ANIP - Earnings call transcript Q3 2017 | ANI Pharmaceuticals, Inc.

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Operator

Good morning, and welcome to ANI's Third Quarter 2017 Earnings Call. [Operator Instructions]. Please note, this call may be recorded. It is now my pleasure to turn today's program over to ANI Pharmaceuticals. Please go ahead.

Arthur Przybyl

welcome XXXX. Earnings and the Call everyone, Quarter Third morning, to Conference ANI's for Good is Przybyl. name My Art I am the Stephen Carey, CEO, and with Chief Officer. me Financial our today is

forward-looking record increases net XL product compared results continued $X.XX, of our result diluted of respectively, and to Before impact share the of non-GAAP also I XX%, each are our those include prior Discussions that adjusted context of it measures press of measures as refer income accepted and Inderal XX%, for These of statements InnoPran dated revenues accounting year. results, direct adjusted principles. found review to and non-GAAP the per million the of launches XX% brand and ask language $X.XX, in XX% XX%, record net prepared adjusted products year. prior our were to can certain $XX.X record non-GAAP million, as respectively, diluted everyone in accordance release in $XX.X of compared we financial and revenues be share and non-GAAP EBITDA XXXX. million, with and XX%, in XXXX Year-to-date of million results launched generally non-GAAP want not per today. Reconciliation to Today, third will the net to financial earnings carefully earnings begin, release EBITDA you this of morning's $XX.X this call. increases the generic of we $XXX.X of of include adjusted reported important as quarter conference and

changes to non-GAAP per $XX.X net guidance product net $XX revenues. our reflect gross than financial revenues mix forecast are million non-GAAP EBITDA to and The annual of annual better to pull-through share to to of and $XXX result As adjusted profit these narrowing reported we $X. $X.XX on earnings adjusted million, a of previously of diluted $XXX million million guidance metrics,

from as million $XX.X products, X% third compared the in pharmaceutical quarter. and business increases to the and platforms, respectively, at generated and at calculated of Our branded quarter are and basis generic two net of an brand $XX.X annualized year revenues net rate rate our XXX%, $XX.X our prior run annualized primary of $XXX generic an revenues an pharmaceutical revenues, quarter million million third and On annualized are million. net run revenues,

third a of our as the ANI compared generic gross oxycodone with drug products, As of XXXX. hydrochloride product non-GAAP products to products XX% X in revenues of launched increase costs. brand net generic indicative Combined the we These products, product quarter product XX% is increased line cost representing points step-up generic a sales our an increased portfolio. result of of total as now second percentage XX and X our tablets excluding sales, a SKUs. In net quarter, brand of Indapamide inventory has as launches additional compared our was XX solution. oral third This for margin to products, to of total quarter, X XX the

in our products the XXXX, portfolio. drug ANI at had perspective, For of XX end

scale to both existing continue value add in portfolio. We product and transactions and to pursue to brands generics our

of long-term specializing We in recommercialization a its pharmaceutical with progress. quarter, and have active to gel finalized glands Combined current our opportunities. porcine material and In ingredient for have powder, using for chain. manufacturing sufficient parenteral with mobile procurement continues executed we our supply of contract we manufacturer the Cortrophin purified corticotropin pituitary capital relationships Cortrophin fill/finish available effort these a third raw isolator supply gel technology. aseptic commercial agreement

and technologies part manufacturing API API. of and current by both lot-to-lot gel commercial lots process lot-to-lot the the of a historically developing as to determine Cortrophin -- we characterization of and scale and consistency comparability manufactured that corticotropin These intermediate continue means analytical used control not to process are modernize establishing continue consistency in utilized advance to methods were new Analytically, the throughout batches process We NDA. characterization yield original package demonstrating to being demonstrate manufacturing potency. to and by implementing used

Our plan In supplemental regulatory early X have milestone we to commercial we scale provide is included press this is release, initiate in updates Table as to filing. advance manufacturing NDA to recommercialization that intended XXXX. our Cortrophin

approval We supplement Vancocin will of that Stephen unmet need We launch oral annually. advancing this million FDA-approved oral of CFO, Carey, over second intend half for dosage vancomycin file a are product, you for another solution. provide and molecule form branded more of will XXXX. the market $XXX turn believe in will our a call results. will commercialization an also the We to now currently the the product fulfill our who to I with compete in on financial details the prior currently exceeds conference

Stephen Carey

for you discuss Thank call Financial morning Art. to everyone you, XXXX the Quarter Third joining line, on Good ANI's and Results. the thank to

from executing and X ended these the months the quarter by X the represent quarter quarterly for launches records basis, new the coming nearly Net in of or of commercial product number in product second results portfolio. of net across million, metrics revenues quarter broaden of posted our XXXX, key second Consistent year. XXXX. in adjusted product off achieve million increase of increased net sequential of posted previous For our a portfolio. to $X multiple accelerating $XX.X ANI third driven to of in records third our this year, $XX.X September portfolio from these by product of lines. quarterly and $XX.X XXXX, of continued our quarter portfolio in reached X% ANI EPS in to quarter growth of prior revenues EBITDA quarter previous XXXX $X.XX a $X.X order XXXX the branded XX, representing XX XX% non-GAAP product record company excess that strategy in with million its driven third the second and execution quarterly On non-GAAP to reported branded revenues diluted million per posted million, families revenues and were X of from These of its for XXXX continue posted net in this the contribution year strong the share. in the reflect All gains doubled the the

increasing of Third posted research $X.X oral solution quarter have and program recommercialization adjusted EBITDA opportunity. increase advance non-GAAP in was result our in This quarter. was as our million, continue than million invest period behind achieved pipeline the XX% Vancocin we representing that Cortrophin year-over-year given to $XX first ago our or time representing while $XX.X million a by $X.X year a investment the we development from million EBITDA and greater and

second basis, increased to diluted sequential from in quarter million $X.XX prior XXXX. the per share. of the $X.XX grew our share share increased diluted share $X.XX current to from earnings diluted of the X% or adjusted $XX.X year of per On XX% the GAAP from per period non-GAAP $X.XX per quarter diluted while XXXX share earnings adjusted EBITDA metric third in per

of XL Inderal increasing second year products addition franchise increased our million to third of by this which EEMT third were products from revenues more or Turning our XXXX that to quarter franchise higher Net of the certain gains of than $XX.X XXXX. X% modest certain our InnoPran our by as doubled, launches revenues the products tempered third of were period, $X.X quarter of up $XXX,XXX by the were key gains sales gain XL, launched branded our generic from million volume. of launch our the of in of I'm with the and XXXX XXXX, quarter and nonrecurrence driven year. -- highlights consecutive from in the of current and to performance. Inderal in XX% Revenues in increased the in into Net a quarter products posted product second revenues introduced from driven quarter sorry. $X LA of second revenues sequential sales February from portfolio quarter the quarter up XX% Yes, million,

inventory services with previous with million the $X.X acquisitions. of the Inderal for sales such GAAP quarter on costs In due of XXXX phases step-up or of InnoPran as purchased $XXX,XXX Comparatively, million cost the includes XL Cost product third recorded to the were XX%. goods contract manufacturing inventory revenues finished step-up addition, of of and associated $X.X recorded acquisitions. in conjunction up of XL a basis included from

related products, X.X costs prior revenues current our percentage branded of greater base as points in in expenses $X.X and generally from year, aggregate by to as employment our the for as year our leverage generic the of which the margins XX% $X in a towards SG&A of and Excluding a approximately employee in the improvement these support of to platform. net third quarter amounts, reflecting the revenues conjunction XXXX growth Research development Cortrophin business cost in business. the development mix XX.X% of X-point by and of year versus product our administrative current recommercialization lines. momentum incurred XX% Selling, million program by net the compared costs in Vancocin of $X.X and our approaching is X% million solution driven goods compared represented to and continued in sold general quarter, driven million in significant higher oral change The with totaled XX% revenues, period. product this carry ago year, were driven costs program. metric prior of sales to in decreased

quarter. included the for that pretax discrete effective and recognized quarter were the tax rate of overall Our XX% was in benefits income

our balance gains an growth adjusted balance we revenues this growth These XXXX. first of Excluding to would've facility first against respectively. representing additional revolving in product of million fund of sheet XL the these the EBITDA, $XX to nearly of in $XX.X the generated XX% revenues line tax XXXX, XL amount, approximately our equivalents million of million $X from InnoPran million XX, From was expenditures. and $XX transactions of XX% against and of net $X.X half $X.X million in quarter an and on year-over-year year-to-date September brands. non-GAAP of of were revenues cash XXth perspective, sheet. operations a from quarter. increase that June the effective rate flow year-to-date cash of $XX.X and for have the of of On principal we of balance representing This posted by generic amounts, we in fueled third quarter portfolio reflective XX% the and utilized XX%, the approximately XX% cash million unrestricted $XXX capital million been gains credit our $XX.X million million, with had which is in the pay and we relatively as basis, Of drew down and Inderal

September $XXX EBITDA. adjusted Xx had net approximately utilizing the of XXth balance million, leverage year date, debt of net representing XXXX full just estimated As sheet we forward-looking

sales leveraging by strong anticipate diluted full revenues our activities in future our fourth million, generation modest in of our representing and off in share to growth ability and EBITDA guidance, To as strength upward confident comments year and between and increase are $XXX to the are our of net continue of XXXX the EBITDA. between non-GAAP XX% to sheet we of earnings we XX% $XXX reach potential. full are forward-looking revenues. XX% our corresponding net We $X.XX this XX% morning, and year to favorable be revision over earnings cash to reiterate in XX% change, million non-GAAP full with business as making of fund robust balance a per and Art's published million. diluted this to and revenues between million on quarter stated previously percentage adjusted currently and a in year a In per our we updating to between adjusted press range narrow guidance XXXX guidance and non-GAAP for a $X cost release a share conjunction $XX.X development be non-GAAP net revision projected revenues project of $XX XX% our to We

business revisions to with fourth operations the revenues. X focused product to to and plan and quarter. pleased than guidance achieved product continued previously of months forecast the daily execution remain pull-through of As better summary, morning's corresponding look behind on us, and we In net remain Art on our we date reflects as results stated, with this mix XXXX

We our deliver exciting X brand solution. are to focused oral investing on near-term results pipeline continuing opportunities while Cortrophin behind Vancocin and

in stakeholders. back this, call to diligent long-term business and opportunities the product our turn order our CEO, to will continue remain to President and in Art our we drive addition, portfolio In development Przybyl. With to value pursuing I expand

Arthur Przybyl

the open conference Steve. you, will now Thank Nicole, questions. we to call

Operator

And the our question of Instructions]. line first from Elliot Wilbur [Operator James. comes Raymond from

Elliot Wilbur

Art, numbers. you're cop, stop going good Teva to terms with bad have guys playing cop of in releasing

saw evolving relatively mixed just some quarter. communicated about Then maybe continue from in your could seen signals unique last real to the of maybe in couple or business nature deterioration and talk Obviously, communicating any that and insulated, the what consortium, XQ. of So terms Seems of given in specifically have with least, like seeing morning or, overall get companies purchasing of pricing XQ and of just in pushes and not is seems of macro or you dynamics. worse-than-expected the to little ongoing whether most your products. substantial business the environment you've to But stabilization degree at in were to of bit they of here, Teva terms U.S. respect the generic companies change pulls you're a quarters terms pricing dynamics this performance some third a dynamics. kind

Arthur Przybyl

thank Elliot, Yes. you.

product, It obviously, of is pricing specifically, anticipated the the forecasted us for our number market or on is share. specific and, based competitors So product-dependent.

remain a know to not order to system. to your generic with existing that scale right They do price if have and reduce revenue seen offset their you is we And typically, The market that grab reduction. base. what in take -- to you consistent have you its that. cash for advent particular out capture me think to have of tend of If the companies The to terms associated larger a utilizing of that in that money I perhaps the products product. competitors we the opportunity order that of to we price that, from pains consortium for share. have margin. brand-new products we and choose independent that -- levels shock greater somewhat from as your introduce, more with to great attempt in in us identify view potentially, product, take And gross the initial the ClarusONE, competitors, we We again, to more the generics the a number launch

more high, our remains, on of I from margin gross think, generics commoditized we away our some try So those stay fairly obviously and to products.

of in is stability product-by-product terms think basis. I marketplace, it the upon and dependent company-by-company in price all specific

very and for a nature new the growth is dependent environment -- just a report because placeholder, product future we Elliot, in out as good But more always a time-to-time, the year-over-year put product existing products X% business for generic pharmaceuticals is based to macro new on competitive company environment. You a always generics our on from that just upon macro introductions, the model talks downward reduction year-to-year, the generic for of that represent. based

potentially products of term. X have and built important that company to We the the But intend that We've and to obviously, moving can have flow that near Vancocin pipeline tried do growth X associated of, represent significant and franchise we representative continue the branded also, in by also we as see acquisition, to you you the to so. branded substantial in our very, through higher-margin volatility very to Cortrophin branded tell, and is products, in generics into continues cash brands, mitigate or franchise grow. offset now company some with products, our

that's how at moment view associated has our with and we time landscape this have how of also essentially affected it so we focused portfolio ANI products well. how branded efforts the pricing towards as in generic and much And

Elliot Wilbur

couple Okay. questioning. And has the BD I in of onboarding in line growth form nice success mean, you've had the very your last of company of and been of the front to obviously, lot comments my assets. segue a on active a terms next years,

companies this to wave niche-branded space, about stability if had to what's be as success beginning opportunistically, you We're assets, these in and of couple a kind start the tapped at point you're past activity. company's what of degree at evolution, to have from about be into, divestiture If of of terms rationalization, -- nice the looking think the such did kind provided that area you as in on time other quarters historically, starting in finding we think But considering still you now. been wondering, you've early And the seem corticotropin. tremendous of of have at kind that's which at to in assets, earlier that the here the I'm space that of least product as generic company's especially in guys likely an larger evolution. you the see of

likely of to that capital in of -- capitalize lot not of wondering whether still environment you're to a companies is the going think sort you're garage on look appearing Just months assets. how something versus acquisition XX be signs viewing that branded to deploying and in to in next or some going what's the generic be to larger sale these XX you

Arthur Przybyl

right. modeling It's he our and I assets one. see. out segments. transaction, and and beyond continues into have not answer in above question, VP some model led for Elliot. us morphing shout give And good of out hybrid primarily growth what sort a here, initially He more name Rob opportunities Thanks generic of might company significant of they All a look between to before many we strategic is it, pharmaceutical assets both and a Schrepfer. I for are these where We we of just in found obviously in anymore. Development, Business And us, amount has let his brand. of of these acquired. anticipated the me model that hybrid a But for have we to a for generics two we're unsolicited see those a to blended

smaller capacity lucrative higher manufacturing opportunities for that Generic competitive is he's product larger of gross the demand. eat The that It's maintain make out landscape for newer, its for lot in the just to and to active the the frankly spaces. represent they shrinks. with both product. And products It's them, supply in competitors, as introductions, dynamics less margin. as companies you if The maybe us, of more way a rationalize for chain, finest simple. more supply the function those products less smaller small especially those each the terms pharmaceuticals up margin. tell competitive us, of associated the environment for competitors, work at contributors, like can products capitalism profit I the So smaller companies

be for to branded tell these look would of some if for opportunistic front time. is are to we from generics can the good sense of coming same and that multiples, at that center products our make I that that I you So And we see we'll time that market true company those for opportunities. say obviously

So to of answer potential out generic like larger pharmaceutical opportunity ANI. lines as your question, generics rationalization company see for we a a companies' of product

Elliot Wilbur

just Okay. I'll real talked into the used Vancocin, specifically being $XXX you that not Could time a there million. a opportunity market One I'm competitive-approved and sort million number compounded jump market vancomycin of that's NDA if But in of from? or where lot through out walk products quantity. terms allotted there's last if you that -- about roughly and $XXX back a my come generating revenue? in or the sure being that already one then just queue, up on of or potential that's

Arthur Przybyl

prior we I are a We that's in the oral for to unmet million but product. meets specific this the can myself, molecule. is acquired I vancomycin we $XXX capsules. the this to includes There file So form was That solution, Again, XXXX. approval is Vancocin not don't again, oral this we compounded market product a for it dosage an -- solution, that misquote that from That Vancocin need. oral market a Shire is believe injections, not supplement. and want entire -- RLD patient is opportunity for why feel

sales to the essentially we it peak We we've us on the feel can and we modernized $XX believe basis. market. can that product bring million And annualized formulation, about for so of reach an

million entire annualized we size an excellent us. is today's what the for but -- for opportunity So we think market it's to the market that $XXX relates And vancomycin -- -- feel the molecule. number

Operator

from line comes next Canaccord. from question the our Dewey of And Steadman

Dewey Steadman

one's confident very I guys smart, business on line other right that questioning. now you How with there are oral come follow an no up solution? guys but guess in smart I'm to generic vancomycin of the the as there's well.

Arthur Przybyl

Dewey, that. an to easy answer there's

the no is We RLD. are the on RLD market. There

Dewey Steadman

month lot PAS 'XX? oral Okay. a a like That review that be what of something makes Vanco would PAS? solution or late time line And if for for Is the in filed sense. that X

Arthur Przybyl

From believe X-month I a I -- a the GDUFA it's time perspective, believe line.

Dewey Steadman

been do inbounds perfect. asking Okay, meeting? And you completion one. how What Cortrophin Obviously, FDA a communicate of opportunity. would be I'm the And me discussed in a of scheduling a the lot that thinking the about such expect about have then to you of on meeting. there? just getting lot folks

Arthur Przybyl

Yes.

we meeting to So We talk about intend still quarter. in that. will fourth request a the

that So encompasses plan And a to is being it's really of we're characterization, VP of of in now. NDA the compiled by fourth our and our which the section. modernization regulatory present quarter filing very Cortrophin process the that's -- And analytics, now regulatory document affairs. chemistry comprehensive

is. with what the to to So are get what actually to go firm is on public but And milestone commit and will announce meet date update we and chances the date the have when don't want I to okay, it, there. that's our we -- communicated from will this, how agency table a we'll do

Dewey Steadman

quarterly that special the normal And but update sort be of... so be the a -- earnings would would it or

Arthur Przybyl

Cortrophin tend earnings during to give our conference updates calls. Yes. We gel

So product. you that progress continuity that should with associated on expect

Dewey Steadman

All right, perfect.

the can or recommercialization progress of in been the far? things Cortrophin Sort surprising how's cooperating you've supportive on this you development -- that process? opine And learned a bit so any agency in

Arthur Przybyl

The don't I developments, any in is agency surprising terms and on comment care. won't I answer communication. of no

Dewey Steadman

All right, perfect.

either of approach my run $XX in as given And In change, that guidance would we a XQ to in that anything downward, yet, that, XXXX, adjusted just last know So guidance imply million haven't there is I rate XXXX? EBITDA. EBITDA. question, you million would -- $XX upward so rate implies on dramatically run or

Arthur Przybyl

It quarter on operating are year's of our announce Dewey, standard next XXXX when excellent procedure our in sorry. That's to we ready fourth question, moment, is not we at XXXX this I it's guidance to believe -- results provide sort April. opine and

would conference earnings So next our be it call.

Sorry. Go ahead, Steve?

Stephen Carey

Yes.

in should announce that, late earnings when So sometime look you Dewey, February XX-K. the and for we file year-end

Operator

And Scott Henry from question our next is Roth from Capital.

Scott Henry

apologies in quarter And granular of QX? occur FDA XXXX? Just that it during first to press questions. couple QX wasn't the expect the just the getting clear it a releases, for when read of scheduling for Would my meeting Or you corticotropin. just on if were or in you I

Arthur Przybyl

that the us yes, request meeting would So meeting will quarter say we that in first to occur shortly expect will XXXX. say it in would for meeting of be XXXX, But okay? XXXX. first I of a to We occur in quarter best

Scott Henry

just then And couple questions. a Perfect. product-specific

a the appears prescription gaining the at that Any growth for data, of Looking comments on to product and be product? diphenoxylate that lot prospects share.

Arthur Przybyl

us captured that have in share It's growing nicely since launch. effectively for product. We very

We had have fact disruptions. of one that by been helped the some the competitors has supply

quicker. allowed to in us that exceeded it's -- traction market again, of it and been our it us nice it think safe always exceeded contracts, into a some maybe allowed was bit gain expectations since a launch. opportunity, and I so to step And those terms to it's But say, share has --

Scott Henry

XX-Q. then going just -- through great. looking Okay, the And

product. to You with and back on E.E.S. the go continue the FDA forth

coming complete do to this I categorize off gave Is noise? any they think that risk there of you the response kind Or product you as market? a lot a letter. of

Arthur Przybyl

not lot it's of a No, noise. a good question. It's

are We we -- have product. marketing the been

Establishment Report. inspection associated product an granted We have Inspection and that been with had a

and have are clinical XXXX, a of small asked to also well We've aware. we to a believe, doing fasting no they But So had findings. submitting we're they study, February study. which in do us them,

Scott Henry

those strong of representative should the Is about and how obviously, continuing? you Or -- think Final we forward? or rates or it representatives more QX. InnoPran that onetime of very run going Inderal Okay. in question, Do are growth? think

Arthur Przybyl

I continuing. believe it's

I my that will that of branded the nice I in at, but and of narrative. ANI's run continue, day And joining mentioned XXX% all in afternoon. thank Bye-bye. like at and brands -- to least Call good Conference increase something rate the annualized I certainly, revenues step-up not XXXX wish think branded I'd participating at that for a our that at a level, Third everybody today. you Earnings Quarter in is

Stephen Carey

everyone. Thanks,

Operator

concludes XXXX This Call. Third Earnings ANI's Quarter

wonderful now this have disconnect lines time, may at a day. You and your

ANI Pharmaceuticals (ANIP) 4 Nov 172017 Q3 Earnings call transcript