ANIP - Earnings call transcript Q3 2018 | ANI Pharmaceuticals, Inc.

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Operator

Good morning, everyone, and welcome to ANI's Third Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call may be recorded. And it is now my pleasure to turn the program over to Mr. Przybyl. Arthur ahead. go Please

Arthur Przybyl

Carey, Welcome XXXX. earnings Przybyl, My And is the everyone. Officer. the I call third CEO. Steve today me quarter name joining Chief to morning, Financial conference ANI's for am our Good is Art

measures of to be our I share conference include million, non-GAAP diluted release release statements third as on earnings $X.XX. financial press reaffirmed Generally everyone to non-GAAP ask important of those were reported Record and it call. carefully each also of dated that context Before adjusted our Based for guidance language want results. adjusted the financial non-GAAP $XX.X revenues net Reconciliation in measures this this in Discussions prepared found in XXXX. we of will accordance certain these Accounting refer of Accepted per begin, review quarter to morning's we and earnings results, forward-looking $XX.X not can today. you to we Today, million, with our EBITDA Principles.

month manufacturing results the contract generated the of of million, EBITDA XX% increases business non-GAAP nine to record of respectively, nine generic million expand XX% share platforms. to of prior execute as compared on strategy and revenues and we month third period. and year continued Throughout quarter per adjusted non-GAAP $XX.X our record successfully adjusted XX%, $XXX.X $X.XX; our to diluted record earnings and brand grow Our

date, now seven products. grow our Cholestyramine, and authorized drug and to Our increasing Year Atacand Brethine with total launch products: we launched portfolio portfolio new generics generic the have drug XX products, generic continued to of generic to of three HCT.

total their our re-commercializing we Solution launch approval filed Extended Release substantial launch increased X October our of our FDA generic Oral Vancocin products are announced work Atacand to In undisclosed prior development to for the dates. to pipeline to track capsules, launch supplemental and NDA gross September, August, ANI in business. on ANI's brand and HCT. ANI we Our Extended label profit tablets, and three of first opportunities supplement biggest Wellspring continues our product Services Cortrophin XX XXXX. products, and drug These products progress quarter to Release review contract product with for a ANI. continued generic the filing in acquired and priority be key history. with manufacturing Aspirin/Dipyridamole will Extended and Atacand the in Methylphenidate the the Pharma our expand portfolio In Recently, revenue Methylphenidate XXXX tablets of Release

We making are business pipeline of look work use to products. and to currently the that manufacturing integrating advance facility forward on our further

XXXX launches, and Cortrophin quarter a you model. to and contract EBITDA continued expanded in XXXX filing, product in with of growth Financial our forecasted our call for As Officer, investment revenue result result. FDA provide more these product prospects who Carey, our XXXX our We are forecast first business turn XXXX business, Steve now Chief and conference on very manufacturing we and the bullish launches financial that, our With events, I on over will about details our to the remain will beyond. excited

Stephen Carey

XXXX thank you to the discuss financial Art. line. quarter you, Thank on Good everyone the ANI's to results. morning And third call for joining

as active for been company-level high-water non-GAAP to $X.XX for acquisition. quarterly ANI represents company. yields period revenues months that first of EPS the $XX.X net time first posted ANI we the and the has an million revenues and a million, adjusted For quarterly of of the diluted share. net three rose $XX XXXX, mark integrate EBITDA for represents work above extremely our It adjusted revenues million, ended new $XX.X This September XX, per performance non-GAAP

transaction operational phases for and August XXX% accounting performs of on approximately and price of $XX.X sourcing Wellspring colleagues as Ontario the new contract preliminary purposes of products. focus are initial plant. integrating the we CMO of announced, the development and deal, Pharma company ANI, pipeline purchase existing on excellence, are The in million. ANI projects cash-free, CMO an with ANI acquired From Canadian the Oakville, manufacturing Canada structured X, operational previously pharmaceutical that equity of the perspective, strengthening with Services As into Canadian was Pharmaceuticals into outstanding of a XXX opportunities, relationships, of a we debt-free seeding

and the approximately for $X.X accounting For the price, million we the GAAP a combination $X.X purchase contributed period dollars. been and Of has working of the day transaction. and of of have $XX property, the $XX.X accounted completed has we net of an of the advisors, insurance. revenue, a operations and accounting ASC Canadian equipment, and costs and resultant perspective, deal To date, deal initial From of approximately million as of related The the incurred integration price business tax employee to for million under services, certain $XXX,XXX and $X.X inclusive XXX. been purchase X million August goodwill. one costs capital, allocated transaction $X loss million approximately legal XX, million to allocation through plant September related accounting provisions related

and of X% of Fenofibrate, were and margin were driven in million was revenue These the LA XX, favorable for as tempered products $XX.X Vancocin, which milestones the unit were million of products due Atacand approximately average related our X%. development this as and label year ANI of decrease XXXX Casodex primarily tempered back of from with income by to by ended declines Royalty million up the sales ANI revenue for Inderal of X% Arimidex by May July driven Canada branded volume approximately quarter, comparisons $XXX,XXX Yescarta. year, declines and Nilutamide. revenues Revenues royalties. sales coupled for a to generic impact prior results, Ezetimibe-Simvastatin, generic declines well higher work sales quarter line more from by and Atacand million products $X.X of a in Inderal our the and $X and to pharmaceutical the or for than and third the was laboratory customers. XL this decrease in Prior offset acquired of lower in $XXX,XXX by performed the are year. was InnoPran quarter, a net million, sales EEMT, of a price of $XX.X of third-party in lower to This by HCT Branded pharmaceuticals as profit $X.X of the other X and such sales and to year. related and in product by as September in $XX.X versus our prior Gilead's also modest Turning benefitted quarterly declined million, certain months launch year declines from XL,

up with contract $XX.X step-up included costs a revenues $X.X our certain current manufacturing modest in million of to goods due cost inventory in $X.X million, XX% million conjunction $XX,XXX or sales of to net Cost of purchased were results of to services due year or addition, revenues million finished step-up period cost sales for $X In our and of principally was of XX% basis the nearly ANI acquisitions. or of the Canada. Prior WellSpring recorded related included transaction.

cost re-commercialization million was seven-point prior of to as the and subject related to in from decreased incremental driven of sales net of revenues. or expenses compared royalty costs quarter, $XX.X U.S. new growth and to Excluding On and were million work investment or products no has Canadian ANI arrangements. costs, improvement was driven cost, by generic underlying program, support corresponding XX% cost business. development underlying income, Cortrophin our million $X.X impact administrative pipeline, year and SG&A sales XXXX the integration year-over-year XX% $X.X of to quarter from of second behind of general and totaled sales, projects GAAP of up Amneal. this This in $XX.X $X purchase directly including amount, prior our transaction Research $XXX,XXX increase is our attributable the million million sharing our year, acquired which higher in to year. our a $X of profit prior This the basis, approximately selling, and by million employment cost

rate On and non-GAAP commercial midpoint XX-month is million quarter. corporate statutory two net federal representing prior through of operations income looking both and $XX the approximated we provide Services as primarily have capabilities The transactions. of was us compared trailing quarter year-to-date undrawn secured a the of when the is September basis, operations, Tax times acquisition of diluted from in rate period, had expenditures for capital respectively. From basis, million of benefited cash back flow $XX senior of a and reflective the from perspective, and invested as quarter adjusted of $XXX.X purchase during XX% gains generated debt of cash business facility the tax generated year million that our and $XXX million, WellSpring, of adjusted our pretax while impact and to remains the from nearly further into of $XX.X manufacturing share, we of from of year XX.X% to credit and revenues, facilities. pipeline we tax in on $X.XX portion million of the $XX.X full rate balance per enhance WellSpring August. with the a Cuts XX.X% continues our favorable diluted date cash XXXX. as flow revolver balance This million generic, On share coupled and XXXX. year-to-date income XX, sheet effective operations of we've $X.X to equivalents of as of leverage our non-GAAP guidance. XX%, due cash established in the of Total earnings XXXX Our flow unrestricted basis, and Act net $XX flexibility million and IDT, XX% utilizing million to the This acquisition our XX% sheet of and with Jobs development opportunities both in pursuing net net earnings the the metrics $XX.X per GAAP forward business adjusted Pharma year-over-year of non-GAAP the representing of investing EBITDA a behind balance our of cash in million Amneal

for of ANI of we of are ANI. updated Canada. future we our call integration We records second back back XXXX these of our successful to We colleagues As new the reiterating the XXXX including quarter guidance and of us, anticipate at continued of represent of our company. Art to metrics previously judicious that pipeline all behind Pharmaceuticals further our driving earnings quarters in our products, deploy and three Pharmaceuticals to call manner. continued and acquired year recently In be forward quarter our With capabilities call. maximizing recent full Przybyl. and about we fourth opportunities, the newest value the generic mentioned, during Terbutaline are generic will three the to label; I'll label; With launch; launch ANI in the our CEO, the Atacand launch continuing Arimidex October Canada, by this, a look capital launch stakeholders in HCT driven and performance leveraging ANI the ANI and increasingly our maximization President Cortrophin execution leveraging the optimistic of of the Casodex re-commercialization in conclusion, July call significant delivering of potential exciting Art - the through as turn Atacand

Arthur Przybyl

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

Operator

Our Instructions] comes Fitzgerald. Brandon from Folkes line question Cantor [Operator with of the first

Brandon Folkes

taking congratulations the on thanks good quarter. Hi, my and question, for

Firstly, guidance number quarter, this presented unchanged. but the left good EPS a you really you

EPS quite us then, the on through my follow of ask it that. range for around a the So the talk line Can leaves up just you. EPS quarter? Thank And XQ. in pushes after you and some fourth pulls I'll wide

Arthur Przybyl

take to Steve, want do you that question?

Stephen Carey

and morning, you. to nice to Sure. speak Brandon, Good

I confident we months remain behind us with ranges the full are think So that intact. year the X

in where has been we background the thus has so, within a ANI performed that's I been reiterated earnings think space. this And a year difficult macro this morning. Clearly,

in portfolio, quarter fourth are really I pulls generics of the and guidance. ago, pushes of company. that deliver in at continuing the And and XXXX important and Impax/Amneal the the ANI very the in our maximize of AstraZeneca divestiture, so, the remains very range And tail-end acquired really the also, to which for the the we're out a that that were within will generic brands bringing January a to in confident remaining brought were current transaction moment laid as And acquired XXXX.

line. our were As in the you those of in year, loyalty know, product beginning the sales represented

And of but days beginning for brought the as the as push business, of those Pharmaceuticals now four have all label. bucket integration from products, of catalysts that And brought we in have ANI all the second then, those the half those us. October of of been of into fourth in We operationalize products quarter. of would early pull lastly four the course, be that Canada, and ANI

Brandon Folkes

in then much. can additional And that, disclosed R&D products had long-term terms Does very you you through your already insinuate we could how there And Thanks you volume? Thank what then, a run Great. following for perhaps rate you may the of beyond? ClarusOne and take and generics spending XXXX secondly, mentioned you. sort pipeline. of disclosed see on us beyond it that reach long from talk just on agreement to

Arthur Przybyl

competitive additional see product for the generic launched. Brandon, you your typically launches of expect disclose for our products We to yes, products latter So, part reasons. generic don't question, should

you - public XXXX. announcement pipeline ER to of that matter, disclose those see you we've the with it first of generic obviously product, and of And a Methylphenidate guided products for date-certain don't October have, Aspirin/Dipyridamole is to over cadence made our expect obviously transaction, product should quarter from impacts the disclose additional XX that, that X. of sense We launches the to fact ER. as one launching course. of for But the the the as associated certainly because and We just us course Methylphenidate know,

of if And was? your so, first and - just the may we ask again question I part you

Brandon Folkes

that us ClarusOne the volume may… help Just increases think to through

Arthur Przybyl

is yeah, achieve. target, products at There We don't agreements manner. through already achieve We have think look don't we so that in for of a have agreement, consortium internally revenue that hope have right. we a ClarusOne, no we okay. right, Oh, that take we a gross - that to, product, number for We runway profit we with tend terms rates obviously on can in model Methylphenidate instance, ClarusOne. ER, to

achieve we pricing, that the be Now, based the obviously, how is the contracts, to volumes. on going

okay, We And product to that way. Red basis, not with we at at the Oak, with this so, quite we but amount don't look aggregate it this an look amount want this amount with in ClarusOne, do WBAD.

place company. a as add for look certain Hope as it on And pricing. certainly the each that so, ClarusOne target the up through entire product We your at with we that is additional grow that how RFPs, will contracts on question. present And test And one they debuted it products that's do look to over occasionally our view what it never specific for are launches them. time win based is we at how as based But revenues market what we particular request proposals, that consortium. and agreement. we market to We and consortium. answers the on products

Brandon Folkes

you Thank does. congratulations and It very again. much

Arthur Przybyl

Brandon. you, Yeah. Thank Thank you.

Operator

with Your Raymond Elliot next Wilbur line from question of James. comes the

Elliot Wilbur

Thanks. Good morning.

current seems re-growth like deal businesses, First to acceleration of the their maybe assets cheap transaction question and market from looking you pretty to from general brand coming obviously, at some environment, an to terms for in entities multiple. get larger Art, both commentary generic just it

of seeing the your platforms. with So generics, the are thinking do activity, just about three to you what are of where brands, then think allocation think respect and sort and perspective, from wondering the how in best XX to do months over of maybe capital terms sort about we XX opportunities next of, development buckets you deal

Arthur Przybyl

Right.

So Elli. it's a question good

are time on amount approval approach, acquisition. people how our for particular felt As product certainly just put excellence approximately many it flow that of coming was we or we product continues sometimes off on and numbers, we tough future dollars. to if work, would But million because are that's to that that a difficult anticipating for more consider of chasing value free are that increase. ANDA is a ANDA through to an could have, have bucket a cash have same something there the of give today's we targets sake generic that you us you competitors center internal know, argument $XXX There development patent, launches certainly put the and of based sometimes obviously, to of that a

the buy look environment - skewed sense. we we if of that mature have internal toward to number available that generics, There it to spend. don't know, but brands, businesses within call and continue product would or So to of primarily heavily you flow, generics us now. generic platform cash that that and I opportunities for is for right cash are a amount see acquisition, as we you say to mean made doesn't through that the it, we

on So attention we that. focused have certainly a

You partnership or agreements generic might ANDA type products products. for see additional

So we more from those And for model pop model just of products. partnership to time. maybe for up time than like acquisitive brands generic some the some the -

So give of number, maybe no upheaval are the set can can't of. the avail generic opportunities of that a within markets, but I there we there transaction U.S. significant is question, - amount without ourselves you a clearly because

the we into might And us so, see seen pull deals but what more than you've a we'll see. - any know, obviously, year year. we did We'll down what this this going new transpire never several year,

investing acquisitive and as that's internally know And work use You our in of we in R&D. best we money continue think that put to to fashion. our well that be as capital obviously

Elliot Wilbur

as of Art. just I want ask for questions follow-up Thanks, Steve financial to a well. couple

I in gross similar and thinking sort but XXX mix XXXX, was of this basis XXX half obviously, the very margin levels. points levels, reported the at second level, above gross or revenue Specifically performance look strong margin and if about those quarter of what to

little similar. a though even it the bit what strong looks gross maybe drove give, levels were like more into relatively of performance mix So fairly color, sort maybe margin just insight

Stephen Carey

Sure, sure…

Arthur Przybyl

point want that, aggregate thing, us, think is as margin Elliot, one I gross Steve, to as to out levels profit is just okay. you important answer And this gross are very but not important, percentages that important I dollars. obviously, Before

the And generic four in $XXX million opportunity million opportunity and so, speak launch that the I are there fact market $XXX product there very three company's profit of methylphenidate few that the to an an about is gross aggregate products, billion. potential to when is competitors have largest $X.X or represent going history, where sales

profit that in than be aware just but in dollars gross the - going you is be more to in less it's are It's particular about going the But that, regards gross be aware with XXs. but of gross be - dollars and our current Steve, percentage product the if and I'd if to for us, Now the our of to profit we profit cash percentage. to always that want interested of that, that are fourth in where you'll generation that flow the that. take take margins appreciate you today, obviously I will and matters. question quarter, rest

Stephen Carey

And the our, think on fact margin would Sure. been that Fenofibrate good been Yeah, Yeah. an improvement probably one product. the and two there our has morning, driven generic things, of portfolio I headwinds be in item generic biggest mix year has so is, that the by within within Elli. of this within products biggest the

corresponding, distributors' an on we agreement that type so, And margin and generic the call that have we distribution product. authorized is that say, just so

relatively well, on that has this the significant pull-through is so, the line been And small. headwind that revenue product year, fairly on

gross strong the think and of on improvement the line, I right. generic profit performance with royalty the then the net-net, coupled within So in portfolio,

for months Atacands that into line. royalty the on And AstraZeneca coming the but gross and our goods from first of there's six we the sold is, four items during the the and margin products so the remained in year, of go third sales in the line going One really line, dissecting royalty ANI, away two two pulled XXX% will through fourth products royalties that was of quarter, the cost Casodex in In quarter. Arimidex, there.

grow, and of years in the the equal, revenue line on important Gilead future other we Yescarta hope, decline But things course, are this builds royalty royalty line in product, that that fourth gross the to other revenue quarter. franchise. we - performance biggest not out margin part Gilead's the but only we expect is those the would all royalties component in So that of of the But quarter, will being factors next quarter. would that continue as the receive

Elliot Wilbur

I of to whether return mix quarter issue quarter, respect about more the then, rose in that that of not more you And June sort wanted much this normalized how sort was relative last Okay. it mix or transpired ask guess, higher same I to the of And period. a specifically the or levels? with XXXB saw to business just

Stephen Carey

Yeah, Yeah, expected, big sure. picture, so as came it in right.

expectations, when set the Inderal mix the mix So levels second we the we in the call, as our that product largely a guidance would on a as through on in forward, product, came anticipated why But one say volume. so the And as in discussed the company quarter that's of came our I third revised of we reset it's right comp. and on product, that versus expected. Still in expected year-over-year to average quarter it earnings going for historical and on price did line. performance expectation both and terms LA, cited negative basis that

Elliot Wilbur

Okay, thank you.

Stephen Carey

welcome. You're

Arthur Przybyl

Elliot. Thanks,

Operator

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

Dewey Steadman

realizing product even any how markets And of thoughts additional actually pricing? products recently going an And the switchover. approach acquired that of corresponds kind data and we net as EEMT competitors increase portfolio, on increases the approved label a meaningful Astra indicates third-party roughly Atacand expect which Arimidex, how the portfolio Hi. Casodex Should the or you potentially on About similar much increase we the switched in are and that EEMT? just with over? for just should entering Thanks. EES then, on forward,

Arthur Przybyl

of the first, two-player it EEMT. Well, part take Currently, a latter is that let's market.

been where us, Dewey. been three players covered this past, in before that might in you've market been And have We the can't it's I have remember.

as associated that always and that for market another - that took drive we've with not we our feel expect on product And that share use that level terms grow. player, lookout In have that obviously. so, of on of product. yes, That record overall sales, about always our to and so actually on product consortium units another to though we It's we product, that position pretty are say or won't We you product. good the same declines know in year-over-year in agreements factor competitor. of But decline that year-over-year on regards sales in seen continues forecast September, to same. that that there be again in we unit

As for It's that we know, be you busted in a There'll that's old hours antibiotic. additional a associated released monopoly our nice on product. line some that after particular update an today. product It's product us. with being Q

on invite can you I - the today. that product you So section narrative to read on later would

so, more hopefully, the a of time? question, you your bit it one EES, of other EEMT, on part And little and gives Dewey, color

Dewey Steadman

pricing and for The Casodex Arimidex…

Arthur Przybyl

to that right, of we we our sake change right, comes Casodex certainly to I brand orders, doesn't label, that, expect were wouldn't What but - what level product Arimidex associated label. and in - months. ANI the what with it But is, increases the XX to the if Oh, subsequent increase. the get right. switch unit would orders didn't so over follow overall to I over when effectuate we to see if a sell, to from okay, - with know don't the wholesalers stocking sell then argument, it on brand certainly we so - see XX say day when it does

head, top HCT. and to my the we look and Atacand can't it Atacand later, you, of off talk We up unit level say Dewey, the you I with tell same increases [they'll whether anticipate of really] [ph]. for you So

Dewey Steadman

divided divided units so by by It wasn't pricing, your It going out. - was of increases. gross unit number revenue revenue

[indiscernible] and so pricing. pricing, gross And

Arthur Przybyl

Steve Right, able right, labels. the the that's under little more we color be afternoon, AstraZeneca give the with same sales in perhaps expect we if have product was level doing on still can talk And to that currently the you a that mean, right. we you - when okay. of a when I later on to generate

Dewey Steadman

And… mandated then and right, that any Cortrophin, before All on there interactions are more filing? are FDA

Arthur Przybyl

No. are to - tell they're No, sorry we I you, Dewey Cortrophin, the will - you interrupt development. not. past

specs production, versus on specs modernized into are good. look We old commercial-scale our this. the We and specs then

very are this on bullish We product.

see it, seen us put we filing of that that of through full really the that on in get excited in first, at that track the had we up with about We And this we think conversations is comparison to mentioned. our point mentioned the the product quarter. point filing very us it's product in the are to putting opportunity development are obviously, long very and sNDA to year and bullish time, out we timeframe a levels, had filing when again, science this time. on date a important stability of speed most that don't first for difficult We next showstoppers the ahead. FDA we any as that the - At the certainly - for product. you for we time, file to modernization know. you it because the on we're that particular are prior on We're to not the thing And to previous

tuned. taking, was So has finished And team project. done you to it our it file. stay let's just great But putting into have paper big job dosage a ago a XX say, to years form of a from

the excited opportunity about break And that excited. so, monopoly to We're well. we're as

Dewey Steadman

Thanks. Okay.

Operator

no And questions. further at to time, over there management. I'll turn this back it are

Arthur Przybyl

I the fact we very call model, to XXXX. for conference business going Well, attending bullish on remain our that and today. now our thank like everybody I'd into reiterate

part our earnings of results to release. next much. will Thank which of We you you a quarter have a Have lot XXXX to nice providing year Bye-bye. we day. you be of the forward shots And look on and XXXX guidance, goal. the end very reporting

Stephen Carey

Thank you.

Operator

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

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

ANI Pharmaceuticals (ANIP) 6 Nov 182018 Q3 Earnings call transcript