Good day, everyone. And welcome to today’s ANI Pharmaceuticals Q1 2023 Earnings Call. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer period. Please note this call will be recorded and I will be standing by should you need any assistance. It is now my pleasure to turn today’s call over to Judy DiClemente. Please go ahead.

Thank you, Ashley. Welcome to ANI Pharmaceuticals Q1 2023 earnings results call. This is Judy DiClemente of Insight Communications Investor Relations for ANI. With me on today’s call are Nikhil Lalwani, President and Chief Executive Officer; and Stephen Carey, Chief Financial Officer of ANI. You can also access the webcast for this call through the Investors section of the ANI website at www.anipharmaceuticals.com. Before we get started, I would like to remind everyone that any statements made on today’s conference call that express a belief, expectation, projection, forecast, anticipation, or intent regarding future events and the company’s future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to ANI Pharmaceuticals’ management as of today and involve risks and uncertainties, including those noted in our press release issued this morning and our filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. ANI specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. The archived webcast will be available for 30 days on our website anipharmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast this call was held and recorded on May 8, 2023, since then ANI may have made announcements related to the topics discussed. So please reference the company’s most recent press releases and SEC filings. And with that, I will turn the call over to Nikhil Lalwani. Nikhil?

Thank you, Judy. Good morning, everyone, and thank you for joining our call. ANI remained focused on two strategic imperatives designed to help us serve patients in need and drive profitable and competitive growth. Firstly, the scale-up of our Rare Disease business with the successful launch of our lead Rare Disease asset, Purified Cortrophin Gel, and the potential to add assets that leverage the Rare Disease infrastructure we have built. This business will be the largest driver of ANI’s growth. The second imperative is driving Generics business growth through superior new product launch execution, cost excellence, and supply reliability. These efforts coupled with our enhanced operational excellence have enabled ANI to compete and win across our core business segments and to generate record quarterly net revenues of $106.8 million for the quarter and record quarterly adjusted non-GAAP EBITDA of $33 million. Our outstanding operational performance demonstrates the strength we have built in our core business segments and I congratulate the team for their hard work in achieving these outstanding results announced this morning. On the Rare Disease front, we continue to invest in the launch of our foundational rare disease asset Purified Cortrophin Gel. We have strengthened the team and improved how we are servicing patients, physicians, and payers, which has accelerated our launch momentum and increased access to ACTH therapy for patients in need. As noted on last quarter’s earnings call, for competitive sensitivity reasons, we will no longer be providing more detailed metrics on Cortrophin. However, we are pleased to report that the acceleration of our launch momentum is evidenced by the record quarterly number of new cases initiated in Q1 2023 and record monthly new patient starts and cases initiated in April 2023. We are also seeing continued growth in the number of new unique prescribers and repeat prescribers. In fact, many prescribers who had previously slowed or discontinued use of the ACTH class have restarted their use of ACTH therapy after the launch of Purified Cortrophin Gel. Our promotional efforts are focused on rheumatology, neurology, nephrology, and pulmonology. We have ramped up peer-to-peer education programs across our three target specialties of rheumatology, neurology, and nephrology to further increase awareness of Cortrophin Gel. In addition, we have completed recruitment of and onboarded a modest and dedicated pulmonology sales team. Central to our Cortrophin Gel launch is our efforts to increase market access for the ACTH class for appropriate patients in need. A critical relevant trend to highlight for the Cortrophin Gel launch is the growth in the overall ACTH category. Prior to the launch, the ACTH category had continued to decline and according to IQVIA had not shown year-over-year unit growth since 2019. ANI launched Cortrophin Gel in January 2022, and from June 2022 to March 2023, for 10 consecutive months, the ACTH category has shown year-over-year unit growth according to IQVIA. In fact, in the first three months of 2023, the year-on-year category unit growth has been in the double-digits. First quarter net revenues of Cortrophin Gel were $16.3 million, which was in line with our expectations and bolsters our confidence in our full-year Cortrophin Gel revenue guidance of $80 million to $90 million. We are pleased with the progress of this launch and look forward to enhancing the scale and scope of our Rare Disease business. We continue to actively explore adding other assets that can leverage our Rare Disease infrastructure. Next, I will turn to the Generics established brands and other revenue segment, which increased to $90.5 million, an increase of 43% over the prior year. These results showcase our ability to use our U.S. manufacturing footprint and agile operations to deliver timely solutions to our customers. During the past two years, we had enhanced ANI’s operational excellence by combining the longstanding strength in manufacturing and our strong GMP track record with best-in-class research and development capabilities, all with the patient-first orientation. This has enabled us to capture market demand arising from the numerous supply disruptions impacting patient access to much-needed medicines. We had increased our R&D investments with focus on niche opportunities. We continue to file multiple new ANDAs in the first quarter of 2023 and retained our top 10 ranking in the number of ANDA approvals. We have also retained our number two ranking in competitive Generic Therapy approvals in 2023. Our efforts to drive cost excellence have included the consolidation of our manufacturing network with the rationalization of manufacturing operations in Oakville, which is now completed. Discussions with potential buyers for the Oakville site are ongoing. In addition, we have augmented our analytical and development facility in Chennai, India with over 60 skilled colleagues. Equally important, our efforts to ensure supply reliability, with a strong compliance and audit track record enhanced further by recent successful FDA audits across all three sites. In fact, our New Jersey site was inspected in March 2023 and had zero 483s and an NAI status. Last, but not least, we continue to maintain healthy inventory levels for finished goods and raw materials allowing us to capture any opportunities arising from market disruptions. These achievements demonstrate ANI’s ability to deliver sustainable, competitive, and profitable growth while keeping the patient at the center of everything we do. The overall trajectory of our business boosts our confidence in the 2023 outlook, and we are therefore raising full-year revenue guidance to between $385 million to $410 million and adjusted non-GAAP EBITDA guidance to between $97 million and $107 million, and adjusted non-GAAP EPS guidance to $2.99 to $3.45. Steve will now walk through our detailed first quarter financial results and discuss the revised guidance for the year in more detail. Steve?

Thank you, Nikhil, and good morning to everyone on the call. As Nikhil indicated, we posted very strong results in the first quarter of 2023, capitalizing on the groundwork we have laid over the past two years to build sustainable growth platforms and strengthen the capabilities of ANI. We saw growth across our core businesses, generating record first quarter revenues of $106.8 million, marking the first time in ANI’s history that our quarterly revenue has surpassed $100 million. This represents $42.3 million or 66% growth over the $64.5 million reported in the first quarter of 2022 and is up 13% sequentially from the $94.2 million of revenues reported in our previous record fourth quarter of 2022. It is important to note that this is the first quarterly reporting period, where results are on a consistent basis with our two growth catalysts; the acquisition of Novitium, which closed in November of 2021, and the launch of Purified Cortrophin Gel which occurred in the first quarter of 2022. As such, first quarter of 2023 performance is reflective of organic growth at the company. Revenues from Cortrophin reported in our Rare Disease segment were $16.3 million in the quarter, up $15 million from prior year. We are pleased with this result and it is in line with our expectation. Further, we believe this level of first quarter performance creates a strong foundation for achievement of our full year 2023 Cortrophin revenue goals. Revenues of our Generics established brands and other segment rose $27.3 million to $90.5 million, an increase of 43% over the prior year and $13.8 million or 18% as compared to the fourth quarter of 2022. These increases were driven by a $14.6 million gain in our generic pharmaceutical products, an increase of nearly 30% year-over-year, and a $12.7 million gain in our established brands, royalties, and other category for an increase of 90% year-over-year. The growth in this segment was driven by increased volume and ANI’s strong commitment to U.S. based manufacturing, excellence in generic product selection and R&D, and an informed and nimble team. These attributes when combined enabled ANI to quickly and efficiently meet evolving market needs. Operating expenses increased by 16% to $96.9 million for the three months ended March 31, 2023, from $83.7 million in the prior year period. Cost of sales, excluding depreciation and amortization increased by $3.4 million to $37.7 million in the first quarter of 2023, compared to $34.3 million in the prior year period, primarily due to a shift in product mix and increased volumes of sales of Generic and Rare Disease pharmaceutical products. In addition, during the prior year period, we recognized $3.8 million in cost of sales representing the excess of fair value over cost for inventory acquired in acquisitions. There were no comparable expenses in the current year period. Excluding the impact of acquisition accounting, stock compensation, and the effects of our Oakville Ontario plant closure, all of which are detailed in the tables contained in this morning’s press release. Cost of sales on a non-GAAP basis as a percentage of total non-GAAP net revenues decreased 13 percentage points from 47% in the first quarter of 2022 to 34% in the current year period, primarily as a result of favorable sales mix from the impact of higher sales of established brands, Cortrophin, and the net impact of annualization of new product launches in our Generic franchise. Research and development expenses were $5.9 million in the first quarter of 2023, an increase of $0.7 million from the prior year period, primarily due to year-over-year timing of work associated with generic products, coupled with an increase in projects related to Cortrophin Gel in the three months ended March 31, 2023. Selling, general, and administrative expenses increased by 27% to $36.5 million in the first quarter of 2023, compared to $28.8 million in the prior year period, primarily due to a $3.4 million increase in sales and marketing expenses related to Cortrophin Gel and increased headcount cost, tempered by a $0.7 million decrease in transaction expenses related to the Novitium acquisition. Depreciation and amortization expense was $14.7 million for the three months ended March 31, 2023, essentially in line with prior year. During the quarter ended March 31, 2023, we recognized a non-cash fair value adjustment of $1 million related to the contingent consideration recorded in conjunction with Novitium purchase accounting. This is compared to $0.8 million reported in the prior year period related to this item. In addition, we recognized $1.1 million of restructuring expense in the first quarter of 2023, associated with the closure of our Oakville Ontario facility. No restructuring activities were recognized in the prior year period. We have excluded both the one-time charges resulting from this action, as well as portions of the Canada results that were expected to be non-recurring post-closure from our non-GAAP financial measures as detailed in the tables in this morning’s release. Net income available to common shareholders for the first quarter of 2023 was $1 million, as compared to a net loss of $20.5 million in the prior year period. Diluted GAAP earnings per share was $0.06 per share, as compared to a $1.27 loss in the prior year period. GAAP earnings per share reflects significant amortization and purchase accounting related charges results related to the Novitium acquisition coupled with Oakville related restructuring activities. On an adjusted non-GAAP basis, we had diluted earnings per share of $1.17 per share for the quarter compared to a loss of $0.12 per share for the prior year period. Adjusted non-GAAP EBITDA for the first quarter of 2023 reached a new company record of $33 million and reflects significant gross profit pull-through from the strong revenue performance. This is an increase of $28.7 million compared to the $4.3 million reported in the prior year period. Importantly, adjusted non-GAAP EBITDA also rose $9.7 million on a sequential basis, up 42% from our previous record $23.3 million in the fourth quarter of 2022. From a balance sheet perspective, we ended the quarter with $67.8 million in unrestricted cash driven by cash flow from operations in the quarter of $21.4 million. This compares favorably to cash used in operations of $18.9 million in the prior year period. We have $296.3 million in face value of outstanding debt which is due in November 2027. In addition, we have $40 million of untapped capacity in our revolving credit facility. Finally, as outlined in this morning’s press release, we are pleased to raise full-year 2023 guidance as follows. We raised total company expected net revenues to between $385 million and $410 million, up from the previously issued guidance of $360 million to $385 million representing approximately 22% to 30% growth, as compared to the $316.4 million of net revenues recognized in 2022. We raised total company adjusted non-GAAP EBITDA to between $97 million and $107 million, up from previously issued guidance of $78 million to $88 million, representing approximately 74% to 91% growth, as compared to the $55.9 million recognized in 2022. We raised total company adjusted non-GAAP earnings per share to between $2.99 and $3.45, up from previously issued guidance of $2.09 to $2.59, representing approximately 120% to 154% growth, as compared to the $1.36 reported in 2022. We maintain Cortrophin’s specific revenue guidance at between $80 million to $90 million, representing 92% to 116% growth, compared to the $41.7 million recognized in 2022. And we continue to expect 2023 Cortrophin SG&A to increase approximately 10% over 2022 to account for a modest sales force expansion. And we now project total company non-GAAP gross margin of between 60% and 62.5%, as compared to previously issued guidance of 59.5% and 61%. In addition, we currently continue to anticipate between 16.8 million and 17.1 million shares outstanding and an effective tax rate of approximately 24%. With that, we will now open up the call to questions. Operator, please announce the instructions.

Certainly. We will take our first question from Elliot Wilbur with Raymond James. Please go ahead.

Thanks. Good morning. First question for Nikhil and Steve as well. Just wanted to dive a little bit deeper into the over-performance in the base business, generics and brands and loyalty line specifically. Was that a dynamic that emerged late in the quarter or do you simply now have more visibility on the continuation of some of the favorable trends that you are seeing versus what you had previously anticipated, I guess, in early March when you provided initial 2023 guidance? And then just if you could provide a little bit more granularity in terms of some of the key drivers, whether we are talking about competitive wins in the Generics business, benefit of off-contract pricing perhaps or just new launch dynamics? Maybe just a little bit more granularity on where the actual over-performance is coming from? And I have got a couple of follow-ups.

Sure. Good morning, and thank you, Elliot. So, to the first part of your question, I will take the second part of your question, which is about the special effects around these trends. ANI’s robust results in our Generics established brand and other segment showcase our ability to leverage our U.S. manufacturing footprint and our agility in operations to deliver solutions to our customers. This has enabled us to capture market demand arising from the supply disruptions impacting patient access to much-needed medicines. We see this as a positive trend impacting our business due to several structural factors, and there is a mix of factors, right? There are product-specific issues, there are manufacturing site-related issues arising from FDA audit outcomes, there are company-specific financial issues such as Chapter 11 and Chapter 7 situations, and there are broader market-driven opportunities. While the mix of these issues will change, this trend is here and is likely to continue, and ANI remains well-positioned with our U.S.-based manufacturing, dedication to supply chain, and manufacturing excellence to capture these opportunities. I would also reiterate that, first and foremost, the first quarter performance represents strength across all four businesses, and as Steve noted in his remarks, this is reflective of organic growth of the company, right? These include the strength of new product launches in Generics, the continued evolution of our Cortrophin launch, and the impact of innovative go-to-market strategies in our established brands business. So that’s the second part of your question, Elliot. And then on your first part on what we knew in March versus now, look, at any given point we are giving the best information available to us. While this trend may have started earlier in the quarter, we wanted to give it some time before we reflected that, right? Our best thinking is reflected in the guidance we gave in March, and as we had more visibility we raised the guidance.

Okay. Thanks, Nikhil. And a follow-up for Steve as well, going back to the subject matter, I guess, we discussed more than usual last quarter and that being cash flow. Looks like you generated operating cash flow of just over $21 million in the quarter. Working capital, it looks like it’s now a neutral versus a negative as it’s been for several periods now, but you are still seeing increases in some of the larger working capital asset accounts. So just wondering with the increase in full-year EBITDA guidance, how should we be thinking about cash conversion and cash flow performance versus what we saw in the first quarter and are there any other chunkier items that may work to your benefit over the course of the year, now that you have got that $20 million plus contingent liability on the balance sheet?

Yeah. Elliot, good morning. Thanks and thanks for the question. We are very pleased with the cash conversion in the first quarter. Again, we posted $21.4 million of cash from operations and right it is dramatically in line with everything that we have discussed on the evolving calls throughout 2022 and the year-end call just back in March, right? The 2022 era where the company was using significant amounts of cash to stand up the Cortrophin Gel launch and to stand up the Rare Disease business within ANI that those chapters are starting to be in the rearview mirror, so to speak, right? When you couple that track with a very significant and healthy quarter, you have a significant unlock of cash in the first quarter. Looking forward, we would obviously expect that to track with our P&L guidance. I think we are very confident and having an increasing level of confidence in terms of the cash generation that we expect from the business as we look forward to the next three quarters. Obviously, cash tracks the P&L performance and lags it by a bit. To your question about chunky items, I think, the few that I would highlight, right? I talked in the prepared comments about Novitium contingent consideration. We do anticipate, right, we will have the two-year anniversary of the Novitium transaction in November of this year and that will kick off the first leg of contingent consideration payments to the selling shareholders. We are currently anticipating about a $12.5 million payment in this year, and there would be a second payment of a similar amount early in 2024. We are clearly planning for those events and we are clearly more than happy to pay those contingent outflows because it’s a very present indication of the strengths of the transaction and the fact that the Novitium transaction has not only fulfilled our expectations but exceeded our expectations as we have combined that great business into ANI. So that’s one on the outflow, and then, obviously, we have talked about the Oakville closure, right, which is from an operational perspective is fully complete at this time. It was completed on track and is on target with our timelines. That facility continues to be held for sale in Canada. Obviously, we can’t predict the exact timing of when that sale will close, but we expect a nice cash inflow from that transaction.

Okay. Thanks. And then last question for Nikhil. You highlighted a lot of the pace, continued positive trends and the uptake of Cortrophin. Specifically thinking about indications that new patient starts, new patient initiations were at record levels in April. Do you have any sense as to whether or not these are new to therapy or treatment naïve patients versus potential switches from your competitor in the marketplace? That’s the reason I asked the question. Some of the data out there and its relatively low frequency may not be that high quality, but some of the data shows a fairly sharp uptick in terms of switches to Cortrophin from your competitor and not sure if that is accurate or not in terms of what you are seeing, and if so, any thoughts as to what may have impacted that? Thanks.

Yes. No. Thank you, Elliot. Look, I think it’s a mix. So it’s a mix of patients that are naïve to the therapy as well as patients that are switching. What I will say is, there is, as I was saying, we ramped up our efforts to increase awareness of Cortrophin Gel, and obviously, there is an increase in the number of new prescribers as well as repeat prescribers. With repeat prescribers, you will see that as they start using Cortrophin Gel, they see the many parameters of the use—the time from enrollment to fulfillment, the impact on the patient, and the engagement with the company. All of those factors drive their thinking about shifting their usage, right? As I also mentioned in my prepared remarks, there are a number of prescribers that used to use ACTH therapy that have just stopped over the years or had reduced their usage significantly. As we ramped up our increased awareness of Cortrophin Gel, they have reintroduced ACTH into their suite of treatments for appropriate patients in need, and that’s why you are seeing the year-on-year monthly unit growth for 10 consecutive months according to IQVIA.

Okay. We will take our next question from Vamil Divan with Guggenheim Securities. Please go ahead.

Great. Thanks for taking my questions. Nice results of the year. So a couple of questions, I just wanted to dig into a little bit more. One on the Cortrophin side, and I appreciate you are not saying too much for competitive reasons. I am just wondering if you could share any sort of general feedback from providers, as your time up, some people may be returning to this market, patients returning and then also some new providers potentially. Just the feedback you are getting in terms of how the product is performing relative to maybe prior experience with the competitor? And also, is there any sort of added cost, we assume on the behind the launch for the rest of the year or in terms of, sounds like the sales force is all in place now, but anything else there or added sort of the marketing meaningful increases over what we saw in 1Q? And then the second question is just more general, again, getting back to the cash discussion. I am just curious if you can talk a little bit more about sort of your comfort level on your leverage ratio as you think about investing behind your Cortrophin, but also potentially bringing in additional Rare Disease assets? What kind of level, I think your debt run close to $300 million, but $240 million or so cash plus the accounts receivable, so just curious how much added leverage you would be comfortable taking? Thank you.

Got it. So, thank you, Vamil, and good morning. Let me answer your second question and then your first, and then I will let Steve start on the last one around the leverage ratio. We have not had any added costs. When we had spoken at last quarter’s earnings call for Cortrophin SG&A, we had indicated that we expect 10% higher than previous year SG&A, and I think it’s in our press release that we will maintain the SG&A expansion rate. So that’s the answer to that question. In terms of general feedback from prescribers, I think it’s a few things. Firstly, they comment on our sales force, which is highly experienced and highly trained, and they focus the discussions on patient need and on the ACTH category. I think that engagement is one they speak very highly of because this is a Rare Disease product and it’s important to identify the appropriate patients in need. That’s the first point they highlight. Secondly, as I mentioned in my remarks, central to our Cortrophin Gel launch have been our efforts around market access and improving the enrollment to fulfillment process, which has reduced the burden on prescribers, something they positively comment about too. Lastly, they talk about the reduced cost for the healthcare system and the favorability of that for the patient. Of course, again, I have to be careful about what I say here, but underlying all of this is the impact on the patient because of the patients they are treating—these are complex cases with patients dealing with complex indications and co-morbidities and the positive impact they are seeing on those patients is significant. Those would be the key points of feedback that we are getting from the HCPs. And then your last question on leverage ratios, obviously, Steve will jump in, but the EBITDA of $33 million has a very favorable impact and also our guidance has a favorable impact on our leverage ratio. I will let Steve comment on how we think about that going forward.

Sure. Thanks and good morning, Vamil. It’s important, because your question kind of links together two aspects, right? The cash, the leverage, and then also just kind of the business development right as we look to build out the rare disease business. While there is no black and white, no absolute, we are obviously going to retain flexibility as we approach different business development opportunities. Every opportunity will have a different profile in terms of the asset we are approaching and its cash flow profile. With those caveats, we are obviously pleased with the cash position as of March 31st and the progress we have made there. As I just answered with Elliot’s question, this is a strong platform for us to build that cash position as we look to future quarters, and we will always remain focused and balanced in terms of our leverage position. For folks that have been following the company for some time, one of the hallmarks of how we have navigated the market throughout the years is to remain conservative on leverage. As we spoke about in these calls and with our constituents, in 2022, we were a bit forced to go beyond our comfort zone in order to do what was right for the business and to launch Cortrophin with an eye towards strength and to launch Cortrophin correctly right out of the gate. We are pleased that as we look forward we are delevering organically as projected, and we are very pleased that this will continue to occur here in 2023. All of these factors put us in a better position of strength to approach business development opportunities. You may know, as you go back through the prepared comments for today, I did cite the untapped credit facility of $40 million. That’s the first time in a while I wasn’t citing that in our 2022 earnings calls because Nikhil and I would not have been comfortable tapping into that given the leverage levels in 2022. We expect to look forward at that credit facility, maybe another piece of the puzzle for us as we look to continue to grow the business.

Okay. Thanks. Very helpful. Thank you.

And we will take our next question from Brandon Folkes with Cantor Fitzgerald. Please go ahead.

Hi. Thanks for taking my questions and congratulations on the very strong results. Maybe firstly from me, just on the gross margin, this is very strong in the quarter. Can you just elaborate on why we are not expecting further gross margin expansion in your updated guidance, just given the increased contribution of Cortrophin through the rest of the year and how would you expect Cortrophin to have better gross margins than the established brands products? Along those lines, can you just talk about if there were any one-time price benefits in the quarter on the base business, especially due to some of the supply disruptions you mentioned? And maybe I will ask the second question, because it may go hand-in-hand with that. Can you just help me further understand the guidance? I just see, if I take the 1Q base business, the run rate, and I add the low end of the Cortrophin guidance, we are getting close to sort of $240 million in revenue. So can you just talk about either perhaps some of the one-timers in 1Q headwinds in the base business for the rest of the year or is this just sort of conservatism given how early we are in the year? Thank you.

Yeah. Thanks, Brandon. Why don’t I start and Steve you can jump in? Our guidance—implicit in your question one and three on the evolution of gross margin and then the question on guidance—is really the question on guidance. Our guidance is based on several factors, as you would appreciate, which includes accelerated launch momentum that we are seeing with Cortrophin Gel where we have had a record number of new cases initiated in Q1 2023, but also a record number of new patient starts and new cases initiated in April 2023, which is the month that finished eight days ago. That’s the first set of factors. The second is the impact of the trend that we are seeing across Generics and established brands of several favorable structural factors such as product-specific issues, manufacturing site-related issues arising from FDA audit outcomes, company-specific financial issues such as Chapter 11 and Chapter 7 situations, and broader market-driven opportunities. Our guidance sort of calibrates the upsides from this thing, right? So that answers hopefully question one and three. And then to your question around price benefits, look, again for competitive sensitivity reasons, we would like to give that question a pass. I think the favorability is largely driven by volume, right? I wouldn’t want to add more specifics around the price. Steve, would you like to add anything?

All right. I think you covered Nikhil the question and what we are prepared to speak to this one.

And we will take our next question from Greg Fraser with Truist Securities. Please go ahead.

Good morning, folks. Thanks for taking the questions. Can you comment on how to think about the quarterly cadence of Generic sales for the balance of the year? And then on the significant growth for the established brands and other revenue, was the growth driven primarily by established brands as opposed to the other segments that have royalties and contract manufacturing, and it looks like you are no longer breaking those out separately? Just wanted to know if there is something chunky in there that drove the first quarter outperformance? And I am not sure if I missed this, but did you comment on the timeline or give any updates on your 505(b)(2) programs, and if not, can you give us an update on those? Thank you.

All right. So—and good morning, and thank you, Greg. The—three questions. The first question is, timeline for 505(b)(2). We do not comment on it, and at this point, we are not sharing information on that. Your first question on the quarterly cadence for Generics, look, we have always talked about sustainable growth for Generics. It’s really about ensuring that we continue with our strong R&D growth engine, deliver new launches, focus on cost excellence by continuously reducing the costs, and therefore being able to continue to supply and stay competitive. The third is supply security, right? With all of these three strategies, with the new product launch as the heart and center, we believe that the erosion we see in our business from Generics will be overcome by growth we get from new launches, from supply security, and from cost excellence. We will be able to grow the Generics business as we keep moving forward. This gives you a sense about the quarterly cadence. On the question regarding where the upside from within the established brands, royalties, and other segment is, while it’s mixed, a good part of it is from the established brands.

And we will take our next question from Oren Livnat with H.C. Wainwright. Please go ahead.

Thanks, everyone. Just, I guess, build on the prior questions about going forward visibility, you have had outperformance from every line. If we start with Generics first, again, implied in your guidance is some conservatism looking forward. Can you talk about if you expect whatever disruptions happened—supply, bankruptcy, etc.? Does your guidance assume conservatively some normalization in the competitive landscape going forward? And then on the brand—legacy brand business, which is obviously a high-margin contributor, going forward is that still a declining revenue line, or do we think that has eroded in volume, offset by some pricing benefits? Is that a stable business going forward? And I have a Cortrophin follow-up.

Okay. I think your first question was on the trend. Look, the impact of the trend has several favorable structural factors, which I spoke about a couple of times, including product-specific issues, and manufacturing type issues from FDA audit outcomes, company-specific financial issues, issues with Chapter 11 and Chapter 7, and broader market-driven opportunities. What you see in our guidance is a calibration of the upside from the cadence and then understanding of the mix of these issues and how that will persist. So that answers that question on continuity. On the established brands, as we have spoken about before, there are a number of steps we are taking to bolster our established brands business, including innovative go-to-market strategies for a bulk of our established brands, particularly for our derm-specific brands that we acquired from Sandoz a few years ago. We launched a partnership that’s now at full flow with another company to do co-promotion. So that is in full flow, and as we talked about, we aim for operational excellence to ensure that as our customers need these products on a timely basis, they are delivered reliably from a strong local supply chain.

Okay. And follow-ups there, actually before I get to Cortrophin, in the past you have talked about product concentration and no product, single product exceeding X percent of total revenue. Can you update us on, I guess, the largest single contributor size percentage wise in Q1? Then I have Cortrophin.

I think it’s Cortrophin by a long distance, right?

Yeah. Nikhil, I’d say we haven’t highlighted those products in the past. I’d say we are still very pleased with the product diversification in the portfolio.

Okay. Moving on to Cortrophin if I may. I know you are not giving—I appreciate you are not giving us more granularity on specific patient adds, doctor adds. But I guess, can you just characterize as that launch is accelerated in Q1? Does the pace of new initiations of actual therapy as you pull through insurance adjudication, etc., has that outpaced, is that higher or lower I guess than the new patient referrals or prescribing adds wherever they are coming from? And so I think about whether you sort of had a catch-up this quarter as you pulled through existing prior demand or if it’s sort of steady state on that front in terms of conversion and its really just organic end user demand growth?

Yeah. Look, our growth that we are seeing, right, is not as simple as saying what’s the pace of new patient adds, right? There are several factors that go from new cases initiated to actually revenue-generating patients, including the mix of patients, the number of vials per patient, the number of revenue-generating patients, and the time to therapy. There’s a number of different factors. I would say that it’s straightforward: looking at what we have done in Q1 and what we are reiterating in our guidance for the rest of the year—we have high confidence that this mix will continue. An important point is that our intention is to continue giving investors the best available information, and while we are not giving a specific number, it’s clear that even in the month of April, we had a record number of new patient starts and new cases initiated, and you don’t have that unless you are experiencing accelerating launch momentum, as simple as that.

Okay. You actually kind of segued into my next question. You mentioning the sort of vials per patient, I guess you can call it units per patient. Can you just comment on—with not pricing per se, but are you seeing a material increase in Q1 looking forward into sort of value per patient in terms of the kinds of indications that are getting prescribed in pull-through? We obviously have a big range and some indications have longer or higher dosing than others.

Yeah. No. There’s no—we are not necessarily seeing a difference in that dynamic. What we are seeing is not something that I am prepared to discuss for competitive reasons.

And just lastly, I apologize for all the questions, but on the Rare Disease space, you sound pretty explicit that you are quite interested in looking at M&A. I am just curious if you could talk about the kinds of things you are looking at. Are we thinking about on-market products, maybe that are underperforming or new launch situations? Are you more inclined towards a partnership, co-promoting, or helping commercialize the product for a company that’s not really set up to do so, as well as you or products and/or company acquisitions that might involve more integration activities?

Yeah. Thank you for that question, Oren. We are looking for assets that can leverage the strong Rare Disease infrastructure that we have built. When I refer to that infrastructure, what do I mean? You remember I have been—the earlier question was about HCP feedback. The first thing I highlighted was the highly experienced and expert sales force that we have. We go into three different sales force stands—three different indications: neurology, nephrology, and rheumatology. The most obvious choice would be to pick an asset that is in one of these three areas, and then, obviously, we just—pulmonology, although it’s a modest dedicated team, is an asset that fits into one of these call points. So that’s one. The second part of it is to look for an asset that leverages our Rare Disease infrastructure, including market access, patient support, specialty pharmacy distribution, compliance, and medical affairs. We are actively evaluating different types of opportunities, and we will find what’s best for ANI.

All right. Thanks so much. Appreciate it. Congrats on a big quarter.

Thank you.

And there are no further questions at this time. I will turn the call back over to Nikhil Lalwani for closing remarks.

Thank you everyone for joining our call this morning. Thank you to the folks who asked the questions. We appreciate it. We would like to reiterate that ANI is well-positioned to continue delivering sustainable growth and serving patients in need, and we look forward to updating you on our progress. We appreciate your time and interest in ANI and thank you.

Thank you.

This does conclude today’s program. Thank you for your participation. You may disconnect…