ANIP - Earnings call transcript Q4 2017 | ANI Pharmaceuticals, Inc.

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Operator

Good morning, everyone, and welcome to ANI's Fourth Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. And later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions]. Please note this call may be recorded. pleasure today's my Mr. over now is to program turn to It Przybyl. Arthur Please go ahead.

Arthur Przybyl

and Earnings Officer. name to the morning, Carey, And welcome Good everyone, is today ANI's I the and Stephen quarter joining me Przybyl. Chief full fourth Conference XXXX. Art My Financial is our am CEO. year for Call

for record of language morning's press share context financial help pharmaceutical year-over-year generic XXXX. release revenues, earnings Before two we record refer generated conference increases. million, launched revenues products to to non-GAAP principles. adjusted the as of diluted this to of XX%, want generated that this pharmaceutical adjusted business respectively the EBITDA to Today, review net everyone products, we $XXX.X to income $XX.X In of and carefully branded ask EBITDA as in period. $XX.X our will compared as in today. XXXX, certain revenues adjusted primary Fourth accounting each of compared $X.XX, XX% and you of million revenue of generic non-GAAP XX%, with share year. of increases XX% net of XX% Discussions diluted net and be and million begin, six $X.XX, I the to results, found results and and reported XX%, of quarter non-GAAP per measures respectively, $XX.X, it million increases year, release these forward-looking earnings and and increase were generally two in as prior of include accepted non-GAAP those XX% platforms record also statements prior XX% year brands our net dated Last four compared million measures financial call. and accordance per in adjusted not our non-GAAP $XXX.X we Reconciliation $XX.X important include prepared year that can full respectively

XXXX, our from revenue has to than by compared as doubled generic product more perspective, For XXX% increasing million. pharmaceutical $XX.X

XXX% significant our fourfold to increased increased over Our branded increase It's by by revenue time note has that increasing year an products, two period. $XX XX% from million. of XX pharmaceutical that commercial product XX portfolio to

very this we by platform hedged building pharmaceutical in During a small portfolio, pharmaceutical generic represent generic profitable portfolio our growth against brand continues year-over-year Brands have generate time, our platform. business revenue focused to touch nevertheless, selective a growing has a and hedge pressures. our macro-environment in and dominated revenue generic a our introductions. XXXX ANI strategy by public on non-GAAP contracting our increasing adjusted EBITDA consortium remained We've changed. decreases company price product through and became not new

increased to products adjusted from approach and to to increase evidenced portfolio XXXX non-GAAP XX% for growth respectively. to from rates this and value. the products. XX XXXX, shareholder And X that As We believe our net EBITDA compound annual fact, XX% are is revenue our best

portfolio products. sold products Our pipeline internal and increase to our still from new partnerships the licensing significant development, which pursue and commercial marketing launches a have are product We of ANDA directly acquisitions. and XX of

opportunity acquired was largest pipeline Our $XX Cortrophin million. gel for

to competitive capital ANI risk the invest in at Frankly the we provide to commercial product. transferred We project. Casodex. Arimidex portfolio well and can product $X.X by At worth our Baudette, reward by the commercial with grow a have our current products product and portfolio for containment HCT, to and Since build products. Atacand, re-commercialize we for tech strategic is we significant end U.S. plat last Minnesota. platform and our it. $XXX equipment help pipeline committed of facility NDAs platform market be and we to and the to that XXXX, continue billion to acquisitions We nearly Cortrophin development rights execute believe needs to monopoly deployed moneys Cortrophin year, These are million acquiring continue of dedicated this designed and the in Atacand manufactured our intend

conservative business significant Our not upside model approach opportunity. but is without to our

and position Our capital remains intact. strong sheet balance

an to times, XXXX. We asset cash two such, acquisitions. are a an have as favorable levered access ANI we continue environment we than the our to less facility for capital believe current expand business credit untapped backdrop opportunities creates acquisition evaluate will evaluate portfolio to potential through And as position. industry continue and increasing throughout to We

position strong places of transaction attractive us capital acquisitions continue in by position prices. experience executing and successfully Our highly growing in a our to

to assets recent of a look Steve and/or company certainly more continue is will positive detail that brand acquisitions. will generic to in to Tax Reform impact product and acquire We The discuss for Reform in several one years. intend provide and use for companies to equitable smaller ANI field service Tax cash more playing like to increased Tax ANI. pharmaceutical Reform flow our we from

example, a development program. we invest For ANDA to intend formal in internal

Vice a Development. and of President We are recruiting Research for actively

opening a to AMDA team and product we new broad will ongoing effort site. expect formulation continue debt transfer site our our We hire in manage tech development

internally ANDAs initially sharing to in file free from developed is XX formulated arrangements. objective and profit XXXX, Our any

XX%. demonstrate to non-GAAP the $X.XX XXXX, lots utilized commitment exhibit $XXX to to the many biological net in $XXX to timeline. continue transactions adjusted building EBITDA as API. increases three of revenues asset purified also increases of that comparability XXXX, successfully of package. ingredient. lot-to-lot For ranging of provided consistency manufactured XX% of are from from following and Reform. employ scale to intermediate And completed to chemical to successfully as with in to three of FX In guidance This and commercial to characterization its we across earnings our XX% our methods Corticotropin re-commercialization increases batches ranging XX%. Cortrophin from as methods of increase effort the research API ranging non-GAAP we to to quarter compared guidance, well XXXX. internal million, and $XX Tax XX% share reset active to an the have batches the $XXX and XX% we test different fourth historically comprehensive million, per manufacturing intermediate pharmaceutical Adjusted includes cadence gel development the scale continues diluted These being of powder, in progress $X.XX, million All

We plan the have manufacturing commercial API and XXXX. to ordered initiate scale necessary manufacturing commercial for scale equipment capital in early

We have begun batches Cortrophin finished drug to product API manufactured of gel, our manufacture scale development from scale batches. using intermediate

in The Cortrophin granted validation FDA Type a for the XXXX, to batch Our regulatory we is C meeting, requested quarter to end provide C by our we our initiate release, provide the of to manufacturing Type gel FDA quarter registration goal Also as ANI we Cortrophin fourth FDA the XXXX. regulatory end intended milestone updates process included a a the re-commercialization occur plan regulatory of book affairs with table the the of have meeting filing. submitted response gel. re-commercialization the briefing of to Corticotropin and updates, first our XXXX. and five is NDA and the supplemental In the advance of re-commercialization schedule that through press by

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

Stephen Carey

revenue, portfolio. non-GAAP the was Good earnings year Art. per to quarter representing to you, to and in per increase adjusted and XXXX $XX.X quarter EBITDA discuss the product and full-year and earnings morning of XXXX result X%. fourth guidance joining Thank record these Full-year for thank of fourth and by driven our non-GAAP line, everyone XX% adjusted full-year figures XX% close our to was profit XXXX adjusted ANI growth financial growth by sales non-GAAP another results. gains and XX% post share. ANI's revenue of our million an diluted as you and portfolio revenue the share expectations adjusted increase representing net XXXX generic to out XXXX place to recorded us reached XX% call on as by adjusted versus diluted a full-year a and mix EPS These modest $XXX.X a favorable XX% product respectively. of compared as net extension Gross of consecutive net brand in $X.XX, short million, EBITDA well our non-GAAP within strong drove

increasing advance as in Tax Cuts rate in was conjunction statutory our $X.X Turning to driven the $XX.X XX, million XX% we entirely $X.X Vancocin a period. by our continue charge with growth quarter opportunity. under diluted the up income for by and quarter. behind tax from the the non-GAAP assets, net from million invest three branded our per adjusted of was months solution to in federal million, EPS reflects the program of Net and million Act portfolio. a revenue the re-commercialization year due result $XX.X loss versus to driven and in increase of representing December highlights ended Cortrophin recognized million GAAP oral research deferred our product tax our change prior EBITDA devaluing year, while XXXX pipeline XX% our the year-over-year share fourth This by development ago $XX.X was to investment $X.XX XX% XXXX. onetime XX% Fourth or achieved attention Jobs

This fourth testosterone down In This acquired merger our the for finite for of asset. intangible in XXXX BioSante. XXX,XXX our our addition, accounted quarter, with intangible quarter live was an year. asset write-off written fourth last of the previously asset non-core related to that a was during NDA in non-cash and gel, we recognized

We filing this balance no with FDA on describe have and value this product. the now discontinued sheet our further officially for

was which Our increase items year. XX% from adjusted per prior of $X.XX an diluted share metric excludes these the earnings or for non-GAAP share, $X.XX

tempered quarter quarter the year driven February launch million generic quarter by coupled in increased the key the of in InnoPran Inderal fourth sales gains of products XXXX our products to by $XXX,XXX products fourth more Net introduced of our XXXX. our XL, products in the in Inderal that $X.X other product revenues in of certain fourth to performance. key were this and of X% or from were the franchise. and increasing from quantities Turning into launches launched the branded of third XXXX doubled of were initial addition XL $XX.X our Net gains revenue than of portfolio non-recurrence year, LA details of and as current period with which million

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

re-commercialization secured The cash Excluding of XX momentum $XX.X during million we $XX.X of free In these support basis, sheet cash decreased an operations senior administrative the expenditures revenues the full-year operations and a of quarter million expenses previously AstraZeneca of development asset ANI capital December, million $XX goods a the with $X.X we sheet was amounts, our of XXXX, costs growth million of and behind $XX.X portion driven into in facility. of XX.X% quarter. in development representing million whereby on and supported asset and at our XXXX. net XX.X% reflective million From million five greater year unrestricted as revenues $XX $XX.X level of had provides cash increase down of business loan facility flexibility and transaction of Cortrophin $XX by new SG&A we by a by to On as revolver future of and driven as cash the as facility increased $XX revenues prior undrawn cost to of term facility $XX.X portion XX% loan December drawn balance revolver Research our for was flow from driven general and credit with executed a this net as compared X% quarter, credit the a equivalents flow million we well from the employment expenses. of we both the $XXX in $X.X from million, year. year generated million. year of percentage the as anticipate perspective, XXXX and our while approaching the of XX, of that term million September the current million Selling, base refinanced related fourth opportunities. flow were from revolving a of balance to million legal continued cash consistent prior $X.X totaled program. sold investment in costs

had times on approximately net net $XXX forward-looking guidance. As XXXX leverage representing two the balance sheet, of utilizing we debt million,

growth between execution our Looking-forward brands addition to ongoing XX% the in the revenues from increase in a non-GAAP XL brand over revenues $XX revenue our by Inderal to growth XXXX, animalization driven portfolio Cortrophin $XXX and XXXX and this the currently launches. million million, increased in by gel re-commercialized net we program. and million of potential to over the XX% spending $XXX XXXX record is representing reflecting product and InnoPran in reach expansion is successful investment from of guidance maximizing currently product development of project of research XXXX, re-commercialization the and million, four to and generic year. Adjusted Inherent $XXX XL, continued our between generic with our base recently be continued of AstraZeneca acquired XX% execution EBITDA to projected XX% driven

expense XXXX. of guidance to total to ANI R&D million Our in $XX approximately include the as $XX $X.X ranges incurred compared million million

XX% assume growth to earnings diluted brands. between we shares investments million and our select continued non-GAAP share projected in reach expense our federal state and reflects share rate outstanding. is and and continued to business the $XX.X combined SG&A anticipated approximately tax addition, $X.XX In effective support $X.XX diluted an per Adjusted per and of of

domestic impact enacted Tax favorable wholly and recently corporation, Cuts have ANI. of will the a on XXXX Act a significant Jobs As

favorable $XX federal Given XX% to such and we XXXX anticipate decrease currently reduced in rate U.S. full worth from state entity footprint, legal XXXX combined burden and that in and to XX cash be will U.S. in we our million to year-end of taxpayer of marginal accelerating position and into of facility, We million by geographic impact are by opportunities to back access $XX Tax the points for beyond. approximately that a as Reform tax pursue XXXX enhanced credit anticipate XX% flow additional million our further in $XX we the this under flow coming are million. we reinvesting strong cash $XX as year. to our We business. revolving With business in and development our look believe cash the forward cash generation a

internal a $X in we very of plan In addition, million approximately summary, capitalize on In to we invest to strong in exit our XXXX. CapEx position XXXX behind capabilities. opportunity

Tax to our all and long more We have will an increasingly playing turn Art to to diverse our I With drive build product base, a Przybyl. healthy forward balance, relationships strong value continuing capital. our term field, cash level U.S. out flow, to back and strong look banking of a and President call this, capabilities Reform, access thanks stakeholders. to to CEO, the We

Arthur Przybyl

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

Operator

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

Elliot Wilbur

morning. Good Thanks.

and the just business additional business, Art, insight been the roughly of of or to last generic quarters, level. into is the quarter to color commentary at back bit current for couple of want little per over First trend kind yourself cap $XX the question look million get a sort

on at with So FDA? I'm pipeline or ANDA rate to see corollary actually just us and mean have that number in metric there or maybe what number expect a we to be curious that are significant have the to are a might the And approvals issues just ANDA supplements? may many many these a in of should in if products of might nature filed been of of of same the unique of fairly that, not how wondering provide your of products slowdown of to an are sort sort I given the of impacting seems prior And approvals potential terms respect want some be of impact overall as that terms reductions approvals. course approval XXXX if of

Arthur Przybyl

Yeah. to be may slowdown. your the due Thank report I've the read government you, slowdown on FDA Elliot.

are issues I approvals. alongside potentially that are other down think debt there slowing

agency a new some occasionally matter part Review Letters a include that pop-up the information. you've Comprehensive I elemental effort Any called the time of impurities. subject And seen seen requesting the of to think on with there's putting more include to like impurities on agency the to to new approvals. of annual perhaps it down slow something in a it effort just report, formally compared part elemental the as an tendency a has You've

to choosing approved our Baudette, filed case, we the would that in we of in approvals the previously Now, exact have are from I our we have and case that particular our tech through to in the Minnesota. get ANDA transfer facilities are re-commercializing that efforts I agency. don't still at particular picking and off have top, products number in

are or approval would somewhat we material by a in slowdown change is previously so submit is, relates We affected supplier type to necessitate would perhaps not product it a prior in a days a the prior for in new only certainly supplements when approvals that affected submitting against that as we raw affected And products approved that. XX are and product being approval change a supplement. had

shape So an impacted We - Elliot. seen on be open the associated think still that is to or any because that's It slowed we we seen there question. ourselves been potentially don't as no it FDA's remains slowdown part, industry scenario. necessarily slowdown form see is haven't I by with in only how any haven't

launches our in okay. guidance extremely press ones so we a from I you are cautious. stated be a certainly our I teed don't have bit generic going for I a not product number to tell, we I to obviously want are have year. about, release, are perspective that feel included have that amount as - can that in the confident of up So the this launches But not,

of agency question believe answer I your I of year and know answer, or this my don't real perspective. that's approved And is They I that that part last I support certainly into for to don't going is they continue a number know in whether XXXX. good hope efforts record their the industry the from not. the slowdown the the So - forward for approved

Elliot Wilbur

just landscape given branded want a more Okay. your headwinds well acquiring as to just durable follow-up for pricing can have had success kind and have the buffer the wondering sort assets maybe you what out return of of more, But a more nice a and to provided depressed And of just on get obviously of I acquisition there. sort seeing characteristics just that maybe this of amount deployment? little maybe that of are to be some generic current asset seems if you that in are good assets guys coming terms perspective Thanks. branded these potentially you been more try generic perspective to more shift to on a bit those maybe more, attractive at side, point bit little the more the levels market if what get

Arthur Przybyl

of not in a the very of us in to overpay. the acquired. kept have and of I have we a probably always it kept And first I'll opportunities have that's point. it's upfront, terms Even excellent first generating Elliott, that best we foremost, foremost, say mean the say fever value disciplined mean significant I fashion an always rapture height us. working a amount have we transactions up in and I multiples, the for he's - we think I development asset would Well, individual business at

you overnight. a EBITDA will company's brands you In ball somewhat environment Generics different generics and it Now product a - literally believe very have have both time. it's over how have certainly we and opportunities stable in to extract can you to specific from target the of EBITDA transaction are generics. seen and approach very have with associated we you to cut get be more brands the because market careful react asset a is the environment crystal those in that be have we brands, half seen coming understanding for today this and value rich on

transaction want So generics. you falling to for don't in asset knife a regards to catch

up amount do market coming opportunities we're XXXX? to of both over And of But billion the a last I believe generic speaking this us already I $X strong the very because for think string towards branded seen there our a that that. for execute are capital not several we're that will more seen and us you've well of years. of type of pearls position. transactions we So strategic significant transactions, we've I and buyer be quarters us in think obviously clearly because sets

so And those include assets. the is buyer if to of please potential assets, marketplace as a message selling ANI you're the

Operator

next question Dewey of from Our line Steadman with Genuity. comes the Canaccord

Dewey Steadman

and competitive revenue is is comment I Hi, can thanks putting question. year can mantras a guys. launches disadvantage, and see we'll Good phasing morning guess yourself growth? weighted half really can EPS disclosing those as you to back as much or something as it any little XXXX or throughout more the you earnings take year taking at the you it the for without propel disclose hold competitor, early through a some

Arthur Przybyl

Steve?

Stephen Carey

Sure. a Good of season the I is on. morning it think year Yeah, as kind that goes moderate Dewey.

I in think as the of generic the the that course XXXX, over comes obviously that year. cadence in launch kicks So

there then flow the in think second there. say and quarter in from starts kick launch I the back out the to half cadence really around

some on. would to you expect So year as goes acceleration the the quarters

of a would moderate that so And base I say build on. XXXX we it's entered the

Dewey Steadman

valuation? year, Rob Alright, you in seen of both substantial the generics that great. begun and or with has of agree assets I a support some pretty But and brands base, know to to guess pricey Rob sell it are and your see too. appear And valuations still private I sellers second reasonable tend I unwilling have the revaluation

Arthur Przybyl

I macro it lower. dependent for and public the the were than different think are mean know companies I that's situation. for And specific is you they obviously really environment yes XXXX upon sure, multiples in no. So, in

somewhat amount of many certainly the their to Number don't sheets the think strategic ways associated on capital that's be is My yes, perspective seeing to So a a focus on this. question they large your to I answer a are - answer States. tough one, I three buyers really largest balance And seem is our in balance has in to with transaction. space. turned reducing mean it sheets. United company's - out companies have there tapped And we again depends that many and debt positions because

that precludes to larger those folks FTC So how don't plays approach some still transactions that of We've transactions. from seen and we somebody's the entirely out. know

out lower some cost we're marketplace. looking should into accretive at approach you going approach that's cadence the manufacturing time, et that what's to specific our on, us transactions really fit assets on depends mean it the color it position that I of a that from after. launches wouldn't we've always overall our transaction, that cetera. And us the distressed us product forward on think expect asset launch - of as opportunities for And I just strength. think that's a to we we're at happening that really going pipeline makes our how are that you're same instantaneously it combination put to we assets sense obviously So the and company in depends how the I of a transaction, I there dealing going brought going and one with is we're time from yet. have is again see, periods I it future any But focus to for is think

Dewey Steadman

sets question point? eventually may assets acquiring about that there you that Great. be such interesting are plug plugged outside Obviously from that final of benefited debt. forms opportunities Are could development. my All this guys on have business just there of it at further your right. you by on that do be normal in into that out And can

Arthur Przybyl

normal our be able we that of debt, wouldn't plugged into dosage could Outside forum be to…

Dewey Steadman

I debt. I in mean by that can't know, plugged be

Arthur Przybyl

injectable is Can't that's our is an which in. so largest one Yes, one and product. plugged an gel obvious Cortrophin well, obviously be

sterile we're asking So drugs, if company require thermic drugs manufacturing, opportunities. vision into like if or that in always moving injectable looking you're aseptic at different is drugs platforms me, the those

hospitals whether and generic consolidation always have we consortiums or all We my solid successfully injectable drug institution the the rated that market it's any the in in felt can and that's in AA certainly with marketplace in markets. background scripts of AB or

would so brings shy or be any we overlap. we injectable, acquisition portfolio - will that what us. that increase would away our an would not future we sense will if And from not merger the it So made include without

Dewey Steadman

right. Thanks so All much.

Arthur Przybyl

Dewey. to just everybody and our signing today. you You're year-end Thank conference thank afternoon very for welcome, I'd a nice like everybody. I earnings attending you call Bye-bye. wish much off.

Operator

Thank concludes earnings quarter call. XXXX ANI's This you. fourth

and may a have wonderful now lines your disconnect You day.

ANI Pharmaceuticals (ANIP) 27 Feb 182017 Q4 Earnings call transcript