ANIP - Earnings call transcript Q2 2019 | ANI Pharmaceuticals, Inc.

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Operator

Good morning, everyone, and welcome to ANI's Second Quarter 2019 Earnings Call. [Operator Instructions].

Please note, this call may be recorded. It is now my pleasure to turn today's program over to Mr. Arthur Przybyl. ahead. go Please

Arthur Przybyl

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

to begin, and generally call. earnings not the Discussions release forward-looking everyone we accounting important conference of will each you can in Before financial it certain refer of in non-GAAP morning's principles. accepted context carefully this also language as today. this to want with I press both ask measures that Reconciliation statements to prepared be accordance review were found release include financial measures in for dated our

reported second XXXX ANI quarter Today, results.

an of and adjusted of prior was For reported quarter, net million, the $XX.X year second EBITDA we XX% of million, period. non-GAAP record increase over EBITDA net XX% revenues. increase $XX.X an of of non-GAAP the Adjusted XX%; revenues

product increased generic million quarter product First several months. to the year to launches of the $XX.X compared over as last revenues a result prior several generic period, direct by XX%

second we quarter, million the oral product anticipate market substantial United enter for not product. This our market September received product, $XXX and During the we FDA solution a Vancomycin the a including will believe launch. we exceeds that approval Vancomycin States, in for compounded

strength uniquely convenient our on single-bottle of for in excitement the is available X launch Our sizes. based the presentation

Rx of drug of take can use industry-wide available. share shortage when from ongoing form a an on product that and shift dosage this compounded is substantial that belief an list is molecule Our chronically the alternative the

virtual awareness existing our marketing infrastructure leverage launch. product will to at we drive Finally,

Cortrophin effort process our continued we quarter, validation Gel. for the Throughout

the After complete material X today, Cortrophin complete required new of product for the the to XXXX. Gel for is PDUFA raw as we the finished As guidelines August. all XXX the to be assigned by intend for a release applications. NDA good described end X-month intend supplemental stability After in supplemental days filing, material and drug line both of we press time drug raw to process March date file PDUFA product, expect validation batches and per in we

guidance be In our of guidance landscape which today's tablets. acquire available XXXX. for XX% revenue and currently profit to due adjusted and opportunities for assets EBITDA growth favorable range ANI. guidance competitive million $XXX to represents our to press and gross to We non-GAAP we product cash We to million, represent share the trends. reduced continue $XXX extended-release X% that both per XXXX for million flow $XXX the in over revenue due updated diluted mix to release, methylphenidate We and revenue reaffirmed immediate earnings over to continued have our future

development-stage our acquired new pipeline an quarter, During business X the X and pipeline agreement Expanding to we important second drugs products us, injectable platform. distribution for that expanded in that continue we injectable invest intend to drug is and to objective X. of signed generic our

company EBITDA ANI has XXXX. annually revenue becoming since a grown public its non-GAAP and in

an In in we competitive trend increasingly well We expect for growth. industry, XXXX. positioned that to continue remain future generic

balance and cash our sheet levered Our overly we debt, from operations burdened remains is robust. are less than flow not by Xx

their the any of We macro and generic the settlements. opioid cash for are that of lawsuit the collusion X issues potential Justice not partied plague and the to price adverse-related industry: Department lawsuits

is States We committed to providers of that Cortrophin Cortrophin near-term break ANI's long-standing Gel and drug, launch opportunity transformational for approval of believe a benefit significantly a upon a Gel, have ANI blockbuster monopoly will FDA since can intended we system the our and We launch to shareholders. dollars. drug for cannot remain price be United patients, genericized. the millions hundreds Upon market anticipated care effort. Gel health launch, of save Cortrophin that

Carey, provide Steve CFO, our you on to financial more over details with call conference who our the will turn now results. I'll

Stephen Carey

Thank to the tempered XXXX results ANI's of for call of joining XX% you, $XX.X were line, products the products from by of to the contract million thank $X.X on post recently months second you atropine quarter quarter to strong was morning well financial June EES, second driven in everyone Ezetimibe-Simvastatin, results. discuss and These up Good manufacturing Art. ANI posting net lower prior incremental non-GAAP year-over-year products net revenue our and $XX.X $X.XX of record XX% generic At X categories. GAAP and for XXXX, and driven $XX.X diluted a quarterly by to adjusted was million. Corresponding launched EPS growth EBITDA pharmaceutical Vancomycin. diphenoxylate gains share. sales year sales per ended Revenues EEMT, XX, net XXXX, Candesartan pharmaceutical the other year record adjusted revenue million, improved the unit by gains as or Nilutamide. as and million XX% versus our in of prior generic continued

sales Branded ANI which the Atacand pharmaceutical Casodex, ANI primarily July of to launched XXXX; October in Atacand revenues Arimidex the and label an in launched in $XX were XXXX. and and million which were the XX% in of increase were of label due quarter, HCT, of in

In L.A. addition, Gains unit InnoPran tempered we lower and achieved of sales sales products were by XL. in gains these Vancocin in Inderal

in and branded revenue from due line. the by XXXX. and product to Atacand, contract of in of million services quarter driven of in acquired XXXX. laboratory initially the pharmaceuticals the Revenue of Pharmaceuticals Royalty by development was ANI services impact however, second to Casodex now income, was of half decline and as royalty these from Canada, August our products $XXX,XXX tempered for $X.X Arimidex other declined million, sales in the This more Revenues somewhat recorded the Canada. the than label manufacturing products aforementioned HCT, included Atacand is which $X.X doubled was ANI launch principally in ANI net of

purpose point buyout The lower of million the $XX was expense in improvement to or year the pharmacovigilance costs costs, the development GDUFA recorded of royalty fees U.S. R&D user is costs paid XX% to $X.X increased first higher new included headcount X quarter process as with and the in period non-GAAP quarter million EBITDA general PDUFA revenues previously prior margin to expenses fees products as Research R&D revenues increased generic Cost This million our current of in continues charge well and Pharmaceuticals. Canada concluded generic approximate the million resulting Cortrophin million investment development-stage to Coeptis favorable back year-over-year calculation. compared to to and and Organic charge higher underlying pipeline. $XX.X our by in costs. EPS compared and X of a our program prior Selling, gross acquisition sales conjunction of from royalty $X.X $XX.X due marketing-related work for our legal in million sales driven spend announced or in net mix. XX% related to and principally the and net U.S.-based recommercialization as in by and related totaled XXXX as year were was be ANI added in our driven of and behind administrative from subsidiary, period. FDA, $XX.X

to our the recognized earnings of onetime recognition by the This relates agreement. taxes, the the driven GAAP of per share previously assets quarter. for net ANI for tax were was tax benefit $XXX,XXX non-GAAP implementation accounting benefit purpose diluted a it As of of upon excluded for quarter, transfer purpose reserved that Canada calculating we pricing during adjusted

would from our shares exclusive to prices calculation XX%. our GAAP rate, due a hedging share than impacted of economic XX% first price tax the as shareholders effective to a consolidated company diluted the in earnings occur the however, basis, an period. is $XX.XX GAAP compared quarterly of above which share requires the On the period doubled up EPS convertible accounting, price $X.XX discrete fully more weighted the protected in of items, share program EPS shares $X.XX diluted place the year per inclusion share by to outstanding to dilutive the the in include This that GAAP $X.XX negatively approximates dilution to theoretical The per equity debt. dilution our that the XXXX. Most ago GAAP our that per these put our share Our average importantly, from $XX.XX effect face are perspective, at quarter. of theoretical convertible of of debt. includes in conversion in on

Our excludes share, impacts diluted these $X.XX per was share per year. diluted up adjusted $X.XX and prior earnings or non-GAAP XX% from

generated of of revenues, million basis, of $XXX.X EBITDA $XX and net and a respectively. representing diluted On non-GAAP we year-over-year XX%, adjusted of earnings per have non-GAAP XX%, XX% adjusted million year-to-date $X.XX share, gains

basis discussed, secured equivalents trailing had form reflective flow is balance of the we of as of the perspective, first June announced our net of representing we and million, as turns maturity our full balance recall in $XXX,XXX,XXX business refinance $XX.X guidance. $XXX upcoming debt development sheet $XX XXXX. XX, under From XX-month Please for X have financing of approximated unrestricted net million of committed is senior date the and place when of cash utilizing debt of fully and December from that million to and cash the $XX.X in XXXX year. cash the convertible year-to-date our a of of credit million $XXX the midpoint as Total cash half a million net year of of previously during approximately operations X.Xx leverage on X.X facility. sheet This utilized activities balance

and cash undrawn of the addition, development with from operations flow provide portion with continues this In remains and $XX transactions. us pursuing million flexibility coupled cash facility to existing further business our in revolver

of second the are stated we continued oral In and and we ANI our to team a execution launch Vancomycin quarter successful for and forward which solution our for by success half recommercialization of with meeting milestones Cortrophin results, half in continued our business plan the the summary, year, reflect program. XXXX. goals In look second pleased first

for opportunities. capital, strong healthy to we continue us development We a fully committed cash balance flexibility to allows sheet, business which access search flow, as have

As to value always, for drive we stakeholders. look long-term our continuing to forward

Przybyl. I the President back Art this, call to will our CEO, turn and With

Arthur Przybyl

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

Operator

Wilbur comes [Operator Instructions]. with first Elliot James. question Raymond your And from

Elliot Wilbur

Obviously, years remember Art, a -- to Steve hit as took which First get to market. subject guidance. time well, and question methylphenidate the market XX for generics when yourself, of I

like it that get in product. Now even could approval I seems

there's bottom But it's on your of line suggests top a revenue So the down rest not overperformance the adjusted reiterated the fact guidance have EBITDA and surprising, going that took portfolio. I to bit little guess, guidance that not expectations. line meet

So relative some are key maybe about the talk of items driving that you could just overperformance. that

Arthur Przybyl

can. we Yes, Yes.

and we more time. forecasted product, revenue the in First poorly fact the at guidance far that in today, market on we admittedly with associated X competitors are competitors, this for of or X that what anticipated that was that there just than point all, of particular basis

inside and I far tell products better. than particular, of our you of greater with our consortium, some that is in on one far anticipated. on mix -- we margins Our can is profit generics certain

so overachieving profit had we And or though base gross down numbers guide on in for number. obviously lower the even EBITDA year gross our we with even first to profit, of are the half our revenue methylphenidate and the the related number revenue on

much to revenues we've and revenues And for been because revenues, is anticipated so better, our that able forecasted mix. loss -- better the of of mix absorb methylphenidate

worked so And well that's very out for us.

Elliot Wilbur

question you, a follow-up as And for Okay. well. Art, then

that effort might a more about you, just master a and the aggressively you of best assets. move but have don't based term opportunities bit dilutive think of those could approved course, presents of bunch pipeline be then on generics your talk be of the to of be near endeavors, into past in sort world and ability bought inexpensive. with are to recently out kind can There's a communicated the experience market whether products? incorporating that companies you thoughts the the quasi-branded the potentially the And strategy you've of XXX(b)X intent obviously, injectable You utilizing optimize on for there side that a strategy. what with ANDAs, little to that it maybe us of couple But thoughts and it injectable more relatively capacity and, and

Arthur Przybyl

Right.

Okay.

of to of expansion was a young, pivot a a not many injectables? when sold the I injectables bag but facilities, This selling those why head. products the And I range due today set same the -- Margaret when large of into $XXX. So $X of courage on FDA the business part manufacturing in many ago, pivot, Commissioner in of many A platforms to Hamburg market to our carried sort $XX are long range was think, and time compliancy was I I that of and in or its $XX. to why

oral solids. far are opportunities in, sake of margin that think, certainly injectables, I there's greater So in argument, than

So an space becomes that attractive for us.

a on Obviously, be we feel injectable that's probably And closer, Gel. without -- is product that's our and -- we getting that, think largest, Cortrophin will first our that's doubt.

and it's invest we're doing And what natural a pivot injectable us potentially to products, so in that's pipeline for now.

experience We competitive that happened is, the contracting level same that but in marketplace in my competitiveness in have from doesn't, solids and also of a oral perspective, to the due have has that far marketplace, want call essence, opinion, generic associated contracting X approvals, fact you products. liquid and to increased the solid a the greater that and if oral it for cartel, in there's, with competition certainly consortium that,

not the of market. than so the contract finite as the And terms current maybe way oral for solid market their hospital is in still they business

obviously So attractive. second this that to why is a reason is as

us. and of some than talk is We much Steve profit that twice manufactured difference somebody margins in brick third well we for really get between else dollars products we have Now that about it dollars almost in we profit we point our gross do manufacture product in we as own XXX% that for gross ourselves But manufacture have to ourselves the us. and for that cases. ultimately, every is and representative put, mention, didn't products never your difference is, mortars. like

least the So looking to an to or the money and we us the We injectable we be that facility. manufactured buy think important into and business buy Canada for which brick integrated our platforms, in potentially chain as it's with to products. supply generic will and opportunities for also led saw you And many associated that have into manufacturing be all that platform fact our to injectable of to with move we us is are out mortars why platform, up us buy into at that free our in business transferring Canada in we're existing go available capacity. Baudette the products

unit our know, that recruiting our you we're because So of for volumes. now facilities shift of those our increased don't Minnesota in for third Baudette,

expanding substantial ourselves byproduct space. which think And And questions first still so Gel. injectables. intended your the a can we why companies available it's and opportunities successful, we obviously it to see profit for answers dollars our we there gross we'll the model. we think launch, will to in as like I as hope that obviously, injectable of like Cortrophin be think are product an in business for We us We be potential

Elliot Wilbur

of final question. to on Good a throw you curve Cortrophin, color. I be a know Then bit ball but terrific here one response. want give a you'd Actually, I able to

for that So of itself million, million some $XXX program sell the the loss. recent business Owner because looks what in have a product, Medicaid about branded they $XXX the developments effectively is Acthar. product lose to like in market of at book to

resulting kind could win you the for You're of pick not to piece that gate. business of structural accelerate are in easy them. of the up really out like encumbered entry for just or of issues guys of out it sort business a into thought that go about the Seems of of right some that gate? a really strategy or sort kind of that by Have Medicaid outcome be you after

Arthur Przybyl

we'll that it's occur Well, for about year. feel analytics, of about think science next all in think and we our and time. the to Cortrophin finally very -- about March good launch about the We

harkens saving product. made competitor revenues comments Acthar, where It millions less now I billion launch. they're industry the an guiding $X definitely It's read in think that I I the back on than of the obviously So think care we're of that hundreds for interesting, that basis. committed markets about annualized to dollars to we to health the U.S. recently

-- that point point price market the point than with we be will lower price increased always today. the with, will question think product that is price drive the certainly will our usage enter it Our for the because

be And that remains so payers interesting well and And in dynamic how that be system. plays will Medicare to an that the obviously with seen.

us, potentially number drug million us for the by drug think We blockbuster us, a flow we still For drug $XXX it of a year. could drive think per reasons. drug call free we cash fact the the in transformational for -- for a we stand

us number, a to can from less. levels a reduced You even still for that, forecast something is at take smaller wanted if it tremendous one blockbuster

total investment all in to filing. $XXX the in is bought to the have of going a B They competitor. of also potential as our And our We it, the it to acquisition slightly -- get of in product at different of billions it investment million, million $XX with a the our end price argument, to it. compared end drug sake for at

and and to like opportunities over you incredibly position, heightened company meaningful years. So to and us a like very grow we've different know to additional we're much and we're up are smaller through transactions, a flows open that company lot a done a cash continue certainly the

And so economics we think we will with to that with when like it FDA once the enter the we not drug. some certainly day we file of the folks believe that go And NDA our And for will position. that that continue supplemental within marketplace we rule the agency. our unnoticed

And plan. regards so our we're transparent very game to in

will. But the investors? and benefit it and break it the to also cost Will monopoly? lower benefit United that it care States system health ANI care will. shareholders serve and Absolutely, health It will definitely

several point so with our we're in going been yard has like this years quarters development on And drug. associated of we many couldn't this And at end this of We're certainly time. the where the be higher and in activities level at. we're X line, and excitement

Operator

question from Folkes Cantor Brandon with line the next of comes Your Fitzgerald.

Brandon Folkes

But mix. pressure week again quarter. one positive Firstly, actually called the talked the generics margin earlier the in players I of pricing in to you other out due know about

about rest do the your for of in So the I think was wondering, of you just pricing how guidance, terms year?

Arthur Przybyl

in beginning of is we up, when set forecasts factor and up that's puts we and erosion, adequate he where combination the do Well, in that that does his in we really of at to we'll and the we what a want model price think end think Steve year. the that guidance we takes.

so typically, like in are And product we There to more than anticipated. competitors methylphenidate, like that we we market with Admittedly, not. get right. did think the we a

end we we our of on we forward, to the with we do that year, analysis. it's and Otherwise we're the where quarter, update of the are rest shape. affirm, guidance -- in analysis numbers, every good whatever at or Going why is do an either that think of based

products So generic we year guidance for of put the rest fact the that we hit the out can see half our be release for pricing for just to in today's press the the of back year. of the that accommodative we

Brandon Folkes

one maybe And follow-up just Okay. on guidance.

market. You think XXXX, the methylphenidate gave when you around for opportunity first generic opportunity. out -- market Aggrenox But million guidance I a was target as $XXX called

it see assumptions over down your just to made product around this million. for I Have changes come Now $XXX that any you year?

Arthur Przybyl

to want directly we say, today revenue just revenue you that? -- in I'll down the took the is guidance Although -- reflective change do Brandon, address made. of guidance I we Steve, assumptions think the we the

Stephen Carey

Right.

So our remainder and out the basis, detailed, process the a of looking bottoms-up of essentially certainly Art a revenues for spoke margins gross do just very for on we that year. fact the a quarterly

guidance expectations so the And our our portfolio. across reflects updated entire

and but at for obviously, And reflects reflective that don't to there's margin on it's level. it expectation assured particular you products. updated expectations And product-by-product products, so and be a expectations various But across an can all our that we puts of basis. takes sales obviously, speak

Brandon Folkes

on about you just winning the day. the Gel. And talked Okay. That's lastly, helpful. Art, at of very know economics I end Cortrophin then

a behind of should the how of Obviously, it? about there needed we investments launch commercial is lot infrastructure new Acthar. think behind terms Just in

biosimilar Is how a should commercial launch, terms terms investment it would of pricing in it? you it think you And So about do terms think generic or an viewing in we you're just then of play? color a Or of put about the in alternative that? of how launch brand? behind element any

Arthur Przybyl

a It's rating product rating plain date. difficult drug, part very like this an would your simple. to feel get to cannot as brand, chromatograph and natural question on There's I extract the a a very generic on difficult mentioned, a not substance, to be with has -- an and we the product, one been not substance is pituitary natural generic, the genericized -- pig match. that pig It is. be pituitary second Well, certainly of alternative it's

will definitely an marketing behind make We effort. investment the

with the today, And a so et macro from And and the point have that some in just product. for sale the at marketing we good team, a prepared cetera. for -- on a boots me ground, plans of overall more time, And question thoughts file talk program we'll answer a we'll we that's will the to specifically associated our sales be when about drug. specialized have

Operator

now like over call I any for to remarks. Przybyl back closing turn Arthur would to the

Arthur Przybyl

thank I'd today. speak quarter. everybody like for our you to you next call We'll a all Wish attending to conference Bye-bye. earnings good day.

Operator

concludes Call. Second Quarter This XXXX ANI's you. Earnings Thank

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

ANI Pharmaceuticals (ANIP) 7 Aug 192019 Q2 Earnings call transcript