as well.
Speaker Change: We.
Speaker Change: Reach with a larger addressable market.
Speaker Change: <unk>, reaching more hcp's.
Speaker Change: So we'll keep you updated on the progress on that on the pre filled syringe.
Speaker Change: We see the Prefilled syringe is a.
Speaker Change: As another alternative right because we had the five ml vial in the one ml vial.
Speaker Change: So we're introducing the prefilled syringe, which comes in two presentations, one ml and the five ml.
And this is really for patients that have.
Speaker Change: A.
Speaker Change: The reduction in the number of steps of administration will be helpful to them. So.
Speaker Change: It's for a subset of patients. It's early days in the launch of the pre filled syringe will.
Speaker Change: To update you regarding your question on switches and a new patients or switches.
Speaker Change: This is another option for patients by reducing one step and four enhancing patient convenience.
Speaker Change: You're seeing one step in the administration.
This type of.
Speaker Change: The steps for administration.
Speaker Change: And then.
Speaker Change: In the near term, we see limited impact on the margin profile.
Speaker Change: It's priced at a slight premium.
Speaker Change: The one ml on a per ml basis, so but.
Speaker Change: Limited impact and then on gross margin evolution for the Euro I'll.
Steve: Turn it over to Steve to take that question.
Steve: Yeah, good morning Les.
Nicole: Nicole Yes, as we as we stated on the call today less.
Nicole: Continue to anchor in overall company gross margin between 63 and 64.
Nicole: Percent throughout the course of the year.
Nicole: And obviously there is.
Nicole: Numerous mixed elements.
Nicole: As the year progresses.
Nicole: And we expect rate as rare disease becomes a bigger portion of the overall part.
Nicole: Of the total company revenues in the second half of the year and Thats the quarter's progress that'll be a favorable margin input.
Nicole: As compared to the first quarter.
Nicole: Strong margins in generics driven by <unk>.
Nicole: As well as the persistent of market persistence of market share.
Nicole: Gains in the in the brand business, which helped margins in the first quarter.
Nicole: Yeah.
Nicole: Great that's helpful.
Nicole: A follow up on the ILUVIEN boutique.
Speaker Change: Neil do you have a sense of what portion of that subset as Medicare part B.
Speaker Change: And is there a potential that cohort cohort I guess the patient does not come back given that appears unlikely to third party will come back with funding.
Speaker Change: The assistance and co pays and then I guess.
Speaker Change: Second portion of that.
<unk> force turnover within ophthalmology does that have any impact or quick shopping.
Speaker Change: Or perhaps asked in another way is that a potential for an increased opportunity for shopping given the new team. That's in place now thank you.
Speaker Change: Yeah.
Speaker Change: Thank you for your questions. So I'll take your second question first which is on the turnover.
Speaker Change: Yes.
Speaker Change: I think you framed it correctly.
Speaker Change: Appropriately if.
If we had.
Speaker Change: The full team staffed well you would've seen more growth in <unk>. So yes it will.
Speaker Change: We will see the impact of the top down until we bring in on on both the ILUVIEN and cultural fit I'm going for.
Speaker Change: So that's the answer on the turnover and the positive impact on <unk> and then your question on Medicare and so Theres a subset of Medicare patients right.
Speaker Change: That don't have a co pay support to various mechanisms that are available and that's the.
Speaker Change: The population that's that's impacted.
Speaker Change: By the funding.
Speaker Change: Not being available and look from our from our perspective from everything that we've heard from major contributors to the Roman Foundation say in the public domain and the discussions are.
Speaker Change: With several stakeholders in retina.
Speaker Change: We believe that.
Speaker Change: Some level of foundation support will return in the second half of the year.
Speaker Change: The foundation support does not come back.
Speaker Change: We are likely to trend towards the lower end of our guidance range as far as the ILUVIEN in Utica is concerned remember ILUVIEN in Utica in the U S is about 70% of our total ILUVIEN and Ut guidance right. So from a total company basis again, just a reminder, it's less than 10%.
Speaker Change: Of total company 2025 revenues.
Speaker Change: Our guidance for total company in the raised guidance factors in the puts and takes across.
Speaker Change: Different business lines.
Speaker Change: And we have high confidence in the overall total company revenues and total company adjusted non-GAAP EBITDA and adjusted non-GAAP EPS guidance that you've given.
Speaker Change: And we continue to retain that confidence.
Speaker Change: Thank you.
Speaker Change: Thanks Les.
Speaker Change: Thank you. This does conclude today's question and answer session.
Nick Hill: I'll now turn the program back over to Nick <unk> for any additional or closing remarks.
Speaker Change: Thank you everybody for joining our call. This morning, we look forward to updating you on further progress as.
Nick Hill: As the year unfolds, and we look forward to seeing many of you at the Jefferies Conference in New York in June. Thank you.
Nick Hill: This does conclude today's program.
Nick Hill: Thank you for your participation you may disconnect at any time.
Nick Hill: Hum.
Nick Hill: [music].